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We had quite volatile day finally, but I still managed to make few mistakes. I also had some bad luck when I was not filled in the first trade, but that is part of this business I guess.
Point A I was waiting for the market to come to this point for couple of minutes. I entered long 4 ticks from higher low but I didn't get fill. Moment of my entry:
T1 Nice entry, just 2 ticks from local low but my greed kicked in and I didn't take 12 ticks profit because I was convinced I just catched the bottom of the market. At least I got out after the market returned to my entry point at BE+1
BTW. look how the market reacted to my preplanned support level (green rectangle).
T2 Still convinced that the market will move up, I entered long. Didn't work as expected so I killed the position at -4 T3 This was my best trade of today. Again just 3 ticks from the bottom, I learned from my last mistake (T1) and didn't take any chances when I saw the market struggling with the 4446.00 price level. This time it went much higher, but so is the trading. +8
There is acutally good lesson to be learned from this. If I took quick profit from both T1 and T3 I would be up $100. Second option was to aim higher but again WITH BOTH trades. T1 would end up as it did at BE, but I would cash $100 from T3. So either way I would make more money. THE KEY IS THE CONSISTENCY HERE. If you are not consistent, you usually end up earning less.
So as you can see, I still make some mistakes which I grew up from on SIM account but on the other hand I feel tiny improvements every day. This is much more important for me than actual dollar gain.
In order to earn money in e-mini Nasdaq or Dow Jones today, you had to have the fastest hands in the east The markets have been quite volatile with extremely quick jump moves which required extremely fast reactions in order to get a good price.
Another thing was very strange auctions on reversals in the market. Many times confusing me and giving me contradictive information.
T1 Too early, but I realized it quickly and killed the position at BE. -0 T2 Reentry, but I realized that the market is not ready to rise yet. +3 T3 Another quick long and quick profit taking +5 T4 Probably the best trade of today, just 1 tick from the local high, though I had to close the position because of the auction +3 T5 Too early but I at least managed the loss -4 T6 Quick short, didn’t work so out at +3 T7 Probably the worst trade today. I was pulled into the long just by the tape. -5 T8 Nice long but there was already low volume and the market didn’t move som I killed it at +5 T9 Nice long just 2 ticks from local low. This was very strange because my profit target was overshoot by 1 tick and I still didn’t get fill. I picked the lmt order with mouse but I didn’t release the mouse button so it should have been there. I don’t know actually what happened here. +4
I had some technical issues from the beginning today and then some bad luck later on. Good thing is that the markets are starting to move finally. T1 My bad. Jumped in too early. Stupid trade. -4 T2 - T4 this was series of confusion and technical mistakes. I still can´t figure out what exactly happened during T2 even when I watch it on the video. After I was filled I suddently saw 4 different orders in the market. It looked like this
The stop loss order was just 2 ticks above my entry for some reason and I got stopped out instantly. After that I killed the other orders with ''flatten'' button in SierraChart, however I still saw the orders as pending in my TWS (Interactive Brokers platform). In this mess I still saw this as a short setup so I entered new order but unfortunately I was too confused and by mistake entered long instead of short. Well, this happens as well. As soon as I realized what I did, I killed the position as well and finally entered short but for bad price. I thought that Murphy had his fun with me for today, but he likes me a lot obviously. I placed my profit target at 4456.25 which is the price where the market dropped but I didn't get fill there and the market started to pull back, so I was moving my limit order higher to take at least some profit and suddently my clock alarm window popped up. I use it to remind me of data releases in the markets.
As I was closing the window market moved few ticks below my short order and everything I could do was to close it at BE+1. -2 -1 +1 T5 Finally an entry without any technical difficulties. I took long from pullback into trend. +16 T6 Another long into trend from pullback. This time the timing was even better - more patient. +7 T7 I entered long from nice 30min structure, tape was also very clear - lot of trapped bears. This is the setup I am usually waiting for. However somebody more powerful (and cunning) pushed the market even lower. During the whole period I was convinced the market has to rise so I gave the market room. As you can see from the picture, the market dropped with tick precision exactly at the price level where my stop loss was (and unlike the profit target, it is stop order so I was filled). After that it climbed back like crazy. ''Thank you'', Murphy -12 T8 Quick aggressive short after some trapped bulls. +8
Suma sumarum, I ended up with slight profit today but most importantly I learned a lot again.
I could synchronize with the markets today quite well. I messed up timing of the first two entries and therefore I started with a small loss even when the markets moved in desired direction. Nasdaq also reacted nicely to preplanned support (near T1).
T1 Premature long. I opted for quick 3 ticks loss when I realized it. -3 T2 Another premature long. This time even with bad trade management. -8 T3 Probably trade of today. I went short just 2 ticks from high of today. +12 T4 Quick probe trade. Didn't went as I planned so I opted for quick +1 T5 Long from the exact local low. +6
The previous week was disaster. This week my trading started to look better. The markets started to move finally as well.
What I need to work on are premature entries and reducing the average loss (trough better entries). Another area which requires improvement is increasing the average profit per trade. The average profitable trade this week was $26.55. Ideally it should be higher than $30. The percentage of profitable trades rised to 60.71%. Ideally it should be in 75-80% range.
Good news is that even when the profits have been small, I made profit every single day of the week. I ended up this week with $146.88 profit and managed to decrease the drawdown from previous week. From the beginning of LIVE session during very tough market period I am down only $60.
Alltogether, I am quite satisfied with my progress so far. The most importatnt for me is to remember that this phase of trading is not about earning lot of money, but about building confidence and basis for future multicontract trading.
Step by step I am slowly improving my trading. The market was also moving quite nice today.
T1 Somehow I still make at least one mistake per day. This entry was again premature. -7 T2 Reentry on the same idea, this time even the timing was right. +12 T3 Tried a littlebit more aggresive short. I didn't see what I wanted to see on the tape so I killed the position at BE+1 T4 Went long just 2 ticks from local low. +12
My trading results are also starting to look more like what I was used to.
Accuracy of sniper shots is influenced by three main factors: weapon system (rifle + optics + accessories), ammunition and the shooter himself. Each of these components are equally important. Take the best modern sniper rifle with floating barrel, put the best scope on it, reload accurate ammunition adjusted for the rifle's chamber and put it all into hands of someone who never shot rifle before and he won't be able to hit a barn at 500 meters. If you put old rusty rifle in the hands of skilled sniper he won't be able to achieve the accuracy he is used to. As you can see, if you replace just one of these three components with inadequate one the result is terrible.
Trader relies as well on 3 pillars when trading: money management, trade management and trader himself.
Money Management is the foundation of the whole trading system. Without clearly defined variables of Money Management, trader should never start with live trading. It is like if the sniper went on mission without ammunition. Without solid Money Management rules the trader doesn't know how much can he risk per trading session, he doesn't know how big basic stop loss can he afford, he doesn't know what profits he should aim for to achieve planned gains, he doesn't know what win ratio to expect, he doesn't know what draw down is still in a norm and what is already a sign that something is wrong and he needs to stop trading at all. Without Money Management, trader doesn't know when to add new contracts to the positions and he doesn't know what basic capital he needs to start trading.
Trade Management is the trader's rifle. It defines exact rules how and when the trader enters the trade, what stop loss to use in which situation, how to manage the position in loss and when to take profits. Similarly like sniper continuously cares about his rifle, also the trader never stops to adjust trade management to current market situation. If there is low volume in the markets, trader needs to calculate with wider stop lossses, trade only perfect setups and take profits quickly. Vice-versa in higher volatility trader aims for more distant profits, entries are faster and management of open position more aggressive.
Trader himself is the most important element of success. He can have perfect money management rules, detailed trade management with clearly defined rules, but if he doesn't follow the rules when trading the whole system is useless and his capital will keep shrinking. I was blessed to be a part of bigger trading group where we all traded the same system. It means we had the same tools, same approach, very similar rules and still I saw that just few of us have been successful. Clearly the system was working well and still just few managed to actually FOLLOW THEIR OWN RULES and become successful.
Today I managed to pick several tops and bottoms with great precision, but I added also some sloppy trades to the mix. I ended up in profit again, but I could have done better without those trades. I tried couple of trades in Dow Jones and both ended up in a loss. I think I will concentrate more on Nasdaq in the future.
T1 I picked up the bottom 4 ticks from low. +4 T2 I picked up the top 4 ticks from high. +6 T3 I tried long in DowJones but had bad price. I opted for quick loss instead of giving the market more space. Even when I can see retrospectively that it would have ended up in profit, I still think that it was good decision. -5 T4 I picked local low just 2 ticks from low. +6 T5 Bad trade, bad management. I took it too prematurely. -8 T6 This was more of a reentry in different market. Still bad idea. -6 T7 Finally a trade which made a little money as well. +18
I rolled over and traded the new contract month today.
I missed the first opportunity for long at 8:34 from my preplanned zone in NQ (point A). After that I kept waiting for some nice setup. (T1) That came after the market pulled back and looked like it is going to bounce off the MID. I forgot the report comming out and jumped in as I saw weak bears trying to push quickly down. My $85 profit target was filled in 15 seconds.
T2 Another good opportunity arose at 9:08 when the market reacted to my preplanned support level again. I waited until the orderflow showed me that bears are not interrested to push lower anymore and I went long for a very nice price. I didn't want to risk anymore so I opted for quick $45 after the market lost the primary momentum.
Suma summarum I reached my perfect daily profit (range $80 - $120) in first half an hour of trading. Keeping in mind that it is friday and rollover period I simply stopped trading and dedicated my time to other activities.
The markets have been quite volatile with extremely quick jump moves which required extremely fast reactions in order to get a good price.