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Today felt very hard. I had a great night in Globex last night and should have left it at that. I was going to do that and trade sim today, then I put on one trade and another and gave back 2/3 of my PA account profit and blew up that Apex evaluation I was doing on the side (which had a $500 profit from Globex). The truth is I was treating it as a venting account, for example, when I got a loss on the PA accounts and had a five-minute break (enforced by my risk mgmt addon). Plus I am trading 1 - 5 micros (mostly 1 &2) with very tight money and risk management in the PAs (vs up to 8 ES lots today in the Apex eval at the end) and it's not hugely satisfying as I'm operating on a very small scale. I tell myself it'll be great when there are 30 of them, but even so, it sometimes feels like my current daily average of $74 per account is nothing.
Then I look at my P&L calendar and I see the average multiplied across all the PA accounts every day and it looks decent, and that there were no losing days, and that it actually represents 13% profit on the account starting amounts in less than two weeks (assuming $2.5K as that's the drawdown, per account). And I also see that my biggest drawdown so far has been -($155). So, okay, on some level it's not satisfying, but it's working and moving forward, not backward. At least on the PA front. I have to think about my eval MO in the last few days. In any case, unless I embark on more bundles or blow up my PAs and have nothing else to talk about, or I'm doing something that I really want to track in the journal on the eval front, I'll probably just report on PAs going forward and evals only as they pass and are added to PAs.
You can't outsource confidence in trading decisions
I did trading for my PAs during Globex for this session and I'm not trading RTH on these accounts. The profit net of commissions (not showing) is actually $162 per account.
I struggled initially because I was working with micros, which I never normally do during Globex. As much as I'm super conservative with the PAs during RTH, the volatility (lack thereof) during the Asia session means that I have always traded full-size contracts, at least one contract, and I aim for ticks. Like 4 ticks. If larger than 2 lots, sometimes just 2 ticks. Usually no more than 8 ticks. But the Asia session ATR is often around 2 or so and it's totally different. It's a game of patience and chess vs RTH. So with micros, I just hurt myself trying to get any kind of meaningful P&L. In the end, I hit my ($90) DLL but was actually down about ($70 ) plus commissions (which also add up with micros) as the risk mgr counts against net wins, not zero. I left it alone and set a level alert that goes to my phone and rings then went to bed. I set it for 4287, right above the Smash level at 4285, and daily pivot zone resistance. It woke me up shortly after the European session started (12 AM PST). I went long twice with 1 lot ES and had a combined price of 4286 and targeted 4289 and went back to bed. It hit at 3 AM.
Planned trades like this at key levels always work better. I usually have a good idea of the levels, but Europeans love to drive past them and then turn around. I am always surprised at the level of aggression vs RTH. I mean, it gets pretty nasty in RTH, but they really love to do deep stop runs during the European session. It's like they have to prove themselves vs US traders or something, lol. So counter-trend trading is always a bit scary because it often looks like it will really keep going. I have to keep checking the news feed to make sure Russia didn't just launch a nuclear weapon or something. In the end, I took 4.5 pts of heat. I should think about giving it a couple of points instead of front-running it by a point going forward. Or plan my second entry a bit lower.
FWIW, some forward-looking notes about the ES from a back and forth with another trader just now.
You can't outsource confidence in trading decisions
Gonna go ahead and post once more separately from my AM post, as that was for the PAs in the Globex session and this is very different. I said I would only post PAs and not evals unless they go to PA or it was something special. This one falls in the latter category for me today.
I went ahead and got another (80% discounted) Apex "$50K" ($2.5K) eval today. I hate not doing anything at all and I was done with the PAs in Globex. I figure maybe, at the end of the day, if these evals save me from blowing my PAs due to over-trading, at least there's that. But I also wanted to try something totally different.
There are some levels that are a core part of my work but I never trade just those levels. They work very well as indications of where price will turn. They are SPY VIX expected move levels at standard deviations from VWAP and work very well in the ES (in my Tradingview charts, not shown here). Today I went ahead and really just traded those levels, taking one at the level and ready to scale in beyond, 1 lot ES each time. I do look at other things, to be sure, and this is how I figure out my "worst-case scenario" scale in. Not gonna go into all of them but some are, like, 5-point measured moves all the way up and down the ES from the 10 min OR. Also all the typical day trading levels. Also Adam Mancini levels, Spotgamma levels, and MIDAS levels (anchored VWAP). Plus some of my own proprietary levels.
In any case, the goal was just to take the outside levels, nothing else. No trading in between, no front-running levels, no level-to-level trading, and no trying to ride levels in hopes of a short cover rally. Just methodically from the outermost levels to the next level inside (just as simple as from one Sdev to the next, and that, I do front run a bit). It worked out great today, albeit everything was very systematic in the ES today, no panic, VIX at lows of 2022-23, high gamma environment, and very responsive mean reversion trading (down for sure, but level-to-level responsive). I think this came to mind to some extent from reading @richw 's journal. It was in the back of my mind, although I don't really use the same indicators (I do look at 1 min RSI, but it's more like background info). But just conceptually. Thanks @Rich. I was telling someone I go back and forth with a lot during sessions "No sweat, no FOMO. Onlly taking the ones I would normally rely on once I got in trouble with the other trades, but instead of sizing way up after I lost a bunch, just taking those normally. It's much better. "
Tame VIX even as the index was dropping all-day
You can't outsource confidence in trading decisions
I blew my Leeloo PAs. I am passing them fast nowadays, which is a big leap from where I was before. I have trouble once I care about them. I'm overly cautious and put a stranglehold on my trading, then go overboard the other way when I get a small loss that bothers me to put down here in the journal. Lots of things running through my mind, but I need to digest them first. The amount of the loss that I wanted to recoup that caused me to get wreckless is half the profit I got in the Apex eval without breaking a sweat the other day, then this morning after I blew the Leeloo ones under the exact same market conditions. Lots to think about.
Have a great weekend.
You can't outsource confidence in trading decisions
Hi @bwolf, this sounds a lot like how I have struggled once profitability is near or in my grasp so i thought i'd share if for no other reason than to just say i empathize. While I am negative for the year it is as if I have a certain trading routine on autopilot that i'm always trying to improve and is far from perfect or even "good" in my opinion but seems to kind of work in many ways. Then once I get past breakeven for the year I start to do things I never would do otherwise, including taking risks i wouldn't normally take or freaking out over little losses or thinking i need to trade more like a "pro" (whatever that means) once in the green and time and time again i take a big loss and have to recuperate it. What happens next is I go back to the basics and suddenly I'm making up that deficit once again.
Each time I try to improve how i get back to breakeven/profitability, prefereably by sticking to my plan in better fashion, and slowly i get back there. it took me making these mistakes over and over to learn to keep my head down and try to keep just doing the small things i've been doing that have been working, and that seems to be helping. I've also identified what would be an "epic disaster day" or big loss for me and i try to minimize my ability to even get there, be it through position-sizing or stop-placement, whatever it takes.
Indeed @snax . I appreciate you sharing this. We share many similar trading challenges! These are the journal entries that are the least fun to post, but then if we had it down completely, maybe we wouldn't need to journal.
Somewhere there is a middle ground I (we) have to find it.
For me, when I am in the eval stage I am much more open and flexible in my trading. Once it "really matters" I clamp everything down, size down, and try to adhere to a very tight risk management program because there is in me, in my inner "Team of Rivals," one that is a wild card. I'm not going to break it down here, most of us here know that character. So I have some 'bulletproof' systems in place. They are, however, very restrictive and the smaller sizing requires more trades and that changes the whole dynamic. And in effect, what happens is the more open environment that allows me to do well changes completely once I trade the PAs (cash account or whatever important 'skin in the game' account it may be). So that while it's 'bullet proof' it's a completely different animal. Then I have that moment you describe very well, where I totally overreact to a loss that otherwise wouldn't phase me and now I can't even trade on my NT8 platform because that small loss has effectively locked me out and I find a gap in my Rithmic lockout times and start trading on there, with little visibility as far as my normal trigger chart (I can turn NT8 on my lifetime license for reference, but I'm still not trading on it). I do these silly Rithmic bracket trades without really planning them. I go way oversize. And then everything spirals down. I think that somewhere inside me, I start making choices that will bust it because it's causing so much stress I want to end it. Then after that, I can go back to the evals in my relaxed framework. So the challenge is to find that sweet spot in the middle.
In the meantime, it's like falling off a bike. I get right back on.
2 new evals today added to the one I started the other day. Onward and upward!
You can't outsource confidence in trading decisions
Gonna post these weekly on Friday. It's a running total I keep. This was for the PAs, I changed the name to evals as I am back to evals today. Maybe I'll keep one for each or just track PAs when I get them. One each is probably better, I'll see when I get there. In the meantime, it helps keep perspective on things.
The initial amount is equal to whatever the drawdown is for the accounts I have. Right now (and the PAs before), it was 3 x $2,500. But if I add accounts I'll just size it up. I used to track one sample account before, no matter how many I was trading. But when I am trading PAs and the daily profit goal per account becomes quite small it helps more to keep perspective on what the overall profit is than to track a sample account. In any business, you track global profits. Maybe also profit per employee or widget factory or whatever, but I want to see the whole thing here. I see the individual accounts all day.
You can't outsource confidence in trading decisions
Note: I honestly don't expect anybody to go through all this. However, I know some people will, and just knowing that really helps me map this out with that thought in mind. But it's a lot of stuff and it really benefits me (it does!). I have no clue if it does you, and I totally get it if people look at this and go "OMG, totally compulsive!" and turn the page.
As of late, I have been working on a very complex Monte Carlo run of the betting sequences I mentioned in earlier posts. It's a different subject, I mention it only to say that this has been on my mind. Last week, in the same vein, but much more simplified, I was wondering how I could apply this to trading the ES vs MES on the $2.5K combine accounts, as all of these series assume MES trading because you couldn't very realistically do a 1,3,2,6 betting sequence trading the ES with a $2.5K trailing drawdown.
So I contemplated doing the following: Trade my 3-point stop/target 1:1 ratio assumed for all the stuff I'm doing right now (my usual setup) and trade 1 lot ES like that and if I get a win on the first trade, then continue with 5 MES and stop at the first loss, or stop at the first loss if my first trade is a loss. So if I get one win and a loss, for example, I stop at $75 on the day (bear in mind that all of this is designed to trade multiple combine accounts in parallel, with trades copied over to each account simultaneously. So every trade is 3 trades right now and it could potentially go to 40 accounts, with 20 Apex, 10 Leeloo, and 10 Bulenox). If, on the other hand, I get a loss on the first trade, I quit for the day (wow! Can I really do that??)
So I looked at 1028 trades taken over 6 weeks from April to May in accounts where I did well until I eventually blew them out in one or two days. The overall set of stats for the original set was 20 winning days vs 7 losing days and $22,747.50 total for winning days vs -($12,657.50) total for losing days. Most critically, the data leaves out the blow-out days, so this is a major consideration as the new strategy, assuming it performs under the normal conditions being reviewed here, would in any case outperform given the blowout days, which are always exponentially large downside days with massive leverage. As you go through the numbers, consider that the original P&L total was actually $2,877 not counting commissions after the final days are included. I am not calculating based on this information, just so we can compare apples to apples, as it were, "If I didn't blow out," but this is a tough reality to be added to the entire equation (trailing drawdowns took me out, not absolute P&L).
Here's what I found in terms of the stop on first trade loss idea, trading one full-size contract with a $150 win/loss and continuing with a half-size position for $75 until the first loss occurs:
if I had stopped at the first loss, that would have happened on 8 of the days traded, so 30% of days would have been cut off after trade #1. In the original set, I had 7 losing days vs 20 profitable days.
The net actual P&L of the days where I would have been cut off was -($680). That is the profits and losses on those days netted out (the actual cumulative P&L on the 8 days where the first trade was a loss). Since it was 8 days, the net loss had I stopped at the first loss of ($150) would have been -($1,200). Up to this point, I am $520 better off trading as I did without this new strategy applied. But wait! There's more!!
There were 5 days where I had multiple wins at the top which turned out to be losing days in the actual sample trades. The original cumulative P&L on those 5 days was -($7780). So per the proposed 1 win continue by 1/2 to the first loss or quit at the first loss strategy, these would have been profitable days. The average consecutive wins on these 5 days was 6 consecutive wins. So those days would on average have netted $150 + ($75 x 5) - 75 = $450 on average, assuming I held each trade to its target. If we take half of that to be conservative we can say $225 per day or $225 x 5 for a conservative estimate of $1,225. Accordingly, the delta between losses on the days where I had multiple wins at the top and deep losses in actual fact is $9,005.
Thus, my overall P&L would have improved by $9,005 - $520, or $8,485, which represents a 37.3% improvement for a total of $31,232.50 profit against the original $22,747.50 profit and a total loss of -($4172) instead of the original -($12,657.50). I think that's right...
Oh, wait! I have to do the same calculation to for the profitable days! Duh. Okay, so I went through it back and forth with all the win/loss data with ChatGPT4 until we got it straight and this is the finished pie:
Original Trading Strategy:
Total Profits: $22,747.50
Total Losses: -($12,657.50)
Net P&L: $10,090.00
Proposed Trading Strategy:
Adjusted Total Profits: $14,487.50 (calculated based on the strategy of a $150 win on the first trade, then $75 for every subsequent trade, stopping at the first $75 loss.)
Adjusted Total Losses: -($4,172) (considering both reduced losses on losing days and increased losses on winning days due to stopping earlier.)
Adjusted Net P&L: $10,315.50
Comparison:
Improvement in Profits: -($8,260) (Adjusted Profits - Original Profits)
Reduction in Losses: $8,485.50 (Original Losses - Adjusted Losses)
Net Improvement in P&L: $225.50 (Adjusted Net P&L - Original Net P&L)
The final part of this is commissions, as all the numbers above are gross P&L.
For the original trading strategy, the total estimated commission cost would be $2,583.98.
For the proposed new trading strategy, the total estimated commission cost would be $1,128.48.
This means that the estimated savings in commissions by switching to the new strategy would be $2,583.98 - $1,128.48 = $1,455.50 (per 6 weeks! So $12,614 savings per year).
Add to this the P&L differential of $225.50 and the new strategy actually outperforms by $1,680.50. Totals are as follows:
Original Trading Strategy:
Gross P&L: $10,090.00
Total Commissions: -$6,882
Net P&L (after commissions): $10,090 - $6,882 = $3,208
Proposed Trading Strategy:
Gross P&L: $10,315.50
Total Commissions: -$5,426.50
Net P&L (after commissions): $10,315.50 - $5,426.50 = $4,889
So, under the proposed strategy, the estimated total net P&L for the period, taking into account both the profit/loss from the trades and the commissions, would be $4,889.
Past performance is not necessarily indicative of future results, but the period under review covers the vast majority of market dynamics one can expect to find in the ES, as smaller time frames give us crashes, rallies, and we had weeks with high and low gamma environments, etc. This period covers all of my psychological states. Most importantly, the only thing that also really matters is: would this strategy cut down volatility in my performance, specifically, downside volatility from days where I run my accounts into the ground? I think the answer would be a resounding "Yes!" The overall P&L is higher with the proposed strategy, and much higher when you include the final day(s) where they blew out, plus savings on commissions. Most importantly, profits don't blow accounts, whereas losses do. So it definitely achieves the desired goal. Even a loss in profits for a huge gain in account stability would be a great trade-off. The only question is, then, can I actually pull it off and stop after the first loss?
You can't outsource confidence in trading decisions
Following up on yesterday's entry, I am going to go ahead and try the 1-loss-out program this coming week. Before embarking on it I stopped to see if I am going overboard in the other direction and what giving myself 2 losses would look like if to follow this quick trade halt on losses program. However, on the data set I was using, out of 27 days there were 17 days where more than 2 losses occurred after the first loss and only 4 were continuing added gains. On average there were 2.5 consecutive losses after the first one, so it just wouldn't pay to continue for a four-in-one chance of extra losses.
I will talk about the other potential benefits I see in this program after the week has ended, if it works, as I think there may be a few tangential benefits. In any case, this morning's post is to say that I won't be posting during the week. I will reconvene on Friday to review how it went. The reason is that now that I am limiting it to 1-loss, that's a sort of added pressure, and even though the stats bear out this approach, those stats are based on going into the day with no such restriction. Going in knowing I have one chance to start making my day may prove to add a bit more pressure on the whole enterprise, but that may just be at the beginning. So I don't need the additional pressure of what I'm going to say here at the end of the day. Better leave it to the end of the week. I mean, unless by Wednesday I'm killing it and suddenly feel great about it, lol, but as of now I think I'll leave it until Friday.
This week also promises to be a particularly crazy week in the indexes, so that's also a consideration. Be safe, as they say.
PST Times
You can't outsource confidence in trading decisions
