Fast's Journal ($3,000 to $300,000) OR ($3,000 to $30). We'll see!

Hello fellow traders,

I'm starting this thread because I want to see if I'm as good as I think I am.  If I am, hold on to your seat, for we're going down (to $30).  If, on the other hand, you wish me the best of luck and I'm as good as I'd like to be, then sit back and relax, for it's still going to be a long, long, long ride ($300,000).

Either way, my plan is to visit this thread once in a while and share my thoughts on whatever it is I might be thinking about at the time.  When I do something, there's a very good chance I'll make note of it here.

I welcome anyone and everyone to drop a line whenever they feel like it.  My thread is your thread!

Best trading and investing to ya,

fast

Quote:

Originally Posted by anomolies 

kind of a boring journal if you don't tell us what you're trading or how you plan to get to your goal.  

 

but good luck to ya

Good point.

I'm neither trading, nor do I have a plan; however, that is what will hopefully make for a not so boring journal, for by sharing my thoughts and building my plan, I should be able to help explain not only what I'll be trading but why.

Quote:

Originally Posted by Oldelectronic 

    Always interested in a good plan, ready to hear about your starting point and watch it come together.

Good Luck.

Thank you.  I've been in and back out of the market a few times over the last fifteen years.  I've learned a wee little bit here and there, but just not quite enough for profits to be consistent, but I do believe what will make the difference this time is a concerted effort to allow a good plan to work.  See, people sometimes come up with viable plans but never discover that they actually work, and one of the underlying factors behind that is they become discouraged with previous trades that have gone south and fail to follow through with their plans.  I will do my best to be insatiably objective and devoid of emotion.  With that and some highly disciplined money management, I should be well on my way to slowly watching my money go away--and find that I really do suck at this trading stuff; either that or I'll start to actually make some progress. 

Quote:

Originally Posted by Stock King 

So are you trading stocks, options, futures?

In the beginning, I'll be mostly trading stocks.  I say, "in the beginning," but by that, I mean once I actually start trading.  Funding isn't an issue, but the patience to wait and not pull the trigger on trades until my plan is in place may take a while.  I may eventually daytrade some futures using a sophisticated platform, but because of time constraints and life's other commitments, my primary timeframe for buying and selling will not be intraday.  However, I do not plan on going to the other extreme and being a long-term investor either.  I would characterize myself as a short-term trader.  I may generally hold stocks for a about a week, but then again, I may hold them anywhere from a few days to a few months.

Looking into the future, once I become comfortable that I have profitable plan, I will branch out as far as time frame goes and hold securities for both shorter and longer time periods.  Depending on the profitability, I may safeguard some money by investing (instead of trading) in specially selected ETF's.

For a little more insight, I will say that I do not plan on incorporating penny stocks into my portfolio.  Any penny stock trades will be incidental and not part of what would characterize the kind of stocks I plan on trading.  Also, my current thoughts regarding the kind of trader I'll be, I'm seriously thinking about trend trading.  There are a variety of reasons behind that, but time is running short right now to go into detail.  I will say that despite the complexity that's involved, simplicity is an attribute of my plan in the making that I would like to strive for. 

One of the things I’ll need to know as a trend trader is whether or not what I’m trading is trending.  A couple thoughts runs through my mind on this.

One thing is the faulty notion that a price trend can trend sideways.  I believe there can be an upward trend of prices, and I believe there can be a downward trend of prices, but I don’t believe there can be a sideways trend of prices.  There can be a visual representation of price over time that portrays prices as if they were moving sideways, but I’m of the opinion that’s it’s a mischaracterization of a price chart to say of a stock price that it’s trending sideways.  In fact, I would call such a stock price to be non-trending.  If I manually adjust the price of a can of tomatoes upward every Sunday, then it’s not the case that the price has moved/changed (let alone moved/changed sideways) come Monday.

The second thing that comes to mind is the seemingly contradictory notion that a stock price can be trending upwards, trending downwards, and not trending at all (all at the same time).  We can see how this is true when we alter the time frame.  I can be looking at what appears to be down trending stock only to zoom out a bit and see that’s it’s nothing less than a small mini-trend retracement in an overall upward trend.  I’m thinking that I will rely on the different time frames to better determine whether or not I have a more favorable chance of price moving in my direction.  In fact, I’m thinking about using three time frames—what yet, I do not know, but I want the calculable difference between them to be based on something that isn’t arbitrary.

Quote:

Originally Posted by Oldelectronic 

    Lots of information out there but something I have learned is not to over think it. When I first graduated college as an electronics tech I had a hard time because every problem had so many possible answers. With a bit of experience nothing is as complicated as it seemed to be. The same applies to making money, take what you learned and just do it. I stopped the wondering, made a plan, and it has been great.

    Sounds like you have been doing your research, you will do well.

"Take what you learned and just do it."

Yes, you may have something there.  The amount of time and energy it will take to convey the wealth of information I wrestle with would take an unbelievably, inordinate amount of time. 

But I didn't say that.

If I hand you a plan, and if that plan will work, then I have handed you a working plan, but you will not be successful merely because you have a working plan, for you will also have to allow that plan to work; in other words, you won't be successful with a good working plan unless you follow the plan.  Traders can often get overrun with emotion when their money is on the line.  They doubt.  They question themselves.  They question their plan.  What I'm saying is that I have a belief, and one belief I have is that there are traders who actually have in their possession actual real life plans that would work if they dared to run the course and allow them to work without letting their fear tear them away from sticking with their plan.  Of course, they shouldn't stick to a plan if it's not a good plan, but they don't always know whether or not it's actually a good plan.  We all think we have it within ourselves to be immune from the pressures that accompany a string of losses, and though we may actually be right about that (that we have it within ourselves, that is), that's not to say we're going to stand tough and completely ignore our doubts.  So, it's not just a plan that'll make the difference, and if you read what I wrote again, you'll see that I didn't quite say what you might have thought I did.  In short, we must succeed at executing the plan and allowing it enough time or number of trades to work.

I do not have a plan.  That is true.  But, I have many bits and pieces of information that I think can make for a good solid plan.  It's not a get rich quick plan--that's for sure.  In fact, it's something that I've spent a very long time etching away at that could very well make it possible for me to make at least a minimal profit over time.  I could care less about profit alone.  I'm more concerned with consistency.  In fact, I'm not even concerned with a good win/loss ratio, except to the extent that I don't want more wins than losses.  Odd, I know.  But, there's a lot odd about how I have come to stare at this beast we all so endearingly refer to as the market.

As to "[putting] myself at a disadvantage," I'm sitting slap dab square center of it by even thinking that I can outperform the market over a long period of time.  That’s why I dare not trade money that I have earmarked for investment purposes.  If I trade and lose, then I still win, and I think we’d all be wise to not step on the floor of that temptation and invest what we cannot afford to lose.

I am almost completely convinced that the angle of the 50SMA is one of the best indications concerning the presence of a trend.  If the 50SMA is horizontal, then the price of the underlying security is not trending.  If the angle of the 50SMA is angling up, then the price is in an uptrend.  If it's angling down, then it's in a downtrend.

One of the things I’ll need to know is whether or not what I’m trading is trending, and a second thing I’ll need to know is the direction of the trend, and I believe the angle of the 50SMA answers both questions.

One of the things that has been capturing my attention lately is whether or not it would be an improvement to use something like a 47SMA 53SMA cross over (or perhaps a 45SMA 55SMA crossover).  See, one of the mistakes people often make when it comes to determining support and resistance levels is to think of a particular price point instead of thinking of it as a zone.  That’s why I always add and subtract three cents from each support and resistance line.  In a similar vein, it would be unwise of me to consider a 50SMA that appears flat to the eye as if it’s trending just because it’s not perfectly flat.  Trading is not pure science, and things are not always as exact as we’d like them to be, yet if I’m to be objective as I can be and in the interim exclude the need for a visual interpretation of a chart (allowing the possibility of subjectivity to take root), then I’m thinking a cross over might be a simple alternative to the 50SMA as a more objective measure of the general price trend (not the short-term or long-term trend) of a security.

I wanted to drop a line to give you guys a glimpse of what has been praying on my mind lately, and that has to do with how I want this thread to unfold.  I don’t want to bore anyone with my endless stream of thoughts on the various (and numerous) aspects of what’ll come to be apart of why my plan in the making is the way it is, yet I don’t want to clam up and be so secretive as to only convey what I’ll be trading and when.  I need a happy median, I suppose.

Another thing that I’m thinking about has to do with ego.  Too many people can easily create a journal and make a run at it and hope for the best.   To me, failing is a big deal.  I know the odds are stacked against me, and I know there’s a lot of people out there that know a lot more than I do, but I’m putting together a plan that I’m starting to truly have a lot of hope in.  To trade and fail wouldn’t be devastating, but it would be a blow to my ego, as I’m starting to think that I should be reaching a point in my trading career that I ought to be finally doing things right.

Another thing that I feel needs to be mentioned is that there isn’t much all that original to what’s going into my plan—although my plan is of my own making.  I’m drawing on the experience and teachings of others.  No, I’m not following any of those whatchamacallits (or stock picking services), but I will be using a good deal of what I’ve learned from many others—a tiny bit of which is proprietary and much of which isn’t.

The goal is to win.

Quote:

Originally Posted by Bermudan Option 

Trading is an art and a science. You are afraid of failure but the scientific approach means there is no fail: there is only data and refining of hypotheses. What worries me, however is that by not having a plan you do not have any hypotheses that you appear to be testing. What worries me is that your ego is too involved in the process, so if your hypothesis (when you get one) is not working, you are likely to stick with it longer than you should. What worries me is that you seem more concerned with making a journal that is interesting instead of consistently making money. What worries me is that you still haven't posted a chart or analyzed a stock.

You say that "trading is an art and a science," and I believe you are correct about that.

You say that I am afraid of failure, and I'm not entirely sure whether you're right about that or not.  You might be.  I'm just not sure.  It would be disappointing.  You give an interesting perspective in conveying how failure isn't possible by likening it the scientific method.

As to my having or not having a hypothesis, I'm not sure how to respond to that.  I will say that I haven't given it much thought in those terms.  I do have a goal, but as it stands, it's neither written nor quantitative (and certainly not measurable), so even as far as goals go, I'm not doing so hot.  But then again, I'm making progress, but to what end I'm not sure.  I'm trying to keep my set up simple.  I'm trying to make pulling the trigger be like clockwork.  I'm focusing on how to and to what extent to filter my trades.  I give thought to the many things that may lead to bad trades.  I've wrestled with opposing theories regarding approach.  For instance, I'm in favor of keeping losses small and letting winners run, and to that end, I've decided on not scaling in but scaling out.  I've analyzed many indicators, given up on reading price, and am narrowing down not merely what indicators I will be using but to the extent to which they will be tweaked and relied upon.

As to ego, you nailed that one.

Will I stick to a plan even if it so happens to be a plan that I shouldn't?  Yes, and I'll ride it till it can't be ridden anymore.  I'll blow my entire trading account before I give up on it.  That's not smart; I realize that, but then again, it's money I'm willing to lose; furthermore, my plan in the making is not merely a shot in the dark.  It's a cumulative concoction of not only my own making, but it's also adapted in part from what I've learned throughout my trading history.

As to it being an interesting journal, I don't know.  I'd like it to be, but the more feedback I get, the more I think I'm probably just going to use it for logging my trades.  It's too early to tell.  I know one thing though; there's no way I can go into great detail regarding every facet of what's running through my mind, as there seems to be so much that's happened that has led me to where I am now.

I haven't posted a chart.  You nailed that one alright.  But, I have analyzed plenty of stocks.  Granted, I haven't discussed the analysis, and I suppose that was your partly your point.

Quote:

Originally Posted by daytrader11 

@ fast, there is nothing like "win" in trading market. the best you can do is to come up with a theory on what should work, test it out (paper trade, years of experience in market analysis blah blah), and then put it in action and hope for the best. I am rather agnostic with the company that we are actually trading as long as it fits the technique you have developed that you think will achieve path to success. It is fun to take up the challenge and follow it through. Should be interesting following your journal.

I've done my time.  I've been in and out of the market three times.  I've had the thrill of successive wins.  I've endured the bitterness that comes with watching fees erode an account away.  Granted, I haven't lost much in terms of total dollar amount (only because I learned my lesson with little money), but despite the fact I do want this to turn out well, my mentality during actual trading will be that of disinterest.  Not uninterested, but in the sense of unbiased.  In other words, like a judge that could care less who wins a case, no individual trade or any single days profit or loss will move me.  My mental state will be such that I simply don't care.  I won't trade the P&L.  I will trade the technicals only.  If I have three losses back to back and see a valid set up, I'm going to take it without hesitation.  I will trade strictly rule based.  I believe I've mentioned it already, but money management and strict adherence to my rules will be what'll make this happen for me.  Well, that and not messing up and doing things I shouldn't because of how I might have felt at the time. 

Something that has been on my mind today has to do with the kinds of orders I will be placing.  Most people use stop orders to get out of a trade when the trade turns against them; I will too, but I will not only use a stop order to get out of certain trades, but I will also use stop orders to get into trades.  So, when I buy, I’ll use a buy stop order, and to protect myself when trades go south, I’ll also use a stop loss order.

One of the interesting things about stop orders has to do with where they reside, and the reason their residence is generally important has to do with the speed in which transactions take place.  The best case scenario is when they reside on the exchanges server.  The worst, of course, is when they reside on your very own computer.  If they reside on your broker’s computer, then that is worse than the best case scenario but better than the worse case scenario.   At any rate, it’s interesting, but because I will mostly be swing trading (because of time commitments, for one reason), I don’t think I’m going to be overly concerned with that, but it’s something I’ve been thinking about.

When I place my first order, it’ll likely be a buy stop limit order, as opposed to a buy stop market order, but my second order* (my stop loss order) will be a stop loss market order.  Some may disagree with my thinking regarding that, and even though my anticipated third and forth order will likely be a sell limit order (at target 1 and target 2), getting out when the trade goes south will be much more important to me than getting the price I want.  The fifth order will be a trailing stop, most likely to be a market order, but I’m still thinking about that.

*The second order may be placed in conjunction with my first order depending on the execution platform I choose.  I may keep things simple in the beginning since I’ll be swing trading and not day trading.

Another thought that’s been praying on my mind is whether or not I’m going to refund my Zecco account versus establishing another.  I’ll probably stick with it until (and if) I start day trading—which won’t likely be anytime soon.

I’ve been thinking about the Slow Stochastic lately.  In particular, I’ve been trying to make sure I’m getting what I think I’m getting (on my charts).  From my understanding, there is good reason to be cautious since different platforms don’t always calculate stochastics the same.

Since fast %D (which is an SMA of fast %K) is the same as slow %K, then slow %D is the same as an SMA of an SMA of fast %K; thus, if I plot them both and don’t get the same results, then that’s reason to think something’s amiss.