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McJackson's Journal - developing healthier trading processes + mindset

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  #11 (permalink)
Colorado Springs, CO
 
Experience: Advanced
Platform: MT4, Ninjatrader
Trading: CL, NQ, 6E
 
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Posts: 24 since Mar 2014
Thanks: 29 given, 107 received

You know the difference between knowing something vs acting on it?

For example:

1. Smoking. I don't smoke, never have, not interested.
2. Diet. Uh....different story. If junk food makes it into the house, I act like an addict. I don't want to, but it always seems to happen.

So, what's this got to do with trading?

I've been driving myself nuts with two things: OVERTRADING and DAILY LOSS LIMIT.

I've tried different tactics, written out plans.....I've tried pretty much everything but kept repeating the same patterns.

I've watched myself back on videos where I've gone into tilt, and it's like listening to a different person.

2 weeks ago I spoke to a friend of mine about mental paradigm shifts....the idea is that your behavior is largely based on your identity.

Let's say there's a cupcake on a table in front of you.

If you believe you're an athlete, you're probably not going to eat the cupcake. It's just not something athletes do.

If you believe you're ______ (trying to be diplomatic)...let's say "unhealthy". You're probably going to consider eating the cupcake.

My friend's point - and I think it's a valid one - is that changing chronic behavior requires finding ways to completely change your reference points, and maybe even your identity. Easy, right?

I can't remember if it was Al Brooks or Brett Steenbarger, but I'm pretty sure one of them talks about how he received a diabetic/pre-diabetic diagnosis. After years of struggling with yo yo dieting habits, he suddenly had no trouble changing his eating. Why? Because it was life or death, and he pictured missing his daughter's wedding (if memory serves..).

So, for the first time, I sat down and really had a look at my IDENTITY as a trader.

More hippie dippy BS, maybe.

But anyway.

I started looking at trading behaviors I'm unquestionably consistent with.

Numero Uno is my risk per trade. I've NEVER had trouble sticking to my stops. The thought of widening them? Nah, it's totally antithetical to how I approach this business.

To be so consistent with my risk per trade...is great. I'm a great risk manager (per trade).

So why...WHY...would I create this crazy scenario where I struggle to manage my risk on a slightly bigger level?

It's the first time I went from thinking "Hmm, I should change this. Maybe I can change by setting this limit, maybe try this tactic"...............to thinking, "this is ridiculous, this isn't who you are".

I'm not sure this comes across effectively in my writing, but it's one of the more profound moments I've experienced in my trading career.

I don't think my problems are suddenly magically solved....but this is a more important step than any of the "tactics" I've tried.

If you've got habits or chronic problems, I genuinely encourage you to dig through some of your deeper convictions about yourself. We're all here because we believe in our abilities to succeed at this business....there are positive qualities deep down that you hold about yourself that are more powerful than any dumb behavior you think you're struggling with.

Alright, I'll get off my soapbox now. Hope you're all having a great night.

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  #12 (permalink)
Colorado Springs, CO
 
Experience: Advanced
Platform: MT4, Ninjatrader
Trading: CL, NQ, 6E
 
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Posts: 24 since Mar 2014
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Alright folks....Some charts for a change

Going chronologically:

A) CL

I've been looking for reasons to get short based off the H1/D1 big picture. The 5 hours leading up to the open got me itching for a strong move. We got it, but I sorta screwed up the entry.

I chased price a bit and quickly went up +12 ticks, but ran into the prior swing. Should have cut and run because it was already a chase out of the opening range and oil has a lot of trouble blasting off without the news or clear volume. Instead I ended up +1 tick scratch. Fine.

I missed the big move later because I was already away from the computer. I've only got a limited window to trade in, though I'm considering setting alerts with tradingview or something (I don't really love Ninjatrader's alerts).





B) NQ

First few sequences I need to be entering/exiting earlier. In the future when I'm up a little more, I'll be entering with 2 lot and scalping half very early. For now, either stop trading this early in the session or get more aggressive with the exits. You'll see in the early sequences I'm always up +5-10 ticks before it spins back and knocks me out.

The second sequence was just trade #5. I was looking for a breakout above HOD, but tried to get in early. Naked attack on the level was liable to need confirmation, so I tried to get in before any of that. Not a great idea, to be honest, and it's something you'll see a little later in the day.

Third sequence was GOOD, almost GREAT. First shot knocked me out, but got in quickly and doubled up as the move pushed. Slight chase, but I had major conviction here. The problem came when I tried to split my targets into separate orders...I mistakenly move BOTH to my eventual exit. I wanted to keep a runner, because I thought here we could have gotten a real collapse. Ended up missing 40-80 ticks, which was annoying.

Fourth sequence was 2 revenge trade / FOMO whatever you want to call it.

Fifth sequence was a decent entry testing if the move was going to keep going south. Quick loss, but good trade.

Sixth sequence was a problem. My general rule (that I should formalize) is 2 shots, then stand aside. In this case I ended up taking 5 shots, 5 losses. The last 4 were way too close together and drew me back down quite a bit.

Seventh...here's where I actually waited for the breakout + confirmation. That's what I was trying to get into with all those quick losses, I was just going too early. In this case I'm glad I got in and I'm quite happy with the covers. In the past I'd try to hold this for a big breakout past high of day, but I'm becoming more friendly with this crazy contract.






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  #13 (permalink)
Colorado Springs, CO
 
Experience: Advanced
Platform: MT4, Ninjatrader
Trading: CL, NQ, 6E
 
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Posts: 24 since Mar 2014
Thanks: 29 given, 107 received


So, full disclosure...I've done it again and hit the max loss in one day.

I might reset and try again, but not making any decisions until Monday. I think the money/effort might be better placed in my personal account, and use Ninjatrader's automated DLL limits set around a hard, small number.

I can list several reasons I came to the computer in a less than optimal state this morning, but end of the day the thing that killed me is not respecting that initial DLL number. Once I blow past that...good things don't happen.

Couple of observations:

1. On days where a major move has broken a premarket range just ahead of the open, I tend to do badly.

2. I can get too attached to a premarket idea, and then get really stuck trying to trade against the trend.

3. My style involves a small stop and big winners. That's great when it's working and you can maintain a win rate over 30 or 40%. But getting past a certain size drawdown (let's say $200/contract), I start holding winners longer than I should, in the hope that a big move comes and saves the day. When you're up 30+ ticks and watch price snap back to take you out for +1 or -5 ticks...it messes with my head and with the session's P/L.

Tough day.

Not going to repeat this behavior again.

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  #14 (permalink)
Hanover, Germany
 
Experience: Beginner
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My personal experience is that I reproduced the same bad behavior trading my own money as while trading combine money. I even repeated it with my own money after having stopped doing so in the combine & the subsequent funded account.

Breaking my own limits live was MUCH more expensive than all combines I ever took combined (no pun intended) btw.
So I personally will not recommend losing your own money before you stopped losing theirs. ;-)

All the best to you, whichever route you take.
ST

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  #15 (permalink)
Colorado Springs, CO
 
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Scalpingtrader View Post
My personal experience is that I reproduced the same bad behavior trading my own money as while trading combine money. I even repeated it with my own money after having stopped doing so in the combine & the subsequent funded account.

Breaking my own limits live was MUCH more expensive than all combines I ever took combined (no pun intended) btw.
So I personally will not recommend losing your own money before you stopped losing theirs. ;-)

All the best to you, whichever route you take.
ST

Thanks @Scalpingtrader, I appreciate the feedback. I took a look at your journal from earlier this year and I can see you had some similar experience, so your advice is extra valuable.

I asked TST about setting automated DLL's, and the answer I got was basically, "Look, if you can't control your DLL yourself, you probably don't have the discipline to be a trader".

It's not a crazy answer, by any means.

But at this point, I see it as my single biggest issue that I struggle with. I'm thinking about putting a very small amount of money in a live NT account, like $750-1000, and ask for a DLL of $100/day.

Either that or reset TST. Definitely one thing I took from your journal was the difficulty focusing on 2 accounts, especially when they're not split by style or instrument.

Thanks again for the advice, I will give it serious consideration this weekend.

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  #16 (permalink)
Colorado Springs, CO
 
Experience: Advanced
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Trading: CL, NQ, 6E
 
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Posts: 24 since Mar 2014
Thanks: 29 given, 107 received

This felt somehow appropriate for my actions today:



So, this being a journal and all.....consider this an intervention to myself.

I've got a problem (DLL violation) that I keep repeating.

The effect is:

1. Financial. I don't like spending money on TST monthly Combine fees and $99 resets.
2. Emotional/Psychological. It really brings me down. Not as dramatically as a few years ago, but it's still heavy.
3. Strategic. I'm questioning parts of my strategy, and I'm not sure if that hurts, helps, or wastes time.

Those are objective truths. Doesn't help to call myself names or have a nervous breakdown.

What actions can I take to make this a genuine catalyst for change? (not just learning, but actual CHANGE)

1. Financial. Pay the monthly fee when it kicks in soon, but don't reset until the rest of the plan is really in place. Don't invest in another personal account either. I've realized it just creates more $ pressure.

2. Emotional/Psych. Today sucked. I've been down all day. So, I'm doing my best to record this awful feeling. I'm doing it to remember, so that I don't lead myself down this path again. It hurts that it's me doing this to myself, over and over again....and when I'm "in the moment", I don't really think about how much it's going to hinder my progress and ruin my day/days.

For specific action #1, I'm going to return to recording my screen and making videos. Talking myself through the trades seems to create a little more responsibility.

For specific action #2, I'm going to keep several visual cues up on the wall in front of me, or on a post it note on my tick chart screen.

For specific action #3, I'm going to return to an old method of taking my emotional temperature (inspired by Steenbarger). I'll use 4 different colored coasters....sounds nuts but it does seem to help slow down my actions a bit.

For specific action #4, I'm going to check in here with you all on a daily basis and post my actual journal. It's an excellent process I've created over the years....and yet I've strayed from it since the early part of 2018.

3. Strategic. I'm not going to mess much with the strategy. By committing to the comprehensive journal, I'll be able to eventually see where I can optimize and improve various elements of what I'm doing. But for now, I just want to build at least a month of sticking to my risk rules.

I've never had as much confidence as I do now, I've never been more committed to this business, and I genuinely think I know what I'm doing.....I just need to take control of this aspect. I've been at this long enough to know that you can't fool yourself into thinking you've MADE IT as a trader if you hit a $ target or nail a few trades. But I must MAKE IT PAST this behavior.

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  #17 (permalink)
Colorado Springs, CO
 
Experience: Advanced
Platform: MT4, Ninjatrader
Trading: CL, NQ, 6E
 
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mcjackson View Post
This felt somehow appropriate for my actions today:

For specific action #1, I'm going to return to recording my screen and making videos. Talking myself through the trades seems to create a little more responsibility.

For specific action #2, I'm going to keep several visual cues up on the wall in front of me, or on a post it note on my tick chart screen.

For specific action #3, I'm going to return to an old method of taking my emotional temperature (inspired by Steenbarger). I'll use 4 different colored coasters....sounds nuts but it does seem to help slow down my actions a bit.

For specific action #4, I'm going to check in here with you all on a daily basis and post my actual journal. It's an excellent process I've created over the years....and yet I've strayed from it since the early part of 2018.

3. Strategic. I'm not going to mess much with the strategy. By committing to the comprehensive journal, I'll be able to eventually see where I can optimize and improve various elements of what I'm doing. But for now, I just want to build at least a month of sticking to my risk rules.

I've never had as much confidence as I do now, I've never been more committed to this business, and I genuinely think I know what I'm doing.....I just need to take control of this aspect. I've been at this long enough to know that you can't fool yourself into thinking you've MADE IT as a trader if you hit a $ target or nail a few trades. But I must MAKE IT PAST this behavior.

See those "specific actions"?

I haven't posted here, so I haven't really followed through on #4, but that's alright. I'll get to posting as things progress.

Steps 1-3, though, have helped me immensely in the last couple of weeks.

Some deeper journal examination and a look at my W/L times revealed some pretty interesting stuff. Namely, I'm great at trading the opening move and/or opening range breakout. A huge % of my losses occur once that opening range breakout runs out of steam and goes into chop mode. Especially with my tight stops, any chop on NQ is a killer.

CHANGE #1: So by trading a little more actively at the open, I've bumped my W% up by almost 2x. That small change has made a big difference. It also helps stave off the emotional crazy crap that leads to gambling crap that leads to blowing my risk rules for the day.

CHANGE #2: I'm trading around much more defined "scenarios", rather than "moves". I'm looking at:

(a) opening drives
(b) opening range breakouts + fails
(c) premarket high + low (honestly, this drives everything in the NQ...highly suggest looking at action around them)
(d) daily high + low

Those levels really drive the action as I see it. Prior day H/L, pivots, and other tools are important for adding confluence but not standalone trade ideas for me anymore. For the NQ anyway.

CHANGE #3: I'm covering trades a little earlier. The journal exposed a shocking number of times I allowed price to move 30-50+ ticks and allowed to come back to breakeven. The emotional toll was enough to mess with my head.

So with all that said, I'm up close to halfway through another Combine Step 2 after 3 trading days. While that's not exactly new, the underlying stats are a lot more comfortable. No more -$800 days being masked by an intraday comeback. And my trade by trade Win % is way up.

Feels like I've made a small step forward, now many more to go. And hopefully no BIG steps back.

Hope you're all up for the week and trading well!

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  #18 (permalink)
Colorado Springs, CO
 
Experience: Advanced
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Trading: CL, NQ, 6E
 
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Posts: 24 since Mar 2014
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I disappeared since the last post - guess I'm still not great about the whole forum thing.

It's about a year and a half since my last post, I think. Thought I'd add an update with a couple of thoughts....

I recently jumped through the Topstep hoops again and am funded (thought there's all sorts of restrictions in the current wacky market environment). My personal account is also in better shape than it's been in years. Nothing really dramatic, just less BIG freakouts, if that makes any sense.

There's been 2 big things I've been working on since that last post.

#1) I built an alternative income stream.

I cannot stress how much this has affected me. I was really driving myself bananas with "extra" financial pressure. About a year before I started this thread, I went through a pretty major business loss and.....it was definitely still with me on several levels.

After an exchange with Lance Beggs, I went back to the drawing board and beefed up my consulting business to a good enough level to pay the bills and offer basic stability. Again nothing dramatic here, but it's been a huge weight off my shoulders.

#2) I pretended I was writing a book

I spent part of 2018 and all of 2019 looking up sports psychologists, athletes, music teachers, pro sports coaches, etc.....anyone with a skill-based profession. And I interviewed them, saying that I was writing a book applying their concepts to traders like myself.

I never wrote any magnum opus, but I did end up taking a ton of notes and rejiggering my journaling. It's by no means perfect, but it's SO much better than where I was previously.

Plus, frankly it's been good to have some sort of "other" thing to focus on.

A few years ago I took that trader psych test on Van Tharp's site and I remember one of the warnings for my personality type was "a lot of creativity" (lol sounds like my mom huh). in all seriousness though, his point was if you feel a need to get creative, you'll get bored easily with a trading system and mess around with it....now THAT sounds familiar.

Having this external book project has helped channel that extra energy into a productive thing I'm interested in, happy with, etc.......without messing with my trading focus.

There's been a few more changes that I'll probably try and make note of in the near future.

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  #19 (permalink)
Colorado Springs, CO
 
Experience: Advanced
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Trading: CL, NQ, 6E
 
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Posts: 24 since Mar 2014
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Thought this'd be a good place to share a quote that's been on my mind for quite a while.

It's one of the few "check-in" tactics that actually work for me. i.e. if I start getting worked up during the session or during a trade, reading this quote has helped pull me out of the red zone and back to better decisions.

It comes from John Hoagland, one of the coaches and main dudes over at Topstep. We had a call a while ago and he closed off with this (I'm paraphrasing):

(context: I kept ruining consistent gains with one big bad day)


Quoting 
"This can be a great career. You can build your castle, brick by brick, day by day.

But if you keep doing this, guess what you'll have?

Nothing but a pile of fuckin bricks.

Which one do you want? The castle or the pile?"

That really stuck with me, to the point where I've written down in a few places including on a post it note I've stuck to the wall behind/next to my screens.

I've got a few other physical tools I have around me during the trading session to keep myself in check. This is an area I sort of made fun of for years.....but I'm learning to eat my words and buy into small marginal gains in my processes through the day.

Hope you're all staying healthy and doing well these days!

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  #20 (permalink)
Colorado Springs, CO
 
Experience: Advanced
Platform: MT4, Ninjatrader
Trading: CL, NQ, 6E
 
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Posts: 24 since Mar 2014
Thanks: 29 given, 107 received


I just listened to an interesting podcast - Tim Ferris interviewing Josh Waitzkin, the author of "The Art of Learning" (which is a great non-trading book for traders, btw).

One point that Josh makes is the idea of challenging your biases and frameworks.

His example is - "if I were to look back at myself 10 years ago, what are the things that I just assumed to be true/correct? What if they weren't?" (bad paraphrasing here).

That got me thinking about my trading career and I've pulled out a few big differences from 5-10 years ago. Thought this'd be a good place to get it off my chest

#1) "Meditation is BS" .........nope. I still don't like doing it during the day, but it's been a huge help in getting to sleep at night.

#2) "I can + should trade as many markets as possible"...........nope. Pretty much either NQ or CL on a given day, and only for the first hour.

#3) "Coaching is BS"........nope. If you find the right personality fit and a good teacher, I think coaches can be great.

#4) "I *need* to profit every day".........really struggled with this one, but working past it.

#5) "Distractions are my problem. If ANYONE makes any noise in the house, it's your fault I had a bad day".......obviously nope. Accountability is actually a real thing!


I've come a full 180 on each of those in the last few years. Thinking back, I really believed these points to be true....and they're really not. There's a lot of anxiety and externalizing blame I see when I review my old journals.

The next step in Waitzkin's point was to take your current assumptions and probe a little bit. What if ____ (thing you think is true) is actually totally false?

These are the 2 big points that came up for me:

#1) Psychologists are BS. Maybe I'm wording it incorrectly, but I've had several people I really admire tell me that seeking therapy was pivotal in their success (entrepreneurs and traders). I don't think it's necessarily an if-->then causal relationship.....but it's also a little weird how much resistance I have to the idea of going myself. Hmm...

#2) Some personal health stuff where I hold a weirdly militant stance. Again, it's weird how much I'm stuck on this position - almost like I don't want to be wrong

These aren't clear black/white issues or crazy positives/negatives. I guess I'm trying to learn to review myself with some more thoughtful, calm neutrality instead of the angry-sports-dad-sorta-voice in my head.

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