Showing posts with label psychology. Show all posts
Showing posts with label psychology. Show all posts

Monday, January 30, 2012

NG update

I probably shouldn't even look at what NG is doing everyday, considering it's a position trade, but I treat it like a day trading, which is completely wrong. I don't know why and I didn't have this kind of issue last time. After seeing $6K+ down, maybe I lost confidence in me.

On Friday, I placed an order to sell at 2.852 figured it might gap up after the weekend (based on the Friday's close). Markets also like to test previous high / low to see if it'll attract buyers and sellers and run some stops. I think the previous swing high was 2.830s so I figured, it'll spike higher to 2.850s, which give me a fill.

It did gap up nicely, but only to 2.844. A lot of things were going through my mind.
-I just risked $6K and only take $300ish profit at 2.844? That doesn't make sense.
-Based on my analysis, we're still on a downtrend, so I'm sure this wants to head down and test the bottom (or higher high) at some point.
-Should I set a stop at about break-even?
-Should I just get out?

At the end, I just decided to leave it alone. Instead of going to 2.855, Nat gas started heading down and today closed at 2.710 LOD about $1350 off today's high, so I'm -$1K again.

I think we're at a critical level. It looks like a bull flag on daily, but it also can dive from here pretty hard. I was hoping for a strong close, but we closed very weak. NG has been very volatile, so buying an put doesn't seem like a good idea. I don't sell a call at least until I have two contracts.

Anyway, I move my target up a bit because I figured if it breaks 2.844, it'll probably go 2.9 or so. If you have any advice on being patient, please let me know.

Thursday, January 26, 2012

NG report

The following is NG report:

The U.S. Energy Information Administration report showed total domestic gas inventories fell last week by 192 billion cubic feet to 3.098 trillion cubic feet. Traders and analysts polled by Reuters had expected a 168-bcf decline.


So, the inventory dropped more than expected, a normal guy would think NG should rally. 24bcf is a lot! But it's not, actually we're well of its high. Outlook still looks warmer than normal. Still well above 5 year average inventory. Heck, on the weekend, I saw lots of birds migrating to north in the middle of January!

Anyway, I stopped rationalize markets because it just doesn't work for me. What works is a plan and an ability to execute the plan.

Friday, January 13, 2012

A chosen one

Have you felt that you have so many things to choose from, but it happens so that you chose something that doesn't work out? I was looking at Corn-Wheat spread, Gold-Platinum spread and Nat gas. It looks like Corn-Wheat would have yielded about $1200 and Gold-Platinum would have yielded about $2600 whereas I'm about -$2200 with Nat gas. I guess we'd all become a good trader in hindsight anyway.

Here's my plan. My break-even on NG is 2.875. NG is currently being traded at 2.655. If it closes around this price at options expiration, I'll roll over and I'll place an order for at or slighly out of the money options for a covered call. To do this I need a bit of bounce. If NG keeps going down like the last 5 days, this can't work.

For example, my roll-over price is at 2.7 and my break even is 2.9 (after the spread between Feb and Mar NG factored in), I'd like to sell 2.8 Calls for 0.2 ($2000), to ultimately make about $1000. Once I have 2.8 calls sold, I'm in a sold position because if it drops again, my break is lowered (2.9-0.2 = 2.7).

On the other hand, if it doesn't give me a chance to sell the call, I'm looking to sell another puts at 2.5 to cost-average. In this case, I can try to sell 2.7 calls for $2000 or so.

There's been lots of talks on NG: hedge fund getting hit, the shortest winter, abundance, new technology to drill etc... I'm simply trying to trade my plan with lots of patience.

I hope for a bounce since the 5-day in a row down day has not been fun.

Friday, November 18, 2011

Personality

I've been trading for a few years, but I don't think my mindset is set right to be a good trader. Every time I enter, 'Ok, just trade my plan and don't get emotional about tick-by-tick action.' Yet, I still suck at managing my emotion.

I sold NG put a few days ago. As soon as I entered it started going against me. First day, no big deal, I have a plan if it goes down or up. But what I really wanted to happen was that NG goes up and my put goes worthless immediately to get the full premium. The 2nd day, it kept going down and I didn't like it. I started checking NG quote like every 30 mins even if this is a long term trade like a novice trader.

Fast forward to yesterday, NG news came out with smaller storage than expected, so it shot up. I got excited, but shortly after it started going down again. I'm thinking now, I get so excited and discouraged on tick by tick action.

I know I'm not overtrading for sure, so I just really need to sit back and relax IF I really want to be a good trader.


Tuesday, August 11, 2009

Golf and trading

I heard a lot about analogies between golf and trading. I had some general ideas, but since I never played, I didn't know.

I also heard people get hooked and go crazy about it. My father used to go fishing almost every weekend. But one day, he stopped going because he started playing golf. Since I've always like to hang out with my father, I watched him play at driving range. I also picked up golf balls for his putting practices. Now that I think about it, he's been totally 'hooked' ever since.

While I was in college, my friend asked me if I wanted to go to a golf range, but I just never did. From what I remember, many experts say, for tennis or golf 'before doing anything, take lessons first.' I didn't want to pick up any bad habits from learning on my own, so I said no to my friend.

Anyhow, about a month ago, I went to K-State gym where I usually play basketball. I often play pick-up games, but since I don't play as often, I just practiced dribble, shooting and stuff. At one moment, I all of suddent realized, regardless how much I like basketball (my fav sports is basketball), this is something I can't play forever. I can still be as competitive as college kids, but I don't think I should push myself that much anymore.

So I came home and found a few information about golf private lessons. Knowing how lazy I am, I chose the closest one offered and registered 'golf getting started' 4 day lesson. I enjoy watching any kinds of sports including golf, but I just don't know if I like golf or not and this was indeed a great chance.

Time has come, there were 3 people registered for the lesson including me. I was the only one who didn't have golf clubs. Day 1 was for putting. My coach asked if anyone has experienced golf. A dude was a former high school golf team member, but hasn't played for a while. An old woman registered because her husband loves playing golf. I told everyone that I have 2 year experience..... with Nintendo Wii as a joke.

My trading buddy Jack, who loves golf and has a few records in local golf courses, has always told me putting and pitching is two most important basics. When I watch golf on TV, putting seems so easy.

It was easy up until I started goof-around. I made a few long putts, but overall I had no idea how fast I had to hit the ball or how to read slopes. But regardless I miss putts, it was really fun. Above all, unlike usual triple digit July temperature in KS, the weather was perfect around low 80 to be outside. I just loved the feeling of standing on green with a nice breeze.

Day 2 came and we practiced some putts and went to pitching wedge. I made a lot of bad shots, but one shot just went right into the hole. If you play golf, I'm sure how that feels.

Day 3 was for irons including SW and drivers. It looked easy, but it was absolutely not. Most of balls I hit tend to go to right (I'm right handed). However there were a few nice straight shots. This is very interesting and I suddenly realized, 'man this is just like trading. ' Just starting out, I didn't expect to make a few straight shots at all, but I did. When I first started trading, I didn't know what I was doing but I made money here and there. Then again, just like trading, I couldn't consistently swing straight!

I consider myself pretty athletic with any kind of ball-related sports, but golf seems to be completely different. There's a fine difference between good and bad shots, just like trading! When I was hitting good shots, I felt like I'm ready to go to 18 holes. I soon realized it was not a good idea because I remember how badly I wanted to trade live after simulating one strategy only for a short period time and lost a lot of money.

The last day of the lesson was a short game. After practicing irons and drivers, we went to a par 5 hole. I made it with 9 shots. While I did better than the 2 other players, I went through rough, bunker, creek and so on. If it was not putting, it would have been easily +10 on that one hole.

I know how bad I am, but it was really fund that I decided to order golf clubs asap.

After the lessen, about 2 weeks ago, I visited my trading buddy's place to trade together. He's got golf net in his basement, so while markets get choppy I practiced my swing. He even made his basement ceiling high enough on purpose so that I can swing there. I swung a few times in front of him and he told me immediately I need to keep my head down. I didn't quite understand what that meant.

One night we went to a driving range and wow he swings like a video game although he claims that he had better days when he was younger (he's 25 years older than I am). I asked him again what he meant by my head doesn't stay down. He's a kind of person who's very modest and since I'm taking lessons, he doesn't want to say much.

Basically, what I was doing was, I swung as if I was dying to see where my ball goes. Thus my head turns left quicker as well as my left shoulder. So I told myself, 'Ok, I don't care where my ball goes. Let's keep looking at the ball.' Surprisingly, the very next shot was probably the straightest shot I ever hit.

My friend then says, it was a great shot, but don't just get frustrated if your next shot doesn't go straight. Just like he said, my shot went like a 6-4-3 textbook double play ball. I didn't get frustrated, but I exactly know what he meant and I thought it's going to take some time to be at the level I want to be.

I apologize if I go back and forth between trading and golf, but in trading, nowadays I simulate for a very long time and I know that's what should be done. In golf, I need to practice a lot even before thinking about going to a real field.

I hope my trading experience will help golf and golf will help my trading. Hopefully I suck at neither????

On the last day of golf lesson, I asked my coach, 'Why do people go crazy about golf?' He replied, 'if a guy makes terrible shots in all 17 holes, but plays good in one hole, that's enough to make him come back.'



Monday, June 15, 2009

Patience

I really need to be patient. After big drawdowns, it's attempted to get out at break-even or small profit, but I'll never make a good trade if I do so. I must be patient.

Friday, August 15, 2008

Trading psychology (revenge mode?)

I'm still working on my psychology part of trading. Yesterday, I exited my 8-month long bean-meal spread. I didn't make as much money as I would hoped for, but made some. Great. Today I got up and checked the bean-meal spread as it became my habit for the past 8 months. Guess what, after I exited, it went in my favor of $1K, but more to come.

I don't know if this is normal, but I must have a bad ego. Since I exited, I want to prove that I made a good decision, but apparently it's not!

One of critical skills to learn in trading is the ability to quickly move onto a next trade. I don't think I'm quite there yet.