Day Trading / Online Trading Blog: BoomerX65

"Pools of sorrow, waves of joy are drifting through my open mind, possessing and caressing me"

Across the Universe -- John Lennon

Ok, so now you know I am a Beatles fan. That line sums up the emotions of trading during this recent increase in volatility. No matter how much we try to control our emotions, do we ever really suppress the joy catching a runner or the sorrow of having our stop loss taken out? Yea, yea, yea..I know that we can't let our emotions dictate our trading, but that doesn't mean that we don't have any emotions left to experience the ups and downs of winners and losers. It only means that we have to trade objectively and not allow our emotions to override our confidence in taking our setups.

So this brings me to these past several sessions of extreme volatility. As one who favors trading around the pivots and fib lines, I experienced mixed results over the past two weeks. I was less than pleased when I realized that a 20 point stop loss was not enough to contain the swings of this market environment. The thought of using 40 point stop losses was not very appealing to me, especially when I was getting by using a 10 point stop loss on most of my setups.

"nothing's gonna change my world"

It sounds so good when the Beatles sing that line, but does it work for the trader?

Ok, so I was forced to make some changes to my stop loss levels and my profit levels. I was also compelled to reduce the size of my positions too.

The one thing I did not do is change the basic game plan that I have been following for several months. After all, why should I? Are the pivots and fibs no longer effective in a volatile market? I think not. All that was required was a few adjustments to mirror the current market conditions. There was no need to throw out my setups and drastically change my trading plan.

Have you noticed that certain trading days favor certain trading styles? One day the pivots are gold. They are like having your own ATM machine. On another day, it's all about trend trading and order flow as the price blows right through the pivots. The important thing to remember is to trade your plan each day and not alter it every time the market shifts a little or even a lot. If your plan is time tested and proven to be profitable over a period of several weeks and months, then stick with it during the ebb and flow of rising or falling volatility.

That brings me to today -- Wednesday -- August 15. Today was a pivot & fib traders dream come true over the first 90 minutes of the session. I realize that these kinds of days are not going to be the norm, but if we stick to our plan, every time tested style of trading will have its golden days.

"nothing's gonna change my world"

David

After being reduced to just a notebook computer for two weeks, it was great to get back to the 21" monitors for a bigger view of things. I especially am enjoying having a printer again. Toggling back and forth between my worksheets and reports on the notebook was no fun at all.

As this was a family vacation that also included my mom, two of my three sisters, one of my brother-in-laws, and one of my nieces. I always find it interesting when they start asking me about trading and the futures market. Even after attempting to explain what day trading is, they always come back with such comments like . . .

"What if the market starts free-falling? How are you going to make any money then?"

Now mind you, my family members are all college educated, but they haven't got a clue on how the markets work. When I attempted to tell them about shorting, all they did was get hung up on how you can sell a contract that you never really owned in the first place.

My favorite part is when I tell them that I am a pure day trader, meaning of course that I do not hold any positions overnight. By the closing bell, everything in my account is back to cash.

That inevitably leads to one of the following comments . .

"I don't know you can sleep at night knowing that a terrorist act somewhere in the world could wipe out all your money"

or

"Aren't you worried about what the price of oil might go up to?"

When I told my mom that my goal is to be a professional trader, she quickly responded by saying, "ok, but you are still going to have a job to go to every day, right?"

That's all for today!

As much as I love and believe in the plethora of numbers that I look at each day on the monitors at home, I have to confess that today was a refreshing day on the market of simply following price action and the most common areas of support, continuations, and resistance.

There were no fib lines, no value area numbers, in fact, there were no extra bells and whistles at all. Just one small screen, one YM chart, the daily pivots, and yesterday's closing price. Oddly enough, I was just as relaxed in this trading environment as I am when I have a full instrument panel at my disposal.

Now I wouldn't want to fly this close to the ground everyday, as sooner or later you are bound to clip some trees or perhaps even crash and burn, but this was a great reminder that sometimes simplicity is bliss and less can be more.

Here is how my day begins . . . .All times are Eastern Standard:

So there you have it&.that's what my typical day looks like. It may seem a little hectic or busy or perhaps even long or boring, but it's just like factory work to me now. I manage my day by the clock..

7:00AM to midnight is a long day though, holy cow! That must be why I fall asleep as soon I as hit the pillow :)

Speaking of hitting the pillow, it is now 11:45PM here in Florida and I need to get a few hours of sleep before catching an early flight to Columbus, Ohio for the weekend and then it's off to Canada for a vacation from Calgary to Vancouver via train. I have never been on a train before, so this should be a great experience. Now if all of the various members of our family can actually get along for 12 days together, it will be a miracle indeed.

That's all for now&.I will be back in the States on July 19 and ready for action again on July 20th. If time permits, I will try to submit a few posts while I am out of town too.

Good luck trading everyone!

It was the summer of 2004 when I opened up my first trading account with Scottrade knowing little to nothing about the markets. I had a subscription to Investors Business Daily online and just knew I was on my way to untold wealth and a life of ease. After all, how hard can it be to pick a winning stock when I have this cool little doctor dude on the IBD site with a scorecard of A+ to "ee-gads" telling me which stocks are healthy and which ones are sick. I'll just pick the A+ stocks and ring the register!

Well, it wasn't quite that easy, but I did make money off my first pick and now I was ready buy more stocks and really test my skills. Those of you who were in the market that summer will remember it was all about TZOO back then. That stock had one of the most amazing runs ever and I managed to buy right before the bearish pullback on three different occasions. It was beyond frustrating to keep getting stopped out only to watch TZOO scream upwards $5 to $15 in the next day or two.

After doing the swing trades for about 6 months and basically breaking even, I decided to open up a day trading account in January of 2005, so that I could trade the gaps each morning, make thousands of dollars before 11AM and sit back and live the life of ease that had eluded me as a swing trader.

Like before, I started off really well with back to back $1000 gap trades winners and once again I thought I was just going to sit back and ring the register each day. Want to take a guess what happened? You got it! I got schooled by the market and found my account dwindling down as I jumped from one strategy to another in search of the ever elusive holy grail.

In March of 2006, a trader friend of mine encouraged me to switch over to the futures market and to purchase a book by John Carter called Mastering the Trade. Well I did both and what a difference they both have made. The futures market better suits my personality and John's disciplined approach to trading was just what I was in need of.

I would love to tell you that my first year on the futures market was a winner, but it would be a lie. I lost an average of $1000 a month for 10 months straight. There was still a couple of missing pieces to the puzzle that I had yet to discover.

I am fully persuaded that having a business plan that specifically outlines which setups you will take along with the entry, stop loss and profit rules all in place, before you ever put real money on the line, is essential to your success.

The last piece of the puzzle is to spend several weeks practicing your setups on a simulator until you have developed the skill to read and execute your trades on a consistent basis.

It is my dream & passion to be a professional trader and to teach others along the way. I am not there yet, but I am making measurable progress and that's a good feeling :)

In closing, I would like to say how much I appreciate the TTM family. The information learned from John, Hubert and other members of TTM has really made a difference in my trading skills.

In subsequent posts, I look forward to covering more aspects of our trading plan and setups.