Picking Blueberries - 7/28/2007

Trading is like picking blueberries.

To get them, you have to be willing to get scratched up. The best ones are not available at the bottom, but way up on the tops of the trees. In the process of reaching out to get the bluest ones, you may fall down and get hurt. You'll drop a lot of good berries. However, if you make the effort, and go for the tops of the trees, you'll end up with the ripest and plumpest berries.

GAME FACE - 7/23/07

We had a S2 for today. Not unexpected given the size of the sell-off. People were remarking how we've been unable to connect with more than 3 down days in a row. They were right.

O/N, I shorted 1545.25 & 1547.50. The market opened at 1551. I knew I was wrong. I covered at 1550.50.

I felt that the market was likely to test to the level of 1555. This breakout pattern on S2 supported that notion. So, I bid 1550.50 for 2 ems. The market acted heavy and weakish. When it dropped down to 1447.5, I stopped myself out.

WRONG!

It later bounced to to 1555.

I am struggling with my stops. I am struggling with my game plan. I don't have my game face on right now. I don't feel adequately prepared.

Questions:
1. Should I NEVER reverse a trade?
2. Should I NEVER watch the RT ticker?
3. Should I stick with my 10 pt hard stop?
4. How can I get my game face on?

I Can't Get No Satisfaction - 7/19/07

Today's call was based on the recent pattern experienced on 7/12. We were due for a rally. We had a rally. I got in at not a great price point of 1560.50. I was on-side for up to 3.5pts, and then by the end of the day, GOOG reported disappointing earnings, and I gave it up and took a loss by selling at 1557.75.

Basically, it was a crappy day. Slow service, awful food, and such small portions.

LESSON: Instead of ONE price point, spread orders out using 2-3 pt spreads. If you have a bad entry, then you need to exit with a smaller profit.

QUESTIONS - 7/18/07

Is it better to bet ALL IN at one price point?
Or to scale in with a delta hedge method?

How do I deal with the problem of not extracting MAXIMUM VALUE?

Should I take partial profits?

TRAP DOOR - 7/18/07

Today is a Trap Door. The recent action has been when we hit a S1, and the market opens below the recent lows, it sells off pretty significantly.

The bullish sentiment is still prevalent which leads to sharp rallies; however, it is not enough to propel us to new highs. Basically, the bull case rests on having enough bears to continue to build a decent short base so that we can spring higher.

I shorted 1554 & 1556, and I covered at 1552. I should've been more aggressive in letting my profits ride.

I am recently developing more of a long delta hedge approach to trading. That basically means having limits spread out every 2-3 pts or so. It may not be optimal, but its working for now.