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Catching Big Waves - a trader's journal of surfing the the markets
I have a flight this afternoon, 1n hour drive from here, want to stop by the job before I go, have not taken a shower yet since I slept so bad and did not want to miss the open, need to be checked out by noo,... so many reasons to say thank you to CL for 96 ticks and call it a day.
I managed the 6 contract short like a scared little girl, and if it had been a single contract trade I might have netted the same dollar amount. If I can just fix that problem, get the fear to stay but only where I want it...
Here goes - yesterday, I read (as usual) a bunch of self aggrandizing, patronizing garbage on most of the trading journals here. Sorry for being harsh - (not on yours Gary)..That ticks me off, as if these hotshots can read every single day..to the tick....and make money in any market......like good ole Livermore.........but it also goes to show why I do not like trading journals unless they identify problems. To me, that is the primary reason to have a journal, and not self pontification. Day before I traded barely with 1 car (very light), and all I got was a few ticks that would not pay a good meal. Yesterday, i sat in my chair for 8hours twiddling thumbs because nothing made sense to me. Not on ES, not on CL, not on nothing
This morning, I traded twice in excess of 30cars on ES each time - as shown below - (you can clearly see I never catch the bottom or even the full wave, but its simple and it made my month because of position sizing. Now I probably wont trade like this for a while, because in my book, this is just about all i can do - and not that often.
Here is the same chart with Pesavento, @researcher247 mentioned PP was lagging, to me I find them real time as the factors are plotted as the wave unfolds. Hedvig knows as he uses Ensign, the problem with PP is obvious, the chart is useful but cluttered as hell, to me the ratios are very informative, especially on ES, where the market isn't as illiquid and useless as CL (I call Cl a child market, because adult markets behave like ES, ZN and ZB)
NT shut down, packing up, but wanted to add that I barely slept last night. I thought this morning I probably should not even trade. So I will cut mysefl a little slack for that. It is tough enough to control emotions when I am well rested, but still not really felling awake even now. Like I never slept at all
But I got all the stars to align and CL delivered to me what I wanted to see this morning, and I took it. That much was good, and my entry saw maybe 3-5 ticks of heat, if that.
The bad news, it offered 50-60, or more, charts are down. I got, I believe, net 60 out of the entire trade. Very poor management. 2 off just because, too much for me today, maybe 4-5 ticiks? I just bailed on those, don;t really remember the number. Two more around 12-15, I can't remember exactly any of it, other than I had +35 before and +95 after.
I had the patience, I did my homework, I nailed the entry like a sniper, I have that skill down pretty good... I just do not hold a larger trade very well, and that is the only difference between my 1 contract performance and whatever number I choose to trade.
I get off easy today. Almost goal trading like an idiot. But that is the focus. I have most of it down, hold time, stop management, deep breaths, concentrae on those things. Especially, when I get everything I asked for on a setup.
The lack of sleep, ok, get out of jail free today. really, should not have traded at all, so there is a second offense. But the lack of management is understandable, today.
Change that habit. Force it too change. Show no mercy.
I have this thing cornered, finish it. I can do this.
I trade well. Very well. Good enough to live off the rewards of it for a long time to come, if I will just push through this last resistance... The next resistance level can't even be charted with what I have before me...
Finish it. You are there, not just saying that anymore, it is real.
Reading someone else's journal is usually not useful. I agree that Gary's is an exception (primarly because he highlights his struggles). Also I think the reason that everyone was hyped up yesterday is that for once the markets were generally very easy to read. That doesn't happen everyday. It's like sunshine in Portland :P
On another note, I remember reading your blog when you had it up. You made it seem easy every day (or nearly so). It was/is like you are a money printing machine. I remember after reading your posts thinking, "am I a retard?" How can anyone execute that flawlessly? What I realized was that while you make it seem very easy, it probably isn't (or wasn't at some point). After working on myself for some time I've had moments, sometimes weeks, where I execute like that. It's almost like I'm not even driving the bus. It just happens. Seeing what you were capable of, while a blow to my ego, made me realize what is possible. So thanks for that.
One of the things that I've been working on is accepting the winners. Sometimes we get so used to having to fight things, to fight for each tick, to fight for a decent entry, to fight for a decent exit, that we have trouble accepting that at times it will seem too easy. Accepting the present includes accepting those large winning trades. Embrace it. Let it happen. Don't have any judgement about it. Hope that helps.
@eudamonia, Thank you - I do okay. The problem with my blog was exactly that, I could not adequately capture things that kept me honest, or kept my hunger high, or kept me cautious. To do that, I think a journal needs to have thoughts scribbled with hand on the charts themselves, why you did that, or why you didn't. Record keeping or any other sort didn't help me at all. I realized after reading my own journal how pretentious and know it all I sounded. So, I shut it down.
Now, I have other methods of keeping my fire burning - to me if I can stay hungry and cautious that is all one needs. Nothing new under the sun in trading. But each of us has our own way of practising control and discipline. To be extremely extremely discriminatory. ironically, when I read stuff here how ES should not go above 1290 or 1300 or things to that effect, I know that prices are approaching pain thresholds, and there is money to be made in that manner. Same thing applies in crude.. That is a very powerful and deep signal.
The other problem for me, is that when I read a jounal saying how so and so made 50ticks today and 100ticks yesterday, it can act both ways, for some it's inspiration - for me its like, I must do so too, so I try and compete with that. Instead of remembering that I need to trade my setup only and not color my mind with other things. A double edged sword.
For me trading is surviving, I am in the wild, and there is a mad bear out there to get me. But every once in a while (like this morning), when others cry uncle, one gets to play. That is trading for me.
There is one other thing, on Opentrader.com forum, you can now read about broker verified trader performances. To me this is a ground-breaking effort in trading - transparency and credibility. That is another thing that makes a journal valuable (which is why I used to post my account number each day on every result). You cannot buy credibility, it is priceless and the only measure of a man.
Beauty in patterns, markets and life....... obviously there are a ton of ways to make money. The popular ones are the ones that have to do with statistics, numbers crunching, record keeping, simple rules, ranges and methods. Because traders are meat-heads!
So boring and un-inspiring.
Life is more beautiful and intricate than that, there is esoteric elegance in the zany ways of Elliot, Gann, Pesavento and Morge (and the pattern geometry geniuses that Morge studied). In that spirit let me present to you some patterns from today, I do wish i had taken some more trades, but I take this as evidence that my joy in trading comes from pretty patterns, full of symmetry and beauty. Where would we be in life without beauty and artistry. One day, I aspire my trading to be so
Once again (ES, with volume, presents some of the prettiest patterns), and few markets can match that. The CL was also symmetrical, but nearly not as pretty (although I did get 50 addtional ticks on CL, but just because they were literally giving money away today, so I did decide to take at least one token CL trade )
CL traders will say, look at that chart...much more was on offer on CL, and I agree..it was. But the ES was all song and dance today......
A lot of emotion has been rising to the surface lately. Most often after winning trades. In fact, I never really get emotional about losing trades. It is not the trade itself, it is not the money made or lost. It is that I am growing very tired, and the issues I am trying to overcome in my trading have nothing to do with trading. I can read indicators, do chart analysis, read markets, time entries, forecast moves, trade profitably... I can trade profitably. What is my problem?
I cannot get past some issues I have, and it is really taking it's toll on me.
I have always been an emotional person. Not wimpy, not afraid, not girlie, not gay, but definitely not embarrassed to show tears. I don't like watching “girl flicks” with my wife, because they get me every time. I know the saying “boys don't cry”, but I was not raised that way, was actually encouraged to feel free to experience emotion, taught to live openly. One strange example, I hugged everyone I met when I was growing up, a habit that I did not realize was uncomfortable to some until I was in my twenties, and today it feels less comfortable to me even.
I believe it is good and healthy and human to feel emotion and allow it to be. But lately have seen such a rise in my emotional level when it comes to my trading, coming from complete exhaustion, disappointment in myself and my inability to execute my own orders, hold to my own beliefs, find the courage to do what I know can be done.
My journaling has felt more like an exorcism lately, reaching deep into places I don't want to go and dragging all of the remaining garbage so I can start again. My health cleanses are the physical analogy, but far more pleasant.
There are some details I have kept from these pages. Things I have shared recently with a select few, but not enough to say I have truly brought them into the light. Pushing this out to the world is hard for me to do, embarrassing, very.
But in not doing it, I stand the chance of allowing myself to ignore the real resistance in my trading. Perhaps just pretend it is not there.
With tremendous reservation, and possibly over multiple posts, here it comes...
I was successful at nearly everything I went after in life. I have ridiculous tenacity and almost no limits to the hours I will put into something to guarantee it's success. I believed so completely in myself and my abilities.
Each year I would establish yet another set of goals for the coming year, and each year had a new highwater mark to start from.
I made quite a bit of money, but if you met me might never know it. It was not about “stuff”, and what I did buy gave little indication as to my true income. Until the last few years, where it went into a home.
My pursuit in work was just about, feeling good. That feeling came from accomplishing something, striving for excellence, living life to the fullest, exploring my potential, setting challenges and overcoming them.
As a real estate developer, I had to provide a Personal Financial Statement to banks on a regular basis. Commercial loans always has short renewal periods, typically one year maturities. Having multiple loans on multiple projects, I had to figure out what my net worth was sometimes once a month, print it out, sign it, and send it to the bank. At the high point of my career, the last PFS I sent to a lender, before they started refusing to renew, on paper my worth said $4.2 million. I did not keep tabs on it that closely intentionally, because it really was not about money, but the lender's requirements to calculate it so often caused me to see it creep up consistently, and frequently. I developed the habit of watching it closely.
When the first loan I had that refused to renew, and instead offered a 6-month forbearance, I was not really nervous. My wife and I flew to San Francisco for a vacation soon after, drove through wine country and and on up as far as Humboldt County to see the giant redwoods, Mendocino, then back down to Monterey for awhile. I came back to Florida ready to go back to work, confident we would work out whatever had to happen, and tried to negotiate a good resolution for everyone involved.
I was heavily invested in real estate, nearly everything I had was in it. I had about $1 million equity between the home I had just moved into and the one I had just moved out of, maybe a couple hundred thousand in the bank. But everything else was out as equity in real estate deals in progress. I did not believe in very high leverage, typically had 25% +/- equity in the projects we did, thinking at the time that it was “safer” to owe less, gave us a greater cash-on-cash return, reduced our risk, and kept us looking healthier to the lenders.
But as one deal gone bad became two, became four, as property values started to decline, I watched my PFS start to wither away. $3 million, $2 million...
In the final year before my fall started, I closed a deal for around net $800k cash to me. Some of it was initial investment, but a decent return came with it. I put $325k into CD as a cross-collateral on a real estate deal where the appraisal came in light, put $400k into REIT stocks like DDR, Pro Logic, Macerich (had never been in the market before, the grand beginning of my “trading”), and kept about $100k to live off of for awhile.
Fast forward, t bank swept the $325k, the stocks fell to nothing soon after I got in, and the $100k was eaten up quickly as my income completely came to a halt. I paid my “salary” by taking a draw from progress payments on construction, and received bonuses when we sold something, but when the banks quit funding, and the properties stopped selling, my cash reserve was all I had to work with. With the debt I tried to service to protect my credit, which was flawless at the time, after a few years, we were running out of money.
I once had about $200k in unsecured credit lines, but they all started shutting me off at whatever the balance was at the time. I once had a $425k equity line on my home, but that was taken away as well. I was going broke, quickly.
I kept trying to “do the right thing”, negotiate with banks, pay my bills, negotiate lower rates on credit lines. I believed I would get through it. I believed in myself completely, and was never really scared, although I did recognize the severity of where we were..
And then, finally, reality prevailed. Tenacity, optimism, hard work, honesty, and possibly what for sometime after felt like my worst enemy at the time, my belief that I could make it if I just never gave up, ended one day as I started talking to a friend, who was also a bankruptcy attorney...
By that point, I was out of money, had no equity left, and had lenders who would not make a move which kept me in a perpetual state of not knowing what my total liability would be. All I knew was, for every dollar I made I owed ten. My guess was negative $1 million, if they pursued me for it. Maybe even worse. I will never know. I filed.
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