Chronicles of a Day Trader | Bulls on Wall Street

Chronicles of a Day Trader

Hey guys! @ckz8780 has been writing a blog of his chronicles of his quest to be a daytrader.

 

He is one of the students in our bootcamp he took our last session. He is also very active in our bulls chatroom.  To be frank he has had quite a few ups and downs and tons of frusterations. Me and him have had many late night conversations on his disappointment of his progress including a couple heated moments where he tried to blame me!  Then we would have a girl fight and make up the next day! but he never gave up and kept battling everyday. trading everyday either live or on simulator.  Then he started to have some aHA moments where things really started to click for him. He narrowed his focus on the type of trades he takes and the setups and his win rate has jumped from 35% to 61% and the last month he has been 80% plus while the market has been getting rocked.

He has a great blog check it out!   Chronicles of a Day Trader   you can follow him on twitter @ckz8780

 

if you want to check our our bootcamp its a 3 month program TRADING BOOTCAMP  we start a new one soon!

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CHRONICLES OF DAY TRADER– here is his latest blog!

 

Trade With Your Brain, Not Your Balls

First things first: the above image is the result of a simple Google image search for “brain balls.” No, I didn’t know it existed either, and yes, you can buy prints on Flickr if you want.

That said, there is some significance to the picture in that I feel that it accurately depicts my trading technique today and the many reasons that we as daytraders need to keep ourselves in check. Simply put, today I got a bit cocky (no pun intended) with my trading and quickly learned why it’s a bad idea to allow that to happen.

You see, for the last month I have been absolutely on fire. Something finally clicked and I have been making trade after successful trade, albeit with small positions, with incredible consistency. According to tradervue.com where I share all my trades, I recently came off a 10 trade winning streak following a near 90% hit rate for the last three weeks. Just take a look at some of these stats:

Full Disclosure: Tradervue does not track my commissions though trading on a per-share commission structure and trading mostly 50-200 share blocks, each trade usually costs me around $4 round trip, so the commission cost is negligible at the moment

 

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Pretty sick right? Especially considering my first month trading (February 2012) with Bulls on Wall Street looked like this:

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Needless to say I have been feeling pretty good about my performance lately, and am starting to experiment with taking a bit more risk: trading thinner stocks, taking larger positions and attempting to handle multiple positions at the same time. For the last three weeks, I’ve been taking only one position at a time so I can really focus on them and learn the behavior of the setup I’m playing as well as the behavior of the different types of stocks. Today I decided to branch out a little bit. I started off my day with a sick short in CLF off a daily bear flag breakdown:

Daily: 

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 5 Min:

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Obviously, taking nearly $1 a share on your first trade is a great way to start your morning. Being that this was my 12th consecutive win I decided to get a little bit frisky! After I covered the 2nd half (the 2nd green up arrow on the 5 min chart) I decided to add back on the bounce. This was fine. You’ll notice however that I covered the add without even really letting it break down again (which you can see it did (another 50 cents!) after my cover). The reason I covered it quickly is because in the time between when I shorted CLF for the second time and where I covered it, I had also taken two other shorts in PANL (a thin stock that was quite risky) and WIN (which I had chased a little bit since I was trying to take PANL at the same time).

At the point I covered CLF for the second time (for a tiny profit), I also covered PANL for a loss and WIN for a less than stellar gain when I had been up significantly on it just a few minutes before and never took profits because I was busy managing the other two trades. I had become overwhelmed and felt that I had too much risk on the table, since if all three trades went sour at once it would take me from a significant gain to a significant loss very quickly, and I hate that more than anything!

I was trading with my balls, not my brain.

As traders, it’s easy to lose control when we get on a hot streak and start taking on more risk than we should and putting ourselves into situations we can’t handle emotionally. In these shenanigans I gave back over 50% of my gains from the first trade of the day. Furthermore, that put me into “revenge mode” and I ended up taking two more trades inWIN later that day for another net loss. I had lost my focus!

Luckily in this case since the first trade was superb I still finished the day with a profit, but my profits could have been a lot more if I had just used my brain instead of feeling invincible and trying to bite off more than I could chew. As you grow as a trader you will almost certainly experience the need to remind yourself to trade with your brain and not your balls (or your…ovaries, I guess, if you don’t have balls). Sometimes when you find something that works for you, especially during the learning process, it’s best to just keep doing that until it becomes second nature. Three weeks of success is hardly enough for me to say I’m consistent, but I’m getting there. I have found a strategy that works wonders for me and I’m making money doing it, so the mission now is to keep that strategy consistent until I build up my account to the point where it makes financial sense for me to take more risk!

Seriously guys and girls, when you get on a hot streak, don’t blow it by being stupid. When you start hitting 15, 20, 30 trades in a row and are making money left and right, be smart! Remain focused, keep your head clear, and stay reasonable. If you become greedy or cocky it will only lead to disaster in the end.

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