All eyes on TSLA

TSLA was the only trade I loved today. I love that daily pattern for a continuation up. Lots of eyes on TSLA. Wanted the followthrough today.

Started by watching intraday levels. I don't mind the few losses I took on starters. I was pre-empting, so starters are the way to go. In retrospect, it seems silly to have tried the puts, but it briefly seemed like TSLA was going to reject vs break the level I wanted. 

Finally TSLA (and the market) started to firm up and I was able to get a good add. I also went farther otm (much smaller/lotto) in case I could get a real flier today. 

When it finally did the beauty run I was hesitant to take targets, especially after the initial losses. Wanted redemption of losses. Wanted 🤑, but I must capture the bread and butter even if I'm still in the red, so I took that pl target. Each trade must be managed on its own, and not in light of what other trades did to me. Also pained me to take that second (squeezed) stop, but that is clockwork and clockwork works. Follow the rules!
I still had the flier in case of launch, but even without the lottos I was back in green at that point with just simple clockwork.

More proof I must stick with clockwork, is how I exited on the downside. Everything I was watching inexplicably topped around 10:25. SPY never even made ndh which is a yellow light on breakouts. I skimmed out of the flier (130 calls) position on the other side. I hated every moment of selling because I dreamed of 128 and 135 targets, but after the fact, as it continued even more downward, I'm glad to be out.

LESSON - The ~66% gains on the otm options were the same approximate dollar gain as the ~20% gains on the atm options because of the difference in cost. Yes I had to deploy more capital for the gains on the atms, but also otms are more likely to dissolve in my hands vs get these gains.
Example:
123C : cost 3.18 : 20% gain=$64 each
130C : cost 1.02 : 66% gain=$67 each

I have studied this before and concluded it is generally better for me to stay at the money. Even though I can get more contracts otm, the position loses value faster in absence of a big move. Losers are bigger, but winners aren't necessarily bigger. Otm is only good for a lotto type play, small size that I could lose entirely, and needing a really big move to get the payoff. It is not psychologically good for me to be always trading on lotto for the same reason it's not good for me to imagine every trade is a homerun.

Please just stick with clockwork. This is a great example of listening to what IS happening and making a great day after of initial losses. If I had held against hope, that is wishing. Trading is not wishing. Consistent profitability is following the rules like clockwork and getting MY money.

Whatever happens next is not my trade. I made good money today., Closed all exposure by 10:35am. Now I go have a great day doing other things with my gains locked in. That's also clockwork trading: grab my money and go have a day, sleep well at night. Don't sweat the market all day and night.

****

Over an hour later, if I was still in this, I would be sweating and obsessing. But instead, I've had a nice morning of journaling, logging, and chatting with trading buddies.

picture of a bottom

Picture perfect anatomy of a bottom

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.

Waste of money. -6% for no good reason in NFLX both ways.

No great setups this morning. I should have walked away. Instead I put my eye on NFLX and burned 7% messing around in there. Puts didn't fill. Calls over puts, then the puts stopped, calls didn't fill. Nothing worked out great and MOST OF ALL I WAS IN TOO BIG. Puts again but I didn't take profits bc I wished to save my day. Textbook mistakes. Expensive mistakes.

Later, I went for tomorrow puts in SPY. I traded scared bc I was already down. First exit was ok, but I should have held on for my target and beyond, which it reached an hour later. UGH

NFLX

SPY

Pay myself first. +6% day. Clockwork.

I should come back to this post over and over. and not forget this lesson. Even if this turns out to be a big day, I should never regret taking my piece. What an excellent hourly rate to make 6% on my account in 35 minutes!

I love how I traded today. I didn't really love any of my picks before the open, but I like this method of clockwork trading

- small positions

- PAY MYSELF FIRST

- tight stop is the right stop

As my account grows, it seemed counter intuitive to take small positions, take off half+ on easy (12%, is that so easy?!) targets, and use tight stops. It seemed like I would leave so much on the table. But you know what... so what? I was having a hard time making (keeping) money using other methods. This way is low emotions, and the small gains add up especially when the losses are small/none. PEACE

TSN

Gap down. Initial entry after surge, watching premarket levels esp 9:29 surge bar. Took off first trade on target and stop. I missed the precise entry when it moved again, but waited for a micro pause and watched lvl2. First exit when it stalled before my p/l target. Then trailed/squeezed stop on the rest.

BA

Gap down. Short failure to bounce. Exit on tightened stop, without reaching target.
This is the best example of the tight stop is the right stop.

BILI

Gap up against red bar. Spread was wide and it stalled at/without filling my p/l target so I yanked it all. I missed the money on this trade, but I do not regret that I stayed sane and didn't have to wait out a loss. 

AAPL

When the market bounced off the bottom, AAPL went bonkers. I refrained from grabbing a runaway train, waited for p/b which was vwap bounce in this case. This pos was big-ish bc expensive options. Trailed stop as it dallied under p/l target but hit eventually. Then trailed/squeezed. G-d I love how I traded today!!

MU beauty +31%

Trade my best setups or PASS.
WAIT for pivots to stop against.
Take MY PIECE. Peace.

Daily setup: gap up
Entry/play: very strong open, buy above 1st 1min candle
Management: Initial stop below 1 min candle. Price target, then trailed/squeezed
Psychology: Good. Dropped hard after my final piece and I'm glad to not ride those...even if it went bonkers higher after that, I got PEACE.

Musing about stock drama

What I'm looking to trade is a 1 minute surge. Drama!
I want to be in and out fast, and within the opening ~30 minutes of trade. So I'm looking for stocks that are going to make a profit-worthy surge out of the open.
Which stocks might move like that?
Something with a catalyst. This is showing that there is a "rationale" that people are reacting to.
Something opening out of a range. This is showing that something significantly different is happening. These stocks might dump quickly. I can't jump on those trains. I need a rational pivot. Or pass.
What constitutes a pivot? If the stock gaps down, I want to see a temporary move up. Not just dump. I want to see the shorts cover, then buying exhaust, then I'm in for the renewed selling.
Opposite for gap up. I want to see temporary move down. Not moon launch. I want profit takers to get out, selling exhausts. Then I'm in with new buyers.
What constitutes "drama"?
Today I thought the market gapping down against/below strong bull bar was sufficient drama. But yesterday's strong bull bar was all time high. So maybe gap down below all time high isn't sufficiently scary for drama.

Happy New Year 2020

This year my trading vision will be 2020. Cliche of the year, but it is my goal.

I want this to be the year that I solidify my skills into a top profiting trading year, using good form and healthy psychology.

How?

Trade my best setups or PASS. (good form)

WAIT for pivots to stop against. (good form)

Take MY PIECE. Peace. (healthy psychology)

DIS +45% textbook

Daily setup: gap above flag
Entry/play: long after pivot
Management: trail stop, tightening near target. Exited on tight stop, then on raised/tightened stop.
Psychology: Good. Textbook beautiful trade.

Remedies to failures

I respond better to cues about what TO do, vs what NOT to do.
So I have reframed today's failures into remedies.

Failure	Remedy
DONT TRADE FRIDAYS.	Take Fridays OFF
I arrived late. Trades starting at 1030 are by definition NMS	Only trade my setup. My setups are on the open. Only trade opens.
Don't trade today's expiration	Fridays are DAY OFF.
Positions too big	Trade reasonable size, to stay rational
Yanking stops	Stops are for safety
Swearing	Reduce size to reduce emotions
Hoping for luck to save me	Proper pivots, proper entries, proper stops
Forfeiting my day to the market	I like trading fast and having my day.
Money burning a hole in my pocket	Cash is safety
Not walking away after first small loser	After a loser, go SMALLER, not bigger.
Revenge trading	Trade only my setup, or walk away.

MSFT +40%. Study this textbook trade

Daily setup: Multi-week box breakout, so near all time highs
Entry/play: 1 min new high
Management: Initial stop below day low, quickly moved to below entry bar. First half on p/l target. Second half on squeezed up stop.
Psychology: Smooth as butter! When I trade my setup, my rules all work. This is how it's done!

For reference, the daily chart:

BUD +18% really lonely trade

Daily setup: Gap above box
Entry/play: new 1 min high
Management: initial stop below day low. Take half at p/l target. Then I realized I'm LITERALLY the only one in the trade. I bought 2, sold 1, and day volume was 3. So I squeezed stop hard.
Psychology: OK. This is my textbook setup. It behaved as I expected, except for low volume. I like how I traded it, even if it was small position, small $ gain, it was a decent % gain and that's how I need to trade.
Immediately after I sold, there was some news that spiked the whole market, but it didn't run to my target.

MU textbook 1 min trade +23% in 7 min

Daily setup: Gap above high flag
Entry/play: Trade above opening minute bar, using NEXT week calls.
Management: Initial stop below day low. Quickly move up to someplace more comfortable. Initial profit target 20%. Bracket order didn't execute like I expected, so I deleted and manual entered. Then squeezed stop on the rest.
Psychology: Beautiful. Strong opening move, I jumped on, got my piece. And peace. Now I have the rest of my day to be productive.

DKS total disaster trade. LEARN. So many lessons

How I wrecked this trade... let me count the ways
Daily setup: gap, earnings
Entry/play: bottom picker. don't do this.
Management/Psychology:

So much went wrong
First of ALL, after jwn trade, I was nicely up. Considered walking away on such a nice day. But F*!
Next, I looked at my picks, and jwn was gap and go. Others were gap and fade. I considered waiting for jwn to set up again, but instead got "too cute" and tried to pick bottom on dks.
Then dks had too-wide spreads, so I was scared to do a stop/market. Should have passed in the first place bc spreads. (do math: 5 calls with 15-20c spread I could lose $100 just on spread)
Then I yanked my stop on dks bc spread. Didn't even try to take the ask.
Then I did take 2/5 off for -26% on those 2.
Then I didn't take break even limit. ("It's going well now, I should just ride it". Mistake.)
Then I didn't take stop/limit
Then it went to new lows and I didn't yank it.
All this time the market is dropping out straight down.
Despair. Psychological damage. Account damage.
Set orders and walked away. Trade in progress.
"Hope" is a 4 letter word.



Meanwhile, JWN ndh... I backed the wrong horse and kept riding. F*!
I'm so deep into this (11am, down 71%) that I am having trouble managing the trade. I feel like I can't stop the 3 calls I still have bc it's down so much. But there's still $90 there. Not nothing. F*!!! 11:09 market bouncing, finally. Please take DKS up with you!

I need to bring this one to the top of my trade reminders list:
ALWAYS TAKE STOPS

Almost every time I yank a stop I regret it. Just don't do it. I'd rather have the opposite: regret the minority of times it doesn't save my butt.

AMD amazing uptrend +90%

I looooove this trade. It did exactly what it was supposed to do.
Watchlist stock, up 8% open. I waited.
Opening bar. Pause. Slight ndh, then it sold off. Familiar pattern lately. I passed.
Pullback tested day low. Hammered. Paused. I watched the level2 for an entry.
Initial stop half below the 3-min pause.
Total stop below day low. Looking to move that up quickly.
Market also strong uptrend in progress intraday.
Trailed/stairstepped stop during beautiful trend.
Half off at position p/l target. No regrets, bc it helped me stay calm during that 10:00 base
At price target, tight trailing stop that got me another tiny smidge. I like that technique.
Stop the last 2 on break of trendline that it was obeying.
Just beautiful textbook trade. BH!
Beautiful example of how a 1 min trend can really pay. Psychologically excellent trade.