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Stream of income, small capital and lots of willpower
Much at the beginning of the session I prophesied (don't like the word, it's drives one into a non-elastic stance) that the market would sell off, regardless of NFP - the conclusion I am now reaching may be that we are about to experience a horrible bear market that will become a full fledged bear in 2017.
I don't like to make such sweeping grandiose statements as a small retail guy, but the bull really looks tired.
I don't trade macros and I pretty much don't care about them but I agree with you. CB's are propping the markets up but that will come to an end eventually. We're in the middle of a giant bubble IMO and when it pops it's going to be big.
Some days my behavior causes me embarrassment. Friday was one such day.
Even a child can tell that this chart is in a downtrend. Seriously I need to stop bottom picking. As I said at the start, I am no beginner, but I begin again and again.
My Trading Method
I keep an open mind.
I live in the moment.
Most of my trades are with the trend. I love getting a kick out of trying to predict the extreme ends of moves..... but usually ending up paying for that!
I allow the teachings of Bob Volman, Al Brooks to gently rise up inside me while I pore in the market - I try to apply the correct parameters to the setup in front of me, knowing that I may be wrong, and prepare to be wrong. Today I did prepare to be wrong so took my losses. However, read the previous point again why I took these - these trades were those expensive trades that my ego can't stop me from taking.
I try for the smallest possible swings with the proper position size (see next para) this may permit.
I also take a side position which allows me to take in the larger swings. I went home with an open long. I realized during the weekend that I am biased towards a bear in equities and a bull in the EURUSD, and these biases are affecting me. I realize that this overnight position may not have been in the best of places and have accepted that some major MAE will happen, but am psychologically prepared for it. (This sounds more confident here that I am really!)
Money / Position / Psychology Management
> 6.5 hours of sleep - compulsory
2% risk max allowed per trade
10% reduction in capital prohibits me from further trading the entire month. This is a 'point of no return' where tilt may result if not followed.
My Career
I have achieved a steadily rising equity curve and am up 83% so far. However there is a caveat of one day where the drawdown was at an unacceptable 35%. Since this was at the start of the curve it now does not appear as horrible as it should!!
Routine and Habits
I do not trade full time. I earn money by working at a day job. This is by choice and also keeps me occupied so that I can trade without anxiety manifesting. One day I hope to become a full time trader.
I start the day by looking at multiple markets and seeking correlations. Apart from that I have omitted my pre-market and post-market routines - these used to make me too rigid and biased. I now face the opening bell raw and full of energy. It seems to be working for me better like this.
Success used to go to my head. I no longer care about individual trades, and that is my secret formula.
I sat on my hands in a confusing market which could not decide on direction.
I am improving my technique and am not slacking or plateauing.
I am cutting my losses at the correct places.
Negatives:
I try to predict trend reversals and keep getting into trouble. If I eliminate this my equity curve would be smoother.
I keep trying to ensure that I take only winning trades and at the last moment I say to myself 'I do not care about whether this trade will make or lose money'. I feel it should be more ingrained into my psyche rather than having to force myself to take the hard looking trades. I don't know if trading will always be hard, every single trade entry and exit!
I do not know how to read tick charts, but I have to say, I think that statement above you made is being disingenuous of your own abilities. If the chart is so easy to read a child can read it as a downtrend, then why didn't you see it as a downtrend at the beginning of the chart? And why is it a down-trending chart now? What is the next bar going to do? How can you tell with just one chart? So without other charts to back up your suspicions about where the direction may go, it seems you are being unfair to yourself by saying that "you should have seen it coming".
Every single chart we have is 100% accurate in movement, LOOKING TO THE PAST, since they are lagging indicators and are charts that look to the past. Daytrading and swing or position trading has nothing to do with the fundamentals of a company, or the fundamentals of an underlying commodity in the case of futures. It's all speculation about where we HOPE the price will be in the future by a certain expiration date. That is why they are called futures.
Kind of hard to see why you went long there since I can't see the chart couple of hours before. But yet i can see you went long because there's a reaction to the upside on the previous tick. The good thing i can say is you closed it fairly quickly...my god if you sold it more at the bottom.
Here is an important principle of trading psychology: You can only manage your trading capital--and your trading--as effectively as you manage the rest of your life.
How we live is how we'll trade: they are both expressions of what we ultimately prioritize.
I can offer no better advice than this: Live your life the way you want to trade. Be the person outside of trading hours you want to be when markets are open.
