Rookie Trader Journal - Advice Welcome

Quote from pt199:

Do you mind sharing your chart and indicator settings?

I question your philosophy and why you went down $2200, well over 20% of acct. before recovering. Very gutsy! +some luck.
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I use a 1 minute candlestick chart, with a 3 minute and sometimes a 5 minute on the other screen, and primarily base my trades on Stochastics.

I think you have your math a little mixed up, I started out with $50k in my account but then took out $5k, so I currently have a little over $45k, so today if I had exited at the worst moment I would have lost just under 5%. I mentioned that I would try to only risk about $10k at a time by trading a small number of contracts, but it's not an exact science.

Thanks for reading the journal.
 
Hi krolyk55,

you call your thread "Rookie Trader Journal". I personally don't think a "rookie" should trade 16 contracts at the same time until he has proven that he is profitable (in live trading) over a period of time.

Also you wrote that at one point you were down 2.200 and "tempted" to close the position. Would you have eventually closed the position at -3.000 if the trend had continued against your favour? Do you have a clear strategy of using stops to limit your losses?

Hoping and praying for the market to come back can be very dangerous.

Best of luck to you,

LL
 
1. They've already to told you to take all of that money out of your account, and if you were smart, you would do it.

2. Your Risk-to-Reward ratio is currently 8-to-1, which is another disaster.

I got the feeling you won't really listen until you get your ass handed to you, so that's all I'll say for now.
 
Quote from Little Lex:

Hi krolyk55,

you call your thread "Rookie Trader Journal". I personally don't think a "rookie" should trade 16 contracts at the same time until he has proven that he is profitable (in live trading) over a period of time.

Also you wrote that at one point you were down 2.200 and "tempted" to close the position. Would you have eventually closed the position at -3.000 if the trend had continued against your favour? Do you have a clear strategy of using stops to limit your losses?

Hoping and praying for the market to come back can be very dangerous.

Best of luck to you,

LL
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Thanks for the feedback. You are absolutely right 16 contracts was not in my comfort level, I am going to try not to get that high again till I have more experience or capital. Maybe I should have taken a loss instead of allowing myself to get in that heavy, but I'm not sure because doubling up my position also was what enabled me to recover.

And you're right I don't have a clear strategy for stops at this point, I am trying to find one that makes sense. On that particular trade I had my stop at around -$3100.

I am still trying to define a clear strategy for stop limits right now, if anyone has a set strategy please share.

Thanks for the input.
 
Quote from MandelbrotSet:

1. They've already to told you to take all of that money out of your account, and if you were smart, you would do it.

2. Your Risk-to-Reward ratio is currently 8-to-1, which is another disaster.

I got the feeling you won't really listen until you get your ass handed to you, so that's all I'll say for now.
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Thanks for the comment, I'll tell you why I am hesitant to take my money out:

1. All I have read suggests that the traders who are not well capitalized have a much greater chance of failure since they do not have the ability to weather a storm without getting stopped or margined out.

2. My particular strategy requires me to be able to buy myself out of a bad trade, I had to do that on both Day 1 and Day 3 (today), if i didn't have my account funded properly I would have had losing days instead of winning days both times. This is consistant with my experience paper trading as well, where I always tried to leave extra money there if I got in trouble.

If I end up regretting this, I guess I'll consider that tuition for my trading education, hopefully that won't be necessary.
 
Quote from krolyk55:


2. My particular strategy requires me to be able to buy myself out of a bad trade, I had to do that on both Day 1 and Day 3 (today), if i didn't have my account funded properly I would have had losing days instead of winning days both times. This is consistant with my experience paper trading as well, where I always tried to leave extra money there if I got in trouble.
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This statement makes me cringe. Why are you so sure the market will always come back to your original entry? It's pure luck that it did. Show those trades to your trading buddies, and if they are real traders who consistently make money they will b!tch slap you. Waiting and averaging up or down for hours when your usual trade is a few minutes is asking to blow up.

P.S. You shouldn't be trading more than 1 or 2 contracts at a time.
 
My friend..... the worst thing that can happen to you...is happening. Twice you've been down more than you should have allowed and twice you have managed to work back to a slight profit. And, the second time by taking on considerable additional risk. You are conditioning yourself to accept unreasonable loss in the belief that if you just hang in and risk more, it will turn around and you can save the day. One of these days you will have your head handed to you. Reduce the size of your account dramatically and you limit the catastrophic loss potential. Until you get a handle on self-control, the lack of discipline you have acknowledged is also going to extend to your decision to only risk $10K. If you get up to your eyeballs in contracts trying to turn around a losing day with just one more trade, be assured you will lose your internet connectin or IB servers will go down and in a blink, your $45k will be in someone else's account. If you are to survive this first plunge into the deep end of the pool, you need to protect yourself against yourself and against circumstances beyond your control......... Expect the best, plan for and protect against the worst. All the important lessons in this business come at great expense. Everyone goes belly up at least once when they start trading. It is going to happen to you. The only say you have in the matter at this point is in being able to limit the extent of the damage so that you can easily recover psychologically and financially to have another go at it.
 
Quote from krolyk55:

I was in as much as 16 contracts and had I sold right then, which I was very tempted to do for fear of losing more, I would have lost $2200. Drawing on my experience the first day I held on and was able to cover that trade later with a $80 profit. After that I made a few other small trades near the end of the day that went my way.

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Does this make any sense now that you are out of the trade? You risked more than $2200 to make an $80 profit. And it sounds like this is normal?????

Just a suggestion. Whatever your entry stategy is; if it tells you to buy then sell. Way better to risk $80 to make $2200 than the other way around. How ever I'm sure that had the trade gone in your direction you would have taken a quick profit.

When is the last time you added to a winning trade?

Give some thought as to why you won't take a quick loss yet as soon as you have a small profit you bail out.

Your strategy has managed to keep you from taking a loss a couple times. That is probably the worst thing that could have happened. Beleive me and others that it is just a matter of time before you have a really bad day.
 
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seriously, stop trading right now. go back to play money and create a strategy that does not involve mindless averaging.

Averaging is either laziness or lack of talent- 'i think price will rally today but im not talented enough to identify a good possible reversal point if the market sells off on bad news, so ill just keep buying it all day as it moves down and *hopefully* it will rebound *at some point*.'

you will have alot of breakeven days or small profit days with this strategy, even some big winners, but risk reward will often be awful.

one day, it may be next week or it may be in a couple of years time you will get in deep and the price will capitulate against you, and you will wipe your account in one day.

this is what my thought process was today after US sold off ES on open:

1) is my technical read, skip to 2) for general day method and 3) is specific price action method

1) 'i think price is likely to rally hard at some point today as this recent selling dip over last few days looks unconvincing on the 1hr charts. also my gut tells me this breakout of the trading range last week is a false break and buyers will be hitting things hard this week. we had a big downmove last friday and then 2 range days with alot of betting on both directions. today or tomorrow we may have a bigger directional move')

2) 'i will buy the 1320 pivot if price moves down to it. i will usually not buy any higher, if it reverses earlier i will miss the move and not care. (i will NEVER enter early just *so i dont miss out* on the move then average down to 1320). i go for fringe entries to ensure i get good turning point prices. sometimes i may buy a 80% type retracement that is above a pivot if price action looks really nice. the downside to this is i miss alot of moves that reverse sooner. i dont care.'

3) ES rallied on figures pre open. sold off hard at US open. this downmove is large and quite violent, i enter at 1320 with a very tight stop, either 8- or -12. i dont allow a larger stop so i dont get faked out, since fast moves like this into an area i like usually either capitulate through or rebound nicely. if we break below were done, no averaging since i have no idea how far down it will run if im wrong about this bounce.

Part 1) is unique to each person but your parts 2) and 3) should be closer to mine. Until then i would recommend going back to play money.

Sorry for the long post, hope its helpful.

Seriously, every1 has to learn the hard way (i blew out a fair bit of money as a newbie). but i only averaged down to 4 contracts at my worst. you are doing 16 already. if u continue the best thing is if u blow ur 50k now. then u will learn through pain. continue and get lucky and u may face the pain in a years time for 100s of k...

good luck
 
Quote from jho:

This statement makes me cringe. Why are you so sure the market will always come back to your original entry? It's pure luck that it did. Show those trades to your trading buddies, and if they are real traders who consistently make money they will b!tch slap you. Waiting and averaging up or down for hours when your usual trade is a few minutes is asking to blow up.

P.S. You shouldn't be trading more than 1 or 2 contracts at a time.
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I understand there is probably some confusion in my technique since I haven't explained it very well.

The market didn't come back to my original entry, and rarely does. I doubled up my position after it went against me when my indicators told me that it was reversing. Doing this brings my average price per contract much closer to the current price. Then, I just need it to correct a little bit. The market moves in waves, so this usually works for me, when it doesn't, I'll take a loss for that day.

You're right though, today got out of hand, I've never been in a trade that long before, it was agonizing. I got in too heavy, it was a good learning experience, hopefully it won't happen again.
 
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