2013 [P&L journal]

masterm1ne

masterm1ne

For all/most of my past trading, I have left at least one part or more of my trading up to an undetermined factor. I felt the effect as my 24k account has dwindled to 8k (-16k) after it peaked at 33k early in 2012. All of my past trading profits/losses are due to the fact that I was not trading an edge or plan that encompassed every aspect of trading and was therefore essentially gambling.

At the tail end of 2012, I started to see the results of having nothing left to subjectivity. I've been testing very closely related concepts since July 2012, with slight modifications to this point. Statistics/back-tests show I have an edge and I am slowly accumulating screen time trading this edge. My last challenge is replicating back-test results in forward tests.

This year, I've simplified my indicators a bit. I still abide by the same principles as I discussed before. I have no doubt in my mind that this year I should be able to end in the green. My short term goal this year is to get to a point where I am comfortable trading 5 ES contracts, which shouldn't be too big of a deal because I have before. I don't plan on trading 5 contracts until I feel comfortable and am demonstrating statistically that I should be doing so. I still work full time so of course can't trade every day.

This year I will keep track of every individual trade in addition to end of the month totals I've been doing. Don't expect real time calls. This journal is really for me and no one else.

Previous threads: -2012-2011-2010-
 
Slow start to the year. I got back from vacation this past Sunday, and worked Mon and Tue.

The stats for my refined strategy are below. I have pre-entry, entry and exit rules. As far as I can see at this point, I am leaving nothing to chance.

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Before anyone criticizes the sample size, my back test results through last July have been similar. My problem has been execution with the relatively small time I have actually day traded with this plan. After study of the market over the past few months, my strategy has evolved slightly, but revolves around the same core principles. I think the most important thing is the last 20 trades and real time forward tests.

No trades today. I was not prepared for war.
 

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Today is the 3rd day in a row I've made $, which is hopefully the result of my preparation. Could have made more had I been more patient. Probably the toughest thing to master is when to exit. I might need to study ranges a little more closely, even though I know most of the time my target will get hit regardless. Of the 3 trades I considered taking, 1 hit its PT, and the other 2 are at this point (1215 central) near their PT. I scratched the first trade because I had a reversal signal, however, there were several signals that were at the same price level. This hints at being in a trading range. Had I reversed long there was another reversal shortly thereafter. All these reversals met my criteria for entry, except they were at the same price level.

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From my most recent tests, average RTs per day is 2-5. Therefore I won't do more than 2 RTs per day.

Some of the days I was on vacation I watched the market and for the most part the trades I wanted to take had I been able to watch the market would have hit their targets.

The biggest change from last year to this year in my plan has been to consider where the market has been/previous price action. Now that I have a solid entry the exit mastery is my next goal which requires interpreting price action in real time.

I am considering incorporating a volume function into my plan. The problem is it really doesn't add all that much if you can read price action well.

There is no question in my mind at some point money will flow into my account.
 

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No trades today. As I watched price develop, the market was sluggish. I didn't take the first trade I saw because we were in a range. Second trade I wanted to take I didn't simply because of how slow we were moving.

Could have taken money off both of these trades but they wouldn't have hit my 4 point target...
 
Did one today and scratched it. Same thing that happened last day I was able to trade happened again. The 2nd best short trade happened in what I call a range. The 1st best short was before I was watching the market (0523).

I took the best long I saw, and could have taken money from the market but I scratched my trade again like the last time I traded because price just hung around my entry for too long.

I am thinking about taking a trade at the open regardless of whether the market is ranging or not. Only one trade that I wanted to take today would have hit the 4 point target.

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No good reason for a loss today. First and best long trade signal occurred @ 0800. That trade would have hit it's 4 pt target. I usually get up around 0500 for work, but my body tends to want to sleep in on off days. Trading will be part time for the next few years. I think it's best that way until I can regularly make more on my trading days than I can on my work days (around $31/hour).

First trade was an error, so I reversed quickly.

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Out of the three trades I wanted to take today, 2 would have hit their full targets. The one I took I should have reversed sooner, and would have hit it's 4 point target.

The one major thing I need to work out in my plan is what to do when reversal signals occur near my first entry. Today, I should have reversed once the sellers were trapped around my entry point. Went short around 1240 and reversal signal was around 1340.
 

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Quote from masterm1ne:

The one major thing I need to work out in my plan is what to do when reversal signals occur near my first entry. Today, I should have reversed once the sellers were trapped around my entry point. Went short around 1240 and reversal signal was around 1340.
More...

When you get a valid reversal signal, you reverse long. The question is how to do it. If the reversal setup is a strong one such as a 1-2-3 setup, I usually just stop and reverse at the price where the new setup triggers an entry, because those setups can really take off and not look back.

If the reversal signal is a setup where price tends to retrace back to or through the entry trigger price, and my stop loss didn't get hit, I'll place a limit order at the expected retracement zone to exit and reverse the other way. This most often results in a break even on the initial trade.

The most important thing is to take the newly signaled trade if it's a valid in-plan signal; otherwise you dilute your edge, taking the loss and missing the opportunity to recover the loss and more by reversing.
 
What I'm finding is there has to be some sort of additional filter for these patterns. I had the two best possible entries today.

The problem is scratching good trades. I reversed my first short to long. I didn't hold onto this long though because another reversal (short) pattern occurred though I should have remained long.

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