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No trades today. The action was relatively slow, with some pick up around 8:00 for some reason. Didn’t really see anything that floated my boat and I wanted to go into the weekend with positive feelings. Also, had to leave the screen for a while to attend to more family matters.
Managed to mark some areas. Real time marker results were ok:
2 wins
2 losses
1 BE
Charts annotated with thoughts about various possible trade areas. Blue means a long opp. Red means a short opp. Black means no trading for various reasons, even though it fits the rules.
For ease of reference, the attached charts are sequenced on a daily basis as follows: CL, GC, NG, YM or NQ, 6E, ZN, and a bonus chart if applicable
Weekly Summary 8/10/15 to 8/14/15
Live Trades: 12, 6 winners, 6 losers
Week’s P/L: $250.25
Starting balance for the week: $2653.66
Withdrawals for the week: $0
Deposits for the week: $0
Ending balance for the week: $2903.91
Beginning account balance from first live trade on 3/10/15: $3000.00
Total Withdrawals: $0
Total Deposits: $0
Total Gains/losses from 3/10/15: -$96.09
After being down almost $900 I have managed over the past few weeks to get back to under $100 in total losses. The turnaround can be attributed to paying more attention to the 3X charts, and waiting for the really obvious trade opportunities. This week the win/loss ratio was better at 50% with a profit ratio of 2.2.
As for the 28 marked/trade areas, the results were as follows:
13 +2R wins
10 -1R losses
5 that got to +1R and reversed to entry for Break Even.
If all hypothetical trades were moved to BE after reaching +1R, and all profits taken at 2R, the total yield would be (13 X 2R) – 10R = +16R.
If all profits were taken at +1R the yield would be (18 X 1R) – 10R = +8R
Therefore waiting for 2R would be the more profitable way to go. In other weeks, taking 1R every time is the more profitable route. Not bad results either way.
That said, I am going to mix things up a bit. I need to break out of this ultra conservative mode and really put my method to the test. This week I will return to sim trading the majority of my trades. The goal is to take as many trades as I would normally mark every day, including real time markers, hindsight markers and live trades, with as little regard for the results in the moment as possible. The goal is to:
-Take everything that I might mark on the chart later during my daily review
-Take profits at 1R and losses at -1R, no management whatsoever. Set it and forget it
-Register as few emotions as possible, win or lose
-Not let previous results effect future trade decisions
-Let the chips fall where they may and do the analysis later.
I should take somewhere around 20 trades per day. It will be interesting to see if this many trades can be recognized in real time, especially if they are setting up at the same time. I expect some valuable lessons to come out of the exercise. Live trades will still be taken on occasion. One of the biggest challenges will be remembering which mode I am in. Should be interesting.
Well that was interesting. As Lloyd Bridges would say, “I picked the wrong day to stop sniffin glue.” Or in this case, trade with abandon. Thankfully all trades were in sim, and I pretty much accomplished my goal of not leaving any trade on the table.
The idea was to take every trade possible that passed the dual tests of context and rules, so that at the end of the day no hindsight markers were necessary. This was all to be done in sim of course, with no hesitation, no emotions, no trade management, and no influences from prior trades. Trade management was simple, take profit at 1R or hit the stop at -1R. The only time I moved my stop to BE was once on ZN when it reached 1R and didn’t trigger the limit order. The rest were set it and forget it. Toward these goals I would have to say, “mission accomplished.”
As so often happens attempting this type of exercise, it was the wrong day to give it a go. ZN was stuck in a 12 tick range all day and the other instruments threw out a bunch of head fakes. I was complicit in the carnage by taking iffy trades, and some outright bad trades, in an effort to not miss anything. The results:
Look backs in the previous weeks did not yield numbers near this bad so I am hoping better volatility means better results. I will continue to do this exercise for the rest of the week, then evaluate at week's end.
Some lessons learned:
-It was not that hard to take 27 trades, especially since there was no management after entry.
-I was able to spot everything in all 6 instruments.
-If these trades were live it would take some guts to stay with some of the trades to target. Lots of chop
-Conversely, there were many more trades I probably should have exited long before full stop, but that would defeat the purpose of the exercise.
-In an effort to catch every opportunity, I took some bad trades that I would not normally consider. A little more patience and discipline required
-It was great to open up and take some trades without thinking too much, and I had a lot of fun doing it.
Another day with listless action. Several instruments in ranges. Trades taking a long time to complete. Not much in the way of follow through. Day two of my experiment to sim trade all worthy set ups and not leave anything to mark in hindsight.
Trade selection was a little better today. I focused on the context, the rules and not getting too caught up in not missing a trade. Results as follows:
17 trades (better trade count today)
8 wins
9 losses (two were commissions only)
P/L: $132.78
Max dd: -$83.60
Max run up: $378.26
(The P/L is not so important right now because my instruments have different R values. My first goal is to get the account up to where I can set all R values to around $150 across the 6 instruments.)
A couple of observations from the first two days:
-It is not hard to spot the set ups, but it is sometimes not easy to determine if they would be worthy of marking in hindsight and thus taking in real time. This is the thing with hindsight. It is so easy to see what you should have done. Having said that, the exercise does force me to visualize more.
-I am forced to be more in tune to possibilities in either direction at all times.
-I am more engaged with the markets the whole day.
-There are times when I have multiple trades on, which would require a larger account to cover margins
-Trades can take a long time to complete with set-it-forget-it trade management, offering multiple opportunities to exit, sometimes to the detriment of profit and sometimes saving loss. The advantage is there is less stress in not having to manage (at least in sim!).
-There are times when a trade needs to be exited in one direction to be able to take a trade in the other direction. If neither direction follows through, you get chopped up like I did in ZN yesterday. Looks really bad in hindsight.
-I am often going in too early, not waiting for a more complete pattern. Again, this is due to the desire to not leave anything on the table to mark later.
For the first two days the markets have not done much. Hopefully volitility will pick up so I can see how this works with a trending market.
Day three of my sim experiment and it is not going well. Though disappointed, I am not surprised. I have tried this type of thing many times in the past with similar results. I was hoping that, with what I thought was greater understanding of price action, this time would be different. It’s not
Today was the first of the three that featured some trends, so I was eager to test it under these conditions. The results were no better:
25 trades
10 wins
15 losses
My efforts to “visualize” in real time what I might recognize in hindsight are proving more difficult than anticipated. Seeing lots of mirages out there! I am catching most of the good trades, but taking too many losses in doing so.
It never ceases to amaze me how it is that one can take deliberate, thought through trades and actually end up with a win ratio worse than the flip of the coin. One would think you could at least get to 50%. If anyone has an explanation for this phenomenon I am all ears.
In any case, I intend to follow through with the experiment for the remainder of the week. Though it doesn’t appear to be yielding good results, there are always lessons to be learned by doing these things once in a while.
Many ideas of thought-through trades involve waiting for confirmation. Trades that need a lot of confirmation usually have a high failure rate, especially in futures markets.
Better planned trades tend to be pre-emptive, into known areas of S/R, with divergent strength/momentum/pattern. Then the failure rate doesn't matter so much, they're already likely to be in good areas for a move away.
Just my 2p.
Cheers, and keep up the good work, you were flying before this last little exercise!
Today went a little better with more disciplined, less manic trading. Swung a little to the conservative side and miss quite a few trades, but in general tried to wait for more significant events: bounces off of major areas, demand/supply lines, quick reversals at news events, etc. Sim results:
9 trades
5 wins
3 losses
1 BE (had to exit before NG inventory)
I was targeting about 15 trades today. I think that is the number, plus or minus, that makes the most sense, depending on volatility. I think 75 trades per week average across 6 instruments is reasonable. That’s about 2-3 trades per instrument, per day. Not out of the question. When I get into the 25 to 27 trade/day range like Monday and Wednesday I know it is too much, unless the markets are really on fire. Still, 9 trades to net 2R is not that exciting. Of course, there were a couple of trades that would have made sense to hold longer, but that is not what I am doing with this experiment. One more day and then we evaluate.
Tried to get in one live trade on ZN but didn’t fill. Too bad because the trade worked out nicely.
8/21/15 Friday
Live Trades: 1 loss
Day’s P/L: -$3.00
Tried one live trade on ZN today that got stopped at BE. The idea was sound and the trade worked for 19 ticks, just without me. I moved to BE at +4t and it came back one more time before shooting up.
18 sim trades. Good number for the type of day it was. In fact, it should have been a few more seeing as how YM was trending. The day started very well with 5 wins and 1 loss. I got a little conservative in the middle of the session, protecting my fake profits, so I decided to open her up. As a result, there were some ill-advised trades after the 9 o’clock hour, but my main objective was to get off my ass on such a nice trending day, come what may. Final results:
19 total trades, including the live trade:
11 wins
7 losses
1 BE
7 of the wins went to 2R, so I was at least on the right side of the market a lot of the time. However, with the way YM trended, I passed on way too many opportunities. Still imagining too many monsters under the bed.
All in all the week was interesting. I was a little spazzy the first few days, trying to take everything, but managed a little better decision making once I calmed down the last couple days. This weekend I will evaluate and decide how to proceed. Whatever I decide, I will focus a lot more on trying to make real money next week.
