Dunning Kruger Journal

Side Bet on MaximumPossibleSuffering's Trading Performance

  • Crushes SP500 Performance

    Votes: 3 30.0%

  • Beats

    Votes: 1 10.0%

  • No Better than Average

    Votes: 1 10.0%

  • Worse than Average

    Votes: 2 20.0%

  • Blows Up

    Votes: 3 30.0%
  • Total voters
    10
  • Poll closed .
M

maximumpossiblesuffering

The purpose of this journal is to document my thought process behind my trades in a live trading account with Interactive Brokers and make adjustments to my trading plan according to perceived errors or to address inconsistent performance. In addition, should my trading results warrent it over a two year period, I may seek to manage other people's money. Thus I will also need to consider scalability for my trades.

I originally opened this trading account two weeks ago in preparation for a trading contest with Desterio.

My preliminary trading plan outline is as follows:

Fundamental Objectives and Performance Metrics
Maximize Reward to Risk
Maximize Win Percentage
Maximize Account Utilization While Maintaining Appropiate Risk Management​

Money Management - Performance Based
Intraday
Overnight Naked Position Scaling
Long Option Positions
Consecutive Losses​

Instruments Traded
Financial Futures and Options
Broad Based ETFs and Options
"High Beta" Dow Stocks
Active Equity Options on High Priced Underlyings​

Trading Styles Used
Scalping
Intraday Reversion to Mean
Day Trading
Swing Trading, Intraweek only
Relative Performance​

Trade Analysis and Trading Plan Adjustments.

I will add specific details to this trading plan, trading styles, and provide trade analysis on at least a weekly basis as time allows. I am currently very busy with my primary source of income.
 
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it would be easier to study for two weeks and perform open heart surgery in your kitchen using a spork as your only tool.

the first items you listed below are in direct conflict with one another. think of them as being on two opposing scale slides. the more you have of one the less you have of the other in the middle you have half the profits you could make with half the win rate you could have.

Maximize Reward to Risk
Maximize Win Percentage

another problem below is only fools buy options professionals sell them. stay away from options for now until you know how to roll them and defend them against rampant volatility moves.

Long Option Positions

trading style is something you really need to figure out what fits you. you can't do everything you listed, so find a style and focus on it. you need to allow yourself two decades to study this not two weeks.

if i were you with limited time i would study the narrow range / widening range patterns otherwise known as expansion and contraction and the stretch entries which toby crabel has so well defined. this would allow you to get into the game but not be a intraday slave. you calculate your trades end of day and place your orders and stops, find a broker who can monitor your trades and free you up.
 
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MarkBrown said:
it would be easier to study for two weeks and perform open heart surgery in your kitchen using a spork as your only tool.

the first items you listed below are in direct conflict with one another. think of them as being on two opposing scale slides. the more you have of one the less you have of the other in the middle you have half the profits you could make with half the win rate you could have.

Maximize Reward to Risk
Maximize Win Percentage

another problem below is only fools buy options professionals sell them. stay away from options for now until you know how to roll them and defend them against rampant volatility moves.

Long Option Positions

trading style is something you really need to figure out what fits you. you can't do everything you listed, so find a style and focus on it. you need to allow yourself two decades to study this not two weeks.

if i were you with limited time i would study the narrow range / widening range patterns otherwise known as expansion and contraction and the stretch entries which toby crabel has so well defined. this would allow you to get into the game but not be a intraday slave. you calculate your trades end of day and place your orders and stops, find a broker who can monitor your trades and free you up.
More...

Mark, thank you for your thoughful reply. I have been trading for over ten years, including some short term trading. I am net profitable on intraday reversion to mean trades and long options. I am net unprofitable at day trading. However, even there, I have a much better defined trading and risk management plan than before.

My goal includes combining different trading methodologies in order to maximize my various performance metrics. For example, I want to use the money management of a scalper, the statistical advantages of a day trader, and enjoy the large moves of a swing trader.

A disporportionate number of my losses occur within the first 30 minutes of opening a trade. I intend to manage my day trade position risk within the first 30 minutes by using a scalping methodology to adjust my position size according to the orders and price action I see. Where probabilities are favorable for profitable overnight trade as well, I will either adjust my position or hedge with short term options most of my overnight risk according to well defined risk perimeters.

I will go into more detail when I dissect my various trades in this thread. Although I have very limited time to trade during the day, there are key times during the trading day when I intend to be hands on.

Thanks again for your input. I could be biting off way more than I can chew, but I would not know how far I can go without testing limits.
 
destriero said:
MPS, you cannot maintain >1 on R/R if your intent is to trade short naked combos.
More...

destriero said:
Ahh yes, another Pro that's never seen an option that wasn't a short!
More...

My trading plan is still evolving. Intraday, short options are silly. With overnight naked options, I am exposing myself, especially on short puts to increases in volatility and adverse moves that may exceed my risk parameters.

Indeed, my first trade with this account was a naked short option trade. After a couple of hours, I realized the stupidity of the trade and closed it for a 1 tick loss. I will highlight this particular trade in a future post because it involved other reasoning and mechanical errors as well.

I intend to trade option spreads in support of my swing trade ideas. All swing trades, if taken, will be closed by the end of each week.
 
What a curious name to pick for this thread. You claim you have not succeeded at day trading yet are challenging someone. Unless Im missing something, you either dont understand what DK means by illusiory superiority, or the Borat guy is making a new movie
 
Bill.C. said:
What a curious name to pick for this thread. You claim you have not succeeded at day trading yet are challenging someone. Unless Im missing something, you either dont understand what DK means by illusiory superiority, or the Borat guy is making a new movie
More...

Actually, as mentioned earlier, there are areas of profitability in my short term trading. In addition, I believe my day trading will now or soon be profitable. It is matter of execution and trading according to how things are and not what I think they should be. For example, in the last two weeks my money flow indicators have never been more consistently and decisively bearish for equities. I have followed this indicator for years. In the past, there would be at most, a trading session delay between my money flow signal and a corresponding move in equities. At least I kept my losses small.

The thread title is based on my talking big and making some really stupid trading decisions over the last two weeks, including not taking a trade on an obvious opportunity.

Although I lost money in each of the last two weeks, the $50.00 or so hole I dug on my $33,000 account shouldn't be too hard to dig out of.
 
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