Thursday, November 23, 2006

Merry Thanksgiving & Happy Black Friday!

In the spirit of Thanksgiving I want to thank you for your continued interest and support. I have some wonderful readers; your comments recently have really lifted my spirits. Combined with a rejuvenating visit with my family for Turkey, now that the Tryptophan has worn off a bit, I'm feeling great. I've quietly been getting my way back into the markets this week, maintaining my watchlists and looking for setups to put my plan into action. I just need to get back into the practice of writing things up for your reading pleasure.

I began this post last night, hence the title, and was going to make a smart remark about whether or not the markets would see the same black balance as retailers today or if they’d be marked down to red tag sale prices. The new questions are now: will today’s shortened and lightly traded day see a follow-thru day in the red on Monday? Will traders and investors go on another buying binge, or will they need to close some positions to pay for the door buster deals they bought this morning? The trend does not seem to be in Jeopardy, so I don’t have to state my answer in the form of a question, but hey I've already gone this far: What is profit-taking? Alex? Judges?

Before I go further with the Jeopardy parody, let’s take a look at the (paper) trades I opened this morning: GT $17.89, ACN $34.32, AGR $17.86, and BAC $54.56. As I’m sure you recall, my goal is 25 flawless trades with 10 in a row before I go back to live, real money trades. I’m off to a pretty good start; however I need to refine one aspect in order to have a clearer policy on managing entry on a stock that gaps down. I watched these develop during the first couple hours at market open and decided to make entry based on the 5 minute intra-day chart. I haven’t nailed down my exact trading policy for such entries, and will review the materials, knowledge base and TMTT resources in order to nail down this gray area of my trading plan.

Thursday, November 16, 2006

Feeling Pavlovian

Dear readers, as you know I've been having a difficult time of things lately. I haven't been secretive about it, but I have been keeping the full magnitude of the recent events out of my blog. I've been in a period of introspection. I do try to bring you the unvarnished truth behind my personal journey here, not only for you to understand what Teach Me To Trade/EduTrades teaches, but also for you to understand my perspective of the journey to becoming a professional trader. I'm attempting to bring you the trials, tribulations, joys, sorrows, successes, failures, mental & emotional adjustments to name a few. So it would be wrong of me to withhold the negative experiences along the way, wouldn't it?

Of course I want to be able to report all the things I'm proud of here, all the happy news of my successes, and no, I don't enjoy bringing bad news to you. I'm sure there will be better news to report to you in the future, the near future, certainly, but you must know just how trying the last few weeks have been on me personally. Not everything is directly related to the market and my pursuit of becoming a professional trader, but since putting in the time takes away from other activities that I'd like to partake in, the personal aspects are inextricably linked. I consider the time spent trading as a short-term sacrifice for a long-term goal. As I become able to live off of my trading profits time will become less of an issue considering that I won't need to devide it up between 2 jobs. It's an investment, but this time commitment has created a terribly difficult strain on me personally.

As you know from reading previous posts, I finally became ill about a month ago. The time burden of the schedule was certainly a large contributing factor. This then led from one thing to another, including a break-up with a girl that I loved very dearly. Yes, even though that relationship started a mere couple months back I really loved her. Why does that break-up have anything to do with the Trading? Simply put, I created a situation that she could not have in her life because of my commitment to trading. I put the market and trading ahead of her and her interests (at least in the short-term) and I don't blame her for deciding to end things based on that. Now, that is a much simplified version of how things ended, but it's at the core.

You must also understand that my actions were actually a consideration of the future with her and that I wanted to be a successful trader in order to provide for both of us. It stung even more to have the market destroy the relationship I was hoping to provide for via the market. So the very actions I was taking for the long-term destroyed part of the reason I wanted to be a success. Is it odd to link the two together? Maybe, but it's the truth of the matter for me personally. Call me traditional, but I still hold to the ideal that I should be the primary provider in a family and I have a strong desire to be able to provide financially, as I know that I already have much to give personally. It would appear that I prematurely invested too much of my emotions in a future with her. The fact that she was unable to forgive me for the single failure on my part, which is really as simple as an adjustment of priorities, is a clear indication that she's not the right person for me. I can't be held to perfection, that's too much pressure for me, and I already have enough pressure from my own expectations of myself. Not to mention that holding someone to perfection isn't something that a loving partner does. I recognize my shortcomings and failures and strive to do better, but in the end must forgive myself of my faults. I do the same for everyone else on the planet, and especially for those I love. I need the same understanding and forgiveness from a loving partner.

It seems that, at least for the near-term future, romance & relationships are not possible. Between work, music and the time it takes to become a successful trader, I don't have time for such pursuits, not to mention the pain and emotional trauma brought on by this most recent experience.

The worst part is simply the timing of it all. I finally, after several months of diligent study and practice, including time with Coach Rob and Mentor Jordan, enter real money trades and get a series of losers immediately followed by my girlfriend dumping me. Talk about a low point, and of course it's become a Pavlovian response for me to simply avoid the markets for the past couple weeks. Think about it, at the moment, the markets have brought me very little more than pain. Pain financially and emotionally. Rationally and logically I realize that I'm letting my emotions get in the way of my success, and of course that realization makes me feel worse because I want to be able to put all of that aside and just do what I need to do. I will.

I have no change of plans for my future and I am, at my core, a resilient optimist. I will be a successful trader, and these events will simply add to my experience to make me better at what I do. I appreciate your interest in my journey and hope that you continue to find my trading blog interesting and compelling enough to be worth your time. We will get back to our regularly scheduled broadcast after this week. I've been working full time and rehearsing & performing everyday this week, accounting for approximately 15 hours of each day (including the commute time), leaving very little time for anything else.

Friday, November 10, 2006

Re: Thanks for the blog

On 11/9/06, CV wrote:
I’m also a TMTT student. As of now we (wife also) just started and completed the master trader on demand and will go next to covered calls. We are also taking a trip to UT in Dec and spend back to back weekends for the master trader and covered calls. We are also reading a lot to try to keep just above water with all the information the academy has. We have a mortgage and 2 kids, so time is in short supply every day. We took the package with 6 classes and extra mentor days (don’t remember but may have been the elite package). We to have signed up for the coaching and additional class and mentor time. We did put a lot of money in, but as for education…they have a ton of stuff to become proficient in trading. Although thinking of the money we let go still gives me a tightening felling in my head and chest; my wife and I have come to a crossroad. We have to be proactive in our future, it’s just a little scary when all you life you grow up thinking that if you just work till you retire (so far it’s 75 they way I’ve calculated it) you will be just fine. I have to consider what I need to do for the future in terms of cash flow, not to mention having 2 kids and how much that will cost in college alone.

I think I’m rambling on so, fell free to contact me. I sit in front of the computer all day long (yes my dreaded J.O.B.). We’ll it’s not really bad here but I really don’t see them planning for MY future as much as they plan it for the executives. So I’m on my own….

South San Francisco

I hear you loud an clear CV. I have enough trouble keeping my head above water between work, markets & music, and the money spent on training certainly feels like a lot today. I look forward to the day it seems like pennies. The folks at Teach Me To Trade are as dedicated as you are to your success, you really are not alone. Granted, they're not there to suggest trades or advise you on a specific trade. No, they're there for something far more powerful: to teach you to trade in order for you to be able to take control and be a success.

I've needed a break from everything market related for the last couple weeks, and knowing my schedule will put me at a severe time disadvantage for getting back in. I've already learned the lesson to not jump back in after a break (see: Discipline, Patience & Timing). I have rehearsals and performances starting yesterday for 11 days straight. I have much to say and do with the markets and will be posting in updates and clearing out the blog-webs (think cob-webs... I know my blog has been attracting dust & lint lately). I need to find some way to balance it all out... I feel like I binge on one thing and then another, when I really need to find a way to balance out each week (and probably each day).

In other news, I purchased: (nothing there yet) which I plan to put a discussion board for others that are interested (amongst other pursuits relative to trading). I'm looking forward to having more of an open discussion rather than the one-sided leaning blog.

Thanks for saying hi, I look forward to hearing from you again soon.


Tuesday, November 07, 2006

Moving to TradeStation, too

Hi Mark,

Sorry to read about your tribulations. Hang in there.

I went to my mentor last week. Sam showed me Fibonacci and gap strategies. He showed me several stocks he thought would go down and a few bullish ones. I played several. I didn't play CMI (coulda made a bundle) and I did play GS and MRO. So far, they don't look good, especially after today's rally. I'm ahead in more spreads than I am behind in but GS and MRO have me in the red.


I sent a check to Interactive Brokers a day before I saw your post about TradeStation. I looked at the TS web site and liked it. IB returned my check because it had my old address. I felt so happy about the returned check that I knew I really wanted to try TS. Did you know there are third party plug-ins that you can use to automate your trading? All I would need is a computer and a Doberman. I would feed the dog and the dog would keep me from touching the computer. Anyway, I'll fund the account after my options expire on 11/17, if I have any cash left. -- GG

He who has injured thee was either stronger or weaker than thee.
If weaker, spare him; if stronger, spare thyself. --Seneca

GG, thank you for your support. I'm making a comeback from the recent emotional and trading lows. I just needed a little time to mourn. I can't afford any more mourning, so it's time to move on. That's over and aside from having an over-extended schedule, I'll be back in the markets soon enough (later this week for paper trading at least).

It seems like we'll be on the same timeline for funding our TradeStation accounts. I'm looking to TS to leverage my time a bit better. From my understanding you can program in automatic trading without 3rd party tools by simply using EasyLanguage. As a programmer, this should be fairly natural for me to write out my trading rules and then I won't mis-manage nor micro-manage my trades.

Of course the thought comes to mind that there is no "black-box" trading system that will work, which puzzles me a little, I must say. Since, logically, if you are strictly trading by your rules, you are essentially being your own black-box system. I imagine my entry rules will be pretty simple, but my exit rules will be a bit more interesting when I get around to programming them into TradeStation. It's all very interesting and I don't know exactly what to make of it. I'm most certainly going to be more involved in choosing which trades to enter, but even that will be honed down to a strict set of explicit rules that should be able to be described in TradeStation's EasyLanguage. It's a head-scratcher for now.

Aside from EasyLanguage, TradeStation's charts are top-notch and, along with a 22" ViewSonic widescreen display that I recently purchased, ought to save me some time in evaluating any given chart. Yes, that's right, I'm beginning my equipment upgrades with a rather large second flat-panel display. Eventually I'm sure I'll have about 4 or more displays working for me, but 2 will have to do for now.