Caught Up On Some Reading

My mental state has been shaky lately as you guys have read. I purchased ‘Trading In The Zone’ by Mark Douglas back in February when I was preparing to depart Bitcoin trading for greener pastures in the great US equities market. I read the book and felt I had a good understanding about the concepts of a winning attitude and how to separate your emotions. The premise of trading is that of the ‘house’ in gambling. It is a probabilities game. You need a large sample size but a common problem is that you always carry your last 1-3 trades with you. As I reread the book yesterday and today, I seriously felt as though Douglas had written it for me specifically. What a difference a few months in the trenches can make when it comes to relating to topics discussed in that book. If any of you are trading and feel extreme swings mentally, pick it up. I promise you it is worth the few bucks it costs.

Confidence is a huge part of trading. If you follow your rules every time, you will become confident in yourself because you can TRUST yourself. You know that you will cut your losses when it says to. You know that you will lock in your profits without question and not get overly greedy. My string of 3 losers weighed so heavily on me I couldn’t believe it. Today I put on two trades. I could feel myself getting tense when it moved against me and then I just rambled off why I entered the trade and what my plan was for it. I was completely content with the money I put on the table to see if the market would work in favor of my plan. I realize that every moment is completely unique and that just because something happened before does not mean it will happen again.

The book opened up my eyes this time around. I plan on reviewing all my highlighted passages on Monday before the open to remind me what this is all about.

I took one screenshot today because it captured both of my trades. Both of these trades were pullback plays. At the red trend line I bought puts for both anticipating the markets/stocks to continue the down trend of the day. The green circle indicated my entry and the red circle indicates my entry. I was 1 for 2 on these plays that I initiated very late in the day. I spent the entire morning finishing up the book and I’m glad I did.


I may say this a lot but I’m looking forward to next week. The journey of transforming my mental state is going to be a 24/7 job but considering the passion I have for this, I’m ready 100% without a shadow of a doubt.

Need to Grow Some Stones

I knew this blog would capture the ups and downs of trading… and currently I’m in a limbo type state where I can recognize my problems but I’m having trouble correcting them.

My brokerage was down until yesterday but even with that, my papertrades were less than 50% successful. I knew that one of the largest hurdles in trading would be my own self but I definitely underestimated how powerful the human psyche is.

I see setups all throughout the day BUT if the first setup I see fails, I’m mentally put off and will usually sit on the hands the rest of the day. I just need to brush that shit off and move on. Maybe if I write more posts about how gunshy I am, I’ll eventually figure it out.

From here on out I’m scaling my position size down one half. I’m guessing when I say that the amount of the loss (all within reasonable tolerances) is too much for me currently. Maybe if my losses are smaller I won’t be affected so much mentally.

My losing trade from yesterday:

TWTR entry:

TWTR exit:

I got out before the complete 60c flush. Maybe I’ll start putting in the values of entry/exit with the screenshots.

Cash Buying Power: 0$

So because the brokerage I use went down on Friday and they had to manually close me out of my positions, the clearing house screwed something up and made my account think I put on a 20k position. Even though I didn’t, and I didn’t make/lose any money on it, it is automated to take 3 days to clear and give me my buying power back. So the past 2 days I have just been sitting on my hands and paper trading. I’m hoping to resume like normal tomorrow.

Apple made a nice 3% move today on the announcement of the new phones/services. Some of my friends made quite a bit of money. Next time it will be my turn.

Friday’s…

I’m 1 for 4 when it comes to trading on Fridays. Took a controlled loss on a $FB put (where I’m assuming the price will go down) this morning which was fine. It was reversal time and I would be down much more had I not been disciplined.

FB entry:

FB exit:

This touches on a pullback pattern where you buy into a fall to the 13EMA. I really should have entered there but I didn’t have the balls.
Ideal TWTR entry:

Saw a late day breakout of Twitter’s highs and decided to pull the trigger.
TWTR entry:

She then proceeded to roll over and then check out what happened to my brokerage account.
RIP:

Four phone calls later, I suffered a loss 10% larger than it should have been. I can’t say I’m pissed, but I’m not fucking happy about it because it was out my hands.

Lesson to learn from all of this? Facebook and Twitter both put in multiple moves which I should have taken. This is a numbers game. Pull. The. Trigger. Have a good weekend. I’m still positive for the week.

Another Morning of $FB and $TWTR

I had some initial doubts today before the market opened about how I would perform today. After having my best day ever yesterday I figured I would find a way to botch my gains today. After a few sips of coffee I decided to push that thought out of my head and play the opening 5 minute range just as I did the previous day. The two stocks in play were the same as yesterday, Facebook and Twitter.

$TWTR entry:

Entered at 6:40AM which was a bit worrisome as it pulled back right after my entry. My stop loss was in place so I quickly decided to keep checking who were the morning movers.

FB entry:

Entered at 6:35AM at the middle point of that second purple candle. Also a bit tense as it pulled back next candle but held support so everything was good to go.

I got to my risk mitigation points in both which always brings me a slight sigh of relief to lock in some profits.

Things on both the S&P 500 ETF and the E-mini Nasdaq 100 Futures were looking toppy to me. Bunch of long upper wicks which had me put my guard up and prepare to lock in profits.

TWTR exit:

I debated waiting for that teal candle to close (the one that tapped the 13EMA which is the yellow dashed line). $SPY and /NQ were not holding their highs so I took it off for a very small loss. This was unfortunate because while I closed out at 50.15s, she went ahead and made her move to 50.76 after that shake out. You live and you learn. Twitter moves when nobody else is. All of these stocks have their own personality and I have a feeling as time goes on, I will get a feeling how my basket of stocks play under normal conditions.

FB exit:

I was shy about 12 cents from my profit target but then she rolled over. I captured a bulk of my entire daily profits and closed out a little bit before my stop loss came into effect. The reason why I can look back in hindsight on Twitter and say, ‘damn, I got shook out oh well,’ is because it was a very small loss and then went higher. Had I held it, yes I would have doubled my profit today… but that’s not following my own rules. Had I broken this rule on Facebook, I would have lost all my gains for the day. $FB traded down into the 76.30s but I closed out in the 76.70s. Sometimes my stop will be to tight, other times it will save me from large potential losses. All part of the game.

See you all tomorrow.

Edit:

Well the $SPY and /NQ took a dive so I figured it was time to buy some puts. Locked in another 20% on $FB. Should have hopped in $TWTR as well but I’m still new to playing these late day moves.

Entry:

Exit: