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Refining my STRATEGY, Eliminating FEAR and Instilling DISCIPLINE.
No my issues don't have anything to do with my capital. Not yet at least, even though that could of course become an issue in the future if I don't get a handle on things.
(Although lately I have been thinking that perhaps I am still stuck in my old mentality from several years ago when I was in fact under-capitalized and every loss would have had a significant impact on my account.)
I mostly bring up my entry signals because I am so hesitant to pull the trigger so the entries are currently very relevant to me. Next up are placement of stops, since those vary based on the setup (and are placed where the current price would invalidate an entry signal) and thus are kind of arbitrary. Uncertainty fosters hesitation.
I used to just have a set $0.16 cent stop loss (though I would usually exit before it got there) and sometimes I still adhere to that when I enter too late or if the market is moving too quickly and I don't feel like I have the time to check where exactly the stop should be placed. Alternatively, I think about not putting in the stop at all thinking I will just wing it based on how the trade develops and in SIM I occasionally do just that, which is what probably fosters fear for the next trade.
Most often though, if I enter where I should, then the placement of stops in not an issue for me. Stops usually only become an issue if I hesitate too long or for what ever reason jump in too late and then the price that would invalidate my entry signal is too far away from the current price (for my comfort).
Can you help answer these questions from other members on NexusFi?
Was at my desk hours before open, eager to practice in real-time my newly formed (ha!) "visual memory" I had attained by analyzing my charts minute by minute (and taking snapshots and notes) the day before.
Got my first signal at 7:09am PST, and before I could blink, I had missed my entry -it took off swiftly without me. I watched in disbelief as CL climbed to new highs.
Ok, I'll get the next one - wait patiently for the next signal. It came in at approx. 9:05 am. Is it a valid signal -let's see, hmm, it turned flat, let's wait a bit. Ok, it's on the move again, will it budge in the right direction. Oh no, it jumped higher. Can't enter anymore cause my stop would now have to be over $0.25 -can't have that.
Oh look how pretty the setup looks now -that is if I had entered early enough. Thanks Analysis/paralysis.
It's early, there will be more opportunities... A short signal forms on the 1 minute chart, but it is against the 5 minute chart trend. I decide to pass. Trade would have been worth it, but oh well, better not to take those kinds of risks. Next.
It's pass 11:30am -Open outcry closing time here on the West Coast. I decide to continue watching even though the volume has fizzled, since I have had no trades yet. I open up my SIM account. Signal comes in at a little past 12pm. I hesitate, fears sets in and I don't take the trade. This is on SIM!! Second opportunity knocks, I snap out of my fear, and momentarily consider entering in live instead, nahh, it's outside of my new "hours" so I enter in SIM. Jump out as soon I see the first hint of an exit signal for slightly over $250 SIM bucks. Maybe I enter the next one live? Hmm, nahh...
I am still surprised that I could not find (or actually act on) an opportunity to enter this all day trend today. Felt like I was chasing the market all day long, not being able to jump in. How strange.
Maybe I really do need to go back to trading SIM full-time for a while to work on my speed of trading reflexes. Can't believe a move like today's got away from me.
Was waiting to enter a last minute LIVE trade at the end when $105 would be taken out, but then gave up after 1:50PM ---too early!
Hmm what else can I screw up today. I was sooo pumped up since yesterday -and nothing, hesitated even while trading SIM. Nice. going. Not.
Was having problems installing a new graphics card today; Vista did not recognize it. Can't remember how many times I opened and closed that case and how many different drivers I tried. Well at least I figured out how to install Vista sp1 at last, thought it was at the very worst time possible -during trading hours. Sp1 enabled me to install it manually under a different model number. Finally got my computer up and running around 10am PST (1pm East coast time). Shoot. I missed a two point move! Yikes, I should get fired.
Goal for today:
Focus on the timely execution of my entry and exit signals -instead of on my EGO wanting to be proved right.
Due to the large morning move, I decided to trade only SIM today expecting a lot of chop. The range was unexpectedly large though.
First Trade:
Hesitated on my entry, wanting to see the next bar. This is common. Profitable trade/bad execution. Grade: D
(Exit was a non-issue).
Second Trade:
False signal. Quick exit for a $100 loss. Bad trade, perfect execution. Grade: A
Third Trade:
Slight hesitation on the entry but the market wasn't going anywhere fast, so I still got the same price as if I acted instantly. I was not too happy with the exit, but I have to remind myself that my goal is not to pick the exact tops and bottoms, but rather to ride out the trends in the middle. Overall not a bad trade -wish it was live. Grade: B
Ok, time to hit the sack.
Hope you guys caught large portions of the moves in CL and ES this morning.
As I slowly came to consciousness I realized that I was way too rested for it to be 5:45am, my intended wake up time. The alarm did not go off. Damn android. It was 7:40am (pst).
Traded in Sim today. Well, actually, only acted on one signal out of 4 total.
Trade: profitable, but late entry. If not for the hesitation, could have made double the sim bucks. Grade: C
Mistakes to avoid:
There is no need to wait for the next bar to confirm the entry signal.
For CL, even though live trading hours (coinciding with open outcry) may be only till 11:30am PST, the actual "work" day does not end till 2:15pm and thus the main focus should be on watching the market and SIM trading till then. I need all the learning opportunities I can get and realtime screen-time is beneficial.
Need to do:
Put more time into analyzing charts after-hours to gain more confidence in signals.
Am considering going back to having both the SIM and the LIVE accounts open at the same time for a while so that I force myself to always act on all entry signals by inputting trades into one or the other. Often times I intend to trade live, but then hesitate, missing out on practicing exits and setting stops by at least entering it in SIM.
There was lots of movement in CL the previous two mornings and there was a report coming out, so I knew there wasn't going to be much happening this morning -I could finally sleep-in with a clear conscience. Instead I woke up at 4AM after sleeping barely 4 hours and could not fall asleep again, so I was at my computer by 5AM.
Last several days I designated 6:00am (9 am EST) to 11:30am as my "live" trading time and 11:30 to 2:15 as sim trading time.
I made a few Sim scalps before the open outcry opening in CL since I was up so early just to practice execution.
First Signal:
A little after 8am (11am ET) I got a short signal. Decided to wait for the next bar. The next bar was kind of iffy -was too scared to act on it and did not take the signal. Grade: F
Mistakes to avoid:
Again, as I stated yesterday, there is no need to wait for the next bar to confirm the entry signal. This action unnecessarily increases my risk which makes me back out of the trade.
Since I am not in the habit of acting on my signals in live trading yet, always have the SIM account open so you can enter the trade there if you decide to back out of live trading it. This will allow me to at least practice setting the stops and practicing acting on exit signals.
Second Signal:
Was not focused (reading something) and somehow managed to miss the short signal that came in after 9:45am. Considered jumping in late but could not make up my mind.
My trading rules state that if there is lots of volume and the market is moving quickly I am allowed to jump in even if I am late and therefore can no longer set a proper (pattern based) stop -I just have to set a fixed dollar stop, like 16 or 21 ticks away from entry. The market moved further and further away from me as I deliberated whether to jump in or not. The decision was made for me by my inaction. Grade: F
There was nothing much happening for the next hour and I became increasingly sleepy. By the time I got my next entry signal at close to 11am (2pm ET) I had fallen asleep on my office sofa. Big fat F.
NEED TO DO:
Fix my sleeping schedule. There was no reason for me to be getting up at 4 am, especially considering I had only been sleeping for around 3 1/2 hours by then. Not sure exactly how to go about fixing this issue yet, but need to consider my options or seriously consider trading something on a different time-frame.
By 7:30am I had lost and then won back $300 in 6 round trip trades. Relieved I decided to continue in my hectic scalping instead of taking a break. By 10:20am I was down about $1500. Boy was I glad I traded Sim today. Can't remember the last time I racked up this much in losses -live OR sim.
Then the market trend in CL reversed and I got a signal to enter long around 10:25am. I minimized the SIM and getting a signal after signal I started chasing the market in my Live account. I moved my entry limit order about 3 times with the market blowing past each time. Finally I gave up as I was afraid that the trend might now reverse just as quickly as it developed. I also wasn't sure about stop placement anymore since the wicks on those candles were getting so large and the price was climbing so fast. Remembering all the red in my SIM I entered instead in that account and recovered more than half of my sim losses.
Although I was disappointed in having taken so many off-plan scalps and losing on most of them I actually felt quite encouraged today. As I said I was down roughly $1500 -normally that would be very discouraging to say the least (and would have me running back to the drawing board). However, I also know that I was very close to recovering that loss in the same day which is not expected nor necessary. Even a loss that is close to 3 x my daily limit is still not a disaster -it can be dealt with; it is nothing to fear, it is recoverable.
On the other hand though, I still can't believe I did not get in on that 10:25am (1:30pm Eastern Time) long signal. I am wondering what caused me to not get in on that trade live. Was I not focused enough; would I have gotten in if I was paying better attention earlier? Do I need faster reflexes? Hmm, now I am thinking I should add in some market buttons for when I want to get in (or out) quickly and the price is moving too fast. It's funny I was just considering doing this yesterday, but I dismissed the idea thinking why would I ever want to risk getting in on such a quickly moving market wherein I can't click on the price fast enough.
Well, I was not too happy about it being so close to a weekend again, but perhaps it will be helpful to have some time to go over all of my 19 (!! ) trades today with a magnifying glass.
I notice you classify yourself as a "Beginner". I would strongly recommend against trading CL. You are likely to have much greater success with a more sensible instrument like YM, TF or 6E.
I have a question for you, what do you like in this bar type (Heiken Ashi). I have tried this bar type many times but it seems to filter out so many details i can't get used to it. Just curious.
In sim today again. Only got one good trade for 25 ticks.
Kept waiting for a good signal that never came. Got several third-level ones, but am very surprised that I never got a good signal for the 8:15-9:30 and the 11:15-2pm moves that happened today. Both were a little over 60 tick moves.
Also was disappointed with my $250 sim bucks, until I realized that in real money that is nothing to complain about if I was able to make that consistently on a daily basis.
When I switched over to futures, I was looking to replace trading daily in-play stocks so I wanted an instrument with lots of movement and volume. I wanted to transfer over my stock trading strategy.
When I first started to watch CL back in September of last year, it looked like the ideal instrument. I paper traded till November (and took most of December off) and did quite well.
Of course the last several weeks have been nothing like the first few months I had been watching CL.
I was looking at 6E briefly last week -it seemed pretty slow. I'll take a look at YM and TF in the next several weeks, thanks.
Honestly, I don't know if the instrument is to blame here; it is more likely my lack of trust in my trading system. I should probably go back to paper trading to practice acting on my signals more rapidly and to assure myself that my (stock trading) system is in fact appropriate for futures trading and that it is profitable overall even though it does not catch every single move on time.
) trades today with a magnifying glass.
