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WTF? That's what happens when you go AWOL or impersonate an officer. And they aren't "your" rules to follow. And the P/L is none of your business...it's above your pay grade. Focus man.
Mission Plan: 2013.03.19.240-260 Theater of Operation: Echo Sierra Mike 3
30 mikes to open...
Getting head sterile...starting pre-mission prep...
Pre-Open Recon Overnight range remained inside of yesterday's RTH range. Friday's naked close is just above yesterday's double top high and well within striking range.
Entry level for current [Core] setup is 4 ticks above yesterday's close, which will likely be tested. This puts my stop in jeopardy. This, as well as current [COS3] conditions will have me avoiding this setup, should it occur.
10 mikes to open...
08:20 T-Minus 10 mikes...ear buds in and metal flowing...focused and on alert...data connection strong and feed streaming...DOM re-checked and hot...ready for engagement...
Initiating [COS3]
08:40 [COS3] rule in effect.
Sortie #240
08:45 Short on [CRev3] setup.
My call was completely wrong.
08:50 No Joy. -10 ticks.
Stand by and prep for re-tasking.
Sortie #241
08:56 Long on [Core] setup.
09:08 Within 1 tick of stop.
09:24 No Joy. -10 ticks.
Stand by and prep for re-tasking.
Initiating [COS1]
09:50 [COS1] rule in effect.
10:13 [COS1] saved me from a losing [Core] setup.
Sitrep
10:14 Price has created a double bottom (09:50 and 10:04) after breaking O/N low, and testing yesterday's 14:45 swing low to the tick.
What are the chances of this double bottom being tested again and/or broken?
10:17 Working [CRev1] long orders...
Sitrep
10:26 [CRev1] has now converted to [Core] setup. Working [Core] long orders...
10:31 Price has now pierced yesterday's close and pulled back down quickly. Entry order missed by 2 ticks then price moved back up to yesterday's close.
Sortie #242
10:36 Long on [Core] setup.
****! Price is plowing through my level and now 1 tick from my stop. Irrelevant PFC! Following mission protocol is your ONLY objective right now! Just do your job and let me worry about the results!
10:47 ****! No Joy. -10 ticks.
Stand down and RTB for debrief
10:48 Loss limit reached. That's it PFC, you're done for the day. RTB and prep for AAR. And review your charts to see if there's anything that the market might have been telling you that you missed while you were engaged.
AAR
Objective: Follow mission plan with extreme prejudice.
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Outcome: Followed mission plan, but took 3 trades, 3 losers.
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Observations: My militaristic mode is back in full force. I was surprised by the slip in my attitude yesterday. And it sank in that this military thing isn't just affecting my trading. It has had a profound effect on my entire life - in a very positive way. So I won't be changing it again any time soon.
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There was a lot of good movement in ES today, but I wasn't able to stay in the game long enough to capitalize, which is something I'm thinking about addressing in my mission plan.
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Even though I'm back in my militaristic mode, I still found myself pretty bummed by my P/L today. However, within 20 minutes of my last trade, my business partner (for my other work) called and it was perfect timing. Usually I'm the one getting his head back on straight, but today it was the other way around.
We talked about what he's going through with his push to get into a certain position with the company he's started working for, and how he's completely turned his attitude around about it and started making significant progress. So he gave me a good kick in the butt and I'm more focused on my objectives than ever.
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One way or another, I will prevail.
"Is it hard? Not if you have the right attitude. It's having the right attitude that's hard." - Robert Pirsig
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Mission Plan: 2013.03.19.240-260 Theater of Operation: Echo Sierra Mike 3
15 mikes to open...
Head is not quite on straight today...starting pre-mission prep...
Sitrep
08:34 Echo Sierra has tested/pierced O/N high, but 03/15 close is a little farther up and still naked. Working [Core] long.
08:35 Entry price hit, but not exceeded by 1 tick to hit my MIT order.
08:39 Entry missed by 1 tick and has reached target. Trade is over, orders canceled.
Initiating [COS1]
08:43 [COS1] rule in effect.
08:48 [COS1] saved me from a losing [Core] entry.
Sortie #243
08:55 Short on [CRev1] setup.
09:00 Tango 1 reached. +6 ticks.
09:02 B/E stop for Lot 2. -0 ticks.
Prep for re-tasking and next sortie.
Sitrep
09:14 The B/E stop for Lot 2 saved me from a full stop out. I also barely got my Target 1 profit - I can see that I'm fighting an upward bias.
Sitrep
09:39 I was wrong about the upward bias. In fact my original Lot 2 stop would have been hit to the tick before price moved back down to T2.
Sortie #244
09:48 Short on [Core] setup.
09:58 Within 1 tick of my stop.
09:59 No Joy. -10 ticks.
Prep for re-tasking and next sortie.
Sitrep
10:00 Wrong again. There apparently is an upward bias.
Standing by...
10:30 I'll be standing aside now until after FOMC minutes are released.
Sitrep
13:01 The stop for my last trade was only exceeded by 1 tick before price turned back around to reach T1.
Sortie #245
13:34 Long on [Core] setup.
13:48 T1 level hit but not exceeded to reach my MIT exit order.
14:00 No Joy. -10 ticks.
Prep for re-tasking and next sortie.
Mission complete. RTB for AAR.
14:30 New entry cut-off time. Finished for the day.
AAR
Objective: Follow mission plan with extreme prejudice.
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Outcome: Followed plan including stopping at 10:30CT to wait for FOMC at 13:00CT.
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Observations: First a personal observation: As I'm writing this I realize that I've broken my diet and I'm eating some junk chips. That's my M.O. when I'm uptight or stressed. So now that I realize it I'll address it this afternoon.
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The next observation is about the market lately and my method. I haven't changed the core premise of my method since the beginning of this exercise, but I'm getting ready to now.
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My method was designed to give me a direction (long or short) and a specific entry level. It hasn't been working too well lately, and honestly I'm surprised it worked at all, but it has served its purpose with flying colors.
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In the same way that through the course of trading a really bad idea I came up with the one I've been using, during the course of this exercise so far I've begun to see things that may be superior to what I've been doing. And I think it's time to begin working with those things.
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This second phase of my training is centered on learning how to deal with being wrong and missing out and that theme will continue as I develop my new approach.
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This change is a little abrupt, but I still have "credit" for several sample-sizes where I didn't make any changes to my method.
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I'm just getting started with the alterations to my trading plan, but I believe that the only thing that is going to change at this point is my entry/trade selection - my risk and trade management should remain the same for now.
"Is it hard? Not if you have the right attitude. It's having the right attitude that's hard." - Robert Pirsig
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Mission Plan: 2013.03.21.246-266 Theater of Operation: Echo Sierra Mike 3
On deck early
05:38 At my desk early to work on my new Mission Plan.
Rest day from normal morning workout.
Ate too much junk yesterday so I'm fasting for 36 hours to let my body do some natural cleansing.
Pre-Open Recon
08:10 ES appears to have a downward bias this morning. O/N has broken below yesterday's range, pulled back up to falling EMA's and is pushing down again to break O/N lows.
Sortie #246
08:42 Long on reversal after test of s/r.
08:47 Lot 1 reached target. +6 ticks.
08:49 Lot 2 stop to b/e.
Sortie #247
09:21 Long. First time I've ever had a split fill. Stop for both lots is set for higher fill price. T1 is set for lower fill price, T2 is set for higher fill price.
09:29 Lot 1 reached target. +6 ticks.
09:38 B/E stop for lot 2. -0 ticks.
09:46 Price pulled back to exceed B/E stop by 2 ticks (but didn't exceed original stop level) and then turned around to hit T2.
Prep for re-tasking and next sortie.
No fill
09:56 Attempted to get long with an MIT order 1 tick below my level. Price touched my level several times, but never came down to touch my MIT order.
Sortie #248
10:01 Long. Price eventually did come back down to hit my MIT order.
10:07 Lot 1 reached target. +6 ticks.
10:13 B/E stop for lot 2. +1 tick (1 tick positive slippage).
10:40 Price pulled back to hit B/E stop to the tick and then turned around to hit T2.
Prep for re-tasking and next sortie.
Sortie #249
11:28 Long.
11:57 My T1 level was touched but not exceeded by 1 tick to hit my MIT order, so I'm still long 2 lots as price pulls back to my entry.
12:01 Price stabbed down to retest/pierce my entry level and create a micro double bottom. I'm thinking that it will be broken and I'm going to be stopped out of this trade.
12:15 No Joy. -8 ticks (1 tick positive slippage per contract).
Micro double bottom was indeed broken.
Prep for re-tasking and next sortie.
SitRep
12:55 Price has created a micro double top at 03/19 close. Will this double top be broken? However, it has created a micro double bottom as well.
13:00 Double bottom was broken - in the direction of the prevailing intraday trend.
Sortie #250
13:13 Short.
13:13 No Joy. -12 ticks (1 tick negative slippage per contract).
Prep for re-tasking and next sortie.
SitRep
13:44 Working a buy order since 13:15. Price spiked down to within 2 ticks of my order (1 tick of my actual entry level), but then resumed the micro uptrend.
Sortie #251
14:16 Long.
14:17 No Joy. -10 ticks.
My entry levels are not appropriate and are just getting plowed through.
Prep for re-tasking and next sortie.
Stand down and RTB for debrief
14:18 Rolling loss limit reached.
RTB and prep for AAR.
AAR
Objective: Follow mission plan with extreme prejudice.
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Outcome: My mission plan was very loose today and so following it wasn't too difficult.
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I had my first split entry fill ever today. I'm going to have to reconfigure my trade spreadsheet in order to log the entry price of each lot individually (I don't want to use "average prices").
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My breakeven stop for Lot 2 is costing me a lot of potential profits. I'll probably be eliminating it after today's trading. In fact it is plain to see that even though I only had 50% winners today, I would have been up +20 ticks if I had had those T2 winners.
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Observations: 5 of my 6 trades today were against the macro trend.
It is very likely that I will be taking tomorrow off from trading as I've begun some intensive study.
"Is it hard? Not if you have the right attitude. It's having the right attitude that's hard." - Robert Pirsig
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Mission Plan: Transition to, and get my feet wet with, 6E/M6E. Theater of Operation: Mike Six Echo Mike Three
On deck early again today
05:43 At my desk early to resume my studies and contemplate some major changes to my training program. I'll be doing some trading in a new market today.
Other than the minor feeling of wanting to chew on something, I'm feeling no hunger so far on my fast. This tells me that my body is not screaming for food and that it is still in cleanse mode. Therefore, I'll be continuing the fast tentatively until dinner tonight.
I don't work out or do strenuous physical things while I'm fasting, so today is another rest day from my normal morning workout.
Sortie #252
10:29 Short (M6E) after test of spike that occurred around 09:15-09:25, and a long upper tail on the current (entry) bar.
10:38 Lot 1 target reached. +10 pips.
11:00 I liked the way price pulled back toward the high and then came back down to 50% creating a triple bottom and I thought that price would try to break it, and if it did it might run a little. So I moved my target from 50% to a hard 20-tick target.
11:06 Stop for Lot 2 moved to BE.
11:07 Lot 2 target reached. +19 pips (1 pip negative slippage).
Prep for re-tasking and next sortie.
Sortie #253
11:10 ERROR Long. Got distracted and forgot I had a protective buy stop order still in (I hadn't set up OCO orders yet). Price spiked up (I'm not used to Euro action yet) hit my order and fell hard. I got out at the market as soon as I realized what had happened.
11:11 Emergency extraction. -11 pips.
Prep for re-tasking and next sortie.
Sortie #254
11:56 Short.
13:00 Lot 1 target reached. +10 pips.
13:52 Getting late. Moved T2 to BE.
13:54 Out BE on Lot 2. -0 pips.
Mission complete. RTB for AAR.
13:59 Finished for the day.
SitRep
15:10 Glad I got out. 6E took off to retest the climax high from this morning.
AAR
Objective: Start transition to M6E (Micro 6E - Euro FX futures). I'll discuss this in tomorrow's post.
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Outcome: Started getting an idea about what charts I'm going to use and how I'm going to go about this. I took 3 trades (1 was an order error) and came out with a gross profit of 28 pips.
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Observations: M6E/6E is different than ES and it will take some time to get used to it.
"Is it hard? Not if you have the right attitude. It's having the right attitude that's hard." - Robert Pirsig
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I was less than focused on my actual trading for much of this week, and more focused on the future of this exercise and ultimately the job that I'm trying to create for myself as a trader.
The reason is because I've started coming to a realization about one very important aspect of my trading, and until Friday I hadn't determined how I was going to deal with it. I'll discuss my solution later in this post.
On Monday afternoon I was fortunate to have a good friend (and my current business partner) give me a kick in the pants to help get me refocused on my goals and objectives and that pushed me to get even more "real" with myself about what I'm facing ahead.
A look at the stats
I exceeded 250 trades in the ES during the course of this exercise. That's far more than I ever thought I would be taking just for an "exercise."
I actually have to laugh to myself a little. With the exception of the very first trade in this exercise, my expectancy, although not good, was never negative. That to me is pretty amazing given that what I used was a ridiculously simple and non-backtested way of entering the market. I'll have the expectancy chart for M6E here next week.
I'm porting my trade log spreadsheet to work with pips and I'm modifying a few things for efficiency, so my stats grid looks a little different now. All the stats will be fresh for the new market. I will however continue to count the number of trades I'm taking during this exercise and label them accordingly (as I did on Friday):
The main objective for this entire exercise so far has been to learn how to behave in a consistently appropriate way so that I can develop complete trust in myself to always act in my own best interests.
With that in mind, I'm making a change in the instrument I'm going to be trading. This change is another important step in acting in my own best interests.
During the course of this exercise I've uncovered some misconceptions that I held about what trading is and isn't.
One of those misconceptions regards the amount of risk capital I have to work with versus the amount of risk I've been taking on each trade. And I realize now how skewed those numbers are...against me.
I want to make money. I want to make enough to live on and to pay the bills. But that has nothing to do with trading wisely and working within the constraints of the amount of risk capital I currently have available to use. I'm realizing that a 2-contract position in the ES is really too much per-trade risk for me in relation to my account size right now - especially while I'm still learning.
This has also had a deleterious effect on the mechanics of my trading. Because I've been trying to minimize the losses on each trade, I have been using stops that are really too small for the market I've been trading.
I've been risking about 2.5% on each trade and I used to think that that was a very small amount, but this exercise has given me a much different perspective.
I was talking about it with a trader friend yesterday and he told me that he recently had 9 losers in a row. It doesn't happen often, but it does happen. And he commented that if he had been risking as much as I have been on each trade he would have had a very hard time dealing with a string of losses that big - and he's been trading for a living for years and years.
And FT71 says he believes that under-capitalization is one of the biggest reasons traders fail. They don't have enough capital in relation to how they're trading in order to survive long enough to work through the necessary learning curve.
I need to be wise about how I use the capital that I have. Because I see the importance of this now, I'll be addressing it by starting to trade a market with a much smaller per-tick value. This market will have much less liquidity but that won't be a huge problem for me because I'll still only be trading 2 contracts at a time to begin with.
Continuing to "know my place"
Moving to this "smaller" market is another example of "knowing my place."
This is going to be somewhat difficult for me to deal with emotionally, because it means that I'm that much farther away from "making a living" from my trading. But it is what I need to do as opposed to what I want to do.
This is just another step in my evolution as a trader, and to skip it would be to invite disaster and the very good chance that I would put myself out of the game altogether, without giving myself a fighting chance.
This is also a tactical move with regard to going live. This market will give me a much better way to transition to live trading when I'm ready.
Some numbers
With a tiny $10,000 account, and a "small" risk of only 2.5% of the initial balance ($250) on each trade, 9 losing trades in a row (as discussed above) would put one down $2,250 which is a whopping 22.5% of the initial account. It would only take a few days of that to put a trader out of business - and those days wouldn't even have to be consecutive.
Not only would it be hard on the account, but there is little doubt that the emotional toll would be even greater, and would likely lead to inappropriate behavior. The friend I mentioned above wrote a post about this a few years ago that helps make the point: 8 Days of Pain. I've read it more than once along with all of his other risk-oriented posts, but obviously I haven't really taken them to heart.
I see the extraordinary importance of proper risk sizing on each trade now. I'll be adjusting my trading to risk only 0.5% of my account on each trade.
The early stages of Phase 2
I'm still in the very early stages of Phase 2 as well, so I'm in the process of developing rules to follow even though I'm making subjective decisions. I expect these rules to evolve quickly and change often at the beginning and until I get a better idea of how I'll be operating.
Some final thoughts
As with everything else I've done during this exercise, I don't know for sure how well this will turn out, but I believe these are the best moves for me right now even though I don't really like them that much.
Because of the hours of the FX markets, I'm going to have to do some rearranging of my schedule in order to start work earlier in the morning. It may have to be gradual in order to get used to it.
Although I was initially a little bummed about the idea of stepping down to a much "smaller" market, I'm becoming a little excited now, because it means that I'm probably closer to going live than I was before.
And for some reason the more reasonable numbers I'm looking at now are making this all seem a little more "real."
"Is it hard? Not if you have the right attitude. It's having the right attitude that's hard." - Robert Pirsig
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@AttitudeTrader been following the journal for a while and I admire your disciplined approach. I've been trading the M6E live for 6 months and I just wanted to give you some heads up on SIM trading the M6E.
- The volume traded on the M6E is very low, however the depth and spread is decent if you are trading 1-3 contracts.
- The M6E will run through levels without being traded. This will skew your fills on SIM and makes live stops tricky because they aren't triggered until a trade occurs at or beyond the stop
- Charting the M6E is useless IMO. Chart the 6E, and trade the M6E.
- The spreads are decent: 1-2 ticks 90% of the time during the full London session.
- Commissions can kill you. Relatively speaking, they are 4-6 X the 6E
Good luck on phase 2, and hope to see you in the chat box during London open
I really appreciate the input @Xav1029 , because I had questions about some of those things, although I'm already using 6E for my charting.
And I appreciate the chat box invite, but 1) for now I'm really trying to stay "dark" during my session to reduce distraction and outside influence, and 2) I'm not quite ready to be up and trading at the London open yet! I've been working my way into earlier wake-ups, but I still have a ways to go.
Talk to you soon and thanks again for the info.
-AT
"Is it hard? Not if you have the right attitude. It's having the right attitude that's hard." - Robert Pirsig
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Mission Plan: 2013.03.25.255-265 Theater of Operation: Mike Six Echo Mike Three
30 mikes to open...
06:50 Starting pre-mission prep...
Sortie #255
09:05 Long. 1 tick negative slippage (per contract) on entry.
Tried to catch a bottom in a strong downtrend. Knew it was a risky entry after I was in, but I need to let my trades play out in order to learn. More importantly, I didn't feel a lot of regret or upset about taking what I thought might be a poor entry.
09:23 No Joy. -22 ticks.
Prep for re-tasking and next sortie.
Sortie #256
09:26 Short. 1 tick negative slippage (per contract) on entry.
09:41 Lot 1 target reached. +10 ticks.
09:43 Lot 2 target reached. +19 ticks. 1 tick negative slippage on exit.
Prep for re-tasking and next sortie.
Sortie #257
11:16 Long.
11:31 No Joy. -22 ticks. 1 tick negative slippage on exit.
Prep for re-tasking and next sortie.
Sortie #258
11:52 Short. 2 ticks negative slippage (per contract) on entry.
11:55 Lot 1 target reached. +10 ticks.
12:03 Stop moved to BE after 15 ticks MFE on Lot #2.
12:10 Price moved to within 2 ticks of my BE stop.
12:14 Lot 2 target reached. +20 ticks.
Mission complete. RTB for AAR.
13:00 New entry cut-off time. Finished for the day.
AAR
Objective: Follow mission plan with extreme prejudice.
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Outcome: I was a little slow getting my first trade on this morning because this is a new market for me and I'm starting out with very loose discretionary rules until I can start to develop more structure.
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However, I followed the rules that I do have without deviation. Once my trade was on I didn't make any changes to my stops other than the automatic move of my Lot 2 stop to breakeven, and I kept my hard targets in place regardless of what I thought price might do.
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Observations: Not used to a market that trends so much.
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I used to have a habit (when I was trading in a very discretionary way like I'm am now) of changing my targets after a few losing trades in order to try to make up for my losses, but today I realized that I wasn't even thinking about doing that anymore.
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Because the London open is well before I'm getting up right now, I realize that I'm going to have to make a specific starting time for myself so I won't get anxious about what I'm missing because the session is already underway. I'm working on getting up earlier, but for the time being I'll be trading the RTH session of M6E/6E which starts at 07:20CT - a little more than an hour earlier than I've been used to starting. My morning routine is out of whack now though, so I'll have to get it reorganized and back to consistency.
Regarding M6E
I've had some questions about why I'm using M6E instead of something like YM or NQ due to liquidity and cost issues.
I'm well aware of the differences in liquidity - especially after today's session, but this isn't just about going from ES at $12.50/tick to NQ or YM at $5.00/tick. Yes, NQ and YM are smaller tick values, however, if I'm trading a very small account and I want to risk only 0.5% on each trade, then NQ and YM are still "too big."
On a $10K account, 0.5% risk per trade is $50. That's only 10 ticks in NQ/YM, and if I'm trying to trade 2 contracts at a time, that's only 5 ticks of working room per contract. A 5 tick stop is not viable for the vast majority of trades in those markets.
I experienced the "cost to do business" issues related to M6E today (I had 15 ticks gross profit, but still had a losing day), but I'll talk about that another time.
** Edit **
I found an error in my spreadsheet, and it turns out that I actually did make a profit today!
Charts?!
I haven't posted any charts up to this point because where I was entering/exiting was irrelevant. It was irrelevant because I was using a very strict "setup" for entries and there wasn't really much to learn from it other than the objective at the time which was to act in a consistent way.
However, in this new "Phase 2" of my training (which is about learning how to deal with being wrong and missing out), my entries and exits are important. I'm making subjective decisions now, and I need to start learning from those decisions.
As a result I'm considering posting my charts for the sake of consistency. I've always tried to use chart time frames that were different than what others were using in an attempt to get an edge (I guess) or see things "differently," and constantly changing them to see the things I missed on another chart. But I'm learning/realizing that that really isn't necessary.
There's nothing wrong with using a simple 5-minute (M5) chart, so part of my exercise will be to consistently use this M5 chart and become very good with it. I'll have the opportunity to change it at the end of a sample size if I deem it necessary.
I have only one other chart with the exact same settings that I use for M15 and M30 time frames in order to mark more distant support/resistance levels.
I don't want to over-clutter these posts, so I'm reluctant to post charts every day, but I'll try it out and see how it goes for now.
My reasons for entries are on the chart itself. My targets right now are hard and they don't move.
"Is it hard? Not if you have the right attitude. It's having the right attitude that's hard." - Robert Pirsig
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