20070410 - INCY - 15mins - Reviewed by ADD

As mentioned, I was going to post a question to the Pro, to find out why they think the setup on INCY failed today. This comment was left by ADD Trader, in response to the question that I posted on Trader-X's site.

Hi Closet,

For what it is worth.....

The high of 9th bar did close strong above the OR high, but below the high of the day and you had a big tail on the 3rd bar to be wary of. Maybe of more importance though is that the high of the 9th bar was the exact high (7.70) that INCY made on a daily chart on 2/2/07. I know X doesn't look at larger time frames, but they can come into play, ESPECIALLY on large gaps right up to resistance.

Also, sometimes a good set up just doesn't work out. That pullback on the 10th bar (leaving a long upper shadow) should have been a sign to possibly close the position. And if not, then definitely on the pullback from the 13th bar high. Three failed attempts to break out tell you (in my opinion) that the chances of it happening are slim.

Not to say I would have sold....just look at my short in STX...I had three chances to cover and didn't. Doh......!

ADD

A million thanks to ADD Trader for spending the time to provide his input. After digesting his suggestions, I made some notes on the chart, to highlight what ADD Trader commented. He pointed out quite a few things (yup, a few! Scary!) that I missed when I was in action. It is definitely something that I need to learn.

Champions League

No more trading for the remaining of the day. I need to catch the Champions League between Manchester United vs. Roma, and Valencia vs. Chelsea.

20070410 - INCY - 15mins - Loss

Symbol: INCY
Type: Long
Entry: At almost the top of the 10th bar
Exit: Stopped out close to the bottom of the 13th bar
Result: Lost -1.42%

I really need to learn how not to jump into trade too quickly! I thought I caught the consolidation from the 4th through the 8th bar, with a few Inside Bars and Narrowest Range Bar. I told myself that if the price moves above the Opening High, I will go Long. I was distracted for a moment, and when I come back to this setup, the 9th bar was already completed, and at that moment, the 10th bar seemed to me that it was going strong. Therefore, I entered Long, and expecting to exit at the 113% Fib Ext.

Not only did the price not go up, it re-tested the 5eMA support, almost as soon as I have entered the trade. The next bar showed a slightly positive bar, and I thought the situation would have changed for the better when the 12th bar closed at its high.

Man! Was I wrong again?! My Protective Stop was set to slightly below the, now flat, 5eMA. And it was executed during the 13th bar meltdown.

What did I do wrong? I wouldn't know unless I check with the Pros... which I will! But before I hear from them (assuming that they will respond), my criticisms for myself is:
1) When the 7th bar broke the Opening Range high, there wasn't much Volume. I don't know if it matters!
2) I should have sticked with my original game plan by looking for bars that have cleared the Opening High. In this case, only the 4th bar had cleared the Opening High! I was observing the situation when the 4th bar completed, and I was not convinced that it was a good entry because the rising 5eMA was too far below.

I will post this setup to the Pros and see what they have to say. If you have input that you would like to share, please feel free to do so. I would like to hear from you.


Review by ADD Trader posted here.
Review by Wall St. Warrior posted here.

20070410 - DNDN - 15mins

This snapshot was taken about 3 minutes into the 10:45 bar. I bet even the pros couldn't predict this! (And you're one of the pros and you knew this was coming, please kindly explain to me why.)

So, since it is such a long bar, does it mean the momentum is exhausted? I hope the likes of X, Esto, Mike, etc., will have some comments on this later. If so, I will add their link into this post.

Not much meaningful setups today... so far!

I've been checking out different charts now, and I still have yet to come across anything meaningful, or worth paying attention to. It appears that DNDN is still attracting a lot of attentions. But I'm staying out because I just don't know enough to be playing with the big boys.

20070409 - TRN - 15mins - Gain

Symbol: TRN
Type: Long
Entry: The beginning of the 6th bar (The arrow was at the wrong candle. It's the one after the hammer)
Exit: The 10th bar when it crossed the 138% Fib. Extension
Result: Gained +1.44%

A strong 4th bar followed by a Hammer-like candle on the 5th bar with a rising 5eMA led to go Long on this setup. Looking back now, I don't know if I have made the correct decision because the entry price was already closing in on the 119% Fib. Extension. Had the price not move beyond the 119 level, I don't know if the profit/loss ratio is that attractive at all.

But as soon as I entered the trade, the price just went loose and continued to rise. I monitored my stop closely and made adjustments. As soon as my 'entry-bar' had completed, I knew that I need to adjust my target to the 138% level. Unfortunately, it was reach 4 bars later and I exited. I'm happy!

20070409 - SCHN - 15mins - Gain

Symbol: SCHN
Type: Long
Entry: The beginning of the 6th bar
Exit: The 18th bar at Fibonacci Extension
Result: Gained +1.44%

SCHN gapped up with a weak Opening Bar. It then followed by 3 strong bars leading beyond the Opening High. The 5th bar is a weak Doji-like candle that closed above the Opening High. With the rising 5eMA, I took a low-risk entry at the beginning of the 6th bar. My target was 119% Fib. Extension. I was cautioned during the weak 9th bar, followed by a series of Narrow-range bars. Thankfully, it took off during the 16th bar, and hit my target 2 bars later.

20070409 - JNS - 15mins - Loss

Symbol: JNS
Type: Long
Entry: Half way through the 6th bar
Exit: Stopped-out during at the low of the 9th bar
Result: Lost -0.72%

JNS gapped up this morning reaching beyond the opening-bar high during the first few candles. It finally cleared the Opening High on the 5th bar by closing above the High. Although it was a 'down' candle, I took the risk of entering Long, once I saw the price raised beyond the 5th bar high. My initial target was the 119% Fib. Extension, and my Protective Stop was set slightly below the opening bar high. Maybe I should have at least set the Protective Stop at the low of the 3rd and 4th bar. But this is speaking after the fact. :-(

Blogging is all about Writing!? Really?

Check out this post here from ProBlogger.net.  It talks about "Blogging is all about Writing."  Duh!  But seriously, it points out some very useful skills and approach on how you can improve your blog/blogging. 

Texas Hold'em vs. Stock Trading

Since I accepted the offer of practicing Daytrading, I haven't had much of a chance to log-in to my on-line poker account. And as I was reading and learning everything that I could about Daytrading, I did noticed that there are some similarities between Trading and Poker-ing. I've been telling my wife, who is also a big fan of Texas Hold'em, that I have noticed that whenever I've read an article discussing the topic of "Qualities of a Successful Trader", you can easily substitute the word 'Trader' with 'Poker Player', and the rules could be applied.

Today, I came across this post from Dr. Steenbarger.
http://traderfeed.blogspot.com/2007/04/what-we-can-learn-from-trading-and.html

I told myself... "I'm glad I'm not the only one who notices the similarities."

Trading to Win!

I just want to share this article with you, from The Kirk Report. It talks about the proper mentality of a trader.

20070402 - GOOG - Weekly - Loss

Symbol: GOOG
Type: Long
Entry: 3rd bar from the right, when the price went above previous bar's high
Exit: Last bar from the right, almost close to the bottom of the bar
Result: Lost -1.13%

This is a pathetic loss due to poor management. But before I talk about how I turned this winning trade into a losing trade, let me tell you how I got the idea of his GOOG trade.

Kevin from Kevin's Market blog has been blogging about how whenever Google has a weekly inside bar, from the previous week, if the following week's price exceeds the inside bar's high (or low) of the previous week, he will go Long (or Short) respectively. I know I'm confusing you. Read about his observation here and here.

Following Kevin's approach, I managed to enter Long when the price went above the previous week's high. In fact, according to Kevin's post, I was commited even before he did.

But the problem is, I was stuck in a meeting on the following Friday, before the Market closed. I failed to exit by week's end, and led me to a loss when the market re-opened on the following Monday. Unfortunately, GOOG wasn't doing too well on that Monday, and since I didn't know if I should hang on or not, I decided to exit the holding for a small loss. (Well, it isn't really that small.) Had I managed to exit on that Friday afternoon, it would have been a gain!

I guess this is the price that I have to pay when I'm trying to trade, while working a full-time job. I just have to learn how to better manage my time.

TraderFeed: Marc Greenspoon: A Visit With A World-Class Trader

TraderFeed: Marc Greenspoon: A Visit With A World-Class Trader

This is an interesting article to read, just to find out to what extent a trader would go, just to be the best of the best in trading.

No Trading This Week

There will be no trading this week because I have a week-long meeting that prohitbit my ability to monitor the market. I shall be back next week.

200703 - Month-end Review

This concludes my first month of daytrading. Overall, I would give myself a D- grade. I was taking way too many unnessary risks, and being impatience with my entry. But this is only my first month! Although not a valid excuse, I simply cannot expect to come out winning right away. After all, winning right off the start might not even be a good thing. I don't want to be over-confident!

Looking at my Google Spreadsheet, it shows that I made 14 trades this month. From the 14 trades, I managed to drop $213.68. But wait, there is also $279.72 in trade commission! Add them up will come to a total loss of $493.40, or -1.23% off a $40k principal.

I don't know if it's good or bad. All I know if I want to improve on it. We'll find out how April goes!