CJ_Viper

End of another month. I'm still not profitable, but I can see my progress and I feel like I'm getting better in ways other than my account size. 1. After initially trying out many different patterns, going short initially, then adding longs, about 2 1/2 months ago, I decided to narrow my focus down to only longs, ideally low float, low market cap, stocks with a catalyst and high volume, first green day, premarket breakout, midday perk and/or multi-time frame breakout patterns, entering on a dip or breakout. 2. By focusing on this specific type of trade/stock, I can ignore everything else, no matter how tempting. I end up only making one or two trades a day. This has been great at keeping my losses small. 3. I make complete plans, from entry, stop loss and profit targets, which I follow no matter what. Even if the plan is a bad one, I'll follow it because my plans always price in a max $ loss value. 4. I keep a journal of all my trades, especially noting my mood during the trade, the setup, what I did right, what I wish I did and NOT on what I did wrong. I realize that if I talk about what I'm doing wrong, I will keep doing that, but if I focus about what I did right and what I WISH I did, I start doing those things. 5. I've accepted that right now I suck at trading profitably, so I no longer feel bad about losing on a trade. I expect to lose (for now). I used to worry about my win rate, my profits, which affected my psychology. 6. Because I have such a terrible track record, I have cut my size way down. I only risk $5-$20 per trade now. With interactive brokers, it's only $2 per trade round trip. I'm not focused on profits right now, but on whether I make good trades. And by keeping my size small, it's buying me time and preserving my capital until I become profitable. After a year and a half of trading, and 185 trades, I'm down less than $1400. $1400 for two years of grad school is a bargain! 7. I find I'm more relaxed now that I've decided to completely follow my plan, good or bad, and not worry about winning or losing. Since my size is small, I am also not stressed about losing during a trade, and I can focus on the trade. I know that no one trade can make me rich, but one bad trade can blow up my account. So if I can't make $100 consistently, then I can't make $1000. 8. I've learned so much from Tim Sykes, Tim G, Mark C, Michael G, Tim B Dux and now Huddie. Currently I am really trying to emulate trading like RolandWolf because of his style of focusing only on longs, dip buys and breakouts. He is consistently making good money using only a few patterns. 9. Another thing I'm doing which has helped me is to trade in a cash account. Since I'm only doing longs, and I'm trading really small size I use very little of my $5000 account. This is beneficial in that I am not restricted by the PDT rule, and therefore don't have to worry about staying in a trade or holding off on a trade. And since my size is small, I don't worry about having to wait 3 days for the money to clear in order to use it to trade. I still have the rest of the money in my account. And since my IB commissions are so low, I don't worry about commissions eating away at my account value. I highly recommend this. It's been almost 2 years since I've discovered Tim Sykes and this niche of penny stock trading. I can see the potential, and even though I've been discouraged so many times, I really believe Tim Sykes and the others when they say that we just need to push past this hard part and not quit. If we can do that, we can turn the corner and become profitable. So I'm still here 2 years later, still not profitable, but getting better. Hopefully someday soon, I can be just like those guys.

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CJ_Viper

I've been taking the past couple of months off from trading, and have been studying again. I've been focused on Dux's DVD. I really feel like what I've learned from Tim, Mark C, Tim G, Michael G and Tim B, now combined with Dux's teachings have brought me to another level. I think it helps that I have some trading experience now for almost a year because I have that to refer to when watching new lessons. Hopefully the time off will prove fruitful. I've made notes and have been practicing drawing and redrawing the charts by memory for the past two months. Here's a pic of my wall of Dux notes:

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CJ_Viper

Been frustrated lately that I can't trade as often as I want to, since I work during market hours. Missed a beautiful opportunity with all the stocks panicking today. Pretty much every stock I was watching panicked and had nice bounces. If I wasn't busy at work, I could've had an opportunity to learn from trading these. I just need to remember that I'm looking at this long term, so this one day doesn't really matter, since every day has opportunities.... But it's still frustrating.

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CJ_Viper

I've been working on my patience and have been focusing exclusively on making better entries. Here are examples of live and simulated trades I made today. I've been putting boxes for zones of interest on my charts, which has helped me to be patient. I feel I'm making such good progress.

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CJ_Viper

A couple of days ago, I was listening to the RolandWolf interview on SteadyTrade. They spoke about something I had heard before many times, but I guess because I'm at this particular stage in my education and experience that I understood it more deeply this time. RW spoke about how we don't want to do what the 90% of failures are doing, we want to do what the 10% are doing. So we want to sell when everyone is buying, and buy when everyone is selling. For some reason, this week it clicked with me, not just intellectually, but I started seeing it on charts. And I am seeing that I have been taking the opposite trade and how I have the crowd/amateur/newbie mentality. So that's my latest epiphany. Not that I have the amateur mentality, because I knew that. But rather being able to see the amateurs getting excited or panicking, and starting to see above that. I can now start to focus on buying when they are selling and selling when they are buying. Let's see how this goes

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CJ_Viper

I've noticed that since my epiphany of accepting losses and ALWAYS having a complete trade plan, that I ALWAYS follow, that my trading has been much less stressful. I feel more calm when in my trades. Now don't get me wrong, I'm still losing, but.... I'm finally beginning to understand when the successful traders talk about. It's not about the money but instead, it’s all about the process. I didn't really know what that meant, because we're all in it for the money. But what I see now, is that in order to get the money, we all need to develop our own process, because everyone learns differently. Everyone has their own personal strengths and weaknesses. And everyone has to start from the beginning. By following your SYSTEM, the money will follow. But if you have no system, it’s impossible to be consistently profitable. So what I see now is I'm trying to figure out a process for becoming a successful trader. From my Challenge materials, to outside books and videos and podcasts, I've taken a lot of good information, and am now starting to integrate them all. I see my process in steps or levels. And without mastering the step below, you won't have a solid foundation to succeed with the next step. So my first step was being able understand the concept of risk and risk levels. That all the successful traders first and foremost manage their risk. We don't want to blow up our accounts before we actually learn to be consistent. In the beginning, I thought this meant how much money I would be putting on a trade. Like I would make all $500 trades, and get as many shares as I could afford with the $500. In hindsight, I now see how ridiculous that was. Now my understanding is so much different. I now understand that what I want to do is to tell myself I want to risk, let's say, only $100 on each trade. If based on support and resistance levels my stop price is 0.20 away from my entry, then I can buy up to 500 shares. And this way, as long as I get out at my stop price, I will GUARANTEE I will only lose $100 on that trade. This was mindblowing to me! Which leads me into the second step. The second step was being able to create and ENTIRE trade plan. Based on the charts, I need to determine three things: my entry zone, stop price and goal prices in order to make an entire plan. If I am missing any one of these three parts I cannot calculate my risk, how many shares I should get, and my reward/risk analysis. I realized I was not being consistent with this step. For a long time, I was focused mainly on setups, and entries. But once I got into trades, when I didn't have complete plans, I was stressed and confused. It's hard to create plans once already in a trade. The third step I see after having a plan, is truly accepting I will be wrong and lose money most of the time in the beginning. And even though intellectually, I accepted this. Emotionally I didn't. It's unnatural to be okay with losing money, or being wrong about plays. All the great traders tell us that psychology plays a huge role in how we trade. I've read books about it, and I understand it. But only now am I starting to truly internalize and accept emotionally what I've studied about psychology. So because I didn't truly accept that I would lose, I have frequently taken costly losses, far greater than I intended. I waited too long because I wanted to be right and hope it would turn around, or I added more shares into a losing position, etc. On the other side, because I didn't want to lose or be wrong, I also take early exits for small profits, even when there was nothing in the trade telling me to get out. More often than not, I was actually right and could have made even more profit. So without truly accepting a loss, I won't be able to do the next step... The fourth step I see is actually being able to FOLLOW THE PLAN. And for this step, I really mean STOPPING OUT. So many times, I would create a plan. But when it came time to stop out, I didn't do it for reasons discussed above. If I can't stop out, I can't keep my losses small, and I can't stay in the game long enough to get past my learning period. Looking back on my trades, I found I didn't have the discipline to stop out, or I was too slow and had significant slippage. So what I've decided to do for now to protect myself is to put in hard stops. I understand that I can get stopped out prematurely, but I'm so bad at my entries right now, that more often than not it has been protecting me more than hurting me. I can always get back in (sometimes not, if shorting). Since instituting my hard stops, I feel I've mastered steps 1-4 so far. I believe it's because of this that my trading has become far less stressful. And I can think more clearly before and during my trades. I'm not too sure as to what order the next steps are, as they I am still forming them in my mind, but I believe they are: 5. Finding good setups, seeing the big picture 6. Making good entries in those good setups, seeing the small picture, understanding the crowd/amateur/newbie mentality vs the pro mentality 7. Making fewer trades, patience in waiting for ideal situations 8. Trade management (the profit taking side) 9. Sizing up I think the fifth and sixth steps go hand in hand. I have found several setups that I like, occur frequently, and am confident in because I've seen others use them successfully. Examples of these are buying pullbacks on spiking stocks, dip buying into support, ABCD patterns, r/g moves, Dip buying panics, shorting lower highs, shorting into resistances, and g/r moves. Currently I am working on trying to narrow these down to one or two. So I am experimenting with all of them and trying to find out which ones work best for me. So right now, my focus is making good entries on them. I am trying to achieve positive expectancy and not even focusing on maximizing profits from them. I'm still entering too late and getting taken out at my stops. Just trying to improve a little at a time.

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CJ_Viper

So I had an epiphany recently and thought I should write about it, more for me, but for anyone else who bothers to read this.... After almost a year, I think I am finally learning what it feels like to "accept" a loss without emotion. I have been listening to Chat with Traders after RolandWolf mentioned it on one of his video lessons. And hearing how all these really successful traders went through exactly the same thing as I am now, it is helping me with my psychology of trading. I see how I am a newbie, and I am EXPECTED to be terrible at this in the beginning. And I am! Instead of beating myself up over this, I am forgiving myself. Intellectually, I know losing is part of the game, and I have to accept loss. But the reality has been that it's been painful to take another loss, and be "wrong" again. And it's painful to watch my profit go lower and lower. What I haven't truly accepted until recently is that this is a process of becoming a trader. My journey isn't the same as anyone else's. I certainly am not picking it up as quickly as Dux. And I've come to accept that now. What I realize is that for now, it's really not about making money. It's about preserving my capital as long as possible to enable me to survive long enough to get to be good at trading. And again, I've always known this intellectually, but I never truly accepted it in my heart, so to speak. And now that I have, I feel truly liberated. I feel like I can experiment with trading ideas, and if they go wrong, I analyze and try to improve the next time. So back to my first point about preserving capital... My first goal was to cut my losses immediately by having a risk price level before I enter, and sticking to it, no matter what. I looked back on my 127 trades and found that I had only 8 major losses that accounted for more than all my losses. If I had kept those 8 losses to $20, like almost all the others, I would actually be up $110! WTF??!! So even with all my bad trades, if I had just kept better risk management, I would be profitable! Incredible! I find that right now, I am too indecisive to do manual stops, so I am putting in hard stops. I realize that market makers can see this, and can take me out, but I am so bad at trading right now that my hard stops save me from losing even more money, more often than it touches and bounces back. So for now, it's working to protect me. For the past several trades, I haven't lost more than $20ish. This, in turn, has resulted in me feeling more relaxed during a trade. I have my plan ahead of time, I execute, I have my stop in place, and I watch to see what happens. If it doesn't go my way, no sweat, I'll try again next time. It's all about the process. I don't even look at profits right now. I am just trying to see if I can create a plan and stick to it. I can see my improvement already in that my losses have been controlled. My next goal is to try and be more patient in choosing which trades I get into....

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CJ_Viper

I took a break from trading live because I wasn't getting the results I wanted. I needed to reevaluate and focus on studying some more. I haven't traded live since the beginning of August, and today was my first day back. I did horribly as usual. LOL. BUT, I had so many improvements, that I'm so happy despite what looks like a terrible day on paper. Things I did right today: 1. I had solid plans with solid risk reward. 2. I executed those plans without (much) emotion. This part is so much better. 3. I fully accepted the loss, which helped with the emotion and allowed me to enter the trades without hesitation. I never really understood this part, but I think I can feel what it means now. 4. I waited for my setup to form and did not chase any plays. This part is also so much better. So even though it was another red day, I feel I improved so much compared to where I was a few months ago.

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CJ_Viper

Have been having problems with greed and discipline. So for my next 20 trades I plan on strictly following my plan. $20 risk. My goal price will be 1R only. So I won't focus on how large my profit is, but setting up plans and finding good plays. And also working on accepting the outcome, profit or loss. I'll reassess after 20 trades.

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CJ_Viper

@RolandWolf Hi Roland, Thanks for explaining so many of your trades. It's so helpful. I'm trying to better understand risk levels. What was your risk level on your recent 7/13 ANY trade? Thanks again.

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