From Persistent Foozler to Disciplined Trader

[foozler]

Day 3

I had two trades today as again my day was shortened due to technology problems. My internet connection was very unstable last night and this morning. The power issues yesterday apparently damaged my modem, and the cable company did come out around lunch time and replaced the modem. Unfortunately it took nearly two hours before the new modem could connect to the internet. I was told that this was normal and had something to do with IP address leasing and so on and so forth. I can only hope that the issue is in fact resolved and tomorrow returns to normal for me and my computer.

Trade 1 DUST: I bought DUST on a DBP. I foozled the entry as I was late getting my buy stop in to the market, and as a result my entry was $23 whereas it should have been closer to 22.80 - 22.85. As a result, I will give myself 1/2 of 1 point for having identified the opportunity, but incorrectly executing my order. I get the easy 1 point for having predefined my loss and entered a stop loss. I also will give myself 1 point for properly managing my exit. I did encounter some slippage on the exit, but I still managed to take a profit of .42 points.

Grade 2.5/3 .42 Points.

Trade 2 PCLN: I bought PCLN as it too set up a DBP. My entry was filled at 1238.33, which given the spreads on PCLN was very favorable. I set my predefined stop loss, and I moved that stop loss up as price moved in my favor. I was still in the trade when the cable technician arrived, and as I was in a profit and I had my stop loss entered, I decided to remain in the trade during that time. I was ultimately taken out of the position when price retraced through my stop loss. I was filled at 1243, for a profit of 4.67 points. However, given PCLN's price, the 100 share lot I traded really was equal to what I expect a full lot size of my average price candidate to be once I am fully engaged in my plan. I won't go into the calculations and reasoning behind this notion of mine, other than to say that for my own accounting purposes, the 4.67 points on 100 shares of PCLN would be the equivalent of a .93 point profit on an what will be my ultimate average position size. I give myself a 3/3 on this trade.

Grade 3/3 Points .93

For the day, I receive a grade of 5.5/6, A- and 1.35 Points

For the week, I have a grade avergae of 20.5/27 C and 4.28 Points.

Here is a table of today's trades:

 

[panzerman]

Foozler, you get stopped into your long position, but I'm not clear how you determine which price to set the stop at. Is it the high of the bar that made the double bottom?

 

[foozler]

Foozler, you get stopped into your long position, but I'm not clear how you determine which price to set the stop at. Is it the high of the bar that made the double bottom?

No, I will place my buy stop some distance above the market. Each srtock is different - for example, I will usually wait for PCLN to trade higher, and then I will enter using a limit order. Others I may place a buy stop a few cents to a 1/4 point above the level that would indicate a possible bottom is in. This is where it helps to spend a lot of time watching your stocks and getting to learn how each tends to trade.

 

[foozler]

Day 4

Just a brief recap as cleaning up after this latest storm has me physically exhausted. I had three trades today. I lost .42 points on an UGAZ trade that was not at all part of my plan. I made .75 points on an FEYE trade that was not at all a part of my plan. I made .15 points on a NUGT trade that was part of my plan. For the day, my grade is 3/9 and I am up .42 points.

For the week, my grade is 23.5/36 F and I am up 4.76 points.

I do not know why I revert back to this "gunslinger" approach where I find myself unable to wait for a proper set up to develop. I went through months of paper trading this set up and three solid weeks of sim trading it, and I had no problem sticking to my plan. The moment I am trading a real $$ account, and my discipline deserts me (or, I desert my discipline).

What is most frustrating for me is that once I go off plan, I seem to be wrecked for the day. For example, I took a trade on UGAZ sometime around 10 AM. It was not an "in-plan" trade. I did set a stop loss, and I was stopped out. But then, just 30 minutes later UGAZ does set up an in-plan trade and I do not take it. Why? Probably because I was already in another non-plan trade on FEYE, which wasn't a bad trade, and it was a good set up that I've traded in the past, but it is not this set-up. And the point of this exercise is for me to develop the discipline I need to always and only take good set-ups.

Then, around 11 AM, I take an in plan trade on NUGT. This trade is stopped out for a small profit about 50 minutes later. Then, NUGT sets up yet another in-plan set up, but I don't take it. And that one ran flawlessly high the rest of the day not once taking out a trailing swing low.

And there were others which I saw and also passed up - UGAZ, AMZN, PCLN - each presented the opportunity, I saw each one in real time with plenty of time to set a buy stop and enter the trade, but in each case I did not. So what is going on?

The only two things that have changed from the last three weeks when I was paper trading flawlessly, to this week is, of course, that I am now trading real money. But I am trading such small size, the dollar amounts at risk, even with slippage, are insignificant to me. But, nonetheless, it may be the money. I may have a real problem that I wasn't aware of regarding how I "feel" about real $$ risk, even if the amount I stand to lose is, as I said, insignificant.

The other change, of course, is that what had been a private journal exercise in a Word document is now a public forum exercise. Could I be somehow afraid to have to post a losing day here in my journal? It sounds preposterous that I would fear as an anonymous internet alter-ego, but it must be considered a possibility.

So, here is what I am going to do. Rather than post daily summaries, I think I will drop the frequency to an end of week summary. Just to take off the pressure that my performance on any particular day might matter. I will let tonight's review be the last for this week. I am going to be taking some time off, extending the 3-day weekend to 5 days, so I will trade tomorrow, and then again next Thursday and Friday. On the following Saturday, I will post a review of that short "week," and then each week thereafter. At least this way I might have a chance to discover whether I am afraid of losing $$, or afraid of losing face (though it is the internet - I cannot be rightly said to have a face to lose, but I have to try this anyway).

So for those who have been following along, I will be back at the end of next week. Thank you for your support and kind words thus far.

 

[dbphoenix]

Perhaps it has nothing to do with the money, nor with "losing face". Perhaps you're simply afraid to be wrong. You don't trust your own plan because you think it will place you in a trade that's wrong. So you trade without a plan and end up being wrong anyway. Rather than avoid being wrong, you seek it out. You want to be wrong, for whatever reason, so you "win" by being wrong. Given that you've been trading under conditions that most professionals wouldn't even consider trading under, the above hypothesis is not all that far-fetched. If you didn't want to be wrong, then you wouldn't trade under conditions that virtually guarantee that you'll be wrong.

You can't earn consistent profits without a plan. You can't trade a plan you don't trust. Therefore, you're going to have to find out just what it is that you're afraid of, and you won't likely find that on a message board.

Good luck to you.

 

[Tonkadad]

I went through months of paper trading this set up and three solid weeks of sim trading it, and I had no problem sticking to my plan. The moment I am trading a real $$ account, and my discipline deserts me (or, I desert my discipline).

You are on the right road. everybody has their issues and the only way to find out what "your" issues are is to do what you are doing.

I think you have a plan but as you said when real money is on the line then your discipline suffers.

Could your issue be that now you are trading with real money (although small) you have no more excuses if it doesn't work, you now have to face the fact that if you can't do it with real money, at least this trading plan isn't viable.

If you have a lot of hope and dreams attached to the outcome of this, it can create issues. If you don't follow your plan then you can use that as an excuse and delay the inevitable.

Just ask yourself, "am I doing what a consistently successful trader would do"?

Basically you are writing your own how to trading manual.

Two steps forward, one step back.

 

[SIUYA]

Day 4

What is most frustrating for me is that once I go off plan, I seem to be wrecked for the day.

I dont think its the money or the loosing face.....its the mental damage of not following your plan, and the face palm you give yourself for knowingly not following it...... After that then its the problem.

This probably goes to the whole zen aspect, of letting go and simply being focused on the actual process as opposed to the result.

You probably trust your plan, it might be complete, but maybe the problem is you feel something in the plan is missing and you feel the need to tinker, or to show it who is boss, by saying "I" will show you I can still do better". (Which is why you think posting here in a different manner will change the problem). IMHO - Its the timing of this tinkering which is the problem.

I have had this problem - always wanting to improve things, always thinking 'how can this be improved', 'why did'nt I maximise this'......my worst results come when I start following my plan and then for some strange reason do a 'i'm so smart' trade that has nothing to do with the original plan.
(*plan=thought process for the day....and its topical for me as I went AWOL on my plan yesterday! Doing what I term 'marginal trades' as opposed to the planned big picture trades.)

Problem is - this maximizing needs to be done in the planning process. Not live, and even if you have a foolproof plan that is detailed in every way, this tinkering at the wrong time is still a problem.

...........................................................................

Try this as a simple suggestion - it may or may not work but its a very simple cost effective thing to try...........

When you see a trade that is off plan (or any trade even), ask your self.....(do this as a checklist like being a pilot - and write this down - it does not need to be detailed.)

Does it fit the plan? y/n
OR Is this a marginal trade? y/n
What do I think will happen here? up/down
Am I bullish/bearish - and why? -----see if you can find a valid reason.

then - simply close you eyes, and tell your self this - "I dont know what its going to do"

....dont think - "odds are it will go up/down", or that "if I dont act I will miss out"

Actually tell your self......"I dont know what its going to do"

If you dont know what its going to do then the default is to do nothing.

Then look again and see if it fits your plan. Also see if there is any change in your thoughts when you actually tell yourself this. You can then review this at the end of the day, and see how good your 'guesses' were.

You have to love the process, and not the final result.

 

[foozler]

Given that you've been trading under conditions that most professionals wouldn't even consider trading under, the above hypothesis is not all that far-fetched. If you didn't want to be wrong, then you wouldn't trade under conditions that virtually guarantee that you'll be wrong.

Thank you for your reply dbphoenix. And to Tonkadad and Siuya as well. The market opens in a few minutes, so I don't have to to think and respond to all of your insights and suggestions, but I would like to ask you, dbphoenix, if you could be more specific as to the adverse conditions you perceive, because I truly and honestly do not know to what you are referring. I do not mean this is a contrary manner by any means. I truly do need a word or two, or a sentence or two of direct explanation on this count, in order for me to understand what you are telling me.

Thank you all. I'll be back later tonight, and if not I will respond by the end of the day next Thursday.

 

[Tonkadad]

....You don't trust your own plan...... So you trade without a plan....

You can't earn consistent profits without a plan. You can't trade a plan you don't trust.

I am going to guess he doesn't believe you have a plan that you trust.

You said "I went through months of paper trading this set up and three solid weeks of sim trading it, and I had no problem sticking to my plan. The moment I am trading a real $$ account, and my discipline deserts me (or, I desert my discipline). "

 

[dbphoenix]

Thank you for your reply dbphoenix. And to Tonkadad and Siuya as well. The market opens in a few minutes, so I don't have to to think and respond to all of your insights and suggestions, but I would like to ask you, dbphoenix, if you could be more specific as to the adverse conditions you perceive, because I truly and honestly do not know to what you are referring. I do not mean this is a contrary manner by any means. I truly do need a word or two, or a sentence or two of direct explanation on this count, in order for me to understand what you are telling me.

You don't see any of the conditions that you've enumerated this week as being not conducive to focused and disciplined trading?