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Filter_Sweepâs Hong Kong Journal
- Thread starter filter_sweep
- Start date
Tonight was another tough night. I'm not sure if was me or if it was the market, but things weren't clicking. I got so many whipsaw stop-outs in the first 20 minutes that my head was spinning, and before I knew it I was down $500 USD. I had to do another pep talk to keep my head in the game and scratch my way back up to a meager profit. I'm beginning to consider that I may need to rethink the way I approach the first 20 minutes after the market open, because working my way out of early losses has been a constant theme since I started trading the Hong Kong markets. I may do some research over the weekend and see if a more cautious approach would serve me better on average.
+915 HKD
(+$118 USD)
+915 HKD
(+$118 USD)
Attachments
So for the week I made just a sliver above $2,000 USD, which if memory serves me correctly is a new record for me (for a weekly profit). As much as I tend to beat myself up over mistakes and missed opportunities, I'm going to try and feel a sense of accomplishment for the week's success and for the progress I've made.
I've begun thinking about for how much longer do I want to keep this journal going. To a certain extent I've accomplished what I set out to do as stated in the first post of this journal, which was to reach my goal, scale up, and then keep myself from doing anything stupid after I first scaled up to HHI. Check, check, and check (so far). I'm not sure that the act of keeping the journal has actually helped me though, in fact it may actually create incentives with unanticipated consequences. Furthermore, I'm not convinced that posting my nightly P&L with a few rants about how much better I could have done is actually helping anyone out there. It does suck up about 15 minutes of my precious sleep time though, which I'd like back. Perhaps I will switch to a weekly format, perhaps I will only post as I hit certain milestones. I'll think about it and make a decision soon.
If I've done any good in creating and maintaining this journal over the past couple of months, hopefully it has been to demonstrate that you can live in the US, have a successful day job / career, and yet also develop your skills as a trader by trading the Asian markets at night. It's not easy, it may take every ounce of energy you have left over after working a full day and taking care of your other responsibilities, and it might take longer than you'd like or hope, but it can be done. It seems like every couple of weeks some newbie will start a thread wondering if he should quit his dayjob and become a trader, but not sure he wants to take that big of a risk all at once. Inevitably a lot of ET'ers will tell him to swing trade instead, but hopefully this journal will serve as a reminder that there's another way.
I've begun thinking about for how much longer do I want to keep this journal going. To a certain extent I've accomplished what I set out to do as stated in the first post of this journal, which was to reach my goal, scale up, and then keep myself from doing anything stupid after I first scaled up to HHI. Check, check, and check (so far). I'm not sure that the act of keeping the journal has actually helped me though, in fact it may actually create incentives with unanticipated consequences. Furthermore, I'm not convinced that posting my nightly P&L with a few rants about how much better I could have done is actually helping anyone out there. It does suck up about 15 minutes of my precious sleep time though, which I'd like back. Perhaps I will switch to a weekly format, perhaps I will only post as I hit certain milestones. I'll think about it and make a decision soon.
If I've done any good in creating and maintaining this journal over the past couple of months, hopefully it has been to demonstrate that you can live in the US, have a successful day job / career, and yet also develop your skills as a trader by trading the Asian markets at night. It's not easy, it may take every ounce of energy you have left over after working a full day and taking care of your other responsibilities, and it might take longer than you'd like or hope, but it can be done. It seems like every couple of weeks some newbie will start a thread wondering if he should quit his dayjob and become a trader, but not sure he wants to take that big of a risk all at once. Inevitably a lot of ET'ers will tell him to swing trade instead, but hopefully this journal will serve as a reminder that there's another way.
I'm switching to a weekly format as my interest in keeping up this journal on a daily basis has waned.
There are a million ways to lose money in the markets, and this week I found a new one (that affected my account at least). It would have been a great week if it hadn't been for a hedged trade that went horribly, horribly wrong, but stuff like that happens in trading, you pay your tuition and learn your lessons, and my trading plan now prohibits hedging intraday trades. More details below.
P&L by day, in $USD:
Sunday: -$2041
Monday: +$245 (IB blotter in pic fails to show $20 in USD profits, FWIW)
Tuesday: +$813
Wednesday: +$305
Thursday: no trades
Friday: +$304
Total P&L for the week: -$374
Sunday
This was obviously the story of the week. Hong Kong gapped up, and I got into an early long position with HHI. Not wanting to get shaken out (I had a strong bullish bias), instead of exiting my position, I decided to hold and hedge by shorting HSI when the setup broke down. Originally I was long 2 HHI and short 1 HSI, which isn't a perfect hedge (still had long bias). However, much to my dismay, HHI started jamming lower with force, and HSI basically stayed in a consolidated chop zone. I was losing money hand over fist on HHI, but wasn't making any on HSI. I tried to fix this by changing the ratio to +3 HHI and -2 HSI, which on paper is a perfect hedge, but this just led to more losses. In hindsight I should have bailed out of this loser long before I did, but since my trading plan really didn't have rules for how to deal with such a situation, I had a deer in headlights moment. I basically nursed this lousy position the whole morning session, watching HHI make LL's and LH's, while HSI chopped (I kept exiting the HSI side of the hedge when a long setup would form, and re-established when it broke down) and decided to hold it over the lunch break. While the market was closed I came to my senses and realized I just needed to exit and start over, forget about the P&L and just trade like I know I should. When the market re-opened after lunch I bailed out of both sides of the hedge, and at that point I was down $2900. I probably should have stopped, but I wanted my revenge so I traded the afternoon session as hard as I could, taking every good setup I could find and letting my winners run when it seemed sensible, and I was able to cut the loss down to close to -$2k. I went to bed at 3:30am, got a few hours of sleep then got up and went to work.
I've known for a while now that hedging intraday trades like I did provided no financial advantage, only a psychological one... it allowed me to be stubborn with a position because I hate getting shaken out of a good position. It was a bad habit that I allowed to sneak into my routine out of laziness, over confidence, and to some degree, a desire to hit home runs. My trading plan did not specifically prohibit hedging, however, this dramatic loss is all I need to convince me that hedging a trade after it breaks down has no place in my trading plan, from now on I will keep my head on a swivel, exit the position when I should, reverse if the situation calls for it, and then re-enter in the original direction if it sets up again.
Monday
I debated taking the night off because I was pretty tired after only a few hours of sleep, but I felt like I needed to at least make a few good trades to prove to myself that I knew what I was doing, get in there and swing the bat a few times. After analyzing the underlying reasons why I had hedged the night before (bias + overconfidence + desire to hit a home run), I decided I would just trade small and take scalper's profits and not try to do anything fancy. I traded for an hour and a half and after making almost $250 I decided that was enough, and went to bed, very exhausted.
Tuesday
Made a nice profit, almost in spite of myself. Hong Kong was very volatile, I was a lot more stubborn than on Monday night, and the market rewarded me for it, although it could just have easily punished me for it. Sometimes its better to be lucky than good.
Wednesday
Traded very much like I did Monday, was picky with my setups, only took scalper's profits, didn't try to hit home runs. Could have made as much as I did on Tuesday if I had swung for the fences, but I decided to keep things simple and just take scalper's profits (the number of ticks you can depend on 70% of the time with a good setup).
Thursday
My wife and kids finally got back from a very long vacation and I took the night off to spend some quality time with the family.
Friday
Traded the first hour of the US session before doing some work (for my employer that is). I was able to call several of the wiggles accurately, and it felt very good (6 trades, 1 contract each, 5 winners with only 1 small loser).
Looking forward to next week; if things go well I should be making new equity highs soon.
There are a million ways to lose money in the markets, and this week I found a new one (that affected my account at least). It would have been a great week if it hadn't been for a hedged trade that went horribly, horribly wrong, but stuff like that happens in trading, you pay your tuition and learn your lessons, and my trading plan now prohibits hedging intraday trades. More details below.
P&L by day, in $USD:
Sunday: -$2041
Monday: +$245 (IB blotter in pic fails to show $20 in USD profits, FWIW)
Tuesday: +$813
Wednesday: +$305
Thursday: no trades
Friday: +$304
Total P&L for the week: -$374
Sunday
This was obviously the story of the week. Hong Kong gapped up, and I got into an early long position with HHI. Not wanting to get shaken out (I had a strong bullish bias), instead of exiting my position, I decided to hold and hedge by shorting HSI when the setup broke down. Originally I was long 2 HHI and short 1 HSI, which isn't a perfect hedge (still had long bias). However, much to my dismay, HHI started jamming lower with force, and HSI basically stayed in a consolidated chop zone. I was losing money hand over fist on HHI, but wasn't making any on HSI. I tried to fix this by changing the ratio to +3 HHI and -2 HSI, which on paper is a perfect hedge, but this just led to more losses. In hindsight I should have bailed out of this loser long before I did, but since my trading plan really didn't have rules for how to deal with such a situation, I had a deer in headlights moment. I basically nursed this lousy position the whole morning session, watching HHI make LL's and LH's, while HSI chopped (I kept exiting the HSI side of the hedge when a long setup would form, and re-established when it broke down) and decided to hold it over the lunch break. While the market was closed I came to my senses and realized I just needed to exit and start over, forget about the P&L and just trade like I know I should. When the market re-opened after lunch I bailed out of both sides of the hedge, and at that point I was down $2900. I probably should have stopped, but I wanted my revenge so I traded the afternoon session as hard as I could, taking every good setup I could find and letting my winners run when it seemed sensible, and I was able to cut the loss down to close to -$2k. I went to bed at 3:30am, got a few hours of sleep then got up and went to work.
I've known for a while now that hedging intraday trades like I did provided no financial advantage, only a psychological one... it allowed me to be stubborn with a position because I hate getting shaken out of a good position. It was a bad habit that I allowed to sneak into my routine out of laziness, over confidence, and to some degree, a desire to hit home runs. My trading plan did not specifically prohibit hedging, however, this dramatic loss is all I need to convince me that hedging a trade after it breaks down has no place in my trading plan, from now on I will keep my head on a swivel, exit the position when I should, reverse if the situation calls for it, and then re-enter in the original direction if it sets up again.
Monday
I debated taking the night off because I was pretty tired after only a few hours of sleep, but I felt like I needed to at least make a few good trades to prove to myself that I knew what I was doing, get in there and swing the bat a few times. After analyzing the underlying reasons why I had hedged the night before (bias + overconfidence + desire to hit a home run), I decided I would just trade small and take scalper's profits and not try to do anything fancy. I traded for an hour and a half and after making almost $250 I decided that was enough, and went to bed, very exhausted.
Tuesday
Made a nice profit, almost in spite of myself. Hong Kong was very volatile, I was a lot more stubborn than on Monday night, and the market rewarded me for it, although it could just have easily punished me for it. Sometimes its better to be lucky than good.
Wednesday
Traded very much like I did Monday, was picky with my setups, only took scalper's profits, didn't try to hit home runs. Could have made as much as I did on Tuesday if I had swung for the fences, but I decided to keep things simple and just take scalper's profits (the number of ticks you can depend on 70% of the time with a good setup).
Thursday
My wife and kids finally got back from a very long vacation and I took the night off to spend some quality time with the family.
Friday
Traded the first hour of the US session before doing some work (for my employer that is). I was able to call several of the wiggles accurately, and it felt very good (6 trades, 1 contract each, 5 winners with only 1 small loser).
Looking forward to next week; if things go well I should be making new equity highs soon.
Attachments
One of the difficult things about trading is that you experience pain when you lose money, and yet even when you make money you experience pain because of the money you could have made but didn't. As a discretionary intra-day trader, my mood, emotions, and P&L still have too much influence over how aggressive or cautious I am, which setups look good to me, et cetera. I need to find a way to remove this element from my decision making, but it's easier said than done.
The theme of this week was courage, I had too little of it at the beginning of the week, and too much of it at the wrong times near the end. As I approached new equity highs, I noticed I was more cautious in my setup selection, I imagine due to a fear of giving back what I had recently made. I should have made $400 each night Monday and Tuesday, but I couldn't find my balls and only made $200 and $250 respectively. Wednesday and Thursday I had the opposite problem, as I was selectively aggressive, trying to hit home runs with multiple contracts, but it was my bread and butter scalping that kept me in the green. Friday I traded US equity indexes while working from home, and averted disaster through a good bit of fortune. I tried trading ES and NQ like I trade HHI, using 1 and 3 minute charts, but got chopped up pretty fierce in the first hour. I was down $500 at one point, but then switched to 5 minute charts and cut my loss down to $150. I should have walked away at that point, but I wanted my revenge, and wanted to get back to break-even on the day, so I kept tradeing through lunch. The chop was maddening, although if I was in my right mind I should have expected it, and I got slaughtered, which led to revenge trading. I'm not proud of what I did to finish positive on the day, because I went on tilt yet the market forgave me for it. I switched over to trading TF since it looked to be making cleaner moves. At first I got chopped up, and I scaled up after each loss. When the market finally broke out upward, I was long 4 contracts of TF. I rode that winner for a few points, which got me very close to being break-even again, then I scalped my way back into positive territory. If we hadn't had a good move like that in the last 2 hours I would have finished with a nasty loss.
I think I'm going to stop trading on Fridays, as its very difficult and stressful trying to work and trade at the same time, especially as a scalper. I also realized that the nuances I've become accustomed to in Hong Kong don't translate to US Equity indexes... they have their own nuances, and I'm not as familiar with them. Even though I examine ES's intrady chart every day, it's different when you watch it live. Also, the nice thing about Hong Kong is that there's no lunch hour, so there's less mid-day chop to get sucked into.
I may take next week off. I had to force myself to trade each night this last week, I was tired and unmotivated. I'm also dissapointed in the way I traded today, and need to recommit to not going on tilt.
P&L by day, in $USD:
Monday: $200
Tuesday: $251
Wednesday: $151
Thursday: $256
Friday: $147
Total for week: $1,005
The theme of this week was courage, I had too little of it at the beginning of the week, and too much of it at the wrong times near the end. As I approached new equity highs, I noticed I was more cautious in my setup selection, I imagine due to a fear of giving back what I had recently made. I should have made $400 each night Monday and Tuesday, but I couldn't find my balls and only made $200 and $250 respectively. Wednesday and Thursday I had the opposite problem, as I was selectively aggressive, trying to hit home runs with multiple contracts, but it was my bread and butter scalping that kept me in the green. Friday I traded US equity indexes while working from home, and averted disaster through a good bit of fortune. I tried trading ES and NQ like I trade HHI, using 1 and 3 minute charts, but got chopped up pretty fierce in the first hour. I was down $500 at one point, but then switched to 5 minute charts and cut my loss down to $150. I should have walked away at that point, but I wanted my revenge, and wanted to get back to break-even on the day, so I kept tradeing through lunch. The chop was maddening, although if I was in my right mind I should have expected it, and I got slaughtered, which led to revenge trading. I'm not proud of what I did to finish positive on the day, because I went on tilt yet the market forgave me for it. I switched over to trading TF since it looked to be making cleaner moves. At first I got chopped up, and I scaled up after each loss. When the market finally broke out upward, I was long 4 contracts of TF. I rode that winner for a few points, which got me very close to being break-even again, then I scalped my way back into positive territory. If we hadn't had a good move like that in the last 2 hours I would have finished with a nasty loss.
I think I'm going to stop trading on Fridays, as its very difficult and stressful trying to work and trade at the same time, especially as a scalper. I also realized that the nuances I've become accustomed to in Hong Kong don't translate to US Equity indexes... they have their own nuances, and I'm not as familiar with them. Even though I examine ES's intrady chart every day, it's different when you watch it live. Also, the nice thing about Hong Kong is that there's no lunch hour, so there's less mid-day chop to get sucked into.
I may take next week off. I had to force myself to trade each night this last week, I was tired and unmotivated. I'm also dissapointed in the way I traded today, and need to recommit to not going on tilt.
P&L by day, in $USD:
Monday: $200
Tuesday: $251
Wednesday: $151
Thursday: $256
Friday: $147
Total for week: $1,005
Attachments
I decided to trade again this week and I'm mostly pleased with the result; it was a good, solid week.
Monday and Tuesday had some nice ranges and the setups worked cleanly for the most part, so I had some above average profits. Wednesday was a large gap day (due to the big down day in the US), and I debated not trading at all since I tend to struggle with large gap days. However, I decided to trade very cautiously and it paid off, in hindsight I could have been more aggressive but hindsight always makes everything seem easier. Thursday had an extremely tight range for the whole morning session, and there was some bizarre fighting going on between the bulls and the bears. Nothing was working, I was missing targets by 1 or 2 ticks, and I had 6 or 7 losing trades in a row at one point, and I was down $700. Then the market made an attempt to make a new low, and I was short 3 HHI. I was able to take profits on 2 of the contracts before the failed breakout shot upward and I exited the third at breakeven. I wished I had reversed but I was not expecting such a strong reversal. I got in a couple contracts on the first pullback, and worked that mini trend until it died, and finished just a couple minutes before the lunch break close up $73. Here are the results by day, stated in $USD:
Monday: +$529
Tuesday: +$513
Wednesday: +$271
Thursday: +$73
Total P&L for week: +$1,386
I started trading again after moving 4 months ago. In those 4 months I've made 10k, a 30% increase on my account. Given that I stepped up to the big contracts (HHI and HSI) only 6 weeks ago, I'm pretty proud of this accomplishement. It's been a good run, but lately I've been thinking a lot about further optimizing my methods. I still enter on too many setups (10-20) a night, and I still make too many revenge trades by scaling up. I'm also not convinced my profit targets are optimal either. I tend to let my P&L for the night dictate how aggressive I will be, or rather, how far I'm willing to let a winner run before taking profits. I've made improvements, and I'm getting better, but I believe I need to make some changes before I'm willing to scale up again. I've been writing a lot in my (private) journal, trying to ask the right questions in order perform the right research. I'm debating between a few options right now, and may even go back to the SIM for a week or two to try out some new ideas. While this would likely mean I'd be giving up the opportunity cost of additional profits, I think in the long run its worth the investment if I can optimize my methods and build a better foundation for limiting risk and scaling up.
The point of all this is that an era of my trading saga is coming to a close, and with it this journal. I've accomplished everything I set out to do at the beginning of the journal, and I'm pleased with the results. However, I'm not satisfied to simply continue with the status quo, I want to aggressively further my development so that I can go from averaging $300 a night to $3,000 a night. In order to build a better foundation for growth I will need to break down and re-evaluate each component of my methodology, and experiment with new techniques and money management styles that won't feel comfortable at first. I believe it will be worth it though, and I feel more excited about my trading then I have in a long time.
I hope this journal was helpful to someone out there. As stated a few posts back, if nothing else, this journal demonstrates that you can have a day job and profitably trade the Asian futures markets at night. I wish you luck and a strong resolve if you choose to follow the same path as me, it may be tough but there's nothing in the world I would rather do!
Monday and Tuesday had some nice ranges and the setups worked cleanly for the most part, so I had some above average profits. Wednesday was a large gap day (due to the big down day in the US), and I debated not trading at all since I tend to struggle with large gap days. However, I decided to trade very cautiously and it paid off, in hindsight I could have been more aggressive but hindsight always makes everything seem easier. Thursday had an extremely tight range for the whole morning session, and there was some bizarre fighting going on between the bulls and the bears. Nothing was working, I was missing targets by 1 or 2 ticks, and I had 6 or 7 losing trades in a row at one point, and I was down $700. Then the market made an attempt to make a new low, and I was short 3 HHI. I was able to take profits on 2 of the contracts before the failed breakout shot upward and I exited the third at breakeven. I wished I had reversed but I was not expecting such a strong reversal. I got in a couple contracts on the first pullback, and worked that mini trend until it died, and finished just a couple minutes before the lunch break close up $73. Here are the results by day, stated in $USD:
Monday: +$529
Tuesday: +$513
Wednesday: +$271
Thursday: +$73
Total P&L for week: +$1,386
I started trading again after moving 4 months ago. In those 4 months I've made 10k, a 30% increase on my account. Given that I stepped up to the big contracts (HHI and HSI) only 6 weeks ago, I'm pretty proud of this accomplishement. It's been a good run, but lately I've been thinking a lot about further optimizing my methods. I still enter on too many setups (10-20) a night, and I still make too many revenge trades by scaling up. I'm also not convinced my profit targets are optimal either. I tend to let my P&L for the night dictate how aggressive I will be, or rather, how far I'm willing to let a winner run before taking profits. I've made improvements, and I'm getting better, but I believe I need to make some changes before I'm willing to scale up again. I've been writing a lot in my (private) journal, trying to ask the right questions in order perform the right research. I'm debating between a few options right now, and may even go back to the SIM for a week or two to try out some new ideas. While this would likely mean I'd be giving up the opportunity cost of additional profits, I think in the long run its worth the investment if I can optimize my methods and build a better foundation for limiting risk and scaling up.
The point of all this is that an era of my trading saga is coming to a close, and with it this journal. I've accomplished everything I set out to do at the beginning of the journal, and I'm pleased with the results. However, I'm not satisfied to simply continue with the status quo, I want to aggressively further my development so that I can go from averaging $300 a night to $3,000 a night. In order to build a better foundation for growth I will need to break down and re-evaluate each component of my methodology, and experiment with new techniques and money management styles that won't feel comfortable at first. I believe it will be worth it though, and I feel more excited about my trading then I have in a long time.
I hope this journal was helpful to someone out there. As stated a few posts back, if nothing else, this journal demonstrates that you can have a day job and profitably trade the Asian futures markets at night. I wish you luck and a strong resolve if you choose to follow the same path as me, it may be tough but there's nothing in the world I would rather do!