Awash's Journal

Quote from Awash:


It's imperative that I focus on all errors if I want to have some success. I'll try to do this over the next few weeks. I may just paper trade the remainder of the year as I continue to focus on what's preventing me from being successful.
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Personally, I don't think paper-trading will help. It's all psychological from here on and to train yourself psychologically, you have to put real $ on the line. There's NO WAY you can duplicate the feelings with a simulator. Just trade 1-lots but do it with real$.

-Fast
 
Quote from Fast_Trader:


There's NO WAY you can duplicate the feelings with a simulator. Just trade 1-lots but do it with real$.

-Fast
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Actually it all depends on the person. Also, the question is, can he learn things on the sim to improve his real $$ trading.

Another important point, I trade both real $$ and sim, and keep track of each trade. By noting any differences between the two sets of trades, I can uncover problems with my real $$ trading.

One example of this, my last time around with real $$, I noticed that my losses were about 2x that of my average loss on the sim. I found that with real $$, I would tend to hang in longer and "hope" if the trade started looking bad; on the sim I had no problem cutting it off and "being wrong".

The perfect, emotionless trader will have no differences between sim and real $$. So IMO a good thing to do is track the differences.
 
Quote from peterfigliozzi:



Actually it all depends on the person. Also, the question is, can he learn things on the sim to improve his real $$ trading.
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I think Awash has been paper-trading for the past 6+ months and he's pretty good at the mechanics of it (I've traded with him in real-time chat). He just needs to get a hold on the psychological side of trading now, and that requires some real cash on the line.

-Fast
 
Quote from Fast_Trader:


I think Awash has been paper-trading for the past 6+ months and he's pretty good at the mechanics of it (I've traded with him in real-time chat). He just needs to get a hold on the psychological side of trading now, and that requires some real cash on the line.

-Fast
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Fast,

What’s up? Thanks for your comments. You're completely right! I've paper traded for over six months now and I've learned all sorts stuff. Currently, I have a general understanding of the mechanics and my system but there's no doubt that I need to learn more.

Just to give you a bit of background information, I started learning to trade (futures) in March 2003. For the first three months, I paper traded simultaneously studying and reading about the markets. My knowledge level was super beginner at that time.

Around mid-summer, I joined Elitetrader.com and read hundreds of threads learning a lot more. But my real knowledge and experience didn’t peak until I started interacting with traders in realtime via #FUTURESTRADES chat room, not to mention posting my journal online.

September & October were great learning months for me. I was able to incorporate new strategies into my system (market breadth indices, daily candlestick analysis and more). I’ve come a long way with my simulator over the past few months and prior to September I didn’t have a clue! I’m not afraid to say it especially considering I don’t have any formal training.

I’m mentioning this because I want you to know that trading (for me at least) will be a continuing learning process; 6+ months isn’t nearly enough time to learn everything about trading in a simulator. Nevertheless, you’re completely right! I still need to go live and stay live, only referring back to the simulator to fine tune certain issues.

My goal is to remain in the simulator the remainder of the year and start anew in January. At that point in time, tackling the psychological barriers that’ll impede my trading will be another task in and of itself. Whatever happens, just wish me luck and keep offering constructive criticism because I’m always considering what you all write. Thanks again!
 
Quote from amigasearch:

Hi. Can you tell me what Market Breadth indicators you use to track the ES? I have been reading your journal since inception, thanks for it.
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Amigasearch,

..........aside from watching the Cash indices ($DJI, $COMPX, $SPX.X, $NDX.X), I use roughly five market breadth indices to gauge overall market direction. I rank them in the following order.


1. NASDAQ Advance/Decline Ratio
2. TICK-NYSE
3. VIX
4. ES price chart only - 10 minute time frame
5. $SPX.X Daily chart with 10, 20, 50 & 200 eMA plotted.

Another trader, NihabaAshi, posted some good comments concerning these indices on page four of my journal.

http://www.elitetrader.com/vb/showthread.php?s=&threadid=21214&perpage=40&pagenumber=4
 
Just checking up on you again, how goes it? I think you're starting to get the hang of it and you definately have the right idea of combining your knowledge of divergence plays with s/r levels, during the summer when I had time to watch the markets I did this on ZN/ZB. I would have S/R levels drawn in from daily TF down to 1 min TF, then I would watch for divergence in my fav. indicator of the week (CCI, MACD, what have you) usually on the 1 min time frame like you, but I would do my best to peek up to 5 min and look for larger scale divergence. Before taking the signal, I would look at my S/R levels and make sure they were at least not going against the trade, preferably supporting the trade. For example, I high-probability trade would be when bullish divergence comes up on my 1 min chart and price is approaching a support level I drew in on the 5 min chart, I got two things working for me at the same time :) Hope this helps, you're almost there, keep trading live and get a better handle on the emotion flow, imho
 
This weekend I was able to reflect on my past trades and I'm looking forward to the next three weeks of trading before the holidays.

I decided to discontinue live trading for the remainder of the year as this will give me the opportunity to focus on my most common errors. I'm also adjusting my system and adding new strategies and setups to complement trend days (later i will discuss in full detail).

All charts will reflect simulated trades!
 
Awash,

What is the NASDAQ Advance/Decline Ratio doing for you?

You list it as your #1 breadth indicator.


Also, you do not mention TRIN. Any reason for not following it?
 
Today I was a bit more focused with my trading, I was able to use my 3 minute chart for signals along side my 1-minute for entry (when necessary). I also used the 10 & 30 minute chart to confirm trend direction and things worked out great. There were several opportunities to enter either long or short today, however the upside was the way to go. I missed a few trade signals today but overall I’m happy because I wasn’t shorting the uptrend.

Trade#1 – [Long 1064.75 10:09 EST & Exit 1066.75 10:15 EST] [ P/L: + 2 ] Took a continuation signal off my 3 minute chart and confirmed entry on 1 minute. I knew there was resistance just above 1066.25 so I decide to reach for a 2 point profit target.

Trade#2 – [Long 1065.50 10:38 EST & Exit 1064.00 10:49 EST] [ P/L: - 1.50 ] Didn’t know if the trend was going to completely change to the downside but I went long anyway. I failed to exit my position after watching my market breadth indices move to the downside. Next time I’ll pay closer attention to what’s going on.

Trade#3 – [Short 1064 14:15 EST & Cover 1062.00 14:18 EST] [ P/L: + 2 ] Super late entry off my 3 minute. Divergence signal was intact at 14:09 around 1066.25, I chased price over two points forcing myself into the market. This trade was awful but I survived it, in the future it may not work!!!1

Trade#4 – [Short 1066 14:37 EST & Cover 1066.50 14:46 EST] [ P/L: - .50 ] Took this trade off a key resistance level of 1066 but I never had confirmation and my entry was premature. Price wasn’t going to drop back down to 1062 so easily. This would have been a good trade had I waited confirmation and maybe I would have sold at a better price.
 

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