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SoftSoap's NQ Journey - from SoftSoap to SoftGold
Started:August 28th, 2016 (01:13 PM) by SoftSoap Views / Replies:11,272 / 253
Last Reply:November 30th, 2016 (09:21 PM) Attachments:403

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SoftSoap's NQ Journey - from SoftSoap to SoftGold

Old September 12th, 2016, 09:06 PM   #51 (permalink)
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Canada
 
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HoopyTrading View Post
Bingo! Futures traders don't make money on volume, they make money on price movement. Volume is only relevant on getting an order filled (and bid/ask spread the further out you go), but believe me, you won't have much of a problem no matter what you trade, unless it's maybe Class III milk or something, lol!

And while the price is different between the two months, the movement is identical. Here's a shot from a few mins ago of both Sep and Dec NQ..

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They're identical except for price. If you looks close enough, Dec is actually a tad smoother. Note the left of chart on Dec, you'll see less of a pull back on that sharp down-movement than left of chart in Sep.

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There's the quote summary from CME. See the near-identical price delta since open between all three months with volume? You'll notice this phenomenon with most instruments regarding price movement.

This will hopefully keep you from having panic days like yesterday. Knowledge is empowerment!

Thanks so much for this, I will refer to this during the next contract rollover date.
Cheers!

Yesterday's excellence is today's standard and tomorrow's mediocrity
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Old September 13th, 2016, 03:24 PM   #52 (permalink)
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2016-09-13 Prep

  • Market down 160 pts Friday
  • Up 140 Monday
  • and down 30 today before open
  • We entered back into the 23 day range area, will we stay there? If so, how will the existing zones react? Will they hold or will they be completely ignored?
  • ON activity was pretty bearish, not at all what I expected
  • High volume in ON session
  • Very little news today, treasury at 2EST, unsure how that will react to market
  • Trending bull and bear is a possibility although unlikely
  • If it is a strong day like yesterday, do not enter any preemptive trades

Things to look for in the open
  • Volume #- How strong of an open will we get?
  • Volume profiles - will there be uncertainty at the open or will we see price slice through areas?
  • Zones- how will the zones from before hold out? Trend yesterday shattered any zone it touched but could they still be at play?
  • Look for signs of a potential trend day
  • PDH - could we break last 2 days? Will we break out after if we do?
  • Careful to add to positions

Psychology goals for the day
  • Do not look at P&L
  • 0 FOMO
  • 0 Emotional trades
  • Do not break any golden rules

Yesterday's excellence is today's standard and tomorrow's mediocrity
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Old September 14th, 2016, 03:22 PM   #53 (permalink)
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Today I've made a very difficult decision and a decision no trader ever wants to make.

Due to my recent performance and inability to psychologically shake my drawdown, I will stop actively live trading until I feel emotionally stable.

I was in a drawdown and feeling negative when the volume and volatility started picking up on Friday. I chose not to walk away then because I thought that with more volatility comes more opportunities to make that money back. I underestimated how my psychology would be affected by this market change though, as this actually created more opportunities to lose money and trade bad.

This is evident by the fact that I've only won 5 out of my last 32 trades. I also did a very thorough analysis of my last 100 trades and I realized that I have only exited 3 of those trades by hitting my target. This means I was either stopped out, exited cause of panic, lowered my stop, or just clicked the close button without reasoning 97% of the time.

I've also checked and in the last 35 trades if I walked away and either let my stop or target be hit - I would be up 15 points instead of down 62.75 points

This shows that micromanagement is a big issue with my trades but I think that's just a symptom. I think the truth is I've lost confidence in my trading. Thus, I felt I've needed to control things more and the only thing I can control in the market is my entry and exit points. Obviously that has not paid off and is not a good habit to continue.

The reality I face can be summed up in my equity curve below. This is my performance since I started trading live full-time (end of July)

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While I haven't hit my golden risk management rule of 12% monthly loss. I am currently down 8.71% this month and I think it's time I re-assess what I'm doing.

Specifically when it comes to my emotions. I have tried very hard these last couple of weeks to suppress my emotions. To pretend they aren't there. To act as if they aren't bothering me. And it's clearly not working.


I want to make the following clear:
  • I'm not taking a vacation, I am simply choosing not to participate in the main games
  • However, I will be taking extra time in practice. I will be analyzing my trades, thinking about my emotions, detailing my habits, thinking about my experiences and how they affect trading, etc. I think doing this without the pressures of the market will allow me to be more objective than usual
  • I will also be looking at how to accept my emotions and leverage them to trade better. @olobay has recommended the book "Trade Mindfully" by Gary Dayton and so far it sounds like it will help me accept my emotions and learn how to not let them impact me negatively. Something I clearly need
  • I will still be writing in my journal every day. I won't have as many (if any) trade entries and I won't be doing my pre-market prep. But I will be discussing things I learn about my psychology with you.
  • This doesn't mean I won't take any trades. But I'll follow my overnight philosophy which is to set an entry point an area where you are very certain the price will turn but not necessarily hit, and walk away.

Let's do this!

Yesterday's excellence is today's standard and tomorrow's mediocrity
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Old September 15th, 2016, 03:27 PM   #54 (permalink)
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Friday's emotional breakdown

I'm about to share a story that I don't want to share. However, pretending something didn't happen or ignoring it won't make you a better trader. You have to be comfortable with looking at your imperfections and issues objectively so that you can truly change them, no matter how difficult / uncomfortable it is.

So I'm finally ready to share with you the story of my emotionally-fueled anger breakdown I had on Friday. I feel that in the last few weeks leading up to it, I had been trying to contain my emotions as much as possible and anybody could tell you that it was going to blow up eventually.

A bit of background, I did my prep as usual, laid my zones, etc. I was happy with my plan, I felt comfortable going into the trading day. I was about even for the week but I was very confident because Fridays are one of my best days.

The key part of my plan is that if we broke through the 4750 zone with force, I should take a break-down trade. This was the bottom of a tight range 20+day balance area and if we broke through it would require force and would most likely be explosive. Here's the FIO screenshot.

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My Overnight entry was bullish, it was currently positive and I was comfortable with the target and stop, that's not an issue. If this trade failed I would take another trade at ~4751 expecting the reversal. If that got stopped then it was break-down time and I would take a trade and sit on it until at least ~4720. That's what should've happened. I should've lost the first 2 trades and then take a nice break-down trade for a profit to end the week positive.
  • And while I did take the 4751 trade, I did not take the break-down trade
  • I bought at 4751, then scaled in at 4756 (not part of my plan)
  • Then when I got stopped out I bought again at 4751.25, then scaled in again at 4749.25
  • Then when I got stopped out I bought at 4742.25
  • And lastly (by accident), I bought again at 4725

I reached my stop limit for the day. First time I had reached it since I re-started trading, first Friday i had lost money. It didn't feel very good.

I walked away to watch a movie and try and calm myself down. My wife and I were going to a friend's going away party that night and I wanted to enjoy myself and not let my bad trading day get to me. You have days where you get stopped out, it happens, but it's okay.

Now that wasn't the emotional breakdown, I was fine or at least I felt fine.

The breakdown happened when I came back to my computer once the market had closed and I saw how much more the market dropped. Instantly all the emotions I had bottled up inside exploded.

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I was very angry.
I wasn't physically angry but I was emotionally angry.
Not angry at the market for not going my way, not at all. I was mad at myself
Mad that I didn't listen to my plan. Mad that I was too emotionally weak to be able to execute properly. Mad that I missed out a great opportunity to take a big win.

I didn't realize it then, but my mind immediately made the assumption that I just missed out on a best case scenario (100+pt trade with proper scale-ins). That I would've had a killer trade that would instantly get me out of this drawdown. It's crazy that I thought that but that is right where my mind took me.

I started diving into negative thoughts, everything I was saying was completely negative. How useless of a trader I was, how bad my judgment was, how stupid I was, how I chose to ignore the signs, how I chose to ignore my own advice, how I wanted the market to be bullish so I kept buying, how much of a fool I am, so on and so on.

I didn't realize it, but I was emotionally bullying myself. I started writing in my journal and I had to walk away because I was embarrassed about posting my true emotions. I messaged my wife with a toned down version of how I felt about my trading and she called me.

We talked for a bit and she made me realize that I am a huge bully to myself. This doesn't help me trade better, and it's an extremely unhealthy way

I thought about it some more and I do this every day - win or lose but mostly when I lose.
If I lose a trade I bully myself for taking the trade.
If I didn't enter a trade and it would've gone my way, I bully myself for not taking the trade.
If I took too long making a decision and it cost me, I bully myself.
If I take 12 pts on a trade I bully myself for not taking 14.

Thinking about FT71's latest webinar he talks about keystone habits. This is one of my keystone habits, and I need to change it.

First step towards changing something is recognizing and admitting it is there, so let's take the first step!


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Old September 15th, 2016, 04:01 PM   #55 (permalink)
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What an awesome post @SoftSoap. It says a lot about you that you are willing to so openly share your emotional state and what you are doing about it.

Good luck with your journey and keep us posted on how its going.

All the best,
Pospicle


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Old September 15th, 2016, 04:05 PM   #56 (permalink)
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Chin up, if you were at a prop firm, they would have already shut your computer off after the daily draw down limit was hit, so the reality is that you wouldn't have been allowed to take that trade anyways. It wouldn't have mattered if the subsequent trade made money or not.

I recommend focusing on what's important. A) Most of the large traders I knew were positioned short heading into the move. Unfortunately and bluntly, you provided liquidity for them to sell. However, figure out what they were seeing that you missed for your initial bullish bias. B) Go and study how to structure options trade to prevent this from happening in the future. You could have for example bought a long ATM put, and if the long got stopped out, let the put go into the money to recover the losses.

I have said it before and it bears reflection again. Focus on the system. I've read most of the journal entries and my feelings are the data inputs that are being used will result in too many random outcomes. The worst outcome is to make money for the wrong reasons since it reinforces bad habits.

Ironically not making money on the drop in this case is good for you. Because you stuck with your draw down limit. It would be worse down the road if you kept saying you could trade out of a hole because you have before, and then instead of a 2% daily drawn down limit, you blow up the entire account.

Focus on your training. I know you don't want to hear it yet since we've talked about it before, but you're not ready yet. You need more training. And only hitting a daily draw down limit and monthly limit is far better of an outcome than blowing up the account and being out of the game all together.

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Old September 15th, 2016, 05:18 PM   #57 (permalink)
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What an awesome post @SoftSoap. It says a lot about you that you are willing to so openly share your emotional state and what you are doing about it.

Good luck with your journey and keep us posted on how its going.

All the best,
Pospicle


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Thank you. Since starting a journal I've been a lot more comfortable with my flaws as a trader and that's what will give me long term growth. It isn't a pretty road but there are no shortcuts!

Cheers

Yesterday's excellence is today's standard and tomorrow's mediocrity
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Old September 15th, 2016, 05:35 PM   #58 (permalink)
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MacroNinja View Post
Chin up, if you were at a prop firm, they would have already shut your computer off after the daily draw down limit was hit, so the reality is that you wouldn't have been allowed to take that trade anyways. It wouldn't have mattered if the subsequent trade made money or not.

I recommend focusing on what's important. A) Most of the large traders I knew were positioned short heading into the move. Unfortunately and bluntly, you provided liquidity for them to sell. However, figure out what they were seeing that you missed for your initial bullish bias. B) Go and study how to structure options trade to prevent this from happening in the future. You could have for example bought a long ATM put, and if the long got stopped out, let the put go into the money to recover the losses.

I have said it before and it bears reflection again. Focus on the system. I've read most of the journal entries and my feelings are the data inputs that are being used will result in too many random outcomes. The worst outcome is to make money for the wrong reasons since it reinforces bad habits.

Ironically not making money on the drop in this case is good for you. Because you stuck with your draw down limit. It would be worse down the road if you kept saying you could trade out of a hole because you have before, and then instead of a 2% daily drawn down limit, you blow up the entire account.

Focus on your training. I know you don't want to hear it yet since we've talked about it before, but you're not ready yet. You need more training. And only hitting a daily draw down limit and monthly limit is far better of an outcome than blowing up the account and being out of the game all together.

Thanks for this. Hindsight is 20/20 but when I look at my execution these last few days I have been making more decisions on what has happened in the last 5 minutes, as opposed to what is more likely to happen. Lack of confidence led me to trying to take control but I can't control the NQ
I have to accept that, and then watch it, interpret it, and let the wave carry me with it.

I think you are also right about the being ready part. It isn't something I want to hear but it's true. My system isn't mechanical enough and it gives me random results. I don't have the consistency and confidence needed to apply it properly. One of my key weaknesses as a trader is that I'm a very impatient person and I want things to move fast fast fast. This leads me to take big leaps that I'm not quite ready for. I'll be easing myself back into trading by taking 1, maybe 2 trades a day and progressively going from there.

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Old September 16th, 2016, 09:44 PM   #59 (permalink)
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SoftSoap View Post
I'm about to share a story that I don't want to share. However, pretending something didn't happen or ignoring it won't make you a better trader. You have to be comfortable with looking at your imperfections and issues objectively so that you can truly change them, no matter how difficult / uncomfortable it is.

So I'm finally ready to share with you the story of my emotionally-fueled anger breakdown I had on Friday. I feel that in the last few weeks leading up to it, I had been trying to contain my emotions as much as possible and anybody could tell you that it was going to blow up eventually.


First step towards changing something is recognizing and admitting it is there, so let's take the first step!


I Believe this experience and this journal is only going to make you a better trader. From reading this journey i've noticed your fairly new at trading. But you have come a long way. I am extremely new at trading and I admire your resilience.

I think that if feel you should take a break, then take a break. keep practicing and hone your skill.

"When your not afraid to do it wrong the first time, you'll eventually get it right". (how do i place that in my quotes?)

So, soon you'll get it right...

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Old September 17th, 2016, 03:21 PM   #60 (permalink)
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Morning psychology prep


Ok so I'm building on the realization I came to about bullying myself and having negative thoughts.
I started looking through some of my notes as well as the morning prep to try and get rid of anything negative that I don't need, as well as turn a negative into a positive for the stuff I do need.

Every morning I do a psychology prep on things I read to remind myself. These are usually things I learned after a mistake. However, looking at things objectively, almost all of my psychology prep in the morning will subconsciously create negative emotions. This is mainly because of 2 reasons:
  1. It is written in a negative form
  2. It was first written after a big mistake and it subconsciously reminds me of the anger I felt when I wrote it

How can you start the day off right if you are reminding yourself of negative experiences? You can't.

I'll be changing my morning psychology prep and taking inspiration from iqgod's journal. I like how calm his psychology prep is. I'm sure it's more effective than the aggressive coach approach which is how things are written right now.

Here's an example of what I had before:
"I will NEVER chase a trade"
Which I wrote after I chased 2-3 trades in a row

I need to re-word that into something a bit more positive such as:
"Letting the trade come to you increases your chance of success, be patient and your edge will show"

Yesterday's excellence is today's standard and tomorrow's mediocrity
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