results for the second two weeks of November

results for 11/18/13 – 11/22/13:

observations:

Tuesday’s results were unusually poor.  I chose to give numerous tries to my new way of approaching entries.  As it turned out I was totally out of sync and my trading amounted to donations to the market.  The 7  losers were taken consciously, though, and I did examine all my trades and saw clearly why they did not work afterwards.  It seemed to give me some good lessons about how to actually implement my new strategy.

The results the rest of the week support this theory.  I only had one full stop-out over the next 24 trades.  My trading was excellent in general.  The main shortcoming was scratching numerous trades that wound up working.  But the win rate was very high.

goals:

Next week I intend to continue doing what was working so well on Wed/Thu/Fri last week.  Specifically, following the trade-stalking process and taking trades that go WITH a shift in momentum rather than trying to anticipate the shift.  I will also work on scratching fewer trades unnecessarily.

expectancy baseline = .26                      expectancy goal for next week = 1.25 per trade

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results for 11/25/13 -11/28/13:

observations:

i didn’t achieve my goals for the week.  i only had one trade achieve full targets.

my error trades negated most of my expectancy goal.

I am scratching trades too aggressively.  Too often I am allowing the “final pullback” to shake me out just before the move actually works out.  I am reading the tape too closely after my entry.  Eventually, this is where I should be campaigning to reduce risk,  but for now I need to improve on taking decent entries and letting the trades play out.

my new way of reading/entering the market does seem to have potential… the key is improving my execution.

goals for next week:

expectancy per trade = 1

0 poor scratches

all trades according to my process

 

 

Results for first two weeks of November

results for the first week of November:

observations:

when it gets toward the end of a session or the end of a week I am much more likely to become impatient and revert to poor trading habits

a few times this week I used a scaling-in entry to avoid a stop out and turn the trade into a winner

too often my stop-out is at or near the best entry for the rotation… I need to keep learning how to avoid these poorer trades and be more selective for these more ideal entries

it is very helpful to be fully prepared for trading the Euro by 7am CT

goals for next week:

expectancy = 1

be aware when I am becoming tired or impatient and avoid the habit to just “start swinging”

focus on entering WITH a shift in momentum rather than trying to catch the high or low tick

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results for second week of November:

observations:

I reached my goals for the week.  I had to attend to other business on Thursday and Friday so it was a short week.  Two of my stop-outs were trades anticipating the break of a poor high and I got caught in the noise.  Also, two of my stop-outs were 2nd attempts after a first stop-out.  I need to reduce those.  My main observation this week is that my losers tend to be with two contracts but my winners are often just with one.  This is partly due to the fact that I am experimenting with a different style of entering and taking more one-lots to practice.  This fact has skewed my expectancy upward this week.  I can see that taking all of my trades with two contracts would greatly improve my final results even if I changed nothing else in my performance.  This will be my primary focus next week.

goals for next week :

expectancy = 1

all trades with at least two contracts

continue to focus on entering WITH the shift in momentum ~ not anticipating it

trading review: error trades

Recently I have been focusing more on my expectancy.  This is an excellent metric because it gets to the heart of one’s trading performance.  A while back I had several weeks when I achieved a slightly positive expectancy and my next goal was trading with an expectancy of 1 tick per trade.  My result was actually -1 that week (2 weeks ago) and this past week my result was -1.6.  Obviously, this is not the trend I had hoped for, so I must ask myself, “what is going on here?”

In examining my trade record it is clear that the primary issue negatively impacting my expectancy is the error trades that I have been making surprisingly regularly.  There are two main errors that seem to be consistent.  The first being trades taken shortly before a known # release.  The second being the general category of “monkey trades”, which includes impulse trades, revenge trades, boredom trades, you know…

I examined the feelings that usually surround these trades, and they tend to be feelings of not wanting to miss out on an opportunity, feelings that I need to “Just Go For It!” in order to “make it happen” and feelings of disappointment and revenge.  Of course, when I am of a level head I do not believe that these are desirable impulses upon which to trade, but my trading performance continually reveals that on some powerful level I DO actually believe this is how I should be trading.

I know that our beliefs determine most everything in our lives.  I intend to establish my beliefs about how I want to be trading with a deep enough foundation so that they are not washed away by the shifting sands of my emotions or the raging tides of the market.  In the future I will not only track my error trades but I will continue to examine the underlying beliefs that they reveal.

I will describe here with a few references what I believe to be the proper and desirable mindset for my trading.  I will make it a habit to review this post to remind myself and help me internalize the concepts until I can see clear evidence in my trading performance that this mindset has become something in which I truly believe all the way to my core.

It is like what Bagger Vance describes as “seeing the field”…

It is like the way Evan Longoria prepares to take the next pitch…

It is like in the book/film, Moneyball when Peter Brand realizes that the mediocre pitches are just not worth swinging at.  The players had to develop a new belief that it was OK to not swing at pitches.  They also built a new belief that they could increase their odds of winning by walking to 1st base more often which is in direct opposition to the standard belief that you’ve got to get hits to win games.  In this same way, my trading needs to embrace one of the biggest advantages I have in the market, which is the luxury to be in or out of the market whenever and for however long I choose.  I know one pitch I want to stop swinging at completely, the pre-# sucker-pitch.  Eliminating this one mistake would make a significant impact on my expectancy.

It is like the way of the Jedi in Star Wars…

It is like Eckhart Tolle said…

And aspects are described in these quotes by the late, great Bruce Lee…

But perhaps the proper mindset for trading was summed-up most succinctly by

Hunter S. Thompson…

One Year

This blog was started after an excellent conversation in what was then the Vankar – Traders Helping Traders chatroom.  The discussion was one of the early ones about a need for a place where we could post items relevant to our trading: our homework, trading results, studies, thoughts, etc…  As I understand it Stage 5 is working on developing a web-based site where this will be possible and it will be enhanced with Trade Analyzer functions.  At the time I loved the idea but didn’t want to wait around, so I simply started this blog and began posting.

Now it has been one year and this is my 222nd post.  I wanted to reflect on the experience so far and share what I have learned.

Challenges:

* To begin with it took some time to get into the habit of using the blog. It felt a little slow and awkward for the first week or two.

* Beyond that, it took a long time for me to find the right balance between too much and too little effort/time spent.  At first I mostly did too much in my opinion.  Over time I have simplified my approach and it works better for me.  I guess this will continue to be a work in progress…

* Occasionally it has been challenging to share results of which I was not proud.

Rewards:

* The habit of organizing my thoughts and recording them each weekend and each day has really helped me to zero-in on a more consistent approach in my trading.

* Having a record of my previous efforts and being able to go back and look at what I was doing 3, 6, or 12 months ago provides a very helpful opportunity to get some perspective on myself and my progress (which we all know is tough to do).

* Posting studies on the blog is a great way to organize them.  One of the tabs I have in my browser every day is the “Studies” page for this blog.  Throughout the day I can reference every study I have done at a moment’s notice.  It makes it very easy to keep the stats at hand!

* Posting my daily homework on the web enables me to look at it from any computer or my phone, which is handy at times.  Also it allows me to share ideas with other traders more easily sometimes.

* The habits associated with keeping this journal have become automatic.   Now it wouldn’t feel right if I didn’t follow my normal routine.  Having establishing this routine I come in to each day with a degree of preparation I know I can rely on.

Potential Pitfalls:

* I can see that at times I have become a little overwhelmed with the process and have somewhat lost sight of the point of the exercise.  It does take some time to develop the discipline of using a journal such as this, but after that I don’t think it should be too time-consuming.  It’s important to dial-in on what is truly helpful and not get lost trying to be too comprehensive or exhaustive in my opinion.  As FT always says, simple is best.

* There are some potential ego traps with a public journal like this.  While this could be a problem, it can also serve as a good opportunity to help you become more aware of your ego and how it may be effecting your trading process.

Final Thoughts:

I’m sure we are all looking forward to using the Stage 5 site when it is online.  Keeping my own “Trade Analyzer” spreadsheet is a fair bit of work so it will be awesome to be able to access the data more easily.  To have that and other information all in one place and to be able to share our efforts will be really great.  I have seen how keeping the records over time to look back at can be really helpful for putting your trading into perspective.  I would definitely give higher odds of success to anyone who is making the effort in this way.

M6E results

weekly review

Monday 2-11-13:

Quiet session with Chinese New Year and whatnot… not too many set-ups appeared this a.m.  The test of previous MC-range made for a good LOD trade which I missed because I was expecting a deeper probe into the range.  I took the first test of OSL, got my scale and let other car get taken out above OSL.  This was my only trade today.  It is unusual for me to trade so little, but it felt great to be following my plan and to not feel compelled to trade despite the lack of opportunity.

Tuesday 2-12-13

Continued tight range made for challenging trading for me.  There were limited opportunities.  I probably pushed a little too hard.  My trading was mostly true to my plan, although I made some exceptions in regard to the magnitude of the rotations prior to my entry because of the narrow range again today.  Mostly, I noticed that my trading was not great today but I kept my risk to a minimum while giving a few of my anticipated trades a shot.  I realize this was sort of fudging my plan I will try to keep myself from doing that in the future.  Today’s trading compels me to be more selective tomorrow.  I will only take grade A set-ups.  If the range is narrow again, I will be content with few or no trades.

Wednesday 2-13-13

I came into today’s session feeling nervous.  My plan was to be extra selective in my trades.  In my a.m. notes where I answer the question: what will I do today?  I described this somewhat ambiguously.  Now that the session has played-out I see how I can be more specific in the future.  With hindsight I see what I “meant to say” or what I “should have said” was…”because of the market context and my personal context, I am only interested in A-grade set-ups at key levels in my homework.  today I will not take set-ups based on intra-day auction levels (ie. MID, open, IB…)”  I will add this distinction to my daily if-thens and will see if it helps.  Today is only one example, but if I had passed on the MID short today and waited for the major trend line test at HOD or the test of the 2764 line in the sand from my homework I would have done much better.  I think dividing my set-ups into homework set-ups and auction set-ups will help as I fine-tune my plan for to the ever-shifting context.  Sometimes I will look for both, but when I feel like the market context is odd, or potentially unpredictable, I will adjust my approach to favor the more significant set-ups.

Thursday 2-14-13:

Today was unusual in that I watched the market all morning and did not take any trades.  There were a couple set-ups that showed up but they did not quite meet my pre-determined criteria so I passed on them.  It felt good to be prepared to trade and not to feel compelled to trade.

Friday 2-15-13:

Day Off

My trading was not profitable this week but I learned some helpful lessons.  I made several errors in execution and these are all worthy of attention.  I am sure, though, that the single most costly mistake I have been making lately is missing or passing on good set-ups.  Several set-ups I just missed…I’ll just need to pay more attention if I’m going to prevent that.  There were a few trades, though, that I simply did not take because the recent price-action had me thinking I should ” wait and see”…thinking I would save myself some heartache when in fact…if I had take these few set-ups my week would have been significantly profitable.

I believe fear of losing has been effecting my performance.  Next week, my main goal is to be selective in stalking my trades and aggressive in executing them.  I am not looking to take very many trades, but I intend for them all to be well-planned and well-executed.

weekly review

My first week back to live trading was a mixed bag.  I was faithful to my plan for the most part and totally faithful to my risk parameters.  I made quite a few mistakes in my execution though.  There were several excellent set-ups that I missed because they just happened too fast for me to see them.  Of the trades I took this week,  many happened to be during unusually volatile times which did not work to their favor.  This made it difficult to feel good about my trading.  However, in examining the trades I see that most of my losses were pretty legit.  My issues were with a few impulse trades in the heat of the moment.  I’m not proud of these trades, but I am proud that I nipped them in the bud and didn’t let myself become out-of-control.  After a month of confidence building trading in a tight bracket on the SIM, this week saw increased volatility and range expansion which are tougher for me to trade than relatively rotational trading.  I know how this goes because I’ve seen it before.  The difference this time is that with keeping records I can see exactly why my trading wasn’t profitable this week.  It was a combination of a less than ideal context, numerous mistakes on my part as well as being a case of some decent set-ups not working.  This perspective makes it a lot easier for me to regroup and and come back next week week ready to do my best at executing the same approach.

Review of January trading

I took a few weeks off from trading over the Holidays to relax a bit, assess my previous year of trading and fine-tune my plan for 2013.  Part of my plan involves keeping better records of my trading this year.

Last year I had been trading on the SIM for many months working out my trading process.  My goal for January was to demonstrate for myself what the results would be if I traded my pre-determined process as faithfully as possible for one month (on the SIM).  I collected my results in one spreadsheet and over the past few weeks have worked on creating some basic graphs associated with the spreadsheet that are helping me to be more in tune with my results.  I wanted to share this work-in-progress here because it has been a helpful exercise for me and I hope some of you will find it helpful too.  I’ll try to keep it as brief as possible…  here is a screenshot of the spreadsheet:

I appreciate the help that many folks in the Stage 5 Chatroom have given with Excel.  Basically everything on this spreadsheet is robbed from them!  There are added functions that calculate cumulative P & L, win rate, expectancy, cumulative expectancy and percentage of MFE retained.  In addition there are columns for the day of week & hour of the day (for easy filtering ).  Just recently I have added some columns to record additional information about the trades and my performance.  I’m tracking the set-up for each trade and there are codes for “Mistakes” and “Victories” which I note where applicable.  I also give each trade an overall letter-grade.  I would like to start adding Comments to certain trades as well in the future.  I really look forward to gathering more of this trade specific data and to chart the results of my different set-ups and compare their performance over a relatively large dataset!   (can you tell I’m hooked on this process!)

Here are some of the charts that run off of the spreadsheet:

Max Position Size

Best Scale Out

Expectancy

P&L per Trade

Win Rate vs. Loss Rate

Cumulative P& L

There is a whole lot that I have learned by using these graphs to reflect on my performance.  I will spare you the details, but these have been the important things for me:

Keeping a detailed Excel sheet that tracks my trading performance has been like shining a spotlight into a dark room.  Lessons practically jumped off the page once I acquired enough data to start seeing the patterns.

It still hurts every time I take a loss.  But having the perspective that these charts provide makes it more possible for me to shake-off the pain and get back in the game and trade well.  This is distinctly different than the past when I would often take the loss poorly and then I would trade terribly afterward.

By focusing on specific metrics like Win Rate or BSO while trading it seems possible to influence them to change over time.  This is a biggie!

The most important thing this exercise has done is it has given me confidence in my trading process.  While I am keenly aware of my many shortcomings and will continue to work on them, I have gained the confidence to trade live again.  These results tell me I have an edge.  I know what I need to do over time to produce a consistent profit.  I know there will be challenges making the transition from SIM to live again, but I feel prepared in a new way because now I have a statistically proven reason to believe in myself.  I will continue to keep track and I’ll let you know how it goes!