Prop Trader Journal

Quote from Shanb:

One of the reasons I was asking about using the ES is because I've noticed that it tends to lead the ETF's at times IE, there are leading indications in the PA and especially the volume that can give cleaner indications.
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No, not really. It's a basis trade. Hedge funds trade that spread all day. At any given time the futures maybe trading at a premium to the ETF and vice versa. All that shit gets arbed to death. That is why it's so messy. All it takes is a big option trade to go through and either the futures or the ETF will get sweeped. It can be very misleading.

Ideally you want to trade an index that has the least amount of arbs. The IWM fits that category as there are 2,000 small cap stocks that are not terribly liquid. It's very hard to trade that basket efficiently. Not to mention all the stocks in there that are hard to borrow.

I think you will find the IWM much smoother and have more follow through.
 
7/15/11

Net P&L= -32

shares traded= 1200

So today was an all around mediocre day...scaled back the trading a bit as it was a choppy day and didn't little order flow stuff.

C:

Took one trade midday as momentum was down and looked like I could get a solid trade...chopped around for a bit and stopped me out and went down. This was mid-day so I could've reentered, but instead just chose to sit back and watch things unfold.

SPY:

Took some trades in the SPY today and have them outlined in the screenshot posted along with some commentary. The first trade looked decent looking back it, I took some small profit as Euro bank stress tests were due out and I didn't want to hold into that. The Second trade was not a good trade looking back at things. I was selling into the first pullback of the break and we were at the lower end of the range on a range day. Might have been a better entry after pulling back to the ema, but event then we were in a range the whole day!

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Ok, so going forward I will be trading the IWM instead of the SPY, maybe trading the SPY if the range is really protracted in the IWM as it was today. I have been doing bar-by-bar simulated trading for the past months trading days.

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I have came acoss Al brooks work in the past and today it really opened my eyes to what he was talking about when it comes to H1, L1, H2, and L2 and the other variations. I've seen these setups before and took them, but just didn't have an objective way of classifying them! Went to his price action website and find his eod commentary pretty good. Worked pretty hard this weekend in looking back at trades and seeing what worked and why...and what didn't work. Think I will have a clearer perspective and approach going forward this weekend after doing this work.

So going forward I'm going to focus on taking the best setups with the trend. Buying and selling first pullbacks in strong breaks/trends, when PA and volume confirm. Buying selling H2/L2 when momentum slows and volume and PA confirm a trend. When I'm talking about volume just looking for climaxes and volume decreases in the direction of the pullback and increase in the direction of the trend. Also not buying in selling into momentum, al brooks calls this micro channels? When the market is in a range, not trading until there is a break and then trading it based upon the above variable.s

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So Maverick recommended I pull out some bad habits that I've noticed myself partaking in and then devoting some time working on them. So the first:

- Not stopping trading after having three losers in a row.

I've noticed that I tend to just start looking for trades without acknowledging other possible outcomes and not be flexible. So this whole week I will follow this rule.

-Not being disciplined in asking myself the correct questions before taking a trade.

I have written down some questions that help me gauge what type of trade i am putting on and identifying the context of the trade/environment. This is just to cut down on impulsivity and help understand why I put on a trade and if it doesn't workout...why it might not have. So for every trade in the IWM this week I will ask myself those questions I have listed and help to bring some better context to my trades.
 

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Quote from Maverick74:

No, not really. It's a basis trade. Hedge funds trade that spread all day. At any given time the futures maybe trading at a premium to the ETF and vice versa. All that shit gets arbed to death. That is why it's so messy. All it takes is a big option trade to go through and either the futures or the ETF will get sweeped. It can be very misleading.

Ideally you want to trade an index that has the least amount of arbs. The IWM fits that category as there are 2,000 small cap stocks that are not terribly liquid. It's very hard to trade that basket efficiently. Not to mention all the stocks in there that are hard to borrow.

I think you will find the IWM much smoother and have more follow through.
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So after going through the IWM/TF and the SPY/ES day-by-day for the past 20 trading days...I think I have confirmed what you have been saying. As a result I will be trading the IWM for the most part going forward. I am trying to put in trades in expectations of having follow throughs on Breakouts and trends, it only makes sense to trade an instrument that has the folow throught that the IWM does. I will continue to work on the order-flow stuff and scalping as well. Just more observation and only taking the absolute best trades when scalping.
 
i dont post much here so its always best to pm.

I haven't read all the posts here, but would like to say that if people are telling you something you are not sure about, follow your instinct. The worst thing a trader can do is let others prove him wrong instead of the markets prooving them wrong (this mistake costed me a month)

Here's my take on the spy, the beginning of the day i had 2 or 3 small moves that i consider break even. I think one was up and one was down.

Just to be clear, in no way am i a "pro". I am in my own world and happy here. but today i thought id check out a journal for the fun of it
 
P&L= -$24
Shares traded= 1400

Today was a bad day in terms of execution. I made some dumb errors that ended up costing me in the end of the day.

IWM:

+16.00

Made two trades in IWM...or three. The third was a keystroke error. Wasn't focused and I doubled my position instead of exiting a scratch trade! So disappointed in myself. Cooling down now, but shit like this should not happen! I will stay behind after the close and drill my keys because of this. The first trade was a winner off of the pullback on the first selloff. The second Trade was not the best trade in hindsight. It looked to me like we were on the top of the range and may be headed back down after three drives up, entered and this is where I doubled my position accidentally as I was trying to exit. Screenshot is attached.

SPY:

-10.00

Made a trade to get short midday after a pullback to the ema and a L2 being put in. volume was really light and I was eventually stopped out of this trade. After the market took it highs that were put in after this move it could be seen that we were rallying off of the lows. Did not see it or believe it...need to be more flexible in this regard. Looked like a possible range but was wrong.

CHKP

-23.00

Chkp had broken the 60 figure and was pulling back and holding the 90's. entered and shortly after CHKP gapped 15-20 cents and I had to swipe out as the market did this. Frustrating with these momentum type trades. Always seems like there will be a gap against you if you are forced to exit...probably because many others are trapped in the same position as you...the sheep lol. i don't know how to exactly go froward with these types of scalp/order flow/momentum trades. I am doing better with the IWM/SPY trades and these just tend to go against me. Will keep going at it and keep these trades to a minimum going forward.

Now I didn't exactly follow my rules today in regards to reading my context questions for the IWM and SPY trades...I'm clearing my desk of my clutter and leaving three things. A note sheet, rules sheet, and my context questions sheet. Frustrating to have so many mistakes today, but the market will bring them out quickly for you to see! Off to drill my keys. Good trading everyone!
 

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Quote from baggerlord:

Why are you trading more than one product if you are not yet profitable on a consistant basis?
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Trading more than one product? Literally everyone in my office trades more than one product. When you are playing order flow/ momentum, the product can vary...I'm just finding it hard to trade this way. Maybe this is a sign that I need to not trade in this way and stick to where I am making some progress! its hard not to trade some of these things moving a couple bucks a day when everyone else around you is successfully playing these things and calling them out. Maybe im just making excuses for myself...idk lol
 
I quickly skimmed part of this thread. Here's some friendly advice:

1) Your stop-loss is way too tight!!! 6 cents on the SPYs lol? Go after bigger moves.

2) Stop trading ETFs (e.g. IWM, SPYs, QQQQ, etc. or even commodity ETFs. You have little edge trading those.

3) Go to finviz.com and create a scanner... I like volume, 52-week highs/lows (never hold lows stocks overnight as they can be bought out by a competitor). Have a plan and trade what is in play aka has volume. Don't trade the same names everyday unless they have above average volume.

4) Technical analysis, in terms of patterns, doesn't work. Use TA to gauge strength among diff stocks and since you're a short-term trader follow rules of momentum. Buy strong stocks and short weak ones... don't chase but trade on dips and bounces.

5) Money is made from the pre-mkt to ~10:45am, then from ~2:30pm to close. If you trade during lunch then enjoy churning your account to no avail.

6) Commissions will kill you so hold your positions longer. The big moves will happen near the open... some people claim that time is random and volatile but it's the only time to make money imo.

7) You're having too many losing days so whatever you are doing is not working. It's great that you're writing a journal but try something else when trading.

8) Don't be scared to put on more size. Don't stop just because you have 3 consecutive losers. You need to learn now and the money you are losing is peanuts at the end of the day.

9) Don't let your emotions get to you. The market is very random and you won't be able to make money every day. To be flat on some days is good. You need to go for the jugular on other days though and make a killing when you see that great opportunity.

10) The only TA that really is significant is resistance and support levels, as well as momentum. Trading signals from oscillators, moving averages, etc. do not work. Don't overtrade from too many signals. Don't get caught in the randomness that dominates the market the vast majority of the time. Only trade good opportunities.
 
So I've decided it...I will focus only on the IWM for now! I have TradingRaw
service still, so I don't know how I will go along with that. Maybe just watch things when the broader market is slowing down etc. And continue to watch his videos and what not. Other than that only trades in the IWM...watch the TF In conjunction and also the ES to confirm moves. Only IWM trades tho! If I deviate from this...call me out...hell I will call myself out!LOL.

I also think that I will start to up my size and take on a little bit more risk. My loss limit for the day is 100 dollars, but my account is close to 10k so in reality that is not very big. I can easily take on 200 share positions in the IWM and risk 20 cents. Maybe even have a +100 day soon! All other things will stay in place. For those that may ask why the IWM...well it has been discussed in this thread. Just about the only thing that I have been making progress with and have been trading ok is the SPY and IWM etc. There are plenty of great traders in this forum that trade the index futures and do just fine. My focus has been here...I will increase it and move forward confidently. I might just be around the corner from gaining some consistency!

Also as soon as I can gain some consistency, I will start incorporating some other stuff...not now tho!
Good Trading!
 
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