The Process

Before getting into the process of how this works, here are a few things to remember about personal style of trading:

  • I’m more of a swing trader. I’d rather hold a stock a little longer and catch big moves than day trade for lots of smaller ones. However, that doesn’t mean I won’t day trade if I have to.
  • When finding stocks to watch, I’m looking for clearly defined congestion and trending areas.
  • When I find a stock I try to apply the Wyckoff Method to it and find which phase it is in during accumulation or distribution.
  • I’m not trying to take a position in the middle of a trend, I’m using the method stated above to find the beginnings of trends, or tradable areas in congestion, where I can take long or short positions and ride for a bit.
  • I’m still learning the method, so I don’t claim to be a professional.

Here is a basic overview of how I do things in the journal:

  1. I find a stock to watch and post it in the Stock I’m Watching category. I will post updates as necessary.
  2. If I eventually take the trade, I start posting it in the Stocks I own category and put whether I’m long or short it in the post title. I add a score card just to get some measurability on how it’s doing. Under that will be the header WHY?, which will describe why I took the trade on that day in detail.
  3. Each day I own the stock, I post an analysis for that day of ownership. I will do a micro analysis, which is a 15 minute chart of that day to see what happened during the day; a macro analysis, which is the day on a daily chart with at least the last 5 days to see the day’s action in some context to recent history; and finally a global analysis which is the weekly chart showing the big picture. This is usually the chart with annotation I created when first put on my watch list so I can follow my overall reasoning for initially taking any interest in the stock. After the analysis I do a game plan for the next day based on the analysis of this day. Finally, I go to the previous day’s post and update the TODAY’S CALL: section with a thumbs up or thumbs down and categorize the previous post as a good call or bad call. Basically I am going back to the prior post and seeing if what I analyzed then is what happened today. I’m not marking good calls and bad calls based on if the stock went up or down in my favor. It is based on if what I analyzed the day before is what came true today, regardless of the stock direction. At the end up every week I update the score card.
  4. Finally when I exit a trade I categorize it as Stocks I’ve Sold and subcategorize it as a winner or loser with the final score card. Winners and losers are not based on if I made money on the trade. The Gain will show a percentage of monetary gains or losses. A winner or loser depends on the Target%. If I close a position at leas 90% of the target price, then it’s a winner, anything less is a loser. Also, the open and close price may change as score cards are posted. That is because I may be selling or buying portions of the stock as the trade progresses. At each update of the score card, I may change the open and close price based on the cost average at the time of posting. I post a detailed WHY? under that.

Some notes on how this blog is organized:

  • You can click on any of the categories to just see posts categorized there. This helps me see just groups of common things as I go back and see my progress. The biggest reason was to be able to categorize good calls and bad calls and see just those groups to learn from.
  • The number of posts is shown by the categories. It shows how many posts were made in that category. That number is only meaningful in the good calls and bad calls categories and winners, losers and break even subcategories of Stocks I’ve Sold. The numbers can be used to measure my success rate.
  • I tag each post with the ticker of the stock. If you click on the ticker in the tags section, you can see all the posts for just that symbol. The posts are displayed in chronological order so you can see the whole history of the trade.