EBIO

EBIO

Missed morning entry at F1 flag at 1.38 and just watched it leave without me..
Tried to dip buy post 1400 for an o/n gapup play and got stopped out, worth. I do need to check RSI when buying.. for dip buying, nothing higher than 50 on 5min and 30ish on 1min. Worth small o/n position for the gap up? My usual play but it didn't come to my mind since it didn't trend up at the eod like i'm used to.

Tried to buy the breakout the nxt day... Similar mistake as NEOT, Chased way past the previous day's breakout as well as the breakout in pre-market. Should have been a scalp and I was up 5%ish but similar thinking as NEOT. Pre-defined my risk however did not have a complete plan as far as estimating where i should start locking in profits.

1.38 Missed play- Fear still hit me.. i've seen the ORB/F1 pattern enough times yet i was still immobilized. One new thing however, i was able to predefine my risk for the first time... 1.35 was the opening and was my mental stop... 3-5cents of downside for so much upside yet i was frozen.

Dip buying- I need to make sure i'm not trying to dip buy when the stock is over bought on the 1min and 5min charts.

Buying ORB on after day 1 of the move- Same thing as NEOT, my goals/profit targets for the stock is unrealistic causing me to miss opportunities to lock in profits and instead lose money.

Still here... Trading in the Zone/Matt Owens

Randomly blogging stuff..

Still here, Been a little busy because of work/process of moving from Japan back to the US/Illinois. I've been really reflecting hard on the main problems i've been having. Most of my losses are because of my inconsistency in being controlling my emotions and not the strategy/market.



GREED - desire to possess wealth, goods, or objects of abstract value with the intention to keep it for one's self, far beyond the dictates of basic survival and comfort. It is applied to a markedly high desire for and pursuit of wealth, status, and power.

Symptoms of Greed (credit to Matt Owens)
Greed will make you:
- Set unrealistic price targets
     (Guilty- I've had alot of progress in the past few months in setting realistic targets, taking profits along the way also helps me lock in profits and not lose money because of this. This is still a prevailing problem for me that i need to work on. Mostly because my hypothesis is usually incomplete prior to entering a trade. Having a complete hypothesis with the focus of actually quantifying my risk is a step to helping me set a realistic price target)

- Not realize profits because of them
     (Lock in profits along the way completely kills this adverse effect)

- Dwell on how much more you can make if you stay in a trade
     (Guilty in the past- Locking in profits helps negate the bad things this can do)

- Set price targets for the trade based on how much you fantasize about making
     (SUPER Guilty- this is a very big reason why I currently have a hard time in setting a realistic price target. I do find myself still thinking about wanting to make at least a thousand in a trade even though I know logically that it's pushing it and very very unlikely that the stock will reach that point. I will then start to hold on longer than I should and "Hope" that the stock reaches that point, which most likely won't and reverse in trend causing me to either lose my profits or even worse puts me into a loss.)

- Ignore rules and risk management practices
     (I've been good with ignoring rules so far cept the last trade where i traded without having any sleep, but that wasn't because of greed. I technically can't ignore risk management practices if I don't have any hahaha... I need to work on really quantifying my risk prior to the trade and ways to minimize it. I've been very very good at stopping out at my mental stop though. Rule #1 Cut your losses !! thanks to Tim Sykes for always drilling... I literally think he says that more than he breathes in a day.

- Get Rich Quick Mentality-gamble
     (Super guilty- This feeling is slowly dying out as I get more and more used to locking in profits along the way. It's slowly making sense to me that It's the grind that'll make me rich and not the swinging for the fences mentality.)

- Cause You To Lose All Of Your Money Int The Market
    (Not there and will take all appropriate steps necessary to not reach this event)

FEAR - a distressing emotion aroused by impeding danger, evil, pain, whether the threat is real or imagined.

(My current thoughts on fear.. I shouldn't try to be fearless, Fear is a natural instinct for survival. However, realizing whether the fear is irrational or rational is crucial in trading. Having no fear in life is horrible ex: I have a fear of jumping off a ledge of a high cliff/skyscraper with no parachute/means of getting to the ground safely or without dying. Fear in this case keeps me alive duh... But in a scenario where I have a fear of dogs due to a negative past experience, but there's a cute/harmless/no history of aggression/cup poodle dog in front of me that wants to play.. The fear of dogs in this case, to others, is completely irrational and because of it will cost me the experience of having fun/positive experience with the dog that's currently in front of me.)

Symptoms of Fear - (credit to Matt Owens)
Fear will make you
- Sell in a panic regardless of price
     (Not felt yet)

- Never want to take a calculated risk
     (HUGE, affected me for weeks during March/April hiatus for 7-level CDCs.. Still affects me atm but having a quantified risk/complete hypothesis as well as ACCEPTING RISK/Accepting that each trade is unique is slowly easing me past this emotion).

- Paralysis of analysis
     (I've felt it before but not to the point where it's affected my trading as of yet, will monitor closely for now.)

- Not enter quality setup because of former losing trades
     (Felt this but have process in place to slowly put myself past this emotion/learning to accept risk and that each trade is unique)

- Chase a stock- FOMO
     (This greatly affects me so much that that i've actually dedicated a section for it,.. Stupid shit...)

- Ignore rules and risk management practices
     (Same as greed's comment)

FOMO - Fear Of Missing Out

I do follow the market/papertrade to keep in touch of how the overall market/strategy is doing as well as really, really killing FOMO... I've watched so many trades where I would like to play but i intentionally miss them in order to experience FOMO to get myself in a mindset/emotional state where It's OK to miss trades. FOMO still affects me where i'd consider chasing a trade even though I KNOW not to. I will continue paper trading until I am at the point where I can ignore FOMO when I do miss my entry point.

** Funny how i just ran across a slide from Matt O.- "Traders need to understand what fear is = simply a natural reaction to what they perceive as a threat (in this case perhaps to their profit or money-making potential). Quantifying the fear might help, Or that they may be able to better deal with fear by pondering what they are afraid of, and why they are afraid of it. Also, by pondering this issue ahead of time and knowing how they may instinctively react to or perceive certain things, a trader can hope to isolate and identify those feelings during a trading session and then try to focus on moving past the emotion." This is EXACTLY what i'm doing with FOMO...

PRGN Chart

PRGN

Saved here for future learning...

Super Weird stuff

Was going through some tough mental battles over tuesday's mistakes. Was listening to Trading in the zone and exactly where i left off, it was almost narrating exactly what it was i needed to do..

Same thing on youtube, while listening to Bulls on Wall Street's Kunal free path to profitability video.. I was reviewing an in-play chart of this past day or two.. and Kunal was again TALKING exactly about what I was having problems on as well as what he was talking about was what was happening with the chart i'm currently looking at.. his youtube video is back from 2014 btw.. Same catalyst, same pattern... I just love how the coincidence of that point really sync'd my thoughts to kunal's mentality on trading...

On the daily timeframe, both charts have started to uptrend and just bounced off a MA when an Earnings Win Catalyst catapults both stocks above the ranges for a huge day.

On a more important note, Trading in the zone talks about qualities of a successful trader that both cameron fous and kunal talks about to the teeth. Staying disciplined, and having a specific mindset that allows them to not be worried about what the stocks would do. It almost seems like they are not fearful of the market just like Mark Douglas mentioned.. Why? It's because both cam/kunal knows that their strategy works and what hey focus on comes down to just managing risk. Courage is not needed if there is no fear in the first place, nerves of steel is not needed if there was no stress in the first place.. there is no stress since both cam/kunal have already accepted the RISK and have a system in which they can cut their risk/loss when the trade doesn't go their way. It's exactly why cam always repeats himself saying that at best, he's only a 50% win trader but it's how he manages his losses that makes him profitable/successful.

It's funny that up to this point, most of my studying/learning had been focused on trying to KNOW the market, KNOW the strategies, KNOW the indicators.. but something always lingered in the back of my mind... Alot of the successful traders i follow and learn from admits publicly that they aren't smart at all... They have no financial background, some have no degrees, sykes at the extreme just basically uses barebones candlesticks and nothing else other than basic support/resistance lines. Grittani who i love doesn't use that much indicators as well and trades off the level 1 mostly+basic resistance/support zones.---

--- Only when I started to listen to Matt Owens that it really hit me that the more complex/hedge fund strategies are out there alright,.. ones you can use to scale up your wins as your account grows. BUT for most if not all retail traders.. It's not needed.. The market is neutral... The strategy is already proven to give you an edge, the MAIN thing I really need to focus on is trying to be as objective and an impartial trader as i can. Finding a way to not be swayed by emotions such as fear, greed, fear of missing out, anger/revenge trading, boredom, etc.. should and IS NOW my main goal for trading since these are exactly what i see between the novice traders and all the successful/profitable traders i've followed so far... sykes, grittani, fous, kunal, nicorico's blog, tim bohen's presentation on youtube, derrick leon's blog, matt owens, and in the future superman..

The market is NEUTRAL, controlling yourself to be a disciplined and consistent trader = successful trader. Discipline.... Compared to the majority of americans, with my past, i feel like i have a very, very good discipline as far as financial discipline and work/studying discipline.. But currently, i'm having discipline problems in trading when it comes to sticking to the strategies i know since i like to try out new things. I do have systems thought out to counter the habits i have the is in direct confrontation to trading, but I have identified a 2nd problem.. a behavioral problem that gets in the way of me fixing my first problem.. Laziness/Procrastination... I've decided to halt trading for a week or so until i finally have the systems i want in place that'll protect me from my 1st problem of being an undisciplined trader..

"Think of it this way, as traders, Our job is to be patient. Most of our time should be spent watching and waiting.” -LX21

Having a patient, disciplined, objective and impartial trading mindset/attitude is what i'll be working on this next 2weeks-1month .. Once i start on a path on being consistently being in that state.. Only then can I expect myself  to be a consistent profitable/successful trader. ................

Computers can't accurately judge huge portions of the market because the market itself are just a huge blob of emotions. It's very irrational like everyone keeps saying, cause what moves the market at it's core is human emotion. If people stopped going to sbux, how would it affect its stock? If people's emotions towards buying each new iphone that comes out changes, what would happen to the stock of Apple for each new gen release of the iphone? lx21 says show me someone with no emotion, i'll show you someone with no passion.. On the other hand, there's been successful traders out there that says to trade as if you have no emotion, just like a robot.. Humans have the edge in analyzing the market because the market itself is irrational and made up of emotions.. humans are at heart, irrational/emotional beings... Computers have the edge in the act of trading, because they don't let the emotions of a human affect/disrupt the plan/strategy. I think I can refine those two opposing schools of thought even more in one sentence...

Sticking to known patterns ORIG, UNXL, LGCY

It's funny... We learn/know things but we really don't LEARN/FOLLOW them fully until it affects us in a way that forces us to change ourselves in order to either benefit ourselves to prevent harm. There's a huge difference between KNOWING something and DOING something about it.

For example, I know i should only be sticking to known patterns that i've been successful with for now. That i should stick to the 1 or 2 plays i know best and master them to the maximum extent as possible before moving on to learn a new type of play. If I do play a play outside my comfort zone, my rule is to backtest it first and paper trade it at a minimum of 3-5 times to make sure the strategy itself is legit and possibly experience the emotional uncertainty I anticipate going through while in the trade.

But what has been going on this past month? My known/best plays that I've traded have been:
1) Buying dips/anticipating gap-ups nxt day using the ABCD/F3 pattern/FOUS Survival Patterns
2) Buying intraday/multi-day/multi-month breakout FOUS Force patterns

The last two trades i've done have been more focused in the market open which i've studied through the FOUS F1 pattern and a very tiny bit through a gap+go scalp. I get the strategy but applying it is a whole different thing. I'm nowhere close to being proficient in it yet i've been using real funds on something i have not papertraded trades in real-time to. I've been breaking rules left and right here. Whats even worse is that i've been trying to fit the pattern to me instead of finding the right market open pattern that I fit with.

http://averagejoedaytradr.blogspot.jp Ed Martin's blog
Chat moderator at Warrior Trading and he mentioned being activein Investor's underground at some point.

I've really been reading his blog in depth this past month, read it at least three times already and i will be mostly using a modified version of how he trades the open. Ran into more videos and read alot into how to trade the Opening Range Breakout play. Funny, how different strategies by different gurus are actually very similar patterns but with just different names... The thing that really attracted me to how he trades the ORB vs how i've been is that he gives the chart time to form and looks for a specific criteria before he trades it. Since the market open types of trades i've been exposed to so far has been the gap+go from DTW (which moves waaay for me) and FOUSF1 (which is horrible for me because i've seen him call 2-3 1minute candles as a breakout to as far as a 1hr timeframe). Ed Martin chooses only to trade them i believe when the chart has at least 15mins.

I'mma keep these as short as i can

ORIG

Positive Catalyst, Nice midday survival/F2 Pattern, had AH/Pre-market activity, Gapped past 200day MA.. F1 breakout of pre-market high or 30min ORB.

LGCY

Positive Catalyst, Nice two-day survival Pattern, had AH/Pre-market activity, Gapped past 200day MA.. F1 breakout of pre-market high or 30min ORB.

UNXL

This one was a meh, Positive catalyst, clearest Intraday FOUS Survival pattern though, had AH/Pre-market activity. This was the only one that gapped and crapped, reinforcing the need to have a specific criteria in place if i want to buy at market open and not just blindly buy at market open. 15-30min ORB worked for the other two so i will be focusing on a F1/Triangle/ORB play at that timeframe.

Overview and Random similarity

2 out of 3 Gapped and had F1/ORB pattern type of plays. 1 gapped and crapped which is reinforces why i like being in the stock the previous day in anticipation of a gap-up AND a need to have a specific criteria in the morning to play and not just blindly buying at open with the hope of a spike.

Just wanted to include this... 2 different types of catalysts but the peak and troughs of ORIG and LGCY are almost exactly the same up to +/- 30 minutes. Its so weird at how similar the charts turned out. Still somewhat of a F3 but very choppy, not clear and will not be in. If there's no AH/Pre-market activity, I expect these to to just fizzle/die out and maybe even fade back down.

Closing Remarks/Immediate Goals:

 Almost all my mistakes have NOT been because of the market but because of my inability to stay disciplined and stick to the rules my mentors and I have formed. The goal is to quell/defeat/ELIMINATE this enemy of mine that is being an undisciplined trader. Self-Sabotage is a bitch. So for the next 2-3weeks, I will ONLY be trading the 2 plays i've been successful with and  papertrade using ORB 15-30minutes after the market open to get more experience with it. I will also try to control myself from a new term i've came up with, Zombie Trading =D... Trading when you are in mental functions are compromised, making sure i'm in good physical/mental health prior to market open as well as having done my homework and being well-prepared vs rushing to get to the market open.

For the next 4weeks:

1) Trade only the 2 setups i know

2) Paper trade F1/ORB setups

3) Make the trading binder i need with all appropriate QRC's (quick reaction checklists)

4) Finish Trading in the Zone within 2-4weeks and start on Market Wizards hedge fund traders on Audible

5) Slowly start doing TriForce Trader's Homework. It's very very complex relative to the strategies from IU/Sykes/FOUS so i really need to take it slow and make sure that I don't overwhelm myself and fall in love with overstrategizing/over-use of indicators.

6) Slowly adjust from My current VWAP+9/13EMA+5/35/5 MACD+MAW/HMA/SMA setup to the Ichimoku Kinko Hyo setup. Funny how i use the area that the multiple MA covers is almost the same to how someone would use the area that the cloud encompasses. The MACD intervals are basically the same as the Ichimoku's cept that Matt owens has an 18/52 type setup and i would use a 5/35/5. One thing that i really like is how the ichimoku uses highest highs/lowest lows in its calculation instead of just the closing price which i believe results in a more accurate and precise measurements. I anticipate having a much faster analysis/easier more efficient use of mental energy once I fully convert my trading to the Ichimoku Cloud.

7) ** I haven't been on a consistent sleeping schedule this past month due to EOC/PCS Outprocessing/Work schedule. I need to really, work on having a consistent process on preparing for the trading day if i can expect any sort of consistency in my trading itself. If i'm ever sleep compromised, I will not be a Zombie Trader !!

AAAAannd... as much as i think his marketing is a little too much for me... and as much as i've heard him repeat these damn rules/lessons of his.. I still have problems fully implementing them... It's not what you know but how you apply the knowledge that counts.. http://www.timothysykes.com/2016/04/5-lessons-today-best-day-2016-far/

Trading in the Zone: Mark Douglas

So i've started using Audible and started to listen to recommended books by Triforce Trader/lx21. Small Exerpt on something that hits close to home.
* Skip down to the important stuff to bypass this wall of text*

... when he finally did lose, he was in a probably in a state of mind where he least expected it. Instead of assuming that the cause of pain was his erroneous expectation of what the market was supposed to do or not do. He blamed the market and resolved that by gaining market knowledge, he can prevent such experiences from occuring. In other words, he made a dramatic shift in his perspective from being carefree to preventing pain and losses. The problem is that preventing pain by avoiding losses can't be done. The market generates behavior patterns and the patterns repeat themselves... but not every single time. So again, there is no possible way to avoid losing or being wrong. Our trader won't sense these trading realities because he is being driven forward by two compelling forces. One he desperately wants that winning feeling back. Two, He is extremely enthusiastic about all the market knowledge he is acquiring. What he doesn't realize is that despite all his enthusiasm, when he went from a carefree state of mind to a prevent and avoid mode of thinking. He shifted from a positive to a negative attitude. He's no longer focused on just winning but rather on how he can avoid pain by preventing the market from hurting him again...
... Learning more and more about the markets only to avoid pain will compound his problems because the more he learns the more he naturally expects from the market making it the more painful when the markets don't do their part. He had unwittingly created a vicious cycle in where the more he learns, the more debilitated he becomes. The more debilitated he becomes, the more he feels compelled to learn. The cycle will continue until he either quits trading in disgust or recognizes that the root cause of his trading problems is his perspective, not his lack of market knowledge. Winners, losers, boomers and busters.. It takes some time before most traders either throw in the towel or find  out the true source of their success....
... They haven't yet learned how to counteract the negative effects of euphoria or how to compensate for the potential for self-sabotage. Euphoria and self-sabotage are two powerful psychological forces that will have an extremely negative effect on your bottom line. But they are not forces where you have to concern yourself with until you start winning or start winning on a consistent basis and that's a big problem. When you are winning, you are less likely to concern yourself with anything that might be a potential problem. Especially something that feels as good as euphoria....... It's when you're winning that you're most susceptible to making a mistake. Overtrading, putting on too large of a position, violating your rules, or generally operating as if no prudent boundaries on your behavior is necessary, you might even go into the extreme of thinking that you are the market. However, the market rarely agrees and when it disagrees, you'll get hurt...
... Huge losses resulting from either euphoria or self-sabotage. Everyone seems to have a different threshold for when overconfidence or euphoria starts to take hold of the thinking process. However, the moment euphoria takes hold, the trader is in deep trouble. In a state of overconfidence or euphoria, you can't perceive any risk because euphoria makes you believe that absolutely nothing can go wrong. If nothing can go wrong, there is no need for rules or boundaries on your behavior. So putting on a larger than usual position is not only appealing.. it's compelling. However, as soon as you put on the larger than usual position, you are in danger. The larger the position, the greater the financial impact small fluctuations on price will have on your equity. Combined the larger than normal impact of a move against your position with the resolute belief that the market will do exactly what you expect and you will have a situation in which one tick in the market opposite of your trade can cause you to be in a state of mind-freeze and become immobilized. When you finally do pull yourself out of it, you will be dazed, disillusioned, and betrayed. And you'll wonder how something like that could have happened. In fact, you were betrayed by your own emotions. However, if you are not aware of or don't understand the underlying dynamics just described you'll have no other choice but to blame the market. If you believe the market did this to you, you'll be compelled to learn more about the market in order to protect yourself. The more you learn, the more confident you naturally become in your ability to win. As your confidence grows, the more likely that at some point you will cross the threshold into euphoria and start the cycle all over again. Losses that result from self-sabotage can be just as damaging but they're usually more subtle in nature. Making errors like a sell for a buy, or vice versa. Or indulging yourself in some distracting activity at the most inappropriate time are typical examples of how traders make sure they don't win. Why wouldn't someone want to win? It's really not a question of what someone wants because i believe all traders want to win. Yet there are often conflicts about winning. Sometimes these conflicts are so powerful that we find our behavior is in direct conflict in what we want. These conflicts can stem from religious upbringing, work ethic or certain types of childhood trauma. If these conflicts exists, it means that your mental environment is not completely aligned with your goals...

Lots of what i typed isn't on what i wanted to point out but oh wellz...

The important stuff   ***********************************

Switching to trading with my laptop, i do not have access to the post-it notes i have on my desktop's monitor to help me trade. I told myself 6weeks ago that i need to make a binder with all the appropriate checklists i have created for trading.. I KNEW that i shouldn't be trading with only 2 hours of sleep, and I KNEW I was not in a fully functional capacity to trade... But what we KNOW and what we DO are in complete opposite of each other in life sometimes and i went ahead and traded anyways. Utilizing checklists has prevented me from making mistakes like that in the past because either i forgot about certain rules/i have memory problems (#1 reason i have checklists) or the checklists gives me a Non-Me perspective reinforcing rules to me that i may be actively ignoring at that specific point in time i'm reading through the checklist.

If i really want to step this up even more, I have to make sure my actions reflect what it is that my mind wants... My behavior of being lazy/procastination caused me to not have the checklist i use to make sure my mental state is not compromised. Since i was mentally compromised by not having enough sleep, I analyzed my trade wrong. Since i went in a trade with the wrong analysis/hypothesis, i lost money. I need to really stop treating daytrading as a hobby and slowly transforming it into a business... because it really is a business....

NEOT: Largest loss to date

I'mma keep it short... Went to work with only 2hours of sleep.. Ran scans at 0800 EST, nothing good showing up.. might be a lame day.. ran another scan a few mins from opening.. NEOT, gapping from 1.08ish to 1.4ish.. Due to me being sleepy and not functioning well, miscategorized the play/wrong exit plan. This inital mistake snowballed into numerous other mistakes that couldn't have been prevented if I didn't trade in the first place.

Mistake of the year so far: Sleepy/Not in the appropriate mental state to trade.

On my desktop I have post-it notes attached to my monitor. The first visible one is a checklist i run through to make sure i'm in a mental/emotional/physical state to trade. Question #1 on there is-- Did I get enough sleep? if no, don't trade. Broken..

Since swapping to trading on my laptop and at work/no access to the post-it notes i have on my monitor. To remedy this, I will be making a binder and in it will be the checklists i will be running through prior to trading as well as having other checklists to maintain a consistent pre-market open process.

NEOT

Previous day's Lows:  0.77
Previous Close:           1.02
Today's open:              1.31
Pre-market's High:      1.45

This pre-market pattern was one i haven't played yet as my first profit target is usually the pre-market's high. In this case i aimed to buy it breaking out of the 1st minute's candle when it tested 1.45 as well as the pre-market high. The most important thing i totally did not heavily account for was the fact that it was waaay up on %gains from yesterday already..  30% from the previous day's close and almost 90% up. 90% up !!! Normally, i'd be very very very cautious about even entering a trade and if i do, the goal would be to just scalp it.. I went in thinking the stock had at least 10% of upside, I was already up 5% on my position and an easy 200$.. I actually thought about sizing down half my size but i held on not knowing this should have been a scalp play.. far worse was how far my ideal entry was from my actual entry.. Ideal entry was at 1.3, i entered at 1.47... 17cents off but my mental stop was at 9ema at 1.41ish.. horrible risk/reward ratio and resulted in my biggest loss to date. My entry was too far from my ideal entry/chased hard since i waited for a flag pattern to form. A gap+go strategy from DTW would've been ideal here.

On a positive note, I really liked how well i had my emotions kept in check while i was in the trade. I stuck to the plan I had even though it was a flawed plan to begin with.