An NYSE Scalper's Tale - A Trader's Diary

Saturday, November 04, 2006

Posts Of Interest - Part II: Trading Principles

Since I use Blogger to blog, it makes it very difficult to categorize and sort my posts. This blog is coming up to 200 posts and so I have gone through all my posts and sorted them out into categories that may be of interest to readers.

Over the next four weekends, I will be posting "Posts Of Interest", which is simply a collection of posts that I thought would be helpful for readers to see what mistakes I have made (and continue to make), and to get a better idea of how I do things (without having to click through the archives).

Part 1 was entitled "The Way I Trade".
Part 2 is entitled "Trading Principles".
Part 3 is entitled "Self Assessment".
Part 4 is entitled "The NYSE".

This weekend in "Trading Principles" I have collected several posts that clearly demonstrate why traders everywhere more or less follow the same basic core principles when it comes to trading. In each of the following posts, I've either learned these principles the hard way or just simply my musings on trading in general.

I have listed the oldest post first and the newest post last. And so, here is "Trading Principles":

Stalking Stocks -
posted on Feb 24, 2006
  • In this post I explain the importance of waiting for a good setup
  • This was posted on a day in which I spent most of the day waiting and in the post I explain that this was probably the best course of action for that particular trading day

Patience Is The Key - Impatience Is Also The Key -
posted on Mar 1, 2006
  • In this post I go explain why patience and impatience is needed when it comes to trading
  • This was posted on another day in which I put on a relatively low number of trades and I also explain how my impatience in getting out of losers was essential for me to pull off a good day

The "Dead Zone" -
posted on Apr 4, 2006
  • Here I explain what the "Dead Zone" is during a typical trading day
  • This was posted on a relatively good day simply because I avoided trading during the "Dead Zone"

Is Trading Similar To Fighting? -
posted on May 30, 2006
  • In this post I compare trading to fighting after watching a show "Top 50 Knockouts" from UFC (Ultimate Fighting Championship)

8 Losers In A Row -
posted on Jun 15, 2006
  • This was a day in which I put on 8 consecutive losing trades in a row (and losing $900 in the process) - a day in which emotions took over
  • I explain that whenever I have such a losing streak, it is mainly because I wasn't in the right state of mind

Is Bigger Really Better? - posted on Jul 6, 2006
  • Here is discuss whether it's better to trade thicker stocks with big share size or to trade thinner, faster moving stocks with smaller share size

Afraid Of Losing Money - posted on Jul 11, 2006
  • This was posted on a day in which there was a huge rally in the overall markets in the afternoon (Dow rallied over 100 points while the S&P rallied over 12 points in the afternoon), however I was only able to make a little over $100 during that time
  • The reason for this was because I was hestitant to put on positions because I was afraid of losing money

Jumping Ship Too Early - posted on Jul 21, 2006
  • This was another day in which many opportunities were lost
  • Here I discuss my problem of exiting winning trades too early - though my results on that day were great, I found myself getting out of too many great trades way too early

Feel Like Crap, Trade Like Crap
- posted on Aug 14, 2006
  • A day in which I wasn't feeling it and my trading results for that day really showed it
  • I had problems the night before and didn't get to sleep at all - I came into the office that day very cranky and it showed in my trading

Not Doing Your Homework Can Be Costly - posted on Aug 29, 2006
  • A day in which I lost a lot in the afternoon because I wasn't prepared for the day
  • I explain the importance doing your trading homework every night - unfortunately the night before I rushed through things and I forgot that the FOMC minutes were being released...I ended up losing $600 in a span of 15 minutes!

The Anti-Trader - posted on Sept 27, 2006
  • A day in which almost everything that could go wrong, did go wrong
  • A lot of trading rules were broken, mainly out of frustration (which is never a good thing!)

It's Like Turning Into Darth Vader - posted on Sept 28, 2006
  • A post that explores the similarities between trader principles and Jedi principles
  • I explain that traders that constantly break their rules and who get too emotionally involved is similar to Anakin turning into Darth Vader (yes - a silly post, I know...but one that illustrates our principles and rules)

2 Comments:

  • JC,

    Great summary of your past posts. Do you use some kinds of alert (audio or visual) to notify you when some of your set up conditions are met?

    Thanks!

    By Anonymous Anonymous, at November 05, 2006 4:39 PM  

  • Anon@4:39PM,
    Thanks for your comments!

    At the office, I don't really use any kind of alert. We recently got some audio alerts, but I don't usually pay too much attention to those. I mainly just look at the charts of a few core stocks that I focus on daily and if the chart shows me something interesting, I'll keep watching that stock for opportunities.

    I have my trading workstation setup so that I can monitor 5 stock charts, 2 Futures charts, 6 Level II windows and one tracker (which basically just tells me the price and the bid and ask size of several stocks I follow).

    Perhaps one day I'll take a screencap and post it up.

    Good luck to you next week and happy trading!

    By Blogger J.C., at November 05, 2006 7:06 PM  

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