Some Observations

Watched the VIX index go into a steady downtrend while the Q's were also working its way into a downtrend. At about 6:50am PST I went short because I saw the markets breaking down and getting weak. What I did was I went long DXD which I believe is a Dow short fund. Such a stupid idea. Why would I short the Dow when I'm watching the Q's? lol, so I bailed out of that one for a tiny loss after I realized what the hell I did. I had the right idea to short the market I just chose the wrong vehicle to take me there.

 

I've been taking some multi vitamins and some Omega 3 vitamins which I used to take a lot when I was lifting and remembered how great I felt. I stopped for some reasons and started taking them again for the heightened sense of being which I'm hoping will ease the slight fear/anxiety I have sometimes when watching the markets right at the open. I did notice a change already, maybe it's a placebo effect but I do feel better overall. Maybe these helped make my decision to go short? I felt confident, calm, had a healthy dose of fear but not enough to debilitate me, leaned back in my chair for about 5 minutes and said out loud, "I'm going short, it's perfect".

 

I'm still keeping an eye on the correlation between the VIX index and QQQQ to see if there's any significant patterns between the two. Last week I did spot a significant situation between the two that have been yielding my momentum stocks. VIX has to be in a downtrend while the Q's are in a steady up trend. Today we had the VIX in a downtrend in the morning but the Q's were also in a downtrend. So, like I said, I'll need to keep an eye on these and see what happens.

Look at this volume

Interesting. Whoever is buying so many shares must know something about this. Especially now that it looks to be making a bottom.

 

Full Steam Ahead

Today has been such a weird day, emotionally and psychologically for me. I got to the point where I was second guessing myself as a trader and questioned if I should even keep doing this. I'm sure my loss had something to do with it, 6 losses in a row, but hey, that's the nature of the business. Before, I didn't mind too much last couple weeks with my losses but I guess it was something about this 6th one that kind of did it for me. Any who, I'm over it and I'm feeling confident in my skills. After that trade I went to go eat, take a nap and then look over all my trades and notes which helped a lot boost my confidence again.

 

With that said, I've got a trade I really like for tomorrow. This time, if it hits my entry point, I'm going to trade it!! No matter what!, lol.

 

The way this is setup, I'll be risking about a 2% loss for a potential 6.5% gain. The entry point is riding above some strong support (green line). Stop loss is just under that by 30 cents which is in a great area (black line). The target exit point is where the red line is at 14.75 roughly where the last line of resistance is for this stock. The yellow line represents a little resistance over the last 6 days of trading so that'll be something to look out for.

 

Time frame for this stock will be 3 days at the max or less if my exit target is reached.

 

del.icio.us Tags: stkl , stock chart , confidence , trading plan

Realization

I've been going over my trade logs to see if I can pin point why my success rate has been declining so much. It's gone from a 68% success rate to 52%. I've been going through a 6 trade losing streak over the last couple weeks, with minimal loses but that's not the point.

 

I found out why I haven't been trading so well. My average holding period for a stock during my peak success rate was 2 days. My average holding time for a stock during my losing streak was about 10 minutes. I obviously can't day trade. I don't have the resources to make it happen and I need to realize it and stop wasting my time and money forcing something that won't work.

 

I'm going back to my old plan of swing trading. This is a classic example of how greed takes control and the losses take over. I've been thinking about this a lot this morning after that bad trade I had and I was swing trading very well back in June, July, and August and then this mortgage crisis came into play and that's when I changed my plan. I started changing my trading time frame from swing trading to day trading to try and capitalize on the new market conditions. I shouldn't of done that. I should of stuck to my plan/trading style instead of modifying it for the current conditions. If I couldn't find any opportunities, then I shouldn't of traded. Simple as that.

 

This is a pretty big breaking point for me as far as my personal development as a trader goes. I'm glad I've gone through this experience. I needed this to help me realize my goals and to not deviate from the master plan! I'm going to do what I can to learn from this last months experience and make sure it doesn't happen again.

 

del.icio.us Tags: personal devolpment , trader psychology , trading plan

Dow Falls

This is just a note to myself for the record I guess. I have a weird feeling about tomorrow. I'm getting a feeling the Dow will fall a lot,..like, way more than normal. I hope I'm wrong.