Tuesday, October 14, 2008

daytrading vs. my personality

folks, after trying to trade some moves of the DJIA on the tick-chart-window in its late trading hours i'm asking myself if my personality fits to this kind of trading :o) why? it's such a breaking stress!!! i'm not sure i will like that kind of trading, let's find out by doing it for a while @small real-money-account :-)

i think i would prefer position trading instead ;O) why? i'd like to hold my positions for few days or weeks and exit them after my trailing stop-order was touched (ok, it's just suitable in trending markets, but there are always many of them out there). furthermore, i could also bring in some fundamental analysis into my trading which i would really enjoy and last but not least, it is such a good feeling when i'm able to move my (trailing) stop-order above my entry price (like today for orange juice and coffee :-) + enjoy the future development of my positions => in the tradition of the old adage, cut your losses and let your profits run. it really is as simple as that :o))


well, i've made few bucks ($43) with 15 DJIA trades today => my broker made more ($60); i've moved 15 x 9,300 = $139,000 on the markets; i had just €400 on securities/margin at my account; the first 6 trades have been on the SHORT side; later i had more longs than shorts as the temporary market trend changed its direction; there were 4 trades with just $1 profit as the price went a little bit in the anticipated direction but not enough to move my stop orders significantly further; there have been 10 winners and 5 losers on my trading table today; my profits has developed approx. in the following sequence (amounts in EUR): 0.75 / 8 / 5 / 15 / break for dinner / 8 / 51 / 3 / short break as i've shut down the trading platform after 3 losing trades / 31.55 / end of trading about 30 minutes before the day close as i had no idea in which direction could the market move next + the volatility was extreme (plus/minus 25 points in few seconds) + i wanted to preserve my profits + i was soooo tired ...


lessons learned: yep, it is very hard (even irresponsible?) to trade on the tick-chart when i'm very tired after my daily work in the office ... after my first 4 trades i've taken a break to eat some food and clean up my mind as i wasn't even sure if i've pressed the BUY or SELL button .... in few fast moving market actions i wasn't able to place a stop-order fast enough to limit my eventual losses (there is some smallest allowed difference to the current market price for limit orders) ... TWICE by a mistake i actually closed my price window instead of minimize it ... once or twice i closed my open position immediately without knowing if i have some loss or profit on that .... few times was my order NOT accepted by my broker (too fast moving market?) and i had to decide to quote a different price some 10-15 seconds later or enter a new limit order .... TWICE there was a situation where i couldn't insert any stop-order ... => the trading result is often more a question of luck than of some trading skills (position stopped out just seconds before a huuuuge move happened ... or an order wasn't inserted fast enough and the position returned higher loss as initially planned ... ==> ToDo:

a) to trade in more relaxed shape... this one will be difficult after my usual business day ;o(
b) i'll ALWAYS try to place an initial stop-order as i can never know what happens with my internet connection, my trading software, broker's stream of quotes .... because i don't like to have any open position in a fast moving market without any possibility to close it immediately!
c)
to test if it would be suitable for my trading to accept the first stop-order quote offered by broker (=> is that the minimum allowed spread to current price?) instead of trying to insert some other stop level, just to be sure there is an initial stop-order in my trading account :-)
d) to use the double-click-mode furthermore as the risk to be a little bit too late when confirmirg quotes seems to be not so critical than the risk to click a wrong button (SELL/BUY) or enter a position accidentially by clicking a price window in order to watch its whole content or just moving it to the front of my desktop, isn't it?


i will post just the 3 most significant trades today:

item--------------: DJIA >> position closed, #9
units--------------: 1
order type--------: market (buy) / stop (sell)
trade type--------: long
entry date--------: 10/14/2008, 20:09
entry price-------: 9,188
initial stop-loss--: (don't remember anymore :-)
new stop-loss----: 9,224
exit date---------: 10/14/2008, 20:11
exit price---------: 9,224
profit (loss) in %-:
profit (loss)-------: $ 36
reason why + strategy: trying to trade some big moves ...
lessons learned: nice trade; clever and FAST placement of initial stop-loss-limit as the DJIA moved fast in proposed direction; nice stop-loss-limit later on to secure the profit => OK


item--------------: DJIA >> position closed, #13
units--------------: 1
order type--------: market (buy) / stop (sell)
trade type--------: long
entry date--------: 10/14/2008, 20:22:01
entry price-------: 9,257
initial stop-loss--: (did i place it in this '1 min 12 sec' trade really?)
new stop-loss----: 9,230
exit date---------: 10/14/2008, 20:23:13
exit price---------: 9,230
profit (loss) in %-:
profit (loss)-------: ($ 27)
reason why + strategy: trying to trade some big moves ...
lessons learned: a bad trade; market moved faster than i was able to place a 'suitable' stop-order => OK, that's trading, that's life


item--------------: DJIA >> position closed, #15
units--------------: 1
order type--------: market (buy) / stop (sell)
trade type--------: long
entry date--------: 10/14/2008, 20:30:04
entry price-------: 9,303
initial stop-loss--: 9,291
new stop-loss----: 9,341
exit date---------: 10/14/2008, 20:31:52
exit price---------: 9,341
profit (loss) in %-:
profit (loss)-------: $ 38
reason why + strategy: trying to trade some big moves ...
lessons learned: nice trade; clever and FAST placement of initial stop-loss-limit as the DJIA moved fast in proposed direction; nice stop-loss-limit later on to secure the profit => OK
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