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The 22 Days: A Price Action Trader shares his Journey
Great job, in the shift of focus, the near immediate acceptance, the honesty with yourself, the honesty with your wife, the realizations you have had, the greatly reduced size, the desire to keep learning. Keep that up and you will find success.
About the comments I made that felt bit ballsy at the time, so much that I felt I needed to come back and add examples of my own mistakes, looking back, I had basically two groups of people regarding my trading;
There were those who said I was crazy. You can't beat the market at it's own game. It is impossible. So many people had a story to tell of someone they knew who had tried trading and lost miserably. Or, those who would not have the courage to even try such a thing. "Get a steady job, buy stock in good companies over time in a little retirement account, and some day (if you're lucky) you should have some money to retire on." That was basically the message from one of my "financial advisors". There were those who do not believe in risk in general, but yet somehow can continue to believe in luck of an account rising on it's own over time.
SUPPORT GROUP
There are those who supported me, but gave very loose guidance, if any. Most just said, "go for it", "you can do it", "attitude is everything", and all kinds of other kind, but meaningless, encouragement. There were instructors whose job it is to have everyone believe they can be succesful. I don't fault them, there is a need for a trading education. There were other traders I started to meet, who also believed what I wanted to believe, that one day we would be profitable, and they urged me to hang in there. There were business partners and others from that world who said if anyone could do it, it would be me, because I was so succesful at other things I had done that they had witnessed.
Neither group gave me what I was looking for. The supporters gave blind encouragement that was hollow, left me believeing it would be easier than it is, possibly convinced me to keep trying when I was not ready. The resistance camp haunted me, their words would echo thorugh my head after a bad day or week, and made me question my sanity at times.
Thanks for the praise, but I really did nothing other than tell you what you already knew. Who is GaryD anyway? You don't really know, I could be any level of unsuccesful trader with a bad attitude and full of self-righteousness. But, what I said to you is what I wish someone would have said to me, years ago. Someone who had been there, done that, and had advice that would actually make a difference. Someone not afraid of upsetting me if that was what was needed, and did not tell me to quit trading altogether, but told me what to stop doing and what to start doing. I have tears in my eyes as I write this. Trading has been such an emotional journey for me, I have become such a softy...
"Successful" trading can mean so many different things. But in the majority view, it probably means you make money. And in that interpretation, then being a "successful trader", you probably make a lot of it. Well, from my perspective, money has the least to do with it. If you can stay focused on the skill, not the money, and have patience, you'll find success. Stay open to the fact that it may not mean what you picture today.
Best of luck to you in your trading. And thanks for making me feel good about my decision to try to help.
Can you help answer these questions from other members on NexusFi?
i really feel silly commenting a lot of the time as my account is in the red, i have little experience, and generally don't know what i am talking about. however there is something i am puzzled by, not just in this journal but in general. people talk *alot* about trading decision based on break of trend. however, i do not see alot of trendlines drawn on peoples' charts. perhaps i haven't looked at enough charts on the site to make this generalization. if so plz forgive me. but i thought i would mention as i would just not be able to function without constantly drawing and redrawing the absolute basic trendlines - connect the lows and highs of the day. if price starts to flag, or wedge, or do the hokeypokey, *draw* it...just kind of easier to *see*.
Du sublime au ridicule, il n'ya qu'un pas. ~Napoleon Bonaparte
I think you brought up a really good point; I thought about this and I do think I owe you an apology.
I do agree that I have not drawn all the trendlines that were necessary to be shown as broken and then retested - especially since this journal is on trading based on valid major trendline breaks and entry on the retest of the extreme of the prior trend. I promise that I will try to edit any posts that do not clearly portray this.
However, Al Brooks does state that he draws the trendlines for "a brief moment" and then erases them once they are no longer needed OR once it is obvious that a trendline exists without having a need to draw it - the reason he does this is to enable you to concentrate on the price action and prevent you from taking decisions based solely on trendlines alone.
I tend to agree with his discussion mainly because there are a huge number of possible valid trendlines and all of them offer trades one way or the other - i.e. all of them are tradable.
But yes, in this journal, since it is for cross-examination, dissection and also for providing a logical framework to guide the textual journal it is only fair that I should add as much information to the charts as can be accommodated for to help the reader and also to cross-check whether I am being true to my self.
Thank you for taking the time to voice your opinion, and your post was pertinent and useful.
Having poured out my inner recesses in my last reply to Big Mike’s questions made the last reply extempore, but due to its spontaneity and the inward focus I realize on re-reading it that a more thoughtful precise reply might serve myself better – this new concise reply is being posted primarily perhaps that I can read it over and over to ‘fix’ my trading if (rather ‘when’, not ‘if’) it deteriorates.
A) What are the top five benefits you have seen as a result of regularly posting in this journal?
It brought commitment into my trading.
It quantified my core qualities – my ability (barely sustainable, on reflection), my discipline (lack of), my patience (lack of), my understanding of what it takes to become a trader (complete on paper, summative zero in implementation). It simply made me realize
1. Trading is not taking pot shots at the market at some random points while running errands.
2. Trading is not being consistent ‘most of the time’ and it is not a ‘discoverable’ science of making progress at technical analysis and then ‘relaxing’ because you have ‘mastered it’.
3. Trading is the purest form of management. Self-management, risk-management, trade-management, life-management, time-management. Other corporate versions seem like diluted watered down versions once it becomes apparent how much hard work needs to go into trading, and I don’t say that is true of timeframes are short or accounts that are undercapitalized; it probably is true on all timeframes, all account sizes.
It showed me that operating in the market is like driving in the gray fog, and made me realize that I would be alright if I just stuck to following the lights on the freeway. It made me realize how hard I made it really because I stubbornly insisted that driving on the edges of the freeway near the railings seemed better because then there was no traffic to contend with. It seems so laughable when stated like this, but this is how I thought (slyly) from all the corners of my mind about tweaks and tweaks and how foolish rules were in front of my brain which could bend it like Beckham so that by the time I was done with trading for the day I could own that Rolls-Royce by evening.
It made me competent. It allowed me to see which trades were causing my account to slide and which trades were (and I don’t mean the TYPE of trades but rather the quality and the ones executed with sheer discipline inspite of the monkey inside screaming to stop-notstart-exit-beafraid-takequickprofit-pushinmorecapitalonthissurething).
It showed me that trading is just another boring day job when treated rightly – correct trading did not invoke the sheer pleasurable emotions that were possible earlier, it did not mean come-trade-takeprofitout-relaxonbeach-goandtradeagainwhenmoneyover.
B) What are the top five problem areas you have identified as a result of regularly posting in this journal?
If I had ever been asked the following questions in the beginning of spring i.e. February I would have confidently and positively replied yes to all of these questions.
If had been asked:
1. Are you disciplined enough to follow your plan day in and day out?
Pre-journal: YES! That’s me, disciplined as a rock. Trust me to keep losses small, letting profits ride and that sort of thing.
Post-journal: NO. I need to be CONSCIOUSLY aware that I am ACTUALLY being disciplined; I need to AVOID low-probability setups like plague; NEVER risk more than the permitted amount and ONLY take the BEST setups which have a confluence of parameters going for them. I USUALLY do none of these and hence I also need to PLAN, and consider that I am NOT competent enough hence MUST have a stop loss order placed IMMEDIATELY once the setup triggers.
2. Do you have a solid trade plan?
Pre-journal: YES! I have read Al Brooks maybe twenty times, and worship it at the altar. You could say that the trade plan is lifted right off Al Brooks.
Post-journal: NO. Everything falls apart and feels like I am building a rickety two-legged stool and am actually betting my leveraged ass by sitting on it hard with no safety net or railings around to grab in case I fall. (I am VERY likely to fall…. I am VERY likely to fall… God of carpentry please let the nails and glue hold till I get up, pretty pretty please). The nitty gritties are very real only once you start JOURNALLING, else you tend to behave like Dr. Watson to whom Sherlock Holmes says “It is a capital mistake to theorize before you have all the evidence” Sherlock Holmes - Wikiquote).
3. Do you have a deep understanding of the markets – can you recognize setups in real-time?
Pre-journal: YES! In all my humility I can claim honestly that most things that the market does are already apparent to be before the market does them
Post-journal: NO. Most predictions are intuition. It is only when you WRITE DOWN the reasons that you realize how flaky they are. Penning down your thoughts serves as a bull-shit radar and filters the bad trades from the good ones. If you had not written down these things you also tend to celebrate wins as if they display your genius and downplay your losers because ‘the markets did me in’.
4. Are you an expert in some markets / stocks / futures?
Pre-journal: YES! I am already an old-timer in the markets and can discern multiple market directions in flat five minutes. So I can easily watch a hundred charts everyday since price action is price action.
Post-journal: NO. I have not proved I can watch ONE market and be profitable. Unless this first piece placement is solved, there must be no attempts to do the whole jigsaw puzzle thing by picking up all pieces at once.
C) Were you initially reluctant to start this trading journal? If yes, why?
As many would say, I always have wanted to keep an elaborate journal not just for my trading life, but also for life in general. While the benefits are obvious and clearly can be visualized, actually sitting down and doing it is another matter altogether.
The reluctance to keeping a private journal boils down to the feeling of investing a lot of time into documenting - it is personally relishing, but the benefits are redoubtable unless you religiously reread it, analyze its best and worst parts and work on improving on that basis.
Also, publicly posting your thoughts into a journal was appealing to the ego when the purpose seemed like a master writing down his daily profitability scrolls as a public service, much akin to a friendly billionaire helping all the poor traders out there (the reality was much far removed from the truth, which was blown account after blown account wherein the real trader within had difficulties making a single dime in the markets consistently).
Thus the reluctance was a mix of procrastination, doubts on usefulness, fear of expression of your deepest emotions and even plain laziness.
However, I am so glad that I overcame all of the above and journalled everything into my posts – and I mean everything – and put down thoughts as honestly as I could.
Overcoming this reluctance occurred because once I started I really figured I had nothing to lose and everything to gain, and it turned out to be true.
D) How do you feel, overall, about your journaling experience?
I think that because of journaling I am making steady progress, not in monetary terms but in getting closer to my goal of becoming a REAL TRADER.
I have stopped gambling.
I have been able to discover my bad habits, my flaws.
I have been helped by the whole community and look forward to helping others (or atleast in whatever small ways I am capable of helping, one of which is to honestly journal my experiences here without shame or fear.)
I have come about to realize what a friendly, secure, comforting, helpful, down to earth place the Big Mike forum really is. Magic seems to happen where it is needed the most.
@ GaryD, it seemed as if a fairy godmother appeared when Cinderella was at her forlorn-est.
E) Would you recommend to others that they should also start a trading journal?
And Thank You everyone (advisors, readers, commentators, enlightenment-seekers, hard-working administrators including Big Mike) for reading this, for this opportunity to present myself, for allowing me to weep like a baby. Nowehere else I can forsee that this could have happened.
Why am I feeling so HAPPY today? Not because I am profitable (which I am) but because I
1. Followed My Rules,
2. Was Patient,
3. Assessed My Risk BEFORE Entering,
4. Entered with a Stop Loss Order in place at a valid point,
5. Did Not Panic and Exit,
6. Exited At A Valid Point.
Here is the detailed breakdown of how I traded today, and how I plan to continue trading throughout this fiscal year ( :-) ):
1. I patiently waited for a setup over a period of two days. I did not click the mouse over so-so setups. I missed one really great setup but did not chase it and enter late. I kept waiting for the next great setup.
2. When the next great setup manifested itself I entered on a stop order one tick higher than the signal bar on 03 Apr 15:02 on a 2-minute chart. I used a 30-minute chart to assess my risk and at a low risk - high reward place I switched to a 2-minute chart where I lowered my risk even further and placed a stop at a point below the last swing low.
3. I then walked away from my computer for the next ten minutes. I have noted that ten minutes is the time it takes for my monkey to settle down my fidget control to kick in (which otherwise is managed by my monkey who readjusts stops, sees danger signs and panic exits!). I will address this issue in a later post because I need to get this worked out - what if the market shoots up in those ten minutes, provides a valid exit signal and then reverses?
4. I exited below the bar at 15:18 which printed a double top at 860. My exit happened at 859 where the bar closed. I could have trailed my sell order but didn’t because I badly wanted the profit.
Note that I kept my position size to two shares and the profit will not amount to much. However I now am simply accumulating proof that I have what it takes to be a trader.
Unfortunately, my quote feed was gone bonkers today - I was able to see the price quote but the realtime chart displays had gone kaput.
I did try to get a feel for the price action by looking at price alone but felt handicapped.
I am sure older traders would say that you can trade off price alone (not even Time and Sales or Level II and not even a price quote but simply a PRICE i.e. the last traded price). A poor man's version of the ticker tape without the volume or the srrrrrrrrrr flow of the tape which might make Wyckoff feel out of place for placing an intraday trade but I wonder if it is still possible.
However I have become so used to having a real-time candlestick chart that the idea of trading on price alone seemed preposterous hence, as said, nil trades today.
However I would like to have healthy discussion (flaming might work, but is not encouraged!) whether this is even remotely possible, or if anyone actually goes so far as to DO it in this century.
Remember - no charts, not even volume, no ask bid either - just pure price.
(The daily price charts are still viewable of course, albeit on a computer, but just like the old timers would do it with graph paper and a sharp pencil. Only the intraday prices are in the form of PRICE alone)
IQ thanks for your posts.....I've experienced your feelings and did those actions many times over the years....I even had to take a couple years off trading because of the self inflicted damage I did.
What has changed today? The number one item (not system, not money management - although I've got those firmly in place now) is psychological help (specifically a trading psychologist).
It has made all the difference in the world. The person who has helped me says his (biased) research shows that 95% of traders need this help to lay the foundation and succeed in this business (and less than 10% have the ability to do it themselves). The attributes that help us succeed in other endeavors outside trading are the exact attributes that kill us in trading (a weird but true dichotomy).
Getting the core mental/spiritual/psychological foundation re-built from scratch is what helped me. After that all the other important disciplines followed.
Still learning and still a humble beginner but getting better everyday.
Well, I had a bad dream last night where I was either in the Alpine Meadows or the Squawk Valley (Lake Tahoe, CA) ski resort sitting on a chairlift with a kitchen pot on my head and two shiny metal poles strapped onto my feet. I was nearing the slope part that started sloping down and was 'ready' to launch myself down the Olympic Ski Slope in this gear (or lack of).
I am sure GaryD must already have cringed at my asking about whether trading is possible only based on a price alone without a real-time chart.
It probably was my demon trying to claim his territory.
After trading and posting regularly last month, and since this month began with holidays where the markets were closed for almost half of last week and the one and half days of being without a live chart I took a break and recharged myself.
However, being in the holiday mood while treating a day as a ‘working day’ is almost a disaster in the making.
I woke up early but ‘didn’t feel like it’ and was also taking care of chores so got to the market after almost half the trading day was over. Talk about the early bird catching the worm.
Meanwhile, the ‘worm’ had already wriggled and shown its downward intentions multiple time by printing a Double Top Bear Flag (5 Minute bars 09:55 and 10:50) and then a Lower High (11:45).
Which goes on to show how even small lapses in discipline have an effect on your bottom line. Especially since there was no plan NOT to trade the first hour etc. since actually the first hour sometimes brings easy opportunities.
However I did manage to take the Failed Failure of the Breakout (12:25) where a pinbar closed below the 20 EMA after a push downwards (breakout) failed and then the breakout failure failed as shown by this pinbar, below which I shorted.
I covered at almost the bottom of the huge bearish bar at 13:00. The exit was simply taken because I was afraid that this was a breakout test of the 09:25 huge bear bar which had closed at 345 and hence covered my position. I did not go long because that would have been foolish and I am not yet a consistently profitable trader to trade countertrend.
