new thinking on taking profits

 I'm moving away from the 20% p/l target. And I'm moving away from taking off half at the first target. 

My trouble has persistently been that big losing days take a bite out of my progress.

New thinking: I need to keep my same loss controls, and build confidence to ride gains longer. I simply need more gains!

Today's approach was smaller size, and go a little farther otm for easier holds, smaller loss potential, bigger gains for successful moves. Today there was a power move on the open that helped me a lot. So I will continue to monitor over time how this is going.

Stellar day!

picture of a bottom

Picture perfect anatomy of a bottom

harnessing that mindset?

Market opens down again. So oversold I think anything could trigger a face ripping rocket launch. Yet, lots of weakness around the open.

My pick, META for a ST level breakdown. 

Entry after pop to resistance and drop. Again I didn't wait for level to develop enough, but in the subsequent minutes it held ok. 

Management. Initial stop ndh, quickly reduced to the level just above my entry. In a few minutes it flushed. I didn't grab the stall, and it rose all the way back. Continued down, but didn't quite make it to my T1 or pltgt. When it stalled down there I though to grab some off, but reduced my stop instead...only to yank it and then actually get my face ripped off. A +15% went -30. I felt all the points along the way I "should have" stopped. First fatal flaw is always yanking the stop. Why!? I can re-enter if it sets up again. Why am I arrogant like that? 

Knowing I was on the wrong side of META, I started a long even before the short stopped. Got a nice winner on the starter and a loss on the add. 

Then the RISK MANAGER arrives. I want to trade again. I allocate myself the minimal increment more money and get myself another META long. It chops and chops. Meanwhile, it looks like the market is going to roll over. I squeeze the stop on the META calls.

...and also the risk manager allocates another chunk and I open a concurrent SPY short via 0dte (not even 1dte???) puts. This is a bit of a desperate kind of trade, obv. BH it made my day.

PSYCHOLOGY

1. As always, I like the system of allocating money to myself for additional trading vs leaving it all sit there. Guardrail against bingeing.

2. I wish ruthless-trader will always show up! Shrewd entries. Tight stops. Sync'ed with the market. I should name her and try to invoke her. Where was she when lackadaisical-trader yanked the stop from META?

weekend update

Market has been "on de face!" Really bad, very strong down. The trading has been great, lots of strong trend days, but the trend is down and lots of pain out there.

My account is near a new big round number and I think I'm mentally struggling against it again. I hope this week I'll be able to cross and keep it.

Some charts. 

SPY 1 year, daily

SPY 5 year, weekly

Tonight I looked through the charts of each of the SP500 stocks. There's a lot of wreckage. Market trend is inarguably down.

behaviors to notice, not just greed

Today a red day, ending an 8 day win streak. Today I lost less than 1%, after having been up 5%. Regrettable, but not bad. I was pushing for market reverse down day today. Pushed too hard. Pushing too hard I recognize is a sign of overconfidence. It backfires. Need to always trade clockwork and don't get too cute. Pushing for more than my piece is a red flag.

$STUDY: in counter-trend trading, don't push. Take what I get. 

It's pretty arrogant to think that a strong market will suddenly fall apart. Take what I get.

Psychology: I was feeling super-confident and doing some behaviors that I recognize as over-confidence. Ex: reading too many trading posts, watching too many trading videos, something I call "counting my money". For some reason I've noticed that when I do these slightly "obsessive" behaviors usually in context of a win streak, it's an over-confidence indicator about myself and I'm about to fall on my face. I even said to myself this morning "this is how I act when I usually break the streak." But I didn't do enough to stop myself.

Opening trade on GME, I let 30% turn into 9% bc greed. 

Second trade on GME, counter-trend, I didn't take a reduced stop bc the p/l wasn't good enough = greed.

AMD, traded around that one all morning (on nms?!!), hoping for destruction that didn't come (of course!). Got a price target but not a p/l target on partial, then didn't tighten down when I got another chance.

Note to self: I can't just trade whatever I want. I need to trade MY setups. That's how I make MY money. Clockwork.

death by COIN

What the heck, self!!?

Opening trade, RUN was ok, in that I had a great setup and got my piece.

Then I got all bunged up in COIN. Totally lost my head. Looking back, I don't think I even really had a plan on the daily chart... should have been: avoid!

First of all, despite the gap, it was trading INSIDE previous day. That means I never should have touched it in the first place. 

AND have I not learned over and over to gauge it around the VWAP?!

I'm not sure I can even explain what drew me to the short, except the gap down open. The inside gap should have just invalidated it, but I got greedy and imagined destruction below. Instead I got destruction on self! Initial short was somehow failure to move up. Was my initial stop too tight? Could I have gotten out green on that short if I held in? But then I reversed long, also viewing stronger green volume bars on 1 min. But I didn't hang in for the long either. 

With a little bit of money left (another situation where I'm likely to give too much room... the last ditch flyer), I took a farther otm put and then gave it room bc the delta was so small. Then another FATAL FLAW I got too cute and kept moving my stop out, ultimately stopping close to top tick... bc that is literally the punishment for yanking stops--I get out at the worst tick.

Red day. I deserved it. I did not trade like clockwork today. $STUDY

Closing February +85%, but it really coulda'shoulda been more. 

Fast Friday

Do I dare to trade on a Friday? Only if I'm willing to trade small, and with tight stops.

Today's trade is precarious, will the market hold onto the highs of yesterday's extreme run up, in context of a downtrend, and below the 5dma?! In the sense that the mkt was way oversold, maybe. In the sense that some levels need to be retested, maybe not.

Rule of the day, don't give room! Do it right away or get the blast out.

SQ paid out of the gate. Ran through my 20% pl target before I even got the order in so BH I grabbed even more. Tried it again later for vwap bounce, that didn't work.

UPST was on gap screener, but I don't see the gap on the chart. Maybe this is a function of a stock that trades such huge ranges, a 2% gap is barely visible. $STUDY. Consider if I need a bigger gap on a bigger ranging stock. Stock is spready, option is spready. Can't give room! Tried the long above VWAP but it failed and I bailed! Reversed for short and (greed!!) aimed for 40% pl, which I got (39% counts bc trading increments). Then it didn't follow through and spread widened to almost $2 on a $5 option so I had to get what I could with a market order (while watching lvl2). Lucky I hit +/- mid and did ok. [Update, thinking about this more later in the day, when I see that it's run back up, this could be another case of a "pull back more than I think" it should.]

And then get out of here! Opening setups are played out, I got my piece--today with a great deal of "luck"--and I'm shutting it down.

+13% week. I wish for 20%+, but won't knock this at all. Won't get rich quick, but might get rich slow.

Ba-BAM!!

Stellar trading day today. Waiting for entries with lvl2. Tight stop is the right stop. Pay myself first. 

2 trades, but also showing one I passed on.

DDOG is a wild mover, but making a great gap this morning to downtrend resistance. Need to let it prove itself first, develop a level to stop against, not just a bar to stop against ($STUDY). Trade was volatile and option spread was really volatile so took only the smallest position. Need to get out with limit order on this, so when it started stalling, I put a reasonable limit in and filled pretty quickly. BH

DIS big gap up, back above a daily level I watched before. Opening low pennant that I tried to short. Stopped on 2 bar reversal and ...if I've learned anything... that's a reversal pattern: bullish setup looks like it's going to fail, but instead it flushes and comes back. Failed intraday breakdown on a bullish daily setup... go long! Grabbed the long and again, when it starts stalling, yank. 

Zigs no zags! Hit and run was definitely the trade of the day today. So much sheket nafshi to lock gains and go have a day. 

After DDOG I even debated quitting then with such nice gain. Definitely "old me" DIS initial loss would have triggered me to tilt. But knowing that about myself, after DDOG huge win, all future positions are small, timing, tight.

This is one I passed on MAT. Daily breakout above long term box. It ran up then really narrow range above vwap. The option spread was pretty big, and it's already up close to 10%. How much does it have left in it? Watched lvl2 and didn't look like there was a play there for me, esp the way tight ranges like that are prone to spike. Glad I avoided.

Need to YANK profits off in volatility

Volatility burns me again. I used my average tolerance stops and got chopped. Net red day. I HATE red days. Need to keep those profits.

Something else I did wrong today was only trading what's in front of me. I had about 10 picks today, but only put 3 on the birdeye. In the end, I traded FB and SNAP bc they were on the birdeye, but never went back to sort through the other picks.

In high volatility, I need to grab fast on surges or give tons of room for stops (extra tight or extra loose). I know that my personality prefers to take the fast gains, even if I will miss the bigger gains. Enduring a big pullback is too hard for me. ZIGS NO ZAGS.

So today, I didn't yank SNAP on the first surge. Tried a really late short (which was my initial thought based on premkt). If I wanted short, I should have shorted the top reversal. If I wanted long, I should have yanked some on that power surge. Then I got stopped on my second calls before vwap bounce and the real move came in. I was watching SPY. SPY daily had made a pivot lower-high so all longs are to be doubted (another clue I should yank longs on surges $STUDY). SPY intraday was pulling back off resistance. That should have told me to yank my longs. ZIGS NO ZAGS.

FB, "courageous entry"--I'm such a hero LOL--off the 2 bar reversal bottom. I got half off nicely on the surge, lesson learned for now (see SNAP), but the add (bought higher) went out for a loss on the stop.

up down + down up day

When will I learn how to identify these days? Need to go back and $STUDY. 

Red day today on SBUX. Market strong up into resistance. Gap up scan, best tickers into resistance, so I looked for weakness. SBUX gap down below minor levels. Spread was ok when I got in, but widened after. Small position size by default, but ugh! Couldn't find anything that made sense to me after that so wrapped it.

Good news is I cut the loss. Tight stop is the right stop!! Look how much trouble I would have been in if I tried to hold!

Lehavdil... 2 tickers I watched for longs on gaps up FB and AMD... both down.

Thoughts about stops. Being ruthless.

One kind of stop I use is a "take profit" stop, where I'm squeezing up a trailing stop to give another smidge of room but trying to lock profits. I feel good about my take profit stop technique. Maybe this is obvious, because if I'm using this, I'm at a win. 

Another kind of stop I use is a "broken trade" stop, where I want to take off a trade that is not behaving right, trend is broken, probable case not playing out. I need to work on my broken trade stop loss technique and discipline. I need to make some firmer definition about where to place these, and definitely need to develop a feeling of relief when the stops hit and not a feeling of dread. 

A strong interfering emotion is greed. I want every penny out of a trade. Never want to eat a spread. And other fantasy-land trading.

First thought. If I'm in too big or if the spreads are too big, I am hesitant about stops, exactly when I need them most. This is the basis for clockwork trading rule #1, small size. Small size makes all decisions easier because small size carries less emotion. Lesson here is that size affects my stop discipline. Some ideas around this are - trade small size. take partial stops. remember clockwork and be a responsible trader.

I need to stop my silly game of stop/limit orders. If I need to get out, then get OUT and use that market order. If I want to get cute with limits, then take targets. Stop limit orders confuse the emotions.

Something else to consider, and I've known this for a long time, if I'm drawing trendlines all over the chart... I'm probably in a bad trade. Good trades GO. Bad trades waste my time, if not also my money. Cut the bad trades and move on!

Here's what the greed trap does to me in terms of stops... I keep trying to give it one more level, and just one more level. But by then my stop technique is no longer appropriate. This is the basis for clockwork trading rule #2, tight stop is the right stop. Disobeying this gets me into more trouble than any other rule-break. This is the concept of keep losses small. Just keep the losses small, and the winners will add up.

Reassure myself: I have a good win/loss record. Go ahead and take those small losers. They will seem insignificant in the rear view. 

THE TREND. Always assess the trend I'm trading. Look left. If the trend I'm trading is broken, I need to be absolutely ruthless. 

Contingencies. Agressive vs slower markets. How not to lose my pants.

I know what to do when it goes my way: Take off half at +20%, trail stop on the rest.

I know what to do when it goes instantly against me: Eat it at initial stop. 

What do I do in between? This is I think where I suffer. I skim, I add, I get chopped up. I need to think about how to handle this.

Today another struggle day. Up was down (long setups didn't follow through) and down was up (gappers down were bought hard). Let's think about what that means... profit taking? sustained profit taking? How do I know? How do I trade it? Smaller size? Quicker targets? 

I think the answer here is smaller size and flexible targets.

Smaller gives less emotion. 

If I've lately been going 1.5-2x size for aggressive. Need to drop back to 1x size or smaller.

Watch the volume. Watch the Level 2.

Stick to only the most liquid options so I can hold my levels.

If my trade is stalling at 15%, maybe I should take that vs press for 20% pl tgt, especially in chop. Stops are not a good solution, as I can't always eat the spread. Also psychologically, I don't want to always go out on the worst scenario.

Say something to myself like, this is no longer trending, or, this is not the trend I was looking for. ...and find my way out of the trade. But still, when to give up, and when to hang in? Volume. Level 2. Watch the indexes and other movers.

Introspection on losing streak

I'm not sure what happened. I don't know how it started. I don't know what I did to end it, but I feel like I have my mojo back. Now I hope I can restore my account! I got hurt pretty bad. 

Maybe I have a certain comfort zone with account size. When I've gotten about 2-3x that size, I have blown out more than once. As much as it seems like I should just be able to scale and scale, I think I get emotional. Maybe my comfort zone is 1/3 or 1/2 that big $number. Maybe I should skim off gains and trade solidly and consistently in that comfort zone. It seems like that's less growth potential, but actually, it will perhaps just be steady gains vs exponential rise and precipitous fall. 

How do I keep trading sane like this? How do I pull in and STOP! when it's not working instead of getting all crazy? I think there was a video I once liked on this topic. I need to find it. Maybe the gist of it was: a loss sucks, but I can generally make it up in a few days (if not the very next day!). And there's going to be days like that. But if I let it go nuts, it's going to take a much longer time to repair. 

My number 1 job should be to keep losses under control by stopping!

I'm going to post for now, but this is a topic I definitely need to continue to ponder, examine, expand on.

UPDATE. I reviewed July and Aug entries, taking notes and processing. Attached.

Pretty good article about losing streaks. Not losing more than an avg daily gain, regaining confidence in a demo account.

Descending spiral

Today I am grateful. I took home some calls that I stupidly held overnight. I got rescued from them. Didn't even try to optimize it. Just lucky to get out of wide spread, low volume, tomorrow expiration stupid calls without losing my pants. So I got out for +3% in the first minute and I'm happy as a clam. Whatever happens after that, was not my money. I'm not even going to look back. Today, luck wins.

Then I had 2 more winners in MU puts and NVDA calls. I caught the move and didn't stick around when both reversed hard. That's how I want to trade! In and out.

BUT, I am still in the throes of a terrible descending spiral in my account. I have moved a lot of cash out of my trading account to slow myself down and keep powder dry, so I'm comforted by that, but why do I keep trading like an ass?

I need to follow CLOCKWORK TRADING rules: small size; tight stops; pay myself first. 

What is my major malfunction? I freak out over losing trades. Literally lose my mind! I think my main defense against this needs to be the tenants of clockwork trading.

• Small size keeps losers small
• Tight stops keeps losers small
• Pay myself first ensures I can lock in some profits

I might also add: trade only the most liquid options; trade only the opening move. If I'm not done before 10, something is wrong. 

I think I need to do some research about how to not freak out over losers. Not revenge trade and all the other crap. 

Notes to myself as a beginner

What I wish I could have said to myself as a novice trader...

Amateur day trading is like amateur surgery.
You would never put your well-being in the hands of an amateur untrained surgeon. Would you give your money to an amateur untrained trader to trade for you?
Guess what, you're that untrained trader.

You need an education. You need practice to absorb the education.
(And you're still going to lose money at first.)

Never trade with money you can't afford to lose, and there is a very real chance you could (will?) lose ALL of it.
I say this not just because you really could lose it all (ALL!), but also because if you are scared to lose money you will not trade well. You are going to lose money at first. Everyone pays tuition to the market, so minimize it by getting an education and wading in slowly. 

If you need to get rich quick, this is not your gig.

Draw from all educational resources: books, YouTube, classes, mentors... Flood yourself with information and ideas. Start to pick out what resonates with you, and pursue more of that. Before buying a course, get an introductory education and try to figure out what style suits you. Trading penny stocks is different from big caps is different from trading options.

An education should include:

Intro to technical analysis. Learning how to read charts
How to read a candlestick chart, including price and volume
Support/resistance
Trends, trendlines, moving averages
Multi-timeframe analysis
Screening
Setups

Intro to trade management. Distinct from technical analysis
Opening an account. Brokers, fees, cash vs margin
Familiarity with your trading platform and tools like screeners
Picking what to trade
Techniques for entering (how/when to place orders)
Techniques for managing the trade (stops, targets, adding/trimming)

Intro to psychology
Developing a style
Understanding your tolerances, greed and fear
Defiining and obeying max loss tolerances
Developing self-discipline
Figuring out what you're good/bad at


Looking back, I realize how much of an education I have acquired at this point. To facilitate learning, especially in the midst of active trading, I can't emphasize enough how important it is to debrief, introspect, analyze, and journal every day. Develop a manageable journaling technique that helps you reveal your weaknesses and hone your skills.

I would tell my novice self to go slower. 

Grow agonizingly slowly, vs through painful losses. Losses are part of trading. Newbie losses can devastate you before you can make it. Trading is not a get rich quickly scheme. It may be a get rich slowly scheme, but not if you go broke quickly.
Protect capital. Use stops. Live to trade another day.