FirstDegree and Crude Oil

[austinp]

Let me add one fact I wish to heck I'd internalized several years ago... it has made a tremendous difference in my career since grasping this reality.

You cannot be perfect in every trade. You cannot almost be perfect in most trades. You cannot be really good in even most of your trades.

No one can.

That's the good news. We aren't alone: we are all in this together. So let's not over-think the process and beat ourselves mentally before the game even begins.

Our job is to end each session wildly profitable, mildly profitable, par for the day or mildly drawn down. Somewhere along the line, each of those will result and that's part of the profession.

Today for example I was shorting TF near pit session highs on a strong sell-signal sequence. Trailed my stop a little tight a couple of times, got hit and had to re-enter once or twice before the down-move began. Caught +1pt and +4pts amidst a -0.8 stop.

Was short later on a trade that went +3.5pts in favor, added a second position on a retrace and set trailed stop to +1pt worst-case finish. That was into lows of the day, what could have been a +3pt TF trade became a +1pt trade in the end.

Moral of the story? Plenty of mistakes. More mistakes than ideal actions. But who really cares? End result of that whole operation was +5pts TF and see ya tomorrow.

Please don't try to over-analyze the whole process or micro-examine every single trade from open to close. Just take the trades, set your stop at acceptable loss and take the loss if hit.

Otherwise let the trades that don't stop out, run.

It really is that simple in the end

 

[FirstDegree]

These are the kinds of replies I was hoping to get in this journal. I can't thank you guys enough for replying and helping me out. All of you. Sometimes it's just the little bit of information that puts a different angle on things that starts bringing me closer to where I want to be.

I am reading the replies and thinking about them. Even though it might not seem like it's translating into my trading, it really is, and I hope all of you will stay with me, along with others coming in as well.

Sometimes just seeing the ups and downs of others reassures me that what I am doing is keeping me on the right path.

 

[FirstDegree]

One trade today. It has been a good feeling to step out of my comfort zone. My heart starts racing and I can feel my chest pounding. It gives me the opportunity to recognize it and try to just calm myself down.

My chart is slightly extended today because before posting I realized I wanted to add another trade that I didn't have on my chart so I had to redo it.

Trade A: Price found some support and made a bounce. It came back up and touched the EMA and then reversed down. It was a short for a quick scalp or at least a BE+1 if you wanted a bigger move. I didn't see this because I was doing something else away from my chart.

Trade B: I missed this trade, but loved it after the fact. Price is finding support, makes a bounce, gives a sell signal, but the sell signal didn't follow through. You have a second entry hammer, higher low. The tops of both support bars was at the same price. This was a nice trade. I didn't recognize it at the time so I'm not going to factor it into the "I should have taken this trade," but I definitely wish I could go back and take it.

Trade 1: This was a break of the previous pivot low. I was going to put the label on the bar, but it was hard to see. I shorted at 81.56. It went against me shortly after getting in and I put in a limit order at +1, but then took it off. Price eventually just crept down going as far as +11, but I was holding for it to test the lows. I moved my stop to +1 after it hit +8 and took my hand off the mouse. It crept so slow that I wanted to take it off at +11, but I was advised to let it ride. Price eventually came back and took me out at +1 only to later find out that it had bounced off a steep down channel line. Looking back on it I wish I would have just take it off for a nice gain, but if it would have worked out I wouldn't be regretting a thing. It's a conditioning process and I stepped out of my comfort zone again to take the break of these pivots. I think I did the right thing.

Trade C: Immediately after my trade you get a reversal signal, then a shooting star bounce off of the EMA. My problem with this trade was the fact that right towards the end of the bar it extended down further into the previous bar. I was liking it before it did that, but afterward it just started looking like it was rangy. Maybe I should have taken it, obviously now seeing where price went, it would have been a nice entry, but having a 10 tick stop it would have come back and hit it to the tick before going lower. It wouldn't have been a survivable stop.

Total: +.5
Monthly Total: -25

mTotal: 0
Monthly mTotal: +74

I saw price drop like a ton of bricks at around 11:35am EST, but my brain just doesn't think fast enough to know that I should be getting in on those. It was more a shock and awe moment. By the time I recognize it, think about it, go to my DOM, check out where to get in, price is already gone and it's too late. It's something to work on. Impulse trading!

I was able to focus myself again. I'm actually enjoying looking for areas where trading opportunities are available. It's a good sign. I'm slowly starting to step out of my comfort zone and eventually I'll get there. I think the tipping point will be a few trades that I take that end up showing me some nice profits. It'll really strengthen my confidence and beliefs.

"By fibbing to ourselves, we can give a needed boost to our self-esteem. After all, none of us is perfect, and daily life brings us into constant collision with our own incompetence and inadequacies. If we did not ignore most of that negative feedback - and counteract it by creating what psychologists call 'positive illusions' - our self-esteem would go through the floor." - Jason Zweig

 

[NoDoji]

Quote from FirstDegree:

It crept so slow that I wanted to take it off at +11, but I was advised to let it ride.

You were looking for a test of the low and it made sense to give it a chance. It found support to the tick of the lower channel line, that line we drew after-the-fact trying to figure out why the heck it found support @ 81.45 when the Law of Lows That Must Be Tested was supposed to be in play

You were stopped out b/e, nothing lost, but most importantly you gave the trade room to do its thing. Now watch carefully for the next signal. At that point a long entry made sense, because another higher low from the 9:30-10:00am ET lows was put in and test of the LOD failed to materialize. If a long @ 81.61 felt too counter-trend (it did to me), then wait for the next short signal, because when price has come so close to the LOD (in this case the overnight low of 81.31) more than once like that, if it comes back for another try, it should be a well-fueled breakout. A decent re-entry short was break of 81.45 pivot, and the fully confirmed short was the breakout itself, via a sell stop @ 81.30 and be ready to react quickly if it fails, and just as quickly if it runs to at least lock in a minimum profit, because breakouts can run hard and they can also bounce back hard.

Quote from FirstDegree:

Maybe I should have taken it, obviously now seeing where price went, it would have been a nice entry, but having a 10 tick stop it would have come back and hit it to the tick before going lower. It wouldn't have been a survivable stop.

Though a 10-tick stop is usually good (I use 10 on breakouts), a 15-tick stop is generally survivable for almost all solid price action setups where you take pullback entries in the direction of the trend.

 

[FirstDegree]

Frustrated today. 1 trade, low tick loser and disappointed.

Price made an incredibly steep move up. I just happened to turn my platform on right at the open, but was in the process of getting myself situated that I really didn't pay attention to the charts.

Trade A: Second entry, lower high, shooting star for a short. Price made such a strong run that I didn't think the bulls were going to give up so quickly. It was a good thing I stayed away from that one.

Trade B: A small bar at the top of the range finding resistance all along those tops. You would look for it to break the previous pivot low, but once it failed to gain any momentum you could move your stop and scalp your way out.

Trade C: Still finding resistance. Here, we have a previous lower low and we're starting to look like it's going lower. This setup stuck out to me, but I didn't take it. I was so unsure with such a huge move in the morning and it was right after the news that I figured I'd just let price settle in a little bit.

Trade 1: Still making lower lows and price looked like it was heading lower. I had a sell stop at 1 tick below the low of the previous pivot low. I had a downtrend channel drawn and had a target of somewhere around 82.95ish for a 50% retracement. I felt that I would get at least some follow through to manage the trade if it didn't go to where I was targeting. Price was coming in so hard once it got close that I left the order in. Sure enough, low tick, it went 2 ticks down and immediately reversed to take me out at -10.

I was really disappointed and frustrated with this trade. It's a new month, I was really looking forward to getting started on the right foot, and my first trade was a loss. The end of October I kept my spirits high and was building on my confidence to not let losses affect me and to trade correctly as far as trading levels and not price targets. It just feels like a setback. This trade stung because I was wholly expecting a solid lower low and I low ticked for a loss.

Trade D: Price is making what looks like a pullback after going down to the retracement area, which I was expecting it to go to. It made a small bull bar and then the D bar was a bear trap, coming down and getting some shorts in and then reverses to the upside. I saw it, but didn't trade it because I'm still working on this kind of trade setup.

Total: -10.5
Monthly Total: -10.5

No mTotal today because I had somewhat of a valid reason to stay out of Trade C.

So overall, I'm going deeper into the hole and even though I'm not letting my drawdown affect me, it's still disappointing to feel like all I'm doing is taking losses, +1 trades, and/or not getting follow through with the trades that I'm taking so that I can build some confidence.

I went back in my account to the last 2 months and realized that I haven't had a full profit target trade since Sept. 23 when I took a +11 trade. The rest were either +1, -4, -10, and one with slippage at -11. I did a couple weeks of sim trading in October so I only had 6 live trades in October, but my 3 profitable trades were all +1 while my losses were much bigger. It's a small sample size, but a present reality because it's a pattern that is starting to play with my head. I feel like I'm constantly climbing out of this hole I'm in with the loss of my account and my problem is that I keep digging deeper.

I'm trying to not let it get to me, just another trade in the next thousand. My real problem is the lack of trades and not giving myself enough chances to let the probabilities work themselves out. If I would have taken all of the trades today according to my chart above and just let the stops get stopped out and taken correct profits on my winners, I would have a +19.5 day. Maybe doing this enough times will strengthen the concept in my mind. It's all hindsight and it's impossible to say what I would have actually done until I do it, but taking only one trade a day is not cutting it. Sometimes I just feel like my one trade is the only setup I'm going to see all day so it has to be a good one, but in reality there are several setups a day.

So hopefully the rest of the week goes well and I can just put this loss behind me. I'm ready for my trading to start coming around. I've read some great things from the guys in the CL thread about not needing to know what is going to happen next and so I am trying to make that a part of my trading.

"By embracing your mistakes instead of burying them, you can transform them from liabilities into assets. Studying your mistakes and keeping them in plain sight will help you avoid repeating them." - Jason Zweig

 

[Picaso]

FD,

Don't let the bad beats of small losers and breakevens get to you. Keep in mind that your first priority should be to protect your capital and to avoid getting emotionally damaged. You learn to do that correctly by refraining from trading when you don't see a trade and by cutting your losses when you're wrong and, <i>even if it is by accident</i>, you will inevitable have winners. Then you just have to make sure that you don't cut those winners short taking profits too early to satisfy a psychological need.

Believe me when I say that I understand how frustrating having small loser after small loser can be. It is that frustration what leads traders to do stupid things like widening their stops beyond what volatility indicates, averaging down, trading without a stop, etc. This frustration can become exasperation when you see how people that trade recklessly, apparently with no other strategy that "it always ends up going up" or "the Fed will bail me out", keep churning profits and accumulating strings of winners.

So don't focus on how many losers you get or how many times you're stopped out at breakeven - after all, once you put on a trade you don't control the result. Focus instead on what you <i>can</i> control, like getting ready with plenty of time before the open, making sure you're paying attention at pivotal times of the day and putting the trades on as you see them.

Time is the greatest equalizer. Trade right and - hopefully sooner rather than later, but inexorably at some point - you will get the right results.

Best trading to you.

 

[NoDoji]

FD, it was a good setup and you followed your rules, so it was not a loser, just a trade that resulted in a loss. Big difference.

You called the re-entry, and didn't trade it. Full target attained on that one (min target zone 83.00).

One of the more difficult setups to trade is the one that follows a good setup that results in a loss.

Even more difficult is trading the setup that follows two decent setups that resulted in losses and one of them was you buying the high tick of the day when the breakout failed.

I stayed in the game that September morning (a failed breakout means it's likely going down) and the next two trades resulted in 61 ticks of profit, erasing an opening loss of $250 loss and producing a $340 net gain, all in a 30-minute time frame.

I then posted in CL Redux to show the importance of sticking with it: http://www.elitetrader.com/vb/showthread.php?s=&postid=2964924

I truly embraced a piece of wisdom from Mark Douglas that morning and try to carry it with me every day:

"There is a random distribution between wins and losses for any given set of variables that define an edge. If every loss puts you that much closer to a win, you will be looking forward to the next occurrence of your edge, ready and waiting to jump in without the slightest reservation or hesitation."

Mark Douglas, Trading in the Zone

 

[FirstDegree]

Ah yes, Mark Douglas to the rescue. I memorized those 5 fundamental truths. I should probably recite them more often.

And to Picaso, thanks for the encouragement.

I really try to not let losses get to me. I guess I came into today with expectations that it was a new week, new month, I feel like I'm starting to get the hang of it and so my trading will turn around any day now. Sometimes when I take trades I think "ok, just this time work for me!!!" It's a sense of false hope that I put on my trades where I start to see floating dollar signs flashing before my eyes that maybe "this" trade will be the big one where it'll just shoot out of the gate and all of my trading dreams will be answered (exaggerating).

I know that the losses aren't affecting me as much as they use to. I also know I just need to take more trades. It's these little pieces that I'm putting together day after day that are beginning to shape who I am as a trader.

I have read Trading in the Zone 3 times now so I should be able to recite that book from beginning to end. I have to start with trading more, taking more signals throughout the day. I need to stop thinking about my current trade and think more about my setups as a complete group.

I often think that I'm only going to get one signal per day and so taking that one loss stings because I feel like all of my opportunities pass me by. It hasn't really sunk in yet, even though I could review the charts in this thread, that there are usually 3-5 good signals per day and I just need to take all of them. I shouldn't be coming up with reasons why trades shouldn't be taken or trades didn't work, after the fact.

Success comes from taking all valid signals and managing them correctly. If you continue doing that then you might have some days where you just "1 tick your way to financial freedom" or you have great days where the technicals are solid and clean and seem to always work out. I'm just really looking forward to that day when I can take more than 1 trade, have a nice healthy day's profit, and feel like what I'm doing actually works. I know in hindsight that I should be doing well for myself, but until I feel the emotional highs it really hasn't sunken in yet.

 

[FirstDegree]

Pretty terrible price action today. No trades and it wasn't because I hesitated. Just, simply, no trades.

Trade A: This had the looks of a trade, but the bar was so big and the EMA was just below. I felt it was a lower probability trade. Turns out it was probably the best trade of the day, unless you're a range trader, which I'm not.

Not much more really needs to be said. I even kept focused on the charts for the majority of the day and it turns out like this.

I woke up super early this morning to try and get myself up earlier, get my distractions out of the way (sports, news, etc.), maybe trade some pre-market (sim) and then be ready to go by the open. Well, I was up late because I just had to watch the Giants win and morning comes fast when you get up earlier!!! So I was a slow riser today and it took a little while to get the cobwebs out. Going to try and continue to get up early again tomorrow.

I did do some sim trading today, but nothing in the 3 hours that I trade live. I am +11 ticks on 4 trades (after sim commissions). I was mainly playing around with stops and trying to see how I could more actively manage my trades without getting failed breakout losers and what not. I seemed to do well. If I would have taken a loss I probably wouldn't be talking about this, but I'm adding it because I had a profit and just because today's price action was pretty boring.

"...we are often most afraid of the least likely dangers, and frequently not worried enough about the risks that have the greatest chances of coming home to roost." - Jason Zweig on his chapter on Fear.

 

[trading_time]

I am sorry if this has been stated before, but what time frame is the charting you use. Looks like 5 minute. but I would like to be sure.

Also don't give up yet, this is a hard business as you know, but once you get it, that's it you got it! So it's worth the time and grief while learning.

On another note have you considered:
Watching DX, and GC along with crude? I Find these markets particularly DX a tale tale to CL, and GC can be a tale tale to DX.. use the same time frame on all charts 5 minute works good. You will start to see discrepancies in prices related to each other, which will give you a heads up on direction.

TT