psychology post: the problem with winning

The problem with winning is it gives too much confidence. I've had several good trades lately, and it almost scares me. Things are going so right. I'm good at following my rules when I'm right. I'm good at following my rules when I'm winning. My mortal downfall is being wrong. Especially dead wrong, when I enter a trade and it never goes green. If I'm wrong right away.

I know myself and soon I will start to jinx myself. It just takes that one bad trade to wipe out so much sweat. Interesting I refer to my downfall as "one bad trade". Because what is that really? A trade that doesn't go as I predicted isn't a "bad trade", that's part of business. 

One yanked stop is a BAD TRADE! And that's my own fault. It's destructive behavior.

I've worked on trading only my setup. I've worked on reviewing lekachim list (to the right) before market open. Now I need to work on eliminating my worst behavior: yanking stops. 

Yanking stops (or not placing them) is the single most destructive thing I do. It has literally obliterated my account(s) multiple times. 

Here are some tips to myself about using and not yanking stops. I've been talking to myself in the negative (don't), so I've tried to express these also in the positive, to remind myself the right thing to do.

Don't trade scared = trade more conservatively. Isn't it counter-intuitive? When I'm scared, I do the most incredibly destructive thing? No wonder I'm scared! I should be scared of myself, not of the market.

 + Don't trade wide spreads

 + Limit my position size

 + Give several days to expiration (ex: Wednesday move to next week, except lottos)

These are very simple and easy ways to be less scared. I shouldn't look at these techniques and think how it reduces my upside. I should look at these techniques and think about how it will help me not fry my account.

Don't ignore pivots = use pivots every time. 

 + Identify a valid pivot

 + Trade against a meaningful pivot

 + Stop beyond pivots

 + Stop beyond the pivot

 + Take the stop beyond the pivot

 + Have I made myself clear about stops and pivots?

DO cut my trades short. I think I get too stuck on my targets as if I'm some sort of genius. I'm not a F*ing genius. Keep some money. Scale out. Cut before my target vs giving nice money back. It's ok. I need to keep something, not hit homeruns. Maybe my target would eventually hit, but don't go through pain on that hope. Just take some off. PEACE.

BABA lotto calls +171%

Daily setup: Preemptive huge box breakout.
Entry/play: Lotto play means very small dollar size, out of the money calls, looking for a big fast move and willing to go to zero if it doesn't. Ex, this position was 6calls @.09 = $58 total.
Management: $176 looked like important level, tried to get a good entry. Wednesday buy for this Friday expiration. End of day I was down about 50%. Overnight news (equals luck) gapped the market, but my calls opened only break even. Some mid-morning news spiked everything and I got T1 (double, on half pos = 3 calls), so now I'm on free money. When it struggled with a top, I took off another 1 very near T2. Moved up stop to below volitility area and stopped the remaining 2.
Psychology: Good. The thing about the lotto is I've written off the money as I buy it, and hoping for at least a double. By definition with close expiration and out of the money, it's bound to melt fast. I like how I managed this trade especially because of the volatile spike that got me near some targets. I really hoped it would go out of the box so much stronger, but I got my piece (more than my usual % piece), and peace!

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.

NTNX toxic trade conclusion +10%

Held over from previous day. Was actually serene about it overnight. I think that's only because I accepted I might lose it all.
So in the morning I let it develop instead of bailing on the initial drop.
I still traded scared the rest of the day. Shaving off profits and stopping too tight instead of letting it run. Total trade was about +10%.

This trade was TOXIC, in that I put too much at risk and rode it on hope. Completely not worth the grief.

NTNX taking home a loser

Daily setup: Gap up above pullback
Entry/play: jumped in too fast on a Monday morning. Didn't even wait for the first bar to close. WTF?
Management: none. complete insanity
Psychology:  This trade is TOXIC AS F*. 

NVDA +49% from last week

This post sat in my drafts, but was placed last week.

Daily setup: Gap above multiday downtrend, on important market gap up day.
Entry/play: Didn't chase runaway train (even though it would have paid...), waited for pivot. 
Management: 
Psychology: Teriffic. 

WYNN messy/lucky +50%

Daily setup: Gap up off double-bottom, but not out of the box
Entry/play: look to move up against pivot
Management: no fucking management
Psychology: Terrible. First problem was sub-optimal setup. Second problem was spread on option was 15-20% in the spread. I KNOW I YANK STOPS ON WIDE SPREADS. Conclusion: DON'T TRADE WIDE SPREADS. Ensuing trade was a nightmare on wheels. Only by total luck did I come out green here at all.

psychological blunders

When I last posted, I was doing great. Winning. Psychologically sound, disciplined trades.
I literally developed a nervous feeling that I was going to revert to old bad habits. I still traded well for another day or two, and then I imploded. All the old bad habits.

And then we had a family emergency. I'd like to say I took a week off, but (am I an addict?) I took a few small trades anyway. And for naught. Really bad decision to trade, and bad trades were made.

Today was a critical day. Account hurting. Need to reign myself back in and trade my best. Luckily I got a technically amazing market day. One overnight hold got rescued (WYNN), and today's NVDA trade was great.

To self: 

Chill Out! I know how to trade. Review lekachim. Keep my cool. Don't trade like a jerk.

BMY -7%

Daily setup: Gap up on news, into resistance, fade from premkt
Entry/play: tested high, few min base, shorted breakdown
Management: Initial stop above day high. Then trailed stop. I considered stop of .86 or .93. The .93 would have kept me in, but that gets back to picking good stops and honoring them. .86 seemed like a good point bc the level2 I watched for entry. 
Psychology: Why short a gap up? I'll allow that for gaps into resistance and weak market conditions.
Later, after a struggle, this broke down like I hoped. But I traded the plan and that was the exercise of the day. 
Take the small losses according to rules bc yanking stops is more harmful overall

TSLA -9%

Daily setup: Gap up, but looking for a fade. Market gapping up, but so technically damaged from Friday that I don't think the gap up will be for upside.
Entry/play: waited for upside failure, then short via long put
Management: trailed stop. stopped out. 
Psychology: I came in today bummed about last week's wipeout. There were no good setups, or at least none of my standard setups. So I stabbed at this one with small size. Should have gone for a walk. 

Lesson: when it's not my setup, I shouldn't expect it to play out in my "usual" way. I am not an expert in this setup.

Bouncing back

The end of last week was a disaster in which I yanked a stop and I suffered the well-known cascade of terrible events. I'm still reeling.

It is much better to take a stop than to suffer the worst. It is RARE that stops don't save me from disaster, so I need to set my ultimate stop and never touch it.

Something else to consider is on Thursdays and Fridays if I should trade same week or next week expirations. When I'm right it's so good, when I misbehave it's so bad.

I am considering paper trading today, but know I won't. I'm still wounded, even after the weekend. But with the lesson fresh, I will NOT yank stops.

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.

JWN calls 48%

Daily setup: gap up, earnings. Gap off base at 5+ yr lows. Lots of overhead levels
Entry/play: premkt flat. 1st bar sell, then tall green volume came in. Maybe jumped in early to this.
Management: initial stop below day low. Quickly moved up to below entry bar. Tightened 1 when it stalled. Tightened 2 when it stalled again. Last 2 off on ultimate trailed stop.
Psychology: Great. Beautiful. I love how I traded this. I love how it paid. 

SPY tiny pos lotto -25% and lesson

Daily setup: struggling at the top of the box, testing 50ema
Entry/play: volatility bar, shorting for ndl
Management: trailed stop down, but coulda shoulda tightened so I wouldn't have come back so deep into the day range. Or, in retrospect, if I was going to give it room, should have given it to vwap. 
Psychology: The case of $55 burning a hole in my pocket. Greed. Waste of $14 that I lost.

UPDATE/Lesson: after 11:00 spike down, it ran back to highs. Upon re-study of this trade, don't regret getting out. Only learn to tighten stop on ndl so I don't run so deep back through it.

NVDA +18%

Daily setup: gap up volume, looking to trade above long term trendline
Entry/play: waited for pivot. Then looked for break to ndh. 
Management: stop below entry bar, then trail. When it stalled at 9:43, and market was topping, I got nervous and squeezed stop. 
Psychology: Good. Got my piece, and peace. It will always seem regrettable (also on TGT today) to miss the next leg up, but I need to stick with peace.

TGT flat on mistake trade

Daily setup: massive gap up, earnings
Entry/play: I entered by mistake. 
Management/Psychology: I looked at TGT in opening minutes, passed, looked at AAPL and wanted calls on that one. Somehow my interface didn't switch the linked option window to AAPL even though the chart was on AAPL. So, by surprise (!) I had TGT calls instead. What do you do? Some people might jump out right away. I decided to set a tight stop and see if I could squeeze anything out of it. It was on my watch list, after all, and it was acting decent. So I got about net 1%. And I missed the boat on a move that would have given me about 40%. But I think I should call myself lucky not to have taken a nose dive on a mistake trade.

Aug 20 reflections

Reviewing "lekachim" strategic trade reminders helps focus me. Do this every day.
Especially helpful lately is to remind myself to identify pivot before identifying entry.
This trade review blog is important to do and important to review.

Some other reflections on today:

• Don't knock 12% just bc pos is small. 12% gain (or even 7%) is better than taking a loss, and is psychologically way better than trying to ride and fret it all day. 
• Get my piece, and peace.
• 10-20% trades should be viewed as bread and butter trades. Don't knock these. The big ones are fun, but the small ones add up too.

BIDU calls +12%

Daily setup: Gap up, earnings
Entry/play: Gaps up must sell off first. Identify pivot to trade against. Watch level2 for entry.
Management: Saw my pivot after selling, hammer, green volume. Didn't want to jump in on runner bar. Liked the next bar long shadow doji to stop against. Watched level 2 for entry above doji and stop below it. Quickly moved up stop to below entry bar. Stepped staggered stops until it seemed to stall around 113. Market trending down, so I squeezed up stop on both. And a good thing!
Psychology: Good. Got my piece, and peace. Bread and butter trade.

HD calls +34%

Daily setup: Gap up, earnings.
Entry/play: Gap up must sell off first. Wait for pivot.
Management: Initial stop below day low, then quickly trailed belwo signal bar, then below entry bar. When it stalled near 216, It was not at my target, but I'm giving zero tolerance, esp bc market opened with a dump. Watched level2 for clues.  Took off 1 on limit order. Raised stop on remaining one arguably too much or too little bc I gave back a lot then missed the next leg.
Psychology: Good. I wish I lost less on the second one, but I like how I managed the trade. Felt good in it. Got my piece.

Aug 19 reflections

The very best thing I did today was review my "lekachim" list of strategic trading reminders. It helped me focus on proper trading technique. In particular today:

• WAIT for a pivot. stop against the pivot.
• As it pivots, identify my stop. THEN identify the entry
• Trade the ONE MINUTE TREND

I managed both my trades right, but I'm mad to have a loser. This is my "worst" kind of loser: one that never moves in my favor. I was wrong from the get-go. I find it much easier to take trailed stops in my direction, even if the gain is tiny.

MU calls -20% plus lesson

Daily setup: Gap up, sector strong on chip news.
Entry/play: Strong open then pb to good support, trying to bounce. Wrestling with 45 area resitance which is also vwap. Waited for a better pivot. After 1min hammer, entered next bar. Stop below hammer bar.
Management: Should have just stopped both below the pivot bar, but prior stronger pivot was close. I split it, even though close and I ate 2 comissions. Fortunately, this was a smaller postion than AAPL so I am still up on the day.
Psychology: I'm pissed at a loser, but I think I played it right. Even much afterwards, I see it traded 2 more legs down. Obviously it would have been very damaging for me to have held it. The relief of being out is less than the frustration of a loser.
LESSON. I think this is insightful, that I'm more pissed about a loser (in general), than relieved to have been spared a wipeout.
Why do I not dread the wipeout? Why do I not feel relieved to have been spared a wipeout?
Maybe I should examine that intraday setup more. can't see the vwap here, but it was ~45.
**Maybe if the opening pullback breaks the vwap, I shouldn't be so quick to buy a bounce.

AAPL calls +21%

AAPL daily setup: gap up.
Entry/play: opening indecision. 2nd bar new low and back in. trade above 2nd min bar, stop low of entry bar.
Management: Initial target 211.7, then trailed separate very tight stops.
Psychology: Rocket trades are fun. I like how I managed it. Feel-good, profitable trade.

AVGO for flat plus lessons

Setup: AVGO top on my volume mover screen. Trading above 4 day bear fin. Intraday spiraling at vwap. Market dropping.
Initial position (blue) short. Good entry. Good target. Wish I lowered stop more so I didn't lose on back half.
Second postion (purple). Market held support, this thing came above downtrend line. Went long. It got sooo close to my target. Reduced 1 on raised stop. Ate it on the second one, even though market is bouncing up. But, today's expiration and I'm not sticking around to wait for it.
Potential +20% day turned flat.
Ugh.
LEARN if mkt is down, upside targets need to be more conservative.
For fastest trades (ex: same day expiration) use 1 min trendline.

big bounce

SPY $10 bounce in one and a half days. It got over the 50% fib, but this is pretty steep. I wish it would go to the moon (otm calls in IRA), but I also want it to sustain. 

REFLECTIONS

Today was first decent day this week for me.
Other days were very frustrating with losers a little bigger than I should, and yesterday's winner not big enough.

Lesson:
Take the small losers and don't get upset.
Take the small winners and don't get upset.
Most of all, keep using my method and the big winners will come.

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.

AAPL puts +13.86%

Thought I had a good entry, but didn't follow through down. Got lucky on the ndh. It didn't make my target, but glad to get out on reduced stop. I'll take it.

INTC calls -19%

Going small today bc major market volitility.
INTC. What's my daily setup there?! Oversold bounce. Open above 60 min base.
I like how I waited. I like how I watched the option prices settle down. I like how I watched the level2 and volumes. I like my entry. I like my stop. I hate taking a loss.
I considered a short at 9:35.

SPY calls

Market has DUMPED for a few days. Big gap down today. Tried to get a bounce w SPY calls expiring today off the bottom hammer. Didn't reach even my first target. Out on raised stop for -13%