QM Trading Journal

Big loss today: -708.

Made a lot of mistakes:

Mistake 1. changed to a new setup since yesterday. It didn't work well today. Went short, the market handed me a loser right away.

Mistake 2. Then went short again. Then the Consumer Confidence number went out, I was convinced that the market would go down big today, so I decided to hold, from a winner to a loser.

Mistake 3. Then the loser came back to a winner, but I was determined to get a big winner, and decided to hold for more.

Mistake 4. The price went back up again, I still held my short position, convinced that the market would go down.

Mistake 5. I watched the markets going up little by little, it seems everything was going up: equities, oil, US dollar...... What is wrong with these people? Did they pay attention to Consumer Confidence number? Obviously not.

Mistake 6. Since I was holding, I might as well hold until the end of the day. This mistake cost me even more.

I will take a break and work on my method and something else.
 
Can you tell me how it is that one can daytrade with a small account without violating the pattern day trader rule? thanks.



Quote from NoDoji:

I spent some time on Skype with a young trader last year and shared with him my tactics for trading CL. He grasped the concepts immediately and began sim trading. He was texting me his sim trades and pretty much trading me under the table. That's a good feeling, when you mentor someone and they just run with it!

Because of his incredible progress after just a couple sessions, I invited him to join our Skype group when he decided to trade live. He was trading CL with a very small account, smaller than yours, I believe. When he went live, he simply couldn't handle the heat of survivable stops in CL. He hesitated to trade certain setups, then he micromanaged the trades he took. He was clearly frustrated by the huge disconnect between sim trading and live trading.

We encouraged him to get a job, save up some money and once he had a larger account, give it another go. He was clearly a gifted trader who knew exactly what to do, but when real money was on the line, that he had to make a living with, he lost his mojo.

It's like the old story about walking along a narrow plank of wood with the ground a foot below you, No problem, you confidently cross the chasm and never lose your balance. Now do the same thing on the same plank 30 stories above the ground. Good luck!

Shortly after we gave him the boot :p he got a bit of funding and although his account was still very small (not much more than yours), it made all the difference and he was able to trade very well with a true trader's mindset.

So your first step is to define high probability setups with strict rules for trade management.

Second step is to trade them, all of them. If you pick and choose, you will pick the weak trades and pass on the strong trades, because the market rewards what is difficult and at the hard right edge of a chart, the great trades can look quite ugly, and feel quite scary, and the weak trades can feel quite easy (reference Mark Fisher's "The Logical Trader", page 33, for his description of the "retail bus people" to understand this concept; it's a real game-changer).

Third step is if you haven't read Mark Douglas's book "Trading in the Zone" at least 3 times, now is the time to do it.
More...
 
Quote from bik:

Can you tell me how it is that one can daytrade with a small account without violating the pattern day trader rule? thanks.
More...

I tell the broker that I trade at night, not during the day, so I am not categorized as "day" trader.
 
Quote from bik:

Can you tell me how it is that one can daytrade with a small account without violating the pattern day trader rule? thanks.
More...

PDT only applies to trading stocks and options. Futures have much smaller intraday margin requirements.
 
I came up with a new trick in trading today. I am going to share it with you who have a small account and need to trade more than the account can afford.

Let me tell you how I discovered this trick accidentally:

I was busyin trying to find a real job these days, and today happened to be a relatively quiet day for me, so I opened my account and looked at the charts of QM and CL. After a while, I decided to put in a trade, so I shorted 1 contract on QM, around 107.875 in the morning. Then the price dropped and I wanted the profit, so I clicked on the buy botton and I thought I covered it.

But I noticed my short position was still on, in addition I had a long position, and the long position was on CL.

I know my account is too small to trade CL, but here I got a CL position. Isn't that interesting?

So there you go: If you want to trade a larger position, you simply sell something first, this will increase your account size, you can double your account size if you sell enough contracts. Then using the newly-created account size, you can put on a bigger position that you otherwise couldn't.

oh, you want to know the result of my trades. When I found out I accidently bought a CL contract, I instantly sold it, with a $5 profit. I didn't want to be long at that moment (turned out later that it was bottom of the day, yes, I actually bought the bottom, but my method would not allow fading). Then I covered the QM contract with a $45 profit.

If I didn't cover QM, I would lose the profit and suffer a loser. That was exactly what happened to me last time I decided to hold a winner=hold a winner into a loser into a winner into a loser=into a big loser.
 
Quote from bik:

Can you tell me how it is that one can daytrade with a small account without violating the pattern day trader rule? thanks.
More...

To tell you a true story, I started trading in penny stocks (everybody started trading in stocks, right? Except Nodoji, who started trading in futures right away and made money right away).

so I was trading LU, NT, CPN (that stock became a penny stock due to bankruptcy issues, but I didn't know), ATML, etc., I was clueless and I was losing money. Every time the account dropped below 25k, the broker would inform me that I was a "pattern day trader."

When I got my first warning, I was extremely upset, I felt that the broker was watching my trading and discovered my trading pattern. Since I was losing money, I was not worried about my broker stealing my trading pattern, I was upset because, I thought, they were watching me and trying to figure out my pattern of trading.

I never bothered to ask my broker about why they were watching me and trying to figure out my pattern, because I was consistently losing money, and I thought: Fine, if you want to follow my pattern, go ahead. Of course, I didn't have a pattern, I was simply clueless. In the words of an innocent man arrested by the cops: You have nothing on me.

Yep, I had this totally innocent feeling that I was not hiding anything, and that I didn't even do it. Simply put, I had no pattern.

You can label me as a "pattern" trader, but I am innocent and I have no pattern whatsoever, I thought to myself.

Until this day, I still have no clue why they call someone a "pattern" day trader.

But are they watching you? you bet. their computer front runs you automatically.
 
one short trade today in the morning, made $8.

It was hard to make money on the short side today, lots of hesitation by sellers in the morning.

I suspected that the weekend short covering would push oil up, so I left my computer and went to get my commercial driver license.

When I came back, I saw so many dead bodies of bears on the road side, mercilessly slaughtered, not a pretty sight.

I am going to think about it, and learn something from it.

Yeah, where is the word Always? I took it away, stupid.
 
What a different day for bears, but that's just the day end revelation.

That's only good for the headline of a news story (Oil dropped 3 dollars!). The fact is it's not that simple.

I woke up and found oil dropped overnight. Last night oil went above the closing line of last Friday. so the news story of Libya peace talk/cease fire naturally came into mind. I guess that was the reason for the drop. But is that the reason? I have no clue. Maybe Chinese stopped buying oil.

Anyway, a drop indicated some shorting opportunities, I was a little motivated, sat there and waited for the setup. From pit open to market open to an hour later, nothing much happened. Those who shorted at the wrong time would probably lose money. But if they held and refused to cover, they would make money eventually in the afternoon. But if they did the same holding last Friday, they probably wouldn't hold today, unless they haven't learned the lesson.

I did rush into a trade, the morning motivation was sufficient to push me into a trade or two. I got away with $8 profit. I shouldn't have made the trade.

Then the big drop came, I watched and let the opportunities pass. No trade, I didn't even think about initiating a trade. My idea is that after the morning time period, market is not suitable for trading. Of course, when you see that it is a big drop, it is too late. Entering at the end of a big drop is a sure way of losing money.

The question of trading is gambling or not keeps coming back to my mind.

I read that successful traders view trading as "a game of probability." So trading is obviously considered as gambling in their mind.

The very fact that I view our entry as a "setup" implies that there is a probability of the setup going against me. So that would make trading gambling, right?

That gambling mentality is partly responsible for my hesitation in entering the trades after morning time period, because I was telling myself that after morning time period, the probability decreases. See, I view trading as gambling too.

If I decide trading is not gambling, I have to ger rid of the infectious idea of trading is a game of probability. I don't deny the fact that these people treat trading as gambling and do exactly gamblers do in trading.

whoever wrote "trading is a game of probability" has left a permanent trauma on me. Damn you!

Too many wrong things have been written on trading.
 
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