Glossary: Tradervue tags

[Note: this is a work in progress and will be updated on a regular basis]

This is a glossary page of all the tags I use in Tradervue -- a really useful online trading journal and reporting tool I've recently started to use.  There are some posts here and here I have recently written regarding how the use tags within each of my journal entries, which then enable me to quickly perform some very useful analysis.

For example, the way I created the tags was due to the types of questions I knew I wanted to ask, especially with regards to how well certain setups are performing (or not), as well as other questions such as how much my revenge and rogue trades were costing me.  I didn't think there were this many tags, but because I developed the tags based on my requirements already in my mind, it only takes me < 2 minutes per journal entry to update.  A great return on time investment for the powerful stats I can generate.

One question I would like to ask, but am not currently able to answer, is the maximum amount of actual profit (and loss) did I have at one time during a trade, vs. how much did I actually close.  In other words, how well did I manage the trade, and what was the opportunity cost of being less than optimal.  It would have taken too much time to calculate the figures for all 1000+ of my historical trades, but perhaps I can do this moving forward.

This is a living and breathing document, so as mentioned earlier, this glossary will continue to evolve.

                             GLOSSARY OF TAGS IN TRADERVUE
                                                 As of 8/21/2011

 

GRADE
a	Perfect, textbook, multiple factors of support
b	Near perfect, one additional factor of support
c	Meets spirit of setup, but some red flags
d	Not an ideal setup under the conditions
f	Fail, no reason to enter
TIMEFRAME
2min	2 minute charts used for entry
5min	5 minute charts used for entry
15min	15 minute charts used for entry
SETUPS
3br	3 bar reversal
b and b	Bread and butter
bo	Break out
bo-hod	Break out - high of day
bo-lod	Break out - low of day
bounce	Bounce of significant level (e.g. whole number)
btfe	Beyond the Fibonacci Extension (FE)
btfe1/2fe	Beyond the 1/2 to the FE (halfway between ORH & FE)
btfe16	Beyond the 161.8% FE
btfe20	Beyond the 200% FE
btfex	Beyond the FE extension (beyond 200%)
btorh	Beyond the Opening Range High (ORH)
btorl	Beyond the Opening Range Low (ORL)
bullflag	Bullflag setup
c and h	Cup and handle
cbd	Consolidation breakdown
cbo	Consolidation breakout
gitsor	Green in the sea of red
ritsog	Red in the sea of green
h-pattern	h-pattern (inverse is y-pattern)
heldbid	Bid that is held by big buyer
pb	Pullback - price pulls back for entry
pb-bt1/2fe	Breaks through "1/2 way to FE," pulls back, and retests "1/2 FE"
pb-btfe	Breaks through FE, pulls back, and retests FE
pb-btfe16	Breaks through 161.8% FE, pulls back, and restests 161.8% FE
pb-btfe20	Breaks through 200% FE, pulls back, and retests 200% FE
pb-btorh	Breaks through ORH, pulls back, retests ORH
pb-btorl	Breaks through ORL, pulls back, retests ORL
pb-pb2rz	Breaks through ORH/ORL, pulls back, retests Retracement Zone (RZ)
pb2rz	Pullback to the retracement zone
pt	Pushthrough (3+ bar opening setup)
qh	Quick hit (2 bar opening setup)
rogue	Rogue trade, not a part of trading plan
scalp	Quick trades for generally $0.10-$0.20 profits
topout	Topout (short setup)
triangle	Triangle pattern, via trendlines
u-turn	U-Turn (long setup)
vlb	Vwap line bounce
vlco-pinch	The 5ema pinches price action through vwap
wnbo	Whole number breakout
SETUP CONDITION
halfnum	Price action was impacted by $.50 level
wholenum	Price action was impacted by $.00 level
ma over vl	Moving average was over vwap (noted if setup was against trend)
midrange	Price was in the retracement zone at the time of setup
no-vlco	vlco had not yet taken place (usually early entry)
vl over ma	Vwap was over vwap (noted if setup was against trend)
tl	Trendline was a factor on the setup
sr	Support or resistance line was a factor on the setup
revenge	Usually noted if prior trade was just stopped out
sar	Stop and reverse - usually, but not always, used with revenge
vlco	vwap line cross over
asctri	Ascending triangle
destri	Descending triangle
filltail	Opening range pattern, price action fills in wick of opening bar
contra	Trade in the opposite direction of the gap (gap fade)
TRADING CONDITION
2extended	Price action was extended at the time of setup
choppy	Price action was choppy
lateday	Trades after 14:00
lunchtime	Trades around 11:30-13:00
narrowrange	Overall range was narrow
news	News released during trading hours, impacting stock
nogap	Stock did not have a gap opening
lowvol	Low volume stock or day, usually resulting in choppy conditions
EXECUTION & OUTCOME
win	Trade was gross winner
loss	Trade was gross loser
scratch	Trade was a gross scratch
fobo	Fake out break out - the breakout failed
error	Trade was entered in error
badexit	The exit could have been much more optimal
chased	Entry was late, chased the stock, usually should have stayed out
early	Entered trade early prior to actual sign (break of prior bar)
goodexit	Exit was optimal, could not have gotten much better price
4barstop	Not touching stop for 4 bars would have been optimal
stop2close	Stop was too close, would likely have been successful
stopped1tick	Stopped by 1 tick, usually used in conjunction with stop2close tag
scaledin	Scaled into the trade, adding on
scaledout	Scaled out of the trade, usually via 2 profit exits
THEORITCAL MAX OUTCOME
hit-1/2fe	Price ultimately hit the 1/2-way to FE
hit-fe	Price ultimately hit the FE
hit-fe16	Price ultimately hit 161.8% FE
hit-fe20	Price ultimately hit 200% FE
hit-orh	Price ultimately hit ORH
hit-orl	Price ultimately hit ORL
hit-runner	Price ultimately went past 200% FE
hit-tgt	Price ultimately hit target (non-Fibonacci target)
MISC
study	Tag to study trade further
twitter	Stock was added to watchlist from Twitter

"Rage to master"

From Dr. Brett's book, "Enhancing Trader Performance", he discusses the concept of fundamental performance fallacy.  An example Dr. Brett gives is that simply practicing the piano 4 hours a day instead of 2 won't necessarily make you better.  I know through my experiences with golf that mindlessly and carelessly practicing the same bad swing more today than yesterday won't make you better tomorrow.  Simply put, hard work alone will not make you into an expert or elite performer.

Then what made elite performers different?

"...it is a transformation of one's relationship to a performance domain...There is a difference between work and immersion, and it gets at the heart of what competence means to expertise.  It is the difference between painting and becoming a painter, the talent that you have and the talent that has you."

Dr. Brett references a phrase, "rage to master", which comes from a study that investigated talent development and creativity.  It is a "consuming motivation to extend and express one's capacities."  Every day, I feel as though I don't have enough time nor energy to do everything I want to learn and improve my trading.  There have been countless days in the past several months where I am absolutely mentally exhausted by the time I get to sleep.  But I don't think I've worked even a minute.

"Performers don't work because they're motivated, but because they're captivated."

After "blowing up" my account this week, and getting a wake-up call regarding focus and discipline, it's time to take all the pieces that I've learned through 1000+ actual trades in addition to reviewing thousands of other setups, and see what I'm really made of.  I know I have the ability to be successful, so it's time to own this moment.  I will raise my level of discipline and execution to a new level, come Hell or high water.

I possess a rage to master.  This is my decisive moment.  Rehearsal time is over.  Next week, it's showtime.

"Focus, discipline...it pays off"

In the comments of Trader-X's blog, Ken left a comment that call it out -- a big wake up call for many of us who visit the site.  Here's an excerpt (emphasis by me):

...I am not trying to be confrontational, but I think your success would go up if you picked one and focused on it. I honestly don't think you can be successful looking at 2, 5, 10, 15, 30, etc. You might get lucky now and then, but I think consistent success is impossible.

I see a lot of you guys posting here, but you aren't really following the Trader-X methods. There is a high number of trades and a lack of real focus on what a good setup is, and when you execute you need to have the ability to monitor your positions and adjust accordingly. Thus, fewer and better trades. If you get down to analyzing a setup and studying the price action and bars like you should, you can't have a watchlist of 200 stocks and trade 5 timeframes. It just doesn't work that way.

Again, I am not trying to be confrontational, but I see you guys doing the same thing over and over and hoping for a different outcome that won't happen. Focus, discipline...it pays off. I have not had an unprofitable week since 2010. I have an unprofitable day every now and then, but never an unprofitable week.

Good luck.

Ken

Much of this applies directly to me and probably most other developing traders.  When I asked a follow-up regarding how many setups he monitors and how long it took him to get were he is now, here was his response:

Grove, I really only trade about three setups. I only look at the 5-minute timeframe, and use a 5EMA. I don't trade exactly like X, but I use the same principles. I focus more on plotting Fib lines over bigger moves which may or may not happen at the opening range. I am looking for a failure through the retracement zone or a nice bounce off of the top of it, with solid support form the 5EMA. I like the 5EMA to be right under price lifting it (or vice versa for a short). I probably put more emphasis on the 5EMA than most readers or X himself.

I have been making solid profits consistently for almost five years, and dabbled in trading for about ten before that but not as a full-time venture.

For me it is about discipline to only take good setups and about focus to only look at a small, defined watchlist and monitor what I am doing closely. And I don't trade a lot, though it is relative. On average I probably make 3 round-trip trades a day. Hope that helps.

Since getting locked out (I consider it a form of blowing up) of my account yesterday, it put me into the penalty box today to really think about what I've been doing wrong, and how I will get back on track.  So here's the plan as I wrote on Trader-X's blog:

Since I'm currently on the sidelines, I'm going spend extra time revisiting my trading plan, and getting back to the basics.  I have the data now, so I need to focus on what has worked for me (i.e. my strengths). 

I'm going to come up with a precise game plan for next week that is focused, measurable, achievable, and then execute.  ZERO trades in a day will be completely acceptable, and perhaps encouraged. 

I'm not as worried about the P&L -- I want to make sure that I follow the plan and execute well.  All my past trades show that if I only take A & B trades, the profits will be there. 

So now my work over the next few days is to complete the analysis of my trading journal, confirm which setups are my strengths, and write out my trading plan for next week.  That's the easy part.  To be contined...

Ooops, I "blew up" my account, again...

Back in a prior life, I used to work in credit risk management, where we would analyze and implement account management strategies on loan portfolios that were billions of dollars in size.  It's not as exciting as it sounds, since managing a big bunch of loans would be similar to driving a big 18 wheeler, vs. trading at a hedge fund which would be like driving a Ferrari.

Through dealing with the analysis of large numbers, I learned that it's not necessarily the absolute value that's important.  Instead, many of the metrics for comparison were based on basis points or percentages.  So as I began down this journey of learning to trade, I wanted to make sure I kept the proper perspective on my progress, and to also find a way to minimize my overall personal financial risk.

Primary way I measure performance

First, I knew the absolute dollar amounts that I would be trading would be considered random daily P&L noise for experienced traders.  So I wanted to measure my key performances, such as P&L and risk size, by basis points of my portfolio or the R-Multiple.  I find this to be the purest way to measure your performance, especially if your portfolio is small.  This way, as I scale up in size, it's not whether I'm betting $50 or $5000 per trade, it's just the same 'ole 50 (or whatever) basis points of my portfolio.

Yes, I do admit, for all the work I do, when I look at the absolute dollars I make or lose, it sure doesn't seem like much.  But measuring your performance based on percentages helps to keep a better perspective on how you're truly doing. 

You'll likely wreck the car (or your account)...

Second, I wanted to make sure that I'm not putting too much money on the line as I learn.  When a teenager is just learning to drive, there's a good possibility that they're going to get into an accident and wreck the car.  So even if you could, responsible parents just don't go out and buy a Ferrari for their child's first car!

Although I could open up an account significantly larger, it just would not be financially responsible.  I know from past experiences that I will initially lose money.  So my intention is to minimize the absolute dollar size of my account, so that I can use the $25k minimum pattern day traders requirement as my backstop to force a time-out.  This is similar to how you would get locked out of your account at a prop trading firm after you exceed a certain loss for the day. 

So what now?

After such a volatile day yesterday where I was very lucky to end the day slightly profitable, I was hoping to take it a lot more easy and be much more focused today.  But I learned quickly that trading with a lack of sleep can be very hazardous to your trading P&L.  That's no excuse for my lack of discipline.  I wasn't so lucky today with a SODA trade to bail me out.  I exceeded my $25k backstop oh so slightly, so now it's time to take a break, spend extra time evaluating what I did wrong, dust off, and refocus on my goals. 

In the meantime, I'll take the humiliating and embarrassing action of sending a little more money to unlock my account.  Nope, I admit, this isn't the first time I've had to do this in the past 4 months. I also admit, it's not like I really blew up my account, but it sure does feel like that to me.  However, this is the first time I'm telling the world of the shame and disappointment I feel.  This will motivate me to do better.  On the bright side, I look forward to the days when I'll be withdrawing money from my account on a regular basis.

Recap: $SODA and $TNA - A tale of two strategies

Being a trader can mean a lot of different things.  Every day trader has a different style, and as an example, what's considered overtrading for one could be standard operating procedures for another.  There is no right or wrong, and as I have read countless times, it's important to find the style that works best for you.

Dr. Brett has written that many beginning traders generally have the process of discovering your trading style backwards.  In the educational process for doctors, a student will go through intensive rounds of training in a wide variety of subject areas, which then help them decide which area of specialization is best for their interests and strengths.

But on the other hand, beginning traders will generally jump into one or a few different trading style, and then try their best to make it work in a not so strategic manner.  Therefore, swing traders may never try learning how to scalp (too drastic of a change), and vice versa.  This leaves open a good possibility that you may never have had the opportunity to find the trading style that best fits your personality.

I'm still finding my way, so here are two of the day trading strategies I used which were quite diametrically opposed in nature:

• A "typical" day trade -  Used a setup that's a part of my standard plan, but I really kept the stops wide and didn't set any profit targets.  See SODA.
• Scalping -- Went down to a 1 min alongside a 5 min chart, as well as the $TICK index.  Also used TradeStations matrix, which is similar to a Level 2 screen.  See TNA.

Both provided very good learning experiences and I'll continue to analyze these trades over the coming days.

SODA - Sold under 15th 5min bar.  This was a variation of the pullback to the retracement zone trade.  Exited and then resold higher at top of the 14:00 bar.  Fortunate to catch a stock that trended strong with little pain, and so I caught a big chunk of the ride.

 TNA - 103 round trip trades (206 total trades)

As mentioned earlier, I actually made a conscious decision to scalp this, and I used 100 shares to try and minimize damage.  I still lost several hundred dollars (small losses and commissions really add up, and it was a good commission day for TradeStation!), but it was a very good learning exercise that will provide a lot of insight for the future.  In some ways, I had to get it out of my system -- I had to touch the fire and see if I got burned.  But more importantly, I had to try to see if it is something that clicked with my personality...