1/7/2010 12:30 pm update: CERN, NBR, NQ

• numerous studies i follow, including this one by quantifiable edges, suggests that seasonal weakness for january may begin tomorrow and last through friday the 26th...
• i am looking to reduce my longside exposure: when CERN and NBR broke out of their daily base on tuesday, i picked up some cheap out of the money calls on each of them...i just sold them for about a triple on CERN and a double on NBR...
• if the typical mid january weakness manifests, i will look to buy some NQ for a discretionary swing trade...
• i will also scan the charts and look for strong stocks that put in controlled pullbacks...once i sense the move down is over, i will get long some strong stocks via cheap out of the money calls...

***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...trade at your own risk ***

12/15/2009

• the NQ and the ES 'feel' like they want to break above their current resistance levels (NQH10 around 1815 and ESH10 around 1115)...
• with positive historical december opex week, and positive end of december seasonality, tomorrow's FOMC rate announcement at 2:15pm might be the catalyst to get the indices over these levels...
• if they do pop, i can envision them running up around 2-4%...
• however, many of the short term and intermediate term oscillators i follow are getting overbought, so i believe a smallish upside break in mid to late december will lead to a larger downside move sometime in january...
• for a discretionary swing trade, i will probably be looking to get long the NQ after the january move down...i am not sure if i will play a decemeber break above resistance to the longside in the NQ as a discretionary swing trade...
• my systemic swing trading models continue to get chopped up...
• i believe i may have found a setup and money management strategy that fits my personality over at 'team trading' (fka velez capital managment, llc)...i have been working on it for the past few weeks and have seen some positive results...still, there is much work to be done here...
• additionaly, i have joined the forex division of 'team trading' led by dr. todd hanson, and am currently going thru the initial 7 day training...
• lots of juggling right now: systemic swing trading the u.s. stock indices for my account, discretionary swing trading the NQ for my account, discretionary daytrading u.s. equities for my prop account, and discretionary/systemic swingtrading/daytrading forex for my prop account...yes, my head is spinning a bit...
• good trading to everyone!

11/19/2009 3:30 pm update: NQ

• what a mess...
• my discretionary swing trading tendency to always be long at least 1 contract, especially near the top of the daily upper trend channel is costing me too much money...
• earlier in the week i even considered buying some puts on the QQQQ's to hedge my exposure, but i didn't...
• i have worked my avg price in the NQZ09 down from 1809.00 to 1781.50, though it cost me too much to do so....
• as i mentioned earlier, i added a 2nd contract at 1791.50, and then during the day session i added a 3rd contract at 1770.25, bringing my avg cost to 1790.25...
• i was stopped out on the 3rd entry at 1763.75...
• this trade: -26.50 NQ points/contract...
• i added a new 3rd contract at 1764.00...this brings my avg cost to 1781.50...
• i sold this one at 1772.50...
• after the NQ rallied into the low 1770's, i placed an OCO with a target to 1776.50 and a stop at 1769.50...the stop was hit...
• this trade: -12.00 NQ points/contract...
• today: -15.83 NQ points/contract, 3 contracts closed...
• still long 1 NQZ09 at 1781.50...
• offering this out at 1807.50...
• no current bids...
• i think i have been overly influenced by the strong rallies of the summer and early fall...this has led to a fear of missing more of the up move...combined with an approach that has me getting bigger on moves down to work my avg cost lower, i am finding that this has led me to be overweighted the NQ during moves down, and relatively underweighted the NQ during moves up...
• i gave back a moderate amount of my summer and early fall discretionary swing trading profits, during the late october downdraft and during today's swoosh down...
• while i am still net profitable trading the NQ, i need to rethink my overall approach to swing trading the it on a discretionary basis...
• entering with some size when the swing begins, and then lightening up towards the top of the trendchannel and/or into resistance sounds like a much better plan...

Disclosure: Long NQZ09.

***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...trade at your own risk**

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***

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...

'Trading Systems that Work'

'Trading Systems that Work' is the title of a great book by Thomas Stridsman. He outlines how to 'Build and Evaluate Effective Trading Systems'. I have used his concepts extensively when building, testing and optimizing my 35+ Systemic Trading Models.

TradeStation, the platform I use to model and autotrade my Systems, offers online tutorials (for subscribers) on the following:

• Introduction to Strategy Trading
• Strategy Testing and Optimization
• Strategy Automation
• Introduction to EasyLanguage

Learning how to build robust trading models and then learning how to technically execute them takes a lot of time. And this is just the cognitive part. Learning how to emotionally trade them takes time as well. It doesn't matter if we are discretionary traders or system traders, pressing the buy or the sell button when we are supposed to is a skill set in and of itself.
For anyone interested in using TradeStation, Wealth-Lab or any other platform to build Systemic Trading Models, or even to just build an Indicator, please understand that these platforms are like rocket ships in their capabilities. Let us learn how to effectively use their functions before we take off. We don't need to crash and burn to learn a lesson!
Do your research and testing before putting your hard earned capital on the line. In my view, 'Trading Systems that Work' and the TradeStation online Tutorials are a good place to start.
http://www.amazon.com/s/ref=nb_ss_gw?url=search-alias%3Daps&field-keywords=stridsman
http://www.tradestation.com/default_2.shtm