Investorpaul's Trading Journal

[investorpaul]

Hi Everyone,

I have been inspired in part by other posters on this forum and a desire to record and analyse my trades to start a trading journal.

Background:

I have traded shares long term for about 10 years now and have had some good success with ASX100 stocks. In 2009 I started trading CFD's and had some initial success. Then partly due to a fear of not losing money (which affected my trading mentality) and not having a clear strategy my account slowly grinded down.

Over this 2 year period I did have on and off success (so it wasnt all down). Reviewing this period I achieved my best results trading the ASX200 intra-day. From a personal perspective I also enjoy trading indicies rather than individual stocks.

I now have the opportunity to work from home and as a result can commit to trading on a consistent basis. I think the ability to trade consistently is an important factor in determing ones success or failure. In the past I would have a day or two worth of trading, then due to work/study committments i wouldnt be able to trade for a couple of weeks. Now I can trade 5 days a week, so hopefully something positive comes from this.

Trading Style:

I trade both short and long and enter the market based on a cross over of the 10 period moving average below the 20 period moving average on a 1 minute chart. I also watch the 5, 15 and 1 hour chart to get an insight into the longer term moves of the market.

I also have the MACD and RSI on my charts and primarily use this to exit the market as it does IMO help in identifying the end of a trend/potential reversal.

I now only trade the ASX200 intra-day via IG Markets. By focusing on one time frame and one index I can more accurately review my performance and will hopefully become a better trader in this market.

Additional Information:

I am obviously an amateur so please take everything I say with a grain of salt and always DYOR. I do not want this trading journal to turn into a bashing of my strategy or criticism of my small trading size. The strategy works for me and I am a firm believer that not everything works for everyone. I am starting out just like many of you would have in the past, I will be brutally honest in my videos so I don't need people trying to shoot me down.. I usually know when I have made a mistake (i.e. exited too early or taken the wrong trade) and will admit it in my videos. I do however welcome informed discussion and constructive feedback.

Videos:

I have uploaded a video to youtube which analyses my trades from yesterday 17/06/2011.

http://www.youtube.com/watch?v=dN7hvlwWsdY

There are a few other videos on the channel, however I have changed my approach from recorded directly off the chart to taking a screen shot and adding notes to the chart before making the video. I only did this because it was taking way too long to review each days trades.

My channel can be viewed here: http://www.youtube.com/user/InvestorPaul

 

[investorpaul]

Hi Everyone,

I have just finished uploading my video from yesterdays session.

Please watch the vid for further comments on my trades, however I have provided a very brief summary below.

http://www.youtube.com/watch?v=GdH1xs4lxR0

Unfortunately it was a shocking session for me. I made a total loss across all the contracts I traded of 51 points.

Summary of Trades:

Trade 1:

Went short 3 contracts at 10:32 @ 4511.5

Was stopped out at 4519.5 for a total loss of 24 points (8pts x 3 contracts).

Comment: If I had not hesitated on my entry i would not have been stopped out on this brief spike up and would have been able to ride the move down to around 4490.

Trade 2:

Went long 3 contarcts at 11:16 @ 4497.5

Exit 1 contract at 11:18 @ 4499.5 for 2 points profit

Exit 2 contracts at 11:20 @ for 4 points profit (2pts x 2 contracts)

Comment: Only a very short term trade, I was lucky to get out with a profit as it did drift down shortly after I exited. it was good to pick up a few points, but was not really a good trade overall.

Trade 3:

Long 3 contracts at 11:46 @4505.5

Exit 1 contract at 11:56 @ 4506.5 for 1 point profit

Exit 2 contracts at 12:20 @4500.5 for a total loss of 10 points (5pts x 2 contracts)

Comments: I should have exited the last 2 contracts alot sooner.

Trade 4:

Long 3 contracts at 4493.5

Stopped out at 4485.5 for a total loss of 24 points.

Comments: really poor trade, although there was a brief bounce of 4488 and a cross over of the moving averages that I follow reviewing the 5 and 15 min charts clearly shows a strong downtrend and I should have left this trade along.

Stopped trading because I hit my max daily loss of 50 points (51pts to be exact).

 

[investorpaul]

I guess to get some replies I should change my avatar to a girl in a provocative pose???

Anyway please check out my vid for yesterdays trades:

http://www.youtube.com/watch?v=QFC9QT-pIGg

Only two trades, one was a ten point profit. With the second trade I got stuck in the range bound trading been 12 and 2pm. I eventually exited at break even.

Looking forward to your comments.

 

[Trader Girl]

I guess to get some replies I should change my avatar to a girl in a provocative pose???

Anyway please check out my vid for yesterdays trades:

http://www.youtube.com/watch?v=QFC9QT-pIGg

Only two trades, one was a ten point profit. With the second trade I got stuck in the range bound trading been 12 and 2pm. I eventually exited at break even.

Looking forward to your comments.

I would like to congratulate you on spending the time to post
your method and results....great work keep it up.

 

[sammy84]

I'll be following this thread.

I have never believed in using MA's for entry, however, I notice that you are still quasi trend following by viewing longer term charts to identify the predominant trend. Do you follow every signal you get from MA cross over on the 1 minute chart? When are entries ignored?

Also would be nice to know what sort of money management you employ?

 

[investorpaul]

I'll be following this thread.

I have never believed in using MA's for entry, however, I notice that you are still quasi trend following by viewing longer term charts to identify the predominant trend. Do you follow every signal you get from MA cross over on the 1 minute chart? When are entries ignored?

Also would be nice to know what sort of money management you employ?

Hi Sammy

Thanks for your reply.

No I dont follow every signal I get from the MA cross over on the 1 minute chart. There are a number of times when the 10 period crosses above or below the 20 period MA, but then quickly reverses or just flat lines for some time. I aim to do a video on this in the near future to show when this occurs and how I look out for it (i.e. try to avoid it). In part this is achieved by looking at the longer time frames (5 min and 15min). Also since I have been able to trade 5 days a week (last month or so) I do feel that I have been able to recognise when this situation may be more likely to occur.

You will notice on the video that I posted today covering yesterdays section that we were range bound for almost 2 hours.

It is hard to outline every situation in which this signal is ignored but it is primarily based on trying to determine the underlining feel of the market. I need each trade to have the potential to go at least 8 - 10 points my way to make the trade worthwhile (accounting for spread, etc). Hopefully as my journal progresses I will be able to highlight this in more detail.

 

[Wysiwyg]

Only two trades, one was a ten point profit. With the second trade I got stuck in the range bound trading been 12 and 2pm. I eventually exited at break even.

Looking forward to your comments.

Gee whiz I can really appreciate the you-tubes because I have traded the CFD ASX200 myself. You have to admit it isn't easy but one would suspect trading will become easier (for want of a better word) with more patience and experience. Very good to see you are genuine.

 

[investorpaul]

Gee whiz I can really appreciate the you-tubes because I have traded the CFD ASX200 myself. You have to admit it isn't easy but one would suspect trading will become easier (for want of a better word) with more patience and experience. Very good to see you are genuine.

Thanks for your comment Wsiwyg the aim of my channel is to be as honest as possible. I think this is the best way to learn and there is no point pretending you are something you are not.

I agree that it isnt easy, but I do feel that each trading session teaches me new skills which will hopefully allow me to become a better trader.

Sorry I havnt posted a video this morning, I had to do some work. Hopefully I do get a chance to put one up, however here is a very very very very brief summary:

2 trades, both losers for a total loss of 33pts.

 

[investorpaul]

Hi Everyone,

New video entry for yesterdays results:

http://www.youtube.com/watch?v=NJwJMzNv5Kc

One profitable trade, one losing trade.

This video shows what I try and avoid when looking at the Moving Averages and how you can get caught if a trading range develops.

Anyway I look forward to your comments and feedback

 

[peter2]

IMO: You have too many lagging indicators (MA's, MACD, RSI). If you are using them for entries/exits then you will be late most of the time.
Concentrate on price, learn to recognise impulsive moves and corrective moves and base your trades around price patterns. Are you trading with the trend or against it? If you are trading with the trend then buy BO's or buy dips (sell rallies). If you prefer counter trend trading then identify reversal setups (failed BO's, 1st HLs, LHs).

MA's: If you want to have 3 MAs then notice what happens to price when all three MAs are together (price moves soon after = time to enter). When the MAs are evenly stacked (price corrects = time to take profits). Consider if you need all three, two should be enough.
MACD: Contains another two MA's now you have 5 to look at. What does MACD provide that the 3 MAs don't?
RSI: What is this indicating?

Oscillators: are good for showing divergence which is an indication of an corrective move or a reversal. So use it to take profits or look for a reversal setup.

In summary: Prepare for the day by placing lines on your chart that represent important support /resistance levels. Look at the larger time frame chart to get a sense of what is happening with the trend and sentiment. Is the larger time frame in an impulsive or corrective move? Concentrate on price and volume (I realise that you don't have volume on your charts, which means you are not seeing what is really happening). Use one oscillator for divergence (and hidden divergence).

You must keep things simple, minimal indicators and basic trading setups. Above all you need to know that you can create a positive edge by sticking to a proven plan.

ps: You have a written trading plan don't you?

 

[investorpaul]

hey guys,

I'm posting off my phone so ill keep this short.

I've been in bed with the flu last few days. No trades, so no videos.

I will answer your q's in the next couple of days, thanks for following.