Saturday, April 2, 2011

040111 Friday's Journal Entry: Hyper-scalping back to flat

Oops I had one of those "falling off the wagon" days again. After 2 weeks straight of solid trading positive days I lost discipline on Friday and took way too many choppy trades. I missed the real moves and my goal deviated from executing good trade setups to staying flat to up. Luckily I was able to get positive for the day but broke rules to get there. So while I am happy that I overcame a loss I am not happy how I got into a hole and then subsequently the method I turned to to climb my way out. Not only did I break discipline but I racked up a ton of commissions and fees over-trading.

One Bad Trade Breeds Another Bad Trade

1. SPY knife catch: When we saw that late day selling come into the market I was licking my chops ready to catch this knife. I waited for the selling to slow to start buying SPY 133.2 with increased tier size but I failed to wait for confirmation (tail wick, candle, being able to get above a certain price, volume change, etc...).  6 home-run swings and misses in less than 30 minutes. Every time I got stopped out I could feel my blood pressure rising and my myopia increasing. I was in the red zone and it's hard to remember exactly what was going through my head but I think I had 2 predominant thoughts. One was that we were "supposed" to fry the shorts into the close so this dip was a shake and we would soon rip to new highs or test that 1338 level. The second was that this was my golden trade ticket. So these 2 biases translated into "get in bigger get in bigger get in bigger" which ultimately resulted in a nice hole for the day.



2. AAPL pin/over-extended trade: Yeah I know there is something not right about AAPL lately: market is ripping and AAPL not participating. A BIG problem I have is that I will turn to AAPL when I need to make "fast" money and get a P&L booster shot. In the past I have traded AAPL Friday pin in a strong tape with pretty good success (probably north of 70% win rate) so you can understand why I turned to this beast to recuperate my P&L. The first set of AAPL trades were somewhat in line with my trading: AAPL had a nice tail wick off 343.3 and the SPY had just tail wicked off 132.80'ish confirmed by the tape. I thought there was a few points in this trade up to yesterday's high or at least a VWAP test. I was willing to give it about 30c to hopefully catch a 1.5+ move. Well AAPL couldn't get above 345 so I figured that this was where the weekly pin action would happen. I noticed that 344 was holding so I got long a few times as momo trades & hit out if the tape slowed. The second series of AAPL trades were penny scalps trying to exploit the push to that level with 20c stops to catch maybe 30-50c. That's not sticking to a 3/1 or 5/1 RR and is breaking discipline to get back my SPY losses. Even though this strategy worked I need to avoid this hyper-scalping/revenge trading situation in the future.



Morale of the story reinforcement: 

1. Breathe and take a step back when you see a sharp sell-off
2. Check multiple time-frames for real support and then confirmation 
3. Don't over-trade into the afternoon
4. Stick to good R/R setups
5. Don't focus on P&L it's about the setups stupid

All the red brackets in the table below are trades where I broke my discipline and trading plan:

Time
Symbol
Side
Market
TIF
Price
9:33:25
 EBIX
BOT
INCA
DAY
24.04
9:37:12
 EBIX
SLD
INCA
DAY
24.39
9:42:30
 NYX
BOT
INCA
DAY
39.05
9:43:17
 NYX
SLD
INCA
IOC
38.95
9:44:25
 NYX
BOT
INCA
DAY
39.01
9:45:02
 NYX
BOT
INCA
DAY
38.97
9:46:48
 NYX
SLD
INCA
DAY
38.97
9:49:03
 NYX
SLD
INCA
DAY
38.99
9:50:01
 NYX
BOT
INCA
DAY
39.05
9:50:23
 NYX
SLD
SDOT
DAY
38.98
9:57:56
 LVS
BOT
INCA
DAY
44.03
9:58:25
 LVS
SLD
INCA
IOC
44.08
9:58:52
 LVS
SLD
INCA
IOC
44.05
10:01:01
 LVS
BOT
INCA
DAY
44.07
10:02:06
 LVS
SLD
INCA
DAY
44.17
10:06:53
 LVS
SLD
SDOT
DAY
44.095
10:15:00
 NYX
BOT
INCA
IOC
39.14
10:18:32
 NYX
SLD
INCA
DAY
39.16
10:22:28
 LVS
BOT
INCA
DAY
43.93
10:22:34
 LVS
SLD
INCA
DAY
43.89
10:22:48
 LVS
BOT
INCA
DAY
43.94
10:23:26
 LVS
BOT
INCA
DAY
43.89
10:23:35
 LVS
SLD
SDOT
DAY
43.82
10:25:41
 NYX
BOT
INCA
DAY
39.24
10:26:47
 NYX
BOT
INCA
DAY
39.2
10:29:34
 NYX
SLD
INCA
DAY
39.3
10:31:48
 NYX
SLD
SDOT
DAY
39.24
10:34:38
 LVS
BOT
INCA
DAY
43.56
10:34:56
 LVS
SLD
SDOT
DAY
43.41
10:36:04
 LVS
BOT
INCA
DAY
43.43
10:36:58
 LVS
SLD
INCA
DAY
43.49
10:39:49
 LVS
SLD
SDOT
DAY
43.48
10:42:53
 LVS
BOT
INCA
DAY
43.6
10:42:58
 LVS
BOT
INCA
IOC
43.64
10:45:22
 LVS
SLD
SDOT
DAY
43.54
10:47:59
 FCX
BOT
INCA
DAY
54.62
11:05:37
 X
BOT
INCA
DAY
53.48
11:15:17
 X
SLD
INCA
DAY
53.5
11:16:06
 FCX
SLD
INCA
DAY
55.09
14:48:42
 SPY
BOT
INCA
DAY
133.22
14:49:17
 SPY
BOT
INCA
IOC
133.19
14:53:37
 SPY
SLD
SDOT
DAY
133.18
14:54:39
 SPY
BOT
INCA
DAY
133.21
14:55:53
 SPY
SLD
INCA
IOC
133.13
14:56:52
 SPY
BOT
INCA
DAY
133.2
14:56:59
 SPY
BOT
INCA
IOC
133.21
14:57:50
 SPY
SLD
SDOT
DAY
133.11
14:58:45
 WYNN
BOT
INCA
DAY
133.22
15:00:47
 WYNN
SLD
SDOT
DAY
133.01
15:02:30
 SPY
BOT
INCA
DAY
133.1
15:02:33
 SPY
BOT
INCA
DAY
133.11
15:04:34
 WYNN
BOT
INCA
DAY
133.07
15:04:43
 WYNN
BOT
INCA
DAY
133.13
15:05:10
 WYNN
SLD
SDOT
DAY
133.0848
15:06:18
 WYNN
BOT
INCA
DAY
133.1
15:07:05
 WYNN
BOT
INCA
DAY
133.2
15:10:18
 WYNN
SLD
SDOT
DAY
132.91
15:12:24
 SPY
BOT
INCA
IOC
133.07
15:12:31
 SPY
SLD
SDOT
DAY
132.97
15:12:33
 LVS
BOT
INCA
DAY
43.39
15:13:02
 LVS
SLD
SDOT
DAY
43.29
15:14:56
 AAPL
BOT
INCA
DAY
343.73
15:17:21
 AAPL
SLD
INCA
IOC
344.3
15:17:27
 AAPL
BOT
INCA
DAY
344.3
15:19:28
 AAPL
SLD
SDOT
DAY
344.11
15:20:04
 AAPL
BOT
INCA
DAY
344.13
15:21:39
 AAPL
SLD
INCA
DAY
344.44
15:22:11
 AAPL
SSD
INCA
DAY
344.44
15:22:18
 AAPL
BOT
INCA
IOC
344.39
15:23:20
 AAPL
BOT
INCA
DAY
344.06
15:23:38
 AAPL
SLD
INCA
IOC
343.86
15:25:36
 AAPL
BOT
INCA
DAY
343.92
15:26:02
 AAPL
SLD
INCA
DAY
344.03
15:26:25
 AAPL
BOT
INCA
DAY
344.09
15:26:37
 AAPL
SLD
INCA
DAY
344.6
15:28:29
 AMZN
BOT
INCA
DAY
179.56
15:29:50
 AMZN
BOT
INCA
DAY
179.34
15:31:28
 AMZN
SLD
INCA
DAY
179.7
15:31:42
 AMZN
SLD
INCA
DAY
179.68
15:31:55
 AMZN
BOT
INCA
DAY
179.81
15:32:06
 AMZN
SLD
INCA
DAY
179.88
15:34:21
 BIDU
BOT
INCA
DAY
138.41
15:34:58
 BIDU
SLD
SDOT
DAY
138.15
15:36:55
 AAPL
BOT
INCA
DAY
344.62
15:37:23
 AAPL
BOT
INCA
DAY
344.5
15:40:37
 AAPL
SLD
INCA
DAY
344.77
15:47:13
 AAPL
SLD
SDOT
DAY
344.365
15:48:15
 AAPL
BOT
INCA
DAY
344.38
15:49:08
 AAPL
SLD
INCA
DAY
344.49
15:49:13
 AAPL
BOT
INCA
DAY
344.44
15:51:31
 AAPL
SLD
SDOT
DAY
344.21
15:53:27
 AAPL
BOT
INCA
DAY
343.93
15:54:12
 TSLA
BOT
INCA
DAY
26.63
15:54:52
 TSLA
SLD
INCA
IOC
26.65
15:56:08
 AAPL
SLD
INCA
DAY
343.94
15:56:40
 AAPL
BOT
INCA
DAY
344
15:59:17
 AAPL
SLD
INCA
DAY
344.31

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