My journey to profitable trading: NQ price action journal

[VV Cehpei]

I will be trading the NQ with 1 contract. I have a small account to start with.

I used to work in the industry from '98-'02, and I have experience trading stocks and options, but this is my first time trading futures.

I opened an account with Ninjatrader and will be using their platform.

I haven't been in the markets since 2008. I have a few posts in the P/L journal from back then, and i used to hang out a bit in the ET chatroom around the same time.

I remember NoDoji and Robert Weinstein, Bighog and a few others. I was mostly a lurker but chimed in a few times here and there.

This will be the first time entering the markets with a business plan and trading rules. In the past I had a few loose rules, but they were rarely followed and my account suffered accordingly.

I will only be taking trades on a handful of price action patterns, and to start with I will be aiming for a r:r of 1:2. This can and probably will change, but right now I'm looking for things like lower highs, higher lows, triangles, head and shoulders, and some breakouts. I will only take trades on setups I feel are high probability and can give me at least a 1 to 2 risk:reward based on appropriate placement of my stop.

I've made 4 trades on the account so far. 2 winners and 2 losers. The 2 losers were today, and this was part of the reason for me to make this journal. I think making a public journal will make me a little more accountable for my actions, as well as a good place to organize some of my thoughts. I keep a private journal and records of everything that I do as well.

I will make this journey public, and good, bad, or ugly it will be updated with the events of the day.

I have confidence that I will make this work. I have a plan this time, and as long as I follow it, I have a very good chance at achieving my goal.

 

[VV Cehpei]

I have a small ($200) max loss for the day rule that I'm following for now at the beginning, and it didn't take me long to hit that today. I placed a couple of trades that did not fit my plan.

The one positive that I'm taking away from today is that I did follow my rules as far as my stops go, and I'm also done trading for the day. I know my emotions got the better of me this morning, and I know being down yesterday affected me. But, this is only my third day back in the markets after a 6 year break, so I suppose that a few slips are to be expected.

The important thing is how I handle this, and how I come back next trading day. My lesson today was that I should follow my plan. It's a simple as that. No exceptions.

3 trades. 3 losses.

Net - $182.66

 

[VV Cehpei]

I modified my trading plan a bit last night. I added a few rules and limited the type of trade setups that i will take.

Today was a good day, I made one trade that fit within my plan.

I trade.

1 Win.

+6pts

net + $115.78

 

[johnny_utah]

Good job today VVC. Best of luck to you!

 

[VV Cehpei]

Good job today VVC. Best of luck to you!

Thanks, and you too.

Well, today didn't go all that well. I didn't make any trades in the morning, and I admit after watching the market drop, I felt like I had missed out. I admit that my emotion clouded my judgement, and I went short at a spot that did not really fit my plan.

Nevertheless, I took the trade and was stopped out for a larger single trade loss than my plan calls for.

This marks the end of the first week back in the markets for me after 6 years. If I didn't place that trade today I would have been flat for the week on points, and my only losses would have been the commission on the 8 trades I placed.

I let my emotions get the better of me and I traded outside of my plan a few times this week, and I paid for it each time. I will learn from this and going forward I will take extra care to make sure instances like this week where I did not follow my plan become fewer and fewer over time. Progress in this area is an absolute must.


Daily totals

1 trade. 1 loss.

-8pts

Net -$164.22



Weekly Totals

9 Trades

3 Wins

6 Losses


Net P/L for the Week -$197.98

today's trade:

 

[johnny_utah]

Sorry about that loss... Been there, done that.

That's a very common mistake you mentioned, by the way. Feeling of missing out, so let me enter "right here, right now" regardless whether it makes sense at the current price level or not . I still have that feeling sometimes when I get distracted and miss my entry but I am disciplined enough not to fall for it.

My question is... did you have the stop loss defined before you entered that trade or did it become a moving target after the fact?

 

[VV Cehpei]

It was a bad trade all around. I wanted the stop at that point, and when i first looked at the trade and thought the market was heading lower it would have been a 5 point stop or so, which was still 2 points more than I wanted.

Then in a few moments, the NQ fell a few more points and it was now around an 8 point stop, and i suppose the emotion took over a bit seeing the market get away from me again and i just placed the trade knowing I had 8 points at risk. It was a bad decision but I'm going to learn from it.

 

[johnny_utah]

Thanks for your honesty.
Consider that tuition money well spent, if in fact, you can learn from it and not repeat the same mistake again.

Btw, what's the obsession of all newer traders with the NQ? I found the NQ to be very jumpy for my taste. My stops would have to be really wide and way outside of my comfort level to be able to trade it successfully. I think YM or even TF may be a better choice if one doesn't want to trade the ES which has a nasty personality of its own.

I personally stick with the ES because it allows me to adhere to my very tight stops (4 ticks) and with enough practice, I was actually able to turn its "nastiness" into my favor.

 

[deaddog]

Looking forward to your journal. Is your plan a written plan?

I let my emotions get the better of me and I traded outside of my plan a few times this week,

Rather than post how much you won or lost you should post whether you followed your plan or not.
Record the emotions that cause you to not follow your plan. You will not only help yourself but also give insight to other traders.

 

[VV Cehpei]

Thanks for the comments and feedback.

I do have a written plan, and I spent a lot of time over the weekend going over it and making small changes based on how things went after my first week of trading last week.

At the end of the week, I wrote a weekly summary document that went over the trades of the week, as well as highlighted things that I need to keep in mind for this week. Some of the items ended up being a condensed version of my business plan. It served as a good review and it's nice to have something printed out that I can put on the keyboard so I can read and reference it throughout the day.

In addition to that, I keep very detailed records of every trade that I make on an excel spreadsheet. I keep track of the date, time, time in trade, Pattern, Action, Entry/Exit, Price, Stop, Target, pts in favor, pts against, commission/ p/l, net p/l and a hyperlinked chart as well as a notes section for each trade.

I also am building a database of patterns that I am looking to trade. So far I have almost 80 annotated charts of patterns and that folder is growing daily. I also include charts of failed setups as well as ones that would have worked out.

I used to trade stocks and options years ago, and many of the names were nasdaq stocks, so I've always been a bit partial to the nasdaq. And I also felt it was a good idea to focus on one instrument for now. But, I am also looking at the ES and maybe CL for the future. But I think for now I'll focus on the NQ while I learn and build my account.

Most of my thinking over the weekend revolved around strategies that will help me to stick to my plan and not deviate from it due to any emotions. Last week, some fear and perhaps greed crept into my psyche, and my trading decisions suffered as a consequence.

So, win, lose or draw my goal for this week is to just follow my plan and don't worry about my p/l so much. The most important thing is for me to just follow my plan and execute.