Day Trading Notes

I have begun day trading the IWM ETF. As a novice trader, my initial focus is developing good methods for day trading. I will frequently chronicle notes on my market observations and performance to track my progress.

• Today was a very interesting day.  Although the market was up significantly, I was unable to capitalize on the move because I need to...
• LEARN HOW TO TRADE BREAKOUTS!
• Today should have been easy money because the market just continued upward in long long trends with very small pull backs, and that was my problem.
• Today began with a strong opening drive to the upside, followed by a sizable sideways consolidation, followed by another strong breakout and surge to the upside.  I had difficulties trading the breakout and opening drive.  I feel uncomfortable jumping into a MOMO price movement because I cannot adequately define my risk:reward like I can on a range play with identifiable levels.
• I need to practice identifying secondary and tertiary entry points in a trend move.  I often forgo entering a trend unless I have got in at the bottom.  I am hoping that a video review of the days action will help improve my ability to enter a trend in multiple places.
• I also need to improve my order entry speed/type.  I feel uncomfortable entering a breakout position because if the position reverses quickly, I have to enter another order quickly.  I practiced entering some contingency and OTO orders to help with this problem.  The issue will require more thought.
• I think the best way to play a breakout may be to setup a buy limit order before the breakout.  In addition I should setup a contingency or OTO order to sell at my stop loss and target profit.  The target profit part is the trickiest with the breakout.  I could place a trailing stop limit sell order to follow the breakout, but the trail size is an issue.  I also could place a stop loss limit order after the breakout has moved a certain distance.  If the breakout continues to move, I can cancel and replace the order with a higher stop loss limit sell order.
• I am thinking of playing the opening drive with a preset market buy order in addition to a preset stop loss limit sell order.  If the market opens up, I can place my buy order and then set the stop loss limit based on my fill.  Just a thought...
• It would be nice to find a day trading mentor that could teach me the nuances of reading the tape and different strategies.

Daily Trading Summary (08/29/11):

Number of trades (round trips) = 3 (0W, 3L)

Trade Size = 1 share

Average Win (Winning %) = N/A (0%)

Average Loss (Losing %) = -$0.02 (100%)

Average Return = -$0.023

Total Return = -$0.07