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Adventures in Oil Futures Trading - Demo to Millions! $$$
Thank you, you are 100% spot on and I appreciate your honesty about your current situation trading. I hear what you are saying and I misspoke. To recognize when emotions come up, and not let them effect the execution of my edge. That is what I am striving for. And I definitely failed today but better tomorrow.
We can't be emotionally detached, maybe we can but I think that's what they call psychopaths.
1/8/19 LIVE
TOTAL = +43 TRADES = 8 WIN % = 62.5%
WINS: 5 WINS TOTAL = 60 *AVE WIN = 12
LOSSES = 3 LOSSES TOTAL = 17 *AVE LOSER = 5.7
BE = 0
Youtube Journal:
"To have the fear that it was just a fluke, a stroke of luck, and that it will be taken back tomorrow. This is what motivates my continuous improvement. Autonomy to control my destiny, the mastery to continue to improve at something that matters, and purpose to contribute to something bigger than myself. Or just the fear of loss and desire for gain, the instinctual essence that drives us all."
1/9/19 LIVE
TOTAL = +5 TRADES = 11 WIN % = 20%
WINS: 1 WINS TOTAL = 31 *AVE WIN = 31
LOSSES = 4 LOSSES TOTAL = 27 *AVE LOSER = 6.75
BE = 6
Day Summary:
Make my broker rich day. Took 3 trades before inventories thinking announcement wasn't for another 30 minutes. I think last week on Friday they were at 11est and I still had that in my mind. That set a negative tone for the day. I was watching the large absorption coming in before the announcement which to me looked like large short positions were accumulating, price would move higher and large selling would come in again. This happened multiple times with little ability for price to move higher. My context overall in the early session was short but first 5 trades were long trying to test HOD on small failures of the lower side of consolidation. Fortunately I put on a nice long off the LOD for +31 and then price had a 200 tick rally. My results don't say I lost, but I feel like I did.
***** I have two big issues right now and would appreciate some feedback. First, ability to sit on my hands and not trade, and not doing a good job of clearly defining my derisk areas. My context read was good, I identified the long at LOD and my shorts after HOD were in good locations, unfortunately the shorts didn't work out. First short was good for around +50 but I went to BE without a valid reason and was taken out to watch price dump and hit my target. I am trading more fearfully now. Disappointed because I know I can do so much better.
Today was an interesting day for me and wanted to write a little about some emotions that were coming up when I made a mistake on the inventories release time. It's important for me to address this, every time I reflect and address an issue I have or had it brings me new insight and provides clarity. The same as when I do trade analysis and reviews.
There are times as a trader, especially as an undisciplined losing trader or a gambling style trader when there is a loss of control. Sometimes there was never any control, and sometimes control or discipline never comes. Those are the traders that blow account after account or just flush whatever capital they they had down the toilet. They walk away beaten, reinforcing their negative belief systems and lack of self worth. This is also when any semblance of an edge, strategy, money management is lost, usually as soon as a trade goes against them. That crazy monkey mind starts talking and the rational logical human is gone. I have been this trader many times, as well as a man in life. There really is no separation between the two anyway.
Today I felt some of that creeping in, and if you have never experienced it, it's something that likely can't be understood until you do. This is when stops get moved, rules are ignored, random trades are placed trying to get it back. Today, there was a point I remember specifically after my third loss in a row. A moment, when I had the awareness to ask myself "am I out of control right now?". At that point I quickly had to reassess what the hell was happening. Then there were more questions that followed. Should I stop trading right then and be done for the day? Can I maintain my composure and trade my plan and nothing else? For me I felt confident I was able to get it together and I continued. Did I make the right decision? I still am not sure but I stand behind it. I am proud that I had the ability to recognize in the moment something was going on, take a breath and check in with myself. When you are a trader there is no one else there to do it for you.
I believe this is a critical stage of my development. Every positive trade, every good day is a stepping stone to building that essential confidence. This takes small wins and rock solid discipline. It's like an addict, every time you lose your sobriety you start over at day 1. It's ok, everybody makes mistakes but I look at discipline as my challenge for sobriety and being out of control as my addiction. There is also that ever present fear, the feeling of being one bad trade from disaster, falling off the discipline wagon, is that something I can overcome? I believe so, we will see.
With where I'm at currently I question if there is much benefit in additional screen time, reviewing more charts, doing more replays? I know that these things have value. But there is also the possibility that I have other higher payoff activities that will help me to progress more. And they may have nothing to do with the technical aspects of my trading. What can I do to improve my mental state of being, my belief systems, and psychology?
I read Adam H. Grimes' blog regularly and I also receive weekly emails from Lance Beggs. I guess both trade profitably; they say they do and have been in the game for a long time but I've not seen a P&L. I used to communicate with two traders who I believe traded profitably for a living (I never saw their account statements). All of these people have difficulties handling emotions at times. All of them make mental mistakes. All of them make technical mistakes. It's part of the deal. I'm sure in your previous job you made mistakes here and there. It happens. The fact that you pretty quickly recognized this and asked yourself questions is a good sign. You didn't go on tilt. I think you could look back at your posts in 30 or 60 days and be happy with how you handled the day.
In terms of some feedback, I have a few things to offer. I don't know how practical they are or even if they are good things to consider.
The first thing you might consider are ways to remove discretion from your trading. I think in general the looser your rules are the more mental energy you expend trying to make trading decisions. The more clearly defined your rules are the easier it is to follow them. If you are having trouble sitting on your hands, it might be because there is too much discretion in your plan or system. I think this is very important when starting. If there are areas where you might execute (either enter or exit) or you might not and it "depends" then that might open up that uncertain feeling and could lead to trading in hindsight or thinking too much in what if's. This then takes focus away from the present moment and just makes everything more difficult. If your rules are concrete, black and white and very clearly defined then there is less room for uncertainty and all of the cascading emotions that come as a result.
If this is not the case then it might be that you don't fully understand and believe in your trading edge. If you have 100% confidence in your trading edge then I think the desire to trade outside your plan mostly goes away because you know exactly where your edge is and where it isn't. Not to say that there would be times when you are tempted to take trades outside your plan or model, but I don't think this would be a big problem. I believe that ALL trading is gambling. Investing is gambling. Putting money into financial markets is gambling. One never knows the outcome of any individual trade or investment. People too often think of gambling like someone going to Vegas and hitting the slot machines who will lose money. The fact is that the casino AND the player are both gambling. Sometimes the casino actually loses money on a slot machine and sometimes a person will play a slot machine for an hour and leave with a profit. The edge comes from the odds, which are in the favor of the casino. Trading is the same. You are placing a bet that a set of circumstances that you see will have a predictable and favorable outcome. Maybe not on that particular bet or trade but over a large series of trades or bets. This is where your edge is crucial. When you are trading you are either the casino or the sucker pulling the handle on the slot machine. Sometimes people think they have an edge when it's really just that they played the slot machine and hit a few times and left with more money than they came with. Anyway, that's my rant on that. Adam H Grimes has a really good lesson on this in his free trading course, statistical analysis of data and randomness. It was really eye opening to me and made me work a lot harder on defining and understanding my edge and if it really was an edge.
Regarding additional screen time...I think that really depends on how well you know your plan and how well researched your plan is. How confident are you in the math behind the edge? How comfortable are you in trading your plan in various market conditions? If there's some discomfort or you're unsure then more screen time is likely needed. If those things are rock solid then it's just going to be about executing in live market conditions.
Day Summary:
I was nervous today. I'm not sure why, but yesterdays results put me in an anxious state. I was also aware of not creating a poor result today based on what happened yesterday, leave it in the past. It's easy to let negative and a bad frame of mind effect me. But we must be aware of our mistakes and course correct or we will repeat them. I spent time visualizing myself doing a good job, executing properly and feeling good. I would have to say it wasn't successful. Today was a grindy balance day which makes sense where we are on the daily back into the top side of the previous large consolidation area from several weeks ago. As always there were some decent setups. I missed a few and found myself getting chopped up. My context read was good and was correct on the majority of my setups but management still is lacking. I did have one error trade and a few where I was early and took trades without needed confirmation.
Trade Analysis:
#1 S51.57 6:53 -10 LOD expecting further flush to break ONL. Impulsive trade expecting the breakout. Took the very worst price one off the low. I froze and had no reasonable stop or area of protection. But this is also why I have my failsafe 10 tick stop in place that no matter what if I lose my mind it's there and I am out of the trade. If I am going to trade breakouts, the extreme edges of the consolidation is not the area. It's too risky and this is usually a FOMO trade. If I am stalking a break I should have a better price and have risk off. If this breakout happens great if not my risk is off. In this scenario I am quickly ripped out for a full loss when the break doesn't happen. The low did eventually break to set LOD at 51.37. My target was 45 to test the ONL.
#2 7:23 S51.70 +4 Expectation to break the LOD and ONL Price came back to my stop behind a chunk of volume to take me out and then made new low down to 51 and eventually LOD at 37.
#3 L51.60 7:33 -9 Taken out to the tick at the LOD when price 1 ticked the low. The LOD and then 1 minute later went to 85 to test the swing high. Taken out on a flush of the low to take all the final liquidity and then pushed higher.
#4 8:09 S ERROR Random fade trying to front run a failure that didn't exist. Not trading what I see. There was massive absorption on the flush of the LOD and not much price movement so not much context for shorts.
#5 8:15 L +10 Break above previous consolidation around 51.80. Price failed a lower test into this zone, took the long expecting a test of swing high at 52. Didn't get there and went +10 on a weak push higher. Price pushed lower 2 more times to test into this old zone but never broke the low I entered on. Price eventually broke the highs and went higher.
#6 8:42 L Large buying from LOD and grinding trade back up to 52 area. Expectation to break above and test ONH and YH. Flush lower below 52 and entered, full loss when flushed one more time lower before the break.
#7 L51.96 8:44 +28 Same idea as last trade, made one final spike flushing previous low. Long with expectation to test ONH and possibly up to 58 of YH depending on action. On a new high at32, small retrace and a new high at 34. Seemed very weak to me so put my stop at 24 behind volume and was taken out. Price came back to 52.05 and consolidated. Shortly after price pushed and took out YH and went to 52.70 on very large volume.
#8 S52.64 9:18 +19 Largest volume of the day after breaking YH and slightly higher, volume coming in looked like distribution. Made a quick push up to test the high and was very weak and entered. Set a target back to fill in imbalance to a bar high and large volume. After hitting that area retraced 17 ticks to previous bar low area then continued lower down to 52.09. Question is, is it worth taking the 17 ticks of heat to where I expect price to hold to look for a larger move down? It would have been a risk free trade however the +20 completely changes the results of my day. That shouldn't be a factor as I should just trade the setup but it was a consideration at the time. There was also a major bar high that could have given me trouble. I would say it would be ok to take the risk for a larger move if there was more space and a larger imbalance move to fill in from.
You made some really great points thank you. Firstly, I think a lot about trying to eliminate discretion from my trading. Most recently something that throws a lot of variance in my results are how I derisk my trades. I have made it more mechanical by saying I will define a derisk area as a requirement to enter. Have I followed this? Yes and no. The problem is much of my setups are managed based on feel and how price responds, this can be hard to create a binary decision. Another way I can remove discretion is on my targets. To take off trades at my first trouble area expectation would remove discretion. However, it also removes the possibility for large expansion trades. I don't get a whole lot of these, so it may be a mental desire for the big win that never comes. I need more data live, more trades, more experience to make a decision.
I definitely don't fully understand or believe in my trading edge as I have been able to execute it in the past. This has changed recently since I have been trading again because of my positive expectancy. I am using a new combination of tools, deeper understanding of the auction, different money management, I am able to see the market more clearly now. So really can I even say it's the same edge? I have a lot of bad previous experience I am trying to work through. I have so much negative reinforcement with hundreds if not a thousand trades and losses. I am building a new foundation and slowly rebuilding my confidence. As I see it the only way I can do this is by continuing to trade and objectively looking at the results. I have no statistical models or regression studies to show that my edge is an edge. The best I can do is to go through additional replays and see how I perform.
My answer would also be that my previous mentor was very successful and I learned from him. But this is not his edge, this is a hybrid of how he traded, that I have very much made my own.
