Alright thx for the insight, not sure why but I like the VIX, that is why I am trying to understand it. Still don't know what to think for the numbers for the calendars and 25dRR. I think I may just need to note down the numbers every trading day then later on in the future I would get more understandings of them, I don't know where they normally trade or what is on the tail side of the distribution(extreme numbers).
An Attempt to Learn How to Trade Consistently and Profitably
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Alright thx for the insight, not sure why but I like the VIX, that is why I am trying to understand it. Still don't know what to think for the numbers for the calendars and 25dRR. I think I may just need to note down the numbers every trading day then later on in the future I would get more understandings of them, I don't know where they normally trade or what is on the tail side of the distribution(extreme numbers).
I plan to do analysis of my trading performance over the weekend(potentially, I will do it sooner or later, but next two weeks I am busy with mid terms), does anyone have any consideration in what types of things I should learn to analyze my trades? Things like Sharpe Ratio, or MDD(maximum drawdown), or something of the sort. Although I may not do the analysis if I am busy studying, I will do it eventually. I just have never analyzed my trades before. So I want to start soon.
Ok, now we come to the meat of things.
Right now it doesn't make any sense to put some performance metrics over your results. You have probably less than 1000 trades under your belt so any statistic has low value.
You should go through your winning trades 1 by 1 and try to figure out common factors why they worked.
Let's say your best longs happened when at the same time the USDJPY dropped, Treasuries dropped and Gold pumped. Then you try to replicate these trades in your next sessions and don't take the longs that don't go along with all other markets.
That's how you find setups on a continuous basis. Most people make the mistake and focus on the losers. You HAVE to look at them to find out if you are making any major mistakes like selecting the wrong strikes or not respecting your stops, but you won't get better by harrasing yourself because of your losing trades.
Figure out what works by analysing your winning trades!
Will do! Going to read the SPY ETF prospectus to get further understand of ETF redemption/creation process and other ETF info. I'll probably start looking at more instruments while trading instead of just USD/JPY. I should probably slow down on learning options, started to get behind in my studies because of it
.I'll analyze my winners. Thanks for the guidance!
SUMMARY:
01/21/2021
REAL TRADING SESSION
TRADES: 3(LONG) + 2(SHORT)
Winners: 3
Losers: 2
-----------------------------------------------------------------------------------------------
NEWS:25
CORRELATING MARKETS:
- TOP 5 SPY EARNINGS SOON
- VOLATILITY:
VIX: +0.28
25 Delta RR: -6.94
1-3m ATM Calendar: ?
3-6m ATM Calendar: ?
- INDICES:
NIKKEI: +0.82
FTSE100: +0.18
DAX: +0.13
STOXX50: +0.12
- METALS:
GOLD: +0.01
SILVER: +0.46
COPPER: +0.44
- OILS:
CRUDE OIL: -0.28
- INTEREST:
10Y TREASURY: -0.07
- CURRENCIES:
USD/JPY: +0.05
- INDEX MAKEUP(TOP 5):
-----------------------------------------------------------------------------------------------AAPL: +1.35
MSFT: +0.16
AMZN: +0.91
FB: +0.62
GOOGL: +0.72
TSLA: +0.48
GAMEPLAN:
View attachment 249640
MARKET STRUCTURE:
-----------------------------------------------------------------------------------------------
- Small Long Bias, expecting consolidation because of yesterday's rally, maybe a drop possibly. Potential Bounce 383.41
PERFORMANCE:
View attachment 249643
LEGEND: BLUE IS LONG & PINK IS SHORT
1st trade, bought puts when wanted to buy calls
2nd trade, entered expecting strong support upwards, failure to meet highs. Did not close early, started moving back stop,
3rd trade, possible revenge trade. No I think it is a revenge trade. I got lucky that my stop didn't get hit.
Taking a break, got to cool off. Chasing hard.
4th trade, expecting increase, slow breaks, no one wants to buy but someone is bidding up. I exited, scared of downside. Watching bid on option chains, someone is stepping up, maybe should have waited. I noticed someone reloading into the bid. I had no exit target, except that I expected a large capitulation upwards, didn't happen so I left early?
5th trade, expecting upward momentum, price moved fast in my favor. Volume came in, see semi-correlation with USD/JPY and SPY. Expecting to sell at yesterdays HOD or strong momentum break. Calls being sold, into momentum. Looking for capitulation to the highs, possible short squeeze. Sold, don't want to hold into a countertrend since ranging day.
Cutting my day off here. Actually mega behind in school work.
Notes:
I think walking away when you are overtrading/not feel the market is quite good. Gives you fresh eyes.
Also date of previous live trade is incorrect I put 01/19/2021 but it should be 01/20/2021. Can't edit but the picture should have correct date.
I appreciate your attention to detail. Are you self-teaching? If so, what books/blogs have you been studying?
Hey, I'll dive a bit more into my history. I appreciate your comment.
So back when I was 18/19 after I lost my $1.5k+ from penny stocks I started trying to learn intensively. First I bought some 700 dollar course BS, rather not get into it but one look at it and I already knew I was be fked in the ass. He was just spilling BS, but I was lying to myself and continued watching mindlessly. It felt as if this man was just trying to extend the video by talking about other stuff related to trading.
Anyways after that I had a bit success in tech stocks so that is where I went to daytrade, although under PDT, so 3 trades a week(lol can't believe myself, I was still losing). Under PDT you are under a TON of stress to preform. Will this stock go up will it go down, when will I enter when will I exit. All these questions. Slowly I wrote down these questions, and started attacking them by myself(the best I could). Everything I learned was in pursuit of trying to learn the markets. First I was in architecture, then I went into computer science, I have around 3 years of python, so I can make my own apps, then I went into math/stats because I enjoyed learning it and wanted to pursue quantitative researcher/analysis role for a firm. I never was a good student in highschool, and am doing okay in university.
My entire life was consumed by trading but I didn't mind, I enjoyed doing what I do(it is really stressful, I try to not make it so stressful now, but still enjoy it.). It was like creating my own program for python but for trading. That being said I am still not successful, but all my ideas come from myself. I just tended towards the most none BS, strategy that my old self believed in. I have a white board in my room just to think about these questions. Recently I haven't been doing it since I don't quite have questions that are market related, but more information that is why I ask @MrMuppet and you guys.
I will give an example of a question I would think of:
In a ranging market if a market tends towards a price, meaning there are lower lows but erratic highs, what is happening and how can I profit from it?
Well I always start with, It depends. Then start doing many case studies.
Case 1: Market was previously rising. Okay than this was stunting buying pressure coming from the downside, meaning someone is selling. If the someone is selling and price is rising steadily, then are they running out of steam? Check the highs, if they are trying to short then the highs would start defending, or if they just want good price, they will come to defend. How big are they, you can't tell. So what is the most pivotal point in this? Well there can be many, If this man was a short seller coming in(in this case man can mean group or people who think the stock will go lower) then he wouldn't want his position to be down, in a strong rally. Then you go into the cases where he would try to perform to defend his short. If he was in the red, and still had size he would drop the stock flushing it right back down, causing a disruption in what traders thought was happening, with a rally then a flush most are thinking, oh shit I gotta close my long, etc. This is where the fun beginnings because
, then the guy wanting to buy at this level if he still wants to buy he can start buying here. AD INFINITUM, and that is why I enjoy the markets so much even if it causes me so much stress. .You do questions about yourself also like, why do I worry so much about each trade. I figured it was PDT, and switched gears 4/5 months ago to cash account option trading.
Hopefully this gives an idea of how I trade and think, I don't have a hard clear cut plan, but I have basic plans to capitalize on my ideas. I still perform trading errors like chasing hard with no plan. Eventually I will clamp down on these, but for now the guidance of this @MrMuppet and others, is making me enjoy trading to a further extent. Thanks and I appreciate the question. Chasing is not bad, and waiting for a entry isn't either, it just depends on market conditions. I don't trust anyone on the internet but I also don't ignore ideas that are against me. Once I try the ideas given, if it gives me a positive signal I go full throttle into learning.
.
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Whoops I meant higher lows not lower lows.
it would be nice you write about your P/L. Thank you!
I'll be transparent. Made 2 other trades near close Friday(couldn't hold myself). Commissions are no bueno 0.65 per contract(just like everyone said).
Been looking at winners to see potential. Somehow I think it is in how price acts, but the more I think about correlations the more I feel lost(potentially because my plan isn't as defined). I will continue since I feel it is a good path to work on, and the old me 1 week ago has seen some things, but the more I think of it the less I feel confident. Also I pay heavily for chasing into support/resistance with no plan, most likely in the moment my expectations are for it to go flying through. In reality it most likely won't, some good chasers are when it already breaks the level with large volume, but when they are struggling to get through most likely a rejection. I'm just going to continue trading how I used to along side looking at different markets. It actually gives me a good judgement to take on trades. Been thinking about some possible situations. Probably thinking to much, I am at the beginning of my career still. Another thing is I notice, price is in my favor and continues to tend in my way quickly if I am correct, but when I am stubborn and move my stop I always pay heavily.
Currently I'm looking back at my profitable trades and I can see semi correlations, but sometimes there are triple correlations in GOLD/USD-JPY/10YTREASURY, on single minute moves(Somehow someone is making a position but I don't know where. It's really interesting dynamic though). Making me think, I may have been fitting my correlations as nonrandom, but the more I look at it the more random it might be. Also treasuries 1 minute chart is really slow lol. Will continue on this path.
Main goal if I trade on Monday is to not chase moves into a resistance unless I have a plan to exit quickly. No plan means I start moving my stop, better to lose less than lose a lot. When I enter I should categorize my trade as a chaser or not so I recognize the impact of not exiting quickly.
School is stressing me right now really hard. So I might not trade in the early weekdays. Econ test is actually Tuesday and I got a quiz on Wednesday for statistics.
SUMMARY:
01/25/2021
REAL TRADING SESSION
TRADES: (LONG) + (SHORT)
Winners:
Losers:
-----------------------------------------------------------------------------------------------
NEWS:
-----------------------------------------------------------------------------------------------
GAMEPLAN:
(Image is when I ended trading because I accidently overwrote my .PNG file)
INSTRUMENTS:
-----------------------------------------------------------------------------------------------
GOALS:
Attempt to reduce chasing with no plan
PERFORMANCE:
LEGEND: BLUE IS LONG & PINK IS SHORT
Man today was scary. I had a short bias from the gecko but I kept shorting and LOSING, I might need some time off.
NOTHING MADE SENSE as the markets were going higher, treasury was increasing gold was decreasing usd/jpy was increasing. I was like are my correlations wrong or something? I was about to stop trading, but then I just continued through, I shorted the market multiple times on the drop.
I was down around -$1.1k YES I FUCKED MYSELF
Then when the shorts trades came in I came up into +$300 territory ending my day positive and I no longer have funds to trade.
Going to stop trading for the week and view some correlations more. Scary shit.
01/25/2021
REAL TRADING SESSION
TRADES: (LONG) + (SHORT)
Winners:
Losers:
-----------------------------------------------------------------------------------------------
NEWS:
- TOP 5 SPY EARNINGS SOON
- U.S. TRAVEL BAN
- VOLATILITY:
VIX: +6.12
25 Delta RR:
3-6m ATM Calendar: -1.37
25 Delta RR:
- DTE(0): -6.71
- DTE(2): -6.48
- DTE(4): -7.01
- DTE(11): -7.23
- DTE(25): -7.56
3-6m ATM Calendar: -1.37
- INDICES:
NIKKEI: +0.67
FTSE100: -0.94
DAX: -1.67
STOXX50: -1.39
FTSE100: -0.94
DAX: -1.67
STOXX50: -1.39
- METALS:
GOLD: +0.48
SILVER: +0.82
COPPER: -0.01
SILVER: +0.82
COPPER: -0.01
- OILS:
CRUDE OIL: +0.04
- INTEREST:
10Y TREASURY: +0.11
- CURRENCIES:
USD/JPY: +0.01
- INDEX MAKEUP(TOP 5):
AAPL: +2.84
MSFT: +1.27
AMZN: 0.00
FB: +1.40
GOOGL: +1.18
TSLA: +0.92
MSFT: +1.27
AMZN: 0.00
FB: +1.40
GOOGL: +1.18
TSLA: +0.92
GAMEPLAN:
(Image is when I ended trading because I accidently overwrote my .PNG file)
INSTRUMENTS:
- Mixed Market, small bias toward long
- 25d RR
- People buying protection from downside?
- Calendars
- Similarly people are buying protection(also I might have calculated Calendars incorrectly last time I think I did 3m-1m, instead of 1m-3m)?
- Market broke highs premarket, but fell to mid/open of friday.
- If the market continues higher, may fall short at or below friday's high
- Consolidation above friday's high is a potential long
- If the market starts off with a downside move, potential bottom, but if bottom doesn't hold move may reach friday's low
-----------------------------------------------------------------------------------------------
GOALS:
Attempt to reduce chasing with no plan
PERFORMANCE:
LEGEND: BLUE IS LONG & PINK IS SHORT
Man today was scary. I had a short bias from the gecko but I kept shorting and LOSING, I might need some time off.
NOTHING MADE SENSE as the markets were going higher, treasury was increasing gold was decreasing usd/jpy was increasing. I was like are my correlations wrong or something? I was about to stop trading, but then I just continued through, I shorted the market multiple times on the drop.
I was down around -$1.1k YES I FUCKED MYSELF
Then when the shorts trades came in I came up into +$300 territory ending my day positive and I no longer have funds to trade.
Going to stop trading for the week and view some correlations more. Scary shit.
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