In order to get some traction with my progress, and to make this journal thing more thorough and quick I have bought Jigsaw Trading Software, and I'm going to start these journal inputs around a video rather than writing so munch. That way there's not senses being stimulated for quicker rate of retention and progress.
I'm also starting to take speed arithmetic tests online to bolster my data visualize and processing speed/power for better abilities in the clutch of the moment during a heated trading session.
First of all, I blew out my Combine yesterday by going over -$3k in one day. Then I went into the SIM 101 account, and was down so badly that I tried to scale in a short trade all the way into the close at the high accumulating 12 short contracts on and down -$6k for a grand total of $9k+ in the hole in one day.
I was mostly just riding the trade out to see what's possible with some slight belief the market could turn back over, and give me back some. I was just seeing what was going to happen. To me that is the tough way of learning, and there's room for it in my book. I was just breaking my trading jitters by riding it out, and seeing why there's nothing to fear except fear itself.
TODAY Friday, March 4, 2016
Today I was up +$1500 at the most, and I closed out with +1100.
My max draw down was only a few hundred dollars today. Instead of trying to trade the off hour markets, I woke up with the openning bell, and I waited for the market to come to me.
My changes to my techniques are showing improved results. My strategy as far as my indicators go are all sound. They've been right for over a month now, but how I use them has not been right.
First of all, I'm waiting for trades that are potentially much bigger. I want to get into trades that I can scale in for a few ticks with very big size. I see a few of them a day, and technically they are the only ones I need to pass the Combine and make a Living.
So I'm trading less, and I'm waiting for the big signals like any successful trader would do.
Second of all, I'm using the scaling in and scaling out techniques I should have been doing up to now that are necessary for managing risk. Rather than going with large size up front, I'm trying to earn a buffer first with small sizes, so that I can build up my size, and not lose so badly if the market goes against me. That's practical. Also I'm much quicker to scale out, and take profits while they are still there instead of waiting for just a few hundred more......just a few hundred more because that just hurts. OUCH! If I have on big size, I quickly scalp a few ticks while I'm ahead, close the whole position, and put back on a feeler or two if I'm going to keep going with the market move.
I was being blown out of my Combine all of the time by getting in too much and holding for too long. I've blown out 20 Combines. In fact one day I blew out about 10 or more a while back when the market was selling off hard, and I was trying to make my $9,000 quota that day on day one. Well, later after blowing up that account, I learned that what TST is looking for is risk management skills not just the quota. So I slowed down, and tried to come up with a better plan.
I'm getting that sense of command of my trading. It's that sense of things I've felt whenever I've become successfully learned of any other skill in my life.
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What I need to do is stop trying to trade the indicators. The indicators are separate from the price action. Indicators include volume, candle stick indicators, order flow that appears on the JigsawTrading.com "power tools," and so on. I have many that I take from news sources and from global political and military objectives, but these are more fundamental analytical than technical indicators.
All of those indicators and then action. The meaning all of the small things surrounding the price action they are the basis of a price move, but they are not 100% true.
In fact often I find that the indicators are there such as in the over night trading hours, but then the price is not. I'll be picking away at these little moves that the indicators indicate, but I wind up losing more than I make this way.
Trading over night is mostly a global news fundamental analysis trade than any indicators most of the time. It is a long stretch of many hours, so until I know when the best hours to trade over night are for a few quick scalps to make some over time money, I'm not going to spend those long hours knit picking at indicators until I finally catch a real trade to break even for all of the losses I made.
WHAT I HAVE TO LOOK FOR:
Look for price action. Don't let the indicators be the all knowing time to trade. Instead let the price action the tell tale times of entry and exit, and use the indicators as the supportive reasons to bolster the value of that price action.
What I mean is wait for the open session to begin. Wait for price action to happen for a while, and let that price action test those levels and test those indicators first. When price action for that day's open session shows something investable, and the indicators point to the same thing, that's the property to be investing in. That's real estate with a future. Snap it, and serve it to the customers.
IT THEN BECOMES A NUMBERS GAME:
It's numbers because I'm maximizing number of reasons to believe the market is good enough to invest in making it that much more likely to be a successful trade, and thereby I'm eliminating all of the worthless pursuits with the petty little trades based sole on indicators. So then that means better numbers.
Also it means that risk management has to be done by scaling in and scaling out not going in with large size without first earning a loss buffer by scaling in accumulating or earning that buffer first. It turns out that scaling in and out is a mathematics game with the ticks and contract ratios making relevant the break even points, rates of profit vs. rates of losses per handle, and when enough profit or enough loss is enough to justify an exit. The scaling buffer creation skill for risk management is a numbers game all of its own.
ULTIMATE PURSUIT OF DAY TRADING:
The gold of day trading is knowing order flow and limits. That means where at is the order flow extraordinary, and what are the traders involved limits. The fact that the are underlying elements to the market that hold intrinsic value such as commodities, labor, global currency spreads which perform to sociological conditions such as national defenses, laws, and disasters caused by people or not. That which is going on in the world among people is a real thing, so if the prices in the market get too low, that fact will set the limit that prices can fall before logic kicks in, and market buys up. The same is true to the upside where the prices become so exaggerated that profit takes and short sellers are going to correct it.
It's order flow and limits. Order flow we are going to get from the indicators on our software. Some times limits too such as limit orders, but then there's the over bought and oversold conditions I just mentioned which I can get from the news sources I use. From the sociological study of the world such as culturally and historically through out the times and the sociological economy phenomenon on display in the news constantly portraying the current developments and changing situations I can gather the intrinsic value of these markets. These tell me when paper is going to call the market's bluffs as their limits have been reached, and they are going to cause shifts in price movement.
Then there's price action. Order flow indicator software, Paper's intrinsic overbought and oversold limits exposed by news data, and price action.
PRICE ACTION REAL ESTATE:
Price action is the truest data there is. When it tests the big bottom of the day or the big top of the day, and then all of Paper's limits and the order flow indicators line up, that's first class real estate on the busiest street in NYC on sale at a discount.
I've watched a lot of business and political shows and series on cable in the past mostly because I was running my own business at the time.
Pawn Stars on the History Channel turns out to be about looking for the desperate seller who just wants to get some fast cash for an emergency. They don't want stuff people that want the max price, and have plenty of money. Those people will not sell low enough because they aren't stuck in a hard place in life strapped for cash. The pursuit of successful pawn shops is to test people for indications that they may need the item they are selling much less than they need money.
The markets are like that. We are waiting for hedge funds and stupid computers that can't see more than a milisecond in front of them like the hordes of technical traders that have no idea what the big picture is. When they make mistakes causing markets to over shoot either too low because of margin calls or too low because of knew jerk reactions that the computers make to news and order flow, then that is the desperate seller walking into my little Trading Post to pawn at a discount. Of course I will accumulate or short sell because I know there's demand ahead to make a fair price on these investments.
If I'm not right 100% of the time, there are the numbers games for risk control.
MY FAVORITE LESSON SINCE BEGINNING DAY TRADING
Grab the money while I can.
So many times I've had on big size because I could see an arbitrage play happening for one reason or another, and my trade instantly profits enough to go brag about, but then I want to wait longer for more. Well, there is no way to wait longer. Take the money, and run.
The reason these big, successful trades can't be held long enough is because by working for TST I have a blow out limit that will shut down my account for the day if I break. Big size with a low draw down means the market can swing just a few handles, and I'll be blown out.
Several times I've put on size, made a trophy profit with it, and the market swings, and blows me out for the day or the entire Combine.
With these low draw down limits big size is only safe for a few ticks, and then scalp it. If the trade still looks good, a contract or two is okay because that's not going to blow men out.
I'm trying to master building a break even buffer by scaling in contracts to the point I have a big enough buffer that I can hold onto large size for longer without burning to much disposable risk on investment money or DROIM.
NEW BUSINESS TERM: DROIM
DROIM means Disposable Risk on Investment Money. This is the % of your account money that you are willing to lose before you find a good trade or before your trade starts becoming profitable without exiting or scaling out of the trade to reduce rate of DROIM losses.
Today was not a bad day for me, but the market was definitely weird. The indicators, price action, volume, and macro news action all broke down, and I couldn't get a trade in that made any decent money.
I didn't trade until after the open.
I caught a few moments on a minor bull trend for most of the day. It sold off without any showing of a reversal of any kind. Just below the 34EMA Harmony Line it was bouncing up against it showing a bear trend was forming. It fell further and double bottomed, but with the bounce off of the H Line saying it was now in a bear trend I stayed out until proof otherwise. By then it was the last hour of the day, and I don't usually want to trade anything then because it's too unpredictable because of block orders being shoved in the last hour.
The last two days I profited $2k on the Jigsaw. It let me make $1k a day so far for the first two days with it.
I'm trading over night right now. I started out the right way trading by scaling in the wrong way, but it all took a turn for the worse, and my account is frozen this minute.
I was down a little over a hundred, and then I came up to 250 profit. I showed off how much I made, and I think between that money and the 2k from the past two days I began to take on the "victory before victory" tar pit where I'm seeing victory in all that I do and trade, but really I'm not pealing that aesthetic mumbo jumbo off of my mind's eye. Wool over the eyes causes wrecks.
I was then trading short 2 contracts then, and Europe started opening markets the day after the ECB cut rates for the last time. They rallied over 2%, and when I was trading the US was not even up 1% yet. Huge positive divergence with the EU markets being the indicator, and the US markets being the traded markets.
With the 2 short contracts I was down about $400. Then the Richy Rich Revenge Trader within started trading. I was under the impression that oil as at the top at about $40, and that there was no way that the US was going to rally over 1%. The market looked like it was topping out, and I had a bad stock market read on my phone on a news app that was not refreshed.
I really just had my head in a cloud all in all, and I was not scaling.
I broke the rules of scaling by revenge trading. I was not thinking straight because if I was, I would have taken that $400 loss as though it was only simple little capital contraction not a dent in my ego. I need to see this as simply as though I'm only starting the next trade at a separate time with a specific number of dollars in my account on the next trade. Ya, I had one number in my account one minute, and then I have a different number the next minute. So what of it? It just means less risk money accessible for trading until more is made.
I have this problem with not seeing that risk capital contracts as the account contracts, and it increases account increases. There's a whole ratio and extrapolation paradigm I'm not seeing here, or I'm just not seeing it some times. It's a dangerous way to see. Bad paradigms in trading or any business cost too much pain.
What happened was I was putting on 10 and 15 contracts wishing on a whim instead of remaining focused and objective. I thought I was going to catch the top.
Well, I did catch the top. 20 minutes later market had only gone up 1 handle above where I was stopped out and account frozen before the market went my way big time. I had a feeling before while holding the trade that even if I pulled it off, I was not okay with it since I did not scale in the right way, and I was not realizing my risk capital was contracting.
I wasn't even reading my Jigsaw charts correctly. Ugh
Soooooo all in all the truth is the truth, and the job is the job. The job goes on, and the truth will keep coming. It's not necessary to consider this kind of blow sentimentally because it's not an aesthetic issue, although between perceived victories, ego dents, revenge trading, denial of trades going bad, not obeying chart and risk management rules, and complete anger as critical trades are on the edge of make it or bust bluff WERE ALL to sentimental, and none of it has to do with the job and it's objective safety parameters.
Keep on rolling
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I wasn't feeling it today at all. I think I was just burnt out this week and in general. The market was very bullish which was very surprising to me. I did not expect that, and I paid for it. My combine is blown out as of the issues said in the last post, but I traded some with the SIM 101 during the open session afterwards, and I did okay. I traded the /CL on a down slide in the middle of the day, but it was not nearly the profit taking day I assumed it was going to be.
That burnt out feeling I was getting was sort of like the blindness of stupidity. Normally I can look into the charts, and I can see all of the risks, connections, outcomes, measures, market sentiment and speed, and work my magic without getting blown away. Today it was like my lights were shut out.
I know that I did okay the first two days with the Jigsaw, but I was also sleeping on those days up to the open of the market too which put my head in a better place with more rest and energy, so my "lights were on." Usually I'm up all night or at 2am to start watching the news and to trade. More rest seems to do me better.
Besides mismanaging risk capital contraction, aesthetical pseudo psyche fog , and scaling in/out, I was not obeying the initial rules of engagement into any trade which is 1, PRICE ACTION, 2, ORDER FLOW INDICATORS, 3, AND THE NEWS STORY BEHIND IT. I seems like I had these backwards in my mind. Very numb skulled of me.
I need to get these things right first and foremost, but I think the work overkill blindness I'm experiencing, and the fascinating Jigsaw I've been using have thrown me for a spin. I need to get used to the Jigsaw some more. Today I started taking the Jigsaw like it's the first indicator in my process, but it should be the last indicator: PRICE ACTION, BASIC INDICATORS, AND JIGSAW INDICATORS.
I think I'd do better just to trade the open session, and leave the off hours alone. The fact is though that there is some decent volume in the after hours from the Asian and EU market actions especially surrounding big market news. Maybe I should just look for liquidity only in the off hours while abstaining from low liquidity hours, and I should definitely stop trying to make up new rules not following indicators and price action because I believe that everyone else on the news network believed the market would head a different direction.
The main reason I blew out the account during the EU markets was because I was not reading indicators, and I was going by market news and trying to time the top on it. Both of these proved to be costly mistakes. News actions should come last in the discernment process, and timing a top or a bottom especially with huge positive divergence such as like was the one between the EU markets and the /ES last night is just not going to fly. It won't happen again.
I picked this post because you said that you are getting a sense of command of your trading. Reading this thread I just feel you are frantically running at full speed in every direction.
You say you bought the Jigsaw tools on the 4th from Jigsaw Pete, I am not sure if that is the day before or after blowing out the Combine mentioned in the first paragraph, then by the end of this week, the 10th it sounds like you have blown out another one. Then somewhere in this thread, or your other one ( https://futures.io/elite-trading-journals/38795-educational-memo-notebook.html ), you mention that you have been interested in futures for 6 months, and have blown out 20 TST Combines.
Really, stop and take a breath. Spend some time just watching the order flow without the distraction of trading. Learn that way. In your Notebook journal you said you are keen to follow all the Jigsaw teaching videos. He talks about watching the order flow for a few days then doing drills. It is a new tool, learn how to use it BEFORE you in effect trade live by trying to pass your Combine.
In your second last paragraph above you say you blew out a number of combines during one downtrend while trying to make the full $9,000 TST $150K Combine profit target, in one day.
I mean, to be honest, WTF. Passing the Combine isn't winning the lottery and getting a prize. Fluking your way through it isn't going to help you at all. You are supposed to be able to repeat what you just did for the LTP. Then repeat it consistently live.
The $150K combine is I believe meant for people that have trading experience so once they go live they can get up to a size they are used to quickly. The daily drawdown is small and that requires good risk management, such as adding to winners, not losers, or starting the day with trades of a few lots and increasing as the day's trading goes well, and you build a cushion, and get a feel for the market. ie, for somebody who is confident and in the long run has a repeatable edge.
From your two threads you don't sound like you lack in confidence or belief in your own abilities, but that, or being driven and working 24hrs a day, absorbing as much fundamental news and live news as possible, previous experience, doesn't mean that you automatically find day trading easy.
If I was you I hope somebody would suggest I slow down a little, learn how to use my tools. Also go for a $30 or $50K combine because: they are a lot cheaper and easier to pass, and if you look at the live Funded Trader Scaling Plan you will see that ALL live traders start with a maximum of two lots anyway.
Last edited by matthew28; March 12th, 2016 at 01:53 PM.
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I'm going to keep going with what I'm doing right now for this week, and then if things are still looking bad enough, I'll keep the advise. I'm in the big combine just because I want to hurry up, and learn the hardest way possible. Hard way first is just how I have always been at entrepreneurship and training etc.
I generally just go head on into what I need to learn, crash course it, and pick up the pieces to learn from the wreckage. I put it all together, and put assets to the front, and iron out the deficits with assets pulling me through the tough stuff.
This was was great with the new jigsaw, but I grew a lot of confidence, and I started trying a few new tricks and ways to figure out what is possible. I usually do that in everything I do, and then I start to weed everything out down to the few solid performers that are left. I'm there already in the basis of my trading system, but I have yet to fully explore the jigsaw.
I think a problem I have is I like to work non stop, solidly without exhaustion, and the Jigsaw just made me feel like I can trade more. Plus the way the news was panning out and the way the Euro and Dollar markets were behaving after the ECB announcement got me turned around in the middle of the night. I was really goobered up good that night. I was pushing the envelope, and I knew it before I blew it.
I think one of the main things to learn for the aggressive worker/trader is where are the limits to the job. I have been a risk manager in different field with lots of money on the line, lives, and my own life and limb, and I started out as an athlete on my way to pros circuits. I like to just get in the ring, start smashing, figure out what all my problems are going to be, and plan my attack after that.
It would be the equivalent of having two new engines to race with, and I'm planning on blowing up one under the gun down in the junk to figure out just where its "Red Line" at. What can that engine take, and how much, and when and when not? Blow it up literally pushing the limits, and swap it out with fresh one. Then manage it on the thresh hold like a professional risk manager.
The ultimate achievement is not just to do something right but to benefit the maximum, so always plan on learning everything as hard and mean as possible to manage it as massive and clean as possible. That kind of attack and plan mentality comes through in my personality these days.
Thanks for your comment.
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