$2,000 to $200,000 in 2020 at 2.00% per day.

[Seaweed]

My first losing day. Down $66.

Curious if you will show us the chart. The reason I ask is because it would be interesting to compare the trades that lost to your previous charts. It may very well be that your trades were just as good as your others, but its just that today, they didn't work out.

We all know that a good trade isn't a trade that won, but rather, a trade that followed your plan. Its easy to say it was a mistake to try some longs at yesterday's low, but in my opinion, this is precisely where they should be. The fact that it didn't work today doesn't mean its a bad tactic. If there really was a way to predict when buying the previous day low will work and when it won't, then this would be a very good tool to have, but I'm not sure if it exists. As you know, even the cumulative delta "lies" far too often.

So I'm not sure why you're too distraught today and already outlining scenarios for why you would pull the plug on Monday. It seems like you've had too high of a win rate up till now, and you expect this going forward, but perhaps it was just luck. Maybe the long term win rate isn't 80% or whatever you had, but more so 60%, which might still be profitable in the long run, but something you need to adjust to.

Looking at the blue PnL line on your graph, there is absolutely nothing to worry about.

 

[sstheo]

Here is Peter's free weekend video. Peter Reznicek is awesome.
He explains that the late day spike on Thursday that had ZERO follow-through on Friday should have been the clue to a bigger drop on Friday.

 

[sstheo]

Here's another way to look at it...

From Day 8 to day 10, you made $12. So you basically made money on day 8, took day 9 off, and came back on day 10 to make 12 bux. Maybe that will help your perspective?

Thanks. Good thinking.

This "small" loss is not distressing to me, but seeing that I could not seem to get "go short" to even register in my brain is what I am curious about, after all these years of being primarily much better as seeing shorts than longs. Fortunately, I followed my rules and kept my positions to the correct max number (5 micros for now). I am still alive and ready for a new week and month.

 

[sstheo]

Curious if you will show us the chart. The reason I ask is because it would be interesting to compare the trades that lost to your previous charts. It may very well be that your trades were just as good as your others, but its just that today, they didn't work out.

We all know that a good trade isn't a trade that won, but rather, a trade that followed your plan. Its easy to say it was a mistake to try some longs at yesterday's low, but in my opinion, this is precisely where they should be. The fact that it didn't work today doesn't mean its a bad tactic. If there really was a way to predict when buying the previous day low will work and when it won't, then this would be a very good tool to have, but I'm not sure if it exists. As you know, even the cumulative delta "lies" far too often.

So I'm not sure why you're too distraught today and already outlining scenarios for why you would pull the plug on Monday. It seems like you've had too high of a win rate up till now, and you expect this going forward, but perhaps it was just luck. Maybe the long term win rate isn't 80% or whatever you had, but more so 60%, which might still be profitable in the long run, but something you need to adjust to.

Looking at the blue PnL line on your graph, there is absolutely nothing to worry about.

@Seaweed Thanks for the encouragement.

I agree that a "good" trade is one where the rules were followed. But along the same line of reasoning, I had some "bad" trades on Friday. While I don't want to give any fuel to those who are eager to see me fail, I need to shine a bright critical light on my trading so that I can hold on to the above-average trading results posted here so far.

So here we go.

As I mentioned previously, I was up $60 for the day, and my confidence was high. "Look at the massive carnage from this tankage!" I thought of all those bulls from the last two weeks losing their shirts. But I was still alive. I was still breathing. I still had an account. This gave me some encouragement. And I think I became "overconfident."

I then broke a very important rule. I fell into an old habit and didn't set a stop on several trades at the "bottom" because I just knew the market was "oversold" - and that I was about to turn that $60 into $120.

So there is my confession. And I don't want to post a public chart to remind me of my failing to follow my rules - especially since I preach about rules all the time.

So what have I learned? And what am I going to do going forward?

1) I have learned once again that the market loves surprises, and so I must be on my toes. The market can go far beyond "reasonable" levels.

2) My discipline in following the rules is the most important thing to help me survive long term.

3) Therefore, In addition to the daily P&L postings which I promised to post, I commit to post my LOSING trades going forward. I will be fully transparent and candid. I will try to determine what I did wrong with those losers in the hope that I can correct my thinking.

I take many trades in a day, and most are winners, but I will not get better without objectively analyzing what I did wrong. I can do this. I will do this.

Thanks for helping me take the next step.

sstheo

 

[Seaweed]

I then broke a very important rule. I fell into an old habit and didn't set a stop on several trades at the "bottom" because I just knew the market was "oversold" - and that I was about to turn that $60 into $120.

Ouch, but I certainly understand exactly what you are thinking. When you say you don't set a stop, does this mean the order isn't filled with brackets already? Each time I enter a trade, the bracket is already there, and then its just super easy to slide the stop and target to where I want them. I too sometimes slide the stop further away because I just don't want it to hit... which ends up being a disaster. LOL

Reading your explanation above, and thinking of your previous trades though, I can't help but think that your high win rate has damaged you. Its not easy to maintain this high win rate, and actually, you're forcing it in my opinion. Lets look at the trades you posted, which I reproduce in the screen capture below with your own comments.

You say trade 1 was risky, and indeed, the drawdown was much bigger than the profit. Perhaps the high it reached for the short was still less than where the stop was, but its easy to see that this could have easily been a disaster as well if it really took off.

2 and 3 are not much different. Profits are tiny in comparison to the risk. All these little wins make you feel good because they give you a high win rate, but what it masks is the risk that is being taken.

4, 5 and 6 are all examples now trades that easily could have gotten you much more profit. Not I'm not saying that taking little bites is a bad strategy, but all these small little wins in relation to the larger drawdowns for 1-3 have to be taken into perspective.

So I think that I'm getting a good sense of how you trade, and although you're doing very well, its important to recognize the risk you're taking. Even though you might get it right most of the time, if price goes against 4 times more than what your intended profit is, then I'm not sure how much comfort you can have in thinking you have a high win rate.

Once again, not saying its a bad strategy, but you just have to realize that you will have to take a big hit every now and then. Winning $10 80% of the time is fine, even if the 9th is a $10 loss and the 10th is a 40$ loss, but psychologically, this may damage you, especially if those bigger losses bunch up together.

 

[Overnight]

I would also add that this has been an unusually-large ranging week. I mean, Friday was something like a 230-point range in NQ from midnight to EOD. That's nuts. This whole week has been nuts. Earnings on top of virus on top of Brexit incoming on top of "overbought" ideas. Feel glad you made money this week, take that as a salve.

 

[Phil-n-Texas]

@sstheo, fwiw and i posted some about this on my thread, the VIX was over +10% up pretty much all day and regularly at 20% and more. i always pay attention to VIX as an overall bias and indicator $TICK for short term directional bias. i.e. which side of zero and how far is it stretched. in the case of VIX the yellow line is previous close and %+/- is how distance from prior close. the blue channel is an auto-linear regression channel in TOS that just gives me an at-a-glance as to the general trend and if it may be rolling over. same with $TICK

 

[Damanuelman]

I would also add that this has been an unusually-large ranging week. I mean, Friday was something like a 230-point range in NQ from midnight to EOD. That's nuts. This whole week has been nuts. Earnings on top of virus on top of Brexit incoming on top of "overbought" ideas. Feel glad you made money this week, take that as a salve.

I thought that traders made money both in rising and falling markets as well as volatility is the traders best friend. Instead I would take advantage of this regime while it lasts. I think it's time for volatility to increase as well I think greed got the best of the market and it could just be normal profit taking. I'm just glad to see a 2.0% day on the NQ and ES as it means I won't have to be levered to the teeth to make some good profits. Less is more is what I've learned unless you can really stomach a draw down and have balls of steel. I'm actually excited for this and I hope more volatility comes to the market.

And SSTHEO I'm sure that there are plenty that want to see you fail, and fall flat on your face. I for one wish to see you succeed. Not gonna lie you're one of the traders I look up to here and it's what's made me take trading a little more seriously instead of gambley you know. I know tilting is real it might be a good idea to practice some self awareness when there markets are really tough sometimes the best trade is no trade and well, 1% should be enough but I know your account size is small so a $20 loss doesn't feel like a huge loss, compared to say a $200 loss if you had a $20k account. I hope you find a stop that you can stick to and sometimes you have to call a bad day a bad day you know. The same thing with winners, I make $500 and i feel like super man almost like I'm a little bigger if you know what i mean. Haha. It's almost like I can't do anything wrong and I make money hand over fist, that's like trading nirvana for me, but then the losers yeah they suck really bad and at some point I have to turn off my screen, go for a walk ,just do something else, it helps and the market is always here tomorrow with brand new opportunities to make money and this is an everyday thing as long as greed and fear exists.

The biggest lessons I've learned as a trader are the ones that hurt the most, and as long as you learn from them you are growing as a trader, never stop growing, and always be learning is key and I hope your sticking to your strategy not hoping. Do that once your bread and butter is there as well, trading edges disappear and you'll have to adapt either way so you don't really have to worry about having to learn something new per se. I found my new love and her name is trading. Wish you the best and I hope not to see this same mistake again.

 

[Nighthawk]

sstheo

If you succeed with your plan, I will call you "Elite Trader De Luxe" !

 

[sstheo]

No trades today. Too much work and 15" of snow to shovel. Thanks everyone for the great comments over the weekend. I will reply soon.