Hello futures.io (formerly BMT) Traders and welcome to my first journal entry. This first post will describe what you can expect from my journal.
MOTIVATION
My trading experience consists entirely of position trading off of daily charts, not for income but for long-term capital appreciation. I've decided to take a crack at intraday trading with the goal of supplementing my income. My journal will document the learning process, first in simulation, and then hopefully live.
I'm not going to focus on what instrument I'm trading, what my charts look like, or what my ruleset is. Instead I'm going to post the analysis that frames my trading before market open, trade statistics for each day, my evaluation of my trading, and the adjustments I make to my trading plan based on the statistics I track.
If all goes well this journal will document the process of becoming a profitable trader sub specie aeterni.
TRACKING TRADES
Here's the heading for each of the columns in my spreadsheet, and what values you can expect to see in each column when I post a screenshot of that spreadsheet:
Expectation: If I see something on the daily chart I will note it. Possible entries in this column are:
1. Range (I expect a tight range-bound day)
2. Long
3. Short
4. Breakout (no directional bias)
5. None
My goal in tracking my expectation for the day is to determine if I trade more effectively on certain types of trading days, and to track my ability to frame my intraday trading intelligently. I am open to the possibility that having an expectation for the day will hurt more than it helps.
Date & Time: Self-explanatory
Direction: This it the direction of the trade taken, which is allowed to cut against any directional bias for the day.
Setup: I have two sets of entry rules, so you will see either (1) or (2) in this column.
Now, to explain the next few columns I need to describe my trade management. I will be trading two positions per trade, each with a separate target and stop. So there are four possibilities for each trade:
i. Full stop out. (Both positions hit their initial stop loss)
ii. The first position is stopped, but the second position is exited in profit.
iii. First target is hit, the stop on the second position is moved and is then stopped out.
iv. First target is hit, second position is taken off according to the exit rules for profit taking.
MAE: This column represents MAE from entry and before the first target is hit. If I take a full stop, I will continue to count MAE entry until price reaches the first target. I will let this number max out at 10 even though both positions will be stopped out before then.
The purpose of tracking MAE is to discover where to put my initial stops. I'm stopping at 10 because that represents the maximum amount of risk I am willing to carry per trade.
MAE after T1: If the first target is hit I will count the MAE from that moment until the second position is taken off. The stop on the second position will be moved when the first target is hit. If that second position is stopped out I will continue to count MAE after T1 until price reaches the initial stop on the second position or the exit rules would've triggered.
The purpose of tracking MAE after T1 is to get a sense for where my stop on the second position should be after the first target is hit.
MAE after S1: If the first position is stopped out I will count MAE from that moment until the second position is stopped out. I will count this number until price moves to the limit of MAE after entry.
MFE / MFE after T1 / MFE after S1: MFE will be tracked in the same way, but what I hope to learn from tracking MFE is where my initial targets should be, under what conditions I should hold the second position after a stop out, and whether I should move the target on my second position after the first position is stopped out.
Exit: I will code the exit based on the four possibilities described above: