DDRX

So, I guess I'm short DDRX 50 shares at $16. I had reserved 50 shares of DDRX to short at $16 a few days ago, not thinking it would hit $16 since it had been channeling sideways for a couple days. My plan was to short when the channel finally broke down. Now, I dont know if I have been blessed with this higher entry, or screwed.

I'm a little afraid that this stock could squeeze some more. There is no reason to short here at $16. It is just making yet another high. The RSI, and the volume are downtrending yet this stock keeps breaking out. I've never seen anything like it. I'd be happy to cover around the $13-$14 area, but I might cut my losses if this thing hits $17.

What I have found is that futures trading is not as predictable as individual stocks. You have so many factors to take into consideration when trading index futures. The reason why I have chosen to start trading futures is because of the profit potential. If 1 point on the NQ is $20, then all I have to do is make two 1 point trades a day, and I will have exceeded what I was getting paid at my last part time job.

That seems easy doesn't it? It seems easy on paper, but when I go to trade on a real account, human emotions come in to play and I seem to forget everything I've gone over, and everything I've learned. Everything goes out the window when I see the price fluctuate between noise, and the real trend. I question myself, and the indicators, and the indicators are right most of the time yet I question them every time.

I will now trade on my paper account until I get somewhere.

Day 1 of New Strategy

***Update #1***

Human emotions never seem to fail do they? I am down $125 because I strayed from the strategy, and started playing off the god damn noise on the 1 minute chart. If I had stuck to my plan I'd be in the green.

I don't think I have found the holy grail (what a surprise), but I do think I have found a very good indicator that can be used to one's advantage. That is, if you stick to the plan, like I didn't do

I'm so disappointed in myself right now.

***Update #2***

-$280 on the day

I don't even know what to say. I made more panic trades into the close. I swore to myself I'd stick to the plan, and I couldn't even do that. This is the second biggest loss I've taken on my account. This loss is huge on an account as small as mine.

Now I am almost under the the minimum required margin requirements to play the /Nq. This is the worst trading day of my life.

A Futures Trading Strategy

I recently discovered a pretty reliable study for playing Futures. Because of the margin requirements, I've only been able to play and backtest this study on the Nasdaq 100 Futures (/NQ). It seems to work best on the 5 minute time frame, so I went ahead and backtested it for the last 20 days. There was not a single losing trading day.

For the /NQ, 1 point = $20 P/L. I tested this strategy for the past 20 days in the 5 minute time frame, playing only 1 contract each trade. This strategy requires between 10-24 trades a day which means commissions do add up, and I will factor them in.

Below are some figures after back testing for the past 20 trading days.

Total $ Gain: $21,187
Average Daily Profit: $1,059
Biggest Winning Trade: $780
Biggest Losing Trade: $83

Those statistics are with perfect entry's so I don't expect to get results as good as those above, even with limit orders. The amazing thing about this study though is the ability to let the winners run, and not let the losers get away. The biggest single trade loss out of the last 20 days with this study was a 4.25 contract loss, which is $83. I like those odds.

So realistically with commissions added into it, it's $7 round trip commissions (thinkorswim). The most trades in a day out of the past 20 days were 24 trades. 24 trades at $7 round trip = $168, and that is worst case senario. For those 20 days, you'd pay $3360 in commissions.

Total $21,187 - $3360 in commissions = $17,827.

Let's say you don't get great fills all of the time. Let's say you are late. I can't really guess how much I could lose based on a slow entry, but at an average of $1,059 a day with perfect entries, how much could you lose based on slow entries? a couple hundred a day? $400 a day?

Let's do that, lets say you miss out on $400 a day because of slow entries. I'm just pulling that number out of my ass, trying to weigh on the realistic side. $400 x 20 days = $8000.

So, the total after commissions with perfect entries is $17,827 - $8000 of realistic missed profits and you have $9,827 for 20 trading days.

And that doesn't factor for after hours trading when a lot of big moves happen!... I know how crazy I sound right now, because it just sounds too good to be true. I will put it to the test with my real account on monday to see what happens.

A pretty decent day

So since I didn't have any trades left, I shorted COT at 4.16 towards the end of Tuesday. I entered the trade because I saw the volume decreasing, and lower highs. I figured if it took out the $4 support I'd be in pretty good shape. It didnt, and I tortured myself by watching this thing until the close.

After the close futures started tanking and I was overcome with a feeling of relief. But then because I like to torture myself, I watched futures start to climb back up from -90, to being positive before the open! I was pretty panicked when I woke up at 3:20 AM to check premarket action. It opened and was sideways for hours. When I went to sleep I put a stop at 4.23 and when I woke up at 7am, I saw that it was barely under $4 and climbing back up. I took my $30 profit at 3.99.























The next trade was MEE. IL alerted it as a possible short fade after the run up. I went short at 22.96 after it started coming off of its high of 23.56. This thing was awesome to watch fall. It fell, and fell and fell until it stopped at the 22.20 support level. I sensed that the run was over and I got out at 22.22. I'm pretty proud of myself for exiting at the perfect time. I ended up with a modest $22 gain.

COT - $30
MEE - $22

TSYS afternoon fade

TSYS was yet another stock I left a lot of money on. I was short 100 shares at 10.35 where the highlighted oval is, and my stop was 10.45, 5 cents over the triple top. These types of plays are the ones I do the best on, and I was liking this stock as a nice fade. As luck would have it, in the open it goes to 10.50, taking my stop out, and then bleeding out the rest of the day, and tanking the following day. I left $200 on the table. Instead I lose $20 after commissions brining my account to a new low. I have the right idea, it just didn't work this time. Ow, ow, ow ow. That stings like a SOB.

Holding Myself Accountable

This is the start of what I hope to be an entertaining and interesting blog. I will be going over most of my trades in detail not only so I can see where I messed up, but so others may offer some helpful insight and/or constructive criticism.

I will also be talking about complaining and rambling about what it is like to trade stocks while having to wake up at the ass crack of dawn.

I started trading stocks when my dad told me of the potential returns that the market can give at any time. I was immediately sucked in, and dreaming of getting rich quick playing the stock market. I wish someone would've slapped some sense into me then, it would've saved me a lot of time and money. Shortly after my dad introduced me to the stock market I opened an account with Tradeking with $5000. At first I made a few hundred lucky dollars by buying stocks like GE, GOOG, BIDU, etc. That's when it all went down hill...

I lost about $500 in 2 days in another one of my pure speculative buys of SIRI when they were in talks of a merge with XM. That is when my aimless buying of big name companies stopped, and I found Timothy Sykes. With the help of Timothy Sykes, and after I switched to Thinkorswim, I was finally getting the hang of it, or so I thought. I made a few more lucky dollars, but every time I got into a trade I was petrified. I would have sweaty palms, sweaty feat, and an uncontrollable heart rate. This caused me to leave profits on the table, and not obey my mental stops. This brought my account down to the $4000 level.

Then I found my way to the Investors Underground chat, where I am constantly learning from Muddy, Laura, Tortexal, Investors Live, and everyone else's alerts and input in chat. I am a much better trader now than I was when I started, but I still have a lot to learn.