In light of my frustrated trading yesterday, I had little desire to pursue opportunity in the Nasdaq futures today. Instead I reviewed tape and read a book while keeping one eye on the marketplace.  How I felt yesterday was very subjective, with a distorted perception of reality.  When trading, it is up to us to change our attitude and act with purpose.  You can sit around waiting for someone to help you or you can take action today.

We printed another normal day in the NQ, the second this week.  A normal day is generally created by a swift entry of the other timeframe participant which has the effect of establishing a wide initial balance.  The rest of the day the other timeframe buyer and seller auction price back-and-forth and two way balanced trade takes place.  These are anti-momentum days intraday.  I am actually quite pleased to observe today’s normal day from the sidelines I tend to chop myself up in these conditions.  The key today was in the hypotheses.  As a matter of fact, the key to every day is the hypotheses.  Trades taken without a plan, no matter how nice the conditions look, back door screw me way too often.  Less is more intraday.  This is simple, only trade while applying a hypothesis after a trading picture emerges.  Simple, but not easy.

The big news on the session came from our favorite real estate apps, Z and TRLA.  Zillow is pursuing a bid to acquire Truila for a very cool two billion.  This calls into question the valuation of all internet real estate, because face it, internet real estate is very real.  You and I and Aunt Yellen have no idea how to truly value of these properties.  Smarter folks then us will use the open market to determine this, naturally.

I took down August calls in WUBA early and then some PCLN yolo action around lunchtime.  Other than that, I continue to sit here, in no particular hurry, watching my book of potent rockets sit at ground zero.

Tomorrow I will form a set of very high quality hypotheses after taking care to present you with the finest Nasdaq analysis money can buy (it’s free), and conditions willing I will take a trade or two.  No more guns blazing, especially on Fridays.

http://youtu.be/EwfI677mRXo

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Insanity is doing the same things over and over again and expecting different results.

-Albert Einstein

In case you think this is yesterday’s performance chart, think again!!!!  Your boy is losing it.  I will save you all the torturous introspective, just know the lunatic escaped from the asylum today and traded like it was groundhog day for fuckssake.

Highlights—a consolidation formed, consolidations “aren’t my thing”, I took 49304u45 trades inside of it, breaking all kinds of rules, and stopped myself just before hitting the old daily loss limit.  Then I sat in the woods and observed the squirrels and willfully allowed the mosquitoes to consume my flesh while I watched FB earnings.

Now I am off to scour craigslist for a physiatrist.

BUT FIRST, A PERF CHART FOR YOU COOL DOODS:

Let’s see if my homie Marc over at FB is going to save my week tomorrow.  I am long of TWTR calls, next week expiry of course, because momo trading is PLUM SLOW.  TSLA calls too, GRPN calls ALSO.  Cool.

Good night

http://youtu.be/x4e53wnInX4

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Day two over here of being tossed around by locals during a consolidation and boy do I feel frustrated.  I think I know what is happening here—I have a tendency to hunt out and buy into consolidating stocks.  The consolidating stock affords me the opportunity to clearly define the risk of my swing trade.  However, my trading style intraday on the /NQ_F is different.  I am not riding a position which can sit through the noise until a clear break emerges.  My risk per trade is too tight for this.  Thus, if a consolidation emerges my job going forward is to wait it out until an abnormal rotation takes place.

Otherwise I will keep donating my hard earned ticks back to the locals and robots.  I am defining my edge here, real time, using small position size.  I am happy to learn my methodology while it is still inexpensive.  I feel closer than ever to a workable trading model here.

To anyone who desires to trade discretionary in any product, my best advice so far is to find out what works for you while trading SMALL.  Also find out what is not working.  Consolidation trades are not working for me, at least not while trading the 1 lot.

When I envision trading more size, I would have carried a unit into the consolidation with a nice scale in place.  It would be much more simple to manage this position because my risk would be way below the consolidation zone as opposed to initiating fresh risk amid the consolidation.  Do you see how the two trades differ?

Anyhow, here are my daily stats below.  I dipped into the red today but spent most of the session confident in my methodology.

I bought a Twitter weekly call early in the session, but when we fell out of the short squeeze, P-shaped profile I brought the risk back to cash.  The rest of my book stayed the same.  My DDD calls are not looking too hot, but I will see one more day of trade before acting.

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Both the Nasdaq and the S&P were in neutral territory this afternoon.  The trade on a neutral print is to find a price to lean on and fade the second range extension back to the mean.  This trade was not an easy one to stomach today, and quite frankly the buyers defended the pants off of their progress.

We saw a slight risk aversion divergence when /ES made a new high without the /NQ and at that point I was looking for short entries despite the poor high printed at HOD.  Net I had a decent day, loaded with machine gun error strikes after my best trades.  This is a bi-product of trading a 1 lot.  I know that my trades might yield more than my first scale point.  Thus, I become overzealous in reentering.  I need to frame my mind as if I am still in the original trade and how I would manage my position if that was the case.  This will eliminate these errors.  I am thinking like a 1 lot chump.  One might presume I could simply bump up to a two lot and this error would magically vanish.  I won’t lie, I considered it.  However, the more disciplined approach to this issue is to avoid taking a poor reentry.  This will pay off big when I do start increasing size, because I will be more familiar and comfortable with proper re-entry/re-sizing tactics.  See below:

I left my book alone today.  If anything, I would have increased my long exposure because something about today’s neutral print smacked me in the face as BOOLISH.  But I didn’t—I rode my cycle instead. I will be poking around the sacred halls of iBankCoin for another long idea this evening.

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I have a pretty bizarre imagination, but I couldn’t make up a day where a Malaysian airplane was rocketed down on the Russian border, Israel launched a land battle in Gaza, and the White House was put on lockdown even under a peyote educed bout of psychosis.  What a day.

I earned some new rules today, trading the /NQ.  Here’s the thing, willpower is finite much like land on an island.  If I sit here, and prices are going all the hell over the place, then over time it becomes more and more difficult to restrain the urge to break discipline.  I have the tools to trade well.  I have the environment to trade well.  I have the ability to trade well.  When a person is selected to join the special forces, like the Navy Seals, we know they have the physical ability to complete the challenges they face.  However they are tested, nearly tortured, and the entire time invited to “ring the bell”.  This is a test of their mental fortitude, their will power.  Those who can maintain the will power can become Seals.  This is because often times their missions require incredible strength.  Some missions require days of reconnaissance and patience in grueling conditions before making a precision strike or insertion or extraction.

Willpower is a muscle, it can be strengthened.  However, until it is stronger one must take steps to ensure their own safety.  Two rules – 3 losing trades in a row? DONE for the day.  45 ticks to the good or more on the day?  DONE.

This will require shutting the DOM down and/or going away from the trading desk.  It is too enticing otherwise, the action.  If I want to abstain from cookies and every 20 minutes someone brings a hot batch out and puts them on the table, then I will eventually break and mangia some cookies.  I know my own weaknesses.  I will strengthen them, avoided impulse in all aspects of life.  Not just trading.  For now, I will create a physical barrier.

ONE MOAR RULE

I am frustrated with myself because I gave back good gains on the day.  Fade trades after 3pm, no, forget that.  The final hour of trade is like the wild west on a Futurama set.  Here are my daily (over) trades:

How cool would it have been to sashay onto iBankCoin and show everyone the money I made in the morning and then how I lounged for the remainder of the day, drinking Kool Aid with my homies?  Instead you see my continued struggle to make the turn.

I stopped out about half my book.  I have work to do, my performance swinging stocks this year is atrocious.  I still have some calls in TSLA and GPRN, August variety.  I am going to work on my back and biceps until they burst then re watch my performance tapes on the week.  Oh yeah.

Please don’t coddle me, or offer advice.  This was stupid what I did today and I know better and I am feeling a little sensitive about it.  That being said, if you know a good tune for a warm summer day please pass it my way.

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I had a strong feel on the market this morning, and my primary hypothesis was playing out very well.  I was able to capture several lovely trades during this time.  After lunch we formed a tight consolidation which I played very poorly.  I waffled all over the place, paying my broker and allowing the locals to make me into delicate sausage.  Then my discipline broke in the afternoon where I could be seen waffling out of a good short and then greedily expecting too much from my fade long.  This breakdown in discipline gave back half the days gain and plummeted an otherwise solid win rate I had going.  Here is a chart of the performance:

I expected more from my book of risk too, which instead received several kicks to the scrotum.  I changed nothing and will see what tomorrow brings.

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I had a fairly strong bias to the downside this morning when I wrote my morning piece.  The symmetry of intermediate term balance was telling me a story, as were two enticing overnight gaps below.  My poor execution started at trades 4&5.  When I took that error and missed the first big thrust, I think my focus was disrupted.  It was my first error on the week and aside from trades 8 & 10 I spent the rest of my day fading moves which is a much more mentally difficult trade for me.  By the time trade # 12 rolled through I had enough and turned my attention to stocks I could buy on the dip.  I managed 8 wrong, stopping out before I normally would, and 10 was a poor trade contextually.

Having a strong read on context is only half the battle.  When trade is as fast as today it is better wait for a slow in the pace before participating because the speed can create edginess and make me lose sight of the bigger picture.  I could have just rode trade number 1, a short a few ticks off the high of the day right down through the gaps and made a killing, but that is not how I trade.  One day perhaps, when I can advance to my scale out method.

Anyhow, here is a chart of my performance and trades:

I was a buyer of risk during much of the lunch hour, putting some calls in the book and joining the Pelicans on a few longs.  Most notable are August calls in GRPN and TSLA, two stocks Aunt Yellen may have on her kill list, thus the leash is short.

LO was smoked but GPRO found a buyer keeping my long term investments slightly green.  I like the idea of WFM very much and have it on my stalk list.

 

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The Nasdaq is in the midst of a Ricky Bobby shake’n’bake.  Or, this is the start of something much more painful and powerful.  For now, keep an eye on this one level.  It matters because it is the low volume node that denotes the thick of intermediate term value and the potential to explore north.

Use it like your afternoon pivot, paying particularly close attention to where we close relative to the price:

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The gap higher was intriguing to bulls who decided to buy the action after watching the opening print.  From there on the intraday action was benign with drifts in both directions forming a consolidation that eventually produced the old, falsie fastie reversal which saw no follow through from the sellers into the bell.  Even with a sell side imbalance and end of day reports of rockets hitting Libyan airports the Nasdaq held up.

 

I managed to contain my impulses today and only take planned trades.  The action was very slow intraday however, and not much came from following momentum.  It turns out one was better served fading moves today, a scalpers environment if you will.  Anyhow here is my daily performance:

 

 

It was another day of watching on the stock portfolio.  I am waiting for some price action to really grab me.  The only transaction I made today was buying some calls in DDD.  The stock gapped higher and early in the morning it was making a slightly higher low and I pounced.  This is opex week, thus I have a moderate expectation for shenanigans, even if they are of the lull into complacency variety.

 

That weekly gap we printed this morning does not sit well with me.  How we cope with it this week should be interesting, especially as the week progresses.

 

I need more mental stimulation, thus I am off to play a sport.

 

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I need to limit my trading to my most sure trades.  I may sound redundant today, seeing as I said this yesterday, but this needs to happen ASAP, tomorrow.

I am feeling it, these juicy Nasdaq days are becoming very comfortable and my confidence is increasing.  I can see consistent profitability because it is so close.  I am not finding new hurtles, it is the same hurtle over-and-over, impulse entry into unplanned trades.

The key trades, the ones that matter, seen as letter-A and -B grades on the below chart are going really well.  My confidence in these trades is so great that I venture into the dark world of unplanned trades.  In the dark world of unplanned trades I sabotage my own success.

These unplanned trades I take, they’re actually decent opportunities but I do not have deep enough pockets or the confidence to trade them.  Look at some of my losers—right idea but lacking the confidence of my tried-and-true.  I need to keep my emotions in check, especially on these big days where confidence might cause mistakes (like it did today).

One hurtle before I can increase to a two lot.  And a two lot trader is a dangerous trader because on these big days my entries yield much more than my first scale.

In my stock book I salvaged some premium off yesterday’s TSLA YOLO and bought some MVIS. Otherwise sitting put until something material changes.

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