Quoting 

I hope that the market remains consistently in this behavior for the next few hours

Generally in my opinion, if you start "hoping" you are on the wrong track. It is a good measurement to notice that something is wrong, so if you realized that, you made something positive out of the day!

Quoting 

I have to add a rule to get out at a maximum drawdown for the day and not trade. My emotions were running wild at 6 ticks down and this was just the start.

If you get emotional on your losses, i would suggest trying to find a risk value that does not hurt and start with that to evaluate your system. For example, we are playing our new swing system with only 0,3% of total equity for risk, because we know that we can easily tolerate a loss of about $400 per trade. Try to find a value where you can easily tolerate the pain of a loss, so you can be more objective about your system (if you get too emotional, you may even screw a good system and will never know if it actually works). If you feel confidence growing, increase your risk step by step as long as you feel no difference when taking a loss (if you do, get back to smaller amount).

Another thing i would consider is adding a rule to reverse your position if you feel your current view of the market may be wrong.

Thanks for the advice. The emotion is more relevant to the competitiveness of it... So losing six ticks after making twenty in the week is like giving back an awesome lead in a long race. This is only on sim too but I found in my previous trading system that losing money didn't bother me. I would make it back either trading or selling some software every time.

I am wondering how to incorporate rules into this sort of discretionary trading. If a profitable trading system is completely objective, then it an be coded, and probably already is coded, and running more efficiently then I could. I spent three years with 3R this, risk = x% capital etc and it wasn't working for me. When I spoke with a prop firm about a job they said to forget everything about my objective swing trading rules which was a shock. So I am approaching this as trading is a skill to be learned, just like tennis, or chess. Playing these games like a computer is never going to beat the computer version... Unless its set to easy mode . So currently a losing day, or trade, is like losing a round of boxing on the Wii, or a grueling match of tennis. I enjoy this new aspect to trading as it makes it real. I read lots of books that say emotions should not be present for successful trading.... But then read about very successful traders who have standby keyboards for there daily outburst incase it involves smashing a keyboard.

Just a ramble I know... I guess my point is I would be just as frustrated losing $400 as $4000.... Probably more on the 400. If I were to lose 4k a few times I would be forced out of the game and probably go on a holiday. Today to combat the emotion I did my usual hour meditation right before the trading session which helped. It was obvious after my first loss that I was trying to revenge trade so I stood up and looked at the ocean for a minute, took a few breaths, and got on with it and made some good trades. But the bots beat me in the end in today's market.

Quoting 

I am wondering how to incorporate rules into this sort of discretionary trading.

As with everything i say, i am not sure if it works for you, but thats the way it worked for us so far:

We have strict swing rules that define the follwing:
1) how much R to risk and the initial stop (this one is a bit discretionary if the system fails to see the correct support) "cut your losses short, know your risk"
2) when to get break even (+ small profit for costs) "you can reenter anytime when wipsawed"
3) when to take 2R for sure "it is actually enough to reach our target of 8R, but..."
4) when to trail and how "...let your winners run"

To accept a trade as potential tradeable
5) 2,5 R must be given as potential to next resistance
6) volatility must be in a certain range to ensure more or less equal position sizing on total money

the discretionary part is:
1) what stocks to trade from the list of potential ones ("gut instinct")
2) if the overall market is right to use the system

I have coded the system pure mechanical (so it takes every potential trade), but it never reached the performance we have with the discretionary part, so we decided to have the entry generally discretionary, but afterwards everything is rule based so we can easily follow our strategies without emotional interference.

So i think what could be the key is to find the parts in your discretionary trading that interfere most with your emotions and make them rule based, keep from the discretionary part whatever works and feels good. Most likely the exit is the most critical part, so i suggest focus on that one first.

grahamg 

Maybe this is what is talked about as 'not a day trader day'. But my lack of skills is the more likely factor here.

Wed and Thursday seemed tough for me too. CNBC reported "volume" was coming back into the markets. So I would assume a lot of the HFT and firms were back to run stops and fool retailers with whiplash. Some of my setups were certainly faked out. For example it's very hard to read price action on the CL on minute charts these days. So many spikes and action occurring intrabar.

Looking at your chart, I assume you're using DOM tape for your setups? I'm a complete novice on that style of trading and am just beginning to learn about it. But maybe it would be good to learn about price action and observing candlesticks. Just saying it's been said some experienced traders usually have at least a secondary working method to fall back on in case the first method is going through a period of difficult trading. I would recommend Corey Rosenbloom's recent webinar on futures.io (formerly BMT) and Al Brook's material.

I've added a markup of part of your chart illustrating some of Al Brook's price action ideas on your bare chart. Personally I find it easier to trade with extra indicators but many try to trade Brooks PA similar to his style of a bare chart with a single 20/21 EMA moving average. Vince Virgil's "CL Trades lite" and "Cl Trades" journals and videos show examples of his take on BPA. Good luck.

Hey @Cloudy!

Thanks a lot for this work (markup of chart). I watched Brooks webinar last week and certainly am interested in researching price action further. Your bit of work has convinced me its worth a shot. I will probably add it as a Round of 6 weeks.

Right now I am purely scalping off the DOM - using Jigsaw. My entry points are based mainly off obvious steps in the profile on the DOM - ie obvious changes in volume traded between different price levels. This I suppose is my 'edge' assuming I read it well. If size trades at these steps and my feel for the order flow suggests a breakout then I try to scalp a few ticks. I guess in theory it should match up reasonably well with the S/R levels identified by price action also as steps in the profile would naturally exist at significant Support / Resistance levels.

On price action I nearly bought the priceactionroom courses - any thoughts on this material? Is Price Action .. Price Action? ie Set rules - or is it Al Brooks / FuturesTrader71 independent you think?

Cheers.

Graham

Hi Grahamg!,

Your welcome. Glad my markup seemed helpful to you. I haven't seen the "priceactionroom"'s material yet. I'll try their free weekly update videos newsletter to see what I think about it. I think the main thing about BPA (Brook's price action) is that it provides a structure to the price behavior. Once you get used to the various patterns and observe the varying candlesticks. It's kind of like learning the general "traffic rules" or "flow of traffic" of the price road but in a generalized way which can also help with the uncertainty in trading. At least one can recognize on some familiar level what price is doing rather than discerning no pattern at all i.e. "a random walk".

Here's a link to the publisher's website of Al's books. Each page has some viewable excerpts:
Wiley: Search Results

Also some free files from Brook's website:

introductory trading videos Free downloads from Al Brooks website. "intro_BPA.zip" - two powerpoint slideshows. One is for an older futures.io (formerly BMT) Brooks webinar. "BrooksQuotesExcerpts.doc" - summary notes of the original book and other material …

And Al has done about 4 webinars on nexusfi.com (formerly BMT) which are available here on nexusfi.com (formerly BMT) in the elite area, or on the nexusfi.com (formerly BMT) youtube channel:
BigMikeTrading's channel - YouTube

I don't think FT71 covers price action the way Al does. In fact I think the recent nexusfi.com (formerly BMT) webinar by Corey Rosenbloom covers a simple and fine opening range strategy too. Yes, there are varying methodologies on price action. Brook's is highly recognized here, and I like his material personally because it covers a lot more interactive thinking examples and charts in the books. However, I don't trade exactly like Al does. It's very hard to trade exactly like him for many. I use a combo of dual MA's , candlestick analysis and some Brook's patterns as seen in my old journal. (recent example here:

Crosswind trading journal Got bored at late nite and did some scalping on the 6E. Someone posted this JAM "auto trendline" indicator on the boards somewhere. I think it draws recent trendlines very nicely.

)But being aware of the structure plus using another methodology can help combine into a better confirmed trade imo and it was significant step in my personal learning journey. For example maybe you can use your skill with the jigsaw DOM to see if the tape behavior coincides significantly with a Brook's entry or current price sentiment or vice versa.

Today I started out alright but got cut up in some chop after 9.30 AM. I was aware that it was a holiday in the US and that there was a good chance that markets across the board would be slow. The Bund and Bobl certainly represented this theory well. Since I have decided not go live this week after some serious lessons at the end of last week I figured I would try the experience of trading the market anyway. I have a good nack of making SIM trading feel real as I get really competitive with it. This is mainly as I am mentally committed to the 6 week trial and want nothing more than to know I can make the bread and butter off a couple of hours trading each evening at the end of the six weeks - how sweet that would be!

The volume was dramatically less than previous days and behavior that of back and forth slowly in a down trend. Not easy to read. After I got chopped up I called it quits at 7 ticks down. Not sure if I would have made money in the subsequent moves anyway as the sort of things I were looking for were just not there - ie icebergs, size, any sort of flow.

For anyone reading I daily review my trading (now with Camtasia). Spend at least an hour or two practicing ideal setups using Ninjatrader Market Replay as represented by John Grady in his September webinar. Read a couple chapters of Brett Steenbergers Enhancing Trader Performance. Also I am working on my audio trading ladder if anyone noticed that example video.

Enjoyment: 6/10
Trading: 6/10

Couple of good trades. I identified the ideal setup I had practiced all day and missed it - well missed the signs to reverse position. More practice?

The ZEW (?) announcement really shook up the market at 11AM. Not to self - don't trade these yet... until the market has slowed down afterwards. I haven't seen an out and out assault panic sell off while watching the DOM yet like yesterdays. It wasn't as large a range day as I have seen - but the market plunged with orders hitting the market anywhere within what looked like an 8 tick range.

Enjoyment: 7/10
Trading: 7/10 (Before I blew up at the announcement. I would not have taken these trades after 11am if it was real $.. hmmmmm.. am I getting too used to SIM?)

So these Eurex trading sessions are starting to become habit and my trading does not seem to be going in any direction. I take some good trades and think I can do it, then take some bad trades (technically bad) lose a bunch and start from square one, BUT motivated to get back in the black. Unfortunately by this time the market has usually quietened down and i get cut up in the process.

The obvious thing is to master the setups that I got in the flow with during the first 2-3 hours of trading, cut back on the silly trades and take the most out of the good ones. Reviewing the last three trading sessions today should help me with that. For the setups and feel for the order flow I am finding that the market only really gets going 9AM Eurex time, and may run for 2 hours after that. After this time I start making more mistakes and / or the order flow has gotten harder to read (for me), unless some important numbers come out.

I am becoming more aware of how I get caught up in the speed / movement of prices instead of watching for players show there hand when trading size and jumping on board. Most of my losing trades fall into the category of trying to catch the train after it already left, followed by jumping in front of the train a bit early. Reversals generally take time to play out with multiple tests of the new levels on lighter volume... or so I've been told and partially noticed.

Going to get out of the habit of gambling on SIM mode after I have mentally called it quits for the session, but want to have a poke to see if somethings works. This can't be productive one way or the other. If I make money on these hit or miss trades I will be reinforcing bad habits. If I cop a hit, I shrug it off as a trade I wouldn't have taken. Starting to think seriously of trading one lots instead of SIM. I have the next No BS webinar starting next week so will wait until after that.

Trading this last session I had some good trades, and should have held on a second longer for what was a great move. Then took an impulse trade and lost most of it. Ended up with -1 ticks.

Enjoyment: 8/10
Trading: 7/10

Bund Trades:


Bobl Trades:



BTW I have been recording each session as of Monday. If anyone with experience in this style of trading and wouldn't mind having a look at my tactics let me know and will gladly send you.

grahamg 

Going to get out of the habit of gambling on SIM mode after I have mentally called it quits for the session, but want to have a poke to see if somethings works. This can't be productive one way or the other. If I make money on these hit or miss trades I will be reinforcing bad habits.

Following your thread and thought I'd chime in. You've got a good thing here, in that you have already identified the issue 'I will be reinforcing bad habits'. Next step is - what is your plan to stop this pattern of behaviour?