Prop Trader Journal

Hey Shan,

Sounds like you're moving in the right direction. As you know, I've been taking a break as well, and it's for the best so far. It feels like it's been months since I've been on ET!

I've been working on my trading plan and just opened my own account outside of the prop firm, so I can sim-trade for a while and nail down my setups so I know <i>exactly</i> what I'm looking for.

Keep up the progress!

P.S. - Regardless of anyone else's opinion, I've found Al Brooks' approach very effective, even if it is really confusing at first.

Talk to you again soon!
 
Sounds good, too many different approaches being pushed here lol. Good luck man, I think you willl do well. You seem to have a better head on your shoulders than most.
 
Good luck to all...

Your P/L will be the judge to whether Al Brooks' methods work. I personally think his setups are too frequent and your trading too much noise. His advice is way too subjective. Read his stuff and follow his strategies but please don't credit him for a winning trade, and then on a losing trade, while still using the exact same strategy, say that "Oh on page 168 he says to do this instead." Again his material is so subjective.

The problem with over-relying on candlesticks is that when news hits the market that little chart pattern of yours is meaningless. And it's not even news but perhaps seemingly random movements in other assets (especially usd/euro, crude, gold, etc.) can trigger buying/selling in equities.

This is not a good market to trade. It is the summer and when earnings ends the small movements may not be worth trading. That said no one can predict if any catalyst will revive the market. Historically the summer is too dull to do anything = inexperienced traders will chrun their accounts on small, low volume moves.
 
His book is the most poorly written book I have ever bothered reading. It is confusing and he definitely comes up with some overly clever hindsight analysis. But there are also some real gems in there, and it has greatly improved my ability to read the markets. I would say unless you have really made an effort to get through the material you can't really give an informed review of it.
 
Quote from Shanb:

I said I would stick to IWM, but after hearing what everyone had
to say...couldn't stop thinking about things.

Thought about it and PA and VOL is PA and Vol...I can try to disguise it in many shades with order flow and momentum and all that, but it is simple. I've been trading the SPY since I started and that is the only thing that I have been doing decent with. The R:R and targets are not very large with it on an intraday basis as far as I have been playing it.
So I thought, use this same stuff on stocks in play...

Blindfolded myself(figurative) and went bar-by-bar on all of the stocks in play for the past 3-4 days...traded in TOS with the playback feature. Did pretty damn good. Went in today and didn't do amazing, but the potential looks to be there. Still traded some in the IWM as I said I would, will keep working on that...but have opened my eyes to some other possibilities.

Thanks to the posters who gave me suggestions, confused me but brought at least a little tiny bit more clarity and direction going forward. We'll see how things go.


..........some other things that I played today. Was in the money 20 cents in both of these, but wanted to swing them out so took BE'S and small winners.
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I would suggest you stick with individual stocks. The reason being is that you are trading at a firm where most of the guys are trading stocks and you will be able to learn so much faster by looking at what they do and learning from them. If you are trading ETF's and no one else is then there really is no point to you being there. Then you should be at a firm that trades index futures. Use the resources that you have.
 
Quote from atlTrader666:



Baggerlord I'm sorry but that stuff with all those lines doesn't work... always easier to post something in hindsight lol
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Trendlines are incredibly easy to draw in real time. Today there was a textbook Al Brooks scenario. A breakdown of an up trend line. A retest of the high. A breakdown of a trendline near the high. A good entry signal right at the top that provided a good 40 cent trade.

Pretty much anyone could draw those lines as the day developed, and if one was looking for a retest of the high followed by a reversal, that trade was a no brainer. I spotted it in the few minutes I had to bring up the charts on my smartphone today, and I by no means an expert.

I know he writes like a crazy man but the scenarios he describes in his book play out in the market every day. There was another textbook perfect play today as well that was good for nearly 40 cents that I didn't mark. I spotted that one in real time too, and it isn't something I would have looked for before I read his book.

I have not found a better explanation anywhere of different types of days, how to spot them, and how to trade them. Most books or websites describe setups, without really getting into reading the bigger picture.

Anyways, sorry for cluttering up this journal that belongs to someone else lol. Just wanted to show how the book can help if you put a little work into it.
 

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Baggerlord,

If it makes you money then so be. Everyone has their niche. i just personally don't know of any consistently profitable traders who make money off TA, especially the more esoteric strategies.

If you're ever bored go into Excel and write an easy program that will create a random walk. You may be amazed how similar it looks to the ES or whatever usually choppy instrument (one reason I think there is little edge trading leading indicators).

I'm not totally dismaying TA as I use support/resistance levels as tools to evaluate risk and reward. But a lot of it is just noise to cloud judgment. Humans are pattern seeking animals and sometimes we see correlations that are not really there. Enough mining with random data will show patterns.

I wish publishers of trading books would audit the financial performance of their authors. There's so much garbage out there. For you aspiring traders, screen-time is more valuable then books. If you decide to read, perhaps read the accounts of guys that ran hedge funds or so forth. Even if they were black swan candidates their better than all those Ari Kiev, Al Brooks, Van Tharp, Mark Douglas, etc. snakeoil salesmen. Half of those authors would make you believe that if you mastered psychology "get control of your emotions" then you would be a successful trader.
 
Took a day off today, was burnt out. I've been the first guy in and last guy out of my firm for the past 2 weeks. After coming home and eating and a workout thrown in every other day(keeps me sane and balanced) I have been living and breathing the markets!Alot of going over every trade after the close, bar by bar sim trading after the day is over. 12+hours in front of a monitor a day can get heavy on the eyes...oh well i'll get used to it.

Also, I notice alot of the guys at my firm have an out....or timeframe where they will move on if they are not successful or start making consistent money. I don't know if this is by necessity or just an excuse to give up. I have no out! I will not accept anything other than being a great trader. After being profitable intraday----moving up and up and up and up. I'm in it for the long haul and I know this is a marathon and a dragout 12-round war. I've never had to work so hard to get anything, but that pain can be gratifying...knowing that you are working harder than just about anyone else you know!

Like a trader friend of mine once said..."attack your passion" you'll make it if you don't shit your pants or they don't break you!!
 
Quote from Shanb:

Took a day off today, was burnt out. I've been the first guy in and last guy out of my firm for the past 2 weeks. After coming home and eating and a workout thrown in every other day(keeps me sane and balanced) I have been living and breathing the markets!Alot of going over every trade after the close, bar by bar sim trading after the day is over. 12+hours in front of a monitor a day can get heavy on the eyes...oh well i'll get used to it.

Also, I notice alot of the guys at my firm have an out....or timeframe where they will move on if they are not successful or start making consistent money. I don't know if this is by necessity or just an excuse to give up. I have no out! I will not accept anything other than being a great trader. After being profitable intraday----moving up and up and up and up. I'm in it for the long haul and I know this is a marathon and a dragout 12-round war. I've never had to work so hard to get anything, but that pain can be gratifying...knowing that you are working harder than just about anyone else you know!

Like a trader friend of mine once said..."attack your passion" you'll make it if you don't shit your pants or they don't break you!!
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Shan, that is a great attitude. However, trading is a lot like college. When you go to college and your studying say history as your major, you might find that economics is more interesting, or maybe medicine. You don't have to quit college, just change your major.

Trading is very broad. You might discover you don't like daytrading, but do like some other form of trading. You might not be right for stocks, but maybe futures or options. You might discover you have a knack for arbitrage. Or maybe even automated trading. So don't confuse giving up or quitting with deciding where you focus should be. That's a big difference.
 
The job is a grind. It will become painful when after so many hours, days, months your P/L will seem totally random or even worse. Your only true edge in discretionary equities trading is playing the right stocks. The stock market is too efficient to be traded in the short-term but at least your learning a certain asset class.

There's a lot of chance involved in trading. Unlike sports or music, where your performance will almost definitively improve after months of practice, in trading it is possible that it will get worse... that is a testament to the randomness of the market.

My advice for you is to use this experience as a platform into getting better jobs in finance... it will teach you a lot about persistence and psychology. You will also learn about publicly traded companies. I highly recommend you also incorporate some macro research of other assets; intermarket analysis among say the USD/EUR, Treasuries, Crude Oil, Gold, etc. Take EOD data and run correlation tests in Excel.

It's impossible to extract money, consistently, and on a daily basis from the stock market... to even break even is a loss considering transaction costs as well as essentially wasting your time. This makes prop trading at a broker-dealer so tough. Try to be very selective with what you trade and how you trade... don't churn and focus on less liquid/high beta stocks intraday that have great volume (except bio-techs).
 
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