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Thursday, June 23, 2011

Vacation post

Flowtastical made a comment that motivated me to check in from my vacation and re-post it here because it is so critical and true.

He said:


What people fail to understand is that your return can be infinite in trading just like in life. You are only limited by your own beliefs.

I'm at a prop desk in nyc. My goal to to increase my financial value to infinity. How much percent return is that? Plenty of guys I know make millions. Who cares? They're aren't you, you aren't them. They have no idea what its like to walk in your shoes. Their value has zero to do with you.

Study your pnl. Copy your best setups. Forget the bad ones. Make your best trades better. Make yourself better. Eat better. Sleep better. Trade better. Constantly work on increasing your own value to infinity. Do it a little at a time and it will add up. I lost so much money in the beginning of my career and wasted so much time trying to be a million dollar trader on day one. I kid you not when I say ALOT of money.

You have the potential to make more than anyone else on any desk. Study your pnl."

There is a lot of wisdom packed into those words. "You are only limited by your own beliefs." So true - I read the quote below from Steve Jobs on The T.A.D Principle blog earlier this week, and it really drives the point home (by the way, if you need to change the way you think, read my post (from five years ago) on The T.A.D. Principle here):

"Remembering you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart." - Steve Jobs.

Flowtastical also wrote "Make yourself better. Eat better. Sleep better. Trade better. Constantly work on increasing your own value to infinity. Do it a little at a time and it will add up." Earlier this year I made a post on meditating, and it stimulated a lot of good conversation. Developing positive habits/practices like meditating daily is a great way to start down the path to improving yourself.

Nice comments!



Grove Under said...

Great comment, much appreciated!

Flowtastical said...


I'm humbled by the mention. Just wanted to share my experiences in trading and give back because I've gotten so much from your blog.



Grove Under said...

A couple interesting setups from 6/24. No actual trades taken. But seems like some good setups might be coming back into fashion:

SNDK - 5m chart, fibs over opening 15 min range.

1) Sell below 5th bar on 5m chart. A short sell variation of Trader-X's "Push-Through" setup, circa 2009. Instead of a 3rd bar setup, this setup takes place on the 5th bar. FE target hit within 10-15 minutes.

2) Sell short right around noon. 15 minute candlestick setup was much cleaner. Bumped up against resistance from the VWAP as well as the 2.0 FE.

Not sure where I would have exited, but possibly around the retracement in the 40.40 area. Although I like to think that since this is beyond the FE, it will likey trend, so lock in some some profit, and let it ride until the close.

If you entered this trade, any good suggestions on how to handle the exit?

EMC - 5m chart, fibs from prior day high to opening 30 min range swing low.

1) Sell below 8th bar. Clean looking candlestick pattern. The .38 RZ was close above (but not perfect), as well as the VWAP. The declining 8 MA (not shown) would have looked cleaner. Would likely have gotten out once ORL did not hold (around 13th bar) for a small profit.

2) Sell below 15th bar. This also sold on the breakdown of the ORL. After entry, there were a couple bars of testing the lows of the day, but when they failed, sellers piled on. FE was reached around 20 minutes later.

I made it through the week without taking any trades, so that I can research and work on my overall plans to improve my mental strength and discipline.

The more I study, the more I'm realizing that I need to work on my thinking an order of magnitude more than my ability to find good setups...if I want to achieve long term consistent success.

One interesting concept I learned is that if you do the right type of homework to review your trading day, one day of trading can be equivalent to 10 days of trading experience. That's a good way to continue leaping up the learning curve!

Marc W. said...

Nice thoughts. I am starting my third month of meditating, and I must say I can notice positive changes in every aspect of my life. Thanks.

Scott said...

Good motivation, thanks. I hope you are enjoying your vacation Trader-X.

Grove Under said...

Trade on 6/27

I was watching both SHW and BTU on the 5 min chart, and both had a potential pullback to the RZ short setup on the 5th bars.

They both retraced too far into the RZ, so I passed on both. BTU would have worked well, and SHW got stopped out.

XCO-worked based on 5m & 15m charts

In the meantime, although I had XCO on the watchlist, I was distracted by the first two stocks mentioned above, and missed the 5 min setup on the 5th bar.

The initial response was to chase, but XCO didn't move quickly and the 7th 5 min bar was a mild shakeout bar. I then saw on the 15 min chart that we had consecutive red shooting star bars forming.

I entered short based on the 3rd 15 min bar setup.

Exited 1/2 the position at the FE (calculated on the current 15 min opening range).

Since this was a weak stock in a strong market, I held on to the 1/2 lot for the FE target based on the prior day high to the ORL, which also nicely overlapped with the 2.0 FE calculated from the current 15 min opening range.

Around noon, there was a strong move up, and I exited the 2nd position when it broke back above the 1st FE target.

Matt said...

Today (Tuesday) was a great day and worth waiting for. Took the following trades on 5-min charts:

HOC, break of 6th bar
OVTI, break of 7th bar
HAL, break of 5th bar

All sold at the fibonacci extension. Great blog and thanks for everything X. Looking forward to you coming back soon.

Anonymous said...

Nice trades yesterday Matt. I took PXP today, 5-min on a break of the 4th bar. I drew my Fib lines over the previous day's low to the opening range high, and made a profit of almost $1. Great blog and comments, I am learning a lot.


Grove Under said...

Nice trades!


Yesterday (6/28) was full of great setups. The overall market had a good move up around the first 15-20 minutes, and then a orderly pullback into the 10:00 AM timeframe. So many stocks followed along, which then formed into the classic pullback to the retracement zone type setup.

Too bad I missed the first hour of trading...


Today (6/29), I started off on a losing note due to taking a bad setup, and it set the day off on a bad note.

But below are a few what I consider decent setups, all based on the 5min chart:

X - (I missed this) - Buy above the 5th bar.

This isn't the cleanest pattern, and the 4th bar with the upper wick was of some concern. But the solid green setup bar supported by the rising 5ma, as well as the whole number acting as resistance were positive factors.

Not sure what it was, but there was something about this setup and the price action/tape action along with the overall market that was telling me it'll likely go higher.

If you drew the Fibs from prior day low to opening 15 min high, you'll see the FE was reached (first attempt missed by .02).

HAL - Bought above 10th 5min bar. The Trader-X "Push through" style setup. Also looked nice on the 3rd 15 min bar.

POT - Bought above 19th 5min bar. Ascending triangle that was somewhat like a "buy above the OR/FE setup" although this was "buy above the 1/2 to the FE."

The FE target wasn't far, but the stop was small enough so the risk reward ratio was ok. This ended up being more of a scalp.

In hindsight, buying above the 8th 5min bar was also an interesting setup. Not the cleanest setup, but a fakeout breakout of the OR high took place on the 7th bar and then dropped quickly nearly $.60. The 8th bar then formed a green hammer, which was just above the .38 retracement.

AKS - Didn't take this, but buy above 8th 5min green hammer-like bar. Not the cleanest retracement to the RZ setup, but the buy was above the .38 level, and it was supported by the rising 5ma.


Instead of having an decent day today, I ended up having a very small profit.

The reason was due to taking a few C or D graded setups which quickly offset the profitable trades. The losses for an individual trade may not seem large, but get a few and they sure add up quickly.

Based on the detailed journal I'm now taking to capture both the factual nature of the setups as well as my mental state of mind throughout the day, it has been very helpful to understand what's going on to help implement corrective actions.

But as Flowtastical mentioned in the past, I need to really learn and understand what I do well, and focus on those strengths in the future.

I'm still climbing the steep learning curve, but I feel like I'm getting better every day. As I mentioned in a past comment, "The Daily Trading Coach" has been very valuable book. I'll probably be going back and referencing that book for years. Great part of the book is that it doesn't just apply to trading, but to many aspects of your life.

Jay said...

I took an interesting trade yesterday (Thursday the 29th). I have been wondering about moving averages lately and how "things seem to happen" when the MA reaches the price. So...

Yesterday AGO (5 min chart) went up and had a small pullback. Then it printed 3 tiny range doji. I mean tiny range, between 3 and 4 cents. I saw the MA rising up to meet the price and thought, when they touch "something will happen". As the doji were so narrow range, I figured I could buy early and if I get stopped out I will only lose 5 cents or so. So I bought in the 12th bar. I was lucky and the price went my way two bars later. I sold near the FE at a 20 cent gain.

This is the first time I have bought before price breaks an entry bar. I do not plan to do that often, but it seemed a decent risk/reward chance this time.

QQQBall said...

Thanks for the post

QQQBall said...

Thanks for the post. I have been going through "another' extended period of mid-life clarity.