Catchup

Hello all. 

Last blog post was in late may, here we are late July.

Since that last daily journal post I have

-Finished my backyard flagstone patio

-SERIOIUSLY mellowed out on trading

-Hosted a big birthday bash

-Got my wife pregnant

-Told everyone about it

-Signed up for brazillian jiu jutsu

-Playing some bomb ass baseball still

-Explored job opportunities and found nothing will satisfy me unless I can fit trading into it.

-Continued trading day in day out, with much less stress on process

-Applied to SMB Capital

-Started to want to do reviews again and more process work

So lets dig in. Personal stuff first.  

For starters, I love my patio, and the party was awesome. Lots of fun.

The wife and I are expecting and we are excited about it. Its been a trip since we found out and continues to be more exciting everyday. Pretty nervous but we think we will manage just fine.

First reaction money wise was I need more. I started thinking about trading much deeper and how I might be able to still get done what I want to get done. 

A long time ago I said something like trading is a privilege. That still remains true but now I wanna change it.

Trading is a privilege, but trading how you want to trade is REALLY a privilege. 

Ive been spoiled these past years, being able to strictly sit here and trade all day without having to worry much about anything else. 

Now that my mind is somewhere else, I thought about how I would have to adjust my trading style if I was to go get a 9-5 job. Obviously I cant be here at my desk staying watching managing my trades.

I did find a way to get it done still. But not exactly how I want it to be, and frankly I dont think it would be possible to do what I do away from the desk.

I would have to resort to swing trading mainly.

And thats fine, but im not there yet. So if I dont have to worry about it, then no sense in it taking up mental capital.

My success at trading is moderate. Im still getting better. Still finding and fixing flaws in the process, trying new things, improving on what I do best. Trading flat out is not at a level for me where I can say I can support a family of 3 yet. Its just not there. I have good months, I have bad months. You cant force the process to speed up, you just have to make sure you take the next best trade, and keep getting better everyday.

So why did I take a big break from typing and doing stuff?

Burnout. Total victim to it looking back at it. I was trying same things over and over and getting nowhere other than losing money. That and with my patio project getting pushed back into hosting that party, I wasnt in it to win it. I had to get away.

And I took a big break. I would look at a small amount of things here and there, maybe take a few trades a week. Just super slowdown of everything. Get my mind off of it, total reset. And it felt good.

I picked things up again in late June, started screenshotting again, keeping the stats. Accepting there is no perfect way for me to get in and out of trades, other than keep doing what I know has worked best and stop obsessing the details. It didnt work in that market. (Starting to see it again now).

And here it is. Me at my most basic.

Get the F in the trade.

Add if it works.

If its a win, Keep it!

If its a loser, Cut it!

If Its a win and it turns into a loser, thats not good trading!

And that is skipping a lot of details.

Where I am right now in my trading, im STILL trying to find a way to best navigate how I want to trade names, is the stock is either day tradable, or it isnt. 

If the stock is daytradable, I daytrade it and log it in my Daytrade stats/folders.

If the stock is NOT day tradable, I strictly look to swing it on a higher time frame, and log it in my Swing stats/folders.

Im not done.

I take 2 kinds of trades. Pullback catches on a D timeframe, or Breakout trades on a D timeframe. 

If its only swingable, I take the trade and manage it on HTF basis, regardless of pullback or breakout.

If it is daytradable, and a pullback trade. I take the trade and daytrade it with FURTHER OUT exp date, keep my day trade win, but keep the position on with expectations it turns into a swing.

If it is daytradable, and a breakout trade, I take the trade and daytrade it, keep the day trade win, and keep the position on with expectations it turns into a swing.

My big issue in the past had been trying to daytrade un daytradable names.

My main goal for everytrade, is I want to swing it. And in between there are excellent opportunities for momentum daytrades inside that swing trade. Hence trading around a core. Ive been confusing myself trying to get this processs down to a way that I like and that most importantly, makes sense. I think this is a good solution.

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Another big issue im having regarding my swings, is im struggling finding a medium between cutting it, and holding it respecting pullbacks. 

Lately it really feels like when I hold through pullbacks, the return never comes. And when I cut them short, they come right back and continue on. There is review to be done here. 

My gut is telling me that vwap is my key. 

Just from trading these past few months, vwap seems to be the deciding line where I should cut it and let it run, regardless of HTF candles/MAs.

I need to take a look at

Separated into BO trades and Pullback trades.

1. Best winners, how they acted

    -Never negative?

    -Interaction with vwap

    -Point A to point B?

    -How much consolidation did I have to sit through

    -Daily Tag theme?

2. Normal wins

    -Interaction with vwap

    -How far did it go against me?

    -Was it a bigger win later on?

    -How could I have held on longer?

        -Survive pullbacks?

        -Find HTF MA support?

    -Should I have cut faster?

        -What kind of failure did it have that made it return?

           -Failed BO?

           -Run into anch vwap?

3. Losses

    -Did it immediately fail?

    -Did it lose it and never come back after vwap loss?

    -Would it have been a winner if I held through pullback?

        -What do I need to hold through?

        -Where did it find S?

        -Would it have been worse?

    -Did market make a difference?

    -Weekly Chart?

    -Theme among daily tags?

    -If winner at one point, what did action look like after vwap loss?

     -Should I have cut faster?

        -What kind of failure did it have that made it return?

           -Failed BO?

           -Run into anch vwap?

Lots of work to do, but it needs to be done. Only way to know is to start digging.

So the big winners.

10 to look at. Will do all 10 here, spaced with -

4 swing only BOs, 3 Day trade BOs, 2 Day trade PBs, 1 Swing PB

-Clear VWAP support? // - /// - /

-Clear HTF level support? /// - /// - //

-Clear LTF MAs S that continued? // - / 

-Would it have been worth it to hold through MAs/retests? / - /

-Clear bullish dip buying? ////-/// - // - /

-Never Negative? / - //

-Somewhat negative? // - / - // - / 

-Very negative? / -

-Lost LOD at some point? // -

-Wait an hour+ for it to be profitable? // - / - //

-Caught the top at max profitability? / - // - /

-Bigger winner later on? // - // - /

-Bigger win if followed LTF MAs S? / - /

-Did it try to shake me out? /// - / - //

-Did stock have a history that followed through? /// - // - /

-Clear Add chance? /// - /// - //

-Clear W chart? //// - // - //

-Noted weekly/monthly watch? //// - 

-18+tags? Only 2, both DT Fails + BO

-Sustained RVOL? // - /

-Abnormal Options? / - / - / - /

-%Captured >50%? /// -- / - /

-Themes among tags?

    Weekly chart. MA on LTF all in favor. Anchored vwap. Failure. Volume. Market helping day of. Big Options.

Some things im starting to see, when there is LTF S with MAs and then the stock loses that MAs, the drop comes so hard so fast, I would be giving up WAY to much premium to sit and wait for that moment to happen, majority happened overnight, opened under, and sold off super quick. 

Another thing, is that these trades im taking, and there location, are rarely at spots right with MAs under price right then and there, simply waiting for the MAs to catch up, could mean a lot of time decay.

I am a directional trader. I expect things to go asap and not revert at all, give or take some space for simple consolidation. Best trades im seeing dont wait for the MAs to catch up. They go at the level they go at, I should not hold full size just because the 50 showed great S a day or 2 ago. That isnt being proactive with taking profits. 

The more I think, the more it doesnt sit quite right with me to hold out for the MAs to really come into play. Im impatient for one, I like the A to B moves, daytrade the breakout, hold the core, look to re enter again some place else. Hold the core, keep the MA Support in mind, but I dont think I can flat out build my process around the MAs. 

If I see that the 20 on the 30min has really been showing good S, I will use that as 1 more variable to cut my runners, but not solely to base the position off of. Because again, my best wins dont ever turn against me, I dont have to worry about holding a loser because it may turn into a win. 

It seems that rather than focusing on what timeframe im seeing the MA support on, its more important simply that it is happening, and that all LTF MAs are supporting the trade. 

Ok finished those, 

    -Clear dip buying.

    -HTF support

    -Half the cases, it did go negative

    -Half also I had to sit through some chop

    -Ultimately it was clear though that there was a theme that as long as it held levels and vwap with no problem. 

WINS

Alright now to go through the wins in whole.

Looking at averages for ALL winning trades. 

Avg +$265

+1.8R

+3.9R MFE

-.4 MAE

Avg Risk $143

Avg % Move Captured 42%

25 BO

13 PB

Avg 16 tags

Of my 38 Wins

-30 were multiple breaks

-31 Had value area significance

-32 had MA coil

-35 had a significant weekly chart

-32 Market not hurting

-29 had Big Options

-31 had an RSI break

-31 had significant Tape

-30 Had MA on LTF all in favor

Nothing here is really new to me. Seeing same stats and tags as before show up. 

Now only looking at 28 regular wins

-Clear VWAP support? //////////

-Clear HTF level support? ///////////

-Clear bullish dip buying? /////////////

-Never Negative? ///////

-Somewhat negative? ////////

-Very negative? //

-Lost and held under VWAP at some point? ///////

-Lost LOD at some point? //

-Wait an hour+ for it to be profitable? ///

-Bigger winner later on? ///////

-Did it try to shake me out? /////////

-Did stock have a history that followed through? /

-Clear Add chance? /////////

-Clear W chart? //////////////

-Noted weekly/monthly watch? ////////////

-Bigger win If I strictly follow D candles? ///

-Exited at bottom? ///

So most important points, clear buying dip theme. Weekly chart significance. Clear VWAP and HTF support. 

Clearly my winners do not lose LOD. I dont need to hold any positions at all, not even give them a chance to reclaim (Unless LOD is a HTF level)

With regards to VWAP. VWAP is a great spot to make a lot of decisions at. Hold? Add? Take Profits? Exit all? 

    -There are some cases where the stock does lose and hold under vwap, and reverses. It isnt the norm, but it does happen enough for me to hold the core through that test under to see if it can still reverse. So flat out using vwap as my stop if it breaks under, would not be giving a swing trade enough time and space it needs. BUT it is the breaking point for majority of these trades. If vwap doesnt want to hold, ill know fairly quickly. 

This makes sense because I am a directional trade that trades moves that go from A to B with little chop in between. I do not want to hold trades, at any point, that are not acting the way they should. My best wins do not lose vwap and stay under for very long. I want to be long, add to the long, and stay long, the trades that are acting correctly. And majority of the time it is based around vwap. 

I have got to be taking profits on any and all HOD breaks. This allows me to keep wins better and trade around a core looking to rebuild a position, without giving back all profits. 

    -The issue I run into with this is sometimes all I have is 1 or 2 contracts on. When the stock is consistently making new HOD, I dont want to be completely out of the trade just because I tell myself I should. If I am left with 2 contracts, then I do need to hold through the pullback. 

    -The other issue to consider, is some names in the morning make these big breaks higher, and give it all up right away asap. Those early morning trades I do need to be taking off regardless on position size. Letting at least 1 ride to build around. 

LOSERS

For my losers Im not going to look at every single chart entry and exit on them to find data. I wanted to mainly find the data on the winners and build my process around those. With the losers im going to look at averages, then the worst losers I had, what went wrong, and compliance issues around them. 

80 Total

Avg +R .4

Avg MAE -1.05R

Avg -R -.95R

6 Reached +1R

6 Didnt cut after Warning signs

5 didnt anticipate correct risk

3 didnt keep win

Avg Daily tags 15

Other low count Daily tags

-17 MACD Day of cross

-15 sustained RVOL

-23 short squeeze

-21 Larger than -1R losses. (-36R)

    -A quarter of my trades are losses bigger than I intended to take. This is an extra ~$2k in losses

Now looking at more than -1R losses, whats happening? Of 21..

Didnt keep the win ////////

Didnt take profits after clear large break //////

Let it lose vwap and held for bigger loss //////////////////

Bought Clear weak name ///

Just bad luck/normal loss /////

Clearly VWAP is the notable thing on these reviews. When these losers lose vwap, they do not recover quickly and just get worse. In all cases I would have saved a lot of money if I cut shortly after it lost vwap, or breakdowns just under it.

Taking profits also needs to be much better. I am sacrificing so much by letting my trade pullback just to see if its going to hold it and then trend higher again. 

FINDINGS

-It is better for me to take profits when I want, rather than when I have to. Be 1st, not last. You pay spread + slippage + stretch when waiting. Especially on low vol, swing only names. 

    -Hold for PT and take, or hold through the pullbacks. 

-Swing only trades with regards to LTF MA S, should not be taken into consideration unless we gap into it, or price remains steady and ultimately bullish as it catches up. 

-Best wins 

    -Profitable from the start of breaking the level. 

    -CLEAR bullish dip buying

    -Anchored VWAP v close/bounced prev day

    -Failed break opposite direction

    -Both BO and PB

    -MA on LTF all in favor

    -Big Option

    -Market helping day of trade

    -Volume

-It seems that rather than focusing on what timeframe im seeing the MA support on, its more important simply that it is happening, and that all LTF MAs are supporting the trade.

-Winners are coming from clear, noticeable dip buying, holding above HTF levels, holding above VWAP. 

-I am too concerned about trading and holding the stock as long as possible, rather than trading to make and keep money

-I am forgetting and ignoring my rules of +1R means cut near breakeven, +2R means cut near positive, +3R means cut at +1R

-The trades that lose vwap and dont reclaim fairly quickly (5min), just get worse and become bigger losers

-The trades that lose vwap and quickly reclaim, become winners. They do not give much space below vwap before getting bought up

-VWAP is the key for deciding ultimate stop

SUMMARY

Trades fall into 2 categories

-Daytradable

    -Daytradable Breakouts

        -Trade short Exp.

    -Daytradable Pullbacks

        -Trade longer Exp.

-Swing only

    -Swing Breakouts AND Pullbacks    

        -Trade longer Exp.

            -Small size starter. 

            -Manage on HTF basis

            -Cut if VWAP/LOD loss and hold under

Looking at LTF MAs and waiting to use as stop is not worth it

Swings must be small to start. Taking to big of L on names that need time to build and prove worthy. Cant keep putting best risk on for trades that havent proven themselves yet. Majority of my wins, had a clear pullback and Price Action that proved my thesis was working. 

Swings that fail moves higher, RUN for the exit, do not walk. This market has not been taking any chances on holding failed breakouts for the pullback. More often than not, the pullback does not stop pulling back. If it does, it will be at clear HTF / VWAP levels. 

Stop loss location, on swings, starts at LOD break and hold under (If at open, if later in day, is changed to VWAP or nearby HTF level just under). After some breakout higher, intraday or extraday, stop moves to hold under vwap or HTF level or breakeven. Take profits after failed moves higher that do not hold higher.

Losses larger than -1R are the reason my months ended up not green. 

I need to be taking profits more on HOD breaks. Market is making solid moves at open, making huge pullbacks.

I am doing a great job at selecting names, that make decent moves out of the open and being in profitable trades

    -I am BAD at keeping those profits

        -Too concerned about trading 'correctly' and holding through pullbacks for bigger moves

            -This is greed. I am given money from the market, I am being greedy and holding for a move that may never come

I believe the focus going forward is going to be cutting trades short rather than holding for more profits. VWAP clearly is my new go to for deciding when to cut trades

GOALS

For month of August, start review from Day 1 and record tabs like the above, and fill in for each trade daily. 

Take proper screenshots. 1min entry/exit. D Chart. 30min HTF view. Include exits for following days.

Trades at open, stop is based on LOD

    -After HOD break, stop moves to VWAP or nearby HTF, or nearby intraday pivot that held near those levels.

    -Stop is still a wait and see, but no more than 5minutes it should reclaim. 

Trades later in day, stop based on VWAP

Profit Taking

    -1/2/3R+ rules are in play, regardless of how small win might be.

        -Unless is strictly swing trade, not daytradable, then must wait and hold

    -Once stock hits new HOD, profits are taken on 1min low. 

        -More profits are taken on trend break lower. Decided by Trendline, or Range break lower. Look to reset and build from core. 

-Does not matter if 3/4 contracts total. Take the profit. 

    -If 2, then take 1 on trend break. 

Feels good to be back. Not just to trade but to review. I felt a lot of calming come over me as I did this. Felt the ah-ha moments again. Said it for years, you always feel better after a deep review sesh. Lets get to work.