Journal of ashes and Eminis

P

phoenix_rising

The goal of this journal is for me to try and solve my trading issues. I'm not sure how long I will post or how much I will post, but at least for now I plan to be pretty open.

To start with, for some silly reason I decided to trade today. Despite the major lack of movement. I have two trading methods in mind that I plan to work on. One is pure scalping while the other is more of a custom trend following system. For scalping my initial thoughts were for a 1 point target per trade.

So what happened today? I won't give exact trades (unless someone really wants to know), but here is a P/L list for each trade taken. All before 11:00AM.

+0.50
+0.25
+0.25
+0.50
+0.25
+0.50
+0.25

-2.0
-1.50
-1.25
-0.75
-1.25
-2.0
-1.75
-1.75

BTW, they aren't ordered by time. First thing to notice is that my average win was .36 (barely better than one tick). My average loss was 1.53 (roughly 6 ticks). On a possitive note, at least I can begin to see what my scalping pain threshold is (between 6 to 8 ticks).

Anyway, there is an obvious problem here. With a win/loss of roughly 50%, even if I killed my losers at 2 ticks, I would still be losing money. And, I wonder how many of my winners originally went against me by 2 ticks anyway.

Couple of options. Increase my target, decrease my "stops", or both. Or, go all contrarian and program my buy button to sell, and my sell button to buy.

But, with only one real day of the start of systematic observations, maybe it isn't wise to make any wide sweeping modifications just yet. Or maybe I should ignore scapling and work strictly on my trend system. However, scalping does fit with my psychological gut, even if it doesn't know what it is doing yet.

Time to go for now...
 
Fool that I am, I made some more trades this afternoon. The sad results... -1.50, +0.50, -2.50, -1.25.

Now what does this say? Since I'm obviously willing to take small 2 tick profits, it shows that all in all today, roughly 50% of my trades went against me by an average of 7 ticks before (if ever) going my way by two ticks. Those are actually pretty good odds if reversed. Can I reverse my methods? Maybe, if I could quantify my methodology. Sounds like I need to write a hard-copy trading plan.
 
Someone on this board said that if you can lose money like that, there is no reason you can't make the same. If trading was really random you couldn't do what you just did.
 
Originally posted by PuffyGums
Someone on this board said that if you can lose money like that, there is no reason you can't make the same. If trading was really random you couldn't do what you just did.
More...

I tend to agree. Since I always took two ticks if my trade went that far, I am looking at roughly a 3:1 profit ratio if reversed (and even losing ticks to market orders) with roughly 50% win/loss ratio. I should be able to make money. I need to quantify what I am doing. From there, I can try to reverse myself.

Problem currently is that it is hard for me to quantify as I do it. If I could watch myself trade it might help. Maybe if I set up a tape recorder and I could talk to myself as I trade, then play it back at the end of the day? And then go back and plot the trades on a tick chart and see what else was happening at the time.

I seriously am thinking about flipping my buy and sell buttons, but somehow that seems like the wrong solution, even if it works. As I still wouldn't understand why I make the trades.
 
What method/system and indicators are you using? If you don't feel comfortable telling us the system in detail, perhaps you could give us an overview of how you are trading this.

I hope you weren't trading past 3:15 today.
 
Apocolypse Now....the horror, the horror.

Your trading errors are numerous. Let's suffice to say that I am not a micro micro scalper like you. I look for a bit more of at least 1 to 5 points in the ES. Anyhow.

Let's start at the begginig.

You look to be overtrading.
You need to revamp you money management rules.
Your risk/reward ratios is obviously out of whack!!!

Remember this in trading the ES.
You only need to net .8 ES pts a day to double your money in a year on a 10K futures account.

So, my philosophy is...to take only the best setups, not the best available setups. If you would like to discuss this philosophy more, let me know...it's important.
 
...so kid. what color are your charts?









Seriously, welcome to the club. Without seeing the actual trades made, the only observation that I can make is - overtrading

...a problem I encounter from time to time.

The other observation would be that you don't understand enough about how the market works.

Three of the past four days have been strong wide range days. So the action after the gap open was not a surprise. You have two groups battling it out. Bears who know that the market must correct, and Bulls who are afraid of missing out on an even stronger move tomorrow. That equals chop - a no win situation. Today was a good day to fiddle with your chart colors:)
 
Originally posted by aphexcoil
What method/system and indicators are you using? If you don't feel comfortable telling us the system in detail, perhaps you could give us an overview of how you are trading this.
More...

Part of the current problem is that I can't tell you exactly what my method is. Today, since it didn't look like a good day for trend systems, I was playing from the pure scalp. Watching a line-tick chart. On top of that I have 4000 tick standard deviation markers. Next to it I have a home made "pressure" indicator. It is a VERY short term volume type oscillator calculated from ticks (not bars) that is drawn as a simple up down bar. In watching it last week, it seemed to often mark the end of short term runs.

Now what did I do today? I think I mostly ignored everything other than just the tick chart line and tried to play using The Force. My personal ideal is to not use anything but this tick line chart, but we'll see if that is a reality.

I also have a five minute bar chart displayed, but I didn't really look at it all day (other than a few quick glances).

I hope you weren't trading past 3:15 today.
More...

Nope. I had shut down for the day around 3:00PM. Going back and looking at that roller coaster, glad I missed it.
 
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