Englishman Trader

Time to go back to school ...

2006-03-14T21:39:00.000-05:00

Clearly all is not well with my trading. My mindset is clearly not right as I took another 2 1R losses today. Clearly I am doing something wrong, and until I can figure it out and get it out of my system, I am simply throwing money away.

So, time to get away from trading for a bit, pick up some books and just reset the mind. I am not sure how long this is going to take, but I am not going to trade again until I have a lot more confidence in my ability to trade well.

There are also some other things that are distracting me at this point, and have been for a while now, so I will get them resolved to ensure I have nothing troubling me in the back of my mind.

So, good luck to all. I will start posting again when I am ready.

"I'll be back."

Trading Summary : 03/13/2006

2006-03-13T17:41:00.000-05:00

I am not superstitious, but it was the 13th today …

Took two trades this morning, both longs and both were full 1R losses. Once more I had a choice between a really good setup (KMX) and a slightly suspect one (OPSW) and naturally I went with the more suspect one. With OPSW all I succeeded in doing was getting in near the top and exiting near the bottom. I entered off the 9:45am up bar and ignored the small wick.

In the meantime, KMX eventually went onwards and upwards to achieve its target of 35.08 (I would have brought that in to 35 and a 2R gain).

My second trade was KKD. I entered above the 10:15am hammer but was stopped out in the vicious chop that occurred at 10:45am. I had set a price target of 8.74 (2R gain) which was hit at 11:45am. So, I do not consider this one a bad trade, just unlucky given the degree of chop that took me out.

There were some nice short setups earlier, such as LEA. If an entry had been taken below the 9:45am bar, this would have netted a near 8R gain.

Perhaps I need to consider the type of setup I use depending on the overall market action early on. I am going to see if there is some correlation between the successful setups and the early morning market action so its back to the past trade analysis.

Trading Summary : 03/10/2006

2006-03-10T14:00:00.000-05:00

Just like yesterday, I took one dumb trade (ZQK short) and one good trade (SGMS long). However, the overall result was a wash as I only got a partial fill on SGMS, and I took a partial loss on ZQK. But at least I did not suffer an overall loss today.

ZQK was a stupid trade purely because the first bar had a long tail, but more importantly, the second bar (which I entered off) was a spinning top showing indecision. I should have waited on the next bar, which was a hammer, and that would have kept me out of the trade. In fact, the 10:00am hammer and the 10:15am up bar lifting off the OR low showed strength, meaning I could have gone long with a target of the fib retracement zone which it just hit two bars later.

SGMS was a slightly risky trade too given the 9:45am and 10:00am spinning tops. However, since they were narrow in range and just below the OR high, I took an entry above the 10:15am spinning top. The target was 33.20 and that was just touched at 12:45pm, but I had already bailed earlier below the 11:45am down bar.

So, overall I was disappointed with my trade management, once again. I should have held SGMS to its profit target, at least realizing a small overall profit, and I should have passed on ZQK.

Overall, I did not see any really decent setups. Volume seemed low, with the market trending up across the board, with nothing decent standing out. No paper trades today.

I have taken the spare time today to refine my scans once more. I currently have two scans running every 5 minutes, one for longs, one for shorts. They are based off the “Change from Close (%)” primary filter in CyberQuant. I have now dialed down the “Volume Over Yesterdays (%)” and “Volume Over 20 Avg Vol (%)” down to zero, but I have left them in place so I can easily bump them up if I want to. I have replaced my “Current Price” greater than / less than “Prior Days High/Low”, with the current day’s high/low. This should show me all stocks that are beyond the prior day’s trading range.

If any other CyberTraders want to take a look at my scans, I will be more than happy to pass them on. You certainly could do no worse than me with them !

Trading Summary : 03/09/2006

2006-03-09T13:41:00.000-05:00

Today I took two trades, both longs (SFCC and ECIL). I feel so much more at ease restricting myself to two trades. I am hoping it will really make me focus on the merits of the trades I pick. My end result, thanks to SFCC was a 1.8R gain overall.

However, my ECIL trade was a total dud. It showed up on my scans due to its high volume first thing and I took an entry above the 10:00am down NR hammer. So, mistake #1 was entering off a down bar, albeit in the top 50% of the prior up bar. Initially we saw some up movement but then the stock fell back to just under my entry and then stalled out and the volume dried up to almost nothing. It dried up so much that it fell off my scan list. I should have taken that as a bearish signal and closed it, but I held till it dropped and hit my initial stop for a full 1R loss. So, a new rule … close trades that dry up on volume so much they disappear off your scanner.

As for SFCC, I entered off the 9:45am inner hammer. A slightly risky entry given the fact that the stock had not reached its OR high, and for the fact that the stock had gapped up so much at the open (20%). We had a nervous time as the stock dropped below the OR high and nearly took my stop out, but then it climbed and I took my profit once I was up $1 on the stock.

I took two paper-trades too, long IMAX and short IDCC. IMAX was another bad (paper) trade for a number of reasons. It bounced off the retracement zone with a nice hammer at 10:15am but then there were two inner NRs, both trending down. I entered off the last inner NR. I should have set an entry on the break of the 10:15am hammer. Since that did not come about, I should have passed. Secondly, the first two bars should have kept me out, with the firat an up bar but with a long tail followed by a down bar that took it halfway to the retracement zone.

The IDCC setup was so nice. The stock had touched its 34MA line (thanks Trader-X) and reversed, then posted an inner inverted hammer which was begging to be shorted off, so I did (on paper). However, it bounced off the bottom of the retracement zone and started to recover. I moved my stop to above the high of the 1:30pm inverted hammer, and was later stopped out for a 0.6R (paper) gain.

Trading Summary : 03/08/2006

2006-03-08T22:14:00.000-05:00

I have finally uncovered the reason why I have not yet had much success at day-trading … its me ! My scans are showing up good candidates, but I am simply not taking advantage of them.

Why else would my scans show up TTWO and LEXR, and I would size them up, but then pass. I passed on LEXR as I found the reason for the move was the fact that it was being acquired by Micron Technology. However, I did not appreciate that it was a stock swap rather than a cash offer. Then on TTWO, I passed since the 2nd bar was still below the OR high (due to a long upper wick on the first bar). Both hit their profit targets.

So, how did I fare today. Not well. I took partial losses on 4 stocks, two of which (WCG and MATK) would have achieved their profit targets if I had let them. Then I had my butt kicked by INFA, and realized a single success (COO) for a 2R gain.

Overall I suffered a 2R loss. Not good. I have to ask myself why I took so many trades again especially given the choppy market. The choppiness is the reason why I got defensive and took 0.5R losses, rather than letting the trades ride.

However, my mess with INFA was the worst culprit. I panic and closed my initial short, when I should have let it ride. Then I compounded problems by shorting again at a lower (riskier) point and with an oversized position, increasing the eventual loss.

(edit) Probably the main reason for the action on INFA was the fact that the 50 DMA was right at 14:08. This would explain the big block buying that Trader Eyal picked up on, and would explain the reversal at 14.05 (11:45am).

So, fear and greed were my downfall today. I have already decided that I am going to limit myself to a maximum or 2 trades for a while now. I will accept a maximum 2R loss per day, and this will hopefully allow me to let my trades ride.

Here are my trades in the order I took them:

Trading Summary : 03/07/2006

2006-03-07T13:48:00.000-05:00

Today was a very subdued day in the market. Volume was down and the action very range bound and tight early on. I was content to sit on the sidelines and considered just walking away, but decided I would stick it out to noon.

Unfortunately I started to switch off at around 11:00am, and I missed a nice entry in LSI which was at the top of my list of longs. Just to add insult to injury, I made another error as I went long on FMD. I should have closed out the position as the stock failed below the morning high, but I let it ride all the way down to where my stop was. Then error #3 kicked in as my stop was inactive. I am not sure how that happened, but all my alerts were inactive and as a result my loss was larger than I planned.

Finally, I paper-traded a couple of shorts today, namely EDS (at 27.45) and MXO (at 9.52). It is a shame I did not really take the trades since EDS hit its target (27.23) for a 2R gain and MXO bounced along under its OR low and would at least have been profitable.

So, just one trade today, and a single (large) loss. Here it is.

And just for kicks, the one that got away, LSI ...

Trading Summary : 03/06/2006

2006-03-07T13:31:00.000-05:00

I took 4 trades today. I had partial losses on 3 but a big win on the last one, making this a profitable day. It is not surprise to see the three losers were longs, while the winner was a short.

WYNN: I entered above a doji that had topped out at the OR high and just below the prior up bar. This was a bit suspect.

Q: I entered off a very big up bar, not an NRB.

CECO: The stock had gone deep into its retracement zone, so it appeared to run out of steam once it broke out.

RBAK was very nice. The stock had rallied to its retracement zone and posts a down shooting star in the bottom of the zone, followed by a small inverted hammer. It was downhill all the way from there.

Trading Summary : 03/03/2006

2006-03-03T18:08:00.000-05:00

An absolutely awful day today. I took four trades in fairly quick succession this morning (3 long, 1 short). I was out of 3 of them by 11:00am, all losses, and the 4th one lasted till 12:00pm before being closed for a loss.

I think what happened is that I got carried away when I saw the early morning volume was higher than normal. Everything I went long on early got chopped hard before lunch.

So, should I have taken these trades ? Lets take a look.

First up, BWNG. I entered off the 9:45am up bar. This has worked in the past but not this time. I quickly closed out for a 0.3R loss as the stock dropped below the 10:00am shooting star and below the OR high.

Second up, X. I went long above the 10:00am NRB. I was not concerned about the wicks. Initially the action was good, but the stock turned and dropped hard, taking out my initial stop, resulting in a full 1R loss. This stock showed up on the Unusual Volume scan and it opened way below yesterday’s close, so it had moved a long way by the time I entered it. I should not have taken the trade due to the upper wicks and the fact that it started way below to the prior day’s close.

Third up, SFCC. I went short just before the 10:15am bar completed. This is a trade I should not have taken since the setup was not good. I got carried away with the two down bars almost negating the 2nd up bar. However, I forgot the stock was still in the upper 50% of the opening spinning top. I tightened my stop and was out for a 0.3R loss. I should have waited for the stock to round-trip back to its OR low.

Next, GNW. I went long above the 10:15 NRB. I ignored the wicks on the prior two bars and paid the price, a near 1R loss. I should not have taken the trade given the higher wicks on the two prior bars.

Then, AKS. I went long above the 10:15am down bar. Unfortunately what fooled me was a bad tick on the 9:45am bar which meant I could not determine the size of the wick on that bar. I assumed (bad idea) that ther was no wick. So, when the stock got above the close of the 9:45 bar and above the 10:15am wick, I entered. I was soon stopped out for a 1R loss. I should never have taken the trade since the wicks gradually descended showing stronger weakness.

I was not very happy at this point with my performance. I had a choice to make; either walk away with a significant loss, or look to get some back, but concentrating on good setups. At this stage, I would have to look for NR3 setups. So, I decided to continue …

WEBX. Went long above the 11:30 hammer. Did not get a great entry and it soon turned and fell into consolidation. I moved my stop up under the consolidation and was stopped out after lunch for a 0.5R loss. Should I have taken this trade ? These was significant sell-off volume and a very steep drop prior to my entry, so this was a bit suspect.

BWNG (take 2). I entered above the 11:30am NRB but only once it had also cleared the 10:15am high of 11.01. I got an entry at 11.05. This initially did well, but then started to drop towards my entry. Then, as the market tanked at 3:00pm, and the stock dropped again, I panicked and sold right at the bottom of its last dip for a small 0.1R loss.

So, due to trades I should never have taken, and to panicking, I was able to lose on every trade. Not a good Friday for me, and a very big disappointment after yesterday. Now I am back where I started having given back the last three day's profits.

Trading Summary : 03/02/2006

2006-03-03T08:29:00.000-05:00

I had a better day today. I traded 5 stocks and achieved a more respectable 3R gain overall. However, once more I took a couple of trades I should not have taken (PCNTF, PETC). However, I noticed the errors of my ways and closed both for an overall wash. With PCNTF, I should not have even seen this stock as its average volume is too low, but due to an error in my scan it did (I was using the 5 day avg volume, not the 6 month avg volume as a filter).

I also made another error, one that we have all been guilty of at some time, impatience. I closed my two winning trades (CHS, PLCE) just after lunch and before they put on further gains. CHS closed very close to where I pulled out , but PLCE went on to achieve the profit target, meaning I left 1.5R on the table.

But, I am feeling happier. Firstly, I am a lot more comfortable with shorting now. Secondly, I am on my way to eliminating bad setups. One adjustment I have made recently, in an attempt to reduce chop, is to increase my average volume threshold from 200k to 400k.

Here are the trades in the order I took them :

(Charts to be posted later)
CHS
PETM
PCNTF
PLCE
PETC

An Apology and a Correction

2006-03-02T08:51:00.000-05:00

I recently posted some information about Trader Mike that he did not want to make public. I immediately removed the information and I wanted to apologize to Mike for the post.

What I wanted to convey was the fact that on days like yesterday, a good trader should be making a very good return. I made just over 1R trading 5 stocks, whereas Mike made over 6R trading 5 stocks and Mike did not enter any trades till after 10:30am !!

Even if I removed my suspect trades, and traded the others perfectly, I would still only end up 4R up. That tells me that my scans are still not finding the best candidates. So, I am going to take a look at those and see if I can find better prospects.

Trading Summary : 03/01/2006

2006-03-01T17:35:00.000-05:00

Not a very good day, given the market rise today. As Trader Mike told me, I should be raking it in on days like these. Not yet, I am not but I will take a profitable day none the less.

My best trade was AEOS which was a typical Trader-X style entry off the 9:45am bar as it reversed the opening bar. I took my profits above the fib extension as it posted the long upper wicks. Perhaps I should have held some since it fell back a little to the fib extension, then bounced along the top of the line until the afternoon when it gathered momentum again.

However, I gave all my profits back on IVGN and ARM. IVGN was the worst culprit due to a bad market fill on my order, and a miscalculation on the position size. If I had my ideal fill, I should have taken 80 shares, not the 100 I took, and then with the bad fill, it should have been only 70 shares. As a result my actual risk was $108, not the $75.

So there is something I need to work on; making sure my position size and fills are good. Perhaps I should have taken the first opportunity (in profit a little) to reduce my position size to match my stop.

I even had a profitable short (PSUN). However, I made a couple of mistakes on that trade that significantly reduced my profits. Firstly, I took an early entry that was risky and I closed it for a -0.3R loss. Secondly, when I did take a good entry, I set the profit exit at the fib extension which was just below 21.50. I should have realized that 21.50 would be a resistance point, and that is exactly where the fall reversed.

I tried a short in ARM but that one was suspect from the start (I must be more disciplined and not take these trades) due to the tails on the prior candles to my entry. I ended up with a -0.6R loss.

Finally, I decided to top up the equity tank (ha ha) with a late afternoon trade (at 2:50pm) in ATHR, where I saw the formation of an NR3. Following my new stop placement rule, I placed the stop below the first NR3 bar, in case the stock dipped initially, and it did. However, I got the pop I was looking for and held to the end of the day for a near 1R gain.

Overall I ended up just over 1R up, thanks to the late day ATHR trade. However, I need to do better.

Here are my trades:

Another month ... and a change of fortune ...

2006-02-28T18:24:00.000-05:00

Well, February was interesting. I had a great run in January, getting into profitable territory, and then I just blew it. I was once again taking marginal trades, looking for the big winner. All I ended up doing was suffering loser after loser, and over-trading to boot, resulting in a rapid decline in my equity.

I know I was over trading for two reasons. For one, the number of shares traded in 10 days was 51,000 ! CyberTrader must love me. Secondly, it was taking an eternity to update the blog.

So, as most of you are aware, I stopped trading mid-month to take a break and to perform some analysis on my trades to determine where I was going wrong.

I have already posted my initial analysis. I have made some changes, namely to my scans, my setups, and my exit strategy (there is not much I did not alter in some way). As a result, I now feel more comfortable overall, although the future results will prove if I am back on track again. Here are my new guiding principles for the month ahead.

Do not over-trade. Firstly, only take the very best setups, and if there are no good setups, do not trade. Equity preservation rules.

Look for longs and shorts with equal attention. Now that I am more comfortable with my short scans and my short setups, I feel I can achieve this.

Do not micro-manage my positions, but let the market decide if its a winner. This is a tough one, but one I must come to terms with to realize good profits. I need to trust my setup and entry enough to let it ride, which leads to ...

Better stop management. I need to widen my stops a bit more, especially under NR3s.

Stay in the game. Persistance is the key to a successful trading career.

And now onwards into March. Good luck to all, or better yet, not luck, but success to all.

Trading Summary : 02/28/2006

2006-02-28T17:55:00.000-05:00

I finally went live again today. I thought about holding off till the 1st of March but then what do I have to gain from waiting ?

I traded four stocks today, and did not really get anywhere with any of them. Overall I finished the day with a 0.28R gain. The good news is that I actually had a profitable day. The bad news was that the profit was miniscule, given my $75 risk.

Quite quickly into the trading I was nearly 3R up, so to finish just above breakeven hurts. However, I need to concentrate on picking better prospects, and I will only do that if I let things ride.

I really tried to hold off micro-managing my positions, and just sit back and let the market determine the success or failure. That was hard to do. I fell into temptation with one trade (SNDA) and moved my stop up, and paid the price since I would have made a little if I had let it ride.

Here are the trades I made:

(Paper) Trading Summary : 02/27/2006

2006-02-27T21:56:00.000-05:00

A profitable day today, which is no surprise given the market action. My biggest winner was AH but I made small amounts on INCY and a small loss on IACI. I saw LOW but decided to pass, but Trader Eyal nailed that one nicely.

Then I took some dumb trades in the early afternoon in NVAX and INCY. I suffered partial losses on both of those. I am seeing one consistent failure and that is the stop under an NRB. Where we have an NR3, I need to place my stop under the first NR, not the last. Quite often I get stopped out as I did in NVAX.

So, in summary, I am happy that my scans seem to be finding good candidates, but I am not happy about my my trade execution, especially the taking of the afternoon trades. I need to be more disciplined.

Here are my trades:

Site Improvements

2006-02-26T10:42:00.000-05:00

I have just made some minor site improvements that I hope will help people keep track of what is happening here, and to help improve any browsing of the site.

Firstly, I have added an email reader (via feedblitz) that will allow you to be emailed any new posts or updates to this site. Alternatively, you can use Yahoo! Alerts new Blog feed (Beta).

Secondly, I have added a site-specific Google search bar at the top of the center section, allowing you to search this site.

If anyone has any suggestions for other improvements they would like to see, please add a comment to this post, or email me.

Thanks !

Englishman Trader

PS. I forgot to tell everyone that I have a new domain, www.englishmantrader.com that is re-directed to this blog. In the futureI plan to move over to a different service provider, so using the new Url will guarantee you will be switched over seamlessly when the time comes.

(Paper) Trading Summary : 02/24/2006

2006-02-24T18:08:00.000-05:00

Took 3 trades today (trying not to over-trade), with one full 1R loss, a partial loss and a big 5R+ win. So, I am somewhat happy with this 3R+ overall gain, although I am annoyed at taking the two losing trades. The full 1R loss (BMRN) should have been closed earlier as it showed a shooting star, followed by a clear down bar, and the partial loss (JWN) should not have been taken at all as it posted spinning tops, rather than bars with small or no tails.

The intriguing thing is that the winner (WTZ) was an AMEX stock. I do not normally trade these as the spreads can be large. However, the spread tightened up in time for me to enter.

Also, thanks to “President Fox”, I am now able to plot Fibonacci retracement levels using CyberTrader Pro. Now, if they could add support for Fibonacci extensions …

Edit (2/26/2006) : I did not calculate the fib extension target on WTZ correctly. It appears that I used the 23.6% fib retracement level as my basis for calculating the target, instead of the 38.2% level. Obviously I do not want to make this mistake in the future and leave money on the table.

Here are my trades:

(Paper) Trading Summary : 02/23/3006

2006-02-23T22:34:00.000-05:00

I took a number of paper trades today to both validate my new scans (both long and short) and to test out the Fibonacci levels out. I have charted most of the trades (there were a couple of other, more speculative, trades that did not work out).

I still need to take care and make sure the risk/reward ratio is good, which only happens off a good NRB and I need to take more care plotting the fibs correctly !

Here are my trades.

Initial Analysis Results

2006-02-23T08:39:00.000-05:00

I am about midway through the analysis of my prior trades, so these findings are preliminary and subject to change.

However, before I could analyze my trades, I had to sit down and define the kind of setup or trade I was looking to find and take advantage of. These are the “Unusual Suspects” that are moving considerably outside their normal trading range with above average volume. Typically such action is triggered by some significant event such as an earnings surprise, or some FDA approval or good trial result.

Secondly, I wanted to establish some kind of method to determine not only a good entry but exit points for both stops and profits exits. I decided to take a leaf out of Trader-X’s book and apply Fibonacci retracement and extension levels to my trades, using an opening range based on the prior day’s high/low to the 9:45am bar high/low (assuming a 15-min chart).

Unfortunately, CyberTrader’s charting function does not support Fibonacci levels, so I have had to manually determine the relevant levels, a time consuming effort, even with the use of spreadsheets.

Firstly, over 50% of my trades should never have been taken as they did not qualify with a decent opening range, or they did not setup appropriately for a decent entry. Another 35% of my trades showed a possibly tradable entry, but I did not enter at that point, but typically later, such as within the retracement zone or right at the extension as it stalled and turned. Finally, a very small percentage of my trades were good setups, but even in those I did not enter at the most optimal point.

So, I have reached a number of conclusions at this point as follows:

The use of Fibonacci levels (retracement and extensions) appear to be very effective at predicting reversal points. I do not profess to understand the dynamic behind this, unless it is simply a self-fulfilling prophesy as many people use it, but then it is not necessary to understand it to take advantage of it.

I am overtrading, leading me to enter many trades that are marginal at best, without taking the appropriate time to determine if the trade is a one, for example that there is no close support/resistance level on the daily or weekly charts.

I appear to be stumbling onto the good candidates, but after their optimal entry, and I have typically mistaken a reversal point for a consolidation point, as indicated by the Fibonacci levels.

Now, what adjustments am I making as a result of the above conclusions ?

I am going to start plotting Fibonacci levels on my charts. If a stock is within its retracement zone, then I will not take the trade until it breaks out of the retracement zone. I will also take more care when the stock is at its opening range high or extension.

I am re-working my scans in an attempt to expose the good candidates earlier, at least by 9:45am, to give me the time to plot out the fib levels before the first possible trading entry at 10:00am.

I will define a profit exit at the OR high (if coming out of the retracement zone) or at the extension level if breaking out from the OR high. Also, if this returns less than 2R then I will not enter the trade since the risk/reward is not good enough.

I will hold the trade through any consolidation between my entry and profit exit. However, I still need to be on the lookout for a significant failure.

I have already started paper-trading using my new rules but I do not have enough trades yet to determine if this is going to work. To date I have taken 8 trades, 3 of which were successful, 2 were partially successful, and 3 failed. Of the 3 that failed, 2 showed an initial profit before showing significant weakness (giving me an opportunity to move my stop), and then breaking down hard.

I will keep on paper-trading for now until I have more statistical evidence as to the effectiveness of my trading rules.

Stop the Insanity, I Want to Get Off (Part Deux)

2006-02-15T21:01:00.000-05:00

Given all the losses I have been recently suffering, it is clear even to a stubborn individual like myself, that I do not have a solid trading system.

I see a number of significant flaws like bad market orders, for both entries and exits, but the most critical flaw is simply the number of trades I enter that simply do not get into profitable territory. Too many entries either immediately reverse, or fall back into an existing consolidation phase, or climb a little (certainly not to a 1R profit point) and then drop hard.

I could come to grips with flaws such as bad market orders, but clearly the killer problem here are my setups.

So, what am I going to do about it ? I think its time to re-analyze my trades. I want to look at the kind of entry, the kind of failure (and in some cases success), the overall market direction, daily and intraday at the time of entry/exit, and some other indicators such as whether it was a high-on-day entry, and what the fibonacci retracement, extensions, and various EMAs were.

Where I had a bad fill, I am going to assume I got a perfect fill, so that is not a factor in my analysis, since the objective of the exercise is to identify a winning trading strategy that improves my odds of potentially entering a winning trade to 50%. I will not assume I can improve my odds to improving my win ratio to greater than 50% (at least not for now).

Then, assuming I have some improvements to my system in mind, I am going to paper-trade it to validate it before putting more real equity on the line.

I will be posting my findings on this site, but until I am ready to evaluate an improved trading system there will not be any more trades to post.

Trading Summary : 02/13/2006

2006-02-13T22:45:00.000-05:00

It seems that the combination of the New York snow and the lack of economic events prior to Ben Bernanke’s first public hearing as the new Fed Chairman, resulted in a very low volume and lack-lustre day.

Due to the lack of much serious buying power, it is no surprise that a significant number of stocks that showed unusual activity had a tendency to fail and drift back towards where they started.

I took four actual trades today, and suffered a full 1R loss, a 0.7R loss, a wash and a small 0.5R gain. So, overall I suffered a 1.2R loss. I also took a paper-trade short (CELL), and I was up 1.2R on that one. I will chart that one at the end. I also watched ACMR but failed to take any of the early entries above the 9:45am and 10:15am bars … d’oh ! I knew that Trader-X would be all over ACMR.

I still made some of the same mistakes today. I entered one NYSE trade (BLK) with a market order, and got an entry a whole 50c (2/3R) above where I expected to enter. I was aggressive with my stop and got out for a wash.

Again, my stop management was not consistent across my trades. I was loose on some, but tight on others. If I was tight, I would have done better (no surprise there).

And here is my paper-trade short:

Trading Summary : 02/10/2006

2006-02-12T23:18:00.000-05:00

Took Thursday off to clear my head and come to terms with my big losses earlier in the week that saw me squarely back in the red. So, to adjust, I reduced my risk from $100 back down to $75, and vowed to take less trades.

Well, I succeeded in reducing the size of my losses, but I still made a loss. I took four trades, one of which was a speculative short (SNDK). All four trades were losses, one a near full 1R loss (EMR), two 0.5R losses (SNDK and TZIX) and a small loss (AOC).

Once more, my stop management let me down, allowing small gains to turn into losses.

Then there was the one trade I had setup but pulled out of just before it took off (WMI). Damn.

Here are my trades in the order I took them:

Trading Summary : 02/08/2006

2006-02-12T21:59:00.000-05:00

Another big losing day. I took 12 trades, 6 of which were speculative shorts, all of which were losses. Of the other 6 trades, one was a short (BOOM) and that was a small loss. With the remaining 5 trades, one was a full 1R loss (SIFY), and the rest either small gains or losses. Add in the commissions and the loss was significant again.

The biggest mistake was taking the speculative short trades. If I am going to do that I am going to do them on paper, and not with real money. I need to apply the same to my “unusual” short setup until I get that shaken down.

Of the normal trades, none of the setups/entries were optimal. I was either late into the trade, or the stock showed significant signs of weakness prior to my entry.

As before, my stop management could be better too.

Here are the trades in the order I took them:

Damn ... trouble posting charts again !
GOOG-2 15-min placeholder.

Trading Summary : 02/07/2006

2006-02-12T15:27:00.000-05:00

My biggest one day loss was incurred on this day. I took nine trades and lost on seven out of the nine, washed on one and a very small gain on the last.

Three speculative shorts (YHOO, GOOG and CTDC trade #2). Small loss overall, but losses none the less.

My position size was suspect in some cases, with an actual risk over $120 on four of the trades. This increased the magnitude of my losses.

Suspect entries of various kinds. RMD was a suspect entry due to the first three candles being near the same size, rather than any NRB. CTDC was a dumb entry as it was taken as the gap filled.

I suffered a terrible market fill for a stop on an NYSE stock (PMI). However, the alternative (a limit order) would have been disastrous.

What made this my worst day was the fact that I suffered so many losing trades without any real winners to offset them.

Here are my trades in the order I took them:

Trading Summary : 02/06/2008

2006-02-11T22:59:00.000-05:00

I am performing this analysis over the weekend, so I have had more time to reflect on my mistakes. I had a bad day as I suffered an overall 4.5R loss. 2R was due to speculative trades outside my normal setups (HANS and TXI). I suffered a 1R loss on a short (HEW), and the rest exhibited a number of rookie mistakes as follows:

Not waiting for an NRB to enter off (LPX).

Bad in-trade management. I need to be more aggressive with my trailing stops as I was in January.

A bad market fill on an NYSE stock. I need to make sure I place a limit order when dealing with NYSE stocks.

Some stocks are not the “unusuals” I am looking to trade, as I am getting in on day 2 or day 3 of a breakout.

Here are my trades in the order I took them.

Problems at Blogger.com ...

2006-02-06T08:36:00.000-05:00

Blogger has been suffering some significant hardware issues since Friday, and it appears that all posts and changes made from Friday onwards in my blog have disappeared.

I am hoping that the problems are now over. However, I am going to have to recover my changes and re-publish. As I mentioned before, my apologies to those with email or RSS feeds, as you will be seeing the same posts again.

Englishman Trader