I put on a short at 2622.5 and just closed it. I don't like the way this is setting up. I feel like there is potential for a short squeeze now. And that potential trashes my long term expectation for this trade. I was able to get out +4 ticks. +31/day.

Uhhhhh...too much volume for a short squeeze?

Salao 

Uhhhhh...too much volume for a short squeeze?

Seems like a WSJ article about WH officials considering lifting tariffs on China.

Comeback King 

Seems like a WSJ article about WH officials considering lifting tariffs on China.

Probably it. I was flat. My chart was screaming at me to get long but I am overly skeptical today.

So during my research into short squeezes...



...yeeeeeah. Maybe I should see a doctor...

Odd day of paper trading for me. +38/day. 4 trades, all winners...sort of. One trade was MOST DEFINITELY a winner and that was the early long I put on. I took it off WAY too early. Over the past few sessions I think I might have a problem letting my winners run. But there is only a small sample size so far, so I should just be aware of it. I will definitely be reflecting on this.

My other 3 trades were winners-in-name-only. I managed to eek out a few ticks on each one before I realized I was wrong. The market moved against all three of these trades. So today could have very easily been a disaster if I didn't take these positions off when I realized I was wrong. This is the good part. The only question is: Why the hell was I wrong so much? My answer: Stubbornly trying to fade the trend. All 3 of these trades were SHORTS. Need to go with the flow. And I need to look at why I'm getting signaled in at these points.

I feel like I had an awesome read of things all day and I am very happy for that. BUT I think I read in Wyckoff that Some of the best analysts have no money in their pockets. Lots to think about tonight.

So I have the LPGA ProAm event on TV while I wait for trades to set up and the golf analyst said something that traders can probably relate to. To Paraphrase:

When we go into clubs throughout the country we are often asked if the club champion who has an Index of +4 would have chance to win on the PGA tour (just for perspective, Index is a measure of an amateur golfers skill...+4 is elite. Probably the top 99.99% of amateurs in the nation). Or even have a chance on the Web.com tour (sort of minor league tour).

The analyst answered:

No. Not ever. The club champion has no experience playing in tournament conditions found on tour. And the professional players have been the best all their lives always winning the biggest events. There is no chance the club pro would even finish in the money...EVER. End paraphrase.

He seemed pretty emphatic. Which I found alarming considering my endeavor to become a professional level trader. It's amazing to me how analogous the worlds of trading and golf seem to be sometimes. I suppose it is the nature of competition and how you react within the heat of competition.

At any rate, it was another reminder of where I need to be before I go Live.

During the week I tried 3 different strategies during paper trading the ES (mostly) and the results are:

Strategy 1: Win rate: 82% (11 trades), +99 ticks.
Strategy 2: Win rate 0%, (2 trades), -3 ticks.
Strategy 3: Win rate 25%, (4 trades), -37 ticks.

I was most comfortable with Strategy 1. It was a clear signal with very definite risk management. I am not going to tinker with it, I will trade it as-is. Strategy 2 I adapted to get me into a trending market if I did not get in early. I began implementing it due to the lack of success of Strategy 3 which does the same thing. I'm going to dump it for now and go back to the drawing board on that one. Strategy 3's signal was difficult to see sometimes mostly due to unclear risk management. Time to look at adjusting this strategy. It just needs more clear rules.

I tried Strategy 2 and 3 in the CL and RTY today and no success really. Those Strategies seemed like such stinkers in the ES, I thought I would try different markets. Still no good! Strat 1 bagged a few points in the ES today and Strat 3 lost me 13 ticks in the ES overnight session.



After 1 week of paper trading live futures markets I learned:

1. I'm not letting my winners run long enough, I'm not waiting for my exit signs. I just get anxious and exit. This is like Trading 101. I used to do the same thing with stocks. It took me a few years to learn to wait for the exit signs. I think the shorter time frame has got my timing off and I'm really going to have to focus to correct this.

2. There were a handful of trades this week that didn't go anywhere after 10 bars so I exited, each for a small gain. They went on to move against me. I did this because I was taught that the good ones tend to work right away. I will continue to monitor this. I was pretty stoked at how well this worked this week. Small sample size though.

3. The biggest move against my winning trades was 3.5 points. That seems pretty tight. I would be happy to keep it around that number.

4. I definitely feel like a geek keeping a journal. HAHA! But I have already experienced the value of a) keeping this record of progress, b) the contemplation that is required in producing a journal entry, c) being accountable, which you need to do even when paper trading...

5. George Douglass Taylor rules seem to hold up pretty remarkably. I'm going to crack the Taylor book this weekend and freshen up.

I'm tinkering with Strategy 3 more. It's too early to give up on it. What was I even thinking...Strategy 3.1 will be an attempt to buy at the low end of a pull back to 20EMA. In theory this will give the trade more time to run and it will have a STOP placed at a lower price.This SHOULD give me an opportunity to get out with a smaller loss or even a small gain if the trade does not work right away (maybe within 10 bars). The idea is to limit loss during reversals and maximize gain on continuation. The perfect trade, right? Well it hasn't really worked out that way that's why I'm adding Strategy 3.2 to the mix...

Strategy 3.2 will be a buy (or sell) after price retraces to to 20EMA and then moves above the high (or low) of the previous bar. The idea is confirmation and a higher win rate, in theory, to Strategy 3.1.I expect this strategy will be susceptible to false breakouts. Proper STOP will be use to mitigate loss in these cases.

I'm only going to keep the more profitable strategy of the two. I'll get rid of both of them if they prove out to be garbage.

Strategy 4 is being added to the mix. It's basically the LBR 2ROC strategy for time frames longer than intraday (in most cases).

These Strats will be tested in paper trade and are currently added to my trading plan, which is a constant work in progress.

The first trade was an execution error compounded by another execution error. I tried to go short but when I realized I was long tried to close. I was attempting to do this on my phone app. So...When I thought I closed my long position I really had not and didn't realize until much later. Luckily the market was closed most of the day for King day and I had only lost 20 ticks. The second trade, a short, was signaled in with strategy 1. I executed on my desktop. I moved my stop to breakeven for the day (+20 ticks) and will probably check it again before I go to bed...adjust stop if necessary.

Big lesson for the day: Don't trade from my phone.