July 19 Trade Summary $226

I scalped the last 2 hours.

PL $226 on 26 contracts and 400 shares

I'm still working on my trading system.
I'd like to have it setup with audible alerts that tell me when to enter.
Wouldn't it be nice to know each stock that is hitting its bid/ask that is counted as apart of the NYSE A/D. I was reading TA of S&C; particularly the article on VPCI, and found that the indicator was worth checking out, however I don't think this indicator would be good for thinly traded small/mid cap stocks.

The trade experiment that I opened yesterday is unchanged, with a P/L $300

July 18 Trade Summary $1k on 57c

I'm expecting ER2 to outperform YM for the next week and to see some sector rotation.
DIA calls should have been closed at the beginning of the week if you were smart about taking your profits with option expiration quickly approaching.

P/L= $1k on 57 contracts and 400 shares

Trade Summary-
I traded 2 hours during the afternoon with objectives to look for short trades on YM and long scalps on ER2.

Trade experiment-
I put on a trade on my simulator account over a month ago.
Long 1 contract YM
Short 1 contract ER2

The results-
YM- $1,760
ER2- $222

You would think I should have gone long 2 contracts on YM to equal 1 contract on ER2, but still, YM strongly outperformed ER2 this last month, while ER2 is breakeven/lower from where it was a month ago.



My strategy has now reversed and I will be reversing positions for the next few weeks to see how things work out.

July 16/17 Comnined Trade summary $100

I had a short position that I put on 15 min before the close on Monday on ER2, which put me negative $700 yesterday, I covered that position early this morning around 5am EST for a 2 day combined $100 profit. No trading for me today besides that.

P/L= $100 on 92 contracts traded.

I don't plan on putting on another trade until I have a trading system in place because I realize that if I don't have a trading system I will continue to have blow up days. So for the next few days I plan on outlining my trading system.

Reflection Time

I read a thread on EliteTrader today that had me thinking of what I've done to prepare myself in avoiding another blowup trading day.
I really haven't done much except that I've been trading smaller size and that I don't immediately start adding to a losing position the minute it goes against me. I have been giving my positions a little breathing room and averaging some of my small losing trades, but I still haven't been using my stops wisely. I had some major losses the last 2 months, and I need to avoid at all costs another blow up day, and in order to do that, I need to develop a more sound trading system.
My ideas on avoiding blowup trading days-
1.Set a max loss for the day (no more than what I average in a 2-3 trading days, maybe 1k)
2.Use audible alerts that sound off when extreme situations are occurring, ie. advancing to declining issues is 3:1, "LONG ONLY, if your short COVER YOU DUMB ASS"
3.Be apart of a trading chat room where you can talk with others, and they may be able to help you if you become a deer in the headlights.
4.Having a trading system that will not average into a trade past a certain point (ie. no more than 2pts, Why would you want to average into a LOSING trade past that point, YOU LOSER)
5.HAVE and KEEP a PLANNED OUT STOP ON EVERY TRADE, no more, "oh, it'll come back, I'll just add a little here and it'll go back down to my breakeven point"

Here is my trading blowup escape technique example-
Based on how I trade I will say I can add to the position only 3 times, meaning if the trade started out as a 1 lot, I will not add more than 3 contracts to this losing trade. Also, the trade has to have a stop on it placed before the entry is made, for this example lets say I'm trading ER2 with a 1.4pt stop placed away from the initial entry. If the trade goes 1pt against my initial entry I'm already feeling like I screwed up, and at this point my brain starts to think, "this can't be right? I'll add to the position and it'll go back!", but then the trade goes another 1pt against you and you are now flat from having your stop hit. If we didn't have a plan in place we would be saying to ourselves, "this is totally out of wack, I'm loading up here now big time, this has got to go back now!,,,,,,,,,,
We know what happens next,,,,Right?

What if scenarios-
What if there is a bombing or something bad happens and the stock market freaks out, did you have in your stops ahead of time?
This is the problem with US retail traders, we are not smart about trading, we may be good at certain times scalping short term moves, but we are for the most part never hedged in our positions the way a option traders would be with a calendar spread or a hedgefund would be with having bought VIX calls for protection.

So what? How about a strategy trading futures where you are long one contract like YM and short ER2. You know both trade similarly to each other, but sometimes during the year the big caps are better than the small/mid caps. So our strategy would be for the most part hedged by being long big caps and short small/midcaps because we see that year to date that big caps have outperformed the small/mid caps.
So we will add to our YM position on down days and add to our ER2 position on up days, and over time we would assume that we are making money by one index outperforming another.

You can use this strategy on stocks and ETF's too, and the possibilities and profits are more likely to be greater IMO. For example you could check out the leading and lagging ETF's for the last 3-6 months and choose to use this strategy by buying the bullish ETF on weakness and Selling the bearish ETF on strength. Checkout the WSJ on their gauge of money flow into and out of stocks for a determinant of what stocks/ETF's this would be a good idea on.

For example you may have an idea to short IYR on strength and buy SMH on weakness, because you are bearish on housing on bullish on tech.

July 13 trade summary $305

I traded the first 2 hours and did badly on ER2 today, although I made a small profit. ZN and ES are trading inversely, and ER2 and ES remain the more bearish indices, which I expect will continue until option expiration next week.

P/L= $305 on 26 contracts

Have a good weekend

July 12 Trade Summary $703

Well my trading results were similar to yesterdays performance in terms of profitability during the time I traded. I traded light today because I was skeptical of the extreme bullishness. For most the day I watched the NYSE A/D trade lower while YM kept pushing higher. I made about $600 during the first 2 hours and then struggled to make the next $100. I could have made $1k more if I had shorted ER2 instead of YM around 1am EST, after getting the intermarket relationship trade pattern between ZN and ES around 1am. I scaled into TLT too soon and took a loss on it, but watching it along with ZN helped me turn a losing trade on YM into a small winner.(Like I said , I should have shorted ER2 or ES, because they are more bearish right now over YM and NQ). ZN and CL really tanked pretty hard during the time that I traded. I guess I should have been trading CL and ZN and just rode the trend. Every extreme NYSE low tick was a buy signal on YM this morning up until about 1am(extremely bullish day-A/D was 4:1 or greater during periods of todays' trading). I guess I should have gone long off of the news I read yesterday about the record short interest in ES. I'm done for the day, I have other business to tend to. I may not be trading tomorrow because I have work early.

July 11 P/L= $1,143

After the first hour I was up 1k, I then struggled for the next 2 hours to make the next 100 bucks. I went short on ER2 a little too soon, because ZN looked like it hit a bottom, I should have waited for the double bottom on ZN and double top on ER2 (intermarket relationship strategy), or at least scaled into the trade slower. ES was the better short, showing bearish divergence, and if you haven't read already, there is suppose to be record short interest in ES right now,(is this bullish?), I think I read it on between the hedges blog.

July 11 P/L= $1,143 on 64 contracts

Trade Summary-
Traded the first 2 hours, Choppy morning, Crude Oil had some good action. Market looks like its chopping before Bernanke speech. Pretty good day. I got a good winner early on, and the confidence and morning profit helped push me to take more. I noticed a little bit of inverse trading between ZN and ES, which I notice tends to happen whenever the word Bernanke is mentioned, also CAD had interest rates increased, which is why I think the market gapped down this morning, I don't think HD's earning had that big of an impact like CNBC says.

P/L= $2,025 on 72 contracts traded

Stock Thoughts-
Does FXI ever go down?

Note- For some reason I can't post titles to my posts.

PL= $707 on 102 contracts traded, a decent monday

July 6 Trade Summary $409

Looks like another light volume choppy day. I'm leaving early to take care of other things, hopefully next week will provide more volume. The 3 main sectors look about the same.
Have a good weekend.

P/L= $409 on 15 contracts

July 5 Trade Summary $409

Only traded for a little bit, got other stuff to do today. Light volume choppy morning. ZN has been trending down since 7am. I wonder if hedge funds loaded up on puts as protection before July 4th , and if they will push the market down today to get the puts back to breakeven.

P/L= $409 on 15 contracts traded

July 3 Trade Summary $106

Traded the first 2 hours. Light Volume half session trading, very choppy and slow.
Have a good 4th of July everyone.

P/L= $106 on 19 contracts traded

July 2 Trade Summary $204

I could only trade the first hour and a half and had problems with my computer freezing this morning. Volume is light and the inverse relationship between bonds and equities looks to have disappeared. My goal is to trade small and use stops to prevent another blowup.

P/L=$204 on 10 contracts traded