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The 1-loss-out program I started this week works insofar as most of the time I am trading with a higher percent win rate, except when I am totally wrong plus the price action is a statistical outlier. Either a surprise impulse move that runs stops or an open drive trend up with no pullbacks such as FOMC, post FOMC, CPI or just periodic breakout. In other words, the 20% of trend days vs the 80% non-trend when I do well, or the surprise breakout move that will jump several standard deviations with no let up.
The way I structured it was with a $600 max loss to give me room to trade, even though I consider it a disaster stop, not a stop I ever wish to hit. On the other hand, the 1 loss out per session setting with no option to get back in incentivizes me not to set a firm stop and to stay in the trade once I’m in, as taking a loss means not being able to recover that day. Plus, whereas under normal circumstances on an open drive I get wrong I might flip sides, with no option to take a second trade this doubly incentivizes me to hope for a failed breakout and so forth. Additionally, it all made sense on paper, where I factored in 3-point stop in my calculations, but it’s another thing live trading, and the set of trades I was measuring against originally did not necessarily have exact 3-point stops. The reality is that I sometimes still freeze and hold to bust or try to scale in on those exceptionally unforgiving moves that give no pullback or level retest.
Since the types of environments where I fail are exceptional, I think I could take up to 2 days worth of profit in losses, so no more than ($300 - $400). This is what I got on Monday night and on Tuesday I recovered well. Insofar as the 1 loss out, it worked well on Monday when I bailed out for a loss because that was definitely a situation where under normal circumstances I would have continued trading and most likely for bigger losses given that I would likely have increased size and Globex had just proven totally random and prone to impulse moves, and sure enough it really didn’t do much for hours and then had a few spurts. Thus, I would likely have grown increasingly distressed and anxious and would have made things worse. Coming in fresh on Tuesday worked well. I traded carefully and essentially made back the loss. Having said that, as far as Globex itself, I am cutting it out of the equation for the time being. I have great success most of the time in Globex, but all it takes is one really bad night to throw me off completely, with lack of sleep and subsequent busts. So for now I am just going to trade RTH (started that as of Tuesday).
Today the 1-loss out saved those accounts from going bust, but it wasn't great. I got on the wrong side of the open drive and was looking for a pullback and it just didn’t happen and I held to max daily loss. I am not happy with it, it’s a ($600) loss that will take more time to make up. As it is, I am not going to trade Friday and will just leave it until next week as I need to restructure the 1 Loss out program and I can’t get in to my risk management addon or Rithmic to make any changes until Saturday. So I locked everything out until Saturday on my Cold Tukey app.
Given that I can’t realistically work with ($600) daily losses, I have to cut it down. This means I also have to cut size as the 1 lot ES, 3 point stop is proving to be too “50/50” for my trading. In other words, I need more room to maneuver than 3 points, but increasing it gets me to infrequent, but still too large a daily loss.
So if to go with restructuring stops and targets, instead of $150 / 3pts with 1 ES, maybe it’s 5 MES / 5pts for $125 max, such that I am not riding the edge as far as my stop distance. With 5pts I know that if I lost within my typical setups, the trade was really wrong to begin with and it’s still a $125 loss (my levels-to-level trades are typically wrong beyond 2.75 pts or so). This all the more so given that I have been overly conservative due to the one loss out program. I have not been letting my 1 lot ES 3pt trades go to profit target whenever there is any possibility it won’t get there (anything I see in the tape, a nearby minor resistance point, etc).). In other words, it’s not a true 1:1 ratio as I am cutting my trades short. This of course leads to the other side of the coin: if to maintain a 1:1 ratio with 5pts of room with 5 MES, then I need to let them run 5pts to make 1:1 ratio (vs the 3pts with ES that I am not managing as it is). On the other hand, even if I take smaller scalps as I did earlier this week, my max loss under this scenario works out better and should be okay given that on a number of my 1 lot ES trades I was just taking a couple of ticks, which is equal to 2pts on 5 MES, which I should get with 5pt stops. I think the max loss will be small enough relative to the daily profits I've been getting.
This is where I am coming out and what I will try:
1. I will in the main continue with the idea of a larger position to start with a half position after the first win until a loss and stop. Only instead of 1 ES 3pt 1:1 trades followed 5 MES trades, I will halve size to 5 MES followed by 2 MES / $125 max position loss (set in the risk mgmt app, not just my stops.) / $250 max daily loss.
2. I will create a max position loss of ($125) so even if I try to move my stops back it will cut the trade at ($125). But since I am trading smaller, I have enough room to maneuver (let’s say, even if I go with 2 MES instead of 5 and scale in, my max loss is set. I can give myself room but make it all smaller).
3. I will also give myself 2 Losses max per day with a 2hr addon enforced pause after loss #1. This runs counter to what I said last week about the 4:1 chance of a loser after the first loss, but from trading this week, I know that when my max numbers of trades are so drastically reduced like this, I just don’t trade the way I did when I allowed myself unlimited potential losses. I am much more careful, and unless I just get caught flat-footed and get it totally wrong with OTF moving price violently, I don’t make that many mistakes. Under this scenario, if I lose any time after 11:00 a.m. PST, then I actually don't get to trade until the next day as a 2hr post loss gets me to the end of the session (I also don't usually put on trades after 12-12:30 pm PST, so realistically 10 AM will be my cutoff). Accordingly, I take one loss and a ($125) loss on the day. But if I have a loss early in the morning I sit it out for a couple of hours and have one more chance on the day with a max ($250) loss.
A couple of other things worth mentioning: This is the first week ever, I think, were I have adhered to a plan like 1-loss out. This would have been inconceivable before. So that's a big one. I have also finally found a way to totally lock myself out of Rithmic and making any changes in my Guardian Angel NT8 app and had it locked out all week, which I never did before (always found reasons to do it for the session, or the day, or two days, but never a whole week, and always with a hole somewhere). That's huge. So whatever I set was set in stone all week and this I will continue.
For those who use Guardian Angel and trade combines with Rithmic, the way to do it is to make the session time for each account Sunday to Friday, from 00:01 to 23:59, so you are effectively shut out of the account(s) 24/7. Now since your session is 24/7 you can technically trade anytime, but you structure your actual session times with the Cold Turkey app, that locks you out of opening it except during the times you set. So you are locked out of changing it, and locked out by Cold Turkey at times you want to be sure not to trade. In addition, you set your daily max loss parameters in Rithmic and lock that out for the week with Cold Turkey. Lastly, don't forget to download all these apps to all your other computers and lock them out 24/7 on everything with Cold Turkey (one license for all computers). Then also use an app lock on your phone and lock out Rithmic there too. To be extra sure you can't mess with Guardian Angel, generate a complex password and take a photo of it and get a photo time lock app for your phone and lock that password up untl the weekend (but if you set it the way I mentioned you are in a 24/7 session and can't access the settings for that account anyway). Now you're all set
Let's see how that goes next week!
You can't outsource confidence in trading decisions
Here are screenshots of the modified risk management parameters for next week. These will be locked out all week.
It helps to put it here because then I'm not likely to file it away in my mind and act all surprised when I get a popup and halt after a loss. Posting here, I'm always reading and re-reading the most recent entries. This journal satisfies that OCD part of me and reinforces the plan
You can't outsource confidence in trading decisions
Really enjoyed reading you journal....granted not in depth as of yet.
Have a quick question or two.....
1. A few years back I was really into the ACD /Mark Fisher concept (Are you familiar with the MFBreakout who is a member here that was trading this system for a long time? One of the things that were claimed is that his system is mostly adequate for a HIGH VOLATILITY market such as the CL and not ES etc ...your thoughts ?
2. What are your A /C levels ...i think there were 2-2.5 points above OPENING RANGE in ES (I also saw some people adjusting it dynamically based on Volatility)
3. What is your opening range based on EST time zone (I heard Mark also changes times to include part of the PRE OPEN s so much volume is executed OverNight)
4. How long of a time frame do you wait for price to "linger" above the opening range before you take a trade in that direction.
Lastly, after speakign with people who have traded this method exclusively....it was my understanding they "abandoned" it during some years due to LOW VOLATILITY - any info/insights on that? Have you back tested the system on enough of a data set to see that it can be profitable?
Thanks, glad the journal is serving some purpose other than my trading psychology
1. I don't trade CL or GC, but I guess ACD would be particularly good for those, yes. It's probably best suited for high-volatility markets, strictly speaking. Although, when you listen to Mark Fisher talk about it (Youtube videos you can find) and in his book, ACD is not only limited to breakout trades. First, he outlines the breakout trades, then the outside-in scenario, and then the reverse breakout, as it were, when it crosses back to the other side.
2. 10 Minutes.
3. 10 Minutes.
4. I have not backtested it. I don't use it exclusively, or frankly trade it on its own right now. One of my chart screens, a split Tradingview screen, is one with a neat (free) ACD indicator I found (you can easily Google it to find it if you use Tradingview). I'm attaching the settings. You can see the ATR settings it uses to calculate the A & C levels. Nowadays I do use it more as a directional reference. I do sometimes trade off this level, not just when it takes off, or reverses. It's often an important level during the day (i.e., pullback to C level). But you can see how it works, and the fact it actually does work in the ES. I grabbed the first two most recent examples in the last week and a half that give the clearest illustration (6-10 & 6-13).
I did read the ACD thread here and found it helpful.
Cheers,
Wolf.
You can't outsource confidence in trading decisions
OK, so trading today may have been a questionable choice. I have not traded half-day holidays recently. A part of me was just eager to put my new plan changes into effect. And I did get some results from it, some positive, but not P&L quantifiable. My P&L is down, and not as down as it might have been, yes in part thanks to changes I made last week. So the minus is P&L and the pluses are: 1. If I had been operating in last week's mode I might have just held it to a ($200) loss and been unable to minimize it. As it was my max position size setting took the trade out. 2. The 2hr enforced stop was perfect. I didn't look at the screens for an hour, then came in for a trade at the end which only made sense at the end. If I had lost I would still have been ahead of my bad days last week. As it turned out I more or less halved the loss and it's not significant for a loss day.
What I did wrong: It was very slow and I went ahead and put on a 10 MES trade as it had been moving in ticks (did test the waters for a while with 1 lot before). Of course, just after I put it on it moved about 3pts. The 10 MES setting is not meant for trade sizing, as a 2.5pt move will trigger my position loss. It's just there so that I can put a 5-lot target in the DOM if I put on a 5 lot trade (one artifact of Guardian Angel is that if you have it set to 5 lots max and you put on a trade manually, not an ATM, in the DOM, it won't let you add a 5 lot target). All this to say, any other day I wouldn't have done this. It was just extraordinarily slow. If I had kept it smaller it would have given me several outs as it ended up ranging between my entry and where it took me out. In the realm of experiments and learning, it was a decent day.
Goal for tomorrow: I will remember that losing days are part of the normal outcome. So long as I ensure my loss days are within 1-2 win days. 70% of days should be positive; 90% of weeks should be positive; 100% of months should be positive.
You can't outsource confidence in trading decisions
Small loss day. I took 2 losses and so my system locked me out for the day. One of those is not technically a loss as the trade was profitable. The next one was also one trade but it was made up of 4 contracts, so NT8 counted it as multiple losses. This is a slight shortcoming of Guardian Angel. I can't calibrate for X number of losses as it just counts contracts (i.e., with a scale in one can be profitable and the other one a loss but the trade profitable and it still counts it as a loss). The only option would be to increase the allowable number of losses, but that gets too complicated. It's fine. When it's working it's working. It's just as well to stop now and not push it to the limit (although the trade I tried to put on where I was stopped by the system just now would have been 6pts in profit as I write this. Oh well )
Back tomorrow.
Goal for tomorrow: I will remember that losing days are part of the normal outcome. So long as I ensure my loss days are within 1-2 win days. 70% of days should be positive; 90% of weeks should be positive; 100% of months should be positive.
You can't outsource confidence in trading decisions
Full day today; lots of screenshots! lol. Some days it works out that way, other days I can't focus on grabbing a single one. It's helpful to doccument.
Very good day from a trading perspective. Small glitch at the end. It's good that my system takes me out for 2hrs after 1 loss (2 losses max total per session). This is the type of thing that could quickly unwind a day's profit. It was close to the end of the session.
Here are all the trades. I think it's pretty self-explanatory so just gonna post screenshots.
I guess my biggest takeaway, yesterday, the day before, today, since I started this new program, is that I can't do what I did before in terms of taking heat to swing, or even taking any kind of heat. I have to be in and out quickly (max position loss $125), and can't realistically scale in much (probably a good thing). If I do scale in it's a one-shot deal, most likely. Even with 1 lot MES if it's at all volatile. Overall, per my calculations, before I started all this, the goal is to move the curve such that losses are on the smaller end of the distribution and to do that means also cutting a lot of profit, just by the sheer number of trades I forego with a 2 loss out / 1hr pause after loss #1 program. The Win rate has to be quite high on the days that I win. Not much room for error. Also, there will be more loss days overall and as I was telling another trader yesterday, those small cuts and having to stand aside all day almost hurts more than 'giving it your all' to try to be profitable each day. But in the long run it works out (should). So this is a very different new trading application and it will take time to get used to. Hopefully, it'll make sense as it unfolds.
Goal for tomorrow: I will remember that losing days are part of the normal outcome. So long as I ensure my loss days are within 1-2 win days. 70% of days should be positive; 90% of weeks should be positive; 100% of months should be positive.
You can't outsource confidence in trading decisions
Thanks so much for the detailed clarifications- and apologies for a delayed response (that's what happens when you're running a startup/or two on top of trading )
Now that I had a chance to read you whole journal and trading plan/history - seems we sort of went through the same learning curve /systems. I have also followed FT71, been doing the Leeloo and Apex programs, Al brooks, Peter Davis and a gazillion rooms at the beginning.
How was/is FT71 room? I have only watched his videos ....someone said he took the MP /volume Profile to a whole new level - and what I really adore about him is the "quant" statistical side of things (in 2009 I did a major study of the GAP phenomena trying to find inefficiencies using statistical software and even machine learning. Though I found an edge and was even able to improve it....trading it was another story
Have you ever looked into Tylor/Wycoff stuff? Linda Raschke covers some of that.
On the ACD - your OR is interesting ...very different than MfBreakout which lasts 45 min I think and starts at 8:45-9:30 EST.
You made me go back and watch Mark Fishers old school videos ....totally forgot about his "rolling Pivots" and the running "scoring" system to identify momentum/trends - do you use any of that and/or subscribe to his data service? Also - what do you use for "buffer" from OR before taking a trade in the ES - 2 points? Anf the tTIME you wait until you BAIL OUT of a trade (I remember MF saying something that if a trade takes a long time - perhaps more than 20 min to work - he is out of a trade so you can have smaller stops)
I have passed both Apex tarder funding and Leeloo's about 2 months ago - I also had to change lots of things and CONTROL RISK...so if you're looking for a trading buddy (sometimes it may be distracting when someone uses a different "Trading System" causing you to Doubt you own system....but it seems we do many things similarly) - ill be more than happy to do a google meet etc.
Glad it made sense and got you back to reviewing things. Part of the process I also find helpful is this kind of back & forth which keeps us in touch with what we do.
I learned a lot from FT71 and Convergent. I started journaling like this on Convergent, as they have a strong trader development & accountability program with a journaling area where you can do this and interact with each other. I also found the CT ES stats helpful and for a while, I had the StalkZones in my charts. All this adds layers of knowledge, even if it's not what I use directly now, although I'm sure it's part of the computation that goes on in the background. These days the only market/ vol profile market analysis I'm paying attention to besides my own is Smashelito's. He's quite insightful and tracks levels which is handy and his Substack is free.
I never participated in / paid attention to the CT trading room chat. I've always found trading rooms where people are calling out their trades counterproductive in the end. Al Brooks' room was helpful in the beginning, and I am on PriceAction Rose's and Al's Discord channels, but I never or hardly ever follow them during the trading session. Rose puts up some good analyses I look at outside of trading hours.
The only trader I really check during the day, and to whom I still subscribe, is Adam Mancini. His style is totally different from mine, although I think his approach and trading principles apply to mine insofar as I operate at a much smaller level, with different levels between his levels, my own derivative levels. The general concepts apply, and his analyses are always spot on big picture.
I left CT because I couldn't justify the cost given that all I was doing there was journaling, and in the end, a place like this gets many more views, which is the most important thing for accountability IMO. I know that on average 87 people see what I'm writing here per day, and that has a bigger impact.
I don't track rolling pivots, etc. But I do track the daily pivot zone every day and put it in my Tradingview charts. As far as the OR, he has different times for different products, as I understand it. I took a quick look just now in his book and pulled this up. But I do recall him saying 10 min for the ES, perhaps it's elsewhere in the book or Youtube, I don't remember. Pretty sure he uses(used) 10 min. It works.
Linda Raschke: I asked my wife to gift me Street Smarts for Christmas & read parts of it so far. I've seen a few of her videos, maybe even a webinar she did here, a long time ago. Occasionally I see her husband's tweets go by in my timeline (and her cryptic ones too).
Congrats on passing the evals. For me it's an ongoing process, as you can see!
I find it hard to do real-time or live accountability partnering, but if you're on Discord or something and want to connect DM me.
Cheers.
You can't outsource confidence in trading decisions
Goal for tomorrow: I will remember that losing days are part of the normal outcome. So long as I ensure my loss days are within 1-2 win days.
70% of days should be positive; 90% of weeks should be positive; 100% of months should be positive.
You can't outsource confidence in trading decisions
I have not traded half-day holidays recently. A part of me was just eager to put my new plan changes into effect. And I did get some results from it, some positive, but not 
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