Another good video

I like this video

The Trading Doctor, Dr. Janice Dorn talks Psychology and Markets with Matt Davio @misstrade from miss trade on Vimeo.

The start strikes me as too much hocus pocus. It gets into some great stuff as it goes on. He deflects the therapist in her a lot, I doubt he will take her up on her services.

Invisible chart

With thanks to Andrew Lais. I am not sure how I will use this but I like the looks of it. It might help me to identify better entry points when the averages get tighter and it might help with accepting certain stop losses. For example, if I buy VMW now but my stop loss gets defined at 56, I can see where this is in relation to the average and decide if that is a risk I can accept or if it is a loss I do not expect to happen.

Maybe today?

Top Pick

Okay, maybe top hope and guess

Restraint equals indulgence

I don't "feel" like I have my finger on the pulse of things, been busy with work and life. So I choose to not trade much, have a very light footprint in the market right now. I'll do some better research in the am, want to have some candidates and conditions lined up.

The blog title comes from a book I have been reading on a family that tried to eat local food for a year. The author talked about how we eat everything we want when we want it, not being willing to wait for seasonal foods out of the garden. And yet we expect kids to wait for intimate relations after living lives absent of restraint. The author suggests that waiting for the suggested aphrodisiac of fresh spring asparagus is the restraint that equals indulgence. Perhaps waiting for my trade that I feel good about is the same.

I suspect I have read enough market books to be successful and just need to continue on the path I am on.

thoughts

Well Friday action was really not expected. Many of my positions got stopped out. Those that did not were also down large, I went ahead and just stood to the side on most of them, let the market calm down and say what it is going to do. My account balances took a hit but I am going to say this has been a good month of trading with disciplined small losses. Prior to Friday, I'd had several positions up at least the amount I was risking on them. So for now I will survive, trade smaller, keep a watch out.

What most ticks me off was the scenarios I had not accounted for. One of my positions went further against me then I'd wanted as I do not like to use hard stops (I do not place orders until after the action happens) and the alert I had placed was at the wrong price. I was poorly prepared. I need to work on my planning and implementation better. It then was compounded by the cleaning lady vacuuming near my computer and sending things haywire.

Having some form of risk management in place keeps me from getting butchered.

How I take a loss

My record keeping is on a notepad at my trading computer. I like the idea of follwoign new product companies with good sales and earnings.Looking back at records and trade records on 4/7 I purchased 300 Shares of XRTX. 2*ATR was 1.71, the amount of money I was willing to risk was about $500. I recorded a stop loss of 17.27 based upon this, along with a note to add if the stock took out 19.25 highs. I felt real smart buying that day as it made the top five list for stocks moving up on volume that day. Yesterday the stock moved a lot with some news, I think someone started following the stock. It fell hard on 5x volume. I saw some of this from work, action did not look good and rather than waiting for my stop loss to hit I sold at 17.76 for a loss of $369. It did take out my stop loss, but did close above it.

Discussion: if you click on the chart and open it, the stock has had 2 big gaps up. Perhaps this uneven trading, ie emotional, was not the best pattern to get involved in. I thought about this a few days ago but stuck with the trade. I will also consider wild patterns as difficult to enter. I'd rather see more regular movement in a stock. I'll keep this one on my watch list as it might set up again.

Update on March 2010

20 trades were made with controlled losses, some profits, mostly in a 2% QQQQ trade at start of vacation. Of the 20 trades I am still holding 7 of them. Some of the 20 are really one trade but spread over several accounts so do not be fooled thinking I was doing a lot.

Discussion: Two trades were very disappointing to me, I made bad entry on stocks at spur of moment. I got out of both of these earlier than my predetermined loss points prior to them getting there. Another trade I do not recall my reason so I'll say a third was bad. The rest were researched disciplined entries. In retrospect I think two of these were where the 50 day average was below the 200, dangerous longs but one is working out for now. PCLN was another tough one, it was on my watch list with directions to buy a starter position and then add when it broke new highs. I never got the chance and bought in for double position right away and it has held that new high plus a bit. I am telling myself that I will risk 2%, not my normal .5%.

I really want to get this all on a spreadsheet but have limited time with holiday plans and yardwork. I will instead just review charts and market health.

Performance review- too be updated

March was not so good. Accounts are up a grand total of $52. But I took a lot of quality time away, had no big drawdowns, was disciplined in taking small losses, had some nice gains in some issues. I will review more in depth later. I added to a Roth, this makes the accounting a little messier.
Jan -1.7%
Feb 4.37%
Mar .0005%
Ytd about 2.6%