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Learning to trade through self discovery
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Learning to trade through self discovery

  #11 (permalink)
Elite Member
Washington DC
 
Futures Experience: Beginner
Platform: OEC
Favorite Futures: 6E
 
Posts: 40 since Sep 2010
Thanks: 42 given, 47 received

Getting better

I felt like today's trading was executed fairly well. I took only two trades; one winner, one loser.

What I especially liked about my trading today was a certain calmness about it. I had less of that certain "urge to be in the action." My efforts to constantly ask myself, "Am I trading well?" certainly helped. It reminded me of my trading plan rules, and encouraged me to calm down. I'm going to do my best to remember how I felt during the good trading morning. Heart rate was steady, no tension in shoulders and neck, eyes not straining at the monitor. Emotionally, I wasn't expecting a big win, didn't feel like I had to be in the market, and was generally enjoying the moments of trading.

One of my many goals will be to replicate this sense of bliss during my trading day.

By the way, I plan to report on my wins/losses once or twice each month. I feel like the daily tally focuses me on the wrong things-- If I start thinking about how many ticks I've won or lost, I tend to overtrade as I dwell on my P/L.

I must constantly ask myself: Am I trading well? Am I following my rules?
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  #12 (permalink)
Elite Member
Washington DC
 
Futures Experience: Beginner
Platform: OEC
Favorite Futures: 6E
 
Posts: 40 since Sep 2010
Thanks: 42 given, 47 received

Getting better still

Today, I may have executed the best trading since starting this journal. I was patient, exercised good risk management, and followed my trading rules. I spent almost two full hours at it, watching bar-by-bar for good setups. There were a couple of them, however, no trades were taken.

Zero trades. If I had entered trades, I would have had winners, but it would have come at a price. I'm practicing how to consistently execute my trades according to plan, therefore, an undisciplined entry, despite being a winner, is still an incorrect entry. I'll admit-- I was a little frustrated at seeing patterns play out favorably without being onboard to reap the benefits. But then again-- I must only take trades that I would be happy and proud to report.

I'm separating the concepts of having wins from adherence to my rules. It might require some psychological conditioning and fine-tuning, but I'm committed to making it happen.

I must constantly ask myself: Am I trading well? Am I following my rules?
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  #13 (permalink)
Elite Member
Washington DC
 
Futures Experience: Beginner
Platform: OEC
Favorite Futures: 6E
 
Posts: 40 since Sep 2010
Thanks: 42 given, 47 received

Status report


After three weeks of journaling, here's the status report:

July 4-8: -64 ticks
July 11-15: -179 ticks
July 18-22: +35 ticks

Honestly, it's not a pretty sight to look back at the losses. However, I'm very encouraged by this last week. There was a major difference between the actions of the first two weeks versus the third week. I'm adhering to my rules much better, but I have also started to think of the market a little differently. It's difficult to explain, but I'm watching the price action of each candle and thinking about what is going on between the buyers and sellers.

A better explanation might be that I'm imagining the entire 6E futures market to be in a trading pit. This might help me to visualize the action-- to understand the dynamics of what is happening between the bulls and the bears. If this ends up helping me next week, I'll explain in more detail.

Looking forward to next week!

I must constantly ask myself: Am I trading well? Am I following my rules?
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  #14 (permalink)
Elite Member
Miami FL USA
 
Futures Experience: Advanced
Platform: Ensign 10, NT7 DOM
Broker/Data: IB, IQ
Favorite Futures: Currency Futures
 
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Posts: 803 since May 2011
Thanks: 811 given, 2,103 received

@dc618

I have many questions, I figure you may answer them in time but I thought I might post a few to provoke some thought. I'm assuming you're on the path to become a price action trader, that's great and I wish you well. In your last post you said, " I'm watching the price action of each candle and thinking about what is going on between the buyers and sellers." I'm not familiar with the OEC Platform and have no idea what data provider you're using, but I would caution you of believing what you're seeing (inside a bar) if your data is bundled or filtered. I also noticed the time of day you're trading and was wondering what (if any) news feeds or economic report alerts you may be using. Lastly (for now) I was hoping you could share your trading setup with us, do you use 1 computer, how many monitors and how many charts do you normally view (daily, 4hr, 5mn ..e.g.) when preparing to enter a position.

Learning to trade can get very expensive very fast. Sure we all want to make alot of money but while learning if simulated trading doesn't stir your emotions you may wish to take a look at the 6E mini or micro contracts.

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  #15 (permalink)
Elite Member
Washington DC
 
Futures Experience: Beginner
Platform: OEC
Favorite Futures: 6E
 
Posts: 40 since Sep 2010
Thanks: 42 given, 47 received

@Cashish

Thanks for your post. I contacted my broker about the data provider. I was told that the data is provided by the clearing firm. So I asked the clearing firm about bundled/filtered data, and they told me that the data was "direct from exchange, no third party used." So... I'm not sure if that answered my question, but at the same time, I don't know if I phrased my question to them in a specific enough manner. Although I'm not concerned (yet) about my data provider, what type of questions should I be asking them about the data service? A quick google search on "unbundled" and "filtered" data describes of what goes on, but since I'm a newbie, I would like to know the impacts of this type of data and what I should do about it.

Here are some details about my trading setup:
I trade with one computer and a single monitor. I've thought about plugging into at least a dual monitor setup, since I'm only working with one trading instrument (6e), I like the simplicity of a single screen. When I'm trading during my preferred 3-5am (USA Eastern time) hours, the trading platform is running, and I enter my trades through a DOM window.

I'll play with risk/reward calculations in an Excel spreadsheet which I toggle back and forth to. On the excel sheet, I also log my trades. Some of the data I capture is the time of each entry and exit, the prices, notes and thoughts on each trade, etc. The trading platform would give me most of this data, but I like to log it into my excel sheet for some added analytic capability, such as looking at charts of my wins/losses, number of trades per day, etc, all while mapping against the notes of why I entered the trade in the first place.

As for news items and other news releases during my trading time, I try to avoid them. I don't like the extreme volatility that might come with a news release, and I do my best to avoid entering a position within 10-15 minutes of that news release. If I'm already in a position and scheduled news is imminent, I typically exit the position, or scale back the sizing.

My chart timeframe is the 5-min. I start off the morning by looking at the 15-min and the 1-hr, but I only look at them once to search for any obvious S/R lines. After I take note of those levels, I don't revisit the longer timeframes, focusing only on the 5-min chart.

I hope this answers some of the questions. Feel free to ask any more. As I continue to write in the journal, I'll further explain my trading method. It has now been a full trading month with a journal. It's been both educational and fun!

I must constantly ask myself: Am I trading well? Am I following my rules?
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  #16 (permalink)
Elite Member
Washington DC
 
Futures Experience: Beginner
Platform: OEC
Favorite Futures: 6E
 
Posts: 40 since Sep 2010
Thanks: 42 given, 47 received

month-end July trading status

After a full month of the journal, here's a week-by-week look at the numbers:

July 4-8: -64 ticks
July 11-15: -179 ticks
July 18-22: +35 ticks
July 25-29: +76 ticks

The bad news is that I was down a rather large sum of ticks. The good news is that I'm trading a much better than the first two weeks of July. I still working on sticking to my rules-- I wouldn't have had a losing day today (Friday) if I had stuck to my rule of not trading on Friday! But still, if I managed to break the no-trading-Fridays rule, I would have been better off if I stuck to my no trades past 5:00 am rule.

I'm looking forward to August, encouraged by my calmer trading approach. For me, a relaxed approach is more effective. It allows me to stick to my rules better, and eases the itchy trigger finger.

I must constantly ask myself: Am I trading well? Am I following my rules?
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  #17 (permalink)
Site Administrator
Manta, Ecuador
 
Futures Experience: Advanced
Platform: My own custom solution
Favorite Futures: E-mini ES S&P 500
 
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Posts: 46,240 since Jun 2009
Thanks: 29,353 given, 83,234 received



Keep it up!



Mike

Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.

Need help?
1) Stop changing things. No new indicators, charts, or methods. Be consistent with what is in front of you first.
2) Start a journal and post to it daily with the trades you made to show your strengths and weaknesses.
3) Set goals for yourself to reach daily. Make them about how you trade, not how much money you make.
4) Accept responsibility for your actions. Stop looking elsewhere to explain away poor performance.
5) Where to start as a trader? Watch this webinar and read this thread for hundreds of questions and answers.
6)
Help using the forum? Watch this video to learn general tips on using the site.

If you want
to support our community, become an Elite Member.

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  #18 (permalink)
Elite Member
Miami FL USA
 
Futures Experience: Advanced
Platform: Ensign 10, NT7 DOM
Broker/Data: IB, IQ
Favorite Futures: Currency Futures
 
Cashish's Avatar
 
Posts: 803 since May 2011
Thanks: 811 given, 2,103 received

dc618

Nice job, two plus weeks in a row, well done.

"Rather large" sounds a bit scary, and you went against a couple rules. A funny thing about trading is, there's no one around to whack our knuckles with a ruler when we reach for the mouse with every intention to negate our best laid plans and through our rules out the window. Believe me, it will behoove you to stay focused on the rules you've set for yourself and respect them. Following a clearly defined set of rules is probably the most valuable skill you will ever learn in this business. Right now, at the beginning of your trading experience is the time to realize how important those rules will be to you and internalize them deep into your psyche.

My question about data came from your comment, ".... what is going on between the buyers and sellers" and the two charts you've posted. I noticed you had a volume study on both charts, you mentioned "ticks" a few times in your posts and your status report also referenced "ticks." Aggregated or bundled data is not tick by tick data. There are pros and cons to aggregation but it can never be, TRUE tick data. This data is suitable for some indicators and studies and not for others. Say I'm trying to see exactly how many trades occurred at the bid vs the offer in the last 5 minutes of trading the Sept, 6E, aggregated or bundled data is NOT effective. When ticks are bundled you'll never see true ticks down at the granular level. That said, minute charts work fine, it will make no difference in a time based chart of the same instrument.


Quoting 
dc618
As for news items and other news releases during my trading time, I try to avoid them.

Good, at this stage I think that's smart. It's kinda like a moth to flame, there is excellent opportunity but you have to be completely comfortable with the intense risk, even 10-15m can often times be to close.

Have a great weekend and again, Great job

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  #19 (permalink)
Elite Member
Washington DC
 
Futures Experience: Beginner
Platform: OEC
Favorite Futures: 6E
 
Posts: 40 since Sep 2010
Thanks: 42 given, 47 received

Today I witnessed a friend take a tremendous loss on an ES trade. It was painful for me to watch; I could only imagine how devastatingly sickening it was to him. I considered him and myself to be at similar points on the learning curve, however, after seeing his trade today, I will forcefully and intentionally move myself further along this curve. I must do this and do it now because there's no way I could ever afford to lose one-third of my account value on a single trade.

Here's my analysis of what went wrong with his trade:

1. Bias
My friend felt that the market at open would follow the upward trajectory as hinted by the pre-market. Congress had a deal on the debt ceiling, or so he thought.

2. Averaging down
I don't like doing this, but he did it. And he did it without knowing his final pain point, because he. . .

3. Moved, then removed his stops
By doing this, he allowed his losses to spiral out of control, to the point where his broker (or broker's software) reduced his position by half. My friend waited and hoped, but exited the other half with the same size loss.

I looked at my friend in stunned silence, not knowing what I could possibly say. It was if he lost a pet or even a family member. When he stated, "I'm glad these windows don't open", (he sits on the fifth floor of an office building), I could tell he was only half joking. At one point I couldn't look at him or the computer monitor, and just stared off at the Washington monument. The VP motorcade passed below us, on the way to the hill, where Joe would wrangle up the support needed to keep our nation from becoming the biggest deadbeat in recorded history.

The mood was surreal. At that moment, I decided something that I hope will become a major milestone in my trading journey. I will honor my rules.

Dreaming of the possibilities that a trading lifestyle might bring can be fun and entertaining. But the harsh realities of the risks are to be taken seriously. I once thought that trading could become my hobby. I now realize that trading should never be a hobby. Anything that involves this much risk is nothing to be trifled with. Several occupations involve levels of risk, but you don't hear of anyone being a "hobby firefighter, hobby hostage negotiator, or hobby missile silo operator. If a person is entrusted to do any of these jobs, he or she is a professional, someone who is trained to successfully execute a procedure in hostile conditions or environment.

One of my trading mantras: I execute my trades with flawless precision.

I must constantly ask myself: Am I trading well? Am I following my rules?
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  #20 (permalink)
Site Administrator
Manta, Ecuador
 
Futures Experience: Advanced
Platform: My own custom solution
Favorite Futures: E-mini ES S&P 500
 
Big Mike's Avatar
 
Posts: 46,240 since Jun 2009
Thanks: 29,353 given, 83,234 received


Has your friend never done this before?

I mean typically, this type of behavior is something that has occurred before and then if you are a good trader that learns from mistakes, you minimize its re-occurrence.

But in this case there are just too many mistakes all simultaneously going on, the bias, moving stops, averaging down... those are all mistakes made by rookies. We've all done them, but hopefully only in the very beginning of our trading careers.

I hope your friend has indeed learned his lesson. Time will tell.

Mike

Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.

Need help?
1) Stop changing things. No new indicators, charts, or methods. Be consistent with what is in front of you first.
2) Start a journal and post to it daily with the trades you made to show your strengths and weaknesses.
3) Set goals for yourself to reach daily. Make them about how you trade, not how much money you make.
4) Accept responsibility for your actions. Stop looking elsewhere to explain away poor performance.
5) Where to start as a trader? Watch this webinar and read this thread for hundreds of questions and answers.
6)
Help using the forum? Watch this video to learn general tips on using the site.

If you want
to support our community, become an Elite Member.

Reply With Quote

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