The time that I allow myself to be upset with me is when I do not follow my plan which is kin to loosing discipline.

This month (Nov.)  has been a very difficult month to trade in my opinion. To date there has been really only one trending day. Now there were two additional days that I will identify as quasi-trending days as they did not meet the typical criteria for a nice, smooth trend in OF or they started out in a definate trend, but then transformed into a range bound day.

For Debbie, months like this are very difficult for two reasons: (1) range bound conditions prevail; (2) when Debbie finally gets a trending day, all she can think about is what “was” for the past 8 days.

Now, the positive on today was that despite difficult conditions there was money to be made in specific stocks. Debbie had a plan for HIG if it trended. She took a hit trying to get in on the OR break but the hit was not a big one. Finall, she got the right price where risk could be managed and if follow through continued then the potential reward was great.

what happened next was, Debbie got spooked out of the position because HIG was moving contrary to the bias of the order flow from the open and the vix was not really making one have confidence in long positions. She took a loss.

HIG went on to move higher until about 11:45 ish. with a profit ptential of somewhere around .70 cents. Debbie spent the rest of the time trying to get back in and continued to take small losses which added up. Once HIG was not working Debbie switched stocks and made the situation worse.

Debbie is upset with herself, as a trader, for two reasons: (1) she did not stick with her plan;  and (2) she fell into an old pattern of trying to make losses back and, as a result, lost perspective on what was happening in the markets and on the stock charts.

The result  of the two above problems are Debbie overtraded and Debbie took an unnessasary negative hit on the P/L today.

The only way solve  reoccurring challenges, or any challenge to ones progress at all,  is to create a rule for the challenge and, more importantly, follow the rule in order to extinguish the problem.

here is what I am doing tonight.

First, I will write these two problems out a a sheet of paper, crumble them up, throw them away, and they will be gone forever. Second, tonight will be spent revising my trading plan and adding a couple more rules.

Profitable Trading ALL!

Debbie, EdD, MAED, BSED

The ten secrets were listed as the following (sited from Investors Business Daily) and I have related each one to daytrading:

1. How you think is everything.

• In day trading where the majority are not succcessful (based on current statistical data), it is necassary to approach the task of learning to master the markets with the correct thinking that is anchored in the positive. Part of our thinking has to be graounded in realistic expectations, an attitude that demands winning, and an “I can do” mantality no matter what happens in any given moment at any given point in time.

2.  Decide on your true dreams and goals.

• Basically if you don’t know where you want to be and how you are going to get there then no one else can help you to get there. In trading, more so than any other profession, it is important to be specific in your overall dream and then break down goals into small steps that lead to bigger steps.

3. Take action.

• Nothing needs to be said here. Other than the road to hell is paved with good intentions.

4. Never stop learning.

• This is very important to trading. The learning componant never stops and unless one is willing to put in 12-15 hour days invested in his/her learning then being successful is unlikely.

5. Be persistant and work hard.

• More so than any other profession one must refuse to accept failure as an option in trading. And, then of course, be willinjg to do whatever it takes to achieve success in trading.

6. Learn to analyze details.

• Details in trading take us to the next level.

7. Focus your time and money.

• Like any business trading takes time and money. Invest both wisely and expect that you must do this. You will always need to put forth more time and more money to get better. A good business plan factors in these items as a part of the overall budget.

8. Don’t be afraid to innovate; be different.

• Someone else can give you everything they did to be successful but you won’t taste success until you make it your own and put your own twist on it.

9. Deal and communicate with people effectively.

• The best trading is not done in isolation. We also get more out of mentoring and interaction from peers when we can be great communicators.

10. Be honest and dependable; take responsibility.

• The key word here is really responsibility. We must take responsibility for our learning, actions, failures etc. That is the only way to see truthfully where we are in out trading, where we want to be, what we are doign that is not working, what is working, and what we need to change. Also, being dependable and reliable feeds into letting others know that you are worth them helping you. If you function “under the radar” noone knows how dedicated  and serious you really are.

In addition to the 10 success secrets outlined in Investors Business Daily, there was an article about Art Rooney right next to those success secrets. Art Rooney was quoted as saying,

One thing I learned from experience:

You are a genius when you win and plain dumb when you lose. Believe me, a fine line seperates the two.

I believe that balancing on that fine line by  implementing some form of the above 10 secrets  is the key to being a ”genius” and not a “dummy”.

Profitable Trading All

Debbie, EdD, MAED, BSED 

The movie was 2012. A movie about the end of the world and the preservation of the human race. the entire movie is filled with moments of natural disasters, crashing buildings, people meeting their end, and people who are trying to survive and perserve the human race.

Amongst the mass destruction where the south pole becomes located someplace in Wisconsin, it is not surprising that religion comes into play. Once scene includes a wise old monk speaking with a young monk who obviously has not attained the wisdom of the old man. As they are speaking the wise old man pours a cup of brown tea until it is overflowing. The young monk tells him to stop as the cup is overflowing. The old man stops pouring and explains,

 ”like this cup a man’s mind is overflowing with opinions and speculation.

You must empty  the cup in order to fill it with wisdom”

and the old man turned the cup over and emptied it. What, might you ask does this have to do with trading?

One great challenge that I believe developing traders struggle with is having opinions and allowing their minds to speculate concerning market behavior. In successful trading, there is NO….room…..NONE for opinions and specualtion. This came to my mind becasue I realized that many times I fall into thisn trap without even realizing it. It leads to frustration, disappointmentm and and overall feeling of failure.

What are some of the things that we say and do that show our lack of wisdom concerning market behavior.

1. We say things like, ” I am of the opinion”, “I think that”, “I believe that”….”It should do ..”.

2. We try to guess where the pull back will end instead of watching it, being in tune with it, and shutting out the signals that will show us it has ended.

3. We can’t adjust to changing conditions.

The bottom line is the market always does what it will. In order for us to exploit opportunities that unfold in market price action, we need to empty our minds of all opinions and speculations and gain the wisdom to see what is unfolding in front of us on the screen in this moment at  this particular time.

Profitable trading all!

Debbie, EdD, MAED, BSED

One very important thing that a developing trader needs to be able to identify is when to pull back and just simply refocus. My criteria for knowing when I need to pull back and refocus are:

1. More loosing trades within a day than is my normal or average and more days that this happens.

2. Being engilfed in the feeling that others are making money and I am not.

3. Trading a trending day like a range bound day.

4. Being nervous about positions.

5. Skipping from chart to chart.

6. Knowing what should happen and then  rarely seeing it unfold in comparison to a good month.

7. Feelings of frustration that sounds like, “This worked before why not now?”

8. Feeling like you just want to kick your dog for no apparant reason (of course not really doing it).

9. Noticing that a  trend seems like a long lost friend who abandoned you and you are left empty asking why. 

10. Your P/L leaves much to be desired and you know that there is no reason, except for yourself, that your P/L is what it is. Basically you are left feeling disappointed in yourself.

What is important, once one knows that all the criteria for a difficult month are staring one right in the face, is that one recognizes and does the following…….

PULLS BACK  & REFOCUSES

I have come to realize that when the top ten items happen, which used to be devastating to this developing trader,  I simply pullback and refocus by doing the following. As these have become a part of my plan. Pulling back, to me, means….

 1. Going back to a lot of watching and sitting on my hands in wait for a trending day and/or a trending stock when most all variables (that make a great trading day) add up. For example, extreme tick readings, trending vix, momentum in the direction of the trend in market and stock, all indices making higher highs or lower lows, nice volume, and orderflow that just screams “find a spot to enter you dummy”.

2. It also means focusing a lot on my “pet” stock  and perhaps trading it exclusively.  This way I am able to capture momentum moves on range bound days.

3. It means having an intense  focus on finding “the”  move when it decides to happen and capitalizing on it with the appropriate share size.

4. It measn that my  average  total volume of shares  traded on a day or in a week is  cut way down.

All of the above helps this developing trader to refocus and capitalize on what little the market has to give at times or in times when the market seems a little Bi Polar and is basically difficult to read much of the time.

Profitable Trading ALL!

So if you are having a hard time this month pullback and refocus:)

Debbie

Simple Concept But Important

Profitable Trading All!!

Debbie

Even when one knows what to do and how to do it and knows that he/she can be profitable, there are demons that always show there ugly faces. The following are two that I have been fighting lately.

1. Overtrading as a result of not realizing soon enough the type of day it is.

This is specifically a result of misreading or being out of sync with what is actually unfolding in front of you.

2. Being the first mouse to get the cheese instead of waiting to be the second mouse.

In life we are taught to be the first to make sure that we get our needs met. In primary school all children fight to be first in line. In big families at dinner time if you don’t get what you want on your plate first then you get the leftn overs. However, in trading its the totally opposite. The first “mouse” gets slaughtered and the second “mouse” gets the best entry and capitalizes on a move that unfolds.

Profitable Trading All!!

Debbie

As is always the case, Debbie looks back at the charts for answers. In this case the SPY tells the whole story.

Monday (2nd): Spy opens strong, takes out opening range,  turns and sells off breaking previous day’s lows, loses its mojo down, and bounces back up and trades in the daily range from around 1:00 PM ON.

Tuesday (3rd): Spy opens in the middle of the previus day’s range.  The days price action  starts, remains, and finishes inside the day’s price action which was inside the previous day’s price action.

Wed (4th): Spy gaps up (above the previous day’s price action and trades in its daily range all day and then gets wild and crazy due to FOMC announcement. But despite announcement price action remains inside the day’s range.

Thurs, (5th): Spy opens strong, breaks out of opening range, trades sideways from 10:45 till the end of day making highs by a few cents at best and then pulling riught back into the days range. At 3:45 ish the Spy took out its high of day and closed close to it.

So, basically we have been range bound and even when there is movement such as in yesterday it certainly cannot be considered clean price action.

The bottom line is much of the opportunity presented this week has been stock specific and/or available but whippy.

If a trader kept losses small or has small gains then I would consider that a success.

Where should our focus be?

We need to keep focused on the important thing which is ….

With all of this challenging price action presented this week there is surly some  nice, smooth, methodical price action is right around the corner . Our job is to keep things tight until then and then kill it when we get it!!

Profitable trading all!

Debbie

SIMPLICITY

Specifically, this first week of November 2009, has been rocky. As a developing trader I feel a little pushed around and a bit dizzy from all the up and down movement and mixed messages in direction.

The first day of November I traded well, followed by the second day where Debbie put on a few good  trades that did not follow through and a couple more that she got a little stubborn with, followed by today where Debbie took some heat, fought back, and ended the day with a little scrape.

While doing my homework, I realized that each day there has been opportunity and Debbie has been looking so hard for the opportunity while being afraid she’ll miss it and trying to make sure to check that all “things” line up for the almost perfect trade that when the actual opportunity arises Debbie is either late to the party or misses it all together.

The example today was HIG. Debbie got pieces of it but not what she should because she was late to the party.

The only thing that anyone would need to identify that HIG was the place to be short today is big, red, candles.

 As long as someone knew Red+Candles=Sell and keep selling as long as the candles remain big and red then that someone would have made their month in P/L today.

The point here:

Keep things real simple so that opportunity does not pass you by. Sometimes it really is as simple as

 RED+CANDLES=SELL, SELL, SELL

Profitable trading all!

Debbie

Testing the “waters” with small share size and quick fingers on the keys allows me to be able to know if my trading idea is still good. I have found that when it finally works out, I can see it and know that the right time has come to get in with some size and capitalize on the move.

Profitable trading all!!

Debbie