Macro Speculator's Journal

M

MacroSpeculator

The purpose of the journal is to attempt to develop from the "occasionally profitable trader" to the "consistently profitable trader". I have been trading on and off since 1996, never full time, but as a hobby on the side with huge ups and downs, but nothing to show for it at the end but the emotional rollercoaster.
  • Trading style - discretionary, using price action
  • Trading instruments - futures, mostly SP500, Nasdaq100, EUR.USD and 10Y tbonds
  • Position size - aggressive, up to 80% margin to equity
  • Holding period - short-term from hours to days. I am not a day trader, as I do hold positions for days if price actions accommodates
  • Beginning account value - $44,026.45 (screenshot is attached below)
I will make every attempt to update the journal daily, and provide a weekly summary during the weekend.
 

Attachments

Intermediate term trend
A first step in my trading approach is to identify intermediate - term trend. Intermediate term trend conditions can be defined as follows:
  • Up
  • Down
  • Congestion / Unclear
Second step is to classify trend conditions into:
a) stages for "Up" and "Down" trend and
b) possible formation / pattern for "Congestion / Unclear".

Once trend conditions, stages or possible patterns have been identified, proper discretionary short-term trading methodology is used. For example, trend following methods are warranted in the early and middle stages of the intermediate term trends, where trades should be given a benefit of the doubt or to in other words a trader should "let the profits run". In congestion areas, countertrend trading is more appropriate for entry and profits should be taken quickly.

I use daily cash and 60 min charts on both cash and futures to define intermediate term trends, and I use short-term volume and range bars to time the trades.
In view we are currently in congestion area with possible broadening top formation developing in 60 min charts. Attached is the chart with notes.
 

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Last post for the weekend:

I shorted 6 ES contracts on Friday at average price of ~ 1178 (attached is the screenshot of the position). I consider the upswing move from 1168 corrective and recent congestion a topping process.
 
I did not trade today, and there is no change in the postion. I am still short ES from 1,178, and today was nail biting day for me. My working hypothesis is unchaged - we are forming an itermediate-term top, and are going to correct significantly in the coming weeks or even days.

It is now clear that I was early with my short entry on Friday, but I am willing to sit through the possible chop in the coming days.
 
When I started the journal, the idea was to post daily, and provide real-time recap of my trading activity. This turned out to be a challenge. In the fast moving markets, I can barely keep up with my personal trading, let alone updating this thread. Also the level of intensity at my work picked up in the last two weeks, and two young kids keep me busy at home most of the time.

Therefore, going forward I will provide a weekly weekend recaps with details / rationale of the trades.

Markets were good to me since the inception of the tread, I am up 37% - account balance is at $60,493.52.

Statement is attached.
 

Attachments

Quote from MacroSpeculator:

Intermediate term trend
A first step in my trading approach is to identify intermediate - term trend. Intermediate term trend conditions can be defined as follows:
  • Up
  • Down
  • Congestion / Unclear
More...

I'd like to add a fourth condition - "hugely overextended and due for a crushing reversal any time soon".

You may find that adding, identifying, and acting upon such conditions on the rare cases they occur - even if only to take partial profits, or buy some options to hedge some of the downside - will significantly improve your results.
 
Quote from MacroSpeculator:

When I started the journal, the idea was to post daily, and provide real-time recap of my trading activity. This turned out to be a challenge. In the fast moving markets, I can barely keep up with my personal trading, let alone updating this thread. Also the level of intensity at my work picked up in the last two weeks, and two young kids keep me busy at home most of the time.

Therefore, going forward I will provide a weekly weekend recaps with details / rationale of the trades.

Markets were good to me since the inception of the tread, I am up 37% - account balance is at $60,493.52.

Statement is attached.
More...

Laziness is not a good sign. It took me about 30 seconds to write my last post, a short paragraph. Your posts are mid-sized paragraphs, sometimes two, so they should take 1-2 minutes. Somehow I doubt that you are worked so hard that 1 minute dedicated to updates, out of the 1440 that occur each day, is beyond your abilities - let alone for 3 whole weeks, the duration of your absence.

Therefore the likely explanation is laziness and lack of discipline. You may have found one of the major causes of your inconsistency over the last 14 years.
 
Quote from Ghost of Cutten:

Therefore the likely explanation is laziness and lack of discipline. You may have found one of the major causes of your inconsistency over the last 14 years.
More...

What the heck, this is anonymous thread, so I will be honest. Deep down I am partially posting to get help and advise.

You are 100% spot on. Life is busy, but having committed to a journal, I should be able to find time to update.

You can add inability to learn from mistakes, and occasional outbursts of stupidity by making "all in" bets on "this a no-brainier" type of traders as causes of inconsistency.
 
Sunday night update

SP500 intermediate term trend is UP. I consider the move from 1,224 to 1,192 corrective within uptrend that started at ~ 1,040. In addition, the ES is currently located at the multiple short-term resistance levels (see chart below); therefore, probability of uptrend continuation is high at least to retest the prior high of 1,224.

Also, historically strong uptrends like we saw in the past two months do not end without some sort of consolidation. If we are witnessing the beginning of the topping process, chances of retesting the prior local high are high.

I will be watching overnight price action in ES to establish good risk / reward long position.
 

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Monday, November 15, 2010 update

I made two trades today:
- went long EUR and got stopped out for $3,020 loss
- went long ES in the overnight trading on Sunday, and added today with capital freed up from the closed EUR position. So far I am long 6 ES contracts at average price 1,195.80

EUR trade

Nothing much to say here - I took a high probability set up (in my view) and got stopped out at 5% stop loss. Looking back, I probably had too wide of a stop loss in terms of pips, but with high volatility in the pair it is logical to give the trade some room to develop. The chart with annotations is below.

ES trade

My hypothesis regarding intermediate-term trend is unchanged:
- there is a high probability of an attempt to retest or exceed 1,225 on ES
- current sell off is either a correction or the beginning of consolidation in the topping process

As I am already long 6 contracts, I am planning on scaling into 2 more contracts for a full position (already have limit orders in place).

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