Maintaining Self Discipline

[studentofthemarkets]

Scalping Demo Account: Lost $115.00 Used 10 ticks stop loss, 20 ticks and 40 ticks for targets

Main Demo Account: $280.00 profit. Used 20 ticks stop loss, 20 ticks and 40 ticks for targets.

Trading the Open Demo Account: $150.00 profit. Used either 20 ticks or 15 ticks for a stop loss. I had a large drawdown and made it back through one large trade, which would be a disaster if I traded like that live. There were a lot of other things wrong too...didn't take profits very often on 2nd target, traded too much and didn't read the charts right for overall direction or timing entries. I'm not posting charts for this account....too many mistakes made.

Although I came out net $315 in profit, there was so much drawdown in 2 of the accounts, that I will never be able to trade with real money like this. I have to find a way to make the profit without the drawdown. Maybe I should try using the loss management system on all the accounts. Psychologically it seems to be helping. The Main Demo Account is the one with the loss management system set and that's the one I didn't have a drawdown in...was that due to psychologically knowing I can't mess it up, or was it just a random win? I think I'll leave everything as is and keep at this a few more days before limiting the losses in the Scalping and Trading the Open Accounts.

 

[studentofthemarkets]

Tried something a little different today. In sim replay last night I reworked yesterday's trading session on all 4 index futures, the ES, NQ, YM and Russell. I paused the replay to put exactly the same orders at exactly the same time on all 4 symbols and used 2 contracts 20 ticks stop loss and 1st target 20 ticks and 2nd target 40 ticks (except ES had 8 ticks stop loss and 8 ticks 1st target and 16 ticks 2nd target) and didn't adjust anything after the trade was put on. I took a total of 29 trades and pretty much just went with the trend flow using a 1 minute chart. Didn't care too much about stop outs or making targets, because the goal was to see which one is easiest for me to trade. Here are the results:

NQ: Lost 61 ticks, lowest drawdown was 140 ticks
Russel: 166 ticks profit, lowest drawdown was 230 ticks
ES: 51 ticks profit, lowest drawdown was 32 ticks
YM: 277 ticks profit, lowest drawdown was 80 ticks

I was very excited last night. Thought I'd struck a gold mine with the YM!

So today, set up YM charts, began trading, and then couldn't seem to take a trade right. Later in the day I added NQ and took trades exactly the same timing on both. NQ hit it's targets and stops earlier than the YM. Overall, I had a lot more losses on NQ than YM. I decided to stop trading both and work on getting the NQ back up.....however, I didn't trade carefully, didn't follow my plan for limiting the number of trades but instead I tried to follow the whipsawing movement of price because I thought waiting for a better set up would take too long. Well, that backfired. After a while, began switching between NQ and YM, trying to figure out which one was best. So, the day is ended and I did terribly with both....but was that because I wasn't trading my setups carefully...and crazy market conditions didn't help that. I somehow keep thinking that trading following the flow of movement, using my indicators as a guide will help me to learn how the market moves, and maybe it is. Maybe I'm learning that not every candle should be traded. But it seems I've been learning this for a long time. I'd rather take setups that work.

Today as I watched the 1 minute candles for NQ I kind of lost hope for trading the NQ with a tight stop loss. It's range is just too big for me to trade with 20 ticks stop loss except in very nice market conditions. The YM should probably have more than 20 ticks for a stop loss if I trade 1 minute candles for it too, but it does better with a 20 tick stop loss, probably because it doesn't move as far as the NQ.

Not sure what I'll trade tomorrow, but if I trade the YM, I plan to use the same 3 demo accounts with the same trading rules for it as I have with the NQ.

And I'm putting a limit on the number of trades allowed in the Trading the Open account. After the 1st 15 minutes...only 1 trade per 5 minutes is allowed. And, as a reminder, 1 trade per 5 minutes is the rule for the Scalping Account and 1 trade per 15 minutes or so is the rule for the Main Demo Account. That's so I can train myself to pick the best entries and be OK with missing out on a winning trade when I get the entry wrong.

 

[studentofthemarkets]

YM Trading the Open Demo Account (used the wrong account for the trades, should have been the Scalping Account): $240.00 profit

NQ: I used a separate account to work on executions today. Price was to too jumpy and I didn't want the record of how it ended going on any of the accounts I'm trying to keep track of. I worked on trying to learn to execute trades with the jumpy pattern on the NQ. My usual method of timing the execution wasn't working because many trades, as soon as they were entered, retraced to take the stop loss immediately before jumping back to the direction the trade was taken for. Not sure I found a way to trade in that environment. Trying limit orders didn't work and using a very large stop loss just seemed to add to the losses. The only trades that worked this morning was when the market was moving quickly without retracing.

Around 10 am Central I decided to move over to the YM and although I was late for entering the trend, I did manage get get two 1st target trades in a row and found it much smoother trading. I actually was able to drag the stop loss to BE+ for both trades after getting the 1st target.

Taking 2 winning trades on the YM in a market like today isn't enough to know if it will work better for me than the NQ, but at least I've started out in demo profit....and of course, I'm stopping trading for the day so I can enjoy being ahead in the YM.....if I trade anymore I may lose and I'd rather stop while ahead so I can be hopeful that I may have found a gold mine after all. I still like the NQ...perhaps what I'll end up doing is trading the NQ during low volatility and YM during high volatility.

 

[studentofthemarkets]

NQ Trading the Open Demo Account: $605 PROFIT, the drawdown was -$260

YM Trading the Open Demo Account: $695 PROFIT, the drawdown was $40

Didn't take any other trades today.

I made a lot of mistakes but because of the strong trend the market was actually very forgiving. I need to work on the things I pointed out on the 30 second charts. They are the same problems I keep having.

On both accounts I was up, then down, then up again and when it hit over 100 ticks in both accounts, I closed quickly, without any consideration of trailing it for possibly more gains and decided to call it a day.

 

[studentofthemarkets]

Tracking NQ and YM separately in 3 demo accounts:

NQ Main Demo Account, resetting after 03-06-2020 losses: $280 profit (from one 2 contract trade on March 10)

YM Main Demo Account: no trades taken yet

NQ Trading the Open Account, resetting after 03-02-2020losses: net positive $4,105

End of day cumulative balances were as follows:
March 3: $2,255
March 4: $3,240
March 5: no trades
March 6: $3,350
March 9: no trades
March 10: $3,500
March 11: no trades
March 12: no trades
March 13: $4,105

YM Trading the Open Account resetting after 03-11-2020 losses: net positive $935

NQ Scalping Account resetting after 03-11 losses: no trades since then

YM Scalping Account resetting after 03-11 losses: no trades since then

These stats may appear better than they really are because the losses that I had taken, causing the accounts to be reset, were usually pretty significant. The point of resetting and just starting over as each account stays in profits is to not be too penalized for big losses....but to be encouraged to keep the positive stats positive...in real life, unfortunately, you can't just push a reset button for losses. Now that I think about it, this may be hurting more than it is helping. I should want to be penalized for not limiting losses. Well, I'll think about that for the future.

I think I'll change the name of the Main Demo Account to Catching a Trend Demo Account, because this account tracks my attempts to catch a trend.

 

[studentofthemarkets]

I've been wondering if I can actually trade and be profitable if I were to stop overtrading as well as wondering if I am able to stop overtrading. So, I might have a way to mimic making the demo accounts more like trading live accounts. I want to make the emphasis not just to get a winning trade, but to be very consistently accurate. The plan is to delete all the trade data in every profitable account at the end of each week. This will mimic removing gains in the account, which is what I would like to be able to do with real money, eventually, not only for capturing profits, but also to limit the amount I'm able to loose. I don't want to give myself the ability to lose profits, if I ever get to the point of making them.

Every account that is is in a drawdown, I will have to keep, and will start out the next week with it's negative balance. This will force me to be much more careful in trading to avoid more losses and bring it back to positive territory.

I set the Loss Management System to $999.00 for all 3 accounts. I might try starting off trading with 1 contract and then only move to 2 contracts after I've made money with one....so a loss won't draw the account down as much.

I already deleted all my trade data from all 3 accounts, so I will be starting fresh on Monday. Let's see. If I were to take the full maximum losses all 5 days in a row, in all 3 accounts, that would be a maximum loss of $14,985 per week. At least the amount of losses per week is now capped. If an account gets so deep in the hole that I give up hope of making money in the account, well, I don't have a plan for that. Guess I would reset it at some point, and start over.

This plan should really help me to remember to work on limiting losses and only taking high probability trades.

Trading the Open Account: No time limits for re-entry after a losing trade. ($999 drawdown is the only losses rule).
Scalping Demo Account: After a losing trade I have to wait a minimum of 5 minutes before taking another trade.
Catching a Trend Demo Account: After a losing trade I have to wait a minimum of 15 minutes before taking another trade.

 

[studentofthemarkets]

Trading the Open Account: No trades
Scalping Account: $710 lost, 3 losses and 1 at BE (2 contracts...1 won, the other lost)
Catching a Trend Account: $255 gain, 2 wins, 2 losses

I'm not sure why I think a trade set up will work, I take the trade, it doesn't work, and THEN I see why it shouldn't have worked. It's hard for me to share charts that show trades like that, so no charts today. But that's the nice thing about this journal. It forces me to evaluate how I traded, and hopefully learn from it.

The only good thing about today's trading was that I stuck to my rules for waiting to re-enter and it kept me from making a ridiculous amount of trades. I guess a second good thing is that I didn't max out the allowed losses in either account before calling it quits.

 

[studentofthemarkets]

Finally, a day with no losing trades!!!

Trading the Open Demo Account: $1,020 # of trades: 2

Scalping Demo Account: $810 # of trades: 1

Catching a Trend Demo Account: No trades

I was very concerned with my losses in the Scalping account from yesterday, so for this trade I used 1 contract and trailed very tightly.....the plan worked nicely and probably more a matter of luck because it's hard to find trades where they go smoothly to $810.

However, needing to make back losses was a distraction from getting the best potential from that trade. The trade had an amazing potential of 1708 ticks and $8,540. It is the type of set up I would normally take in the "Catching the Trend" account, but the losses from yesterday interfered with sticking to my normal plan. Not trying to say I would have done better, I might have still messed it up. I'm trying to say that the losses from yesterday had psychological consequences that reached into today's trading and it's really important to grasp that.

Something to think about was that on March 4th I had lost a lot of money by taking a lot of counter trend trades but then did catch the counter trend move when it happened. In that day's journal posting I wrote:

"However, if I had just limited myself to a few trades I wouldn't have caught the winning trade, or would I have?"

Well, today's trade shows that I can catch the countertrend, without a lot of losses, by being much more selective with the entry. So, no more excuses for trading countertrend unless there are reasons to think the trend is actually changing.

 

[studentofthemarkets]

Scalping Demo Account: $25 profit 1 trade taken, 40 tick stoploss, 1 contract. Got the entry right but the overall trend direction wrong...was holding for a larger move.

No other trades taken today at all.

The volatility was so high that I wasn't comfortable trading today. I would have needed a larger stoploss than I want to use and didn't want to risk having a large drawdown in the account in case the trades were stopped out.

I marked up my charts more than usual, trying to find areas I thought price might move to. I think this was helpful. It's less costly than taking a trade to experiment with where price will end up going and I think I should make it more of a habit.

 

[studentofthemarkets]

Trading the Open Demo Account: $260 profit Trades taken: 3 (2 contracts each): 2 losses 3 wins 1 BE+.

Catching a Trend Demo Account: $1,225 profit. Trades taken 1 (2 contracts): both won

No other trades taken.

In the "Catching a Trend" account, I'm trying to trail profits for a while, maybe 10 minutes or an hour or so and didn't stick to the plan because when I saw the amount of money the trade made, I didn't really want to risk losing anything, and didn't really care anymore about making more, so I closed it. However, if I had stuck to the trailing plan for this account, it would have been stopped out around $5,000.

This is the 2nd trade this week that didn't have much drawdown and yet had a lot of potential AND I didn't have to take a lot of losing tries before getting the winning trade. I think both trades happened the way they did because the market trended really nicely and it's very unusual to have it trend like this. However, if the markets ever get back to normal trading, although I'm not sure there is a normal for the NQ, there should still be trends, even if they are smaller, that I can trade this way. I'm still trying to wrap my mind around the potential the NQ has and what I can do to try to capture it without getting stopped out a lot.

Something else I keep thinking about is that I've been doing well lately with just a few trades a day. What will happen when I start having a losing streak? Revenge trade and lose it all? Or lose the maximum losses for the day? I want to end this week positive. I think it's my best week ever and don't want to lose it tomorrow. If I trade, I have the risk of losing what I've made for the week. I'd rather wait to trade until Monday. But then, since there's no actual difference in the trading day, that decision is just based on wanting to start fresh on Monday, and it would be losing one perfectly fine trading day. I think the only thing to do is limit myself to a small amount of trades tomorrow, not the maximum allowed and if they lose, then stop before giving much back. I'm not going to reset the loss management account to force myself to take only a few losing trades. I'd rather try to recognize that I'm revenge trading, if it happens tomorrow and stop it myself. I think if I have in my mind to prepare for struggling against revenge trading, I'll be able to. Having a week like this where I actually have profits without taking a lot of trades has made me think that maybe the reason I usually struggle with taking too many trades is from revenge trading. I think the thing to do is focus on knowing how to make good trades and recognizing when I'm not, so I stop.