Consistency is my goal

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mastacoli71

Inspired by the few noteworthy journals I have come across last year, I decided to keep a public journal of my trading for 2011. It is something that I have definitely been lacking in the past due to my quick success in trading. I am hoping that posting in the public will keep me honest with my commitment to keeping a journal.

I have been trading full time since 2007. Prior to that, I was just another number in corporate America trying to work my way up the ladder. I built up the courage and broke free to follow a career that I knew in my heart I could succeed in. I was fortunate enough to find a mentor in the beginning. This definitely helped shorten the learning curve.

Trading through the financial crisis was a huge help in building my working capital that I have today. 2009 was not all that bad but definitely some bumps in the road; all things considered, still a decent year. In 2010, I was on track to beat my 2009 results until August hit. From that point forward it was a downward spiral until I decided to stop trading mid December to take a long needed break. I still finished up for the year but I knew something had to change.

My net PL goal for the year is $150k. I trade prop so access to capital is not an issue. The goal is conservative for me but it is a target I can live with and that will allow me to get back on track after the emotional rollercoaster from the 2nd half of 2010. I am starting off with $100k in my prop account. The weekly PL numbers I post will be net commissions. Another commitment is tracking my equity curve so I will try to post this monthly.

My main strategy in the past has been pairs trading. One of my goals for 2011 is to break out of my comfort zone and find more that fit my trading personality. In order to achieve this, I have made a commitment to myself to quantify each new strategy.

If I am fortunate enough to generate any questions from this thread, I will do my best to answer them. Please do not be offended if I do not share specifics about my strategies but I am sure you will understand why.

Last note, some that may run across this thread probably recognize who I am. If so, enjoy the free entertainment!

Ok, that is it. My next post will be week ending Jan 7.
 
Week ending 1/7. -1500, -200, +2100, +3000, +1900...week total +5300 on 88,000 shares.

No landmines to speak of. First full week back since my Dec. break. Of course some bad habits I am working to get rid of reared their ugly heads but so goes trading. Discipline is one thing I am working hard on this year.

Results are a bit magnified due to a year end trade I put on Dec 30th so not expecting nearly as much next week but you never know what lies ahead in the markets.
 
Below is a snapshot of the base capital in my prop account ending 2010. I will not be posting this again. My PL postings will also include my retail account. I do substantially less volume in it so do not expect at this time much contribution to the bottom line (maybe 10%). If this changes, I will certainly point it out.
 

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Quote from mastacoli71:

...I decided to keep a public journal of my trading for 2011. It is something that I have definitely been lacking in the past due to my quick success in trading. I am hoping that posting in the public will keep me honest with my commitment to keeping a journal.
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I understand this completely and is the reason I started to keep a journal late last year as well. I first started it private but I felt by it being public I would find it harder to stop in the future.

I hope you get out of it what your looking for. My goal was more consistency and to recognize some of the errors I make by forcing myself to examine my trading day.

Best of luck with your journal
 
Quote from PropTraderMTL:

I understand this completely and is the reason I started to keep a journal late last year as well. I first started it private but I felt by it being public I would find it harder to stop in the future.

I hope you get out of it what your looking for. My goal was more consistency and to recognize some of the errors I make by forcing myself to examine my trading day.

Best of luck with your journal
More...

Thanks. I contemplated doing this publicly but decided to for the same reason you did. I have always struggled keeping a trading journal so hopefully this thread will keep me accountable.
 
Well the landmines I avoided last week were still around and I stepped on one today and man did it hurt. I carried a pair over the weekend thinking I had a big edge with the move it made on Friday. Well I was wrong. Realized loss locked in for the spread = -$10,300:( . Had I stuck to my original stop loss last Friday, I would have saved myself $7500 today (Friday the spread closed down $2800 against me).

I've come to the conclusion that it is not the pairs that are hurting me but rather my psychology with them. I have been struggling for the past 5 months with pairs and have finally realized that it is time to kick them to the curb until I can come up with a way to trade them in the current environment. Until then, I will break out of my comfort zone like I mentioned in the beginning and trade strategies that I have been working on during my break.

I keep telling myself this is just one day.

Daily Net P/L = -$9000 on 37k shares traded
 
Another day in paradise. Started off the day following all my rules. Struggling a bit with profit taking but that will improve with time.

Then, the afternoon grind hit which is when I typically start looking for trades and swaying from my dicsciplines. Took a trade on DO with the range it had been trading in all morning. Got stopped out only to see it close right where my original profit target was sitting. I have to stop forcing trades and stick to my disciplines.

Revenge traded VRTN in the afternoon from a morning trade I was stopped out on. News type trade, I know better then to trade them. It is something I am simply not good at.

Good news for the day is I did not take one pairs trade. I actually shut down the pairs alert system. It will be idle at least until the end of February.

Net P/L = +1200 on 36k shares
 
Quote from mastacoli71:

I've come to the conclusion that it is not the pairs that are hurting me but rather my psychology with them. I have been struggling for the past 5 months with pairs and have finally realized that it is time to kick them to the curb until I can come up with a way to trade them in the current environment. Until then, I will break out of my comfort zone like I mentioned in the beginning and trade strategies that I have been working on during my break.
More...

Personally I have never really understood the attraction of this strategy. I obviously understand how it works but I would rather just buy the strong one and trade it like that. For me I really dislike holding trades that go against me. With the pairs strategy you always have one position that is against you. I know its meant to be hedged but from a psychological perspective it just really doesn't suit me.

What sort of strategies are you looking at? automated?

Tough day for you but just treat it the way your doing... its just another day. As long as you followed your system then there is no reason to be annoyed.
 
Quote from PropTraderMTL:

Personally I have never really understood the attraction of this strategy. I obviously understand how it works but I would rather just buy the strong one and trade it like that. For me I really dislike holding trades that go against me. With the pairs strategy you always have one position that is against you. I know its meant to be hedged but from a psychological perspective it just really doesn't suit me.

What sort of strategies are you looking at? automated?

Tough day for you but just treat it the way your doing... its just another day. As long as you followed your system then there is no reason to be annoyed.
More...

Trading mean reversion of pairs is definitely not easy on the emotions. Sometimes it gives you a false sense of security thinking you cannot get hurt too badly cause you are "hedged".

No matter what strategy you trade, risk management is always important. That is one of my weaknesses that worked well in volatile markets but not now so I have to really focus on it.

Right now I am concentrating on two strats, mean reversion using standard deviation as entry and intraday / day breakouts. Nothing is automated. I use trade ideas as my alert system as well as a small list of stocks that I follow daily.

Thanks for the encouragement. To be able to come back with a positive day after a day like that says something about the changes I am making. It will be a process but in the long run will pay off huge. I always like to look at drawdowns like paying tuition in college. Nothing is free. LOL.
 
Made a commitment to myself to stick to disciplines today. Amazing what happens when I do. Only traded 1/2 a day and came back right before the close to take some early trades off. Still fighting the urge to move stops and profit targets in the middle of a trades but that will subside as I gain my confidence back. All in all a good day.

Back to breakeven for the month. Goal this week is to get account back to green without taking any unnecessary risk. If it happens, it happens. I live to trade another day.

Daily Net P/L = +3300 on 13400 shares traded
 
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