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Catching Big Waves - a trader's journal of surfing the the markets
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Catching Big Waves - a trader's journal of surfing the the markets

  #2061 (permalink)
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GaryD View Post
This is roughly the last week of the month, Monday technically being the end, but close enough to take a look at where I am. I netted roughly $6k last month trading 1-2 contracts, but am currently down roughly $2,800.00 so far this month trading 2-6 contracts. Some of my account decrease is related to commission, so the -$2,800.00 is really not that bad, but it is still negatve, and that is not why I want to trade. Treading water for a month is a poor reward for the hours spent.

On a percentage basis, had all trades been the same size, not a big deal. But it bothers me regardless. It is not the dollar amount, that would be $1,200.00 +/- by just hand grenade accounting based on my knowledge of various trade sizes and outcomes, had I traded 1-2, and that I could make up before Friday if I were trading good. What bothers me is that I see, feel, a distinct difference in my trading when I increase size.

If I traded more mechanically it would be an easier move to step up, but I trade so much based on feeling and risk aversion. On 1 contract I might drop it at -8, because something does not "look" right. Not the best technical decision sometimes, but I could take 3,4,5 hits that size and not be in any danger. It felt insignificant. But at 3-4 contract, dropping 8 ticks is -$320.00, which was previously near my max stop loss placement. For some reason, I cannot get that to register as being "ok", and so I drop back to one contract, build it back up to positive, then size up again. I have done that nearly all month now.

The idea of sizing up when my confidence factor was higher has not worked for me yet, but I agree with the concept. I took a couple 25 - 30 tick losses at 3-5 contracts this month by getting taken out on extreme ticks, slight S/R penetrations, or just getting tired of taking the heat, only to have 100 tick moves in what would have been in my favor afterwards. That may just be a result of CL's increased volatility recently, and possibly over a year's trading it would correct itself, but on losses like that I walk away until the next day, and leave the computer feeling defeated, or gullible.

I have somewhat tracked the difference by adding some new stop loss titles, and my 1-2 contract trading is at roughly 65% wins, but my 3-6 contract win % is 46%. The 1-2 % is in line with what I have been expecting for about a year and a half now, so something is up with the way I process size in my mind.

I have kept my max win vs max loss right where I wanted it. max losing trade so far this month is $970.00, and max winning trade was $1,780.00. last month the average of that ratio was about 1.7 to 1, so I am actually ahead on that number. despite the current drawdown, I find some satisfaction in that number.

@researcher247 talked about only trading in the mornings, and I have been watching that in my own trading to see if there is a difference for me during certain times, and I have seen that I typically have small losses first thing, then move to positive before noon. Today I am up $850.00 trading one contract (short) and yesterday was up $550.00 on one contract around this same time. It is like I feel I need to warm up, so I take a single contract to get my feet wet. But a later 4 contract trade yesterday had me finishing down $700.00 (long around 103.25. That move went all the way up to 104.50 after stopping me out... My support zone was about 20 cents higer than actual). Had all trades been the same size, that would have been a positive day regardless of my misplaced support zone.

I have seen a shift in my view of trades through the increases, I am far more relaxed on a 1 contract trade this month than last, it feels like a welcome relief. lol1 I wonder if that is how it happens; similiar to lifting weights, what was once heavy is now light, and so you push yourself harder and then the new heavy becomes light, and so forth?

I am not considering changing indicator, changing S/R analysis, changing markets, nothing so far had changed my belief that I have the right screen setup for myself. The answer is in my head, in my belief system. I am going to need to spend some serious time on digging deeper into that understanding of myself if I am going to move up. I may start by buying a windsurfer...


GaryD View Post
Watched the market until around 2pm, but never took another trade after pre-EIA. yes, took one, but closed with $10 profit, just because I said I was done for the day. My wife was home and we had plans to drive to the beach, so trying to snag a final trade was not the right mindset. Caught the first wave down of the short at the open, only tipoffs were overbought (on whatever), EIA long traders would probably want to lock their profits, and then I got a great volume bar just before the major burst down.

I entered at the retest, had an initial 20 tick PT, sat in it for about 5 minutes, and my first target hit in about a second's worth of motion. Jumped back in 31 x 2, and then quit for the day. Sometime's if it seems too easy, I am better off stopping.

Makes no sense, but I believe it. It takes a lot of work to nail a trade just right, and another sin, "lust", starts to set in when the profits start flowing. It's one of my favorite sins, but not an emotion to trade with. Made for a great energy to spend the day in the sun with my wife though.

Naturally, trading came up in my conversation, which she really does not want to talk about, so I keep it short, or try. I had gone fishing yesterday afternoon with a friend, one who had similar issues with how the world changed in Orlando, and I told him a realization I had from working on my trading psychology; we experienced such great losses in so many ways through the past 6+ years now, that we spend so much time thinking about how to just, "get back to where we were", and as a consequence, we are not able to fully appreciate where we are. Be here now, basically.

The windsurfer is something I have never been on, but have always liked watching them. That and the kite surfing. But just messing around on craigslist I saw a windsurfer for $200 or best offer, and will probably buy it sometime this week. Atr 43, it sounds like mid life issue maybe, but I think of it as healthy, new, adventurous, alive. In the moment and having fun. We are back on a chain of lakes, at least temporarily. Why not enjoy it?

Need to download and install the iespellchecker. It's not that I can't spell, but I can't type.

I was giving this some thought..you know as I do from time to time...

This is a quote from a book by Richard. D. McCall "The Way of the Warrior Trader".

He uses the principles of the Sumarai in terms of trading.
The present moment being their most important principle.

"so you see it really doesn't matter if the fear we experience is the fear of loss, the fear of pain, or the fear of the unknown. it doesn't matter if the fear was brought on by reflective or anticipatory thinking. and it doesn't matter if the fear has been hanging around for a while..or if it comes suddenly like an acute danger. To the true warrior (Samurai) and warrior (Trader), the solution remains constantly and perpetually the same !. He and you must bring consciousness back to a centered sense of the present moment _ or now _ the only controllable moment in all of eternity."

I'm in no way suggesting you are fearfull etc..this is just a passage amongst many in a very good read imo.

Imo, being aware of this principle of the present moment is a bit like a switch being turned on.
The more often it is then the more energy is bought to it and the more light bulbs start lighting up...so to speak.
The flow is more consistant and present.

I think it can come in many ways. Perhaps what you mentioned about talking to your friend and the joy of the exprience you had fishing (I think) was just one of those moments.

It doesn't matter at least to say that they come in many ways (serendipidy at work) and the experience of it can then be bought to bare in any other experience or moment. A tool as McCall explains.

So what I wanted to say was this:
In spite of your concerns etc..over the size increase, there is much to think positively on.
Namely that you "managed" the experience on higher size without losing track or sight of much of what you use and do in your trading.

Setting aside the dollar/money value for a bit perhaps try to break down a few things for yourself so that you can get specific (for yourself);
Namely:
how far off were your entries and exits on larger size to that on smaller size ?
in other words what differences were there actually between what you did on size and what you can think you would have done on less size ?

The reason I say this:
Another of the positives of what you've done on size (money value aside) is that you have actually now had the experience.
From that you can in a sense replay the movie in your mind.
Try to be there again and feel what you experienced at all the important moments (entry exit etc)
From this there may come a moment in which you get a glimps of something.
I don't know what it will or might be. A sense of something maybe.

The present (watching now) changes the past (your own movie).

Then you have something to work with.
And the work may well be as simple as McCall suggest.
Being that at a moment of a similar "sense" we can practice to be present and in doing so we can move through
what is I imagine just a plateau.

It can be, (depends on the individual) as you mentioned, a case of to a fro, a sort of getting used to the expereince.
However, this will always happen at any other plateau unless we are able to enter the experience already prepared rather than, which may be the case at the moment, having to have the experience (however tentively) in order to then see how to deal with it.
(which will be by being present).

But, as I mentioned about light bulbs going off, I do think that there will come a moment when the switch is more on than off and this will as researcher247 mentioned mean the difference of several zero's at the end of things.
This is because we are prepared prior to the new experience from learning that the present moment is the experience. The thing is already flowing. we are already present.

That awareness in effect makes us prepared for all things as we have accepted the uncertainty of the unknown, are in control of the only moment that we can be (being now) and are joyous in the experience of it.

As your trading is intuative, then perhaps take advantage of that skill rather than trying to force it into a structure
that it might not or can't exist within.
By that I mean start out with small targets, "grab" ticks here and there, and it may allow you to start "stretching" things (targets etc..) as you will be getting used to the experience by experience.

Things will stretch until at some moment something inside you will snap.
That thing will be your limitations, or rather you will no longer have them.
Another of those contradictions in that the more we understand the nature of our control the less we are limited.
The more present we become to this moment (the now) the more fluid and freely we flow through it all.

Sorry to write so much.

wishing you well

zt379

Edit:
Enjoyed this film Blow and these two clips, not with standing the lovely Penelope..
The Wrong Dream (This is not to say your dream of trading is wrong !! )


Sometimes You're Flush

Every moment I wake up I realize I know nothing, and then I smile...

Last edited by zt379; April 26th, 2012 at 04:53 PM.
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  #2063 (permalink)
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Something is off in CL's move up today. ES held at the 786 from the morning high for awhile, seeming like it would be a down day, and then blew those stops on very high volume.


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That ES move should have sent CL back up from it's prior high support easier than it did.



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  #2064 (permalink)
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zt379 View Post
I was giving this some thought..you know as I do from time to time...


...Sorry to write so much.

wishing you well

zt379


Z, you are welcome to write as much as you want.

I am making some progress in things. It is coming, but I decided to just back off some. The great thing is, there is no pressure to make money today.

I have been noticing how I trade, how I interpret things, what I am thinking, at various times throughout the day. Yesterday I laid on the beach with my hat over my face, visualizing myself trading size without stress. Today I just watched for a long time, with zero intention of taking a trade, slid my chair back about 3' from where I typicaly sit, and tried to call play-by-play. I saw that CL had a lot of weakness in the 104.70 area. I saw that ES had shorts trapped, but did not seem like it had any other reason for going higher. Likewise with CL; once the stops were blown, what was the point?

The seed has been planted, the new direction of growth is established, now I just need to keep that thought healthy and see where it goes. I know I can't make a tender young plant grow by pulling on it, the roots will just let go.

Thanks zt.

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  #2065 (permalink)
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I did take 2 trades today, net -$10.00. Then tonight another, net $30.00. It put a penny in the pig.

I am not really even trading, just opening and closing positions, almost numb. All were 1 contract, and that seems to not hold my interest like it did. Strange how the mind can shift so rapidly with the right intent. But I am not yet qualified to trade larger, so I watch and think, and toy with a trade. Like a cat batting at a stuffed mouse, that is not "hunting" for a cat, it is something to pass the time. No target in mind, no risk/reward benefit, just in and out, "because".

The desire to trade larger is in there, and I think I have contained it somewhat. I almost know I can make money with 1 contract, and I almost know I can't with 4. There is no difference in the market motion, or the patterns, or the volume, or the indicators, or the experience, or the SR levels... It is me, and only me. Desiring to break out of my own resistance, held back as if I am in a trading range. I have seen this behavior a hundred times in price action, and in some ways can understand my own dilemma better because of that. Markets gets range bound as there is confusion and/or acceptance of price, and I am in a phase of confusion and/or acceptance.

Out of the blue, walking to get a beer, I passed my wife on the couch and said, "trading is like farming". She did not answer, and I would expect that. I kept going..."You plant a seed, and then you hope it grows. YOu can't control it, can't reason with it, can't control the weather, the insects, the diseases, the rain. You just have to let it do it's thing. All you can do is understand what you can control; when to plant, how to fertilize, when to harvest... That does not mean there will be a guaranteed harvest though. Farming requires hard work, patience, and belief in the unknown. And, for the most part, for not near enough money for what is involved.

That is where I am today. Sure, I'm a "farmer". I can survive. I can eek out an existence even. Yippee.

Since I know this will be read, I am not looking for advice here. I have looked at every angle of where I am. I'm just, I don't even know.

I write this out, hoping I will reach inside myself and find what I am looking for, or push some button that needs pushing, or anything that needs to be done to go from what I perceive as a minimum wage trader to something that feels like it was worth all the effort. I'm sure many guys would be thrilled to make money on 1 contract consistently. I was one of those guys. "If only I could make $100 a day, over time I could..." Well, I got what I wished for. I could probably make $100 a day 90% of the time, but that has nothing to do with scaling up. Spreadsheets are easy, trading is difficult but workable, scaling up is something I did not understand until I was ready to really try it.

I keep thinking the issue is wound around how much money I have lost in general over the past few years. I had no fear 20 years ago, and it served me well, until 2006. I did not feel I was really a risk taker. I was a hard worker. I was a deep thinker. I made plans and plans upon plans, and tracked my progress, and busted my ass. I was honest, trustworthy, dependable, tenacious, calculating, risk averse... And when I finally got to the place where it was time to "scale up" in what I did for a living, it took me down.

Maybe that was it, thrown onto this page by my persistence in keeping this journal. I worked for years to get to where I could "scale up". Slowly, keeping my risk relative to my equity, managing everything so precisely that I was often hired just to do risk analysis and problem solving... One project I was hired by the bank and the developer, on opposite sides of the deal at the time, to find a way out. I rolled out a 5' long spreadsheet on the bank's conference table one morning, got some really weird looks, an then proceeded to tell them with mathematical precision, why they were f*cked.

I made my way to being on top before, I was "there". I remember saying to my wife one night, after the first round of banks informed me they were not renewing, and they were not interested in negotiating either, as they felt they were "well covered" (not so much anymore, huh?), that there was "no way" we would fall below $1M, and that I had taken most of our risk "off the table" by paying down our equity lines. Maybe I learned that there is no such thing as minimizing risk. Maybe I learned that risk is always spelled with a capital R.

We come at the world as puppies, full of energy and ready for anything. The experiences we have going forward shape us for life. My current dog was rescued, and has seen nothing but love since we got her roughly 4 years ago. But, something happened to her before we got her, and despite all the work I have put into trying to make her feel better, it is never going away completely. She is scared of strangers. Period. But other than that, best dog I have ever known. I wonder sometimes if I am destined to be a good trader, except for...

I have slowly made progress with my dog though. I know if I put her on leash she is more comfortable. I have taken her to parks and outdoor markets to let her get comfortable in her own space, while all kinds of things are happening around her. Initially she tried to get out at whatever cost, would buck like a bronco to back out of her collar. Fear. Bad memories. Today we can walk right through the middle of the weekend farmer's market, dogs, kids, people everywhere, and she is cool with it.

That is where I want to be.


Last edited by GaryD; April 27th, 2012 at 12:25 AM.
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GaryD View Post
I am not really even trading, just opening and closing positions, almost numb.

Interesting choice of words. I do firmly agree that trading is a very boring proposition, unless you are losing money and then it tends to get exciting (man, we are a screwed up society). Some people think that when you make money trading it is like winning blackjack or something. That is not the case. When you get your weekly paycheck from McDoanlds, you don't associate that event with something "fun" like blackjack, do you?

One trading book I read years ago, no idea the author sorry, said something like "I sit across the room from <professional trader> and you would have no idea if he had made 50k that day, or lost 50k. His emotions were identical throughout the day. The only idea you would have whether he had made or lost money was whether or not he offered to buy lunch."

Mike

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  #2067 (permalink)
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Prior to trading, I learned to make a lot of money. I also learned in hindsight that to do that, in a risk-based profession, you risk a lot of money. I learned that I did not enjoy the losing process. It felt horrible.

I learned that money is not everything, and that safety is worth pursuing. And that, I think, is my issue. I learned to enjoy a degree of safety, by getting beat into submission before I even started trading.

I learned that I can lose hundreds with no thought about it, that is just a normal day, but thousands register with me. It weird, I can have a budget offset of $5k that gets very little thought, comes with the territory. But a $5k trading drawdown is completely different to me for some reason. I don't like it, and I do things to avoid it.

One of those things is to keep my size small. I can get $500 back in no time. $2,000 though, it comes at you so fast in trading, there is no negotiating. Bang, gone. Want it back? Put yourself out there again...

Having an "edge", for me, requires having a certain mindset. Lose the mindset, lose the edge. And I can't trade without that edge, that is just gambling. Roulette, red or black.

Again, like the market, I am working myself into a point of a triangle, tighter and tighter hitting the boundaries of support and resistance. Sometimes you wish the market would just break out already, pick a damn direction and get it over with. But it consolidates...

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Very good to know these things about yourself. You absolutely must understand your own strengths and weaknesses.

If you watched my marathon 3-hour "Afternoon with Big Mike" I talked about the long process I endured of getting to know myself in order to follow my passion and dream of being a trader. Let's just say it was not easy.

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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An hour from the pit open, and I am already short ready. The ES has returned to a potential minor double top, CL has worked it's way back above 104.30. I am waiting for the GDP, and need volume confirmation, but just think I saw something yesterday. If I am wrong, I lose a few hundred dollars, not the end of the world. If I am right, I may show something to myself today.

 
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