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Refining my STRATEGY, Eliminating FEAR and Instilling DISCIPLINE.
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Refining my STRATEGY, Eliminating FEAR and Instilling DISCIPLINE.

  #1 (permalink)
Trading for Fun
BC, Canada
 
Futures Experience: Beginner
Platform: TWS, QuoteTracker
Favorite Futures: CL, ES
 
TriggerShy's Avatar
 
Posts: 81 since Feb 2011
Thanks: 116 given, 126 received

Refining my STRATEGY, Eliminating FEAR and Instilling DISCIPLINE.

I switched from Stocks to Futures, specifically the ES and CL, in September, 2010.

In the last two weeks or so have decided to narrow my focus to only trading the CL, at least for now.
(For some reason though, I have left ES on my screen...)


Reasons for Starting this Journal:
Lately, I have become very hesitant in entering (live) trades and have started to cherry pick my entry signals or simply not acting on any signals at all.

Not sure exactly where this paralyzing fear is coming from; my losses have never been over $400, but perhaps because they have gone over my stop limits (usually $$100 to $200) I have become trigger shy (hence my name here ). This is the main reason why I am starting this journal. I want to refine my strategy, eliminate the fear I have and instill necessary discipline. I also want to win that $600 dollar Tablet!! I am hoping that a public journal will provide some external accountability and help me advance as a trader. If I am lucky, other members will shed some light on my lack of progress in trading futures, despite having a good (enough) strategy.


Journal Format:
For the most part, this journal will be similar to my old private stock journal which included the following headings:

- Feelings about trading today
- Mistakes to avoid (as in what I have learned today)
- Need to do (things I should work on implementing)

I will list the Profit/Loss for the day, but will most likely only describe one trade in detail.

I won't be revealing my whole strategy here, this journal is mostly about whether I followed my plan or not and if I acted on my signals the way I should have.


Platforms and Charts:
I use Quote Tracker for my charts and have the following charts open at all times:

15min. "Trend" chart
5min. "Signal" chart
1min. "Timing" chart

IB's TWS: BookTrader is used for order entry.


Time line:
The goal is to post my daily analysis here for the next five weeks, from Monday, Feb. 28 - Friday, April 1st, 2011, after which I will evaluate the usefulness of keeping a public journal and will decide whether I will continue or not.

Expected Outcomes:
In addition to refining my strategy and attaining the ability to pull the trigger on every single valid signal, I would also like to use this journal to push my self to finally create some trading related tasks that I have been procrastinating on such as, a daily mental rehearsal, a "good morning" letter/reminder, updating my Trading Log and Plan (from Stocks).

I of course welcome feedback, criticism and suggestions from all of you. Welcome to my Journal to consistent profitability.

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  #2 (permalink)
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  #3 (permalink)
Trading for Fun
BC, Canada
 
Futures Experience: Beginner
Platform: TWS, QuoteTracker
Favorite Futures: CL, ES
 
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Posts: 81 since Feb 2011
Thanks: 116 given, 126 received

Trading Journal for Monday, February 28, 2011


No trades today, even though I did have a few entry signals.


A very common issue came up again today. I am a night owl and I (attempt to?!) trade from the West Coast. You know where I am going with this. Went to bed at midnight and instead of sleeping decided to read some threads here at Big Mike's Trading Forum from my Android. Did not log a single minute of sleep. Got out of bed at 5:30AM PST to get ready for the Cbot open.


Feeling bored, a little after 7am PST I decided to modify my charts (add another qualifier) to remove some signals I knew to be false. Since I was already at it, I thought the background colour needed changing... Needless to say, I ended up missing a valid signal (although it was 2nd rate). I saw it, but did not feel comfortable jumping in rushed.


I decided not to act on my second signal because it was again a second rate one and it was getting close to lunch time on the East, my break time (duh!). In retrospect, considering I hadn't taken a single trade yet, I should have given it a go. I believe this decision was really a result of my lack of sleep.


My main signal came a little after 11am as I was falling asleep on the sofa in my office... Major fail.





Mistakes to avoid:
  • Absolutely no tinkering with charts during trading hours.
Next time, I need to make a note of changes necessary and then forget about until after I stop trading. I have so much common-sense after hours :-)


Often times I do allow myself to work on other tasks while watching the market when there is sideways action, however, those activities take place in other programs and I can easily minimize them when a signal comes in. Tinkering with charts should not be one of those allowed activities.


Cost of error: Forfeited 35 Ticks of potential profit.
  • Not taking the opportunity to practise trading by using my Sim account when I am too tired to trade live. By the time my 3rd signal came in I decided I was too tired to trade and that I would just watch.
Cost of error: Forfeited 20 Ticks and/or learning opportunity.
  • Sleeping during trading hours. Major no-no. (Unless I traded over-night). Naps, if absolutely necessary, should only be taken between 8:45am to 10:30am PST.
Cost of error: 90 Ticks
Need to do:
Obviously, I need to work on my sleeping schedule AGAIN. I can usually maintain a 9pm to bed 5:30am rise for a maximum of a couple of weeks before I screw it up by staying up too late or not sleeping at all. Then it usually takes me several days to fix.


I should implement a rule that if I am up after 12am PST that I should be at least watching the market (till 9AM at the latest).


Ok, so a very embarrassing first journal entry, what can I say. I have lot's to work on.

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Refining my STRATEGY, Eliminating FEAR and Instilling DISCIPLINE.-mon-feb-28-2011.png  
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  #4 (permalink)
Trading for Fun
BC, Canada
 
Futures Experience: Beginner
Platform: TWS, QuoteTracker
Favorite Futures: CL, ES
 
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Posts: 81 since Feb 2011
Thanks: 116 given, 126 received

Keeping an online journal

Honestly, I thought about starting an on-line journal many times before, but never have despite being a "lurker" at another trading site for over 7 years. I finally started one here, even though I only found this site several days ago because:
  • I desperately need to overcome my fear of pulling the trigger (and do what ever that entails doing)
  • any criticism at Big Mike's Trading forum is constructive since flaming wars are not tolerated
  • I am finally ready to be uncomfortable in order to improve my performance
  • the survey that Shodson posted (in the Psychology thread, sorry I had to remove the link since I am new here) linked keeping a journal (or post trade analysis) with increased profitability
  • the contest requirement of posting every day will enforce discipline and the prize provides motivation.
I have never kept a journal consistently for a whole month, day in and day out, so I am hoping that I will find the time to do this on a daily basis. I'll probably try taking notes during market hours instead of doing a big post at the end of the day. This last journal entry took me quite a while to compile so hopefully I'll find a way to speed things up for myself.

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  #5 (permalink)
Trading for Fun
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Journal entry for Tuesday, March 1, 2011

Boy did I pick a day to not watch ES!!

I used a strange technique to force myself to pull the trigger today. Can't remember the last time I did this, maybe never. Traded off only the BookTrader, without a single chart open!! Yikes.

First trade was a loss -which was good I guess because that always makes me jump right back in wanting my money back.

Still sleepy from yesterday, I stopped trading almost as soon as I made my money back and went to take a nap, setting the alarm for 12pm PST. Fearing losing what little I made today, I paper traded the CL run up to $100.60 (while watching the charts this time).

Considering I actually took some trades today, I was fairly happy with today, however as I read somewhere, "a trader afraid of losses is like a doctor that faints at the sight of blood."


Mistakes to avoid:
Don't be overprotective of realized profits when a valid trade signal comes in.

I lost out on almost $600 dollars worth of profit because I was afraid to lose the hundred something dollars that I already had



Today's P/L: +$126


Hope you ES traders made a killing today.

Attached Thumbnails
Refining my STRATEGY, Eliminating FEAR and Instilling DISCIPLINE.-tue-mar-1-2011.png  

Last edited by TriggerShy; March 2nd, 2011 at 04:59 AM. Reason: misquote
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  #6 (permalink)
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  #7 (permalink)
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...What I learned from trading yesterday.

I was so tired when I was writing up yesterday's summary at night that I could not remember the main thing I learned and wanted to document:

Every time I entered a position yesterday, it went against me almost instantly, which influenced my profit target objectives. When the price started coming back to my entry point I was so glad to be out of red that I left my (low) profit target alone -scared that price might turn back down again and then I wont even have that small profit. My initial expectations from the trade when I initially decided to get in would materialized the second my target stop would take me out of the trade, leaving about $100 to $300 on the table.


Mistakes to avoid:
As long as the signal is valid and the charts continue to support an entry, don't set (or lower existing) profit targets based on minor fluctuations.

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  #8 (permalink)
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Journal entry for Wednesday, March 2nd, 2011

The last few weeks when I have been pulling the trigger very rarely and not even paper trading (just passively watching the CL and ES hoping to jump in) I would always look over the 5min. and 15min. chart at the end of the day and marvel at just how easy it all seemed -why didn't I act on these very straight forward signals?

Today, although I again did not have the guts to pull the trigger, I at least SIM traded actively and realized how difficult it is to stick to the 5 minute signals when also watching the 1 min. chart. On a day like today, my trading strategy would call to enter around 8am PST and hold till closing time. Of course, that is not what did, instead I jumped out several times -at any hint of a downturn really.


Based on today's SIM P/L I would say that I am ok with that, however considering that I am afraid to pull the trigger, would it not make more sense to not have to constantly re-enter the market? Is my stress coming from having to jump in and out or am I more stressed out when trying to simply hold a position amidst fluctuations? I am not sure... However, I do have a tendency to overtrade when paper trading as opposed to live trading.
When I used to Sim trade actively I would sometimes have 20 to 25 trades a day and then when I would trade live I would only aim for 3 to 5 trades total.

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Refining my STRATEGY, Eliminating FEAR and Instilling DISCIPLINE.-wed-mar-2-2011.png  
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  #9 (permalink)
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Favorite Futures: CL, ES
 
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Posts: 81 since Feb 2011
Thanks: 116 given, 126 received

Journal entry for Thursday, March 3rd, 2011

Today I was trying hard to trade AS IF I was trading live (for real) even though I was using my SIM account. If the number of trades is any indication, I believe I traded as close to my typical live trading as I could have. Only made 2 trades today, although it should have been 3 or even 4 -I missed the last signal.


Mistakes to avoid:

If a entry signal is missed and the trade takes off without you, DO NOT leave the computer. There might still be other opportunities to enter. I missed getting in on the second leg of the run because I left to make myself a snack

Cost of error: Had I been trading live today, that sandwich would have cost me 500 bucks!!

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  #10 (permalink)
Trading for Fun
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Posts: 81 since Feb 2011
Thanks: 116 given, 126 received

Why am I so trigger shy and what to do about it


This morning I was (again ) contemplating about what it is exactly that has made me so trigger shy.

I have developed my trading strategy years ago and even though I haven't back-tested it properly (don't know how) I have applied it to historical data and most importantly have tested it by watching it "perform" in real time for long enough (several years actually) to know that it is profitable overall. I thought I had stopped trying to create the "perfect" strategy long ago and had accepted that it does not exist and that I in fact don't even need my strategy to be perfect.

I know my fear of acting on entry signals has a lot to do with my erroneous belief that any losing trade will have serious repercussions. In other words, emotionally not accepting the potential loss of any one trade. (Logically I know that a 1% loss of my account will not have any major impacts). My unjustified need to "be right" on every single trade is what paralyzes me and prevents me from taking live trades since I realize the unlikelihood of being able to pick only the winning signals/trades.

... but I try nevertheless. One of my biggest mistakes is that I when I trade with my live (real cash) account I never take ALL of the signals. This works against me of course, because by trying to cherry pick the signals I end up choosing the false signals and the secondary or tertiary signals. So I end up missing out on the big runners because by the time one of the first level signals comes in I am too afraid to place another trade (because I am either protecting the small profit I managed to make with bad entries or don't want to add to my already existing losses).

That is usually when I go back to SIM trading to regain my confidence, which never lasts long because the profitability of my system is confirmed very quickly. (Just like today, I felt ready to go to live trading after seeing all the paper money I made, haha). Not wanting to delay making real profits any longer I go back to live trading and after the very first trade I start cherry picking my signals and immediately thereafter become extremely fearful of pulling the trigger, stop trading completely and just watch the market for days, hoping to jump in... the cycle continues.

So how do I stop this cycle? Am trying to decide if I should continue to somehow force myself to trade live as I have been trying to do these last couple of months or instead commit to SIM trading for at least a whole month or more. As I mentioned before, I often have a problem keeping my SIM trading true to my real live trading tendencies. I know that more than anything I need to work on my mental preparedness to trade live -but how do I do that? How do I convince my fearful mind that taking several 1% losses per day will not have any serious consequences? Not yet, that is at least...


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