A Cowboy's Trading Journal
|August 16th, 2015, 12:21 AM||#1 (permalink)|
Dallas, TX, USA
Futures Experience: Advanced
Favorite Futures: ES, YM, TF, CL, GC and ETF's
Posts: 1,589 since Mar 2013
Thanks: 2,486 given, 1,648 received
A Cowboy's Trading Journal
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
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).
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)
What I learned so far from all these good folks like @Inletcap, @Big Mike, @tigertrader, @rahulgopi, @Pariah Carey, @bobwest, @choke35, @Narcissus, @GruttePier and numerous others on FIO
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.
In TRADING everything is WORK IN PROGRESS so don't take anything RIGID and one must be flexible and adjusting all the time
It's not about the METHOD it's all about your MIND and EXECUTION
Swing Method - SMI Overbought and Oversold Method (Trade Marked )
Time Frame - 2 hours
Instruments Prefered - TNA, TZA, SPXL and SPXS (If comfortable use ES/YM etc)
Indicators (I know...) - Stochastic Momentum Index (settings on TOS/MC 13, 11, 1) and maybe use Weighted Moving Average (180)
Stop Loss - trailing stop of $1000 on YM
Scale in - One can scale in at comfort
Hidden variable for entry and exit - CURRENT CONTEXT
Entry Long - Simply enter when SMI crosses above -80 from below or much better entry would be based on context wait for divergence
Entry Short - *Always be careful with shorting* Simply enter short when SMI crosses below 80 from above or much better entry would be based on context wait for divergence
Exit - This is tough because one must use there own method. I prefere to exit and re-enter based on ADR_H and ADR_L, 180 WMA and CONTEXT.
Backtesting done? - Partially yes using Multicharts with trailing stop of $1000 using YM.
Why SMI indicator? - Because inheriently it uses ADR in the formula.
Swing Method - The Natural (Trade Marked )
My sincere thanks to @Pariah Carey for this method
Time Frame - 25 mins
Instruments prefered - YM and QM
Indicators - 180 period weighted moving average
1. Price must close above/below 180 period WMA
2. Enter at next round number (i.e for example on YM enter at 16100, 16200, 16300 etc. for oil 30, 31, 32 etc. )
CONTEXT/ADR_H or ADR_L/approaching Overbought levels on SMI (above settings)/to keep it simple exit at $1000 profit
Always place a stop loss at next round number (+ some buffer) above or below entry based on short or long
Last edited by bmtrading9; February 25th, 2016 at 05:24 PM. Reason: added context related