Trade Review - M - May, 15


Stock Selection Information


Macy’s (M) declares $0.25/share quarterly dividend, 25% increase from prior dividend of $0.20. Forward yield 2.11%. For shareholders of record June 14. Payable July 01. Ex-div date June 12. The board increased share repurchase authorization by $1.5B, bringing the total share repurchase program to approx. $2.6B as of 04 May. (PR)

Macy's (M): Q1 EPS of $0.55 beats by $0.02. Revenue of $6.39B (+4% Y/Y) in-line. (PR)




Watch List Reason - Earnings before the open
Pre-Market Volume - 6.56%
Trading Plan - To go long on a break up above 48.00 or to go long at a support level at 47.00

Management

Entry Setup used: Pre-market range break up | Pre-Market range fail break


Trading Comments

First trade was taken and it was a good entry. As the market was correcting and most stocks were failing to break pre-market range, this stock was hold. And there were buyers taking the offers, but the trade was stopped out.
Second trade was a really bad one. My plan was to go long if it break above the 48.80 level, but it never did. My anticipation cost me money. When it failed, I believe it would not continue the up move and soon would follow the market. So I shorted it on a failed break, but at a bad price. Should offer it around 48.70.
As it started working, I was concerned with taking the profit but had my target at 47.01, but I decided not to wait for it an closed the position. Tape reading helped me to get out of the position and to see it was hold the level in the open.

Evaluation

I don´t think it was a great trade, but it worked. My entries were not all good ones, mainly the second entry when I tried to anticipate the market, but it helped me see the stock was no longer strong.
Last exit should´ve been at my target and not to take profits. This was my plan. I must correct this and improve my morning sessions,cause I am not being very efficient at them. 
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Trader Tools - Trading Journal - Psychology Trader Journal

The second journal I will talk about is the Psychology Trader Journal. This is one of the most important journals to have and if you are a discretionary trader, it is a MUST HAVE. A trader can be compared to a high performing athlete, where you are responsible for your own results. The more you practice, the better you get (or the more profitable you are). So this journal it is like a trading coach. It tells you what to do so you can get better. What should you practice? What skills should you develop?

The first session is the strategic part of it and is is done before the market open. It has two parts:

  • Goals for the day - these are the goals I am trying to complete by the end of the day. 
  • Risk Management - how I am going to control my risk during trading hours. If I stay way on vacation or if I did not trade yesterday, I lower my risk parameters. During earning season, I increase my risk parameters. 
Next session of the journal is updated after each trading session: the morning session and afternoon session.
  • AM / PM Mental State - describe how I felt during the trading session. Confidence level, sleepiness, boredom, anything that goes through my mind.
  • AM / PM Trading Session - describe how was the trading session and how well did I trade it with a small review of the traded stocks. 

  

After the market is over, I start updating next sessions:

Today Summary

  • Trading Summary (Describe the day) - complete description of how was the market today and how well did I trade it.
  • Trade of the Day / Playbook - best trade of the day. Usually the most profitable, but not always. Could also be the best executed. This trade will be reviewed again in the blog.
  • Worst Trade of the Day - write down and review your bad trades. Find your mistakes in the trade. Think that every mistake is a lesson that you paid the market to teach you. If you learn nothing from it, trading will be very expensive for you and you most likely will fail.
  • Risk Management Review -  review of how did you controlled risk, rules you broke or trades you were not in control.
  • Also take note (other trades or relevant info) - this is the "others" were I write any other thing I find relevant.





Learning Experience

  • Did Well Today - I write down the things I did well today. Recognize my strength and try to repeat them next trading session. 
  • Could´ve done better - things that need to be improved. You can always turn this into goals for next day. By improving the things here you will become a better trade. A trader must be humble or he will fail. Most people have trouble accepting their failures and it is hard. Turn them into lessons. 
  • Things you learned today - new things you learned today. It could be about the market, about trading, about yourself, it does not matter. How are you better today, than you were yesterday? 

Goals Evaluation
  • Daily Goals Evaluation - did you manage to achieve your goals for the day? What lessons did you take from it?
  • Weekly Goals / Evaluation - did you manage to achieve your goals for the week? What lessons did you take from it?
  • Monthly Goals / Evaluation - did you manage to achieve your goals for the month? What lessons did you take from it?


This journal help me practice my trades. By reviewing them you learn from them and improve into next trade, just as a high performing athlete. Repetition is the key. This is why preparation is more important than the actual trading itself. Mistakes will be made, and it is a part of trading. Learning nothing from it, that is preparing yourself to fail.
Also keep in mind that this is my template for the journal. From time to time I change the journal to adjust it for my trading needs. You must feel comfortable when you are writing and reviewing, so create it based on your personal or trading needs.

Go back to the introduction about journals, click here.
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Daily PM Prep - May, 15


** Preparation for Closing Session **

MARKET CONDITIONS



SPY - Market is reaching the target of the up move with an interesting setup. It just broke the long term channel and now has up momentum where I see two possibilities:
1-) Fake break up - sellers will step in at the target zone and hold prices. Then we most likely will re-test the POC (see picture) of a potential new range.
2-) Good break up - the target zone will not hold prices, and this change on the angle of the channel will continue till it find sellers much higher. This means the market is very very bullish.
The first scenario is the one I think has more chance of happening because of the time the break up occurred ,the volume it had and there is a potential divergence of momentum in the 60 minute chart. So, the bias is neutral to bullish on the longer time frame. On a shorter time frame a bearish sentiment may come if the shorter up channel is broken down. The longer time frame will only go bearish if we lose the 163.25 zone.
Bias: Neutral bullish
Accuracy: 100%

PM Stock Selection Sheet download - first 20 names I´ll be looking to trade.
Updated at 13:40

Want more information about the Stock Selection Sheet?
Legends - Click me
Read this before using the information provided in this page:
1.Educational purpose material only. Use this information at your own risk. 2.Stocks may be added to the selection sheet at any time. They are used as a guide to select which stocks I will trade and set alerts . It does not mean that I follow all of them, that would be crazy.3.The Accuracy information is for my own use only. It is reviewed after I am done trading. This is just a way for me to measure how is my reading of the market and my confidence in it. I suggest you develop your own way to do this.4.The afternoon sheet will be updated between 13:00 and 14:00
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Daily AM Prep - May, 15

** Preparation for Morning Session**

MARKET CONDITIONS

World Markets News: Asian markets finished broadly higher today with shares in Japan leading the region. European markets are higher today with shares in France leading the region. 

Economic Calendar



SPY - Market has been in trend for a couple days. The range that was broken had an amplitude of 6.5 points (160 - 153.50). The target for the up move is the range extended, so 160 + 6.5 = 166.50. We are getting closer to that level. This does not mean the market will stop there, but we can consider that some people will take profits around this area. From the up move of the past few days, we can see that the market worked it´s way up on the upper band of this channel, on a slow move, and so far there is no reason to think it would change this pattern. Some correction/profit taking is expected on a short time frame, but the bearish sign only if brakes down the up channel. This brake would most likely put the market back into a range mode before going bearish.
Bias: Bullish to Neutral
Accuracy: 80%

AM Stock Selection Sheet download - if market moves to the upside there are some good trades to be made.
Updated at 8:35

Want more information about the Stock Selection Sheet?
Legends - Click me
Read this before using the information provided in this page:
1.Educational purpose material only. Use this information at your own risk.2.Stocks may be added to the selection sheet at any time. They are used as a guide to select which stocks I will trade and set alerts . It does not mean that I follow all of them, that would be crazy.3.The Accuracy information is for my own use only. It is reviewed after I am done trading. This is just a way for me to measure how is my reading of the market and my confidence in it. I suggest you develop your own way to do this.4.The morning sheet will be updated between 8:00 and 9:00
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