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If the new micros are anything like their currency brethren, you'll be able to simply chart the minis and trade the micros. CME has been putting a lot of effort behind marketing these products and I bet they'll be pretty popular right out of the gate so liquidity shouldn't be an issue. Hell I've been brushing up on NQ in sim just to get my feet wet and possibly have another instrument to trade that actually moves... the Euro has been riding the struggle bus lately lol.
Like usual, I meditated this morning and after I finished, I wondered about the possible levels of meditation. I thought, what are the agreed upon subjective differences between meditators in terms of their own experiences, and what do master meditators experience? I looked up the stages of meditation in google and found that article I pasted above, and according to "Culadasa" (I have no idea who that is) there's 10 stages. It turns out that I've only reached and that I'm currently in stage 3! I won't list the stages in this post as it would be redundant and a waste of time, but I thought it would be useful to some of you that are curious about meditation.
As for today, I've got some free time, so I'm going to do some more digging as to what could help me improve my trading. I want to get familiar with expectancy, different back-testing methodologies, and maybe watch one or two trading webinars.
Around 5 days ago, in replacement of practicing and re-learning basic algebra, I decided to delve into probability because it's a much more personally relevant and interesting subject. Since I'm an aspiring trader, there's no doubt that it's in my best interest to learn to truly think in terms of empirical probability and conditional probability, and it wouldn't serve me or actually make sense to make logical assumptions based on technical analysis alone that isn't based on empirical data. I'm obviously a hypocrite in this regard, because part of me still thinks it's possible to trade price action by experience and poise alone, and that trading momentum and trusting yourself could possibly be just as valuable, and as profitable (if not more/less) as an automated trading system- as long as the trader's emotions are in-check, and if the trader has ample amount of screen-time. With that being said, I know that realistically it's best to play it safe and to treat this game as a numbers game, as to not get strung out in my own subjective experience from losing and winning streaks. It's still incredibly fun and engaging to trade discretionarily, though.
It's not that I'm stuck between acting on one or the other perspective. Since I love the challenge of becoming a discretionary trader, I will continue to trade discretionarily. Part of me is in this for the self-development aspect: to become more disciplined, more emotionally stable, to perform effectively under pressure, and to become more logical and analytical. But since I trust and have confidence in empirical probability (back-testing) more so than my current discretionary abilities, I will continue my search of edge through mathematical means as well as trade the way I want to on the side. These things don't necessarily have to be separated, but for now I will keep them separate because I know I need to allow my automated strategy to work by itself- without my influence. (I'm referring to the initially half automated/half discretionary Double Top strategy.) So, if you usually read my journal, you'll notice that I won't be interfering with the Double Top accounts trades. I mentioned that this was probably going to happen a week or so ago. This is my shot at true consistency, and I refuse to change another thing. Anyways, I'll put my fake money where my mouth is tomorrow if a DT appears. I've had a very productive day, and I have to wake up early tomorrow, so goodnight all!
-$282.28 loss in my pure discretion account, and I didn't get to use my Double Top account. This is a relatively huge hit. So, what happened?
Trade 1: The red line represents where I closed the position, the blue line represents where I entered, and the green line was my profit target. The blue arrow is the price path that I wanted to see. Before the open, I was anticipating that price would fail to the upside, specifically that it would resist the 2947 area, and in doing so, would form a double top-like pattern on it's way down. 10 minutes or so after the open, price was going according to plan, so I entered short after some pretty convincing momentum that touched my entry target. There were absolutely no takers/sellers. I sold at the very bottom and watched as price crept back up towards my stop. This is the interesting part, though. I did meditate heavily this morning, and meditation makes me watch myself as if I'm outside myself (not visually, lol), and I noticed that I felt a strong sense of denial as I was watching price go against me. This triggered a memory of me writing that post regarding the occasional sense of inevitability; that sometimes, it seems absolutely likely that price is going to do something- I would say definite, but I know that's wrong. Anyways, I felt that here, and everything in me told me to get out. So I did a little late, 2 ticks before I would've gotten stopped out.
Honestly, I would be lying if I said I reacted well to this loss. I was offended at first, more than I'd usually be. But, within a couple of minutes or so, I detached myself from these negative feelings by meditating again, and realized that there may be more opportunities soon and that I didn't have to be done for the day. With this acceptance of risk that I've developed recently, I felt encouraged to trade again and I didn't think twice about losing a second time or losing even more money. For some reason it didn't occur to me that it would make more sense to stop trading because of my small account size- I was too compelled by my enthusiasm to trade again. Essentially, I was fueled by my willingness to take risk (because I'm risk averse and need to compensate) and believed that I could at least minimize this loss. I was clear-headed but had the wrong attitude and wasn't being entirely logical because of this. I was too optimistic.
I continued to analyze price, looking for another opportunity. I noticed that price was having a really hard time bearishly. I contemplated going long, and in doing so I decided to look at the daily chart and my immediate impression was that it's totally likely for a break-out to happen to the upside. Given that it was approaching 10am, I thought that if there was going to be a break-out, it was going to be soon because volume slowly dies down after the open. So I had my mind set on going long. Before I entered this trade, I watched as the bears took control, but they got nowhere for the third or fourth time, and that's when I placed my stop and entry. Price crossed my entry, I got in, and there was a little bit of momentum to the upside after I entered.. But once again, there were no takers. I had that same feeling that I should get out, but this time I just let price hit my stop.
So now I'm in a 6.2% drawdown. For my next discretionary trade, I would be willing to risk 2%. My current balance is $4690.19 and 2% of that is $93.80. I'll bump my risk up to $100/2 points, a̶n̶d̶ ̶o̶n̶l̶y̶ ̶a̶c̶t̶ ̶o̶n̶ ̶t̶h̶e̶ ̶n̶e̶x̶t̶ ̶d̶o̶u̶b̶l̶e̶ ̶t̶o̶p̶ ̶p̶a̶t̶t̶e̶r̶n̶ ̶I̶ ̶s̶e̶e̶.̶ The reality is, $4690.19 hardly leaves room for error, and I should've been paying attention to my risk per trade in the first place. Honestly, I didn't think I would make this kind of mistake again, but it seems the thing that kept me away from trading again after a loss back then was fear. I'm not that scared anymore, thus, this happens. I'll learn how to balance this riskier mentality I have now, with logistics.
"Mathematics is unique as an academic discipline because the purpose of its structure is to reduce ambiguity. The semantics and syntax of mathematical language make it possible to express relationships in a way that colloquial languages are unable to grasp. Therefore, a true understanding of mathematics requires that an individual must possess strong reasoning faculties and knowledge of the underpinnings of mathematical language (logic, set theory, etc…).
We see a distinct divide between those who are good at mathematics and those who are not. However, it is not the ability or lack of ability that should be scrutinized. If you consider this from the perspective of how the information is being delivered, it becomes more clear that it is the ability to memorize and repeat processes that creates the divide rather than mathematical ability.
If a student is capable of writing clearly and expressing ideas creatively, they have mathematical ability. If a student is capable of reading and analyzing literature, they have mathematical ability. If a student is good at taking an abstraction in their mind and creating it on a canvas, they have mathematical ability. If a student is good at reading music and translating that into meaningful sound, they have mathematical ability.
For everything else we learn we are given a context and a framework, except for what we learn in mathematics. There is no sound to hear in math as in music, or kinesthetic pattern to teach the nervous system as in sport, or immersion and constant usage as in one’s native language. The foundation and the context of math is logic, which underpins the syntax and semantics of mathematical language. One cannot be expected to learn anything when the material is presented without the prerequisite ability to interpret it." - A reply of a post from Quora regarding the difficulty of mathematics.
Zach I looked at your ES screen took the liberty of recreating it...added your Red and Blue lines...just to show you how I look at it...may or may not be helpful....but as I looked at it...your were in a breakout to the upside...and it was only a pull back that you got in on...most everything pointed to the upside...as looking at it with the indicators I use...I really didn't see a sell on the ES until 15:45...most of the day was up...again by my indicators...the ECO2 was above 0, price was above the MA(black line) a buy only area...sell if it falls below the black line....the GOM indicator was showing buyers coming into the picture until around 15:45 you see the sellers taking over...and the ADX shows the strength of the move...if its rising..a strong move either up or down...just another way to look at things....the biggest thing I found when trading is never assume where the price is going....just follow it...and trade accordingly...All these indicators are on nexusfi.com
I really appreciate your response. I suppose I'm too aggressive in making calls (somebody mentioned this in my journal awhile ago), as in I made the short-call too early and should've just waited and watched to see more. I definitely have a short bias!.. But yeah, after watching price fail to the downside again and again, I thought I was initially wrong and that if I'm going to take a trade, it should be long. I just got in at the wrong time.
My "bad timing" of entering trades has sprung up a couple of times in the process of writing some posts here, especially recently. I remember writing that "if there was going to be an opportunity, it was going to be soon" in my last post, which seems wrong to me at the moment. Anyways, thank you for going out of your way for me!
The blue zone was a no-trade zone. The red zone was considered a good place to go short, and the cornflower blue lines inside of the red zone were a set of entry and exit lines for a default bearish plan. The very top goldenrod line, closest to "Higher highs", was my entry for a long opportunity, given a bullish break-out.
Outcome:
Price dropped to the downside almost immediately at the open. It quickly recovered, as you can see by the small green candle with a very long wick that is a point or so away from my entry target. I observed patiently as price tried and failed multiple times to the upside. I also witnessed price close in on my entry target once more after the sell-off event at the open, by 2 ticks. After noticing price fail to the upside once again, even more dramatically, I was assured that my plan was a good one. Right before price re-tested bearishly and crossed my entry target, I thought it would make more sense to increase my stop loss width, given the size of the most recent bars and/or the relatively high volatility. So I increased my stop loss by a point, putting my risk for this trade over 3% of my account balance. I was willing to take that risk, but I went against my own logic from yesterday. (I feel the need to critique my discretionary process, even at the most fundamental level. For example: why am I trading a $5000 account?) Anyways, since I felt good about this trade, I let it play out, and I let myself get stopped out.
The rules of my pure discretion account: "..The rules are: 1. I'm not allowed to question any of my decisions. 2. I'm not allowed to intellectualize every trade I take. 3. I must act on promising opportunities that I'm scared to take. 4. JUST TRADE!"
Within the confines of the rules of this account, it's simple: I just lost. With that being said, I don't like or appreciate saying one thing, and then doing another. Nobody likes a hypocrite, and I know I don't. Even with something as trivial as changing my risk parameters the next day after establishing what they would be, I feel discomfort in that, so I will keep this recognition in mind next time I write something, and I will try to be consistent in my actions and have integrity personally and in my trading.
So, logically, the best thing for me to do with an even bigger draw-down now, is to be very selective with my next trade in this account. My current balance is $4,549.02. 2% of that is $90.98. My absolute max risk for a single trade, rounded up a tick, is (and was) $100 or 2 points, and I will not make the mistake of increasing my risk again. Now is the time to especially enforce discipline and to pick A+ set-ups. Statistically, bullish break-outs have worked for me in the past, and we're in a bullish market- so I think what constitutes an A+ set-up in my case, is a double top or a bullish break-out. So, I will be acting on these patterns only. I'm really holding myself to it this time.
As for my own inability to follow-through with certain things that I say or think- I genuinely think and believe that this lack of discipline and consistency can be remedied. It takes accountability, acceptance, and commitment to change. It seems to be a slow process, but a worthy one.
I didn't take a trade today. As mentioned yesterday, I'm restraining myself to only acting on double top patterns and bullish break-outs in my pure discretion account. I stopped watching price around 11 because the action was too slow, and instead, I found myself more preoccupied with wanting to come up with strategies to back-test. It's more important. I've got some ideas, but I want to come up with even more, and I also want to sleep on these thoughts as well, so I don't catch myself with a really good separate idea during the back-test itself.
I haven't exercised my interest of trading psychology through writing here lately, and I haven't thought of anything I considered to be relatively profound during the past couple of days. I will say though, the natural emotional consequences of the last 2 losers have reminded me not to dwell in that mental space, or the old way I used to handle losses. Naturally, I would heavily focus on the result of every trade, rather than thinking in the long-term like a trader. Admittedly, not focusing on results is somewhat difficult now, given that I'm forward testing my discretionary abilities, causing intermittent bouts of uncertainty- which redirects my attention and concern to back-testing once again, in resolve to my possibly obsolete approach. I will say though, the other side to this is apparent through remembering why I created this discretionary account in the first place: To purposely deal with uncertainty, to act on opportunities that I'd normally be scared to act on, and in general, to trade freely. Is this a waste of time? Maybe not- which keeps me from abandoning this attempt at becoming a fruitful purely discretionary trader.
I'll continue coming up with strategies to back-test, and I'll continue trading discretionarily.
It was a very simple trading day. When I first checked on the ES, there was nothing for me. I knew I had to wait for an opportunity to develop (if there was going to be one, I initially thought today might be like yesterday), so I meditated even more for awhile, then watched some YouTube videos on stoicism. I periodically switched back and forth between these three things, but I was less involved with meditation as time progressed/as the open was approaching. Eventually, I spotted price action that made me consider that an opportunity for me really could develop; I easily imagined a bullish break-out opportunity in the future, given the current trajectory of price, and/or better yet- a double top. I prepared for both scenarios. I was somewhat conflicted at first as to which one I would trade, but by analysis of the daily chart, I thought trading the double top was the way to go. Anyways, price sorted itself out in the form of an almost complete DT. Everything went according to plan, my lines were set, and I entered short:
Outcome:
I didn't mess with the trade at all after entry, because a 2 point stop loss is tight enough risk as it is. I felt confident in this trade, but naturally I was cognizant and slightly concerned about the increased likelihood of my stop getting hit, for price to then run down without me. That's exactly what happened- but that's just how it is sometimes. I did everything that I could within what I consider to be appropriate risk parameters for my current account balance, and I even uncharacteristically didn't close too early because I knew it would be foolish if I did, especially at this point. This loss compared to the other two is nothing because I didn't break my discipline, and the percentage loss is smaller because of that discipline. All in all, I'm happy with my performance today.
I will remain consistent in my process: I will continue to use reasonable risk for each trade, as well as be very selective with opportunities. As for this current string of losses, keep them coming!
