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Things I learned from Blowing one PA today:
1. I have to be able to take a loss, I had plenty opportunities to take a small loss today and instead I was so focused on getting a payout from APEX I did not even consider just taking a small loss and putting on another trade.
2. I had no real plan to exit, I just kept hoping it turned around (fear of being wrong)
3. Allowed the scale in process to become completely frenetic ( I have now established rules for how I want to scale in to trades)
4. I did not acknowledge the obvious trend change and traded it like a pullback.
5. Emotions took over and my P&L controlled my decision making, NEVER GOOD.
6. My fear of being wrong today stemmed from a lack of acceptance of risk.
7. Traded too small this allowed me to play the "it will come back my way" game. I am guilty of trading to small to actually avoid the risk of trading.
8. Lack of written down Trading Objectives
9. Lack of objectives for my APEX PA accounts this allows the GAMBLING mentality to set in.
10. I have to trust that IT IS OK TO BE WRONG.
I hope my blow up today will help others as much as it helped me really narrow in my focus and understand this is serious business.
After my blown PA yesterday, I really had some trading breakthroughs in the last 24 hours:
1. Stops are mandatory: not to protect me from the market but to protect me from hope!
2. Trades that work usually work right away for me so I do not need wide stops.
3. I am a Nasdaq trader. I almost fell for the folly of I just need to change markets and then it will work out, thats nonsense!
Trading Stats for the Day
Key statistics from the day:
Total Profit/Loss: +251 Ticks
Profit factor: 99.00
Max Drawdown: 0 Ticks
Sharpe Ratio: 9.81
Sortino Ratio: 1.00
Probability ROR: 2.98%
Total Trades: 12
Winning Trades:3
Losing Trades: 0
Break-even: 9
Percent Profitable: 25.00%
Average Winner: 84 Ticks
Average Loser: -0 Ticks
RRRatio Avg: 4.0
Largest Loser:-0Ticks
Largest Winner: 7 Ticks
Average MAE: 7 Ticks
Average MFE: 39 Ticks
Average ETD: 18 Ticks _ 2023_10_25 (9_38_55 AM)
NQ (5 Minute) _ 10YR (5 Minute) 2023_10_25 (9_39_07 AM)
I also added the 10 YR yield to my chart helps me spot possible reversals and strength of trend
Today was a huge growth day, I did still snatch a couple of profits pre-maturely however I did bag a 10R trade(risked 20 ticks to make 200 Ticks) and I am realizing the importance of small losses and large wins. I want my trading to reflect small loses break even and large wins. I am starting to understand the fallacy of a high hit rate.
Trading Stats for the Day
Key statistics from the day:
Total Profit/Loss: +215 Ticks
Profit factor: 2.38
Max Drawdown: 115 Ticks
Sharpe Ratio: 9.73
Sortino Ratio: 1.00
Probability ROR: 18.31%
Total Trades: 12
Winning Trades:3
Losing Trades: 7
Break-even: 2
Percent Profitable: 25.00%
Average Winner: 124 Ticks
Average Loser: -22 Ticks
RRRatio Avg: 5.5
Largest Loser:-38Ticks
Largest Winner: 200 Ticks
Average MAE: 17 Ticks
Average MFE: 47 Ticks
Average ETD: 29 Ticks
3 Lessons of the day.
1. Sometimes I can get caught putting up "Christmas lights" during the trading day, Christmas Lights are when I have a bunch of buy and sell (stops) in the same area taking a lot of small losses that add up and still have the potential to put me on tilt. I am glad I made myself aware of it today. I will need to think of a fix for it moving forward.
2. My winners are substantially bigger than my losers which does help with my psychology throughout the trading day. Now a increase to my hit rate is something I will be working on this week.
3. It is still uncomfortable to hold the big winners, which is proof that trading is just about consistently doing the uncomfortable thing.
Note: I did at line charts of the 10 YR Yield and the 10 YR Note to the bottom of my chart and Volume profile, this is to help me with price location and strength of market.
Trading Stats for the Day
Key statistics from the day:
Total Profit/Loss: +143 Ticks
Profit factor: 1.33
Max Drawdown: -439 Ticks
Sharpe Ratio: 9.54
Sortino Ratio: 1.00
Probability ROR: 32.01%
Total Trades: 27
Winning Trades:6
Losing Trades: 21
Break-even: 0
Percent Profitable: 22.22%
Average Winner: 97 Ticks
Average Loser: -21 Ticks
RRRatio Avg: 4.64
Largest Loser:-23 Ticks
Largest Winner: 168 Ticks
Average MAE: 17 Ticks
Average MFE: 30 Ticks
Average ETD: 24 Ticks _ _ 2023_10_30 (12_29_59 PM)
Yes the issue I am having is hit rate which obviously diminishes as you look for higher RR trades. So I may find myself looking for lower RR to improve the profitability of my style. Or trade less. I do want to keep my losses small though.
As your NexusFi help assistant, I've taken a thorough look at your recent trading records. Overall, I've noticed you've made some commendable improvements in your discipline and adherence to your trading rules. Your systematic respect of the 40-tick stop loss is a testament to your regimented trading approach.
On the other hand, I've noticed some patterns that may be interfering with your trading success. For instance, in Post #892507, you mention your tendency to engage in "Christmas Light" trading, which could lead to unnecessary losses over time. It's good to see you're aware of this and committed to finding a solution.
A second area for focus is the discomfort you feel while holding big winners, which could potentially lead to premature exits from profitable trades. Emotions are normal, but they should not overshadow your trading rules. Perhaps practicing patience and developing trust in your strategy could help with this.
Another point worth addressing is the discrepancy between your planned and actual reward-to-risk ratio. In Post #892525, you mention aiming for a 10:1 or 20:1 ratio, but your stats show you're averaging a 4.64:1 ratio. This suggests there might be room for improvement in achieving your desired outcomes.
Lastly, I noticed your concern about your hit rate, as mentioned in Post #892526. While it's true that a higher hit rate might improve your profitability and psychological comfort, it's also important to remember that trading success is not just about win rate, but also about expectancy. How often you win is less important than how much you win when you're right versus how much you lose when you're wrong. Your current average loser of -21 ticks contrasted with your average winner of 97 ticks indicates that you've been doing well on this front overall.
Remember, efficient trading is about understanding your strengths and weaknesses and improving upon them. Keep refining your strategy and adhere to the principles of good risk management. And most importantly, the NexusFi community is here to offer guidance and support whenever you need it. We look forward to seeing your continued progress.
Stay diligent and good luck with your future trades.
