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Wednesday, April 6, 2016
That is today's chart. The diamonds show where the EIA report was released. I should have boxed that. That was the first mistake of the day.
The other mistake was about how I was using the /ES and /CL pair, but these are no longer correlating. I knew they were not paired before the open, but I risked it still. That knocked me down a few hundred in a few trades.
No, that's not all. The worst trade that went wrong was when I dropped the above mentioned pair, and I went with the /ES and /NQ pair, but the DOM was not switched over to the /NQ. While the /ES ran, and the /CL was closed and flat, it knocked off almost -$15,000.
This was a Crafpy day. I'll mark it up to a lesson learned, and nothing more than that.
Yesterday the /ES and /CL pair ripped my combine in half shooting me down so far that I became egotistic, and I just let the market have that one. I'd rather learn on a bed of rocks and nails about mistakes than squirm and gyrate over the small stuff. So I blew it up. Method to the madness is all I have to say about it.
Once you have the technique it's only about recognizing the right ones. The techniques are a little like seeing fish on the sonar fish finder in the man's boat, or seeing the fish through the glare on the water.
So, if you can't see a trade in front of you with the gear you've got, you don't put money in there to waste your time.
The guessing is out of the equation, and that has to be the highest kind of business there is. If you can put money down on something, and you can cut out the guessing about whether or not you lose money, just stick to that. The ancient guy line used to go that once you found the right way, just keep walking. Don't run it if it's just going to make you error.
This trading at home kind of business is not like the pits. It's dead, and I mean dead. The pits will keep you alive and full of the things that make you crave your job. This though is more like drifting in a boat in the middle of the Nowhere Ocean, and the time alone combined with the hours there start to work on the mind in weird ways. Errors and more Errors.
If the pair trade goes the against you the opposite way that you assumed it would go, accept break even, and get out. The value of that trade is 0, and at best it's worth -0 because IT'S ON THE WRONG WAY! GET OFF!
Then get back in when the signal is right.
Be sure that your pair is correlating before trading as a pair. If it changes, it's going to be a bad day.
At this minute my account is down between 3-4k which is over the draw down. I'm hoping that this will not blow the combine limit. The counter hasn't shut me down yet, so as far as I know the combine is still good.
I'm long 5 /ES and short 5 /CL, and the too are very diverged as far as my account means can handle. There's no way to know when this trade will even back out or if it will. I think I hit a trip wire trading this pair, and this is the week that these two divorce, and I happened to open a combine on the same week. Lucky me as usual.
And here I was doing great for the last 2 weeks averaging +$10k a week. As the saying in business always goes, "It's always something."
Conclusion for the day:
I blew out the combine. I'll reset it, and start again next week. It's just bad luck is all. The system is effective. The pair was not.
Last edited by Trader2016; April 8th, 2016 at 03:01 PM.
I've been inundated with problems lately related to lining up a new combine and other errands, so I've been out of it for a few days.
Today I started a combine, and I blew it big. The first trade was supposed to be the ES and NQ pair, but CL was on one of the DOM's instead of NQ. This ripped my account for -$2,000. At first I was down a few hundred, and I thought that these two markets would revert back to their mean, so I'd break even. I recovered all but $150, and I should have just bailed out of the trade, and looked for another entry. Then an EIA report came out, and I lost a ton. I was stopped out accidentally, and then the market reversed back the way I wanted it to. At that time I was up to 8 contracts on CL.
I made a good trade after that to recover a few hundred, and then the market was just kind of dead, so I got some some sleep. I didn't sleep last night, so I needed it.
The lessons of the day:
Be aware of the economic report schedule first of all. Set the alarms.
Check all platform modules to be sure they are all in order, or you could be trading in the wrong account, market, etc.
If the trade is bad, get the heck out of it. You can't know just how much more you'll lose any more than you can know how much you'll make for staying in a bad trade. Just dump it, and re-enter another trade to be safe.