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Broker: Sierra Chart, Sierra Chart Data Feed, Topsteptrader/Rithmic
Trading: NQ
Posts: 12 since Jan 2011
Thanks Given: 7
Thanks Received: 22
11/11/14
Today I am resetting a $100K TopstepTrader Combine.
I put on a bright green shirt and bright green underwear to celebrate this latest turning point. This turning point is about risk-control and keeping an acceptable K ratio.
The only thing we can control as traders is our risk. If we trade out of control, then we cannot perform proper risk-management. This is known as the DIY-LOBOTOMY and shared by Dr. Alan Watkins in his 2 TED Talks called “ Being Brilliant Every Day”. Physiology and self-awareness of physiology can keep us focused and trading with proper risk-control. Thanks to Viraj for posting this video in TSTSquawk and to the company that makes the heart-rate watch that I’m now wearing. I have discovered that when my heart-rate is above 90bpm, I cannot focus on a single trade idea, and repeatedly throw down trades in both directions. I HAVE DECIDED TO STOP TRADING WHEN MY HEART RATE IS ABOVE 90BPM.
There are 390 minutes between 8:30am and 3:00pm. Why try to put on all of your trades in the same 15 minutes? If you are wrong 2-3 times in the same location and getting slapped around… STOP and REFLECT on the trade. You are beginning to lose focus on the original trade-idea. WAIT and put on a new trade in a new trade location.
Today is Veterans Day and a bank holiday with no USD market news. My expectation was for a rotational day that stayed inside the previous day high/low with no wild swings.
Something odd happened. I shared my trading plan in a live-trading-room where I teach. The plan called to buy /NQ below value for a run back to the middle. One of the students remarked that the entry location looked “high”.
Eventually, price moved lower to my level, entered the trade location, reversed, and went on to make new highs at the end of the day. If I had bought /NQ at this trade location, and it kept falling to the area pointed out by my student, I would have been wrong. All I can figure out is that my ego protected itself from being wrong. This bias created a funk in my head that I could not shake. I did not take any trades today.
My screens/alerts are setup for the Nasdaq 100. I like to trade the /NQ because Treydog999 confirmed that the NYSE-TICK is correlated to the E-Mini indexes beyond a random chance. Having the NYSE-TICK on-screen while trading is something I consider an edge. I like to watch for Tick Divergences as spelled out in John Carters book Mastering The Trade. The most influential trader I've studied with is Rob Hoffman (yes I was in the room during the big drawdown) and the most influential videos came from Charles Cochran here: CN Futures Trading Market Profile Part 1 Market Profile Part 2 Market Profile Part 3
I changed my mind to trade bigger size. I have been trading the $100K combine for some time now. My problem has not been massive losing trades, rather, many back-to-back small stopouts that grind the account to dust. When you trade small size and dig yourself into a hole, it is very difficult to get out of that hole with the same small size. I traded 1 lots and 2 lots for a very long time and to earn the kind of money I want, I made the decision to get comfortable trading size. Over the past several months, I've been trading 3-6 contracts and in the past 2 weeks, I've even thrown down a 9 lot on 2 occasions that worked out just fine. I'm going to start out slow and conservative until the account balance builds. Then I'll increase the leverage accordingly. I just learned last week that funded traders start out with a 2 lot... very disheartening to learn.
Why have I been struggling? Because I could not set firm rules for myself to stop trading and I would go into a tailspin. As of today, my primary focus is stopping when I'm wrong and waiting for another setup... that's it. That is how I'm going to pass this Combine. Kam Dhadwar spoke at TST recently and it resonated. Just like Alan Watkins said, no amount of self-talk will make you change your behavior. And now that I know its physiology, I have accepted that, and have backed away from the screen with no questions when my heart-rate runs high. Remember to breathe
A friend of mine referred me to a book called Turning Pro by Steven Pressfield. This book is not about trading. It is about EVERYTHING in your life. If you want to do something different, all you have to do is change your mind. Allow me to quote...
TURNING PRO IS FREE, BUT IT’S NOT EASY.
You don't need to take a course or buy a product. All you have to do is change your mind.
When we turn pro, we give up a life that we may have become extremely comfortable with. We give up a self that we have come to identify with and to call our own.
TURNING PRO IS FREE, BUT IT DEMANDS SACRIFICE.
The passage from amateur to professional is often achieved via an interior odyssey whose trials are survived only at great cost, emotionally, psychologically and spiritually. We pass through a membrane when we turn pro. It's messy and it's scary. We tread in blood when we turn pro.
WHAT WE GET WHEN WE TURN PRO.
What we get when we turn pro is we find our power. We find our will and our voice and we find our self-respect. We become who we always were but had, until then, been afraid to embrace and live out.
Broker: Sierra Chart, Sierra Chart Data Feed, Topsteptrader/Rithmic
Trading: NQ
Posts: 12 since Jan 2011
Thanks Given: 7
Thanks Received: 22
I have 4 displays attached to a Core i7 computer. This is my main display. The focus is primarily on ask/bid delta. With the help of Sierra Chart spreadsheets and the user community at the Sierra Chart support board, I've been able to implement my own version of Prometheus. i.e. it displays the net change in ask/bid delta after a trade is opened and gives an audio alert when delta moves +- 200, for or against, my position. The thread for this code is over here:
Broker: Sierra Chart, Sierra Chart Data Feed, Topsteptrader/Rithmic
Trading: NQ
Posts: 12 since Jan 2011
Thanks Given: 7
Thanks Received: 22
Day 2 Trade 1:
I spotted Settlement as a target and drew a line 20t below Settlement and determined that would be my long entry. I entered the trade at 4177.00 @ 09:03:26 and immediately took 12t of heat with no mfe. The bid dropped out from under me, but the sellers did not come in. Prometheus kept me in the trade because it showed there were only -45 deltas against the position. I will punch out of the trade at -200 deltas against me as a mechanical rule. As the trade came back to my entry I added 1 at 4176.75 @ 09:05:32. I have heard Hoag say that -1t or -2t is acceptable for an add and is not considered adding to a loser. I’m sticking with it. I took off both contracts in front of Settlement at 4182.00 @ 09:08:30 and netted +40t all-in. <see attached> My heart rate went over 100 on this trade. I must have been holding my breath. I knew to stop trading after this one and take a break.
Day 2 Trade 2:
This trade was a jump the creek on Monday’s Cash Session High. We got above 4188.00 on strength to 4191.25 and pulled back to 4188.00. I waited for price to stop going down, and for the deltas to turn up. When the deltas went purple, and the price chart ticked purple, I did a buy limit on the bid and got filled at 4189.25 @ 11:17:05 CST. I had a 20t target and a 30t catastrophic stop. I took 5t of heat before even getting 1t of mfe. No big deal. However, 5 minutes passed, and then price moved +5t in my favor. The clock was still ticking and I thought, man this better start moving or I’m out. I moved the stop to Entry+1 and scratched it out at 4189.50 11:24:01 CST. Time to sit on hands and reflect. <see attachment>
Day 2 Trade 3:
This trade entry was very clean and precise with only 1t of heat. I entered after a fast move of increasing delta and then waited for a pullback in the NYSE-TICK. The entry was a buy limit 1 @ 4188.25 14:12:46 CST. Hmmm, same as the 2nd trade. The clock was still ticking and I thought, man this better start moving or I’m out. I moved the stop to Entry+1 and scratched it out at 4188.50 14:16:35 CST. <see attachment> Price went on to hit my target of 4193.00 without going any further than my stop.
The 3rd trade was in a good location and was not a bottom catch. I moved the stop up because a) I already had a winning day, b) I was unwilling to accept the risk of a full stop and c) I’m used to doing that because historically, I’ve been chasing bottoms which required me to keep a tight stop. I suspect I’ll learn to leave my stop in place now that I’m trading in better locations. It will take some time to unlearn the behavior.
Summary: Ended up +$200.28 all in. Entry Mistakes: None All according to plan, no impulsive trades. Exit Mistakes: Some. Unwilling to accept the risk. Wanted to keep a winning day.
Broker: Sierra Chart, Sierra Chart Data Feed, Topsteptrader/Rithmic
Trading: NQ
Posts: 12 since Jan 2011
Thanks Given: 7
Thanks Received: 22
Summary: 2-0-0 +22t $110.28 all-in
Well rested and well fed. Opened the charts at 7am for an 8:30am start (CST)
Day 3 Trade 1:
The first trade was a robot long setup. I traded a 1 lot with entry at 4208.75 @ 8:44:10 and took 2t of heat. Exit at 4212.00 @ 8:45:26
I have programmed Sierra Charts using my own indicators and robot setups. In the attached image, you can see the purple box in the bottom left corner of the price window. That is my key to watch for a long setup. I waited for bid to hold and for the colors of both price and delta to transition from white to purple.
I'm trading small size because I want to get my account balance up before throwing down a lot of risk. All of the prior combines went negative quickly after being started and *never* got back to scratch.
After this trade, I had a bout of euphoria and decided to just sit it out for a while. Euphoria will cause just as many problems as fear.
One of my trading buddies logged into the room and we discussed charts. I was only looking for longs in NQ today and he said his charts were beginning to roll-over and indicate short. Well, that was it for me. I've had many trading buddies in the past and I used to fade them and keep doing my own thing. That never really panned out so good. I turned off my monitors and came back in the afternoon.
Day 3 Trade 2: "The Reprieve"
At 1:47pm cst the delta came out of NQ. At 1:57pm the delta was still selling hard and price was hovering above the 1m opening range. Delta pushed again and price fell 6t to the Overnight Volume Area High, and stopped 2 ticks above the 8:30am open. WELL BID WAS HOLDING and whoosh, up we went blowing out the short stops.
I watched price run higher until it hit 4211 at 2:07pm.
I took a 3 lot long jump the creek trade on the overnight point of control (tpo midpoint). The ladder looked jumpy and buyers were coming back strong into the delta. Entry was 4210.50 @ 2:10:45 cst. I got 2t of mfe and ultimately took 99t of heat. Entry mistakes: none. Exit mistakes: yes. I did not punch out at -200 delta as I said. My ego did not want to take a losing trade. I watched price drop all the way back to the opening range high with my 3 lot and I thought, don't punch out here, you've punched out on lows before only to get a bounce. This is a huge mistake for me. I almost always punch out of trades that do not move in my favor rather quickly. What is the point? So anyway I've got some reflecting to do. This was the most heat I've taken since I can remember. The thoughts running through my head were about everything except the trade. "what will my peers think?" "I'll have to post an 'expense' (loss) in the big mikes blog." At this moment, as I write this, I'm questioning whether this blog was the right thing to do. Sorry gang. The moment I'm trading for the sake of what others think will be my downfall. I'll see what I can do to keep this thread going.
Broker: Sierra Chart, Sierra Chart Data Feed, Topsteptrader/Rithmic
Trading: NQ
Posts: 12 since Jan 2011
Thanks Given: 7
Thanks Received: 22
Summary: 2-3-2 -9t -$85.00 all-in
Everything was going fine today. I made 4 small trades in NQ and was up 16t including 1 scratch and my first loss in this combine for -9t.
I recall seeing gold down -$10 in the morning, and around 11:15am cst I saw that it was suddenly up $25. I switched charts to GC and took long trade. -8t. Then I took another long with a 2 lot and had 25t of mfe in a hurry. I moved the stop to entry and scratched it out. Then I took another -8t hit.
So what is the milestone you ask?
I threw my hands in the air and shutdown the computer.
I have NEVER shutdown and stopped trading with a loss of -$164.
This Combine is about stopping when I'm wrong, and 3 trades back to back in the same spot is how my tailspins begin. It was very annoying to shutdown, but I did it. As I write this, I'm still annoyed and it's Sunday night - Ha!
Keep the focus, keep making good trades, and pass this combine by eliminating mistakes.
I was writing my journal last night around midnight and I was documenting the -16t expense in GC and how I had expertly walked away from the computer.
Then I noticed that gold was up $3.00 and from the back of my brain came Hubert's Good Night Gold trade. I don't even know the details of how he does this trade, but I started buying what appeared to be the 1st pullback after the run up. Well, to make a sad story short, I dug myself into a deep hole in GC.
This will clearly have to be corrected before the combine will pass the smell test. At this point I'm not angry, just annoyed. I have zero(0) doubt about my skills as a trader so I can get it back. I didn't feel anxious so it did not get shut down. Each trade was approximately an -8t stopout. What is the takeaway? That -8t is not a reasonable stop in GC.
I moved on to NQ at 08:30am. The easiest trade I've ever put on took place at 10:35:47 in NQ at 4193.50. Hoag calls this the cheap trade. I was risking -10t and only took 2t of heat. I came back from the kitchen to see price making a new low while delta was making a higher low. Price moves lower to shut off selling and this was perfect timing to be back in the hotseat. I put down my bowl of oatmeal threw the trade on with no hesitation. This trade was so intuitive, so easy. Held the trade for 50 minutes and had plenty of time to put away the oatmeal.
It takes a lot of screen time to identify setups in real-time. I will have been trading every day for 4 years in January. Here is what I saw.
1. Delta divergence with aggressive Ask Volume
2. The 10:30am E period was crossing back above the D period low (4193.00).
3. The low was Thursday's cash session low ( I carry forward 5 lows and 5 highs on the charts)
4. We were inside of Thursday's buying tail
5. We were just below Friday's buying tail
<see attached>
I'm pleased with how the NQ trading went, still annoyed with GC.
Thank you for the kind remarks iqgod, it will help me going forward. I collect nuggets like that and I'll remember what you've said.
