My Path To Success

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There was a time when it seemed I just have tons of energy. I was making very good money and I was able to get to work easily. I lived right next to the YMCA. So, I'd walk down to the YMCA and play racquetball, swim, or lift weights. I worked hard. But, I just had a lot of energy.

Now, I work long hours. It isn't intense. But, it seems I'm just tired. I've trouble sleeping. I used to study the market all night and know what the market would do the next day. At that time, I felt that the style suited me. I'd be a day trader who placed his trades before the open and slept all day. It felt like a good plan because I always won. But, managing my research and also being in good shape for the open has never been a strong point of mine. Part of the reason, is that I simply feel there are more opportunities before the market opens. So, the trader who has to trade the 9:30 is disadvantaged. But, 24/7 trading has a high cost and is impossible to do properly when working a 9-5 (like I do).

Now that NADEX has changed their spreads. It invites me to look at my style. I could get up in the morning early instead of staying up all night. In this way, I'd model the typical professional trader. It could be worth at least trying.

Health is important. I used to lift weights and was strong. I think part of my plan for getting back into tip top form for trading has to look at the health issues. It has to look at my sleep issues.

The other side to this is that I really like to share my market insights. I like to always win and do the impossible. It is important to stay in feedback loops. There is so much work required to maintain my performance that sharing becomes important. But... I'm not willing to share everything with the public at large. I can't see it. And, I've tried to find various partners. But, mostly I have picked the wrong sort of people -- i.e over left brain, critical, etc so it never ends well.

I think 3-4 aspects are required for me to get back to the watch tower. The watch tower is a mythical representation of where I can look out over the market, see all the moving parts, and stay above the fray.

* Must get sleep.
* Must get my health back on track, lifting weights, getting in shape, etc.
* Must find a way to stay in market flow without spending 24/7 doing it. My greatest breakthrough (in the past) came when I learned to reduce my workload in calling the market by a factor 10x. I need to do this again.
* Must find a way to satisfy my need to share. This could come about in a few ways: I could mentor someone, share more for free, or simply start to really appreciate even making a small win. I ran this account up to what $1500. But, I didn't really stop and appreciate what I accomplished. At one time, I played poker and started with a $50 account and ran it up to $100. This was a insanely difficult task. If I lost $20 then it was a big deal.. While, it is obvious a big sign that I'm more serious about the market, I could start to appreciate getting a $100 win even.
* Must find a way to get my research done. My trade studies are piling up. My best system ideas are sitting and gathering dust.
* Must find a way to bring in more money/capital without thinking about it all the time and without it affecting my performance or other goals.
* Gotta plug my leaks. I read too much. 99% of the news isn't worth reading. 99% of the posts here aren't worth reading. I spend too much energy correcting others. I have to start to refocus my energy footprint into areas that return the most value.

Trading for me has always been about 2 ideas. One is developing a connection to the Source, the source of creativity and energy. The other was about self improvement through technology, i.e Cyborganism. I need to get back to these central tenants.
 
Time to sit down with the coach again.

Coach:
How did your trading go today?

Me:
Well, I finally got the Fed reversal I was planning and trying for all week. I lost quite a bit just because I didn't have a clue what was going on. I knew what would happen. Part of my ability comes from not paying too close attention to what is going on but obviously I need to pay enough to attention to know what I'm trying to do.

Coach:
I see you made $1,000 in your hypothetical account. Not a bad win. That would translate probably into about $200 to $300 win, no?

Me:
It very well could normally. But, I dropped my size down. I also did something stupid. I've got a love for this idea of taking out measured moves and using the premium for edge. For example, I'll take a slight bit more risk to get a slightly better entry. I had seen some of the new priced spreads at NADEX where they offer fair premium with smaller contracts. So, I was over eager to jump in and I jumped on a contract that expired at 2:00. It expired out of the money. I saved the day by entering a daily contract. Net-net was a wash. It should have been at least $100 day to a $300 day for me.

Coach:
And you traded after the 11 AM cut off, why did you do that?

Me:
I always say Principles over rules. My principle is not to trade after 11 AM. But today was a unique event.

Coach:
What do you think caused the poor action today?

Me:
It was definitely the jobs data. The jobs data is terrible. This will make it hard to stage a real rally. But I didn't know what it was. I just figured everyone would sell because the market was priced to perfection. I came within a hair of bailing. But, I always use my sim account as the decision maker. I wasn't quite ready to give it up. So, I managed to make a few dollars.

Coach:
I like that you are still trading and staying in the market. I think it is worthwhile to keep your size down and experiment. I mean if you are taking of 5 contracts you could be in the futures market. The ability to trade smaller is a benefit you should take advantage of. Why didn't you add to your position on confirmation?

Me:
Okay, I was about to push it. I came within a hair of adding. If I had of pushed it then I would have had at least a $100 day today. I was mainly concerned about the volatility. I had chosen a contract with a lot of risk.

Coach:
I see. Well, it seems that having so many options is current a distraction for you. But, you may yet use that to a better advantage. keep your size down. Learn as much as possible about these contracts. Find whatever ways you can to exploit them. You need to learn these like the futures contracts. Don't forget you gotta find a way to keep up with events and market releases too. Keep focusing on your strengths. I like that you took a hypothesis based trade. We still have some work to do on your position sizing. We need to automate that so you don't have to consider it. You'll get 3 levels: feeler, normal, and pushing it level. I don't want you taking time to think about these things. You've enough to think about.
 
Coach:
I want to get yourself physically strong. And, something else. you need a mental edge. Something to brighten your a mind. I have something for you.

Me:
You're not a telemarketing vitamin seller?

Coach:
No, I'm going to put you back on a powerful nootropic. It's called Creatine. It will brighten your memory. just a bit.

Me:
Does that mean brighten good and darken the bad?

Coach:
Yes, we're going just going to raise the intensity a bit of your mind. That means more good and more bad. But, you need it. You need energy and it will help with the getting strong.
 
NET P&L: +$675

Good day. It was a slow start. Looked like I was going to lose $200 then it recovered. I stepped on the gas and bought more. Immediately reversed on me. I reset my new contracts to break even and tried to scale out. Then it ripped higher. I added more contracts. Got a bit of value on them.

I'm terrible at knowing when to step on gas or breaks.. end result is good though..+$307. Spoke with Gary Smith here.. that was very cool.
 
Coach:
I want you to start to focus in on your trading. On staying in market centric feedback loops. You feel a need to correct people don't you?

Me:
Yes, I see all the garbage posted on ET or stupid questions. I do often feel a need to set the record straight.

Coach:
And, what does that return?

Me:
Nothing. It just waste my energy.

Coach:
Okay, and if it doesn't return then you have to cut it out. I want you to become the best trader you can become and that means no wasted energy. You have to focus on that and then find what you enjoy and do that.

Also, how did your trading go today and what are you learning?

Me:
You know I'm terrible at taking profits at the right time. However, I'm always in there trying because I feel that the trying does me some good. What I've found is that if there isn't much time left then it probably pays more often to try to get out at a relative high then just at any arbitrary point. Even a couple points can make a difference in the futures market.

My best targets are usually taken out after hours. I'm always looking going into the close with trepidation that they will try to game it. At NADEX, my spreads expire at 4:15 so I don't the opportunity to get my target fill. If we drop a few points then that's what I get.

Coach:
I think it makes sense to think about the time left in the trade relative to your targets. If you can't hit your #1 target then it makes sense to get the best price you can get especially given the fairly consistent tendency for the market to *redacted* going into the 4:00 to 4:15 period.

Me:
Yes, I was a hairs breadth from eeking out an additional $50 today. Just really close. The volatility in the 4:00 to 4:15 increases too. I think it makes sense to take off at least a portion before then. But I give up an additional tick for that.

Coach:
What happened when you added to your position today?

Me:
Well I added at the exact high of the first period and then it reversed against me pretty hard. You know I'm thinking at that time: this is terrible. I just want out. But, I know the perfect trader exits on a high and not a low. I'm always thinking but if I can get out at my previous entry then maybe it was a decent entry after all. So, I set a break even stop for the new contracts I entered and then an additional target for my base contract. Came back to the market near the close and it was at target #2. I gave up I guess up probably $40 or $60. I was on target to have a $400 day.

Coach:
What did you learn specifically?

Me:
I learned that if I add to a position then I need to be willing to get out very quickly if the market goes against me or I need to be willing to wait for an excellent and low risk entry OR anticipate even before hand and buy an out-the-money position for almost no risk. Those are the 3 options that make sense. What doesn't work is buying a new high and then letting it roll against me.

I think it makes sense to wait for a pullback because I don't have to get filled on these extra contracts. Their extra. I could have bought an OTM position for almost nothing as the market moved against. But, at that time I felt pretty sure I wasn't to make anything today. So, i didn't want to add to my losses. It also goes my paying too much for premium -- in terms of point premium.

I know I've had some brutal hypothetical losses when I added to my positions and they rolled against me. And,with only 1 day contracts then there isn't much time for things to work if it doesn't work out.

Coach:
We definitely need to think about under what conditions we will push. Now, what's interesting is that you added on your sim account and captured the whole with the extra contracts.

Me:
I'm always comparing my performance to my sim account. I try as much as possible to use the paper account as the decision maker. Sometimes I'm a bit more aggressive with the paper account. But, also, I don't use nearly the same amount of leverage even when I'm pushing. So, I think it is important think about that. The other difference is again I can hold a bit longer to try to get out. I also will synch my sim account to my real money account. This has been hurting my sim performance because I'd usually hold a bit more for a second target. But, this isn't really a psychology issue -- it is just that my contracts expire at 4:15.

Coach:
I like that you are focusing on these difference -- become ever more aware of these fine distinctions because they are and will be more important. Lastly, I want you to enjoy this win. That's a lot of money you made and it wasn't easy. Oh, it is good to look at the MAE of your system trades before bailing on a losing trade. You may find that what feels like a sure loss is a normal MAE.
 
Coach:
So, how did you do today?

Me:
Nearly terrible. I was bearish heading into the open today and didn't want to risk a lot. My system had signal a long. I was trying to get filled at an excellent price. Anywhere from 1263 to 1265 would have been a reasonable fill. But, I was pushing hard to get the best fill possible. I gave up about 5-7 points of short profit, as well.

Coach:
Right, you've experimented with this idea of using limit orders within time limits. If you don't get your fill by a given time then you go to market. So what happened?

Me:
Well that was what I was doing. I'd give myself like 15 minutes to get the fill or 5 minutes. If I didn't get fill before then I'd go to market. However, over last few weeks the market always hit my limit. I waited about 2 hours and lost at least 7-8 points of edge.

Coach:
But, you eventually went to market?

Me:
Yes, I eventually went to market using a very low risk spread. I only had $50 at risk total with $20 per point. $30 per point is my standard. I didn't want to risk much because my entry was poor. I was up about $130 today and added to my position to make it $30 per point. Unfortunately, market reversed and gave back most of my profits.

Coach:
Tell me about the reversal.

Me:
The close was gamed to deal with the expected order imbalance in the 4:00 to 4:15 period. So, these idiots gamed the close and sold it off in an attempt to front run any imbalance. It bounced back in the 4:00-4:15 period.

Coach:
What do you think your problem was today?

Me:
I was definitely too risk averse. Risk averse on my shorts. Risk averse on my long trades. I wasn't aggressive in getting my fill.

Coach:
I agree. You did finally go to market though with a low risk entry and managed to extract some profits. This is a benefit that you finally recognized you were wrong and self corrected. This takes a great deal of skill. I think you are taking too much flexibility in your system trades and you need to tighten down how much discretion to take when trading the system especially when you aren't reading the market well. What we might want to do is take 2 contracts using the system rules and give yourself 1 or 2 contracts for your discretion.

I think that you lost track of time because you didn't have a time limit on those orders. So, I think you need to come up with a time, i.e 5 minutes or 15 minutes. Whatever it is then go to market.

Me:
Right, I agree. I lost track of the time and let the market get away from me. The only thing that saved me was I predicted we could see 1282 taken out. Not quite but close.. very disappointing to give back more then half my profits.. But better then a loss.
 
Coach:

So, what happened Friday. I didn't see you update this thread and heard you lost some money?

Me:
Yes it was a very small loss. I got in on a short and got out fast when I recognize I was wrong. It would have been a big loss. I was on a split second to reversing. Just quite didn't get to that level.

Coach:
Well, it is good you got out when wrong. I'm still concerned you aren't trying your best. But, I understand that you are ramping up for the next level. I can see that. Now, let's talk about your posting here, you've been doing quite a lot. If it doesn't produce value then you need to cut it out. Are you reading google news?

Me:
I agree. If it doesn't produce a value for me then I have to cut it out. Yes, I agree reading the news doesn't produce value except when it is market related. If it doesn't make me money or give me value then it becomes a cost. It makes me sick really that I read the news so much. It is just a bad habit. Right, I agree we have to cut it out. 99% of the information out there is worthless.

Coach:
And how do we know what activities to cut out?

Me:
If the activity doesn't lead to flow, if it doesn't lead to service, if it doesn't make me wealth then it's worthless and a cost. The thing is that I'm typically reading the news to chill out or rest. But, it never works. I'm just spinning my wheels. I'm trying to find a way to make money. Trying to get somewhere.. but I'm dividing my energies. I'm wasting my talents. It never works. I recognize that and will now act accordingly.

Coach:
Exactly. You need to get focused. Look, 99% of the people are reading news, watching movies like Broke. The top 1% of the people are working out, they are obtaining flow, they are making money or enjoying the beach. Either the activity is a value or a cost. If it is a cost then cut it out. The brain is always working: the least we can require is that it is fun or makes us money.
 
Coach:
Tell me more about this idea of service that you have. What exactly is the source?

Me:
Of course, I can't share my most proprietary knowledge in public. Who knows what the source is? It is energy. It could be dopamine. It was once called nature. And then there are more esoteric ideas. It is power but has limitations.

Coach:
Right and how do you develop that connection to it?

Me:
Getting into flow is a big part of that. Flow is the interaction with the source. It is a good question how to get the connection to it. I find that keeping an open mind helps. Music helps. It helps to be selfless. It is a wonderful feeling. Flow is all about making connections. It is making connections from A to B to C to D and all at the same time. One other thing because the mind is always processing data, one has to reduce the noise to get too it. We process everything that we come into contact with, so we must be careful to restrict what gets processed.

Coach:
What is the open mind concept?

Me:
Well, it is similar to my concept that the mind has 2 neuronal circuit processing paths. If I have "open mind" then my mind is like an antennae. I am "open" to receiving from the source. If I am closed mind then I can't receive. The square heads, the logical head, is going to be at a difficult to receive from the source. It is blocked out. So, a part of that as is aimed at destruction. But, let me discuss the 2 neuronal circuit processing paths. If I have a question, I may work on it hard, but as soon as share it then I get the answer. In other words, just my sharing the question somehow produces the answer. I believe that somehow the mind interprets or processes through a different pathway.

Coach:
Destruction?

Me:
Creative destruction. Yes, it can be done by facilitating by pain, for example the cayenne pepper. It certainly doesn't have to be though and that is only a method I'd use on rare occasion. It helps to have a partner or a relevance aimed at it. One has to have something to listen too. Whether any information is transferred, I am gnostic in regards to that. I deal in practical methods.

Coach:
Right, the closed mind is why the square heads are seldom able to produce success in the markets and yet the open minds will often even win following the false guru. I want you to develop your open mind and be aware when you are taking on the close mind. It is important that you always work to use the open mind. You'll need a conduit though. Hmm, that could be yourself or you could use *redacted*. You could email yourself for that and use music. The important aspect is to get the open mind and get yourself into flow again. It may not be easy but you must try. Try.. try you hardest. It is worth it.

Anything else?

Me:
Yes, one of the greatest benefits of reading traderfeed was my ability to model his well-though out executive processing capabilities. You see, if a brain is around another brain that has a higher meta cognitive ability then the other brain will take on those qualities, as well. I feel it might be useful to read traderfeed such that I can benefit from the meta-cognition.

Coach:
Right, I agree. I want you making connections. I want the gears turning. The strong meta-cognition will help when executing on those ideas skillfully.
 
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