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NQ - Slowly figuring things out. Very slowly.


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NQ - Slowly figuring things out. Very slowly.

  #21 (permalink)
 Binkius 
Taipei/Taiwan
 
Experience: Beginner
Platform: IRT/Bookmap
Broker: S5
Trading: FESX, NQ
Posts: 36 since Apr 2016
Thanks Given: 31
Thanks Received: 66

Too much family stuff today. I just want to wrap up yesterday.




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  #22 (permalink)
 Binkius 
Taipei/Taiwan
 
Experience: Beginner
Platform: IRT/Bookmap
Broker: S5
Trading: FESX, NQ
Posts: 36 since Apr 2016
Thanks Given: 31
Thanks Received: 66

I had to take some time off journal'ing to take care of my parents. I've managed to start sim-trading FESX. I have a real swing trade in NQ I will update, but my focus on intraday will be on sim-trading FESX.

I was worried about the switch from NQ to FESX, but I'm finding FESX easier to trade than NQ. I think what I'm finally able to see (very dimly) is price action. I've had to change my software a little bit, but it's been an easy transition. The time zone is especially easy for me compared to NQ.

I've introduced a new metric to my statistical record keeping: Doubling Down. Every time I double down, I record it as a trading mistake. I've traded FESX 7 days and only doubled down once. I resisted the temptation to double down twice and let my stops take me out. Letting a stop take me out is actually an emotioanl/developmental win even if it causes a statistical money loss.

Here is a screenshot that sums up my biggest problem, doubling down. I trade 1-2 contracts, 3-4 times per day. I'm looking to average about $150/day over a long period. My sim-trading style is yielding me this result (NQ and FESX) unless I double down. When I double down, I actually can pull it off probably 80%-90% of the time. But when I don't pull it off, I get the red square.

As seen above, I'm close to my goal of $150/day, but then wipe myself out -$43,300!!! Market goes up, I can trade it. Market goes down, I can trade it. But if I let my emotions take control. If I HAVE to be RIGHT, I make the red-square-of-death appear.

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  #23 (permalink)
 Binkius 
Taipei/Taiwan
 
Experience: Beginner
Platform: IRT/Bookmap
Broker: S5
Trading: FESX, NQ
Posts: 36 since Apr 2016
Thanks Given: 31
Thanks Received: 66


I'm doing a more in-depth homework analysis because it's the weekend. Thanks in advance to those who go through it all.

Too Long, Didn't Read Summary in One Pic:
Overall trend is up (but overbought). Look to go long on retest into support at 3340 or 3325. Breakdown of 3325 is bearish.


The details:
Candlestick charts:
-Daily is a copy of the symmetrical triangle on INDU(DJIA) and NYA(NYSE) which isn't surprising since FESX is considered the European DJIA.
-FESX is still holding it's 50dma<200dma death cross.


-Hourly shows a retrace back to the 127% Fib Extension with a MACD bearish divergence*.


PnF charts:
Pnf charts are very bullish, showing breakouts up, on top of previous breakouts up, on both the 5x3 and 5x1 charts.



30-min Volume Profile:
Clear breakout over an ascending wedge. Price currently backtesting the ascending trendline.


Weekly Market Profile:
Merging the last 5 weeks gives a very balanced profile. There is going to be a big move soon. I'm thinking the market will use the Fed meeting on March 21 as the "news event" to spike the market one way or the other.



Daily Market Profile:
Merging three days together gives a balance profile. Price tried to move up on this balance yesterday, but fell back into a double distribution on indecision.


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  #24 (permalink)
 Binkius 
Taipei/Taiwan
 
Experience: Beginner
Platform: IRT/Bookmap
Broker: S5
Trading: FESX, NQ
Posts: 36 since Apr 2016
Thanks Given: 31
Thanks Received: 66

My real swing-trading is going horribly (Nasdaq ETF's (I think I've erroneously stated NQ when in my mind I've been thinking Nasdaq)). My sim day-trading is going swell.

I think the problem is that I am basing all my swing-trading decisions on my sim day-trading charts. I've been getting my time frames confused and taking long-term real trades based on short-term intraday analysis. Argh.

So, I'm just going to look at NQ in a longer time-frame and ignore the intraday period until I can figure out how to get the time frames straight in my mind.

TLDR. Too Long, Didn't Read Summary in One Pic:
-My last update said I was expecting a down move. There was a short-term ~90 point move down on NQ from my last post. Great for daytrading.
-Then it moved up 315 points. Not good for me because I went swing short Nasdaq ETF's based on my prior analysis.
-Then instead of getting out at obvious breakout points, I sat there with my huge swing-trade percentage stop.
-NQ is now at serious support. A breakdown here should give a good move down.
-Trend is up until that breakdown occurs.



Details:
Hey look! Short term balance. I think it'll go down.


It went down. Short term... Long term... It went up. A lot.


Start merging multiple Market Profiles together and it's a different story.


Merged together, the profiles suggest balance (which suggests a vertical move). Looking at it in this time frame (which I didn't do earlier), it's pointing up for the vertical move.


Well, now it's pointing down for a large vertical move -- but the pattern isn't really clean. The deep part of the distribution doesn't look Gaussian so much as just a huge square block of volume.


Ok, I can't resist. Here's a short-term 5x1 NQ chart. If price can print at 7020, that's a significant breakdown.

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  #25 (permalink)
 Binkius 
Taipei/Taiwan
 
Experience: Beginner
Platform: IRT/Bookmap
Broker: S5
Trading: FESX, NQ
Posts: 36 since Apr 2016
Thanks Given: 31
Thanks Received: 66

Solid breakouts of PnF patterns.
Real-swing-trade short Nasdaq ETF's all green.

Major Trading Problems:
I made my daily nut fairly early sim-trading. Then I saw strong signals all over the place. I couldn't bring myself to get in, risking my sim-gains for the day. So I watched TWO sets of strong signals play out while standing on the sidelines.

The pain of doing this TWICE then made me start to play stupid counter-trend moves. Got out of both counter-trend moves at +1 and BE.

I didn't want to take risk when the probability was on my side, then after watching it move without me twice, I couldn't stand it anymore and entered multiple times on sketchy setups. Stupid stupid stupid.




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  #26 (permalink)
 Binkius 
Taipei/Taiwan
 
Experience: Beginner
Platform: IRT/Bookmap
Broker: S5
Trading: FESX, NQ
Posts: 36 since Apr 2016
Thanks Given: 31
Thanks Received: 66

9th day trading FESX.
Every day positive, which shows improvement.

But... This is what I'm doing:



I can, with a decent amount of accuracy, get decent entries. But then I screw up the exit beyond all belief.
Trade #1 (1 contract): I get 3 out of 19 possible ticks.
Trade #2 (2 contracts): I get 11 out of 32 possible ticks.

I set up scaling exits (when I use multiple contracts)... then move the limit order. Emotional problems somewhere. Fear of loss/being wrong probably. The same emotional inadequacy that makes me double-down (in a losing trade) manifesting itself in a winning trade. I'm worried about losing my profits and get out too early. I'm afraid of being wrong.

Mark Douglas writes that successful traders have to come to understand each individual trade is like pulling a slot machine lever. There is no emotional attachment to pulling a slot machine lever. You pull, the wheels spin and you get a result. It's useless to beat yourself up or emotionally attach to the spinning wheels because you can't change the outcome. The wheels will stop where they land. The market will move with or against your entry. You wouldn't beat yourself up over the slot machine not winning. You shouldn't beat yourself up over a losing trade.

I've got an edge. It works. But I lack the emotional control necessary to trade at a level I feel comfortable going live.

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  #27 (permalink)
 Binkius 
Taipei/Taiwan
 
Experience: Beginner
Platform: IRT/Bookmap
Broker: S5
Trading: FESX, NQ
Posts: 36 since Apr 2016
Thanks Given: 31
Thanks Received: 66

Crap. I did it again. I doubled down into a truly epic loser trade.



Price is clearly dropping after two initiative breakouts. The there is a reflexive pullback on weak volume with sell imablances. Everything is screaming "SHORT". Locked into my stupid homework, I read it completely wrong and go LONG.

It takes me about 3 minutes to figure out I've just lost my mind and did the opposite of what I should've done. I look at the situation and try to salvage the loser trade. This is where all my education and work experience work against me.

Bad test grade in school? Study harder.
Client not satisfied? Rework project until client is satisfied.

But a loser trade? Cut my losses (give up) or double down (work it harder)?

My mind drops down a couple of gears and goes full throttle. Thankfully, FESX moves like molasses so I have time to think.

1) FESX has had two drops on high volume. Maybe one more big drop, for a pattern of 3-thrusts-to-a-low/high. But it's probably going to take out my 6-tick stop given the range of the last two breakout bars.
2) FOMC day, so moves are likely to be responsive, moving from the outside back in, until the announcement at 2pm. So it's likely to mean revert. FESX has been mean-reverting for the last 6 or 7 weeks. Big time-frame players, who could really move the market are going to wait for the announcement.
3) First thrust down, 9 ticks. Second thrust down, 11 ticks. Set new stop 11 ticks under last low. That is one huge, huge hole.

I'd like to say I looked at the analysis and made a calculated decision. But the monkey-on-my-back, my emotional desire to be right definitely colored my final decision. Give the trade some room. If a reversal pattern doesn't show up in another 11 ticks, let it go - turning a 6-tick loss into a 14-tick loss.

It played out ok. Another 11-tick thrust ends in a nearly 30:1 buy-imbalance, setting up stopping volume. I double-down and have to grunt through over an hour of chop until price lifts. I have two chances to get out BE but I'm sure I've read the price action right and there is going to be a sizable bounce.

I scale out at VWAP and then finally exit my runner when a 100:1 sell-imbalance appears (it doesn't get any clearer than that).

It would have been a lot less nerve-wracking to have closed out my trade as soon as I realized I had made a mistake and then re-entered later. But the profit was higher by doubling down into the losing position.

So, no improvement. I'm still doubling-down into losers.

But, I've realized that homework seems to have an undue effect on me. I get locked into my homework research and don't have fluidity to react to the market. I end up like a hammer looking for nail to hammer even when there are no nails present (and end up hammering my fingers). I have to find a way to make homework work for me.

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  #28 (permalink)
 Binkius 
Taipei/Taiwan
 
Experience: Beginner
Platform: IRT/Bookmap
Broker: S5
Trading: FESX, NQ
Posts: 36 since Apr 2016
Thanks Given: 31
Thanks Received: 66

Title: This Green wall of win is actually a trading disaster waiting to happen.

April 2018 results (Jigsaw Performance Dashboard).


Incremental Goal #1: Find an edge. Identify an edge and achieve consistency trading that edge with 1-2 contracts.

Goal #1 achieved. I've now traded FESX at a profit (each individual day) for 36 consecutive trading days. I can sim-trade profitably with consistency. My edge works (volume profiling / footprints / Bookmap based on Niels Koop of AMS Trading and Morad Askar (FT71) of Convergent Trading (I pay to attend both of their classes)). I have developed my edge to a point where I am comfortable with it and it is becoming a natural reaction.

Incremental Goal #2: Scale up my edge. Increase position size, building familiarity with increased risk. Prove to myself that honoring full stops can still be profitable in the long-run and needs to be done to prevent account suicide.

Continuing Issues: I keep doubling down. I will have to stop this. Doubling down on a single contract when each point is only 10 Euro can be recovered from. Doubling down on size will end up killing me when I go live. I have to solve this problem in sim before I go live. I hope that I can convince myself that honoring a full stop is better than dragging out a losing / double-down disaster. I will practice in sim until I can re-wire the emotional part of my brain that requires me to be always correct.

I traded NQ for 46 consecutive winning days. Blew up the account on day-47 due to uncontrolled doubling-down. Then I traded FESX for 36 consecutive winning days. I am still doubling down.

Trading NQ never felt comfortable - I couldn't even imagine going live with the edge I used sim-trading NQ. After taking courses / coaching from Niels Koop and Morad Askar (FT71) I have been able to duplicate the consistency of my NQ trading with FESX - but I have been able to develop my edge into something I feel comfortable with.

Jigsaw Performance Dashboard, March - April, 2018 FESX Statistical Summary


FESX 36 days traded, 107 trades, 83.2% wins, 7.5% losses, 9.3% scratch break-even. Percent long 50.5%. Percent short 49.5%.

I've been able to get away with doubling down because of two factors: 1) I only make losing trades 7.5% of the time. I eventually can get the direction of the market correct enough to "save" a dying trade. 2) I'm only trading 1 contract most of the time, so the hole I dig doubling down is usually recoverable. However, as I've proven on day-47, all it takes is one 3-sigma event and I blow up the account. Everything lost.

What I have to prepare myself for is not seeing a calendar month of all green. This is where being a "good student/employee" really, really hurts me. I want perfect performance statistics/metrics. So I'm journaling this as a memorial to being a "good student" with a green wall of win. I did it and now I have to turn my back to that midnset.

To be able to trade live, I have to more red losing days. Days where I accept that I'm wrong, honor my stop and turn the green screen into a checkerboard of green and red. All it takes is one 3-sigma day and the "green screen of win" is completely obliterated because I keep doubling-down.

Some thoughts about trading:

For April, 2018, I finished 5th place out of 221 participants. That's in the top 2.5%. That matches with the acceptance rate at the two top-10 graduate programs I attended (I am a very good student). And that is my problem. The mentality of being a good student - what worked in academics and most professional careers doesn't work in trading. I traded in a very specific pattern, taking very specific risks to achieve the highest possible score possible. In effect, I'm trading like I would take a standardized exam for entry into a prestigious academic program or pass a professional exam-- I'm aiming for a score.

The score doesn't matter. Being right doesn't matter. What matters is your ability to read the market and act accordingly.

Learning how to trade is the hardest thing I've ever done because there is no one single solution. In the academic and professional world, there is usually a well documented solution to every possible problem. All you have to do is search hard enough and you will find that already prepared solution. That does not exist in trading. No matter how hard you look, there is no pre-made, already researched and proven solution that explains how to trade. You have to find the unique solution that works for you. And that solution is specific to just one person - yourself.

So this post marks the end of the first part of my trading journey.

It's taken 6 months. I've gone from hopeless to having a solid and consistent edge that works and I am comfortable with. I have the performance metrics that prove what I'm doing works. Now, I have to go beyond the metrics and the contrived trading for emotional satisfaction and employ my edge in a way that I will eventually be able to make a living from it.

I have to give up being a good student and a good employee and I have to destroy my beautiful metrics and egotistical emotions and learn how to trade for a living.

---
Notes:
Pete Davies at Jigsaw described their leaderboard algorithms as based on what a prop-shop is looking for. Consistency across all trading environments. The algorithm doesn't weigh gross profit-and-loss as the primary statistic. Instead, it's looking for the trader who can consistently make money under any conditions. Because once a trader can do that, he can simply scale up his position size to make more money. This is in contrast to a boom-or-bust trader that posts huge PnL one week and then blows up the next week. So, I rank highly in the algorithm even though my PnL is tiny (due to only trading 1-2 contracts) because I consistently can sim-trade making money.

Trading is ridiculously hard. Simply getting break-even puts you in the top 50% of traders on the Jigsaw leaderboard. Morad Askar (FT71) says it takes two years for an online trader to become successful trading live. I'm 6 months in and hoping I can do it within a year.

I highly recommend Jigsaw's Performance Dashboard Leaderboard as it lets you compare your performance to a decent sample size of other people trying to learn how to trade (I think one or two of the top guys are actually live trading). It gives you a yardstick to measure your progress so you know if you're improving or not. Is the bad week you suffered due to you or did the market go crazy and everyone else also had a bad week? These kind of metrics are impossible to get if you're trading alone and in isolation.

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  #29 (permalink)
 
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Binkius View Post
Title: This Green wall of win is actually a trading disaster waiting to happen.

April 2018 results (Jigsaw Performance Dashboard).


A few things you didn't note comment on but you should.....

1 - You are consistent in number of trades - which is a good sign you have your behavior in check, sticking to your plan.
2 - You had 2 losing days you turned into winning days - which is a very, very good sign - the ability to turn a day around.

Cheers

Pete

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  #30 (permalink)
 Binkius 
Taipei/Taiwan
 
Experience: Beginner
Platform: IRT/Bookmap
Broker: S5
Trading: FESX, NQ
Posts: 36 since Apr 2016
Thanks Given: 31
Thanks Received: 66



DionysusToast View Post
A few things you didn't note comment on but you should.....

1 - You are consistent in number of trades - which is a good sign you have your behavior in check, sticking to your plan.
2 - You had 2 losing days you turned into winning days - which is a very, very good sign - the ability to turn a day around.

Cheers

Pete

Earlier, I said learning to trade is horrible because there simply isn't one single answer. Another reason that it's horrible to learn how to trade is that there is an endless amount of bad information out there. Just pure rubbish. False, misleading, and predatory information swamps the few isolated legitimate educators/software providers.

So, somewhere out there, you have to piece together your answer to trading and this is made even more difficult because of all the charlatans out there peddling absolute bullshit to unsuspecting customers.

There's a thread somewhere on futures.io about how much money people have wasted trying to find the "answer". I can say that I've contributed my fair share of thousands of dollars and been ripped off by charlatan educators preying on people trying to learn how to trade.

Of the money I've spent learning to trade - Pete Davies is one of 3 individuals where I feel that my money has been well spent. Because the trading-educational market is so predatory, cost is NOT a sign of quality. Actually, in my experience, as cost increases, quality of information provided decreases.

It's like the most immoral, cheating, predatory "educators" charge more to make their scams seem more valuable. I paid more to one charlatan than to the 3 legitimate educators combined who have helped me get to this point in my education.

But back to Pete Davies. He's an educator that can look at your trading metrics and immediately pick out where you are having problems and where you are doing good (as can be seen by his post above). I knew I had turned a corner in April because I could turn a losing day around - honor my stop, drawdown for the day, but then be able to change my mindset enough to get back into the correct rhythm of the market. A good coach/educator can see that in your metrics and offer advice for further improvement, or even improvement in a direction you never even imagined.

These are the three people who taught me how to trade and use their software. If I ever can trade for a living, it started with what these 3 guys have taught me.

Pete Davies / Jigsaw
Niels Koop / AMS
Morad Askar (FT71) / Convergent (S5)

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