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Earlier today I counted 10 trades and here is my chart. There are however, 11 blue arrows for entries. Trade 5 at 9:20 I increased my position, as i expected a second entry into a bull move. Didnt develop, so I closed the trade out. 2 entries, 1 sale.
Trade 6 moved well for 15 ticks. I think I am most proud of that, as it was a straight momentum play. I will refer to it as a dynamic entry. Signal bar with teh long bear tail at 10:05 was solid red. Just before the close, it moved strongly to the EMA and closed with bull momentum. I entered at that moment it touched the EMA, and carried me for 15 ticks, It went higher, but I moveed my stop into 15 ticks with the intention of letting it run, but I got taken out on the pull back. Got in at the close a little late at 10:15, but then it moved fast and hit my target at 21 ticks.
didnt trade the move at 10:35. I let it go, I thought it would be a second entry off the 10:20 bar, but I hesitated, and it moved strong. (News driven?)
Trade 8 thought there was going to be another bull move after some consolidation around the EMA. Late in the morning, and the next 3 trades were really ill advised. I came out ahead on those 3, but they were forced, not easy. thats what I have noticed. in a good trade, its very easy, efficient, no effort. In a bad trade, immediately its like I am tangled up in the tape, uncomfortable. I like good trades better.
Still fighting this cold, but its in its final stages. Still restless nights.
Tight trading range day on the CL. Ussually its 2-3 hundered ticks, but today its only 125, so far.
Reviewing over the last few weeks has given me a little insight into trading the CL. Generally speaking, i am right more than wrong on the movement. thats a good thing. I can almost feel when its a good entry. Like when I hit a great shot in golf. i know its going to be good, becausei hit it on the screws. Dont even have to watch it, i know where its going. A good entry is almost the same. It feels right. Does this make any sense?
I have been meditating on this idea. Trading is not static, its fluid, and it has its own ebb and flow. So I am attempting to quantify what a good trade looks and feels like, to me. Intersting, but visualization is a good concept to keep in mind. See the trade before you take it. This has to come from experience. Anyway, I am focusing on my best trades, and what did I feel like right before, during and right after them. I havent read any of the books by Douglas on Zen and the Art of Trading, but my gut tells me that this is what he likely talks about.
Every high perfomance athlete I have met uses mental rehearsal. trading is no different. i have been doing that every day, attempting to mentally rehearse my trades, and it seems to be helping. Reduces anxiety and stress for me. I feel much calmer because of it, and it helps. And helps me with patience.
When I first started this back in August, despite the fact that I have been in the investment field for years, I realized how little i new about derivative investments.I did write an exam about options and futures, but it was 1 chapter in the course 20 years ago. derivatives are estimated to be 20% of ALL investments. And i knew next to nothng about them.
OK so on to my day
Stared at 9 am EST. Cold still keeping me up at night.
Trade 1. - 11 ticks. Set my stop a little wider today as it seemed like th reasonable thing to do. Though there would be a reversal off a spike down at 9:00, but my stop got hit fairly quickly.
Trade 2. Still was convinced of my setup, so I got back into the trade 2 ticks above my previous entry. ran up 21 ticks.
Trade 3. One of my best trades. 9:10 strong signal bar Broke the EMA, got in quick on close of the bar, hit my target price after +17 ticks. Wonderful.
Trade 4. Second entry off the 9:10 signal bar. Hit my stop -10.
Trade 5. Got back in. but wasnt my best trade. I added to my position to average down my cost, but I tighten my stop as i wasnt thrilled with my postioning. +7
Trade 6. 9:55 EST long at 99.53 Target at 99.70 +17 ticks. A good entry and unfolded as i had anticipated.
for the day
-11+21+17-10+7+17 = +41 Apart from the 2 down trades, things went well. No one can trade at 100%, but one can be profitable.
I have come so far in such a short time. I started this Trading Journal in September, and looking back these last few weeks, i have made a number of very important discoveries.
The number 1 discovery is the importance of a journal. The public accountabilty is likely the most powerful tool for trading improvement. I have had a few fellow traders contact me, and they have given me perspective and greater insight, particularily Panda Warrior. Thanks PW.
Following close behind is being patient. I used to make up to 50 trades a day. Now, there may be 50 setups, but how can one adequately plan, monitor, and review that many trades? Its impossible. Even more than 10 is tough. Add in research, reading and recordkeeping.
For me, keeping it simple is very important. Dont complicate the uncomplicated. my daughter has trouble with math in high school because she cant beleive its that easy. She has the abilty, but she has the wrong perspective. She lacks confidence. If you think you are going to fail, or beleive that you dont deserve it, you will fail, and , of course, you didnt deserve it after all.
Makes perfect sense to me. I often feel the same. When talking to myself I refer to these entries as sweet spots in the market, just perfect entries (in context of my trading style and setups of course).
They always make me happy, even if they go straight through my stop.
Although I have to admit that I do become a sulking child if that happens several times in a row...but normally these sweet spots are few and far between so that it hardly ever comes to such extremes
There is something in your gut most of the time that tells you if its a good trade or not. Hard to quantify that with indicators. On the other hand, sometimes the indicators are telling you to take a trade and you pass or maybe you still take the trade but your gut is telling you no.....the whole time you are in the trade you can't wait to get out.......so you either pass on it or bail asap....and it turns out your gut was right......try to build that into a mechanical system.....you can't and thats the reason an expert trader will always beat a bot.....feel.
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
Well, you only need the gut feeling oscillator, you are only allowed to enter when above zero. But you are not going to get it
I think you nailed it! I spent quite some time trying to develop a nice strategy but I couldn't teach it common sense, let alone gut feel.
Two things I will succeed teaching myself one day.
I like the part about being in a trade, just iching to get out. And the moment you pull the trigger to take the trade, you know, in that instant, it was a mistake. It just feels wrong...
In golf, you should never take the club back unless you know where the ball is going to go. thats after you figure the conditions, the lie of the ball, your target the landing area, the margin for error. then, its the kind of shot you want to hit...draw, fade, high, low. Then its the mechanical stff with the swing. Grip, alighnment, stance, takeaway, followthrough. rehearse as part of preshot routine. then hit the ball.
Imagine for a moment, going through such a list mentally, quickly, before placing a trade? My list isnt that long, but thats why in part, that i use a 5 minute chart. The shorter time frames dosnt give me time to reason on a potential setup or trade.
Golf is a game of misses. Ben Hogan said if 2 shots in 18 holes went exactly where he expected it to go, he was playing at the top of his game. And he was one of the greatist ball strikers to ever play the game.
Trading is about managing your misses when you are wrong. And not being afraid to be wrong, or at least admit when you are. I dont think one can succeed without that, not only in trading, but in any endeavor.
Sticking with phsychology of trading theme for today. A couple of personal observations. I keep coming back to golf as a metaphor for trading, because the comparisons are close. Allow me to elaborate.
An average round of golf will take between 3 1/2 to 4 hours, depending on how slow everyone is playing. In the UK, they play way faster than that, and i like to play quickly myself, but, it is what it is...i dont live in the UK.
The actual time hitting a ball, from the entering of your pre shot routine to actually following through on a swing is likely 1 minute. Actual swing is less than 2 seconds. And of course after contact, there the consequences of the swing, but then its too late. A single digit handicap golfer, that adds up to less than 2 minutes actually hitting the ball to get it into the hole. Everything else are the things you need to do, to reduce as much anxiety as possible to get you to the point where you may hit the best possible shot. Golf, like any spot, is 99.99% mental, and so is trading.
If I compare golf to trading, or any other endeavor, and I distill the action ( hitting the ball, placing the entry) to the highest potential, lowest consequence course of action, based on relevent training and experience, then I have the highest potential for success. ( succesfully executed shot or trade). In golf, one needs to maximize strengths and minimize weaknesses. I said minimize, because one cannot eliminate weaknesses, for the simple reason is that no one is perfect.
So if everything is set up correctly for you. Knowing yourself well enough to objectivily look at you strengths and weaknesses, and work on those areas one can maximize the potential for success.
Gary Dayton defines it as high value trading actions under trader control that lead to successfull trading. He calls it the Cycle of Trading,
Can I explain to you in detail each of the steps for every single trade I take. And do I pass on trades for a breakdown in one or more of these steps. Notice the first 4 steps are before the you place a trade. The trade I cannot lose on, is the trade I dont take. Eliminate all possibilities and you are left with the probable.
Of course, I have really no long experience in trading, and these opinions are my own.
How did I do today? It was a tight ranging day...
10 trades, fought the tape a bit as it looked more like trading teh ES than the CL.
Your gut will be right sometimes, and your gut will be dead wrong sometimes. An 'expert' trader will beat a mediocre bot every time, but an 'expert' trader will not beat an 'expert' bot any time. The bots that we generally talk about are toys written by traders tinkling around with code trying to duplicate what they do as traders. There are good bots, and there are bad bots. The bad ones will be all over forums like this. The good ones are closely guarded commodities. Expert bots are written by teams of programmers, and generate millions of dollars for their owners. Not too many expert traders can generate the returns these bots do.
I was a programmer for many years, an I've still not been able to get my indicators to duplicate exactly what is generally very obvious to my eyes, even after several years. Then again, that just might be a commentary on my dismal programming skills
I suppose I should have made the distinction between the "expert" bots and bots you can find on google or forums like this. You are correct in the distinction.
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
