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OK, week done, month done. Overall a win on process. I'd say a big win on process. I'll go more into it over the weekend. The structure is laid out and beginning to gel. No tilt! Now I have to go for the low-hanging fruit, like not trading the half day with 8 tick ATR last Monday, or taking a trade that's not in my plan in the final 5 minutes today. Some other ones. I'll delve into them later.
Today was good overall. There was one loss at the top of the day that was just part of the deal (being generous with myself, shorting on a gap & go day, ). The one in the last 5 minutes was unnecessary. I would have been better off taking the short I had been eagerly anticipating, then reluctant to take (albeit for good reason). It's clear in the screenshots below. But it's fine. No loss today and a big win just as far as risk management. Once the low-hanging fruit start to be cleaned up (the C game catching up, if you are familiar with the inchworm analogy), things should get better. The momentum on those blue weekly P&L bars are headed the right way (this is all net of commissions).
I am right around "$50K" on 4 of my 5 Apex accounts, a bit higher on the 5th. My monthly renewal is coming up on July 10th. I have basically been treading water with these, just because of my losses earlier in the month, as I was working out my risk management. They have a 90% off sale until the 6th and I can get 10 new ones for the price of the 5 renewals, basically, and they are at the same profit, so I may end up retiring the 4 that are right at $50K (or tiny bit below) and replace them. I think that was also in the back of my mind when I took that last trade (but I am really trying not to have this disposable eval mentality anymore).
I'll go into the month sometime over the long weekend. Going out of town until the 5th. Have a Happy 4th Everyone!
Goal for July (Aug, Sept, Oct, (...) : 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
This is the June recap I mentioned I’d do. It really helps me to bring it all together and understand the progression. It’s so easy to forget stuff and just keep repeating history. Doing this keeps things in perspective. It’s amazing how easy it is to forget. We are in the first week of July and I really had no idea what happened in the first two weeks of June until I reviewed everything.
At the top of June, I was in that prior month Leeloo bundle eval to/ PA mode where each bundle of 5 accounts allows for 1 to pass to PA, which encourages 80% loss / 20% win trading to get one to pass. I did that successfully as I have no problem getting 1 out of 5 to pass fast, usually within one to five days or so. The problem with this is twofold: a) it continues to foster bad trading habits (which eval companies thrive on) and b) unless there is a very strong risk management program that runs completely opposite to the eval passing risk-prone program in place following the PA qualification, the PAs are bound to blow up sooner or later, usually sooner.
To be sure, I had pretty conservative trading protocols in place. The problem is that they weren’t ironclad and left room for getting taken out on highly unusual price action. Thus, for example, while I might only trade micros in RTH, I found that with the slow price action in Globex, I could trade one to as many as four ES lot trades in Globex ad get away with it, and rack up profits comparatively fast. That is until some unusual price action took me by surprise and took me to a big loss. Also, whereas I might be using Guardian Angel diligently in RTH, and be working other trading protocols such as careful notation of trades, tracking, and things that generally keep me on the sidewalk of trading, so to speak, in Globex, with the slow PA rationale I would not be doing any of that and I'd occasionally get taken by surprise. That might mean a late night getting back on track, which worked out that night, but then the additive stressors would result in subsequent mishaps in RTH. Thus, I blew up my Leeloo PAs by the second week in June (counting the first week as the two trading days on Thu/Fri 1st & 2nd of June).
Week 3 I started a new program: no more Globex trading and 1-loss out for the session, with a $600 daily max loss. The way I structured it was with a $600 max loss to give me room to trade, even though I considered it a disaster stop, not a stop I ever wished to hit. Overall this worked out better. The problem was that sooner or later one hits disaster stops, and I did that by Thursday of that week (it shows as a -$1,800 loss on my calendar because I am tracking the P&L on 3 accounts in the calendar throughout June – trade counts on the other hand show per account). What did work, however, was the beginning of locking everything out completely for the week until the following Saturday, such that whatever risk management settings I chose for the week were absolutely unchangeable until the weekend. (I go into how to truly lock down elsewhere in the journal and the Discipline Problems thread in the Psychology and Money Management section). The main advantage of locking things out for the week was that from this point forward I could really test a risk management program and see how it performed, as I had no room to improvise with new settings or random trades that departed from my agreed upon settings.
Week 4 I tried the following, as outlined in my June 15th journal entry:
"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."
My conclusion when the week ended, upon review of the prior week was as follows:
"I found that with 2 losses max per day and a two-hour break after 1 loss, was a step in the right direction, but I still found myself doing the same thing (holding trades) to a lesser extent. Also, while the position loss was a good idea to cut down the possibility of reaching my DLL in a single trade, and twinned with the 1 loss / 2hr break and splitting the DLL into two max losses, I was still incentivized to look for runners, which runs counter to scalping multiple trades, or if I do, taking profits too quickly, due to the pressure of having fewer opportunities."
Week 5, I therefore set out to do the following:
1. Changed my DLL from $255 to $210
2. Changed my max position size from 10 MES to 2 MES
3. Changed my max position loss from $125 to $37 (14 ticks / 2 lots)
4. Changed the time-out setting from 2hrs after 1 loss with 2 max losses per day to 30 min after 1 loss and 1hr on the next consecutive loss (this resets if there is a win and consecutive loss after).
5. Other settings remained the same.
That was last week, the final week of June. The settings above worked out really well. One thing I didn’t mention in my journal was that I also had a -$10 scratch allowance on all of my settings from the third week forward and that a trade with a -$10 loss would not count as a loss-out trade. This encourages me to scratch quickly if it’s not working out as I planned, or fast enough. Small losses like this are a plus, not a minus.
In any event, these new settings really worked well in terms of balancing time out between losses. It took me out the right amount of time, did not incentivize me to hold losers, and gave me enough opportunities during the day to have a higher chance of coming out ahead given my trading particulars (win rate, etc.). I never went on tilt. When I got taken out 30 minutes turned out to give me a good opportunity to tune out and do some other work and come back in what felt like no time but was long enough for a reset and a new look at what was going on. The subsequent 1hr out in the event of two consecutive losses was fine too. This seldom happens but if it does it’s definitely better I stop for another hour. And even with this stop, I could continue my day afterward. The way it’s set, unless I get a third loss in a row, I don't have another hour off on a subsequent loss, as a win on the third one would reset me to a half-hour break on a subsequent loss until I got two losses in a row again. So all of these things worked out well. I’m happy with the risk management settings and as I wrote last week, now I can turn my attention to other stuff, like not trading in the last 5 minutes of the session, or trading on that half-day holiday on Monday, June 19th, and other similar “low hanging fruit” of C-Game trading. That’s what I will be focusing on starting this month.
As far as breaking down my month, I see what I anticipated in my earlier calculations of trading stats: My long-term win/loss has always been about the same: Over the last 3 years, no matter how much I lost big picture I won about 64% of days and now it’s typically closer to 70%. This month I basically lost on 6 trading days. I had one day with -($24) across 3 accounts, so -($8) per account, which is just a scratch on each one. So 72% of days were non-losing days. The problem is, and always has been, what happens on the other 30% - 35% of days. This goes way back. When I first joined Convergent, about two weeks into it I wrote about this to FT71. Later, in correspondence I came across last week whilst looking for something, I found myself saying the same thing to Lance Beggs in an email exchange. And more recently I said the same thing here. I must’ve said it many times in between to fellow traders with whom I exchanged ideas. It has never changed much no matter what stage of trading I was at, what new type of trading strategy I was applying, indicator, no indicator, trading pure PA or order flow, or simply trading the DOM, or whatever. It’s always been the same. In fact, I could almost do a coin toss, it wouldn’t matter, if only I could keep my loss days down on the 30% - 40% of loss days, I’d be coming out ahead. But I never managed to do it. I also never worked systematically on my risk management with fully locked-out settings before. It’s hard, for reasons I touched on in a recent thread here on FIO “How to Overcome Tilt (...)”.
The other thing that comes forth in my trading calendar breakdown is that the better I control losses, the more it also reduces profits. But I’ve known this for a while. The idea is to really reduce the standard deviation size of losses and this by definition reduces the overall standard deviation of my entire trading P&L (I think I’m stating this correctly, correct me if I’m wrong). By working on the said “low-hanging fruit” initially, I hope to increase the standard deviation of wins and shift the curve so that tails are on the winning side of the P&L distribution curve, to increase the upside volatility of my P&L vs the downside. It’s a process. Let’s see how July goes!
Happy 4th and best wishes for great trading to everyone this month.
Goal for July (Aug, Sept, Oct, (...) : 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 was bit early on my first short. Later I took a long that went against the order flow signal I saw and it would have been a bigger win had the lower probability trade gone, but it didn't and I took a small loss on it. The third one that was probably the only trade in my plan that manifested today. It was a responsive trade off one of my levels when it went down late morning. It happened when I was on a 2 consecutive loss break. For my last trade, I was looking for a breakout after it came back up from my level below (the one I missed), but it was ultimately pretty weak and didn't have cooperative VIX so I scratched that too.
Yesterday I did what I talked about last week: "I am right around "$50K" on 4 of my 5 Apex accounts, a bit higher on the 5th. My monthly renewal is coming up on July 10th. I have basically been treading water with these, just because of my losses earlier in the month, as I was working out my risk management. They have a 90% off sale until the 6th and I can get 10 new ones for the price of the 5 renewals, basically, and they are at the same profit, so I may end up retiring the 4 that are right at $50K (or tiny bit below) and replace them with 9 new ones for a total of 10 for the price of 5. "
Since the renewals on the 4 I replaced were on July 10th, I was very tempted to do a Kamikaze trade with the 4 I was replacing last night. I wanted to go short 6 ES lots for 10pts to get the $3K profit in one trade if it panned out. It turned out it would have, but I didn't do it. I felt better about it that way. Sometimes they work out, but more often they don't. However, what always happens no matter what is that it continues the pattern of finding excuses to take shots like that, which are ultimately really bad form and wind up causing constant failure one way or the other. So I was glad I didn't do it.
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
Today I hit my DLL -($210) in 3 trades on all but one account, where I had a -($40) loss on the day. The latter had my correct max position loss setting of -($35). On the other ones, I had the wrong position max loss amount. These are the new accounts I just configured on Wednesday. I was going too fast and entered a max position loss of -($135) on those vs -($35). Not sure what I was thinking. I had been driving all day and was tired when I did that. If there is any good out of it is that it's a sort of max loss risk setting A / B testing for what happens when I don't have the stricter settings in place and the results are in. The stricter settings work. I had not hit my DLL since I had the same more generous position loss amount setting three weeks ago (must've been stuck on that when I set it up this week). My trading wasn't great today, needless to say. I clearly need these things in place. Since I can't get in there to make any changes until Saturday, I will forego trading tomorrow and resume on Monday, after I have reset everything correctly this weekend.
Have a great weekend.
You can't outsource confidence in trading decisions
Just surviving for days when profit comes gushing in! I'm still waiting
Back tomorrow!
I had a full loss here and documented it, but can't find the screenshot. Must've overwritten it by mistake. Went short with 1L and got trapped as it moved up towards the end.
You can't outsource confidence in trading decisions
OK, I'm treading water right now. P&L-wise. On the emotional sobriety/tilt/risk management front, I am not having huge daily swings that are 50%+ of my account trailing drawdown limit. I'm not going off. I'm pretty focused even though I'm making some uncalled-for errors and taking too long to get out of the ones that would make the difference between a profitable day and a break-even one. I'm also not really swinging for the fences (what little of that I may try is hemmed in by my -$40 max position loss in NT8 and the -$200 DLL in Rithmic). I'm not leaving trades unattended in Globex. I'm not scaling in on any losing trades at all for weeks now (big one), or chasing price discovery during the news announcement. So a lot of good things going on. So now what remains is continuing to work on my trading. Logging everything here helps because I go back over it every night and really see where I went off plan
I am tempted to take one quick 4 ES Globex trade for $400 and reset my accounts (they're down -$200-250 or so for the most part right now). But not yet. I'm not there yet. But I'm tempted, lol. I have a feeling that the market really wants to go get those zero prints around 4484 before it goes up more.
Goal for tomorrow (lest I forget!): 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.
Back tomorrow!
Hard on myself about the above read on the images below. Looking at it later, I can see why I went in. There was a nice price rejector at the bottom, unfinished business at the top, and 3600 being absorbed by passive buyers. In most cases it goes up from there. It was the end of the day and CPI day and not unusual to get a late liquidation break before going back up. But just from an order flow perspective it was justified, although not in my plan right now because I am only taking trades around my levels right now. So I should have been looking for continuation up, gotten it at the PB on the break over the next level, or one the level below, where it bounced and so on. The trade was whimsical and spontaneous, "I'm so smart I can read OF" kind of trade. NG. But the general read made sense.
You can't outsource confidence in trading decisions
This week I hit a bit of an impasse. It came to a head yesterday.
I realized this because I did one of those "dumb" moves yesterday, taking a swing trade guess on the short side when the price action was hard to read and stuck in a tight range that was bound to break out one way or the other. I didn't heed the 'never short a dull market' adage, because my default mindset is to always short first and ask questions later (long positions have been a very lengthy & arduous education process where I'm concerned). I did this by turning off NT8 to avoid my -($40) max position loss, knowing that I have a -$200 DLL set in Rithmic, rationalizing, 'What are the odds that it goes 40 handles against me here at the top?' (1 micro). Of course, as always happens in these situations, we got a gamma squeeze and it went about 20 handles against me and the pain was such that I finally closed it at the top, before it came down 10 at the close. So that was another -$122 loss on the drip, drip of small losses or breakeven days I've had recently (commissions piling on the thousand cuts). I did not heed the adage not to short a dull market, but at least I held to the other adage, to keep it small if you plan on doing something dumb. In RTH, that is... (I should add that last year I had an indicator made that prevents shutting down NT8 with open positions [a CS file, not an indicator loaded via chart loading]. I had forgotten about it when I updated to the new NT8 [conveniently, as traders like me tend to do]. Today I reinstalled it).
After the RTH session, I broke my micro-only tight risk management regimen and took two 4-lot ES trades to 'get my accounts even'. The first one was an impulsive long trade as soon as I had a chance to get in there and "do something.' That one almost blew my evals and cost me -$250 by the time I came back from the edge of the abyss. After that I took my time and really planned out the next one, staying up until midnight my time (PST) for it to hit just the right spot, which coincided with the European Open. I posted that one below.
What happened was an admission of failure, or just a self-induced crisis to make me look at what isn't working. Over the last couple of weeks I downsized and reduced everything such that I was doing great on all the risk management fronts and effectively eliminating all the tilt-related trading issues, but in the process I also killed my profit. Thus, I boxed myself in to the point where I was just treading water, bobbing up and down, my world totally shrunk by my trading straight jacket and lobotomy.
This week I started identifying the current problem as having to work on quicker exits or different stoploss parameters, because on average my win rate is decent, but now my R factor isn't working. I can have 6 or 8 wins and two losses that undo everything (I'm counting small wins, effective scratches in there as well). More importantly, I am really lacking 'systematicity' if that's a word. I am not operating systematically on my level to marker go / no-go determinations once I am in a trade. My scratch vs hold parameters are too discretionary and impulsive. So those are the main issues. And the other one that was weighing on my mind was the fact that my entire trade development process was just eating into my trailing drawdowns and I needed to reset them (this by itself can undermine my go/no-go decisions). So I reset the accounts with some after-hours ES trades.
Putting on the planned trade that reset my accounts brought up another issue, which is: Why am I hell-bent on working out my level-to-level scalping when at the end of the day, to get myself whole I do one planned 4 lot ES trade that gets me massively more profit in one trade than I achieved all month so far? Wouldn't I be better off just doing one planned trade a day, maybe not with 4 ES (what happens after 2 weeks of drip-drip losses), maybe just with 1 ES or even a few micros, or even one micro for that matter! From time to time I've been known to say to myself (and others): "Just do the setup that you end up going to after you've hit bottom and need to make it all back, nothing else." Well, it's maybe not necessarily one setup (although it could well, and maybe should be), but it's just an approach that is totally different from what I'm doing during the day. This is something I need to think about.
In the meantime, I'm continuing to work on my level-to-level strategy because I do see great opportunity in it if I can work out the issues I'm having. I may need to do this in Sim for a bit. It may end up being somewhat messy and not really so much 'trading' as working it out. I may or may not post what I do here. I'll see how it goes. I do have some ideas. One revolves around a strategy I built out with an order flow developer a while back, which may help me better structure my entries and exits. I've been working with it on weekends in market replay but I just end up never implementing what I do with it in live trading as I always wind up thinking I can find my entry spots better than it can. However, it does trigger off order flow parameters which are always ultimately less susceptible to error than I am. All this may not be so clear unless you were where I am, but it's something to circle back to here if I work it out.
This is my month-to-date P&L and yesterday's trades (RTH and Globex, the latter being the Friday session). The monthly P&L calendar tracks 3 eval accounts. I have more now, but I had 3 last month and decided to keep tracking 3 to compare apples to apples, as it were. Also posted below, is the last trade I did which got my accounts 'even' (slightly profitable for the first time since I launched them).
The two below were not my actual trade, I only did the one above with 4 lots ES. The ones below just track what a swing based on this entry would have looked like.
The note on this chart is supposed to be "Would be trailed" (typo)
During Today's RTH session, I went ahead and tested my levels strategy with order flow entries and risk management only. My only discretionary input was moving my targets in function of what's happening and other levels sometimes and moving stops closer in sometimes if the obvious LIS is closer. But entries are based on certain order flow conditions and I also have it set to close on reverse signals. This last item causes a fair number of them to close for a small loss, but in every instance, those could be situations where I would take a full loss. The trade-off for safeguarding against bigger losses is more frequent scratches. It makes for less sexy win-loss ratios but stops a lot of the big losses. In any situation where there is good follow-through on the price action, this will not happen. So I mainly have to be more careful with selecting areas where I turn it on vs keep it off (strategy). Today I did a few 'in the middle' where I probably ought not to. A couple of things I noticed: a) It takes off a lot of mental pressure on constantly second-guessing my order flow and price action read, and if it's turning on me once I'm in the trade. I think this alone can have the effect of bad trade management just to get peace of mind. The other thing is that the average MAE is under 4 ticks, which is good. The profit after commissions was only a measly $18 but on 10 funded accounts that's $180 and given the MAE, if this can be reproduced consistently, it can be scaled too. I will have to keep exploring this path.
Have a great weekend!
You can't outsource confidence in trading decisions
After my end-of-week musings, I decided to take a different tack this week. It's all an outgrowth of what I've been doing, but back to ES, not MES. I have a profit goal of $75 per day, looking for two 3-tick trades with very narrow entry parameters. I want to see how it works out this week before going into any details.
I guess the gist of it is that it focuses on a single setup where I have the highest degree of probability to achieve the highest and best risk-return trade-off. My risk management add-on is set to halt trading at $75 profit, so I don't get tempted to get creative looking for swings or something (I trade multiple Apex accts).
My last trade, last week shows that swings are perfectly valid, and a great strategy, just not necessarily for the trailing drawdown prop accounts (I also took the swing entry last week, not the actual swing). I keep it open as a possible 'catch-up' trade now and again. But I"m trying not to do that. I'm really trying to figure out a day-in, day-out bread-and-butter trading system. Orderflow is ultimately too prone to instantaneous changes for swing trading IMO, unless you're trading very small, with a comparatively large account, and not limited by a 1 pm PST cutoff time. For 5 - 10 pt swings with micros, I think I'm just better off doing what I'm trying to do here. I want to see how it goes before I get into it (I'll do a post-mortem either way).
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
). The one in the last 5 minutes was unnecessary. I would have been better off taking the short I had been eagerly anticipating, then reluctant to take (albeit for good reason). It's clear in the 
