Maintaining Self Discipline

[studentofthemarkets]

Just playing around with the statistics, even with the losses of $395 from Monday, I still came out ahead for the week by $345 because of adding a 2nd contract and managing them.

I had around a 50% winrate for the last 3 days, but ended up with $740 just by changing to managing 2 contracts.

So, as far as I can tell, the issues to work on going forward are:

1. Not taking losing trades....at 2 contracts each entry, those losses will add up fast.
2. Learning to stick with the trend.
3. Learning to trade the same way in a live account.

Moving forward I plan to monitor the statistics and profit/loss from Wednesday, January 29th, because that is when the changes were made.

 

[studentofthemarkets]

Not quite sure how I'll be using this journal in the future. I need some time to work on how I'd like to trade the open and don't really want to post charts here just for the sake of posting them. This journal has helped me stay focused but I need to rethink my entries and exits and so I'll likely take a break from posting here.

Today I decided to try having a very wide stop loss. The first trade was accidental....I forgot to reset the stop loss size. The second trade was entered close to the open and had a drawdown of $120. It was taken in the Practice Demo Account, and I didn't take any other trades today, figured one nice runner was plenty. The thing is, this worked because I took a chance on entering, gave it a wide stop loss and then it didn't retrace much before I was able to get out with a large profit. Most days won't be as easy as this, but I do need to spend some time backtesting the opens and seeing if I can find a plan that should work consistently.

Although I'm still at a 50% winrate....the last 4 days have been hugely profitable. The market has been trending, so it's possible that when the market conditions change I'll have a harder time.

 

[studentofthemarkets]

Thought I'd share what I learned from today when trading the open. I know it was too many trades, I'll work on that area another time. Right now I'm just trying to map out how I do with entries and exits. These were taken in the Practice Demo Account trading the first 35 min of the open.

1. When I didn't manage the trades by adjusting the SL and TP according to what happened after I entered the trade I ended up with a 12% win rate and lost $810.
2. When I did manage the trades I made $1,135 and had an 80% win rate. Surprisingly the Long and Short trades were both at exactly an 80% win rate too!
3. I had 6 long trades, taken one right after another, that would have been better if I had adjusted the first trade's target to much higher. Then I could have been in the trade and not taken the extra risk that comes with more entries. It'll take some work to figure out when to close and when to let the trade keep going.

Hey, I got to the elusive 80% win rate when managing the trades!!! Yay!

This is also the 5th day in a row being profitable due to simply changing to 2 contracts and managing the stop losses and targets.

 

[studentofthemarkets]

I didn't trade in the Main Demo Account, which is the one I'm trading carefully.

All trades were taken in the Practice Demo Account because I'm still trying to figure out how to trade the open and how to manage 2 contracts. Also, I didn't trade well. After looking over my trades and trying to find the problem I see that I'm struggling with not waiting for the right set up.

Something that is frustrating to me is realizing that yesterday's "good" trading happened because price went one direction and I took trades in that direction. It probably had very little to do with "managing" the trades. Accuracy is so important. I'm considering trying 2 contracts with 10 sl and 20 tp and maybe not extending the 20 ticks, even if I "know" I could get more ticks, but work on managing the second trade's stop loss for a little while. It would help the focus to be on picking accurate entries. There's something about trying to catch a runner that really messes with my mind and I begin to take low probability trades, especially if I'm in the negative and want to make up the losses. I'd rather have consistency with small profits than lots of losses trying to find a runner. At this point even being profitable with small profits seems unattainable. I'm wondering if 2 contracts at 10 sl and 20 tp will be less profitable than using 1 contract with 10 sl and 10 tp because 1. Say I have a 50% loss rate....that's 2 contracts per loss. 2. Say I get 10 ticks 50% of the time, but most of the time I move to BE +1 and that gets taken. Then I'm left with 10 ticks profit but at 20 ticks risk...so how often will the 20 ticks profit get taken? I went back over most of my trades using 10 sl and 10 tp and so see how often 20 ticks would have been hit and no matter how I fiddled with it, using a set 10 SL or adjusting to BE+1 SL for the 2nd contract, I always ended up with less profitability than using 1 contract. Maybe the answer does lie in managing the 2nd contract. Here's a thought....maybe I should always trail the 2nd and not have a profit target for that contract. And now I'm back to thinking managing the trades is the answer. And then I remember that all this wouldn't matter as much if I could be more accurate with the entries that have potential to go a ways without retracing. My thoughts seem to be going around in circles today.

 

[studentofthemarkets]

New Plan: will try this tomorrow and see how it goes.

Limit of 5 two contract trades per day, traded throughout the day. Wait for a while after each trade before placing another....15 or 20 min minimum wait? This should help with overtrading and help the trades to be more selective.

Place the 2nd contract TP really high and plan to trail it to be stopped out. Over the course of 5 trades a day, if they are well-placed trades, I should be able to get a runner.

I'm not going to pay much attention to getting 5 losses or even 5 wins in a day. I just want to see if I can get the trades right and consistently.

For tomorrow, I don't plan on trailing the 2nd contract right away but I'll try to give it some room.

All this was based on a few good trades I took today that would have done well if I had trailed them. The reason I ended up in the negative for the day was from all the other trades I took that didn't do so well.

If tomorrow goes well, I may stick with this.

 

[studentofthemarkets]

Practice Demo Account: Traded the first 30 min of the open. Ended negatively, but I think I'm reading price action around the open a little better.

Main Demo Account: 1 trade, made $225.

Re: The Main Demo Account:

I didn't trail the 2nd contract as well as I wanted to because it was a relief the trade worked and I was in profit, so closed it a little early. It was the safest thing to do but meant I lost out on the full potential.

I had planned to take 5 trades everyday in this account but I'm finding it really hard to take a trade when I'm in profit and way too easy to take a lot of high risk trades when I'm in the negative. So, if I had lost I would have kept trading, up to a total of 5 losers for the day, which would have cost $550. By stopping trading after a win I limited the gains for today's trades to $225. That's backwards from what it should be, and I think the only way to overcome this is to force myself to continue to trade when I see the right set up. The focus should be on the quality of the trade set up, not previous losses or profits (within reason).

 

[studentofthemarkets]

Didn't take a trade today. Almost did a few times. Some would have worked, some wouldn't have.

This week I mostly traded in my "Practice Demo Account" because I don't care as much about the statistics in there, I'm just trying to work out trading with 2 contracts and where good places to take trades would be. That account did terribly.

The "Main Demo Account" I'm trying to trade just the best set ups in and trade it like it was a real account. Only took 1 trade in it this week, and it worked. And last week's trades worked well too. So, basically the trades and stats were already posted, so no need to repost them, but I think I will just because it makes me feel like I can trade, when really, I'm so uncertain of what I'm doing that I feel like I'm gambling every time I enter.

Since I'm postive for the week in the Main Demo Account, I think I might try an occasional live trade in micro NQ next week. I have to limit it to 1 trade per day and I think I'll try 2 contracts. In the 2 months I traded 1 contract the net profit never made much above $500 whereas in 2 weeks using the 2 contracts the net profit is $965 the largest drawdown intraday was $220 and the largest drawdown in the account was $80.

The reason for the large jump in net profits is because of the 2nd contract runners.

 

[studentofthemarkets]

Just realized I wrote: "In the 2 months I traded 1 contract" which I should have written as:

Since the middle of September, so almost 5 months ago, I began trading single contracts with 10 sl and 10 tp. November 19 was when I finally started to make small profits, although, obviously, the profits vanished.

 

[studentofthemarkets]

Practice Demo Account trading the open: Ended in losses....this shouldn't have happened, it was a good morning for trading. I need to figure out what I'm doing wrong and then stop it.
Main Demo Account: Lost $55. Today could have had huge losses but it was saved by adding more risk on the last trade....I extended the 1st contracts profit to a lot more than 10 ticks to help make up the losses from the first trades taken. I also took it after having made 5 full 2 contract losses...which went against my plan for stopping after 5 full losses....although partly it was because I was pretty sure the trade was right, so it wasn't as bad as revenge trading. However, I hate days like this....they are risky and not right....if only I had just taken the last trade of the day and none of the other trades.

I try to evaluate each trade according to these questions.

1. Did the trade go against the trend?
2. Did I wait for a good set up or did I enter because I wanted to catch a move/be in a trade? Wanting to catch a move sound like a good reason to enter but I need to get it through my mind that it's not. A good entry with good potential is a good reason to enter. A move that is happening is hard to enter.
3. Did I enter late....after the trade potential was over?

Trades 1 and 2: I shorted against the uptrend of the day. I entered a set up that would have only worked with high momentum, which these trades didn't have. I entered late to the counter trend move. The better trade would have been to go long in the same area. What could have helped getting the trade direction right? I think a lot of my trades tend to be countertrend rather than joining the trend and a good pullback. I didn't see this area as a pullback.

Trades 3: Finally, traded with the trend. But oh no, didn't wait for a good set up, wanted to be in the move I had missed, so entered late.

4: Same as 3....wanted to be in the move I missed.
5: Finally, a pullback with some momentum showing up. I think the 2nd contract was exited well, didn't let it lose much profit.
6: I took a short here, against what my charts were saying, because of a little voice I often hear in my head saying, "It hasn't gone up, so it must be heading down." Well, not making new highs isn't the same as making new lows, and this trade also shouldn't have been taken.
7. A little early on this trade...
8. Finally, the winning trade for the day. It actually wasn't a good entry....it worked, but there were better and safer entries that I didn't take today.

I can see the mistakes after I make them....can I start not making them? The reason I wrote them all out here is because I'm hoping it'll help me to stop doing the same things wrong when I trade. If I post the same problems on here everyday...you'd think eventually it would hit me that...maybe I shouldn't take this trade, it's counter trend, not a good set up and late to the move....

There was something really weird about my statistics today.....every one of my winners had only 2 ticks or less that price went against it. I would have been in profit today if I had a 4 tick stop loss....notes are on the trade list chart.

 

[studentofthemarkets]

I think I made a breakthrough with trading the open. Seemed like I was getting the direction and the entries either right, or closing when wrong. Ended with $290 in profit....but after looking at my trades, I realized I took 5 two contract trades within the first 1 minute of the open and all were stopped out....that cost $420. If I delete those 5 trades and go with everything starting at 8:31 am central....I ended up with $710 in profit. The largest profit was only $125, so it wasn't bad trading that reversed with 1 good trade, it was a lot of good 10 tick and slightly more tick trades. The statistics were 78% winrate and for flat to flat (I think that means for each 2 contracts together) it was a 75% winrate.

To finally read price action correctly is a huge step for me. I think it's because I spent a few hours yesterday really studying several days of the first 45 min after the open and trying to see how price moves. At least, I hope that's why, and I hope I will only improve from here. Thought this before, and always been disappointed, but maybe this time is for real?

Practice Demo Account (only traded the first 30 min of open): $290 profit
Main Demo Account: No trades. Thought about a few....but never felt confident enough to pull the trigger. Missed out on 2 great moves, but didn't want to get stopped out a lot trying to get in, and I think having traded the open well made me more cautious....since I wanted to end today positive and not risk losing in the 2nd demo account. Funny how psychology plays such a part in this.