Sep 22, 2009

Tuesday's trades

About my only bright spot today was SGY. But even that turned against me later in the day. My initial position was off the 5-min chart, and I doubled up after a nice pullback on the 10-min. Like I said... it was all for not as price came back down.
Stopped out of ASML, CCL and breakeven on KMX. Finding this week especially choppy. I wonder if the way I've been trading lately just doesn't do well in 'uncertain' market days... like the days leading up to the FOMC.

Also, SpiderScan just came out with a new version which includes a new TDAmeritrade scan - along with some other new enhancements. Do yourself a favor and check out the free trial.

Lastly, I've been thinking for the past 2 months or so if I even want to continue blogging. Personally, I'm just not getting what I hoped (and experienced) when I first started a couple years ago. I don't post charts as a journal... I can do that with a folder on my desktop. I created this blog as a way to interact with other traders. This is a very isolating job and I figured the blog may be the closest thing to having an office-like environment. To bounce ideas off one another and to generally have some fun. Right now, I feel like I'm posting charts just to post charts. It's just not working out.
Granted, I haven't exactly put the kind of energy that I once did (Rise or Fall) but, still, the feedback and interaction is not there.

I'm really having a great time trading right now and personally feel like I've reached a point where I can truly consider this a career. It's taken some time to get here, but it feels good. Not every day will be a great, but what I've always hoped for is consistency and a trading plan I can depend on.

Moving forward, I will probably use this blog to post some very good, textbook trades instead of the day-to-day approach I've used since the beginning. Of course, I can only hope that I have a lot of those to showcase :)

Take care,



Tom T. said...

There are a number of trader-x progeny blogs that have either stopped or are not as prolific with their posts. Trader-x has posted his reasons for not posting. If I am not mistaken, I think he suggested that the x-trade was no longer a bread and butter setup as he was coming up with new variations. I have been following along for over 2 years now and up until this month I have found consistent setups - not every day but at least 75 percent of the days (I am not saying I traded them, I am just saying I found them whether in real time or at the end of the day) and I thought it was premature to sign the death certificate on the x trade. Right now, I am joining those who have doubts. On the other hand 3 weeks does not give enough perspective to judge the continued viability of this setup.

I have been battling with the idea that trading should be more science than art. The fibonacci aspect appeals to the logic part of your brain and the reading of candlesticks and the wedge patterns appeals to the art side. How often have we spotted a setup and then it fails, we turn to post-mortem analysis and note that because one of the candles had too much of an upper tail or was too far from the line do we realize that this is more art than science. I have been experimenting with the idea that each stock that gaps, if you plot the fib lines correctly, you should be able to find a target regardless of the evolving pattern. Is this working, it worked one day but did not work the next, so back to more watching, testing and interpreting.

What drives us to find new setups? If the x trade is so consistent in appearance and profitability - why are so many people having problems. If it is so predictable and occurs almost every trading day - why do we have so many bad days? Why are about 30 to 50 % of the posts on the daily journal type blogs end up to be about losing trades.

I have followed oonr7 and he uses 10 minute and 5 minute timeframes - I have had so much variation of results that I stick to 15 minutes because I need to limit the variables so I can figure out what is the variable in my trading that needs tweaking. I find if I switch then I do not have that memory of pattern recognition to judge the setup. What looks good on a 15 may not be the trigger when trading a 10 or 5 minute chart.

OONR7 - what is your opinons on being consistent and the frustrations you expressed on finding setups?

Anonymous said...

Good luck to you in your trading OO. I tried to post to you in the past but the post would not post. Even though you may be slowing down blogwise, thanks for what you provided already on the blog.

OONR7 said...

Tom... that's an excellent comment. But to answer your question... is the X trade dead I need to ask you a question: what is an X trade? X introduced me to 1) finding gappers 2) the opening range and 3) the moving average.
What I have done with those 3 key concepts, though... is completely my own. The biggest change for me over the past two months has been using the different timeframes to spot entries with different moving averages. Using multiple timeframes allows me to spot better entries or entries I probably wouldn't have taken notice on just the :15 timeframe.
Now, we need to remember that this is trading and it's all about probabilities. So, you're absolutely correct about the art/science thing. But the biggest difference in my trading now as opposed to 6 months ago is conviction. When possible (meaning I have the buying power) I look to take every possible entry that presents itself within my trading plan. That mix between art and science can only be exploited if you take all the possible entries. Otherwise, you're not trading for average - which, in my opinion - leads to consistency.
Yesterday was a good example. FCX presented a nice entry off the 10:35 bar (5-min) using the 13ema as support. But I hesitated and that ended up costing me as price shot up over a dollar from that exact spot on a very narrow entry. This wasn't a stock I caught at the end of the day... I gave careful consideration and, because of the choppy market over the past two days, I thought I would wait to see if something developed above the ORH (a higher probability). Nothing did and I ended up with a small loss on the day with my other trades.
I'm also resigned to the fact that I will have losing days from time-to-time. What I strive for, though, is to make sure the losing days aren't so bad and the winning days are great. I've gotten out of my head the notion of being right on every trade and switched over the wanting to be right from a profit standpoint at the end of every week.

Tom... you always provide great feedback and interesting questions. Thanks for that.

TraderAm said...

Hello 00nr7.

Fully see where you are coming from and I'm in the same camp as well, in terms of maybe reducing my blogging. My reasons are slightly different, as I said on my blog.

There is no question that the interactions have died down. Also there is no getting away from the fact that markets are much tougher than a year ago. Last year, a NR7 entry was giving multiple-R gains as we got trends that continued thru the day. Now it is more choppy and you have to be more selective especially if you trade the 15min charts. I have multiple days where I just don't trade.

People are finding it tougher so I suspect they have left the arena after some losing weeks/months and gone onto other things?

Whether the TraderX setups work now? Well IMO it is the same as anything else > there will be losing days and there will be periods when it doesn't work well.

greytrader said...

Interesting comments. It is interesting to note that the scalping type traders like SMB capital are having record months. I think the bottom line is you need more setups in your toolbox than just one type of trade. AIG for example has made people tons of money in recent weeks but is too volatile to trade of a 15 min chart.

andi said...

like others have said, trader-x type trades are dead. Even if you luck out w/ one , there will many that would have failed essentially making the entire exercise useless. For the market became very diff to trade after mar 09 as the stock rally resumed. In fact i believe that pattern traders are being hounded by HFT (high freq) so they are stopped out w/ losses most of the time. So swing trades and bying the sell off work now but no reliable set ups....
In other words, it is bad for pattern trading. I was thinking of dollar cost avg, but that takes balls.

OONR7 said...

andi... I'm having a blast with my trading. Can't categorize them as X-trades, but I definitely follow a pattern.

greytrader said...

OO, wow 7 good comments... you are sure you want to end this ? :-)

OONR7 said...

gt: maybe I should end the blog every day :)

Anonymous said...


Whether you stay or go, thanks for the many great articles. I really learned a lot on this site....


QQQBall said...

Hola 007!

Looks like it just about made the 1.482 extension on SGY. Nice trade.

QQQBall said...

I will chime in.

I need to work mostly on patience and discipline. Over the years I have gotten much better in NOT trying to over-optimize the trading framework. People go back and look and say "why didnt that work, what do I need to change." My answer is possibly nothing, but you need to work on money management and discipline on the winners and not just the losers. Searching for the holy grail gets confusing. Not all trades work - there is RISK.

Look, it should be almost 50/50 on trades (less minimal trading costs & some slippage) - basically a coin flip... but 95% fail - that's because so much of it is psychological. Its not the charts that need to change so much as the trader's thinking and perspective.

007 - now that you are scanning multiple time frames for entry, maybe one day you will think about entering say on a 5-min and using the 15-min chart for your projected exit target. Think about it ;)

Thanks for all the blog entries.

My son is in school over your way, so maybe next year we can meet up.

editL I meant 1.382 ext - i'm typing in the dark! ;)

QBz ;)

OONR7 said...

Qbz: I generally agree with everything you say but I just want to point out that before you can start accepting losses as part of your plan you have to be sure that winners are also a good part of the plan. Otherwise, you'll end up in a zero sum game. I've come to the realization that it doesn't matter if I only have a 25% win rate on a certain day so long as that 25% makes me a good deal of money. But if my success rate is consistently 25% then I think my entry criteria needs to be re-examined.
But I think you're right on the money with the trade management. Many times I let good profit slip away as I am holding out for the bigger payday and sticking to my plan. But the real essence of any trading plan is to make money. And letting 2R in profit slip aways is extremely frustrating.
Also, since I use the :15 timeframe as my opening range, I often use the profit targets from the :15 timeframe.
Let me know when you're in town... I'd love to meet up for a drink. Cheers.

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