There will always be a better price

What have I learned from these last days? As usual my TZA position at 9.31 was early. I anticipate, but cannot wait. On the last down days I thought to myself; take the profit while you have it, it’s a good 3% of your account. Still I couldn’t quite do it, as I remembered how I would take profit and just see prices fly past the point where I took profit. This last week I instead remained passive – losing time (potential profits) and money. I have one OK entry price now; 20% at 9.10. Still, I really want to let it ride, as, logically, the money is to be made on the downside. This of course does not mean that I couldn’t have traded on my position. had I done that I would probably have been in a zero risk position right now.

I am expecting the downside to go past 1084,5 ES like yesterday. The run up was just amazing. Blatantly executed by MMs.

What have I learned?

1. There will always be a better price, therefore I buy positions and set good stops so that either price goes in my direction right away, or I limit the loss and can pick the stock up later for a better price.

2. Take the profit (partial) when feeling uneasy. If there is lack of strength in the direction you are trading and divergences in the oscillators – EXECUTE, DO IT NOW!

3. I am not biased, I trade in the direction of the market.

About number 3. I see now that there is a divergence between SML and SPX in buying/selling, the SML is clearly weaker – sell offs stronger and rallies weaker. This is a safe sign of trader sentiment – it has turned. Therefore I am keeping my position.

Another selling day

As I came back from class I found ES down 1,6%. That is pretty substantial. I have been waiting for this sell-off for a few days. Yesterday’s retrace was only a bull trap. Still I am unsure, and will not stretch my luck. For the moment the market is selling, so so will I. I am on the right side of the trade, and will stay here. Still I would want the resistance/support zone to be broken today.

Watching light crude oil

Thanks to aviat72 on the TTW blog who discovered that based on the daily chart of CL (crude light) it seems it is following TD sequentials, so I am watching this for confirmation on when I should cover.

The –ES looks like this. The last price channel which has proved as a resistance, should also provide support for the upward (market downward) movement.

Good and calm today.

Today I kept my composure and stayed short. Maybe I should have profit, but the tape seems week, and I want to see this market change character once again. I will cover 60% at ES 1083 and watch for break of SPX 1084. Apparently that’s when hell breaks loose…

My beloved –ES chart looks like this today.

The VIX today

Keeping my head cool. Tomorrow will be interesting. unfortunately I have school at the same time as the open, so I cannot follow the market so closely. Will be in at about 11.30 EST (17.30 GMT +1).

Bam!

SPX was stopped at the old support from September (the rising beige line)

 

I am afraid this might just be a major correction of a bull market. On this chart you see us still in a bull channel from Nov 08.

If we break bottom channel line, then we might see new lows. Until then I am confident this sell off will be contained by the channel. Lower channel lines are at about 1075 and 1055. I will cover at these points and then play day-to-day.

Sell off?

It seems we have started to sell off. I saw it first starting as a bearish intraday wedge:

 

This happened:

:)

I entered new shorts. Am now 120% short :P

Are we selling off or not?

Well… I don’t know.  From these 5min charts however, the SPX sold off to wedge lows from Friday, while SML was bought long before touching wedge line. This of course shows strength.

I don’t like these kinds of weak morning selloffs followed by “strength” the rest of the day. To me it is total bullshit – but that is how Mr. Market is right now – he is indeed a psychotic friend. I think his mood will change though, it just takes some time.

Today I bought some nice running shoes. Getting ready to kick the price action right back down where it belongs!

EDIT: SML keep posting new highs. SPX stuck at 61% retrace from open high. The SPX is of course leading – SML only moves in the extremes of the perceived market direction – hence it is a good trend indicator.

Update: It seems we are selling again. SML put in a new high. Gold is selling, about –1% at the moment, but is possibly putting in an inverse head and shoulders pattern.

UPDATE: 20.50:

So now SPX is moving up, but SML is lagging behind – actually the SML seems to be posting a bearish wedge… It could seem that the traders have changed sentiment?

This week

I’ve kind of made it my thing to analyze the /-ES, the negative of the ES – for me it for some reason it’s easier. This is the updated view on the ES and it’s development.

On the hourly regular ES however – we might see more upside. What scares me a bit is that after touching this upward correction channel we have not fallen back as strongly as earlier touches. This might suggest a breakout upwards. I will hold my position until we correct. max pain is 1116 for me (1% over where I shorted).

I don’t like that there has not yet been a real bounce. However I am patient. The market is not there to instruct me, it is there to serve me. Uptil now the upward correction has followed the rules with a nice about 45 degree angle retrace, so we will see what’s next. What might happen is that we would get consolidation at around 1105 just in time for the overboughtness to wear off and the lower channel line to provide support for the push up.

Enjoy the week! I will be watch, but not as closely as usual – I want to hold this position until we at least get a few decent days of red.

Holding trade until we go down again.

I will be keeping my TZA position. Like usual I was a bit early on buying, but the potential is for TZA to retest 11.80 highs, but call for some profit taking around 10,50.

For this to happen we need bearish downside momentum. Momentum is to the upside right now. Keeping it over the weekend. Apparently Wednesday is a turn date of some significance. I don't put much importance into these turn dates - for me it is more about timing the sentiment - which I am getting better at, but still am not good at (hehe, check trades gone against me :P ).

Discovered a funny guy with some substance yesterday; hitthebid.ning.com . Liked him, don't know why - maybe his rants reminded me of how I too have felt.

Passed an exam today (pathomorphology). Yes, it was very hard.

Short the market

First image I posted at tradingtowin.com before the open today. Second image is after today's close.

As I said in the last post it is about time to go short. Today I waited for my entry in TZA, but was still a bit early. Am 100% in TZA at 9,31. Should have waited until right before close - as I have learnt before; in trending days one should only take overnight positions right before the close, as they will rally or fall until close according to day trend.

I shorted at SPX 1106,5 pretty much at the 61% fibonacci retracement level. After close the Fed announced the raising of the Rates to 0,75%. The market reacted immediately, and I am "in the money so to speak." Es dropped in one minute about 10 points to 1096. TOS in working properly at the moment, so I can't check the price right now, but tomorrow should be a nice gap down, and possibly the continuation of something nice. This round I will wait for a better point to take profit, and in the mean time just let it rip.

SPX at resistance

Looks like SPX is hitting resistance very soon. This resistance is very strong and has acted like support for months. When SPX hits it - it is time to go short. I will set a stop 2% over for my ETFs.

Let profits run

When you have position and set stops, just let them run. If the entry is OK, then you shouldn't worry about it. Today I am well in sync with the market, and entered a few good positions. I had one exceptional trade - which would be even better if I followed my original plan perfectly, but got a very good profit on it.

All in all I am following my plan well. Also I double leveraged my account - it makes it relatively cheaper to trade. What a great day today is! :)

Lesson learnt

I have learnt a few things since starting this blog (haha, 3 days ago). Although I have traded for 1 1/2 years - and have learnt these lessons several times before, I will not fall to the lows of these actions;

- I do not get affected emotionally by bad trades - I recognize them, and cut them
- I do not trade the moment I discover a trade, I wait 5 mins for confirmation before entering.
- I set stops on playing reversals.
- I recognize trader sentiment by watching movement in ETFs and trade thereafter.
- I sell 2 bars after CCI 200, that is often the high.
- I enter trades where I risk max 0,30% = commission + commission.

I keep getting stopped out! This time was the last time. There will always be a new trading opportunity. For the moment I am out of sync with the market. Will be back tomorrow.

Well... Broke my rules again

Last night I got frustrated and took a position, which not necessarily was so stupid, only the timing (for the second time for this position) was stupid. I got tired of being thrown out by stops, so I removed them, and have overnight risked a lot of my trading capital, instead of waiting.

I have done a lot of waiting - it seems that I am too scared of taking some trades which I see are good, and then other times I need to prove to myself that I am not "scared" and then the quality of the trade is less, and I am punished - of course for my stupidity. The market wants to teach me something...

Friday gave a selling climax, let's see that retrace!

Hitting the targets

The papers I'm buying keep hitting the targets I assign them, but before that I am long gone - "securing" minor profits - ensuring that I will, by commisions and stops, bleed out.


UPDATE: am long TNA 36,5 and have relatively conservative target of 37,3. not touching until it is executed.

what is wrong with this tape?

these moves fucking annoy me. 1,2% moves in 2mins to throw out stops. Of course I got thrown out as well.




in reply to my own headline; I am of course the one who is wrong as the tape is always right.

bear or bull flag

well, entered a good TNA trade, but got thrown out by a too tight stop. Now the question is whether we are posting bear flag in the bull movement?

Trading the consolidation

The ES is due for a bounce, however I think this week will be range-trading (1050-1067) before a bounce to around 1080. I will go short around 1080 with stop right above.

Will set stops before entering trades this week. Will let profit run, but only according to Zigs T-theory (time symmetry). I will not trade according to PAR signals or Sequentials, but only use them as confirmation of itraday movements.

Will update my trades as they happen.

Took the loss

I finally took the loss. Probably too early as I could have gotten a better exit price, but that's life. Still got a net profit of 1,44% for the week. Next week will be better. Without stupid mistakes, this week would be up 6-7%. That's for next week.

5 stages of grief

The stages Kubler-Ross identified are:

* Denial (this isn't happening to me!)
* Anger (why is this happening to me?)
* Bargaining (I promise I'll be a better person if...)
* Depression (I don't care anymore)
* Acceptance (I'm ready for whatever comes)


This is definately me in a losing trade position. Normally I guess I go directly to Depression and then straight to anger. Then when I repeat mistakes I go to denial and then to bargaining before finally when I've lost so much it has wiped out most of my profits, acceptance.

Officially dumb

I have had three great opportunities to get out of my position (yesterday before close and twice today). And still I was unable to get out with my loss. The position was bad to start with. ADMIT YOUR FAULTS AND GET ON WITH IT. Today I have not only NOT exited my bad position, but I missed 3 GREAT trades. Really - I feel stupid. Just plain old dumb.

The flame is pain

If you have a bad position that you KNOW is bad, and you hold it overnight and just pray for a better price to get out - see the opportunity to get out when it presents! Don't let your hope get the best of you. I was burned today as I took a long position before closing yesterday. Before the bell it looked like we might get a turnaround day, so at the open I actually had a chance to get out. Instead I sat there waiting for a higher price - EVEN THOUGH I KNEW THAT THE OVERNIGHT SELLERS VERY SOON WOULD CROWD THE TAPE. I let the hope get the best of my head, my week's profits and my trading.

What's more is that after waiting for months and months for this to turn I am trying to go long for a swing!? DON'T GO AGAINST THE TREND. If the trend is bearish, look for short entry. If it is bullish, look for long entries. Sometimes it just feels like I try to lose.

UPDATE: We very well might see a good bounce, the overnight support of the lows on ES held well, and now I think we will see what the bulls can do. For my long position I will hold for the moment. Held way too long anyway. Another rule: don't let a swing trade/scalp turn into something longer term. Just cut the loss and make money any way the market will go.

Aren't there enough trading blogs?

Long have I had the urge to try myself up against the best - to eventually, with time, become one of them. It was the spring of 2008, and I had just started watching the Norwegian stock market. It was trading not so far from ATH, and after a pullback everyone was overly bullish. Having only one week's experience, I decided to jump in - with everything I had. I have always liked opportunities, so for me the bigger blue-chip companies were not interesting - they were done growing. What instead cought my eye was a small company called Questerre Energy Company - QEC. Of course, this was a trader's favourite - having over tripled in three months. When I bought it it was about 5% off the top, trading at about 20NOK, so the bottom was pretty far off. For me this was not something I worried about, the market could only trend higher. And the market "could only trend higher" for about a year. I had over that 10 month period lost over 40%, trying to buy the dips. I was trading quite often, and was doing OK - the market fell almost the double. QEC ended up at around 5NOK, and I was still buying. This worked well - I sold at 9,20 around June 2009, expecting a drop in the market - P3, so I could buy back cheaper later. This is when I discovered the economic situation of the world - after a year of crashes and heavy losses! Only NOW I turned bearish.

My bearishness was rewarded in the start of July, only to be irradicated by the end of July. This bearishness took form in different ETFs. For me I had long outgrown the Norwegian ETFs, where the liquidity was too low, and anyone with 100k $ was a market maker - making the retail trader easy bait for the banks. They would move, sometimes, detached from the market they were supposed to move according to! I found the American stock market much better in terms of technical analysis working, and ETFs actually being "predictable" - plus the leverage was better! I was severly hurt money-wise until in september when I started playing both sides of the market - trying to be a bear when needed, and bull when that was appropriate. Of course my main bias was still bearish, as the economy is crap, so would still get into bullish positions, only to take a small profit (2-3%) before selling, only to watch it rip 10-15% up. Those are the actions of a bleeding bear.

Over new year my approach changed. I started keeping better account of my trades, and for January and February I am for the moment up 20% on my account. If I would have ridden the profits on my good trades, I would be up well over 40. But it's all a learning process, and I intend to learn from and with the best.

The blogs I am reading give me an indication of what to look out for, but only give me input to my own analysis, which of course is the base of my trading. I am using Think-or-swim trading software and am reading different blogs - I started out reading xtrenders.com, but am now most often seen at EvilSpeculators or at the Trading to win blog.

Where am I now? Well, I try to trade for a living, along with doing my studies, medicine. My ultimate goal is to be financially free. But for the moment I mostly want to trade the best I can - cutting my losses quickly, and riding the momentum of profits as far as possible. By publishing my ideas I intend to remember what I did wrong, and what I did right. I am tired of learning from luck and forgetting the real lessons.