My NQ Journey

Y

Yass

I know that starting this journal will be helpful for me, and I hope that some of you can also learn from my mistakes.

A bit about me
  • Open minded and looking to grow as a trader
  • Relatively young
  • My life motto is "Yesterday's excellence is today's standard and tomorrow's mediocrity"(not sure whose quote)
  • I live in Calgary, Canada so I worked in Oil & Gas from before graduating until I quit
  • For what it's worth, I have a BBA
  • I have a broad set of work experience and skill sets but the most relevant to trading are:
    • Business Analytics
    • Operational Excellence / Business Improvement
    • Business Strategy and Business Process Development
    • Project Management
    • Root Cause Analysis
  • I also have a lot of other O&G experience that is great for a beer conversation in Calgary but not very useful in trading
  • No previous market experience
  • I’m married with no kids and my wife is not only very supportive of my trading, but she helps me improve with the psychological part of trading

My Trading Methodology
  • I trade the NQ
  • I look for the bigger swings of the day (10+pts), this means my trades can range from seconds to hours depending on how quick the market moves
  • Default risk is 4.5 pts, default target is 11.25 pts
  • I will adjust my target 90% of the time, and my stop about 35% of the time
  • Entry points are based on at least one of the following:
    • Support /resistance zones
    • Volume count and profiles
    • Observing what I refer to as “Long-Term Player behaviour” (big money)
    • Things that cannot be explained logically but make sense in my crazy head
  • I look at volume, volume profiles, and time candles in my charts. No indicators
  • The majority of my trades are looking for the reversal of a trend
  • I’m not afraid to get in front of a trend as the majority of my trades are counter trend expecting the market to reverse
  • I use this spreadsheet to track my trades, although I've modified it quite a bit to suit my needs

My Golden Risk Management Rules
These are rules that I will not break under any circumstance. As I develop as a trader I will be tweaking the numbers on these rules, and introduce additional rules.
  • Max 1% risk per trade
  • Max 3.5% loss per day
  • Max 7% loss per week
  • Max 12% loss per month

My Silver Risk Management Rules
These are similar to my golden rules in the sense that I don't want to break these under any circumstance. However, right now I am not emotionally strong enough to never break them. I read these every day to myself before the market opens to remind myself though.
  • Walk away if you are emotionally unstable
  • If you execute 2 ‘bad’ trades in a row, walk away for 5 minutes
  • If you execute 1 ‘really bad’ trade, walk away for 5 minutes

My Trading Philosophy
  • One thing that I ask myself constantly and you will see me ask frequently is why. Why does the market do that? Why did I take that trade? Why didn’t the market react as I expected? Etc.
  • I have 3 main goals that I remind myself of every day:
    1. Understand more about how the market moves and why
    2. Understand more about myself and how it impacts my trading
    3. Trade better today than I traded yesterday
  • I believe in starting simple and adding depth as required. The market is already an extremely complex organism, so I don’t need to add to that by also having a complex decision making system
  • I believe that trading futures isn’t a strict science but a combination of science and art. Having said that, I’ve observed 3 branches of trading, this is how I would define them:
    1. Fundamental – Looks for quantitative macroeconomic indicators to make decisions. GDP, manufacturing, interest rates, etc. Longer Term players and Big Money prefer this (my speculation)
    2. Technical – I am not very familiar with this branch of trading as I haven’t taken the time to understand it. What I gather is that the traders are looking for patterns in the market to make decisions. These patterns are derived from price, time, and volume and often rely on indicators to speed up the analysis. It seems that scalpers and shorter term players prefer this (my speculation)
    3. Market Sentiment – I’d say that this is the art of trading. This is what I would refer to as being able to ‘feel’ the market in real-time. It’s easy to determine that we are in a bull or bear market based on historical data, and that’s usually what people think of when they think Market Sentiment. However I view this a bit differently. It’s hard for me to explain but if you view the market as a living organism as I do, it’s as if you are holding on to it as it’s moving and can get an idea of where it will go. Some key events will make reading this extremely obvious (Brexit results coming in as an example)
  • My philosophy primarily focuses on Market Sentiment and Fundamental Analysis, but I will use some technical analysis such as Support/ Resistance and Volume Profiles for my entry and exit points.

How I grade my trades
Shortly after starting to trade I realized that grading performance on P/L isn't effective. I decided to come up with a way of grading my trades that is tailored to my issues.
  1. Really Bad
    • Not in plan
    • Knew I shouldn’t have entered
    • Made execution mistakes
  2. Bad
    • Not in plan
    • Some signs were there, but it felt like a 51/49 gamble
  3. Ok
    • It may or may not have been part of the plan
    • Some signs were there, but it felt like a 51/49 gamble
    • Decent (but not good) target and/or stop
  4. Good
    • It was in the plan
    • Observed signs of entry
    • Good target and stop
  5. Excellent
    • Everything a good trade has but also adapted to the market either by modifying entry for better potential, or exited early/late depending on the market conditions

What I plan to post and when
  • Intraday
    • Snapshots of some of my entry / exit points along with a brief description
  • End of day
    • Summary of the day
    • 3 things I did well
    • 3 things I could’ve done better
  • End of week
    • Summary of the week
    • P/L, expectancy, win%, other quick analyses
    • My best trade and the trade I will be sure to avoid in the future
  • End of month
    • Summary of the month
    • P/L, expectancy, win%, other quick analyses
    • Risk of ruin analyses

Current Routine
  1. Sunday Routine
    • Get caught up on news
    • Note newsworthy events from last week as well as from upcoming week, enter them into outlook for a reminder
    • Look at US holidays, will any of them have an impact on market activity?
    • Calculate updated daily, weekly, and monthly max risk
    • Complete week-over-week changes in market (range, volume, high, low, etc.)
    • Get an idea of market sentiment
    • Look at support / resistance zones, note how many times they’ve been tested and note what conditions will require them to break
    • Look for signs on the market that something has changed or is changing (volume, range, etc.)
    • Try and get a gauge of the emotions in the market, how will that change trader’s behaviour? How will that change my behaviour? This helps raise my self-awareness
    • Write down weekly goals
  2. Pre-Market Routine
    • Calculate updated daily and weekly max risk
    • Get caught up on news
    • Re-read weekly assessment
    • Conduct daily assessment
    • Lay out type of trades I will NOT take (if applicable)
    • Think of various scenarios
    • Lay out areas in NinjaTrader where I will likely enter a trade, as well as no trade zones
    • Enter alerts in NinjaTrader
    • Ensure my ATM strategies are set and good to go on NinjaTrader
    • Complete checklist of daily personal preparation expectations (things such as drink x amount of water, re-reading weekly assessment, laying out no-trade zones, etc.)
  3. Post-Market Routine
    • Read journal
    • List 3 things I did well
    • List 3 things I can improve on
    • Complete checklist for what I should've completed during the day

Thanks for reading! The purpose of this journal is for me to improve, so if you have any advice, comments, or criticism along the way I would love to hear it!
 
Last edited by a moderator:
My Trading Career so far
I quit my job at the end of 2015 and dedicated myself to trading starting this year.
I was initially going to trade CL as I was familiar with O&G but saw that my account wasn't big enough to handle the volatility. I then chose to go with NQ.
I found some free data going back to 2004 so I started just trying to figure out wtf I was looking at
hmmmm.gif
, nothing really made sense.
The fact that I just copied other people's setups from screenshots didn't help as I had so many things on my charts and had no idea what they all meant.
I got rid of everything and started fresh with a naked candle stick chart. I eventually added things to it but only if it gave me an answer to a question that I was having.
Starting 2013, the data I found had intraday data so I was able to get into the 5 and 15 minute candles.

Sim trading
I then started sim trading from 2014-2016 YTD, took me a couple of real months. I tried different things until I found something that felt right with me. I replicated this over and over until the numbers proved that I had found an edge. I was slightly profitable in sim. I got some advice from a few traders to further improve my edge on sim. I had raised my numbers so much in SIM I felt like I would have a very easy transition to live and I'd be bringing in 10% monthly ROI on my first month
boxing.gif
.

However, SIM did not take into account any psychological factors and I severely overestimated my ability on that, I felt that my numbers would slightly fluctuate but the overall trend would be the same.
Let's all laugh together
sarcastic.gif


My first try at live trading
At the end of May I took my first 2 trades on the IB platform because I didn't have NinjaTrader set up and they were pure gambles, I didn't even know how to exit out of my position. Needless to say I lost both of those trades.
pcguru.gif

I then proceeded to lose the next 3 weeks and took a bit of a break. I traded on and off in May, June and early July as I was losing most of the time. I lost ~20% of my account so fast and realized that I completely underestimated the psychological aspect. The really bad thing about this is that I did not go a full month trading live, August will be my first full month of live trading.
faint.gif


Proving to myself that I still had an edge
I didn't question my edge throughout this time but I no longer trusted my ability to execute things according to my plan. I was frustrated, I'm used to picking things up extremely quick and here I was down a significant % of my account and still executing trades that I didn't want to execute. The emotional side in me was completely ignoring my edge and just doing whatever it wanted to do.

What frustrated me the most is that I am an extremely logical person and this was not like me at all. Some people smarter than me suggested that my system is not mechanical enough and I need to go back to sim. I felt like going back to sim was taking a step back andI hate taking steps back. However, sometimes you need to take a step back in order to make a huge leap forward. I decided to stop doing the on and off live trading thing and stop altogether.

I sat down with one of my mentors over a beer and told him my problems (he is not a trader). He challenged me on whether I truly had an edge. I knew that my emotions were getting in the way but I wasn't able to prove it. So in order to prove my hypothesis I started to divide my trades into the 3 following categories:
  1. Rational trade – Part of my plan, signs are there, all the good stuff. Essentially, my head entered me into this trade
  2. Emotional trade – Was this in your plan? Did you want to avoid this trade? Were you thinking about it? Doesn’t matter, you are now in a trade because the dopamine surge you got from looking at the charts was enough to click a button
  3. Mixed trade – Mostly rational but has a bit of emotions in there. Example, all the signs are there but I entered with a market order
I populate this category in my spreadsheet the second I enter into a trade.

I then took the next couple of weeks to sim trade and think very critically about my biggest pitfalls. My wife helped me as well to not just think about what I was doing, but WHY I was doing it. I honestly spent so much time asking myself questions and doing a full root cause analysis on my emotional trades. I decided to modify a lot of my management system to accommodate. I started back up in full force on the last week of July and the difference feels like night and day.
I still have a LOT to improve on specially emotionally speaking, but I feel like I'm more in control of my emotions MOST of the time.

I love this journal because despite just starting I feel that this will make me more accountable regarding the emotional side of my trading!
 
Welcome!

And thanks - I'll be watching with huge interest. I can hardly believe how similar your trading-style is to a lot of mine. I won't hijack your thread with a sentence-by-sentence description of all those big similarities and small differences; suffice it to say that there are many statements in both of your posts above which apply to me, also.

Good luck and good wishes with both the journal and the trading.
 
I appreciate it guys, this is my first post on this forum so as I get more comfortable with things I'll be posting more and more.
Feel free to chime in whenever / however you want!
 
Weekly Prep

I do most of my prep on my written journal but I thought I'd post some big things I've highlighted.
  • Surprisingly still in balance after Yellen speech
  • Top of balance ~ 4836 hard tested twice, likely to hold the first time we approach it (unless very strong move)
  • Bottom of balance area is now 4857 mark, it was tested twice on Friday but unsure how it will hold up during the weekday. Will probably hold the first time we test it and I've placed an ON trade at 4758.50 in case the price drops 20 pts before I wake up
  • I'm expecting a strong break out of balance this week and a big trend to show, the most likely time will be after the jobs report comes out as Yellen put a strong emphasis on that
  • However be ready for the market to trend any day now, we have been having a tight balance for the last 3 weeks and you can see range and volume growing
  • If you look at the charts it appears that we will reverse this post-Brexit bull rally, and trend bear for a little bit. Reasoning is that bulls can get tired and LT players don't like uncertainty
  • However the bulls are out in pretty strong force I would say, and if you believe in the whole market and election correlation then you won't expect the fed to hike interest rates in September
  • If you believe the election / market correlation then not only will you not be expecting a rate hike, but you will expect that the US markets will be in a stronger position come election time than where they are now
  • Does this mean that people will raise the price from where it is this week based on that? Not likely, but keep an eye out in case that becomes a reality
  • My prediction is that the job report comes out as expected or better than expected and we have a slight bull rally, then some of the longer term players / big money step in and use that liquidity to slam the market down and start a slight bear trend. However, this is me having fun and I'm going to trade what I see.
  • While I personally think it's unlikely that we see a rate hike before the election, big money doesn't like uncertainty so why not get out of their bull positions after the liquidity is there from a positive job report?
  • One thing to take into account though is that after Friday it is a long weekend, so I'm not sure how that will affect the potential trend?

These are my goals for this week:
  1. I will take 0 Emotional trades
  2. I will enter 100% of my trades into spreadsheet
  3. I will screenshot all my entries & exits
  4. I will not look at account P/L until Friday (unless I sense I'm getting close to a stop)
  5. I will write in my journal every day
  6. I will watch FT71'slast webinar
  7. I will pick my next trading book and listen to half of it
 
2016-08-29 Morning Prep

So today I woke up 1 1/2 hour earlier than expected. Not the biggest fan as I already don't get enough sleep and sleep is precious to me. My stomach woke me up so the pizza I had last night was obviously not nutritious enough, I'll need to make note of that. As a positive, I had a bit more time to dig through some news. I'll definitely need to make up the loss of sleep with a nap after the market closes though. I'm also listening to some faster paced music than usual to make sure I'm awake.
music.gif




As with my Sunday prep, I do most of it on a written journal but here are key points:
  • ON activity very tight, no surprise there
  • Big surprise around the 4775 volume though, zone tested 3 times during the night and it held very nicely
  • Big Money unlikely to step in today, but we could see some big swings with less volume from firms who can still move the market
  • Range has expanded as volatility grows
  • Looks to be a balance day
  • Range should stay ~ATR
  • Although I'm not yet seeing any signs that we will trend today, I need to be prepared for a trend day any day this week so I'll still be looking for signs that Long Tern players with big pockets are taking up / exiting positions
  • 15 day balance so far
  • Wicks show uncertainty
  • 4800 zone has been very weak but if we have a low ATR this could be a place to watch
  • I saw on the news this morning that the shorts on the S&P 500 have dropped significantly after Friday, something to note as part of market sentiment
Delete 20.jpg

  1. 4815 zone - Surprisingly strong zone over the past 2 weeks, top of Friday’s session
    • a. Expect this to hold unless very strong force pushes through it
    • b. Look for signs of a move being exhausted
    • c. Can enter pre-emptively as long as the move pushing into this zone isn’t too strong, although aim to have a stop of 4821+ if possible
  2. 4790 zone- ON high, also the place the market balanced at end of Friday
    • a. Not likely to hold and we’ve already passed it
    • b. Look for any signs of change
    • c. Already been broken pre-open
  3. 4775 zone – ON low, decent volume ON, also the low right after Yellen’s speech
    • a. Look for long position if volume allows it
    • b. If we have a very strong bear move, look for continuation of bear move and avoid taking up a long position
    • c. Can enter into a short position if the move is very strong, but only if you feel that it will hit the 4762 zone
  4. Used to be the low of the balance area until Friday
    • a. Only look for positions if volume shows change happening here
    • b. I’ve removed it as a support zone as it was very useless on Friday but it is still an area to watch
    • c. Do not enter this zone pre-emptively
  5. Current bottom of balance area – Zone should be strong
    • a. Look for long positions
    • b. Can enter pre-emptively
  6. Early August resistance zone, could be support if we reach this point
    • a. Look for longs
    • b. Take a trade only if volume allows it

I currently haven't marked a no-trade zone as I don't have a good idea of where we will see balance, right now 4788-4778 looks to be that but the first hour will determine whether that should be a no-trade zone or not.
Big Gap between 4790 and 4815 in my morning prep, I need to watch those areas carefully as apart from a potential 4800 zone being at play, I don't feel comfortable right now setting zones
 
Missed my first short trade and here's my second, I could be reading the market wrong as I am expecting things to turn around slightly
Delete 21.jpg

Looks like the bull move is exhausting itself so I entered into a short position expecting a reversal. So here's my entry, 4799.25 which is currently the high, so I got very lucky with a fill

Delete 22.jpg

So far the signs look good, the volume profile@ 30 minute interval shows that the market will reverse. I’m comfortable with my stop but I will have to watch at around the 4795 and the 4790 area to see if someone will step in to turn the trend around again

We'll have to see how things keep moving along, so far we are seeing a bit of resistance at around the 4795 area but I have not yet seen strong signs that I'm wrong on my entry strategy


Edit: 1012 EST
Market is moving my way but not as fast as I would've wanted it to. I won't lie and there's a bit of me that just wants to take the W but I still have yet to find a reason as to why I'm proven wrong.
I also have as good of an entry as I can have with the current high of the day to the tick, so why exit now?
The 15 minute profiles show some bulls holding up the market, but overall bearish sentiment to me
Once the bulls get too tired, we should trend down, or at least that's my thinking
Delete 23.jpg



Edit: 10:30 EST
Market tested the 4790 zone and moved up from that, but it doesn't seem strong enough to counter the bear trend, at least not yet. Still holding. I'm going to set some alarms at certain areas and step away for a couple of minutes after the results from the dallas fed mfg are discussed


delete 24.jpg

Edit: 10:52 EST
Market came down to 4788 then moved up 6 points after that. Definitely not what I want to see but I still have not seen anything that proves my entry strategy wrong, I still read things as the market will keep trending bear at least for the next while.

Delete 25.jpg
Delete 26.jpg


One thing I also have that's positive is the EU open was very bullish so when the EU close comes around, I'm expecting those who were thinking we might have a bull move to at least the 4810 zone to get out before they go home, as they might feel that this will be a balance day.
As always, these are pure assumptions

Edit: 11:37 EST
Okay so now looking at things I'm starting to have some doubts about the market dropping as much as I expected and having mixed signals.
  • The 24 hr chart is telling me to hold on to this as the bear move will continue at least 10 more points.
  • My volume profile is showing me that the bears are hesitant to drive down the market further
  • The volume count tells me that when prices drop we see an increase in buying, so the bulls > bears
  • My 5 minute candle tells me that the bear move has slowed down a bit and the wicks are now reversing
  • The 15 minute candle is showing that the trend is now reversing
  • Looking at fundamentals everything in the NQ is up apart from bio
  • Looking at the other indexes there is a pretty strong bull rally
  • The thing that is holding me back quite a bit is the fact that I'm short on the to top of the day so far.
Delete 27.jpg


Honestly right now I'm very unsure as to what to do...


Edit: 1150 EST
Ugh I got stopped out. I was very confident in this trade as for 2 hours things were looking good, but the last 10 minutes pushed the market 9 points and destroyed the move. I'm pretty upset about this to be honest because I was debating getting out but I had conflicting viewpoints in my chart.

I think I let the fact that I had such a good entry point cloud my judgment to be honest, the other 2 major US indexes are up quite a bit and the NQ was lagging behind but it's only going to be some time before the NQ catches up trend wise.

Delete 28.jpg
 
Summary of 2016-08-29

Market was very slow today and I only took 2 trades. 1 rational trade and 1 mixed trade. I expected a balance session today and we definitely got it, too bad I miscalculated where the bottom and tops of the session were going to be.

Day range is ~ATR but the RTH range is ~20pts, so quite low

3 things I did well today

1- 0 emotional trades

2- I’m quite happy with one of the entry points I had for my 2nd trade, didn’t end up being a winner but for 2 hours out of the 2 hours and 15 minutes I was in the trade, I had good execution. With a few improvements I can turn this into a winning trade in the future

3- I walked away for a bit after I got stopped out on my 2nd trade as I was pretty grumpy due to lack of sleep and a failed trade haha. This may not sound like a win to some but sometimes lack of sleep combined with a trade you felt really good about being stopped out, can lead to a spiral of bad trades

3 things I can improve on

1- My first trade had some signs but not enough signs that I would’ve very comfortable taking that trade, it was definitely a bit of a FOMO mistake by my end there, and although it was a small loss it was still a trade I shouldn’t have taken

2- I need to speed up my decision making, I can blame it on the sleep all I want but the truth is I’m not a fast decision maker. I need to be able to look at the data in front of me and make a quick decision on whether or not to enter, stay, or exit a trade. I even made a comment as I was in a trade and it was moving against me that I didn’t know what to do. By doing that, I left my trade to chance, and I’m in the trading business not the gambling business

3- I need to work on leaving the last trade behind and only focusing on the trade ahead of me. Part of the reason why I hesitated shorting at 4804 was because I had lost my last 2 trades and I wasn’t 100% comfortable about taking this trade although all the signs were there, mainly because of the low volume. Had I not thought about those other 2 trades I would’ve entered into a winning trade.
 
You must log in or register to reply here.
Back
Top