MAKING MONEY IS NOT THE GOAL OF SUCCESSFUL TRADING, IT'S THE BYPRODUCT

I cannot claim this crazy revolation as my own. I am sure I read it elsewhere and only recently came to understand it as my own. And, I am positive that all those that I read (C.Kirk, Mark Douglas, Marcel Link, et al.) will agree to this:

Making money in trading is hard...especially when you are TRYING to make money. However, if your focus is to make good trades, and really, truly, THAT alone is your goal, THEN AND ONLY THEN, will money be made.

I sit here with a short gold position and I am at least 5 points in the money. I have wanted all morning to add to this position, but there is no good reason to do so and no good place to do so. I simply want to add more to the trade b/c I want to make more money. I want to trade and really, that's the only reason. BUT, if I were to think about making GOOD TRADES the goal, then it is clear that I should NOT add to this trade here and now. A huge sigh of relief through my body when I realized this.

A little more....Making the act of making good trades the goal, makes it easier to make money. When I think..."I just want to make $100 more today.", or "I am adding to my 1 lot and scalping out for 2 more points", it becomes so easy to let money slip away. But if only I were to wait for good trades to present themselves, I limit my trading to high probability trades. And that's when money comes.

I am sure I could have said all of this better...but as long as I get it for now, that's fine with me.

Good luck, Traders.

Andy

MARKET GOES DOWN, I AM SHORT, I LOSE MONEY

http://i62.photobucket.com/albums/h101/asunblock/MIDCAPSHORTTIMING.jpg


http://i62.photobucket.com/albums/h101/asunblock/RUSSELLSHORTTIMING.jpg

I was writing to a fellow trader the other day about waiting for trades to present themselves, rather than force things. Sometimes "ok" looking setups happen, and you can go either way...sometimes you make money, but mostly you lose. And then those "perfect" trades appear and you think to yourself, "Why don't I just wait for these kinds of trades instead of chopping myself up?!". Well, practive what you preach, my friends.

At around 10:45 am today, the russell and midcap both looked like good sales as they broke their intraday 15 minute uptrends. Everything about the trades looked great, except the following: ENTRY, STOCHASTIC and TIME OF DAY! Time of day...well, I don't know...sometimes I think it matters, but when you are trading purely technical, I can allow exceptions. Stochastic on the other hand....they are what they are. If you look at them and follow them, they do so. Don't cheat. And Entry...if you don't have a good entry into a trade, then you might aswell just give your money away. Have direct deposit into a charity or something, b/c you are not going to make money over the long run...or short run for that matter.

Needless to say, I was short, market went down, and I still lost money. My entries sucked...I chased the market, and I had no idea where to place stops. To make matters worse, (and this I bet happens to all of you) my targets were hit perfectly. Had I just waited for a better set-up...I might not have made the optimum, but I would have made the most while risking the least.

If you care, the two charts I posted are of the MidCap and Russell2K futures on 15 min charts. Imagine losing money on shorts!!!!

me

BEARS CAN BE LONG TOO!

It seems that everyone forgot that as of yesterday, the markets were all headed to ZERO! Now, I do know the significance of an big up day on big volume...but one up day out of a few weeks of selling doesn't convince me. All the indexes have broken their respective long-term uptrends (weekly charts) except the DOW. I am not looking to buy the DOW, nor was I yesterday (unfortunately) b/c while it looked buyable...all the other indexes were crap. In addition to breaking the long-term uptrends, all the indexes (including the DOW) are below their respecive 50 and 200 day moving averages. As of now..I am neutral with a bearish lean. I will let the markets tell me different.

With that, I may sit on the sidelines, I may look for places to sell...not sure. But in the meantime...I am not against riding some longs even though I am bearish (like I did today)...Afterall, making money is the game, not being right.

me

SOMEBODY SHOOT ME!!!

What a terrible trading day for me. My fund was down a small 1.5 % again..that's fine. and I ended up making back that money on a long I took in the midcap futures. That was a great trade...what sucked was ME! I was up good in the midcap trade and decided to put a hedge on with dow futures. What a moron. All I ended up doing was taking away good profits from my good longs. With the amount of round turns I did today, I probably am down a little money. Just sucks to sit here all day and accomplish nothing. Felt like a rookie. It happens. Please tell me it happens to you too....

me

ARABS DIVIDED

http://news.yahoo.com/s/ap/20060718/ap_on_re_mi_ea/mideast_arabs_1

CONGRATS ON THE GOOGLE SHORT?

http://i62.photobucket.com/albums/h101/asunblock/GOOGSHORT.jpg
For those of you who took this google short that I posted last week, Congrats! It's hit the target today after a monster drop of over $17.
I suggested the short at $424 risking to just above $429. Great risk/reward.

For those who read this blog, you already know I did not take the short!

Andy

RUSSELL SAVES THE DAY

My commodity fund was stopped out pretty early today (Down 1.6%). I managed to scratch the day with this good Russell2000 futures short. I took this trade just after 7am my time when the 3rd 15 minute bar opened and headed lower below the channel resistance from the day before. Stochastic were headed lower and the blue line just crossed over the red.I got further confirmation when the index closed two brackets later below the 9 bar moving avg. I got out just above the two recent lows from the two previous days (679ish). I bought a 67940 or 60. Overall a good trade. Later in the day, I tried to get long when the mkt closed above the moving average again, the stochs. were oversold and coming up. I didn't realize I got signed out of my front-end, and by the time I logged back on, it was too late and I didn't want to chase the market. Good decision.

Have a great night. Hump day tomorrow. And it's my 30th B-day on the 21st (Friday!!!!) Send presents to the following address:

kidding.

me

PUTTING THINGS IN PERSPECTIVE

I went to the hospital last night to visit a friend who sits behind me at work. He was in a nasty car accident on Sat. night. He was on a dark desert road when he swerved to miss a coyote. His car flipped at least 6 times. He broke his neck and collar bone and miraculously, no nerve damage was done. He was clearly tired and in pain and scared, but I watched as he moved his arms and legs and listened when he talked quietly. I knew he didn't want me to stay long, and that was fine. All I kept thinking was how lucky he was to be moving and to be alive. And, I think that's all he was thinking aswell. So, today, I just want to give it up for Tod Ruble. Let's hope he has a speedy recovery. It's expected that he'll have that enormous and constricting "halo" cast on for at least 3 months and it will be about a year until he is fully recovered. I hope he can fully recover. So so lucky. So...my bad trading day yesterday and all the negative thoughts I had about that quickly disipated when I learned the extent of Todds injuries. I will bounce right back from bad trading days, but Todd has a long road to recovery and I am sure he would do anything to trade places with a dumb trader who is upset over a bad trading day.

Get well soon, Todd.

me

THANK THE LORD FOR MY COMMODITY FUND

It's up today just over 6%. Fantastic day for the fund. I swear, I wish I had millions in this. I found something that has truly seemed to be workining. Now, if I can just figure a way to stop losing money on stupid things...I would be a good trader.

I made a big mistake today (read blog entry from this a.m.). All in all, I am down money today...good thing my investor money is only going into my fund and not the other trades! Lucky guys!...

More later.

Have to make it to the gym...that makes my trading better.

me

I NEED HELP!

Why is it that I make mistakes? It's not just regular mistakes, it's the same mistakes over and over again. My Fund is up a whopping 6% today, and I am down a whopping 2K today! How is that possible? It's because I tried to make a little money when and where there was none to be made. And, when the trade got out of hand, I doubled up...and then trippled up. So here I sit with a great position in my fund and I am down money. If I hadn't shown up for work today, my system would have triggered my trade for me, and I would be up plenty. But alas, I got invloved!

WHOA IS ME!!!

honest and frustrade,

Andy

Closing Bell

Forgot to mention...

My fund up a measly 1% today. I know that's not too shabby, but it was up more than 3% at one pt. today. I tell ya, following systems is just as frustrating as not following systems....Well, not really.

Have a great weekend!!!

PIRATES OF THE CARRIBEAN

I watched this page this morning and the more I watched, the less I saw to trade. And trust me...I wanted to trade something. It's like an addiction, and when trading becomes like an addiction, LEAVE.

And that's exactly what I did! Pirates of the Carribean II...good movie.

Anyway, I wish I could do it more often, leave work, that is, but it's hard and usually there IS something to do. But on my way back to the office from my 9:00 showing, I was thinking this: I made a great trade on Wed. where I took the S&Ps from 127600 to 126400. That's 12 dollars on a one lot. I did add one down the road and made roughly $850. On pretty much a 1 lot! That's amazing. The problem is, I try to do that all the time. I press and I press and I try to force trades that aren't there. I wanted to just make some money this week. Maybe a measly $1000 (and believe me, when you are trading, the idea of making $1000 in a week seems pointless.) But by trying to make that kind of trade everyday, I ended up losing most of the time instead of waiting for the trades to present themselves.

Believe me, I can make 4K on a trade, but I can also lose 5K. But when I am more controlled, and wait for the trades, I might only make $500 here and $300 there and a random $12-15000 there. By waiting, my week ended up about $1200. Not great...not enough to even live off of in Scottsdale, AZ...but believe me...when the market is crappy, and you are forcing trades, making anything is better than losing $1.

This is a great segue into what TRADING ON THE FLOOR OF THE CME was like. I was requested by 1 of the 3, YES THREE! readers of my blog to talk some about that....

I knew lots of traders in the pit who were big shots. They traded 10 lots in the SPOOS...they traded 20-50 even. And when they did well, they did well. But lots of times I would talk to them and they would be down $100 for the week or up $50. Point is, these guys were risking SO SO much, and making no more than I was at times. I just didn't get that risk/reward ratio. Lot's of those guys are not trading anymore. It's better to be small and consistant and wait for "sure things" (and by that, I mean trades that are at least stacked in your favor) than being a lame BSD.

More about pit trading later...It's friday and I am up!

Andy

P.S. My wife is working with me on my delivery...I know I ramble and make stories too long...it's from my mother!

$$$aving Money

The two moving averages seen in this chart are the 50 day (10 week) and the 200 day. They didn't seem to mean a thing as the market broke both and didn't look back. I didn't really trade much today, and with that, I think I traded too much.

Commodity Fund was down a normal 1.6%...that's fairly average for a down day since I place my stops pretty much in the same place everyday. Gold however ended the day up pretty big (up $10). Sad thing is I was long today, but just couldn't hold past my stop. It happens. Discipline, Andy, Discipline!!!

I did take a short in the Nasdaq that covered that small loss in my fund, but also played a little too much in oil wich gave that back. So..scratched the day give or take $60.

Good thing I didn't take that short in the oil that I suggested. It seems backing out of that trade yesterday, as well as saying "watch out" for all the indexes as they broke those previous lows, were two of the best calls I have had in a while. Unfortunately, not all good calls result in making money. Some just result in saving money.

And that is a big part of trading...Saving money.

Anyone who has traded can tell you this: a trading day most often can look like this: up $20, down $100, up $300. You can't just count the up $ trades. P&L consists of winners and losers. What I am trying to say, is that even bad traders have made money...they just lost more than they made. I just read someone who said in their BEST year, they lost 150 million dollars. That same year, however, they made 300 million dollars! (not an exact quote). Point is if you can limit those losers, then...well, I think you know what I am saying. I have a tendency to ramble and make stories longer than they have to be. So with that....I pretty much focus on trying not to lose money...the good money-making trades will present themselves.

TWO GOOD NON-TRADES IN ONE WEEK?!

Huh, For those 2 of you who read this blog (me and my wife), I had another great non-trade yesterday! Now, if I could only get together a bunch of good actual TRADES, then I would be extremely pleased.

CRUDE OIL SHORT: I had written twice about this short that I was waiting to take, and in after-hours yesterday, I finally got my chance. Did I wuss out? No way....but I didn't take it either. I sat there, put the trade on, watched it go my way a few ticks and put my stop in, and then...Well, the crude trade book looked WAY too light and thin to trade. It seemed that even if I was right, there was not enough liquidity in that market at that time. I quickly got out of the trade and pulled my stops. Who knew Israel and Lebanon would start a war and oil would reach new record highs? Not me! But you would think I knew something. Truth is, I didn't...and that's why I didn't trade it!

me
Investing
Market Dispatches, 10:05 a.m. ET
Global gloom clouds the market
Israel's attack on Lebanon raises geopolitical concerns. Oil prices set yet another intraday high. Merrill Lynch downgrades Wal-Mart and CIBC cuts its rating on Disney. Pepsi tops the Street's targets.
Jubak: 3 ways to win from the oil glut



Israeli troops fire across Lebanon's border.
Israel hits Lebanon's airports, blocks ports, bombs army
Israel blew up all three runways at the Beirut airport, bombed a TV station and blocked Lebanon's ports. The Israel Defense Forces dropped leaflets warning residents in a Beirut neighborhood of an impending attack. The Associated Press reports local police said Israeli warplanes attacked a Lebanese army air base near the Syrian border, the first strike on Lebanon's army.
DEVELOPING STORY
Fighting spreads Gallery
A history of violence
• Israel hits Palestinian Foreign Ministry building

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Today's Action

Clearly it was a gift from above that I wasn't able to get into my long NQ position yesterday. As I wrote in my blog yesterday, "...buy 'em. Close stops below recent lows are a good way to stay away from heavy losses. If we break those lows, all bets are off, and watch us tumble."

As I left the office before the close, the commodity index was up just over 1%. It was up more than twice that in the a.m. before heading lower-for a short time posting a loss. It's the long-run that counts.

I am still trying to get into a short in the aug. crude oil contract, but stops there will be very tight as oil is clearly in a bull market and I rarely like to get on the opp. side of the market. Any suggestions here?

DISCLAIMER

DISCLAIMER - I DO NOT MAKE RECOMMENDATIONS TO BUY OR SELL SECURITIES - I JUST POST MY THOUGHTS, TRADES, AND OPINIONS. DO YOUR OWN DUE DILIGENCE - YOU ARE RESPONSIBLE FOR YOUR TRADES, INVESTMENTS, AND DECISIONS!

GOOGLE CHART

http://i62.photobucket.com/albums/h101/asunblock/GOOGSHORT.jpg

END OF DAY and TRADE UPDATES

The nasdaq longs seem to have been pretty good. The mid 1520s are the lows now, so the trade is safe in the money. To be honest, I am not in the trade. As I watched the day go by, I wished more and more I could stick to what I recommended, but it doesn't always happen that way. This morning the market opened lower (about even to my entry 1530ish). But the news of the bombing in Bombay should have taken most longs out of their positions...as it did mine. Given the news, I took to the sidelines for most of the morning after a lucky/stupid scalp. I never did get back into the trade and now as we are almost $20 higher, I feel the pain.

Check out my other post from today THE BEST NON-TRADE.

Market Overall: I had been short the Nasdaq and Dow for over a month now and have not made any money on the shorts (made a little in QQQQ shorts, lost a lot in the DIA shorts) I think the end of today says a lot. The final hour is usually when big money gets involved. Like I said yesterday, it seems weak, and the nasdaq is at a pivot pt. I like buying when it's weak, and the buys in the NQ ( though I don't have them) are good. I think we could have a few up days in the NQ and it's hard for one market to be up considerably without the others following. So...buy 'em. Close stops below recent lows are a good way to stay away from heavy losses. If we break those lows, all bets are off, and watch us tumble.

Crude oil came close, but no cigar to the short entry above $75...couldn't get into a short position at a good level and perhaps it's b/c other people didn't miss the trade last week like I did.

I will get into the commodity fund I have been managing later on, but since it was an up day in the system, I feel it's a good day to mention it. So here it is: I have created an automated system trade in some of the commodity markets. The system is doing very well for the year (started the trade mid Feb 2006, but have back-testing it for years). It's up a decent percentage still after giving back some in June. For now, I will give the % up/%down for the day each day. I base all % gains off an initial investment of $10,000. The daily perentage DOES TAKE INTO ACCOUNT SLIPPAGE AND COMMISIONS!

GOOG: I definately would not be one to tell anyone to sell this stock, but I did listen to someones explaination of a short opportunity today in google. I will show the chart. It's expensive to buy or sell and it's volitility scares me. I time to sell it would be between todays close $424.8 and below $429.9. The stock is strong and I only wish I had bought it long ago. Not to mention it potentially becoming an ISP/phone company one day. Looks good for future earnings. Anyway..the short has a potential target of mid $390s (near 10-week moving average). Since we close near the stop level I would set of just above $430, it's not a bad trade. See chart. Keep in mind, this was not my idea, so if it works, kudos goes to someone else...if it fails, go ahead...yell at me.

Commodity Fund up 3.3%

YTD (since inception) 37%


If it intrigues any of you, feel free to inquire.

Andy

THE BEST NON-TRADE!

I traded today mostly from the short side. I have been trying to trade much less and keep the trades limited to those I rate very high on a scale of 1-10. A few trades made the list today, but one that I didn't take today was one of my best non-trades ever.

On a short term basis, a bunch of the indexes (SP, ND, YM-that's S&P, Nasdaq and Dow futures) were in good downtrending channels. I will include a chart of at least one to show. As the day went on, I was dying to get in a short trade in the dow. I wanted to sell them around 11125ish...but each time it got close, it would go back down to the lows. And then....the time came. The stochastics were overbought, and my target entry was reached. But something happened. The ND, and the SPs also were creeping up...and too fast. They looked a little too strong. The problem is, it almost always looks strong when it's time to sell, just as it almost always looks weak when it's time to buy. The point is, listen to your gut. If something is telling you it's wrong, then it's wrong....maybe not for the rest of the trading world, but for you. And it was wrong for me...and guess what...it rallied hard. I would have lost a bunch. Instead, I switched markets, focused on the S&Ps and watched as it closed on the 15 minute above a resistance level. I took the long, and a trade that started out as a sure short loser, became a nice long winner.

In the end, the feeling of making a good trade is good. But the feeling of NOT making a bad trade is better. It shows discipline. And anyone who knows this business knows that discipline is the key.

Missed Opportunity in Oil???

Though I do aknowledge we are in a major uptrend in crude oil, I fell there is an opportunity to take a nice short here. I hope I didn't miss the opportunity last week when oil tested near highs around $75.775. As you can see in the weekly and daily charts, the uptrend is completely intact, but a new channel top can be used to short the futures with risking only to new highs plus a little (to avoid an upthrusting fakeout of shorts). The perfect time to take the trade is the first time it hits that level, which was last week. It is worth watching to see if we retest last weeks high to enter the trade again. Notice how the stochastic is hovering near the oversold area. This gives me more confidence in the trade. As always in an uptrend, be careful taking shorts, but this one looks pretty good to me. Furthermore, I would suggst pulling up some intraday charts to pinpoint a good entry level...or not.

Buying Nasdaq

chart order: Wkly, daily, 15, 5min NQ




I spent the better part of the day looking for a spot to buy the NQs. On a weekly chart, I still feel we are in a bullish trend. I haven't tried to post any charts on here, but when I am done writing, I will attempt it. The channel I have drawn makes it seem that now, despite all the bears, now would be the best time to buy some Nasdaq futures (1526ish). When I take a closer look on a daily chart, I see two things: 1) since Jan 11th 206, we have steadily come down in a nice bearish channel and this channel is still intact and 2) the bearish channel from Jan 11th, hit the bottom of the weekly bullish channel today. What does this mean to the average trader? It means two things, either look so sell on a daily level, or look to buy on a weekly. To me, I know that the stronger of the two trends is the weekly trend. So, I am looking to buy per the weekly.

Given that, I have to find a good place on a daily and then a 60 minute, 15 minute and on down the line to a 5 minute chart to pinpoint a solid entry. The 60 minute gave me nothing all day, but the 15 and 5 were golden. After a nice headfake on the 5 minute where I got in around 1534, and got stopped out at 1531, a better entry on both the 15 and 5 minute charts occured around 1531.75 at around 12:50 pacific time. that is where I got in. Sorry if the charts don't work.

Being Honest

This is the first of my blog entries.

It's been almost 2 hours since I got here this a.m. and aside from my gold system trade, I have not put anything on. Very cathartic holding back from putting on tons of trades to just make money. I find that looking back over results of many months, I usually try to just make money as soon as I can. I find it hard NOT to be in the market at all times, even if just a 1 lot. What that has netted me, a lot of winners and a lot of losers and a lot of commissions and a lot of stress.
It's much better for me to weed out all those hundreds of trades I make with 70% sureity and focus only making trades that I am 90%+ sure of. Now, that doesn't mean that I will make money on those trades all the time, but I think it will be a lot better for the "making money" goal I have set for myself in life. If making trades was the goal, then I reached that goal a LONG time ago! My goal is to one day get very real and honest about my trading. As soon as I can admit things to this blog, I may get somewhere.
Hmmmm....about time, huh?
Andy