9/14/2009 1030 update

NQ discretionary swing trading:

• very powerful uptrend on the 60M chart, pullbacks to the 8MA have been buyable in hindsight, but after numerous days up without a pullback, i have been hesitant to enter on the long side during the uptrend...
• sideways on the 15M chart since thursday afternoon...pause before resumption of the uptrend or base that will break down soon??
• couple of quick scalps to the long side over the past two trading sessions within the base...
• my discretionary swing trading style does better during choppy, ranging, moderately trending periods as compared to power trends...
• NASDAQ internals are mixed...
• NYSE internals are bearish, but improving...
• NQU09 due to expire this friday...i am now using the NQZ09...
• the NQZ09 pivot in the low 1670's has been a good place to enter long (for me) over the past few sessions, with exits in the low 1680's...
• my bias is the NQZ09 is basing before a pullback within the longer term uptrend...with this bias, i am hesitant to enter in the low 1670's again, so currently looking to re-enter the NQ swing long at limit 1658.50 and at limit 1643.50...these levels might be raised if the NQZ09 breaks above 1688 and the internals improve...

vcm discretionary daytrading:

• monday mornings are tough...choppy, not a lot of follow through...
• watch out for gappers that may look good on a daily chart, but have sold off a lot on the premarket intraday chart (ARIA, S)...the first buy setups may fail...wait for buy setups on a higher timeframe...

Disclosure: Long ARIA.

***remember this is an illustration of what i am trading and my thinking...my trading plan may change without notice...this is not a recommendation for you or anyone else, to buy or sell this or any other security...***

9/11/2009 notes to self

vcm discretionary daytrading:

• if a position is to be held through lunch, then do not open any new positions after 1115 rt...
• consider exiting open positions into the 1200 or the 130 rt...
• wait until 215 rt to open new positions for afternoon trades...
• if i am comfortable with the uncertainty of a position that is going against me, i have to train myself to be comfortable with a position that is going in my favor...when it is going in my favor, i have noticed that i tend to believe that it will reverse and then go against me...

8/19/2009 post close update

• NQ appears to have made a nice recovery from the -1.00% opening gap, closing up about 0.50%
• the discretionary NQU09 swing trade is now essentially flat...
• still looking to sell the NQU09 at 1607.50, 1617.50, 1627.50...the orders are on my brokers book, and could be hit overnight if the NQU09 trades up there...
• if any of these orders are hit, i am not sure where and when i may re-enter the NQU09...
• the 'BTD Index' systemic swing trade is up about 2%...an exit signal has not been generated for this model yet...if the NDX closes about 0.30% or more above today's close, then a 'BTD Index' exit signal will be generated for tomorrow's close...
• no systemic swing trade entry signals were generated for today's close...
• between yesterday and today, i remodeled six of my systemic swing trading models...in addition to the 30 models i am currently trading, there are about a half dozen that are on the suspension list...these will be remodeled as well...
• this process takes a lot of time...i figure i can do about 3/day...with some focus and hard work, i should finish this by labor day...
• did some daytrades this am (and yesterday am) in my vcm daytrading account...flat for the two days...
• need to filter out more of the setups that get discussed in the vcm chat room (DOW, HPQ) and just enter the ones that make sense to me (NVDA...great trade idea from the room, but i scalped it instead of R it and left a lot on the table)...
• my scalp trades tended to work out well (ERTS, ANN)...
• my R based trades netted out flat (HURN + 1R, LANC -1R)...
• very happy with how i entered, exited, position sized and managed the HURN trade...i should look to this trade as a model of how i should R trade...
• in the IRA and custodial accounts, the FAS was flat today...exit orders are still on the book at the same levels mentioned in earlier posts...

Disclosure: Long NQU09, long FAS.

***remember this is an illustration of what i am trading and my thinking...my trading plan may change without notice...this is not a recommendation for you or anyone else, to buy or sell this or any other security...***

8/8/2009

• back from vacation, semi rested...
• looking forward to trading on monday...
• no systemic swing entries generated for the 4pm friday close...however, i noticed that a signal ('SB IDX') was generated at 415pm...not sure why it was then and not at 4pm when the trading behavior was essentially the same...i need to look into this...in any case, i am going to enter the order in the EMDU09 when the sunday night session begins...
• i am going to try something new...a blend of systemic trading and discretionary trading...for my money management stop, instead of using the fixed percentage size that the model ('SB IDX') calls for (2.6%), i am going to use the 15 minute pivots carved out over the past week or so during the regular and the overnight session...i have identified 4 pivots, where 1/4 of the total position size will be stopped out if that pivot gets taken out...i will hold all the non-stopped lots until closing time on monday...i will be getting smaller if the position goes against my entry price, but staying large if it goes in my favor....
• this blend of systemic and discretionary trading, with this level of detail is new for me...i am not sure if this will help my trading by fine tuning the systemically modeled stops to the current environment, or if i am just playing games and looking for a reason to change the systemic trading plan which is not supposed to be changed...i am not clear on this...however, the above plan came to me last night when i was reviewing the systemic models signals...i haven't made any decent money in nearly 40 days, so perhaps i am trying to mix things up a bit....somehow this adjusted trading plan feels right, but who knows, i could just be playing games and breaking the primary rule of systemic trading: always take each and every signal exactly as prescribed...
• had some seasickness while on vacation...spent some time chilling and conceptualizing how markets move...this led to an insight for the systemic intraday ES trading model...i am looking to begin coding this up on monday...
• sold one of nine IRA/custodial FAS lots on thursday 8/6, booking 75% on that lot...8 more lots to go (currently up 40-82% on them), with sell limit orders in the mid 80's, 90's and 100's...

Disclosure: Long FAS.

***remember this is an illustration of what i am trading and my thinking...it is not a recommendation for you or anyone else to buy or sell this or any other security***

7/30/2009 morning update

• NQ rallied up this am...i fine tuned my target of 1625, such that when the QQQQ approached the whole number of 40.00, i would exit the NQ...filled at 1623.50
• this discretionary swing trade grossed 31.50 points/contract...
• combined with the two discretionary NQ swing trades taken on friday 7/24/2009 (http://stbsmb.blogspot.com/2009/07/7242009-noon-update.html), i have grossed 59.5 NQ points/contract over the past week...not bad! the chart above shows 2.5 of the 3 trades from the past week...for some reason the entry for the first trade is not being shown...
• i am not sure if i will re-enter the NQ swing trade...if i do, i have not determined where my entry, target exit, and money management stop would be...
• in my discretionary day trading account at vcm, i am trading HLX and YHOO to the long side...flat on YHOO, down a bit on HLX...
• just closed YHOO for a tiny gain...closed HLX for a 1 R loss...

7/29/2009 afternoon update

• 1 discretionary daytrade in my vcm account based on an opening gap...small profit...
• still holding the NQ discretionary swing long trade...entered at 1592.50, target 1625...additional buy orders at 1576.50, 1552.50...
• made some great progress coding up some components of the ES intraday system...
• no systemic swing trade model entry signals for today...
• i am going to check out a presentation tomorrow: 'Joe Bridges – of www.treasuryincomeengine.com is going to show EXACTLY how to data mine and build a valid - successful trading system'...
• i am not familiar with Joe's work, but i am always interested in how system builders go about constructing their models http://www.onlinetradercentral.com/presenter_090730.asp

7/28/2009 afternoon update

• no afternoon trades in the vcm daytrading account
• the NQ discretionary swing trade is in the money 10+ points (marked at the 4pm ny close of 1603)...my target continues to be 1625 for this lot...
• no systemic swing trading entry signals were generated at today's close...
• made significant progress coding a work around for a component of the ES intraday systemic model...overall there is still a lot of work to do, but progress is being made building the model's structure in the most robust manner that JE (http://myestradingjournal.blogspot.com/) and I can think of...
• oliver velez, a trading/teaching master, and founder of the daytrading firm i am with, is holding a conference call wednesday night at 415pm ny time...he will give his outlook on the market, review a few lucky conference call participants closed trades and evaluate stocks of your choice (http://www.vcmtrading.com/events.php#)...
• FAS -1% today...

Disclosure: Long NQU09, Long FAS.

***remember this is an illustration of what i am trading and my thinking...it is not a recommendation for you or anyone else to buy or sell this or any other security***

7/28/2009 morning update

• re-entered the NQ swing trade (at 1592.50) on monday morning just above the bottom of the friday afternoon's base...i thought the odds were good that we would continue to power on up, but just after my entry the NQ sold off to 1578.50...
• i have an order in to buy another lot at 1576.50 and at 1552.50...current target is 1625.00, and my exit order is sitting there...
• started late today, so i didn't trade any opening gaps in my vcm account today...yesterday, i played PXP and MYL to the short side from their opening gaps...made a tiny bit on both...the main vcm chat room moderator/trader/teacher also played MYL to the short side, and after MYL exhausted itself on the downside, he then traded it to the long side...he booked more than 10 R's on the trade...i was pretty amazed at how he handled the trade, and he talked us through it live...
• no systemic swing trades were generated for yesterday's close...its been 5 days since the last trade there...i imagine a new entry signal should be coming any day now...
• ran into some coding/EasyLanguage issues yesterday when i was working on the ES intraday systemic model...i thought of a work around for it last night, and will write up that code and test it this am....
• FAS tacked on a few percent yesterday...

Disclosure: Long NQU09, Long FAS.

***remember this is an illustration of what i am trading and my thinking...it is not a recommendation for you or anyone else to buy or sell this or any other security***

7/24/2009 afternoon update

• , NQoriginal NQ target of 1597.50 would have been hit by EOD...i need to continue working on the discretionary day/swing trading plan, so that it factors in more of my emotions...
• the way it looks now, what started out as a multi day NQ swing trade turned into a NQ daytrade...how did this happen? i did not expect the NQ to continue its upward climb so fast after yesterday's apparent exhaustion day...however, all major market indices filled their opening gap downs, and are again testing their recent highs...relentless buying pressure...i thought it more probable that if we were to test the highs today, a summer friday, that we would drop back down later in the day, and i could rebuild my position...wrong! it didn't happen that way...low probability behavior, in my view for the market to continue its run up today...
• i will still be looking to add long side NQ exposure on a counter trend move down...i am hoping that will happen sunday night or monday...if not, i am not sure if i will buy a break above the recent NQ high of 1604...
• S&P 1000 will probably be the next target....those still short the market, or under invested, may be looking at a break above S&P 1000 (just as they are now doing with S&P 950) as the next psychological target to adjust their positions...
• i wonder if the 'fear of losing' for the shorts and the 'fear of missing' for the longs will be at play on a break above 1000 on the S&P 500?? i say the answer is yes! we could see another strong ramp up on a break above S&P 1000 if the shorts and longs get real emotional...
• if i/you/we could book on average just 1 ES point per day/contract (net of commissions), that would be 252 points/contract/year...at the current ES level of 979 that would be 26%/year...all i/you/we have to do is figure out how to do that...what a great challenge! at 26% per year, financial security would be at hand...
• finished the R&D on a particular component of the systemic ES intraday model that JE and i are working on...just need to code it up...also ready to back test a few of the model's filters...
• great phone conversation with JE today (http://myestradingjournal.blogspot.com/)...i think he comes up with a new trading idea/concept every day!
• happy with my vcm discretionary day trading this week...looking to continue my approach next week...
• no systemic swing trading signals generated today....
• though i didn't fully follow my discretionary swing/day trading plan for the NQ, i am still happy to have booked 27 NQ points/contract today...
• have a great weekend everybody!!

***remember this is an illustration of what i am trading and my thinking...it is not a recommendation for you or anyone else to buy or sell this or any other security***

7/24/2009 noon update

NQ discretionary swing trade:

• NQ ran back up to the top of the base that formed from the overnight session and the morning high...got nervous when it started to sell off from this high, and exited the long position at 1587.50 for a net gain of 12 points (27 for the day)...
• nervous is the operative word here...perhaps fearful is a better word...i didn't want to give back my nice gain...i initially placed my target at 1597.50, thinking that the morning low was greater than the overnight low, so we had a slight uptrend in place...if the NQ could rally back to the top of the base (forming an ascending triangle), then there was a good chance it could break above the base and then rally to the 1600 whole number and i would exit at 1597.50...this was the thought process and the plan...
• however, my emotions started to get amped up after we hit the top of the base, and then started to head lower...i didn't want to give back my gains, so i hit the sell button...
• this exit was not part of the trading plan that i described this am...though i did book a nice gain, i did not execute the plan...i will give this trade a C+
• my plan could have had another contingency, such that i could take my profit at the top of the base....since i believed that the NQ could test 1600 today, i could re-enter on a break above the top of the base with a tight stop a few points below the break, or i could re-enter on a move back down to the low 1580's - high 1570's....
• right now i have an order to get back in at 1577.50...
• i am feeling somewhat jumpy as i watch the NQ move back up toward the top of the base again...maybe it will break above it, maybe it wont...i am hesitant to buy a break above the base as i feel like i am acting on the frustration of not trading the plan according to specs or not having a better plan laid out this am...i do not want to trade from a place of frustration, so i will not enter a long position today above the top of the base...
• i still want some longside exposure for a longer term move up, so if the NQ breaks above the base, then i will raise my limit order (which is currently below the market), from 1577.50 to 1582.50...

***remember this is an illustration of what i am trading and my thinking...it is not a recommendation for you or anyone else to buy or sell this or any other security***

7/24/2009 morning update

NQ discretionary swing trade:

• since we rallied so quickly from yesterday's late sell off and i didn't believe the NQ would be able to make new swing highs so soon, i sold my first NQ lot at 1589.50 at 943 am (booking 14.75 points)...this level was around the area that would fill this morning's gap down and the area of the overnight session's swing high...
• i bought that lot back 15 minutes later at 1575.25...
• if we rally back up today, i will sell this second lot somewhere in 1587.50-1597.50 area...currently, i have a limit order in at 1597.50...if we don't rally back up to this range by late afternoon, then i will carry this NQ lot overnight...
• i have another order to buy 1 lot (1552.50) just above the next lower pivot (1547)...a potential move down to this area on the NQ will probably coincide with a move down in the ES to the 950 area...

VCM discretionary daytrading:

• traded TUP to the short side for my VCM account this am...was in and out 2x, both winners...small profits, less than 1 R in total...
• this makes 8 consecutive trading days netting profits daytrading, mostly opening gaps...small steps...i did have a few losses, but they were all manageable, never even approaching the daily loss limit on any of them...
• i am going to continue working on this opening gap approach...
• i am not planning on placing any more daytrades in my vcm account today...this week has been my most profitable week at vcm since i started there in july 2008...while my $ profits were not enough to qualify for potential advancement to the next trading level, the trading performance trend of the past 2 weeks is definitely in the right direction...
• one of things i can do to potentially increase my $ profits, is to trade bigger size, trade more opening gappers, and/or trade additional setups that may occur later in the day...not sure yet which may be the best option for me...

Disclosure: Long NQU09.

***remember this is an illustration of what i am trading and my thinking...it is not a recommendation for you or anyone else to buy or sell this or any other security***

7/23/2009 update

• continued to play opening gappers in my vcm account...went 4 for 4, with 3 shorts and 1 long...only generated 1 R though...
• market continues to be a beast to the upside...i am looking to build discretionary swing long side exposure during any counter trend move down, and just opened my first lot in the NQU09 at 1574.75 at 840pm (about 2% below today's intraday peak, and just above wednesday's intraday peak)...my bias is the next upside target for the S&P 500 is 1000, though it may retest the 950 breakout level before getting there...i am hoping it does retest the 950 area as this will enable me to get a bit longer for the next swing move up...though i am writing about the S&P 500, i am trading the NASDAQ 100 via the NQ...the NASDAQ 100 has led the major market indices higher, and it is my market proxy of choice...
• continued working on the ES intraday systemic trading model...JE has some terrific trading ideas (http://myestradingjournal.blogspot.com/)...we are hoping to build something that is very robust...so far so good, but there is a lot more to do...made progress today conceptualizing one of the model's components, and performed some statistical analysis to help determine its optimal implementation...still more to do here though....
• no entry signals for the systemic swing trading models were generated today....
• the FAS is up about 20% in my IRA, and is flat in the two custodial accounts...the custodial accounts got in a bit too early, but since these are longer term investments, i believe they will do fine...looking for about 100% return for the FAS within the next 9-15 months...

Disclosure: Long NQU09, Long FAS

***remember this is an illustration of what i am trading and my thinking...it is not a recommendation for you or anyone else to buy or sell this or any other security***

Catching up; checking in with 'fear'

its been a few days:

• the 'SHOE July Pre OE' long model was closed on Monday at 4pm, and generated a loss of about 1.7%...
• still stressed about the systemic swing trading models being out of sync with the market...i know there is nothing i can do about it and that is helping a bit...still its been nice not having any open systemic positions the past few days...i needed a break from the 'uncertainty associated with an open position'...
• doing some joint development work with JE on an ES intraday trading model (http://myestradingjournal.blogspot.com/) ...some concepts appear robust and limited testing bears that out...continued refinement of additional concepts and then more involved testing...working with JE has been a great experience in and of itself...
• discretionary daytrading at vcm (http://www.vcmtrading.com/#) has been going pretty well since the beginning of last week...i have been focusing on trading opening gappers...so far the results have been good...the things i am most proud of are cutting my losers short and taking the small loss, as well as exiting a trade that wasn't moving in the direction i was anticipating after a reasonable period of time...i still need to work on letting my winners run some more...over the past 8 trading days, the dollar value of the biggest winner has been greater than the dollar value of the biggest loser, so this is step in the right direction...but perhaps the bigger thing is to decide if i am going to R base the opening gap plays or scalp them....so far its been a blend of both: start a small position with a known profit target, add to that position when certain setups occur, and then calculate the R based stop...even had a good back and forth chat room exchange this am with the chat room moderator (trading/teaching master to the nth degree), who helped clarify my thinking about certain concepts...
• from this weekend's quiz (http://stbsmb.blogspot.com/2009/07/quiz.html) : when the average trader makes a decision to enter or exit a position, one of two emotions is probably dominant in the traders decision making process...what are the two emotions that the average trader might be keying off of? JE had a funny response...the insight i had this weekend is the two emotions are not the usual fear and greed pairing, but rather 'fear of losing' and 'fear of missing'...'fear of losing' leads to them selling into a down market, 'fear of missing' lead to them buying into an up market...when these traders act on either of these emotions, it tends to drive the market further in the direction of the current trend...i believe this is what is playing out now...the shorts have been madly covering over the past week on the failed head shoulders pattern in the S&P 500...under invested longs are scrambling to get more upside exposure and continue to drive the NASDAQ 100 to new swing highs...'fear of losing' and 'fear of missing'...
• can it be that 'fear' is the driving force in the market?? leading to under performance for the trading novice and to out performance for the trading master?? i am aware that fear plays a role in my trading performance, but perhaps i have underestimated its influence...
• is mastering fear one of the requirements to achieving trading mastery?

I am psyched to be trading with Oliver today.

11:13 update:

600 vcm traders with oliver in the chat room today...

we are working on learning some of the tactics that he has mastered....

one of my challenges with daytrading is that i expect the prevailing trend to reverse...i seem to be looking for a reversal too often...

Trader Education

My good friend JE over at the 'ES Trader' (http://myestradingjournal.blogspot.com/ ), recently blogged about the value of 'trader education' and Don Miller's new trader training program. This post has generated considerable interest with other trader's and bloggers posting their comments on these two topics.

I felt compelled to add my two cents on 'trader education' and my experience with VCM's (Velez Capital Management's) 'Trade for Life' Program(http://myestradingjournal.blogspot.com/2009/07/don-millers-jellies-group.html). Here is a copy of what I posted:

je,


since i am not familiar with don miller's trading method or his training program, i cant speak to their pro's and con's...

however i do want to speak on the value of a trading education...

i do believe that trading can be taught...i believe some people would be better students than others, like with any skillset...i also believe some people would be better teachers than others, especially when it comes to trading...

as you know, i am a prop trader with velez capital management's 'Trade for Life' program...i paid a fee ($9000) to learn the discretionary daytrading and swing trading methods vcm teachs, and to get access to vcm's capital...their training model and their prop trading model is working for me...

some of the highlights of vcm's training/trading model include: i can retake the 2 day training seminar every month for the rest of my life for free...i can retake their online trading lab every month for free for the rest of my life...i get access to their twice daily update every day for the rest of my life...i get daily access to two different chat rooms that are monitored by very advanced traders, some of whom are significantly advanced, and who generate trading gains nearly every single day...i get to network and share ideas with other vcm prop traders via 2 vcm facebook sites...i get access to vcm's capital every day for the rest of my life...the better i trade, the higher the % of profits i get to keep, and the more access to capital i get...i love the model of their training/trading program...

yeah, i paid $9000 up front, and now the price is up to $12,000, but for this kind of education and access to capital, it is almost cheap...i have literally booked millions of dollars of gains trading the markets since 1996, and have booked millions of dollars of losses since 1996...so paying $9000 for professional training and access to capital when i was looking for help and another means to generate a trading earnings stream, was a no brainer for me...

again, i cant speak to the pro's and con's of don's training program or his trading method...i can say the vcm training/trading program works for me...i am still a pretty poor discretionary day trader on a technical basis, but i am making progress...however, the psychological training that is an informal part of their training has significantly helped me become a better systemic swing trader when it comes time to execute my models...

we will all pay our market tuition one way or another...the teachers at vcm suggest it will take anywhere from 18-48 months for someone to fully understand the methods and be able to execute them consistently...however, some will never make it...just like the students who drop out of their vocational, undergrad or grad school program...so if someone is a quick learner and is on the 18 month track, then the current upfront vcm tuition rate of $12,000 comes out to about $32/trading day for daily training and access to capital...this sounds pretty cheap to me...

overall, i guess trading is not for everyone...but for someone who is inclined to trade, and can find someone they trust to train with, then the odds of success can only increase for that trader...trust is the key word here...i like to believe that vcm will still be here 3, 5, 10 years down the road...i have no reason to believe they wont, but who really knows if they will...so far, they have been everything i hoped they would be...

whether don's training and trading model will work with his students remains to be seen...i hope that don and his students are very successful...vcm's training and trading model is working for me, and i am very happy to be part of their organization...

i do think trading education can work, but it has to be with the right students, the right teachers, and the right program...

adam

Ever wondered how Trading Masters think & trade? Then check out Wednesday & Thursday nights free Events hosted by Velez Capital Management.

When I am not managing my Strategy Trading Portfolio, or writing some EasyLanguage code, I am working on my daytrading skills at Velez Capital Management (VCM). Periodically, VCM offers a free 2 hour event to outline some of their Equity and their Forex trading concepts/tactics as well as their prop trading programs.

Tonight, at 415 pm and at 815 pm (NY time), Oliver Velez will be hosting his equities based 'Earn a Living in the Markets with Three Powerful Tactics' event. The course outline is as follows:

• Three of our most reliable trading tactics and how to use them in your everyday trading;
• The most accurate entry method used by VCM Traders;
• How to find the key stocks in play every day;
• How to exploit the stocks in the news each day;
• How to ride the prevailing trend of a stock for maximum profits;
• The best protective stop method used to minimize risk;
• The best trailing stop method used to keep your hard earned gains;

Tomorrow night at 415 pm (NY time), Todd Hanson, will be hosting a two hour event, "Mastering the Forex Market". The course outline is as follows:

• The basic concepts of the Forex market and how it is different than trading equities;
• The significant edge that the VCM Forex Proprietary Trader Program can provide their traders over any other Forex trading alternative;
• The excitement of trading the Forex market through trade examples;
• The power of Dr. Hanson's Systems and Signals grey box software;
• The design of the trader advancement system in the VCM Forex Proprietary Trader Program;

Check out the following link for more details on all three of the events. Registration is required.

http://www.vcmtrading.com/events.php#

If you have ever wondered how Trading Masters like Oliver and Todd think and trade, then check out these free events.

White Knuckle Day!!

Last Wednesday, 'SPY Gopher' generated a Long Entry Signal, which made me 100% Long the ES (http://stbsmb.blogspot.com/2009/06/spy-gopher-generated-entry-signal-for.html).

Yesterday, 'NDX 30th DOM' generated a Long Entry Signal, which made me 100% Long the NQ (http://stbsmb.blogspot.com/2009/07/ndx-30th-dom-generated-long-entry.html).

Yesterday, I was able to get into the 'NDX Summer Rally' Model at the original Entry Price that was generated last Thursday, and this made me another 100% Long the NQ(http://stbsmb.blogspot.com/2009/07/asleep-at-switch-ndx-summer-rally.html).

So right now I am about 300% Long (200% Long NQ, 100% Long ES). White Knuckles Baby!!

This is the riskiest aspect of my style of System Trading. I will have a few days/year where I might have three or more models open in the same direction. Today is one of those days.

So how am I handling it emotionally/psychologically? I did what I could to relax my body and my mind so I can be at full mental strength for today's trading. Yesterday, shortly after the market closed and I was 300% Long, I went to the gym and did my usual cardio routine. Since my positions are in the ES/NQ Futures, I could check to see how they were trading in the after hours session, but I didn't look. I don't know what good it would do me. Instead, we had our family dinner, then I took my 2 1/2 year old son on his new bike to the local park, read some books to him before bed, and then had a chance to spend some time with my wife. In bed and asleep on earlier side for me around 11pm.

Today, I awoke around 730 am well rested. I reduced my usual AM coffee intake. I have been at my desk and in front of my screens monitoring what is going on since about 830 am, one hour before the NY open. Though I have been keeping an eye on my Futures positions, I have also been monitoring a potential trade setup for my daytrading activity at VCM, posted 3 notes to the Blog, spent some time with my family, caught up on some email, and did some bookkeeping.

I am aware of what is happening in my positions, but I am trying to keep busy so I don't obsess over every tick that goes out of my favor. So far so good, but there is still about 2 hours to go before the closing bell, the ES and the NQ are barely hanging onto their lunchtime bases, and the closely watched Payroll Report is scheduled to be released before tomorrow's opening bell, which might cause some EOD volatility. As we all know, anything can happen in this market.

Oops, the ES and the NQ just broke down through the lunchtime base.

Monday morning's directional bias

Bias to the Short Side for daytrading stalks on the QQQQ

wow, that was quick: first scalp opened at 945 am and closed at 949 am for $0.13/share on the QQQQ...looking to short some more on a bounce back up...

***remember this is an illustration of what i am trading and my thinking...it is not a recommendation for you or anyone else to buy or sell this or any other security***

Wipeout

During the 12 day span from May 22nd through June 9, I had 37 consecutive winning daytrades. The losing trade finally arrived at the EOD on June 9. I was pretty psyched to have had this run scalping the QQQQ's for about $0.03/share profit. But the way I was playing it, suggested that if there was an extended move against me, I might run out of buying power/stop out before I could get back to breakeven.

Wipeout!! Well, on Wednesday June 10 I got crushed and had to shut myself down with the Daily Loss Limit. I was inclined to scalp to the short side, but the gap up wasn't big enough, so I decided to play it to the long side. Built up my size too soon, and stopped myself out at 36.29 around 2:15 pm, which just happened to be the low of the move down, and the QQQQ's then rallied nearly 2% into the close, which was the move I was looking for.

However I wasn't pissed. Actually I was glad it happened, because I knew there was something not quite right with my method. I realized that I wasn't paying enough attention to the charts, and more particularly, the appropriate setups that would help optimize my average entry price.

On Thursday, I decided to switch from scalping mode, to stalking mode when daytrading the QQQQ's. This might be a breakthrough for me. I made significantly less trades, but averaged significantly more profit/share stalking ($0.12) than scalping ($0.03). I even profitably traded UNH in this manner to the Long side shortly after its gap down open.

Today was another good day stalking the QQQQ's with a downside bias until about noontime, yielding about $0.07/share profit. I stopped daytrading around then to continue to deal with some IT issues.

System trading wise, my models have not generated any entry signals in about 9 days. Nothing is setting up right now, but who knows what will happen by 4 pm when the signals are officially generated.