Getting my act together
- Thread starter gutsytrader
- Start date
Update
I seem to have turned the corner with the problem of holding winning trades. With some professional help I was able to figure out that my problem was fear of losing. It wasn't fear of losing money. It was the fear of losing control (didn't trust myself to make the right decisions). I hadn't noticed it but my largest losing day since starting trading was the first day I traded after the incident with my daughter; 5/4/05. That day I was trying to make profits when none were available. I held onto the losers way beyond where I should've and that was the start of the problem.
In the following months I did it more than once and at some point my subconcious stopped trusting my concious self. I probably should've been able to figure this out for myself since I didn't feel stressed when I tried trading with a stop in place. Since August I've had over 90% winners when in the past the average has been more like 60%. This is also a sign of the problem. There's no reason for the subconcious to not trust the concious when you close out the winners and take any size profit. In the past week I've been trading with a pulse monitor on my wrist. When I put a trade on it almost always started going up right away. It stopped rising and started settling down when I put a stop in the market. Through a little trial and error I found that if I put the stop in first and then put on the position, my heart rate stayed nice and calm. I've put in some tight stops and gotten stopped out to condition my subconcious to trust the concious by seeing how little effect a losing trade had on my account.
Other changes:
I've purchased a new computer from Office Depot with XP on it. I did this because my Win98 system drops the connection with OpenEcry after about 10 min. and I have to login again. This was putting too much stress on me to try and time the entry and exit.
The only thing I have on the new computer is the OpenEcry software. I also decided to put the computer behind me so I can either enter trades on it or monitor the market on my main computer. I can't watch my open pnl at the same time as monitoring the market. So far, I've found this to be much more relaxing.
I've changed my initial goal from breaking even on my monthly expenses (about 2k/month) to averaging $2,250/week in profit.
At this level I can quit my night job and concentrate entirely on trading. The monthly breakeven obviously has to be exceeded before this, but I wanted a goal that had more significance to my personal life.
I've also put additional funds in my account so that the size of any one loss is insignificant. I'm paying interest but at least when I want to scale up it won't be a problem.
Here's the statement from my largest losing day, 5/4/05.
I seem to have turned the corner with the problem of holding winning trades. With some professional help I was able to figure out that my problem was fear of losing. It wasn't fear of losing money. It was the fear of losing control (didn't trust myself to make the right decisions). I hadn't noticed it but my largest losing day since starting trading was the first day I traded after the incident with my daughter; 5/4/05. That day I was trying to make profits when none were available. I held onto the losers way beyond where I should've and that was the start of the problem.
In the following months I did it more than once and at some point my subconcious stopped trusting my concious self. I probably should've been able to figure this out for myself since I didn't feel stressed when I tried trading with a stop in place. Since August I've had over 90% winners when in the past the average has been more like 60%. This is also a sign of the problem. There's no reason for the subconcious to not trust the concious when you close out the winners and take any size profit. In the past week I've been trading with a pulse monitor on my wrist. When I put a trade on it almost always started going up right away. It stopped rising and started settling down when I put a stop in the market. Through a little trial and error I found that if I put the stop in first and then put on the position, my heart rate stayed nice and calm. I've put in some tight stops and gotten stopped out to condition my subconcious to trust the concious by seeing how little effect a losing trade had on my account.
Other changes:
I've purchased a new computer from Office Depot with XP on it. I did this because my Win98 system drops the connection with OpenEcry after about 10 min. and I have to login again. This was putting too much stress on me to try and time the entry and exit.
The only thing I have on the new computer is the OpenEcry software. I also decided to put the computer behind me so I can either enter trades on it or monitor the market on my main computer. I can't watch my open pnl at the same time as monitoring the market. So far, I've found this to be much more relaxing.
I've changed my initial goal from breaking even on my monthly expenses (about 2k/month) to averaging $2,250/week in profit.
At this level I can quit my night job and concentrate entirely on trading. The monthly breakeven obviously has to be exceeded before this, but I wanted a goal that had more significance to my personal life.
I've also put additional funds in my account so that the size of any one loss is insignificant. I'm paying interest but at least when I want to scale up it won't be a problem.
Here's the statement from my largest losing day, 5/4/05.
I started to trade normally again last Thursday 10/19/2006. My goal was to get all the profit I should in the trade. While the trade only lasted about 20 min., I was very happy to capture 3.50 points. It was about .5 larger than the method because I bailed when I saw more large specs moving the market in the direction I was in. Without institutions I knew the move was close to done.
I was so satisfied with the win that I took the rest of the day off and did other things. Later, I was disappointed that I checked out of the day. I decided to paper trade Friday and try to keep focused on each trade. At the end of the day I had three paper trades (all profitable).
I thought about this over the weekend and decided to not beat myself up too much. If I can average 2 pts./day then I shouldn't have any trouble meeting my goals. In time I'm sure I'll take more trades, but I'm going to be satisfied with holding each trade I'm in as long as I'm supposed to for now.
My goal for this week is to trade 2 contracts in each position for each day and have at least one complete trade each day (hold for as long as I'm supposed to).
I was so satisfied with the win that I took the rest of the day off and did other things. Later, I was disappointed that I checked out of the day. I decided to paper trade Friday and try to keep focused on each trade. At the end of the day I had three paper trades (all profitable).
I thought about this over the weekend and decided to not beat myself up too much. If I can average 2 pts./day then I shouldn't have any trouble meeting my goals. In time I'm sure I'll take more trades, but I'm going to be satisfied with holding each trade I'm in as long as I'm supposed to for now.
My goal for this week is to trade 2 contracts in each position for each day and have at least one complete trade each day (hold for as long as I'm supposed to).
Update for last week
Last week didn't go as well as planned. I only traded 5 contracts for the whole week instead of the 10 planned.
On Monday I had a good buy signal but I estimated the stop loss point to be more than 4 points away from the entry. On the previous Friday the paper trades I did had stop losses of less than 2 points each. I skipped the entry on Monday figuring it was too risky. After watching the market move 8 points away from my entry I decided I better get away from the screen before I put my foot through it. Lesson for the day...I have no idea what the reward part of the equation is likely to be, so stop trying to figure risk:rewards and let the trade determine it. Maybe after a couple of months I'll have enough data from trades to estimate this.
On Tuesday;10/24, I decided I wasn't going to screw around and let the stop loss point influence my trading decisions. I got a marginal buy signal and decided to get in the trade. Because it was only a marginal signal I only put on 1 contract. The entry was at 1383.00 which was the short term high of the day (lol). The stop was about 5 points away. When the market pulled back to 1381.00 I got a decent lower risk buy signal so I put on the second contract. The market continued to fall to around 1379 and I got a low risk buy signal. Since I was already in as much as I planned, I ignored the buy. The market then turned and went higher. I got a exit signal at 1382.75 and I dumped both contracts at 1382.50 for a whopping profit of $37.92.
Lesson for the day...wait for a decent entry and don't rush in on marginal entries. The exit point was within a tick of the short term high, so the timing was excellent.
Last week didn't go as well as planned. I only traded 5 contracts for the whole week instead of the 10 planned.
On Monday I had a good buy signal but I estimated the stop loss point to be more than 4 points away from the entry. On the previous Friday the paper trades I did had stop losses of less than 2 points each. I skipped the entry on Monday figuring it was too risky. After watching the market move 8 points away from my entry I decided I better get away from the screen before I put my foot through it. Lesson for the day...I have no idea what the reward part of the equation is likely to be, so stop trying to figure risk:rewards and let the trade determine it. Maybe after a couple of months I'll have enough data from trades to estimate this.
On Tuesday;10/24, I decided I wasn't going to screw around and let the stop loss point influence my trading decisions. I got a marginal buy signal and decided to get in the trade. Because it was only a marginal signal I only put on 1 contract. The entry was at 1383.00 which was the short term high of the day (lol). The stop was about 5 points away. When the market pulled back to 1381.00 I got a decent lower risk buy signal so I put on the second contract. The market continued to fall to around 1379 and I got a low risk buy signal. Since I was already in as much as I planned, I ignored the buy. The market then turned and went higher. I got a exit signal at 1382.75 and I dumped both contracts at 1382.50 for a whopping profit of $37.92.
Lesson for the day...wait for a decent entry and don't rush in on marginal entries. The exit point was within a tick of the short term high, so the timing was excellent.
Last week cont'd.
On Wednesday I forgot it was Fed day. I decided to hang out and forget about trading for the day.
On Thursday; 10/27, I found a low risk point to go short but the market moved to a average entry point before I could enter the order. I decided to put it in the market as a sell limit order and see if it came back. The market continued to weaken and I put in another sell limit order just above where the market was trading. Why? Lapse of discipline. Anyway the market had one of it's upward bursts and I got filled on both orders at very favorable prices (1391.75 and 1391.25). The market moved immediately in my favor. When I was ahead by a few points I made the mistake of turning around and looking at the p/l. I was up more than I've been in any trade since August and I got a little excited. The market rallied a little and I didn't like the loss of profits. I decided to take one of the contracts off with a two point profit figuring I'd let the other ride till I got a exit signal. I bought one contract back at 1389.25. And exited the second contract at 1387.50. I thought most of the profit was done in the trade and I didn't want to leave my biggest win since August hanging. Profit for the day +$300.42. The trade went a little further. Had I waited for a exit signal on both contracts, I would've won about 450 for the trade. Lesson for the day...stick to the exit plan and ignore the p/l while the trade is on.
On Friday I made the mistake of watching CNBC before the open and saw a trader talk about the weak GDP number. He thought we should have some kind of a sell off as the day went on. After the market opened I was not excited to get a low risk buy signal.
I decided I needed to take it to improve my discipline, but just in case the market started trending lower I'd only use one contract to limit my loss. The market bounced around my entry price and confirmed for me that it was a low risk buy. The stop loss was only about 1.5 points away from the entry. Eventually the market rallied and I exited the trade when I got a exit signal at 1390.50.
Lesson for the day...stick to the plan and put on both contracts when the entry is low risk.
Here's Thursday and Friday's P/L
On Wednesday I forgot it was Fed day. I decided to hang out and forget about trading for the day.
On Thursday; 10/27, I found a low risk point to go short but the market moved to a average entry point before I could enter the order. I decided to put it in the market as a sell limit order and see if it came back. The market continued to weaken and I put in another sell limit order just above where the market was trading. Why? Lapse of discipline. Anyway the market had one of it's upward bursts and I got filled on both orders at very favorable prices (1391.75 and 1391.25). The market moved immediately in my favor. When I was ahead by a few points I made the mistake of turning around and looking at the p/l. I was up more than I've been in any trade since August and I got a little excited. The market rallied a little and I didn't like the loss of profits. I decided to take one of the contracts off with a two point profit figuring I'd let the other ride till I got a exit signal. I bought one contract back at 1389.25. And exited the second contract at 1387.50. I thought most of the profit was done in the trade and I didn't want to leave my biggest win since August hanging. Profit for the day +$300.42. The trade went a little further. Had I waited for a exit signal on both contracts, I would've won about 450 for the trade. Lesson for the day...stick to the exit plan and ignore the p/l while the trade is on.
On Friday I made the mistake of watching CNBC before the open and saw a trader talk about the weak GDP number. He thought we should have some kind of a sell off as the day went on. After the market opened I was not excited to get a low risk buy signal.
I decided I needed to take it to improve my discipline, but just in case the market started trending lower I'd only use one contract to limit my loss. The market bounced around my entry price and confirmed for me that it was a low risk buy. The stop loss was only about 1.5 points away from the entry. Eventually the market rallied and I exited the trade when I got a exit signal at 1390.50.
Lesson for the day...stick to the plan and put on both contracts when the entry is low risk.
Here's Thursday and Friday's P/L
For the week I made a total net of +469.80 so it wasn't a complete bust. With only 5 contracts traded, the average per-contract profit was 93.96 which is a great improvement from earlier trading. I didn't feel stressed out like I did in previous trading so having a stop loss in the market before I put on a trade has been a useful tool. I need to be more disciplined and just let the trades happen instead of locking in profits (no matter how large). As always it's easier to trade when real money isn't in the market.
In watching the market last week I noticed there were 2-3 trades available per-day. Since I only participated in 3 trades over 3 days I think my biggest improvement from here will come from increased frequency of trading. At 2 trades per-day during the 4 days (skip Fed day), that would be at least 8 chances to get in on trades. Since I only hit 3 trades I'd have to say I participated in a maximum of 38% of the available trades for the week.
This week I'm going to try and get in on more trades. I feel like I'm close to a breakthrough and hope to increase my weekly profits by 2-3 times in the next few weeks. To boost my discipline I'll go back to posting the daily results at the end of each trading day.
In watching the market last week I noticed there were 2-3 trades available per-day. Since I only participated in 3 trades over 3 days I think my biggest improvement from here will come from increased frequency of trading. At 2 trades per-day during the 4 days (skip Fed day), that would be at least 8 chances to get in on trades. Since I only hit 3 trades I'd have to say I participated in a maximum of 38% of the available trades for the week.
This week I'm going to try and get in on more trades. I feel like I'm close to a breakthrough and hope to increase my weekly profits by 2-3 times in the next few weeks. To boost my discipline I'll go back to posting the daily results at the end of each trading day.
Hi Gutsy'
appreciate your thread...
One question and One Small Sharing...
<b>I. A Question... </b>
In one of your posts you said...
"I check 7 charts every 6 seconds to answer two questions⦠"
I would assume i would know 4...
1. Up Down Vol
2. Tick
3. Prem
4. Futures Price
do i have these right and what would be the other 3 or all 7... thanks...
<b>II. A Sharing....</b>
You mentioned very honestly in this Journal that you are working on your diet and health... so...
I was a professional athlete for a large part of my life and was very into efficient and nutritious diets... what i found was that i could FORGET worrying about nutrients and calories IF i focused on eating natural color food in very diverse meals...
as in... you can eat a million pizza's and still be hungry and not satisfy your body's cravings unless you eat food that is natural too...
here is a web page example of a meal just like i am talking about and i eat a number of times a week... i am rarely hungry... and it feels great...
http://www.enflow.com/codefood.htm
anyway... hope this helps a little
cj...
_________________
HAVE STOP <img src=http://www.enflow.com/p.gif> WILL TRADE
appreciate your thread...
One question and One Small Sharing...
<b>I. A Question... </b>
In one of your posts you said...
"I check 7 charts every 6 seconds to answer two questions⦠"
I would assume i would know 4...
1. Up Down Vol
2. Tick
3. Prem
4. Futures Price
do i have these right and what would be the other 3 or all 7... thanks...
<b>II. A Sharing....</b>
You mentioned very honestly in this Journal that you are working on your diet and health... so...
I was a professional athlete for a large part of my life and was very into efficient and nutritious diets... what i found was that i could FORGET worrying about nutrients and calories IF i focused on eating natural color food in very diverse meals...
as in... you can eat a million pizza's and still be hungry and not satisfy your body's cravings unless you eat food that is natural too...
here is a web page example of a meal just like i am talking about and i eat a number of times a week... i am rarely hungry... and it feels great...
http://www.enflow.com/codefood.htm
anyway... hope this helps a little
cj...
_________________
HAVE STOP <img src=http://www.enflow.com/p.gif> WILL TRADE