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McJackson's Journal - developing healthier trading processes + mindset


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McJackson's Journal - developing healthier trading processes + mindset

  #21 (permalink)
 
mcjackson's Avatar
 mcjackson 
Colorado Springs, CO
 
Experience: Intermediate
Platform: Ninjatrader
Broker: Ninjatrader
Trading: NQ
Posts: 40 since Mar 2014
Thanks Given: 77
Thanks Received: 147

Hello folks! Almost 6 months since my last post.

I connected pretty much every major issue I've had to not having a daily loss limit. Or, being really bad about sticking to it .

Over the last few months, I stopped fighting my nerves and just automated a very tight DLL.

On my personal account, that just meant emailing NinjaTrader and asking them to set it for me. Easy.

On Topstep, that was a little trickier. You've got to dive into R Trader's settings and manually set up your "Auto Liquidation" level. If you're looking for it, here's how to find it:

--------------------------------------------------------------------------------

1. Log in and click "Trader Dashboard"

2. Right-click on your account name and select "View Risk Parameters"

3. You'll get to a page with 3 tabs. It defaults to the "administrator" tab, but you want the tab on the far right, "Risk Parameters set by the Trader". Click it.

4. You'll get to a blank sheet with your account name and a list of the products you're allowed to trade. Next to the account name, you'll see Auto Liquidate, Auto Liquidate Criteria, and Auto Liquidate Threshold (plus a few more options).

5. Here's what to set up:
Auto Liquidate --> Enabled
Auto Liquidate Criteria --> Loss Limit
Auto Liquidate Threshold --> (the dollar value you want to set)


----------------------------------------------------------------------------------

I know there's a prevailing opinion out there that says "well you shouldn't have to do this, you should have the self control to not hit these limits". (that's what Topstep told me)

My response is....sure, that's a great goal to shoot for. But then why do we bother with having stops on individual trades? Adding another layer of risk control isn't a bad thing, in my mind.

Hope you're all well!

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  #22 (permalink)
 
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 matthew28 
United Kingdom
 
Experience: Beginner
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Good to see you back.


mcjackson View Post
On Topstep, that was a little trickier. You've got to dive into R Trader's.....................

Just in case another TSTer reads that. It will work for Rithmic data accounts, but not CQG as R Trader is Rithmic's platform. So not possible on TST's other main platform, TSTrader.


Quoting 
I know there's a prevailing opinion out there that says "well you shouldn't have to do this, you should have the self control to not hit these limits". (that's what Topstep told me).

My response is....sure, that's a great goal to shoot for. But then why do we bother with having stops on individual trades? Adding another layer of risk control isn't a bad thing, in my mind.

I agree with your response.
If some platforms and brokers allow the user to set a DLL they should all go that way. (In TST's case a "soft" DLL that doesn't cause a sanction if hit, inside of their "hard" DLL).

You do not win as a trader, you just get to play again the next day. If that game doesn’t appeal to you then you should not trade. Gary Norden
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  #23 (permalink)
 
mcjackson's Avatar
 mcjackson 
Colorado Springs, CO
 
Experience: Intermediate
Platform: Ninjatrader
Broker: Ninjatrader
Trading: NQ
Posts: 40 since Mar 2014
Thanks Given: 77
Thanks Received: 147


Yes good point matthew28 thanks for pointing that out.

I've not used Tradovate yet but I'd imagine there's a solution there too (and also that they won't make it easy for you to find it).

I like a lot of what TST does, but this particular point feels pretty shady. If you're REALLY there to help traders succeed, you should absolutely not hide the risk controls that exist.

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  #24 (permalink)
 
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 bobwest 
Western Florida
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mcjackson View Post

Over the last few months, I stopped fighting my nerves and just automated a very tight DLL.

On my personal account, that just meant emailing NinjaTrader and asking them to set it for me. Easy.

On Topstep, that was a little trickier. You've got to dive into R Trader's settings and manually set up your "Auto Liquidation" level. If you're looking for it, here's how to find it:

...

I know there's a prevailing opinion out there that says "well you shouldn't have to do this, you should have the self control to not hit these limits". (that's what Topstep told me)

My response is....sure, that's a great goal to shoot for. But then why do we bother with having stops on individual trades? Adding another layer of risk control isn't a bad thing, in my mind.


matthew28 View Post
I agree with your response.
If some platforms and brokers allow the user to set a DLL they should all go that way. (In TST's case a "soft" DLL that doesn't cause a sanction if hit, inside of their "hard" DLL).

Good information to get out into the world.

If anyone actually has the idea that "you shouldn't have to do this, you should have the self control to not hit these limits," I disagree.

It is part of your job as a trader to manage your risk and your losses. If you do have the "self control," congratulations. If you don't, why should you not use any available solution, whether supplied by your broker, your software -- or your mother, for that matter?

I hope anyone who struggles with these kinds of problems (which is all of us at one time or another) finds a solution as simple as this one. Good work.

Bob.

When one door closes, another opens.
-- Cervantes, Don Quixote
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  #25 (permalink)
 
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 matthew28 
United Kingdom
 
Experience: Beginner
Platform: Bookmap
Broker: Stage 5, Rithmic
Trading: US Equity Index Futures
Posts: 1,250 since Sep 2013
Thanks Given: 3,500
Thanks Received: 2,532


mcjackson View Post
I've not used Tradovate yet but I'd imagine there's a solution there too.

There is an easy solution in Tradovate for DLL, along with WeeklyLL and maximum number of contracts, as the platform already has the functionality for the user to set those limits
( https://tradovate.zendesk.com/hc/en-us/articles/360035750553-How-do-I-set-a-Daily-Loss-Limit-on-my-account- )
Unfortunately @TopstepTrader have not carried those functions across in to their TSTrader labelled version of the same platform.

I know TST used to allow funded traders to apply to set their own 'soft' DLL on the TST risk management system, which if things went badly would be hit before the TST DLL, thus saving the account. I don't know if they still have that option.

You do not win as a trader, you just get to play again the next day. If that game doesn’t appeal to you then you should not trade. Gary Norden
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  #26 (permalink)
 
mcjackson's Avatar
 mcjackson 
Colorado Springs, CO
 
Experience: Intermediate
Platform: Ninjatrader
Broker: Ninjatrader
Trading: NQ
Posts: 40 since Mar 2014
Thanks Given: 77
Thanks Received: 147

I don't want to drum it up too much, but this whole thing about setting an automated DLL has really helped me over the last 6 weeks.

Since adding this automated stop out, I've:
  • slowed down in general
  • slowed down after losing trades
  • gotten back to "actual" journaling, which has literally FELT good again
  • realized how much big losing days (and blowouts on Topstep Combines) really stayed with me.
  • overall felt much more self-aware as to when I'm in sync with the market vs "off". I also feel like there's another big win waiting for me on this point, it's like I'm around the corner from really being able to identify better windows/setups/contexts (whatever you'd like to call it).

I also hit the funding goal for Topstep (for the 4th time, I believe). I have a couple of days to go before it's official, but I'm not concerned. And for the first time, I feel a little more confident about *not* blowing it right away.

I haven't been trading my personal account much over the last month or so but the couple of days that I did trade felt pretty good. For the DLL on my personal account, I just emailed NinjaTrader and asked for an automated stop out if I hit the max loss - the only difference here is that it won't automatically stop you out of a live trade once you hit your limit. Instead, it'll wait until you close a trade that takes you past your DLL, THEN it locks you out until the next day. Not a big deal, but worth noting in case you think it'll just close you out automatically.


I've got a lot more that I'd like to blabber on about, but I'll save that for a future post.

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  #27 (permalink)
 
mcjackson's Avatar
 mcjackson 
Colorado Springs, CO
 
Experience: Intermediate
Platform: Ninjatrader
Broker: Ninjatrader
Trading: NQ
Posts: 40 since Mar 2014
Thanks Given: 77
Thanks Received: 147

As usual, I make a few posts in this thread, take a "short" break.....and then almost a year flies by.

Here's an update.

The last few months have been one of my best periods as a trader. I'm currently trading a small personal account but mostly focusing on a Topstep account (however you feel about those ), which I'm currently at the "pro" stage. I've gotten here before (more times than I care to admit) - but every other time I would flame out in the first week (even the first day).

Here are a few notes about the shifts I've noticed over the last few months:

#1) Stop thinking like a swing trader.

I'm a day trader - and a short term one at that. Most trading books I've read over the years, though, talk about things from a swing trader's perspective.

The two approaches are very different and I was definitely hurting myself by trying to cram the two ways of thinking together.

For example:

-- Managing emotions is totally different. When I used to swing trade, I was taking a handful of trades every week. One loser didn't really get to me. As a day trader, I've got to be ready to potentially handle multiple losses in a row or in a session. It's a HUGE difference and I've had to implement all sorts of little safety barriers (stand up + get away from the computer, automate my daily loss limit, write out my W/L column by hand, use an emotional thermometer).

-- Stats are different. Swing traders can look at expectancy and deal with losing streaks on a trade by trade basis because it's mostly about probability. A day trader's performance is much more about risk, personal performance, etc. It's also really hard to effectively journal 20+ trades in a session - so many day traders skip the process. The fix, for me, is to start treating sessions as trades - what's my avg w/l (per session)? What's my W% (per session)? What's my expectancy (per session)?



#2) Find a niche.

Related to above - I trade the NQ at the open. My best days are done in the first half hour of the day.

This is great because:

-- I know my performance dips over the course of the day.
-- I get more time to focus on keeping a great journal.
-- I have another business.

It's also helpful because:
-- I get to focus on the same basic moves every single day.
-- I get to focus on the same basic levels every single day.

Constraints create focus, focus creates consistency.

The moves/levels I watch for are:

* What happens as the 1m/5m opening ranges form? What happens when those leves are tested?
* What happens when price pulls back to the opening range h/l?
* What happens when price tests the premarket h/l?
* (I also use the pivots to cover)


#3) Narrative analysis > everything else

Here's one of those things I knew "about", but never really "did".

I talk myself through what other traders are thinking, constantly. In the past, I was just looking for patterns or setups. Now I'm much more focused on building narratives that make some sense around strength/weakness, pleasure/pain, etc.

The groups I think about:
-- Live Bulls
-- Live Bears
-- Sideline Bulls
-- Sideline Bears

I still get it wrong all the time, of course, but it's helped a lot:
-- It helps avoid chasing late entries.
-- It helps separate pullbacks from fails.
-- It helps improve BOTH entries and exits.
-- It helps journal with more consistency and clarity.



#4) Identify + work on the big scary problem (and the cause).

I'm someone who can get lost in the details and try to overoptimize and chase shiny objects.

I think it's really valuable to figure out what levers are going to solve multiple problems, instead of trying to solve multiple problems, if that makes sense.

So how do you find the underlying cause of the bad stuff? I think you've got to keep asking "why" or "what's the cause?".

In my case, I used to think the big scary problem (BSP) was big losing days.

OK, yes, definitely a problem. But WHY do I do it? WHY do I keep shooting myself in the foot?

I think it comes down to two core "causes":

CAUSE A) Finish Line mentality.
In other words, thinking that reaching some outcome equates to "OK, now I've *made* it! Smooth sailing from here!".

The fix: The. Journal. I've got a process down that pulls me into a daily process where I check in before the session and check in after the session. In the past when I'd skip the journal, this is when the finish line BS comes out to play.


CAUSE B) Need to be right, always.
In other words, prioritizing the ego-stroking "being right" over responsible risk.

The fix: My grounding question is "Do you want to be right, or do you want to be profitable?". Took me a long time to understand the question (I think it comes from Brett Steenbarger or Lance Beggs), but I'm starting to get it.

I've also been using a physical tool to help track where I'm at, mentally.

If you're a fan of Steenbarger, you may have read about his emotional thermometer or taking your emotional temperature.

I have a doc that I print out with 3 zones (hot - pro - hot) in 3 side-by-side boxes.

I use a stupid little board game token that I place on the zone I'm in.

The "pro" zone is where I'm feeling calm + focused.

The "hot" zones are where I get either too up or too down, emotionally. This has helped me cut back on big losses after a big win (something I did A LOT). It's pretty clear to me that adrenaline rushes after a big win are just as dangerous as a big loss.

If you'd like to try it out, this is the doc, just make a copy for yourself: [ link]





That's mostly for me, but if anyone reads this I hope it's helpful!

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  #28 (permalink)
 
mcjackson's Avatar
 mcjackson 
Colorado Springs, CO
 
Experience: Intermediate
Platform: Ninjatrader
Broker: Ninjatrader
Trading: NQ
Posts: 40 since Mar 2014
Thanks Given: 77
Thanks Received: 147

Most of my posts in this journal thread are me rambling on and on about the thoughts rattling around in my head.

So I thought for a change, let me share a couple of visuals:

Today was my first day back after a brain fart last week. I took the rest of the week off and came back with a pretty good day. This is

08-23-21 Mon NQ 1m and 200t 3 sequences


Trade #1) I rarely enter in the first candle, but we'd already created a spring, tested down a couple of times, and pushed back up. No guarantee of an attack on the all time high, but that was definitely on the radar as well.

Exit was just about slow down of momentum on the way up. I would have happily held if price just ripped up but covered when we momentarily stalled and turned down. I'm happy with this exit because price could easily turn back down and fail into the opening range. I've had that happen enough times to want to get my day off to a profitable start and worry about big picture direction later.

Trade #2) Is really a sequence of 3 losers in a row. All 3 are slightly late entries - the first one in particular. Mediocre sequence because I liked the idea (a pullback to the 1m opening range high) but the entries weren't the cleanest. Exits were good because I kept them super tigh (avg loss was -7 ticks, biggest loss was -9 ticks).

Trade #3) Solid trade based on the same idea as the sequence in #2. Maybe I should count it as part of the same sequence, not totally sure. We're basically going:

-- pullback to 1m range
-- consolidation as bulls + bears try to fight it out.
-- breakout of consolidation and attack on the high of day.

I entered on the wedge breakout and added a second contract quickly, well ahead of the high of day breakout. Good stuff here on the entries.

The best part of this trade, though, was the exits. I covered the first half on strength as we pushed up and held the second half until we hit the R1.

We obviously had a huge green day - but that doesn't affect my grading of this trade and the two covers.

This bit actually reminds me of a trader I spoke to early on, I think I was still in college - he showed me what he called his 3 Kings method of covering trades. I've seen the phrase come up before in various forums but never really about this way of covering your trades.

Short version: Split your position into thirds.

T1 ideally will cover about 3R, so that the rest of the trade can run.
T2 you aim for the 0% level (he was a Fib retracement guy, entering on 50-68% retracements)
T3 you aim for the -23 level or whatever you call your extension levels.

That concept has stuck with me for YEARS, even though I never really traded like him.

Here's how I've applied it to my trading style:

T1 is an exit on strength. I'm aiming to let price test a level and see what happens. The second there's some weakness or a stall, I'm covering this bit and pocketing some profit. If I've entered a pure breakout, I'll trail a stop behind each 1m candle, aggressively.
T2 is allowed to run a little more. Expect to have to sit through a pullback and test another level.
T3 is all about aiming to hold for as long as possible. I haven't traded with this 3rd part for a while, but I still like the general idea.

That's more like a really, really loose guiding idea than set rules for a trading strategy.

It works nicely on the NQ because if you can combine speed with *strategic patience*, you combine small losses with small wins and some big wins.

I think that another Lance Beggs quote - "many small losses, many small wins, some big wins, NO big losses". I screwed that idea up last week but I definitely believe in it!

Speaking of stats, here's what the day looked like:



08-23-21 Mon performance summary



Overall, here's where I'm at with the pro account:



Topstep Pro acct performance 08-23 so far



And here's what that looks like in terms Ninjatrader's more detailed summary so far:




August 2021 performance so far TST acct

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Last Updated on August 23, 2021


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