Andy's Day and Position Trading Journal

Hi ALL,

the sugar trade didn't work out - no entry!

I got a new idea.

Selling June 07 Heating Oil at 1.8359 stop market (I personally would only enter during the open outcry session but using the elec. market). Probably a risk of about $2,000 will make sense.

http://share.esignal.com/groupcontents.jsp?folder=&picture=HO_04242007.gif&groupid=707

Let's see if I get lucky with this one.

Happy trading,
Andy


PS There is almost an identical setup for June 07 Crude Oil with a sell stop at 64,09 (I personally would take only one of both trades).
 
Heating Oil / Crude Oil Trading Idea

Both markets are going in the opposite direction. Will not take any entry for the moment into these markets.

Happy trading,
Andy
 
I am very sorry, but I just don't find the time to post any new trades at the moment.

I hope this will change soon.

Happy trading to all of you,
Andy
 
Hi Andy, I am trading a really small account and very often I can trade only one contract. What would you recommend I do?

Trading only one contract is really tough. You are extremely limited in managing your trade. You have only two choices: In or out of the trade. Trading multiple contracts gives you much more flexibility. You can take some money from the table without exiting the trade completely whenever you think it is necessary. Or you can enter the trade with only the first lot to see if the spread is going your way before you add on another position. I personally would not like to take trades where I could trade only one contract. Don’t try to “reduce the risk” just to make sure you can then trade more contracts. This is for sure the wrong way! Skip the trade and wait for the ones with less risk. You can then trade more contracts and you will be much more flexible.
 
Hi Andy! I just wiped out for the second time. Am I some kind of trading freak?

Most successful traders failed at some point in their careers and wiped out their account. Many traders lose because they do not understand the nature of the decision-making process, which should be based on rational price action analysis versus emotional, irrational reactions to price action. A reason should be required for each market action taken. When fear exits a trade, it is more difficult to take the next technical signal. Traders will eventually become confused and feel guilty from indecision. Do successful traders buy an education with the mistakes they make?

What separates the winners from the losers is that they learn from mistakes, refine the decision-making process, keep on trying and never give up. If traders cannot accept the losses that go with the trading, they do not deserve the profits. Failure is the greatest teacher only when a student is prepared to learn. If the student has forgotten previous lessons, or the dog ate his homework, he is not ready. A positive attitude has positive expectations of future events and normally precedes the success it creates.

Another reason for failure is that traders fail to understand the real nature of the markets. They do not understand where prices will move, why they will move, and what it is that makes them move. That’s why we teach these things at our seminars.
 
Hi Andy, can you give me some idea of how much money I should risk on each trade?

This is really a tough one because I do not know enough about you, your trading style, or the money you trade. But I will try to give you some general ideas. I personally feel the most logical way is to use a certain % of my trading account on each trade. For example, if your trading account is $20k, and you are willing to risk 5% on each trade, you would trade $1,000 on your first trade. If your account grows to $22k, you would then risk $1,100 on the next trade, and so on.

Now you will probably come up with the following question: “What % should I use for my trading?” And this is the point where the problem starts. If you use too much on each trade, you will be out of the game whenever you have several consecutive losses. If you are risking too little, your account will grow really slowly. Without going into details, try to think about the following points:

- how many consecutive losing trades are possible the way I am trading?
- what is the maximum drawdown I am able to accept?

I totally agree when you say it is very difficult to find out how many consecutive losing trades your trading style can produce. We are not able to look into the future, and anything is possible in trading. But your trading journal will give you a good estimation. If this trading style or method is new for you, you should try to get a good estimation from somewhere else or you should do some paper trading to get at least an idea. With these numbers (how many consecutive losers and maximum drawdown) you are now able to find out if the percentage of risk on each trade is too little or too much for the way you trade. All you have to do is to calculate the balance of your trading account after all the consecutive losses, using the percentage of risk you are willing to take on each trade. If this is something you can live with, stick with it. If not, lower or raise the risk on each trade, and do the calculation again.
 
Hi Andy, we are almost done with 2007. Any idea how I can get ready for 2008?

If you have a trading journal, there is plenty for you to do. If not, you should get one for next year. Here is what you can do while going through your trading journal:

- Look at the big winners and the big losers. What caused the good trades to become big winning trades? And what happened with the big losers? Is there any way to avoid them?

- What is your winning percentage (comparing the winning trades to the number of all trades)?

- What is your win/loss ratio (divide your average winner by your average loser)?

- How was your trade management? How does the winning % and the win/loss ratio change when you manage your trade differently? For example: did you exit 1/3 of your position at the first target, 1/3 at the second target, and 1/3 using a trailing stop? What would have happened had you used a different strategy for your exits? What happens to the winning % and the win/loss ratio when you exit ½ at the first target, and ½ using a trailing stop? Try to play with the numbers to find your personal exit strategy.

- What about your risk management? Did you always risk the same % of your trading account on each trade? Or did you use a risk of 10% on some trades and only 5% on others?

- Did you follow your trading plan with enough discipline? Did you get out fast enough on your losing trades, and did you stick to the winning trades?

As you can see, we can learn a lot for the future from the past. The trading journal is essential in helping you to improve your trading. If you don’t keep one – start one!
 
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