The title of this journal and my earlier statements imply that I have taken the exact same in my real money account. That did not happen for this trade; I think going forward I will have that setup but am starting to find it distracting.
- The signal bars (two candles before the blue cross which is the entry bar) were Double Dojis - a double doji break in a bull trend.
- There was a breakout from the bull flag (130.43).
- There had been an earlier bullish momentum move which broke the major bear trendline.
- The second swing high forming the double top (130.52) was one tick lower than the first swing high. The market usually breaks such formations as it knows there are lot of stops above the perceived double top.
- A three push pattern had been completed and a second bull leg was anticipated.
- There was no bull trendline break.
All these reasons gave me confidence that this was an A+ setup - so I entered long at 130.44 with Auto-OCO +10/-10 ticks.
Risk / Stop loss:
Entry is always with a 10-tick stop loss. But that is the worst case scenario and actual stop is at tipping point defined below. (Thanks to @tigertrader - Risking 10 to make 10 is not a good trading strategy! Thanks!)
The tipping point was 130.37 below which the trade premise would have been invalidated.
Stop cannot be moved to breakeven (losing proposition, driven home by @PandaWarrior who whacked my behind for this breakeven stop idea in a earlier combine! Thanks, Brian!)
The following 2 users say Thank You to iqgod for this post:
This is the rule that tests whether my discipline is in place.
I sat on my hands (ouch) till the 10-tick target was reached.
Okay, I did move the stop down to 9-ticks to account for the horrible algorithm used by T4 simulator to trigger the exit - if there are 9 orders before me and then I am filled my target is the 10th order.
But I see T4 not filling it sometimes when the number of orders increases to say a higher number (say 24 randomly chosen) and then I see the ask contracts decreasing from 24..23...22...21.... ..... ..... 8,7,6,5,4,3,2, and I am still NOT filled.
And voila it fills me at last when I should have been filled when the number was 14 (I was 10th in line).
However next time I will take all 10 ticks with patience.
This has simply been one winning trade in a series of trades I will be taking one by one.
The next trade may be a winner or a loser.
It does not matter.
Because I believe in the positive expectancy of my system I will continue to patiently wait for the next valid setup to present itself and take the trade confidently.
The outcome of any one single trade does not matter to me.
What matters is that I take all the valid trades that are presented to me to allow the positive expectancy to play itself out. (not skipping trades because I am already in the green etc...)
What matters is that I keep my losers smaller than winners.
What matters to me is that I exit when it is technically unfeasible to continue having a positive expectancy and when the trade has degenerated into a coin toss (never because the loss is unbearable or because I was to keep it a winning day).
Here I am reseting myself, mindful and free.
The following user says Thank You to iqgod for this post:
Good stuff here. I think you are going certainly in a right direction. If you are trading Bob Volman's method (I read his book too and tested out his approach), maybe focus on trying to minimize a number of setups taking. He offers too much setup types and it generates a lot of trades. Same issue as with YTC Scalper, it's a madness, HFT can trade like that constantly, human will be drained fast. So look to figure out only the very best types (I find all range break out unreliable, stick with the trend/momentum), and introduce a good filter that will stop you from overtrading and taking too much trades, like trading only key few hours, taking trades right after the hour/15m period end when longer-term trades enter/exit positions, volume or volatility-related, etc. Good luck!
Trade to live. Not live to trade.
The following user says Thank You to xelaar for this post:
Here is a trade I missed (apart from another trade early during the session):
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I am recording this observation in my journal because:
- Both trades were missed because I had just logged in to the platform after demands of life forced me to take a break of a few hours.
- Both instances I did not take the trades though they were valid setups (I hesitated).
- This last trade I hesitated because I had already mademy mind 'opaque' - I had decided to start the first day of the combine on a green foot and hence decided that I will stop takng trades. This was against good habits and this entry is to serve myself a memo.