MGB: Journal

Discussion in 'Trading' started by MGB, Aug 5, 2001.

  1. MGB


    I've been intraday trading off and on for the past year. Learning as I go along. I trade a position and if I get hit then I step back to assess the situation. Each time I trade I try to determine why it was successful and why it was not.

    One problem I couldn't figure out was why every position I traded turned around very quickly. I was buying after the open when the stock started to run up and quickly turned down.

    Bad move, huh?

    I did more research and I discovered that the "first wave" always hits resistence. The "second wave" might pass resistance but the "third wave" almost always breaks resistance.

    Ah finally, nirvana. I was always "greedy" to catch the first wave because I was afraid that it would run away from me. But now I let the first wave hit and watch for the bottom so I can establish the intraday high/low. From there I can ride my positions on each wave.

    Anyway, in July I decided to take it seriously as a career. So I finally get ahead with ~$1,500 for the week. I know this is pennies compared to most of the guys on this board. Yet every journey starts with a step.

    It's really rewarding that I made money last Friday while the whole market was down. That feels good.

  2. Magna

    Magna Administrator


    Enjoyed the first entry in the MGB Journal. Your openness and insights are always welcome and a pleasure to read.

    For the horrendous week that just passed it is superb, don't think otherwise. Keep up the great work.
  3. MGB


    Thanks for the encouragement. What's even better is that I was only trading 500 shares on my positions. I'm not trading 1,000 shares yet. So that's definitely encouraging to me.

    I plan to do another 4 weeks of trading 500 share positions. I want each week to be net positive. Then after Labor day weekend, I will start trading 1,000 share positions.

  4. Hitman


    Who would have thought? Someone who was obessed with mechanical investing stuff is now day trading :)

    500 shares is ok for summer market for people with under a year's worth of experience, I start every position with this kind of size and pyramid as needed.

    $1500 is fantastic, as Magna said, I only managed $600 this past week . . . I am curious how long have you been day trading and what is the overall progress? Especially how the hell did you decide to dump the jumping frogs for day trading, pretty damn drastic change . . .

    Also some comments on your focus/strategy will be helpful. Don't tell me it is that mechanical day trading strategy you came up a year ago . . .
  5. Magna

    Magna Administrator

    Michael (ah yes, the jumping frogs...),

    Mambo, indeed. One of these years you'll maybe get it right ;)
  6. MGB


    <b>re: Hitman</b>
    I've daytraded on and off since last December 2000. I've been an investor since I was 12 years old. Around that time, there was an article in Money magazine about a guy who lived in Colorado and traded million dollar equities for his clients. I was hooked.

    In the early 80s there was a big deal about Wall Street Firms hiring software developers to do Quant analysis. At this time I was into computers and decided that computer software would be my career. In the back of my mind was always the desire to trade for a living. I figured a computer career would lead into that somehow.

    After graduation, I worked for Microsoft and made a couple of greenbacks doing project management. After I left Microsoft and started doing contract work, I also started getting serious about trading. Happily, plenty of direct access brokers were available to make this happen. The rise of the Internet was perfect timing.

    The use of computers to do Quant analysis has always appealed to me. It combines computers and trading. Hence, the appealing nature of mechanical investing. Mechanical investing biggest strength is finding the right stocks. But its' weaknesses are when to get in and when to get out. So, in my work to find ways to time the entry/exit, I've learned Technical Analysis. When you learn Technical Analysis, you start dealing with smaller time frames.

    The high-tech slump has made it necessary to make a living somehow. Hence, daytrading has become a serious endeavor for me.

    I've gotten old enough to know that I want to follow my passion -- The passion of being the guy in a cabin in the mountains trading serious portfolios. I expect to make a few greenbacks but I also want to be charitable and give a few greenbacks to local charities on an annual basis.

    As for my focus/strategy... I look for intraday <b>Jumping Frogs</b>. Just kidding. The stocks I like are Nasdaq stocks that stay up when the Nasdaq Composite turns down. The demonstrates support for the stock. This is a great because when the Nasdaq Composite turns up, the stock tends to jump up equally (or more). Lately, the stock I follow is NVDA.

    I also look for stocks that tend to follow Candlestick patterns for reversals. Not every stock is Candlestick-friendly. I run a chart with 1-minute candlesticks and 1-minute stochastics. Lately, it seems that a bullish candlestick pattern with stochastic < 25 is a strong confirmation signal.

    My favorite bullish reversal pattern is 3 red bars with each red bar that has more volume than the previous red bar. While the 3 red bars go down, the 3 volume bars go up. At this point, I don't hestitate -- Fire that buy button!

    So far, my future goal is to become a Broker-Dealer that can trade directly with MarketXT, Island, etc. This includes developing my own trading software. Doing so would satisfy my own passion for software development and trading. MarketXT requires at least $500,000 in Net Capital so this is a 5-year goal.

    In the meantime, I'm just going to have fun, make a few greenbacks and enjoy the journey.

  7. MGB


    Ah, another sweet day, indeed!

    Closed P&L for Monday is $530.00. My best Monday start.

    Made most of my gains with NVDA between 9:30 and 11am. When stoch < 25 and the bullish candlestick patterns are in place, the stock went up. Sometimes you have to hold on through the wiggles.

    However, from 9:30am through 10:45am, NVDA was not following $COMPX. They were disconnected. Then after 10:45am, they were in sync.

    After 11am, I noticed several stocks breaking out to the upside when they crossed up over their previous day's close and made a new high. One of them was CIEN. I rode the stock to the top. Sweet.

    Traded 500 share positions and all of them long. I still haven't traded a short position yet.

  8. MGB, are you following stochastics on NQs or an indicator stock or just the stock your looking to trade?

    Nice thread.
  9. MGB


    I'm following the 1 minute stoch on just the stock I'm looking to trade.

    I have the /NDU1 and $COMPX charts at 1 minute intervals with no studies.

    I'm keeping it simple.


  10. Babak


    MGB, its not really about one, two, or three waves, its really about how much punch (volume) there is behind a rally. As well as if it is going with the tide (relavant index/sector) or against it.

    also NVDA goes more with the SOX than the COMP

    wish you the best and look forward to reading your journal

    #10     Aug 6, 2001