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I totally agree with you even though I have been taking few long positions here and there that's been messing with my mind. I just can't let that go away from my mind. Example today I was about to go long but my brain keep telling me you stupid this is what you have been suffering and waiting how can you go long after the news...my timeframe is bigger but I don't need 1800, just 1900 would be sufficient
Trading: Oh what a tangled web I weave, When I want to take profits in trading
Frequency: Several times daily
Duration: Years
Posts: 1,742 since Nov 2014
Thanks Given: 3,432
Thanks Received: 3,011
I have been piloting a passive method of trade execution for a month now. It involves discretionary entry during the 1st 60 minutes of US open (as I have to leave for my day-job after that) but then passive exit using scale out 1/3. My initial plan, when I became this forum member in November 2014, was to scalp 4 to 8 ticks but soon realised that it's a loser's game. Hence moved to a higher time frame, despite my screen time restrictions, but didn't like the swing trading concept either. My goal is NOT to have overnight position now but try to catch the big move of the day. Currently my stop is at 8 ES points and targets are 4, 8 and 12.
This method taught me 2 valuable qualities of a trader.
1 - Patience in my entry, as I get only ONE chance to enter. (I can re-enter only after all my targets are hit)
2. Acceptance that I am wrong and getting used to my stops being hit. (That's a giant leap for my personality)
I am re-organising my work and personal situation in such a way that I can sit infront of my trading monitor for more than the current 60 minutes. I will aim to trade the first 3 hours of US open from the 3rd week of November 2015.
I will continue to manage my trade in a more passive way but slowly interfere with stops and targets from December 2015 so that I can lean against high volume support/resistance.
Why do you think what you are doing is trading? You are simply taking random pot shots at the market. Your results will be at best, random also. There is absolutely nothing that can be gained from this exercise given the way it is being executed.
Trading: Oh what a tangled web I weave, When I want to take profits in trading
Frequency: Several times daily
Duration: Years
Posts: 1,742 since Nov 2014
Thanks Given: 3,432
Thanks Received: 3,011
I trade my beliefs. I Observe recent market behavior, interpret that using volume profile and anticipate certain behaviour from others. Once I see the evidence of my earlier assumptions during the first hour of trading, I place my bet. I know the actual cost to act on that belief, maximum loss and the potential benefits.
It's no different from any trade, I guess. A (possibly complicated) medical example would be... let's say I believe in increasingly unhealthy lifestyle resulting in increase in Obesity. I anticipate more metabolic syndrome like Diabetes, Hypertension and hence a demand for medical and (non-medical) lifestyle interventions. I hire a nutritionist or physical therapist in my practice. In this case, I know the initial cost to implement it, i.e advertisement, overheads & recruiting staff and their salary. I estimate the potential increase in patients and the likely increase in revenue and finally the total cost if my expected patients didn't take up the service during a particular timeframe.
I agree that the results will be random. But I disagree that my attempts are random. (Almost) Every one of my entry has a reasoning and I try to write in my journal here before the outcome of my trade. You can prove that my logic/reasoning is incorrect or stupid but there is always one. My goal is improve my reasoning by looking closely into my trades on a weekly basis and keep learning about myself and about the market. My hope is that this repeated and objective hindsight analysis will slowly improve my live market analysis and eventually my foresight into what's likely to happen.
Though I am at a disadvantage of not able to monitor my trade continuously due to my day-job, I refuse to succumb to scalping during my 60 minutes screen time. I may migrate to swing trade at a later point once I get enough shorter term trading experience.
Possibly. Since there is no other established exercise I am aware of, I came up with this one. My goal is to practice this only for 100 trades or 3 months and then re-evaluate.
It may be too early to say this but I think I have seen quite a few benefits like improved patience before I enter the market and getting more comfortable with the concept of me being wrong. I don't feel hurt when I am stopped out these days.
I also see my personality more objectively now. e.g My perma-bear personality was rewarded well during the august & september bearish moves but struggling during this strong bounce from 1900 to 2050. It's clear that I have counter-trend trading personality. Even though I was profitable during this period, obviously a more sensible and less stressful approach would be to go with the trend. I also realized that this short bias was due to me reading Zerohedge for too long and also my small swing short position for 2 months now. This helped me to decide on NOT trading 2 time-frames and instead choose on just day-trading so that I can trade the chart in front of me. I also minimise exposure to news until I get more objectivity.
This execution style is just the beginning though. My stops and my targets will eventually be at logical places based on my understanding of Volume profile and S/R levels.
I highly appreciate if you can direct me to better ways or exercises to improve my understanding of market and the execution style. I guess, the ideal situation would be give up my day-job and do this full time with a prop firm or with other traders and learn from more experienced mentors. It's not an option right now but I will consider that if I am not getting anywhere at the end of my first year of full time trading. i.e Summer 2017.
great reply. my one caveat is that you try recognize and avoid instilling any "bad habits" that are a result of adapting to your special situation and it's attendant limitations.
Trading: Oh what a tangled web I weave, When I want to take profits in trading
Frequency: Several times daily
Duration: Years
Posts: 1,742 since Nov 2014
Thanks Given: 3,432
Thanks Received: 3,011
I had an opportunity to spend more time day-trading due to a combination of my personal circumstances and work flexibility. For the next 6 to 8 weeks, I can watch RTH for atleast 4 hrs and possibly upto closing time.
This summary is for non-elite members who don't have access to my journal.
I tentatively started last week and traded 7 days in total. Will start again next monday.
Before we look at the results, let me be clear that the goal of this exercise is to check a number of things, not just profitability.
I suffer from many of typical setbacks and personality issues of wannabe traders.
1. Hanging on to losers with hope
2. Cutting my winners short.
3. Focusing on win percentage
4. Expecting most if not all trade to be a winner and NOT thinking in probability
5. Not comfortable in stop loss being hit.
6. Focusing more on monetary gain rather than process & execution.
7. Over-trading and revenge trading
.... the list goes on but these are the key ones.
My goal is first to statistically find the evidence by using tradervue and improve on the measures I already employed in becoming a successful trader. How do I do that?
I want my MFE to be significantly more than MAE. My win % to be less than 40% but average winner to be atleast twice the size of my loser. I also want the holding time of winning trade to be twice the time of a losing trade. I want a gradual reduction in the number of trade but with same or better profitability.
Now to the results. I will let you decide after seeing the attachments (I hope you spend some time on the second picture). My reaction - I am happy It makes me feel I got what it takes to succeed in trading. Obviously this is just the beginning and lot of hard work ahead and consistency is key.
One of the other goal is to 'sample a trader's life'. What I am doing is significantly different from my current job in health care where I am more active physically, always engaging with colleagues and patients, get a lot of satisfaction from helping others (usually). Compare that with staring at a screen for (atleast) 8 hrs and limited social contact except FIO community, sedentary job and the emotional roller coaster.
I have mixed feelings about the emotional and social aspects of full time trading for me. I don't want to jump to conclusions at this early stage. I will wait for the full 2 months period to finish before I summarise my thoughts and experience on that.
Trading: Oh what a tangled web I weave, When I want to take profits in trading
Frequency: Several times daily
Duration: Years
Posts: 1,742 since Nov 2014
Thanks Given: 3,432
Thanks Received: 3,011
I have reduced my frequency of trading significantly during the last 2 weeks but that seems to be the only positive thing. I am struggling with other issues but learning fast.
1. I am still unable to manage multiple positions, which makes me more emotional and irrational.
2. Holding Overnight positions seems to make me stubborn and inflexible rather than disciplined.
3. Concentration difficulties, partly due to time difference i.e 8 PM to 2 AM trading.
4. I am realistic about the difficulties in transition from my current job to trader. It's going to be VERY tough. Becoming consistently profitable is obviously the basics. But there are other key issues too. I have to find solutions to improve my mindfulness, active socialisation and more physical activities to counteract the side effects of trading.
With regards to my old habits, I increased my position sizing whilst holding a loser. I also tried to catch the falling knife twice yesterday. I did that with hope rather than a clear exit plan. I quickly realised this and cut it down but yet that's a very bad execution on my part. Since this could ruin me in the long term, I decided to switch to SPY, to reduce loss potential, for another 2 weeks to practice position sizing. I will avoid Overnight holding for the time being but will aim to swing trade once I return to my regular job in a month's time.
Trading: Oh what a tangled web I weave, When I want to take profits in trading
Frequency: Several times daily
Duration: Years
Posts: 1,742 since Nov 2014
Thanks Given: 3,432
Thanks Received: 3,011
After my difficulties in managing multiple ES contracts, I sensibly shifted to SPY ETF where I can 'play with' my tools and ideas without getting hurt. Did I learn anything? You bet.
I managed to swing trade by zooming out one level and held positions for several days. I also spent less time staring at my computer screen. I effortlessly scaled in and out of my positions with clear logic and plan. I generally stuck to my plan, let's say 80% of the time. You can follow my daily thoughts and entry logic in my regular journal and I'm posting only the pictures here.
Decent comeback or recovery with SPY after ES struggles.
Trading: Oh what a tangled web I weave, When I want to take profits in trading
Frequency: Several times daily
Duration: Years
Posts: 1,742 since Nov 2014
Thanks Given: 3,432
Thanks Received: 3,011
As I explained in my regular journal, my profit targets were 1840 & 1820. When I saw a huge gap down open and price flirting with 1800, I thought Bears would take this down much further. Essentially, I became greedy and was blinded by the exhaustive selling.
However, I took partial profits below 1820 but fully covered only in the 1860 to 80 area.
It makes me feel I got what it takes to succeed in trading. Obviously this is just the beginning and lot of hard work ahead and consistency is key.