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David's Trading Journal Chapter 2


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David's Trading Journal Chapter 2

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  #61 (permalink)
 David_R 
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Mich62 View Post
Hope you don't mind me giving some input and food for thought.

Is it fair to say you could not hold on to these trades because of fear like you already mentioned? Not probably but for sure?

Where is this fear coming from? What is there to fear?

Is it the because of the possible loss of money?

You bought the NQ for $649,600 (16,240 x 20 x 2). Just 1% price decrease is $6,496. Do you think this is normal? To buy something worth $649,600 with one push of the button. How long do you need to work to make such an amount of money?

You've lost 22K in total (Post #56, 15K to zero and 11k to 4k). That's 3.4% or 1.7% per contract (when traded with two lots), that's just peanuts.

You need to take away the cause of the fear or else you will never succeed, no matter how much, and in what way, you are going to try.

There is only one way to take away the fear and trade in a carefree state of mind (which, you know, is necessary to become successful).

Yes, it is fair to say that I didn't hold due to fear of loss. I'm not certain where it comes from exactly except that I loose a lot more trades than ones that make money, so I go in thinking the next one will lose as well.

What's the way to take away the fear and trade carefree? Less risk? micros?
Mich, the losses you quoted are recent and maybe peanuts in reality, but this is just the most recent. I've blown every account I've ever had, so that adds to the fear.

Maybe trading isn't for me.

I should also share that i continued to trade and ended the day red down $800. From here on i will be trading micro contracts. Probably the MES.

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  #62 (permalink)
 Mich62 
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David_R View Post
... I loose a lot more trades than ones that make money, so I go in thinking the next one will lose as well.

Ask yourself what does that mean?

Is there a way to lose more trades than win and still come out positive? You should answer this.

Looking to past trades what caused the low win/loss ratio? Were your entries bad timed and/or was your stop too tight?

Is there a way to optimize/better time your entries (and exits)? Is there a location for a better stop, giving the trade some room? Look at NQ yesterday.

The losses are peanuts compared to the underlying value you are trading but in reality it's of course a lot of money (that's why you should deleveraging).

Good luck with the micros. I am glad you came to see an important obstacle and took action to solve this problem. Well done. You just made an important first step to improvement (based on a problem solving approach). You are going to learn to handle your emotions (and test your setups) meantime preserving your funds.

Remember that one trade or one day is not significant. Wait till end of week or month to make up the balance. Looking forward to the next trades.

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  #63 (permalink)
 Mich62 
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Hi David, hope you are doing okay. On a day like yesterday in the (M)ES, when you don't come in on the day with a plan, when you don't recognize the day type structure, and you don't have rules what to do in case a particular scenario/plan unfolds, then you easily get whipsawed. Especially breakout traders. No plan/scenarios and no rules means your monkey brain will almost certain take over causing tilt / revenge trading. Hope it helps.

Plan was to buy lows and above PVAH, sell only below PVAL:

211208_NQ_15s


211208_ES_1m_RTH


211208_ES_3m_RTH

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  #64 (permalink)
 David_R 
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Mich62 View Post
Hi David, hope you are doing okay. On a day like yesterday in the (M)ES, when you don't come in on the day with a plan, when you don't recognize the day type structure, and you don't have rules what to do in case a particular scenario/plan unfolds, then you easily get whipsawed. Especially breakout traders. No plan/scenarios and no rules means your monkey brain will almost certain take over causing tilt / revenge trading. Hope it helps.

Plan was to buy lows and above PVAH, sell only below PVAL:

211208_NQ_15s


211208_ES_1m_RTH


211208_ES_3m_RTH

Mich,

Appreciate the time and effort you take to respond. Im going to study your charts.
Today I hit the trailing drawdown in my combine account. 3 days in. I'll be stepping away from trading and evaluate whether or not I try again. At this point in time I see no reason to continue other than for the fantasy of trading instead of working a day job, but the reality is I don't know how to do it. I've been a member of the site since 2009 and today is just a continuation of the prior years, so why keep experiencing this bullshit day after day

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  #65 (permalink)
 Mich62 
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David_R View Post
Mich,

Appreciate the time and effort you take to respond. Im going to study your charts.
Today I hit the trailing drawdown in my combine account. 3 days in. I'll be stepping away from trading and evaluate whether or not I try again. At this point in time I see no reason to continue other than for the fantasy of trading instead of working a day job, but the reality is I don't know how to do it. I've been a member of the site since 2009 and today is just a continuation of the prior years, so why keep experiencing this bullshit day after day

Well, thank you David for sharing your journey. Believe me, I've learned a lot from your journal and my participation in it, more than you did I would think.

You're probably right. If unable to change things around it may be better to stop. Nothing wrong with that and maybe the wisest thing to do although it will not be easy. You've tried and came to the conclusion it's not for you, time for something else. At least you've tried and probably learned a lot about yourself.

Forget the charts, they are just there for illustrative purposes to show it's all about having a plan, executing the plan and sticking to it.

You cannot start to play in the premiere league (minis) and expecting to win. You need to prove you belong there by making small but consistent profits (micros). Then you build a routine, a habit, which allows you to gradually scale up and eventually you are allowed to play in the premiere league. You earn it like anything else in the world needs to be earned. It's like a game, from one level to another.

We once had the S&P contract. It got too expensive and they introduced the mini. Now the minis are too expensive, prices went more than 10-fold last 12 years!, and they introduced the micros. Even with the micros you can lose a lot of money.

When the focus is on making money, because you need to make $3000 to continue or make some amount to be able to stop working, you'll certainly lose. When the process is in order the results will come automatically. Process also has to do with planning, how you handle things, analyzing, making changes, making small steps towards your goals every day.

You are fearful of loss because your size is too big and expectations too high. I bet in sim you'll come out positive more than 90% of the time. Anyways, you probably heard this a hundred times. I wish you good luck with what ever you decide to do but hope to see you still around here.

-Mich

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  #66 (permalink)
 Mich62 
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  #67 (permalink)
 ignacio90 
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Hi @David_R

With all respect, most Traders still trading the dream, and seems is what you are doing. You can think that you are trading but is not based on something real, always is the dream. Let me explain better and using an example, poker.

How many cards do you have? 52
All of them will give you something, let's say an edge? No, only a few combinations.

If you want to play poker, you need to know these combinations. Are the rules. Nothing more, easy. Hope you start understanding what I'm trying to illustrate. You trade charts, you play with cards, but don't have explicitly any combination, and seems never to try it in that way. What I mean is that you are focused on trading cards, but not combinations.

I saw your charts. What can be a combination for you? Let's see a poker combination:



Out of all of this, you don't have an edge and never will do. Inside of these combinations, you can have an edge. More, you can classify the edge, know which one is better, and start building something. Let me illustrate a trading combination (is one of my cards to play every day):





Let's see this in a chart:



My question is. When you start trading, where is your trading playbook? Where are your cards? Or are you playing what you feel, what you think? I think you need to learn how to build your trading playbook and work with this. This is the only way to know if you can be disciplined, quantify, know your edge, know if you can be profitable, etc...If you try this, and still facing problems, then go out. But don't do it, only because you were not able to build a trading playbook. If you have questions, only let me know. Leave to trade the dream and start trading something real, something you can grow. Confidence is something needs to be built, no trade it. Hope this can give you some light in the way.

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  #68 (permalink)
 ignacio90 
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Hi @David_R,

Let me show you my trading playbook for 2 trades, one loser, one winner. I have 2 cards to play with it, Take the first one. The risk was too higher and decide to let little room only, based on new highs for the current bar. The option was to trade short, for a pullback. Basically, it's a variation for the card I show you in my first post. The risk was above the previous swing, about 50 points and really was too high to play with it. Then when the market goes back to the previous break low, I got my new card to play with less risk, following the same logic, stop bars. Go long to the previous swing high, expecting a reversal to the previous zone worked.

Trade 1:


2021-12-20_09h06_23



Trade 2:


2021-12-20_09h12_45



This was my trading playbook, and I'm able to reproduce them, every time I see them. I'm focused only on what I have in my trading playbook that can grow, change, or what I need based on my experience with it. This is my way to control emotions, overtrading, and other psychological factors. I can measure how far I'm going from my trading playbook because I have a clear definition of it. Only to illustrate what can be something that can help you, maybe yes, maybe not.

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 ignacio90 
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@David_R

Trading PlayBook nš 3:


2021-12-20_09h41_28



I can repeat it again and again...

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