Right on about the accountability. Just knowing that I have to update my journal each day adds so much accountability to my trading! Video recording is a great next step!


Sent using the NexusFi mobile app

Do not read this if you are malleable in your adoption of trading ideas.

"As of 7:59 EST, the daily charts bull run looks like it's slowing down. At first glance, it wouldn't be surprising to me if price tested ~3007, if the bears take hold. This idea makes the prospect of buying at ~3013 hard to swallow, but of course and always: the OrderFlow serves as confirmation for these ideas.

Good buy locations (from worst to best): 3013, 3012, 3011, 3010 (VPOC of July 12th), 3007, 3006.25, 3005.50, and 3005."

Higher time-frame bull bias target is ~3050.

This morning was terribly boring in the MES. Despite that, I performed exactly the way I know I should, and I sat on my hands. I took a breather from the charts at 10:30 EST, then started watching price again at 12.. To my surprise, price was selling off rather dramatically given the lack of participation today. It was quickly approaching my best entry price (3005), so I thought and felt the urge to take advantage of this, regardless of the time of day. The micro context was pre-dominantly bearish, so I knew I was possibly stepping in front of a freight-train, but I also knew this is/was a great entry price to go long on a technical basis, regardless of the outcome. I wish I maintained that perspective while I was in the trade. So yeah- I entered long at 3005.50, and I started thinking and feeling the way I used to when I was in a trade: scared. I quickly closed the position with a 3 tick gain, and felt stupid as hell right after:



+ 3 ticks.

As I'm typing this, price has reached 3013. Had I of been in control of myself and my emotions/fear, I'd of made a much, much better profit. In retrospect, my actions do make sense because the way this price action occurred; I perceived it as suspicious given this mornings activity. Mentally I was conflicted: possible freight-train versus fantastic entry price. The premise of the trade wasn't totally sound in my mind given the sell off, and my fear simply won.

Also, it makes sense why I performed worse the second time around today. I started meditating and breathing before the open recently, and it has worked wonders (that, and the lack of caffeine). I wasn't in that state of mind/body when I took this late trade. I wasn't prepared for this move, either.

What I did well:
- Pre-open analysis was accurate (so far).
- In my first session of trading, I sat on my hands/didn't invent trades.
- In my second session, I executed entry on my ~best entry price.

What I did poorly:
- I wasn't calm and collected during the second trading session.
- I closed my trade too early out of fear.
- I wasn't totally prepared for the trade, mentally.

What I need to do:
- If I'm going to trade, I need to make sure I'm in the right state of mind. This morning was great: I felt and acted the way I did yesterday. An hour or so ago, I just wasn't in that state.

I refuse to beat myself up over this, but I can't let it get past me. As long as I can manage my psychology before and during trading, I'll make it in this business. Next time I decide to check the market at noon, I will be as ready as I am mentally and physically, at the open.

Hindsight sure is a kicker!

First off, great job identifying that area. Whatever you are doing is working - stick with it!

I believe that sudden down move today was triggered by a comment from the Fed today. The lack of volume in today's market probably helped to make the move efficient. I was watching the NQ and it dropped like a rock.

Don't read this if you're easily influenced.

"The daily chart looks more bearish now, but I won't consider the overall bull trend to be broken until price drops down past 3000. I can see a double top developing, so I need to be especially cautious today and I need to figure out if going long is a solid trading decision. Future real-time price action will let me know.

Potentially good entry locations for a buy: 3005.50, 3004.50, 3003.50, all the way down 3007.75 and 3000.

If price succeeds in dropping past ~3004 and tests it bullishly and fails, the second test at that price area would be a good short. The same applies to 3000.

I've realized that I've closed too early twice now ever since I started live trading. I don't want to get back into the habit of doing this for obvious reasons, so I'm resetting the goal to hold my trades no matter what until my profit target or stop loss gets hit. I've accomplished this goal in the past, so I know I can do it again. Individual trades do not matter- the times I lose sight of this are the times that cost me. Win or loss, I will do the right thing today. I also must remember that losing is not a sign of incompetence, but a part of doing business. Losing streaks should be expected, and losing trades should not be avoided, because always cutting profits short compromise the positive asymmetrical reward over time that gives my strategy edge. This is what I need to remember while trading."

Zachary Standley 

Don't read this if you're easily influenced.

Too late. I get sucked in so easily....

Quoting 

I also must remember that losing is not a sign of incompetence, but a part of doing business. Losing streaks should be expected, and losing trades should not be avoided, because always cutting profits short compromise the positive asymmetrical reward over time that gives my strategy edge. This is what I need to remember while trading."

Exactly right. Hard to remember, but totally right.

Bob.

bobwest 

Too late. I get sucked in so easily.... Exactly right. Hard to remember, but totally right. Bob.

I laughed at that.. I'll try to make my next disclaimer bobwest-proof.

It's especially hard to remember the moment price moves against you while you're in the green. I may just walk away from my computer like I used to, and just let price do it's thing. Me watching price isn't going to net me a winning trade anyways.

Anyways.. It's almost time! Get ready @bobwest!

The first half hour of the trading day since the open was relatively weak in terms of volume. Price bounced off of 3005.50 but exhausted quickly, which set the stage for price discovery to the downside. By ~10:10, price showed bearish strength and was steadily approaching 3000. At this point in time, after I recognized the true potential for a bearish move, I checked the daily chart to see if it was still sane to go long at my established good entry prices. In my eyes it was, but as mentioned earlier- if price passed 3000, there's no way I'd go long. So, price was quickly approaching my very best entry price, and I had to make up my mind if I was going to enter or not. I was scanning the OrderFlow to see signs of exhaustion, and I perceived that there was after we bounced off of 3000.50 (notice the decreasing negative delta around my entry). I waited for more confirmation after seeing that, because I wanted to see heavy buying around that price level. I didn't see exactly what I wanted, but the information risk was increasing (am I using that term correctly? lol) so I entered at 3001.25 with a 2 point stop, and quickly got stopped out by a down-tick or two that probably triggered other stop losses:



-2.5 points

I ended up losing 10 ticks, but my stop loss was 8 ticks. Can anyone explain that one to me? (Yes- I'm absolutely sure that my stop loss was 8 ticks).

I find that losing while having done everything I was supposed to feels much, much better than winning by violating my own rules. That's not to say that this loss felt good, but I feel great knowing that I stuck to my plan, I executed near my best entry price (I could've entered earlier, but then again- that's a little unrealistic), and I had every intention of staying in the trade because I was relatively calm. Overall, I performed well, but I do feel naive because I bought today.

The kicker is, had I of let my last 2 winners run to their pre-determined profit target, I would be up on the week. This lost wiped out yesterdays and Mondays gains (only 6 ticks and total), and my 5 tick win sometime last week. What a perfect lesson.

What I did well:
- I stuck to my plan.
- I executed on my best entry price.
- I was calm and collected when I entered.
- I didn't bail out of the trade (to be fair, I wasn't in it for long at all).

What I did poorly:
- I want to say that I could've been more impartial in my real-time analysis / could have been more cautious. Part of me certainly did acknowledge the bearish strength and thought it wasn't the best idea to enter, but I didn't want to go against my plan and the OrderFlow looked good at the time.

What I need to do:
- Copy my behavior from today, and be more cautious of trading against the start of a trend like this in the future.


Also, I want to clarify how much money I'm working with here to put this into perspective. My funds still haven't settled yet, but when they do, I'll have ~$3097 to trade with. 1% of that is obviously $30.97, and today I only lost $12.50. That's not even a 1% loss! I have plenty of room for a future drawdown, and knowing that makes executing my trades a lot easier. I'm being very conservative with my trades and my risk, and I intend to be forever. It seems I have to force myself to remember this while in a trade that could potentially net me 3:1 or even 5:1.

In the grand scheme of things, I really have nothing to lose. I've realized that when I get too serious about trading, I get expectations of myself, and I try hard to no avail. All I have to do is remember this to deter it, and execute my edge every time it presents itself. I will continue to carry this mindset and train of thought into my live trading.

Zachary Standley 

I ended up losing 10 ticks, but my stop loss was 8 ticks. Can anyone explain that one to me? (Yes- I'm absolutely sure that my stop loss was 8 ticks).

Sure. Slippage.

You're trading live, right? Your stop, when hit, is a market order, in this case a sell, which is what you want -- it guarantees a fill, but not a fill price. The price depends on the orders on the other side that can be matched against it, and on your place in the queue. There weren't enough buy orders at your price, after the other sells that were matched ahead of you, for you to get a match. So when price ratcheted down a tick, then another, suddenly you were able to get a match and got out.

In sim, this may not happen, or not much anyway. Sometimes in sim you get an instant fill on stops and regular market orders. Some simulators are deliberately programmed to more or less randomly duplicate the live-market behavior so they will be more realistic. But in real trading you don't get a fill unless there is someone else actually there to take the other side, and there may or may not be, taking into account that you're in a queue and that traders ahead of you will be filled first.

Welcome to live trading.

Bob.

bobwest 

Sure. Slippage. You're trading live, right? Your stop, when hit, is a market order, in this case a sell, which is what you want -- it guarantees a fill, but not a fill price. The price depends on the orders on the other side that can be matched against it, and on your place in the queue. There weren't enough buy orders at your price, after the other sells that were matched ahead of you, for you to get a match. So when price ratcheted down a tick, then another, suddenly you were able to get a match and got out. In sim, this may not happen, or not much anyway. Sometimes in sim you get an instant fill on stops and regular market orders. Some simulators are deliberately programmed to more or less randomly duplicate the live-market behavior so they will be more realistic. But in real trading you don't get a fill unless there is someone else actually there to take the other side, and there may or may not be, taking into account that you're in a queue and that traders ahead of you will be filled first. Welcome to live trading. Bob.

Yeah I haven't experienced that before, I mean I've had a tick of slippage.. But two ticks of slippage?! Anyways, thanks for the explanation Bob, I'm familiar with the concept and mechanics but thought I was missing something at the time of writing.