Maintaining Self Discipline

[studentofthemarkets]

I think I turned the corner, and will start to be profitable from now on. I know, I've thought that before and it didn't happen. But the changes I've been working on are actually working. I'm trying to rely on my indicators and wait until the possible beginning of a trend or a good entry to enter a trend.

Practice Demo Account: Lost $345.00 BUT it's not as bad as it seems. I was really focusing on getting trades that had potential, and I did get them (!!!!!!) but didn't close them, until after I got fed up with losing good trades. If I had even taken partial profits on the good trades, I would easily have made $ in this account. Here's some of the better ones and what I closed them for:

+$280 closed for -$55
+$515 closed for +$10
+$325 closed for -$70
+305 closed for -$50
+190 closed for +$15
+$1,015 closed for $-20

The account did run up pretty high in drawdown after not taking many profits and I finally figured I better just start taking profits and was able to bring it back to only -$345. Once again, the loss management system wasn't working, but this time, I'm glad for it, because I needed to work on learning to manage trades so I won't go into large drawdowns. Something that would have helped would have been to closely trail the 2nd contract until I had a cushion of profits in the account, and then more loosely trail a 2nd contract. This would help avoid risking drawdowns in the account in order to make large profits.

Main Demo Account: +$630 Yes, that's a PLUS sign!!! I made more than the target daily goal of $450. Entries could have been better, both with getting into the "trends" earlier and the timing of the entries, but I followed my plan and it worked and that's what I'm really happy about. If I will just work at staying with this method, the entries should eventually improve and I'll have a winning system.

 

[studentofthemarkets]

Practice Demo Account: I was long during the spike up today and had removed an exit target because I was hoping for a runner and so netted a positive $2,255. If I hadn't already removed it, I would have been stopped out for less gains. I should be feel a sense of accomplishment about this, but I don't because I didn't trade well before getting into that trade and I'm more concerned about my tendency to enter risky trades to catch a runner than being excited to have got a runner by chance. I also got stopped out of way too many good entries by using a 10 ticks stop loss. That was too small for today's high volatility.

Main Demo Account: The loss management system shut down trading at -$465. Looking over my trades, some were good and some weren't. I was using a 10 tick stop loss in a very volatile area and would have gotten all except 1 of the trades with a 20 tick or 50 tick stop loss. However, this isn't a good excuse. I re-entered the trades too quickly after being stopped out and need to learn to wait as well as recognize when to have a larger stop loss. I don't want to post the trades because I didn't take them according to my plan and I need to work on that. I'd rather post trades when I've taken them well.

I need to spend some time on figuring out how to use a stoploss correctly. The idea of placing it below the previous low is generally the way most people place it, and oftentimes that is just too far away from my entry to make the trade worth while re: risk to reward. However, using a set 10 tick stop loss when all I do is re-enter the trade right after, makes even more losses than a correctly placed stop loss. I also need to study what size of a stop loss is right for the current volatility.

Part of today's losses came because I wanted too badly to get into a runner that wouldn't get stopped out by trailing. Those entries usually come at an "edge" and not in a retracement to a trend. But by making that my focus, I gave up following my method's indicators for determining trade entries (sometimes). I need to focus on getting the right trade entries right following my system in an area that has a possibility to trend. Then, if the trade goes to around 40 ticks and looks like it could be trailed, then I can trail it.

I haven't yet been making trades that I enter into correctly, without drawdown in the account, that I can trail for 20 minutes to an hour. That's the goal of this journal. I should be able to do this.

 

[studentofthemarkets]

This has been my one of my best trading days ever. I accomplished trailing a trade consistent with the plan I've been working toward for the last year or so. I stayed in the trade for 14 minutes.

However, today was also one of my worst trading days because my winrate was at one of it's lowest percentages and I overtraded. I definitely have a serious problem with overtrading and I plan on fixing it. I'm not really sure what to do about it because I keep struggling with this and it's not getting better. However, if I had just limited myself to a few trades I wouldn't have caught the winning trade, or would I have? My drawdown was -$780 at it's lowest point this morning. The only thing I can think of to do to work on this is go over my trades from today, and even sim replay those areas and try to find where I went wrong and how it should have been traded and hope that eventually I will learn to get the runner without getting stopped out beforehand. I feel like I was trading better a few months ago when I limited how many losing trades I could take in a day. Even though I think I'm trading carefully, there's something about knowing I only have a certain number of trades to take that helps me do better. I've been limiting my trades in the Main Demo Account, but not the Practice Demo Account. It'll be interesting to see which one eventually does better.

I'm not trading in the Main Demo Account today. I don't want to risk losing in it.

Practice Demo Account: $985.00

 

[studentofthemarkets]

Thought I'd try printing a new pre-trade checklist and have it in front of me. I kept it simple so even a quick glance could be enough to help think through a trade. I have a column for where a stop loss "should" go, meaning where would the best place be for it to go. I'll probably still stay with 10 ticks or maybe 20 ticks stop loss, but having to think through where I should be placing it is something I should already be doing and I haven't been. Also, I have a column for checking if the entry is outside the box range of previous stopouts. Something as simple as a pre-trade checklist to make me think through things a little more before trading might do the trick to getting more precise entries. I have another pre-trade checklist, but it was a couple pages long and so stopped using it. I think I'll print that one out too. Hey, maybe if I make myself read through both lists before each trade, I'll take fewer and better trades?

 

[studentofthemarkets]

The volatility today was so high that I didn't trade in either the Practice Demo Account or the Main Demo Account. I switched computers to another demo account where I don't keep an ongoing record of statistics (because I use it for sim replay) and worked on watching how price moves in relation to the indicators I use. I also worked on placing stop losses below/above recent swings and even tried using up to 50 tick stop losses and a few different ways of managing them. I had the thought today that I should shift some of my focus from finding ideal entries to recognizing and even memorizing templates of the "looks" I should avoid trading.

 

[studentofthemarkets]

I had the thought today that I should shift some of my focus from finding ideal entries to recognizing and even memorizing templates of the "looks" I should avoid trading.

After looking over the charts some more and seeing how I've been trading the last month, I think it's not so much memorizing where to stay out that I need to work on, but being more selective with my entries on the 5 min chart and doing a better job of reading the indicators on that chart for finding the trend. I may need to use a larger stop loss, but to trade the 5 min chart according to my plan, there are only a few really good entries a day. I've known that for a while but when trading I find it hard to wait for those areas to show up. I've decided to change my loss management system to allow for larger stop losses and plan to put the stop loss below the most recent swing, or as close to it as possible, if it's larger than 25 ticks away. I'll need to have the 1st target set to whatever the original stop loss placement is, and then trail the 2nd contract.

So tomorrow: I'm allowing for $1,000 in losses in the Main Demo Account, 4 trades at 2 contracts a trade, at 25 ticks stop loss max per contract. I'll need to wait a minimum of 15 min or so, at least, and hope to spread the trades out across the day. If I get stopped out, no re-entering. This should work. I should be able to find a trend starting, and capture it, at least once, if I give myself 4 tries and follow my rules.

I just want to see what happens: Can I follow my rules and make it work? Will the price action be too difficult for me to read where to take a trade? Will 25 ticks be about right for the volatility tomorrow? My goal for tomorrow is to make at least as much as I am allowing for losses, so hopefully, $1,000. How I do tomorrow will help show areas I need to work on. Will a drawdown day be because I didn't read the trend correctly, have too small of a stop loss, or lack the patience to follow my system?

One of the benefits of this journal is that I can put my goals on here to evaluate how well I do in trying to meet them. Helps to keep my focus right.

 

[studentofthemarkets]

I stuck to my plan for the Main Demo Account of trying to find a good trade entry with potential for it to go a ways on the 5 min chart. Yay! That's a huge accomplishment and what I should have been doing all along.

Practice Demo Account trading the open: $110 profit

Main Demo Account: $85 loss I'm actually relived that's all that I lost, since I gave it the potential for $1,000 in losses and the drawdown in the account was -$490 at it's worst this morning.

I'm finding it difficult to wait for the trade set up on the 5 min chart and then it seems the exact places of entry happen quickly and I have to wait a while for another trade. I might allow myself to enter in a little later than the exact beginning of what might be a trend, since those are kind of risky to take anyhow, but for today I was trying to catch the trend right at the turn and that helped to reduce the number of trades taken....which is another relief. I'm kind of afraid that if I try to take "continuation trades" I'll start overtrading again.

 

[studentofthemarkets]

Statistics for the week:

Main Demo Account: Lost $30. I accidentally left a losing pair of trades off of Monday's trade list (had time entry wrong) and only made $520 on Monday in this account, instead of the $630 posted on this thread.

Practice Demo Account: $3,005 PROFIT. I keep thinking that can't be right, but that's what the trade list is saying. I did get one trade that I made over $4,000 on, so if I hadn't had that one trade, I would have ended negatively. So, maybe I should discredit this $ as a random win since it doesn't reflect consistent profits.

My winrate for both accounts is really low. Although some of that is probably me just taking bad trades, some of it could be due to using tight stops in this week's high volatility and also trying to go for larger than 10 ticks sometimes for the first target.

So, overall, I'm not sure if I've improved as a trader, but it is nice to be ending the week profitably and I'm very happy with my plan for trading the 5 min chart...it's the same plan I started the journal for, and yet somehow I keep getting distracted from trading it and take too many trades that don't have the same trend potential.

 

[studentofthemarkets]

Decided to track 3 demo accounts, starting tomorrow.

The Main Demo Account will be for finding a trend on the 5 min chart and trying to stay in it as long as possible. Only 1 loss per 15 minutes is allowed. Max loss is $1000 per day, which is equal to losing a little less than four 2 contract trades with the stop loss set to 25 ticks.

The Trading the Open Demo Account will not have a maximum drawdown per day.

The Scalping Demo Account will focus on getting a high winrate with the 1st target set to the same as the stop loss size and the 2nd will be trailed. In this account there will not be a maximum drawdown for the day, but I will restrict how often trades can be taken. The purpose is to become very accurate for getting the first target and learn ways to trail the 2nd as well as practice adjusting the stoplosses or targets to minimize losses and maximize gains. I plan on ideally taking a trade around every 5 to 15 minutes, depending on how price is moving. However, I will not allow more than 1 trade every 5 minutes. If I miss a good trade, that's just the cost of not having picked the best entry. I'll see how tomorrow goes and then may adjust the rules a little, but I think this should solve the problem I have of overtrading and yet allow me to continue to track how well I'm doing with working on fine tuning entries.

 

[studentofthemarkets]

With the craziness of today I didn't use the Main Demo Account or the Trading the Open Account.

Scalping Demo Account: $210

The 3 trades taken today got the trend right but timing the entries was off. None of the trades could have been trailed, unless they had a 35 tick stop loss or 50 tick stop loss. I used 2 contracts, 20 ticks Stop Loss and 20 ticks 1st Target and 40 ticks 2nd Target. Stops were adjusted after the entries which minimized the losses.