This journal is long due, I am trying to improve my trading. I think documenting the journey would help me to achieve my goal.
My Mindset – I want to buy low and sell high (that makes me the one always fighting the TREND)
I will be very uncomfortable/fearful/dreaded BUYING at highs i.e breakouts or buying at all-time highs or near all-time highs or 52 week highs. At the same time I am very comfortable SHORTING at highs and needless to say that was not at all a good idea in last five years.
I will be very uncomfortable/fearful/dreaded SHORTING at lows.
I don’t mind averaging down in the HOPE of getting back to breakeven and in the process of going thru hell lot of pain
and mental agony and missing the meat of the move by selling the position once I am at break even.
I always enter the trade a bit early and get out of it a bit early (This is direct result of position size and leverage I
understand that).
This makes me the guy who always looks for mean reversion.
What I learned so far
One can fight the trend if he/she have huge margin but with small account you simply cannot.
I need a stop-loss preferable mental one because hard stop-loss always gets me (I mean literally every time).
Be fast and adaptive to the changing markets.
I MUST follow a method and stick with it and that method must include a stop loss.
My Method (Still developing)
Combination of Buying/Trading Value, trend following, monitoring market internals and mean reversion.
Tools selected - Auction Theory using mainly Volume Profiles (Different time-frames), sometimes Market Profile using range bars and HA candles for visualizing trend.
Platform – TOS ( I tried other platforms somehow I keep coming back to TOS so going to stick with it even though
it’s not great for Volume Profiles but I think it’s not that bad).
Future improvement – Will try to incorporate Volume Foot Print chart and cum delta volume to identify reversals
(But might have to wait for TOS. I can go to NT or Market Delta but both needs monthly subscriptions to data and
platform so not ready for that yet).
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I started this journal on August 15th, 2015 seeking freedom from my bad habits in trading specially
1. Counter trend trading (Looking for mean reversion trades)
2. Loss aversion (Fear of taking losses)
CONTEXT IS EVERYTHING so what is CONTEXT? If we simply do a google search we will find numerous examples etc etc but there is no
fixed definition of context related to trading so each one has to find there OWN definition of context to get better at trading.
So for me CONTEXT means finding what is DRIVING the market at the bigger level and at the day to day level.
There can be numerious driving forces but KEY is to find what is the driving factor NOW and using that in your trading.
Few examples of driving forces are Central Bankers, QE, OIL correlation, USDJPY correlation, BONDS correlation,
Small caps correlation, Banks, Techs etc. KEY IS FINDING WHICH ONE IS RUNNING THE SHOW NOW.
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In TRADING everything is WORK IN PROGRESS so don't take anything RIGID and one must be flexible and adjusting all the time
And
It's not about the METHOD it's all about your MIND and EXECUTION
Update - 10/30/2020
Deleted method because it's not relevant anymore.
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Had short bias on ES/YM on Friday but didn't took it because of weekend...looking for reversal this morning somehow missed but took a short on YM at 17465 went up to 17489 but now at break even...looking for VPOC at 17430 or stop out at highs.
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I am back short YM at 17481 and ES at 2095.75 ideally I want these two close below in next 30 mins or else again I have to take a bite and call it a day...
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That didn't go well but still having both shorts only change is I hedged my ES with December contract, reason for this is they might try to run out stops above 2100 and any overnight weakness I will get out of YM short.
Edit: LOL, while typing this they were running stops....
Site Administrator Swing Trader Data Scientist & DevOps
Manta, Ecuador
Experience: Advanced
Platform: My own custom solution
Trading: Emini Futures
Posts: 49,386 since Jun 2009
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That is a dangerous belief. I see stuff like that usually said by people in "rooms" or rookies that don't really know any better (the same people that blame HFT's).
I'm just urging a bit of caution in the way you are thinking about the market.
If you find you are getting run over counter trend trading (I assume you are, since you say your stops almost always get hit), incorporate foot print charts as soon as possible. Footprints will show you where momentum is running into resistance (absorption), it will make your entries a lot better if you can see the order flow.
Have a look at how I use footprints to catch reversals in my journal, Trades on August 14th and August 17th both show how absorption are potential reversal points.
You don't need to pay for marketdelta, just use NT (free for sim) and get the Gom Volume Ladder in the elite indicators section.
Get a data feed such as kinetic (about $90 a month), use NT to watch orderflow and execute on TOS. That would be the cheapest way.
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@PeakGrowth Thanks for the message and advice. Yes, I am aware of GOM footprint. I use TOS for charting and data because it's free of charge for me but they don't have footprint charts maybe in future they will have. Almost everytime they will run my stops, maybe I need to get foot print charts even I have to pay for the data.
Gotta pay to play - if you want this to be more than just a hobby, you need to invest in the tools. 90 bucks a month is nothing if you're treating it as a business.
For an even cheaper option, go with DTN IQ feed, futures.io (formerly BMT) elite members get a pretty good discount on it.
Nobody is running your stops, you are too insignificant (no offence intended). There are only 3 reasons why you are getting your stops hit
1. You are getting entries in the middle of momentum and you are getting run over before momentum exhausts itself
2. You are placing your stops too tight and getting stopped out in the noise
3. You are placing your stops at obvious places (a few ticks below a low, etc) where other retail stops are and your stops are getting run along with every other guy who put their stops there.
In all 3 cases, it's not the markets fault or someone deliberately running your particular stops. Whether your stops get hit for the right reason (your hypothesis is wrong) is entirely up to how you place them and nothing to do with someone else or the market running them. You are solely responsible for why you get stopped out.
You can solve all 3 problems by fixing how you place stops
1. Don't step in front of momentum
2. Use a wider stop
3. Place a stop further away from an obvious stop point so you don't get gamed
Hope that helps.
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Still have my positions from yesterday...I put a limit order to close YM at 410 but didn't hit and now market pulled back so have to give little room and manage ES later...I am short biased for today.
I am at Doctor appointment so checking on my phone only
Good Research on Definition of Lucky and Unlucky. Worth to read and re-read and re-read whenever we feel we are Unlucky...............
Why some people have all the Luck ?
By Professor Richard Wiseman, University of Hertfordshire.
Why do some people get all the luck while others never get the breaks they deserve?
A psychologist says he has discovered the answer.
Ten years ago, I set out to examine luck. I wanted to know why some people are always in the right place at the right time, while others consistently experience ill fortune. I placed advertisements in national newspapers asking for people who felt consistently lucky or unlucky to contact me.
Hundreds of extraordinary men & women volunteered for my research & over the years, I have interviewed them, monitored their lives & had them take part in experiments.
The results reveal that although these people have almost no insight into the causes of their luck, their thoughts & behaviour are responsible for much of their good & bad fortune. Take the case of seemingly chance opportunities. Lucky people consistently encounter such opportunities, whereas unlucky people do not.
I carried out a simple experiment to discover whether this was due to differences in their ability to spot such opportunities. I gave both lucky and unlucky people a newspaper, and asked them to look through it & tell me how many photographs were inside. I had secretly placed a large message halfway through the newspaper saying : "Tell the experimenter you have seen this and win $50."
This message took up half of the page & was written in type that was more than two inches high. It was staring everyone straight in the face, but the unlucky people tended to miss it & the lucky people tended to spot it.
Unlucky people are generally more tense than lucky people, and this anxiety disrupts their ability to notice the unexpected. As a result, they miss opportunities because they are too focused on looking for something else. They go to parties'; intent on finding their perfect partner & so miss opportunities to make good friends. They look through newspapers determined to find certain types of job advertisements & miss other types of jobs.
Lucky people are more relaxed & open, and therefore see what is there rather than just what they are looking for. My research eventually revealed that lucky people generate good fortune via four principles. They are skilled at creating & noticing chance opportunities, make lucky decisions by listening to their intuition, create self-fulfilling prophesies via positive expectations, and adopt a resilient attitude that transforms bad luck into good.
Towards the end of the work, I wondered whether these principles could be used to create good luck. I asked a group of volunteers to spend a month carrying out exercises designed to help them think & behave like a lucky person. Dramatic results ! These exercises helped them spot chance opportunities, listen to their intuition, expect to be lucky, and be more resilient to bad luck. One month later, the volunteers returned & described what had happened. The results were dramatic : 80% of people were now happier, more satisfied with their lives & perhaps most important of all, luckier.
The lucky people had become even luckier & the unlucky had become lucky. Finally, I had found the elusive "luck factor".
Here are Professor Wiseman's four top tips for becoming lucky:
1) Listen to your gut instincts - they are normally right
2) Be open to new experiences and breaking Ur normal routine
3) Spend a few moments each day remembering things that went well
4) Visualize Urself being lucky before an important meeting or telephone call.
Have a Lucky day and work for it... "
The happiest people in the world are not those who have no problems, but those who learn to live with things that are less than perfect."
" There is a great difference between "worry" & "concern",
A worried person only sees the problem & a concerned person solves the problem..!
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Closed YM short at 17471 for 10 points, I didn't take it out in the morning anticipating a trend lower that can still happen but damn I lost patience. Still have ES (September) short and ES (Dec) long so basically flat...that's my trading ladies and gentlemen any help will be appreciated.
Note: I am ready to short at higher prices or ready to close ES short around 90 and keep long for a bounce and ultimately get flat before FOMC...that's the plan
Got out of ES Dec one too at 2068.25 before FOMC want to be flat...Overall 10 handle gain I am happy with that but not too happy but don't want to risk into FOMC.
08/17 YM Short -> 17465 closed at 17490 lost 25 points (Hindsight this would have worked have but stop is stop)
08/17 YM Short -> 17481 closed at 17481 gained 10 points (Hasty entry and exit, hindsight would have worked very well but FOMC prevented me taking short overnight)
08/17 ES Short -> 2095.75 Closed 2069.5 gained 26.5 handles (Hasty entry)
08/17 ESZ5 Long -> 2090 Closed 2068.25 lost 21.75 handles (Approaching FOMC forced me to close the position)
08/19 ES Long -> 2069 Closed 2075.25 Gained 6.5 handles (Approaching FOMC forced me to close the position)
Overall managed to pull 10 handles since I started the journal but key is at hindsight every trade is a BIG winner if I wouldaaa couldaaa hang on to trades this is what happening to me all the time....
Few things I can remember
1. I am kind of emotional and afraid of shorting why? I lost a bunch shorting at highs before that is having tremendous influence on my trading even-though days are different now...
2. Position size (I am not sure why I am afraid even with one lot)
How to overcome
1. By being extra extra careful while shorting or just eliminate shorting from the trading
2. By refining my entry points using Volume Foot Print and CumDelta studies
Site Administrator Swing Trader Data Scientist & DevOps
Manta, Ecuador
Experience: Advanced
Platform: My own custom solution
Trading: Emini Futures
Posts: 49,386 since Jun 2009
Thanks: 32,059 given,
96,662
received
What are your strengths and weaknesses?
What are you doing right, what are you doing wrong?
Your journal is only 4 pages long, but in the future it will be very important to review the journal regularly. For example, every weekend read the prior two weeks journal entries. Every month, read the prior two months.
It is only when you read them that you will start to notice patterns. These patterns are key to understanding how to improve.
May be I am looking for reasons for my crude entry yesterday but this is what I was looking even before the entry...I have a plan to add at 35 and 38 plan to buy UCO stock.
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Not a good day, I did lot of trades tried to improve average on my ES longs, Into the just close just before plunge I hedged my 2 ES Longs with Dec ES Short...
My average for ES Long is 2003 and My ESZ5 entry was at 1975...I need prayers but that's not the best way to trade, I know...
I still have my oil long i.e QM but closed DUST and VXX (Short - opened to day) for $280 profit...I was scalping longs and short on ES for few handles that's I got my average down...Hindsight, Once break of that range at 2044 and 2036, I should have forgot trading ES or should have got out when damage was less but last 4 or 5 years dip buying always won big time and changed my mind drastically...
Edit: Scalping gave me 13 handles (but too much of stress), Dust $240, VXX $48 and yesterday's ESZ5 short gave 2032 - 1997 = 35 handles...this is freaking nuts what happened to my following trend from now on...
Why do you hedge? If it's wrong just shut it down. Hedging with a contract further out only means you're paying two sets of brokerages and now you got 2 headaches instead of 1. You only have a clear mind to be objective if you are flat, by adding another one you are just making it worse for yourself.
Learn to love the loss, it's just paying for the chance to test your hypothesis about the market - an expense.
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This is becoming a freaking unbelievable scary scenario...Was able to pull out 63 handles from shorting overnight from ESZ5...got panicked and short ESZ5 at 1915
Make that 90 handles realized on ESZ5...still have one Short of ESZ5 average at 1901...I wanted to close this also but couldn't because of margin requirements...
Just going to sit on my hands for now or add to the short at higher...
Edit: This crappy biased trading is what I want to avoid but damn that BTFD screwed me now I am totally scared about trading
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Damn what a day...I was able to get out of my September ES long position one contract at 1948 from 2002 that's 54 handle hit but bcoz of my short hedge I am kind of survived...Still have one ESZ5 long from 2002 and short ESZ5 from 1934...looking to add to short for retest of o/n lows then add to long for reversal
Sent from my SAMSUNG-SM-G900A using Tapatalk
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I am kind of bummed for not following the plan from yesterday afternoon but market was so volatile no plan would have worked...Still this market is not out of woods...so the plan for now sell rips and buy dips
I am short long term so carrying ESZ5 short from 1910 bullish short term so carrying ESU5 from 1934 so basically trying to manage....apart from carrying oil long QMZ5 from 43 (Underwater)....I am kind of bummed by seeing DUST and NUGT go in my way big time, but the thing with swing trading sometimes you have let go positions based on intra-day market conditions before it plays out properly...
Flat (means long ESU5 and short ESZ5) for the night on ES and still have QMZ5 long which is under water.
My gut was telling yesterdays 1850 was the bottom by the time I realized it moved 10 points then waiting for 1855 to break the short but didn't do it because original plan was to get out of the short at 1800 and add to long side....why do I want to do this kind of spread trading?
I know with small account size and these kind of wild swings I cannot afford to loose more but I don't want to miss the move big upside move for some 100 points are so market gave me that opportunity multiple times this week but at the same time velocity of the moves are scary...anyway that's still the plan but I should stop for scalping and wait for good swings...
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Tomorrow's plan go long at the breakout of the top of range or with bottom of the range at 1860...in between maybe at 1920 add to long for a scalp or short at breakdown or just sit out and wait
It didn't get breakout of the range but while sleeping (Mad as hell), If I would have dare to follow my gut I would have made a lot...Anyway I just sold my long and left with a short, I think it's too stretched and will comedown for 20 points
Edit: I saw o/n price went to 1938 anyway I would have waited for 1920 to get out of short
What a freaking day, simply put it this when presented with 14 handle profit didn't took it just sitting on my swing short trade i.e short ESU5 from 1968, planning to add at 1990 and see where it will take...what do you guys think?
Only good thing is my QMZ5 up nicely 10%, now is the tough time fighting my mind to hold on to profits are take profits...rightfully so after these doldrums and see profits evaporating in mins if not seconds...very tough to deal with it mentally...
Edit: My order for second short ESU5 filled at 1990 so average is now at 1978.
Good to see QMZ5 nicely up another 4%, keeping calm is the key in swing trading...
Still have ESU5 short from 1978, Yesterday I night I was expecting they are going to test 1990 one more time or may be go to as close as 2000 to lure fresh retail in so I bought ESZ5 at 1965, so I am already up like 5 handles on this but 5 handles is nothing in this volatality...idea is to sell ESZ5 as high as possible and keep the short.
Edit: Why in the hell wouldn't listen to myself and consider not *lucky* and listen to people from twitter and futures.io (formerly BMT)....I place a limit order to close my ESZ5 at 1982 but canceled it because of saw that there is Jacksonhole meeting mins will be coming soon now it is trending lower and at 1970 that's freaking 12 handles....
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Why the hell I am using spreads? that's only way I take out leverage out of equation but still can be profitable in this volatile market...My plan is right but execution and timing is way bad...MUST improve this
In this volatility even BALL's of steel can get shattered. You MUST be very very QUICK to take positions and change positions which I am really lacking right now. That being said I scalped today for meager 2 handles on ESU5 i.e went short and covered quickly because I was late for the short and don't want to risk much
LOL, as I was typing this market is making another V. Bulls don't want to give up yet, all the retail MUST be in before the drop again (My thought process as of now)
Current positions
QMZ5 from 43
ESU5 short from 1973 (Average dropped because of today's add to short and get out)
ESZ5 long from 1965
Basically flat on ES trades and long on oil (Oil drop of is little concerning but would like to hold to atleast 50 then look for re-entry.
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Exited QMZ5 at 49 from 43, I know I told myself to wait for 50's but after biggest jump in 3 days I have to lock in profits...but looks to renter for any pull backs...
Edit: Crap I know I left some money on the table but not this much...same thing happened with gold trade before I started this journal...
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I hate to see my plan working out without me...blame is on me I was chickened out to take risk maybe rightfully...I was expecting for breakout and touch the 2000 and then go down...anyway I did traded yesterday for few quick handles on both short side and long side so now my avg on short is 1936 and on long side is 1945...oil I have to look to rebut but market is showing signs of breaking down so what is the right price is the question?
I am not having proper read on the pa right now...I tried short of TF on break of LVN area but my 2 point trailing stop hit and lost $50. Then I tried to enter long and canceled the order because I was expecting to move lower and test yesterday's lows then went to lunch and market took off...for just want to sit on my hands...I wanted to get long crude at 43 it reached 43.12 and reversed hard....no love there.
Still have long ESZ5 at 1945...that makes this spread a net short, Plan is to get out of short at vwap at 1960 or long if we stretch this move to 1986 to 1990.
It always happens after I got out of my position, I don't know they might have my IP with them...anyway I prefer a bounce to HVN area and fail for re-entering the short.
Edit: I am so mad right now but need to focus...1942/43, 38, 34 and 22 might be good areas for a bounce...
I realized how tough it is to trade in this highly volatile super fast environment specially in the morning juggling with two kids and going regular work doesn't help at all but that's the main source of income so can't do anything....
I still have same positions, it will be interesting to see how much I will loose on this spread as the expiration is nearing by...
Added to short ESU5 at 1963 but with stop at 1965....not risking more bcoz confused if it's a breakout looming or range day...as of now looks like breakout...
Edit: Changed my stop to trailing 3 points so now it is at breakeven...
I did some unnecessary trades overnight...finally I left with one contract of short ESU5 avg at 1978, will add it near 2000 or break of 24 hr VWAP/GLVN 1983/1982 range...worst is mornings are tough...
Closed at 1974.50 didn't get a chance to add to short...will look for renter the short\
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Edit: Overall was having a good day until that push down which make me to panic and add a short so basically flat at the moment...Got few excellent opportunities to scalp but didn't do it because of bias
Note to self: DON'T TRADE in the MIDDLE of the NIGHT....I lost 8 points and since yesterday lost 16 points...so MUST TAKE A BREAK....Also have to deal with the contract roll over/FOMC etc. etc.
As of now positions
Long ESU5 @ Avg 1950 (Must roll over this or close it at 1970)
Do it. I just started really getting into meditating about 4 months ago. I was referred to HeartMath and bought the EMWave2. If you are like me and want to see concrete evidence if something is working. Get it. I don't go a day without it. It helps to track your meditation and quantifies it in a score. Some people might think it is a gimmick but whatever helps right and I can be one to say I definitely see an improvement, not in trading, but overall in life. Thinking in the present and clearing the mind.
Just a disclaimer I do not work for HeartMath or get any monetary gain by saying their name. I just believe in passing a good word for a good product.
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Literally sitting on my hands...still have same positions, some time soon I have to close September contract because of rollover...too many things next week FOMC/rollover etc. etc.
Positions
Long ESU5 @ Avg 1950 (Must roll over this or close it at 1970 - Yesterday I got a chance to get out at 1965 but didn't get out)
Still not trading, I feel there is no edge here in swing trading except for scalping...I need a big move up or down (Previously big move or up would be considered as 10 point swing but these days it became common so need more than what we have right now)...This contract rollover and FOMC is making it more tough, I feel like I have to close my September contract but not able to pull the trigger...
Site Administrator Swing Trader Data Scientist & DevOps
Manta, Ecuador
Experience: Advanced
Platform: My own custom solution
Trading: Emini Futures
Posts: 49,386 since Jun 2009
Thanks: 32,059 given,
96,662
received
I honestly don't know what you are trying to do, but I would say it's a safe bet it isn't working (based on this thread).
Hedging ES with a front month is not hedging ES. You are spinning your wheels and compounding your mistakes, like closing the winning trade early and letting the losing trade continue.
You'd be better off sticking with the basics until you master them.
If you want to hedge, take a look at this for a global tactical asset allocation system:
In this thread I'm going to document the development of an ETF-based "global tactical asset allocation" system. What are the goals of this system? It's meant to take the main role of allocating a long-term portfolio. Hopefully we will …
Thanks for taking time to comment on this journal...I will explain later what I am trying to do or my mindset it ...Your are right it might not working but that hedging is making me comfortable in this highly volatile market..
Not a good day to short but I didn't loose much on this short...I did few trades this morning currently I have 2 lot ESZ5 short average at 1966 (Seems very far and I don't know when this rip will end but expecting a turn down before FOMC..
Edit: Now I am feeling itchy and not comfortable at all...
As per this post, I should have sticked to the idea of getting out of long at 1990 on ESU5, why did I change it because market whipped me with volatality and thought I will be good if I get out at 1970 areaa....hindsight is always right
Obviously my plan backfired spectacularly, still holding two contracts of December with avg price of 1966, tried to get long at the end but didn't/couldn't so with FOMC coming tomorrow only chance is drop overnight or take the max pain and go hiding few days or leave that swing so that margin kick me out or go flat by adding two front month contracts and managing it as we go....
positions
2 ESZ5 at 1966 (this is by far a stretch to me, I am generally a one contract guy)
2 contracts of SPY NOV monthly puts at 4.80
What to do now?
1. Take a bite on ES
2. Wait for pullback before FOMC and go flat by adding two front month contracts and manage after dust settled (I know I will do this but need atleast a 10 point pullback before FOMC).
3. just go plain flat
4. Worst case scenario is hold into FOMC and to next week...
Why I am in this position?
1. I expected a range day/pullback before FOMC but didn't get it
2. If I look back my entries they are not that bad considering I entered one at 1969 and another at 1979 with around 20 points cushion from selling of my long.
Hey this is swing trading unlike other for me swing is swing not a day trading...
Edit: I am also looking at bear flag forming on weekly chart.
