Successful Trading and Compounding

[gmst]

Update for week 23 ending Jan 6, 2012 :

-200$ for the week.

Would have been up +800 USD for the week, had I not traded ES and some other tiny futures again. So, same story repeats itself.

For everyone who reads my journal, please check tomorrow. Among all this gloom and doom and serious DDs and high risks per trade, erratic PL etc. I will be reporting the good news that has emerged from my analysis of my trading for last 5 months.

This Week's Stats:

Withdrawal: 0$

1. Week PL: -200$
2. Start Equity: 4.6k
3. End Equity: 4.4k
4. Maximum equity run-up: 5.2k
5. Max Win day as % of that day's start equity: 27%
6. Max Loss day as % of that day's start equity: -30%

Below stats are from Journal start day:

Withdrawal: 1100$

1. Total PL: -1800$
2. PF: 0.94
3. RoI: -24%
4. Max. DD: 82%
5. Current DD: 31%
6. # of winning days 51%, # of losing days 49%
7. Av. win day: 16%
8. Av. Loss day: -14%

 

[gmst]

Update for week 24 ending Jan 13, 2012 :

-400$ for the week.

Would have been up +100 USD for the week, had I not traded ES. So, same story repeats itself again. Also missed short Euro trade by probably 4-5 pips before the Euro sovereign downgrade rumor started (as I walked away from my desk for 3 hours), I had an open target and was hoping to close the short position 1 big figure down. Had I not missed this trade, it would have netted me +1400$. So, would have been +1500$ for the week.

Lesson: "Am not going to walk out from my desk for extended period during active market hours." This thing cost me 1400$, had I had a bigger account it would have costed me 14k. So, better to learn the lesson with lesser dollars

Net net I am actually happy with my trading, but it is not getting reflected in my bottom-line. I am soon going to close this journal and start a new one (maybe in 2-3 weeks). I am also going to post some 'very interesting' analysis (maybe in 1-2 weeks) which will show that I have achieved most of the aims that I set for myself from this journal.

This Week's Stats:

Withdrawal: 0$

1. Week PL: -400$
2. Start Equity: 4.4k
3. End Equity: 3.9k
4. Maximum equity run-up: 4.5k
5. Max Win day as % of that day's start equity: 15%
6. Max Loss day as % of that day's start equity: -18%

Below stats are from Journal start day:

Withdrawal: 1100$

1. Total PL: -2300$
2. PF: 0.93
3. RoI: -31%
4. Max. DD: 82%
5. Current DD: 37%
6. # of winning days 52%, # of losing days 48%
7. Av. win day: 16%
8. Av. Loss day: -14%

 

[gmst]

As I said, I would be starting a fresh journal in 2-3 weeks, reflecting my new aims. I will write the details later (maybe 1-2 weeks down the line). This new journal will be very different from the current journal as far as the aims are concerned.

I have a question for readers of this journal. Do you think I should add any particular stat (in addition to the ones I report every week) that will make the performance tracking more useful/interesting ? If so, kindly suggest. Thanks a bunch!

 

[nakachalet]

Quote from gmst:

As I said, I would be starting a fresh journal in 2-3 weeks, reflecting my new aims....This new journal will be very different from the current journal as far as the aims are concerned....

I have a question for readers of this journal. Do you think I should add any particular

gmst

thx for asking.

there indeed is something that is vitally important for any trader who trades to show others what he/she is trying to accomplish in trading. and that is.... also showing other traders a pix of the trading screen to accompany your verbiage, so others would have a clearer picture of what you are trying to explain.

without a snap of your trading screen, it is like chewing on a piece of wholewheat sandwish without any fillings.

the pix would really help your description and what you are trying to convey to others.

just running a bunch of numbers with excellent verbiage BUT without any visual accompaniment is really daunting your own effort and lessening your effectiveness as well as your creditable efforts to help other traders to become even more proficient, more profitable and more consistent in their own trading.

gmst, if you could or would include pix to accompany each of your seemingly weekly report, it would be very helpful for those who follow your post.

it really does not matter whether the pix would or would not show profitability.

what really matters most is, again, the pix will go with your description and each will explain much more than what you can describe with words--alone, in an hour.

that is only--one trader's opinion. and thx much again for asking.

wishing you even better and even more profitable trades in the year of the dragon.

 

[gmst]

Thanks naka for your comment. I posted screenshot of my setup last week and I hope you had a look at it. You ask in very nice way and I want to be careful that I don't offend you with my reply. I am afraid - it won't be possible for me to depict exact trades on my screen. Let me explain so that you are satisfied -

1. I do 100+ trades on average. I will buy euro at 1.2815 and sell after 45 seconds for 1.2819. Impossible to depict on chart.
2. There is no chart on which my trades show up automatically. So to show you my orders, I will have to go to paint and work on it.

However, if you can think of any statistical parameter of my trading that you would like to see, I would be happy to oblige.

P.S. - I 'completely' understand that you want to have a pictorial representation of my trades. There are many threads on ET e.g. ES journal - you have traders calling out trades the whole day.

Aim of my journal is different. Its a story of my struggle that shows "evolution of a guy from being a complete newbie having serial blowups in 4 weeks to a boom and bust level trader" - who makes money and then loses it...). This journal is about the 'process' and not about individual trades. This journal is about identifying my profitable actions and reinforcing them and identifying my unprofitable actions and trying to cut down on them. This journal is about the development of a "profitable trading process" - doing largest loss analysis, keeping daily detailed records, knowing which products to trade, about discipline (not leaving your desk during market hours), about not giving up (even when faced with 82% drawdown) etc. etc.

As I have said before, I have multiple edges, still over the last 5 months, I haven't made money - why ? Because I repeated again and again the behavior/trades that cause me to lose - because my subconscious mind is trained to lose! Its not a mathematical battle anymore, rather it is a psychological battle. (Many Thanks to Ammo and Handle123 for making me aware of these points).

Cheers and have a nice evening!

 

[nakachalet]

Quote from gmst:

Thanks naka for your comment. I posted screenshot of my setup last week and I hope you had a look at it. You ask in very nice way and I want to be careful that I don't offend you with my reply. I am afraid - it won't be possible for me to depict exact trades on my screen. Let me explain so that you are satisfied -

1. I do 100+ trades on average. I will buy euro at 1.2815 and sell after 45 seconds for 1.2819. Impossible to depict on chart.
2. There is no chart on which my trades show up automatically. So to show you my orders, I will have to go to paint and work on it.

However, if you can think of any statistical parameter of my trading that you would like to see, I would be happy to oblige.

P.S. - I 'completely' understand that you want to have a pictorial representation of my trades. There are many threads on ET e.g. ES journal - you have traders calling out trades the whole day.

Aim of my journal is different. Its a story of my struggle that shows "evolution of a guy from being a complete newbie having serial blowups in 4 weeks to a boom and bust level trader" - who makes money and then loses it...). This journal is about the 'process' and not about individual trades. This journal is about identifying my profitable actions and reinforcing them and identifying my unprofitable actions and trying to cut down on them. This journal is about the development of a "profitable trading process" - doing largest loss analysis, keeping daily detailed records, knowing which products to trade, about discipline (not leaving your desk during market hours), about not giving up (even when faced with 82% drawdown) etc. etc.

As I have said before, I have multiple edges, still over the last 5 months, I haven't made money - why ? Because I repeated again and again the behavior/trades that cause me to lose - because my subconscious mind is trained to lose! Its not a mathematical battle anymore, rather it is a psychological battle. (Many Thanks to Ammo and Handle123 for making me aware of these points).

Cheers and have a nice evening!

UNDERSTOOD your intent and goals completely. had been there my humble self many times over.... but NO MORE.... lol, THANK GOD....

there are several questions coming to mind after having read your responses above, have time to answer them, pls?

1. I do 100+ trades on average.

do you mean 100+ lots or orders/trades which is taken to mean--100+ roundturns or 50 roundturns? which is which, pls?

2. There is no chart on which my trades show up automatically.

you are definitely NOT USING YOUR MONEY POWER TO GET the cutting edge technologies and WHAT YOU NEED TO TRADE PROFITABLY, PARTICULARLY WHEN TRADING CURRENCIES AND SUCH.

a trader who trades live should not have a dynamic trading screen which does not include any or all the indicators that are necessary to show and compare the fast, median and slow moving markets in any give day or period of time--so he/she can pinpoint his/her entrance and his stop SUCCINCTLY ON SCREEN....

i also bet that you are using the screen that your broker(s) provide you to trade on AND THAT YOU DO NOT HAVE DIRECT ACCESS TO TRADE VIA A THIRD PARTY WHO MIGHT BE MORE NEUTRAL IN DELIVERING THE REAL TIME TICS AND EXECUTING EACH OF YOUR TRADE, without being under the mercy of your broker(s)....?

gmst, pardon me....

1--to trade for a living, you really need an independent signal provider, preferably two or even three in case of emergency of any one's unexpected failure.

2--to trade accurately to the seconds, you need your own independent trading screen which also shows in real time, tic by tic move of the products you trade and the markets you trade. the broker provision screen and signal are just isn't GOOD ENOUGH to trade live, from my experiences. their screens may look colorful and exciting but rather useless in terms of execution in real time and knowing exactly what price you are getting at that very moment in time of clicking the buy-sell order of your choosing.

3--to trade for profit and consistency, a trader really needs to see each trade and the price at which he/she decides to enter the trade DOWN TO THE SECOND AND THE LAST TIC....

my friend, you are at a great disadvantage without the above items.

stop throwing your money to your broker(s). just tell them you want all those three imperatives immediately.

if they give you any excuses at all, move your money to other companies who are more honest and up to date in their services and technologies. and pls do not tell us that those brokers were your relatives or something.... and that they also need your handouts for survival.... LOL

i will also bet that if you have all those suggested items on your personal trading screen, your profitability will soar, with your experiences and all....

let's know how you work out and what are your broker(s')/relatives' excuses and responses, only if you wish to share, K?

DID YOU SAY--sell high and buy low....?

at the very very least, you ought to have this (see pix) on your personal trading screen to trade live and FOR YOUR OWN FUN, PROFIT AND PLEASURE, alright? LOL

 

[gmst]

Quote from nakachalet:


1. do you mean 100+ lots or orders/trades which is taken to mean--100+ roundturns or 50 roundturns? which is which, pls?

2. you are definitely NOT USING YOUR MONEY POWER TO GET the cutting edge technologies and WHAT YOU NEED TO TRADE PROFITABLY, PARTICULARLY WHEN TRADING CURRENCIES AND SUCH.

1. LOL - definitely not 100 lots I trade 50k-100k positions per trade. What I mean is that I average 50 round turns per day.
2. I have Multicharts, I use excel for data analysis. I enter orders through IB TWS. So, I am happy with my toolkit at the moment. Though in future, I might incorporate few other tools like TradingBlox and/or MATLAB. Not anytime soon though - maybe in 2013+.

Quote from nakachalet:

a trader who trades live should not have a dynamic trading screen which does not include any or all the indicators that are necessary to show and compare the fast, median and slow moving markets in any give day or period of time--so he/she can pinpoint his/her entrance and his stop SUCCINCTLY ON SCREEN....

i also bet that you are using the screen that your broker(s) provide you to trade on AND THAT YOU DO NOT HAVE DIRECT ACCESS TO TRADE VIA A THIRD PARTY WHO MIGHT BE MORE NEUTRAL IN DELIVERING THE REAL TIME TICS AND EXECUTING EACH OF YOUR TRADE, without being under the mercy of your broker(s)....?

I trade without indicators, and I do not want them on my screen. They are clutter - I just want to see price, velocity of price and how it behaves around important levels. Sometimes I draw important sup/res lines on my chart but that is rare....not too frequent.

Again, I do not want fx quotes from 3rd party, because IB quotes are better than most others. I do see your point though if I am trading CME futures. Thanks for that.

Quote from nakachalet:


gmst, pardon me....

1--to trade for a living, you really need an independent signal provider, preferably two or even three in case of emergency of any one's unexpected failure.

2--to trade accurately to the seconds, you need your own independent trading screen which also shows in real time, tic by tic move of the products you trade and the markets you trade. the broker provision screen and signal are just isn't GOOD ENOUGH to trade live, from my experiences. their screens may look colorful and exciting but rather useless in terms of execution in real time and knowing exactly what price you are getting at that very moment in time of clicking the buy-sell order of your choosing.

3--to trade for profit and consistency, a trader really needs to see each trade and the price at which he/she decides to enter the trade DOWN TO THE SECOND AND THE LAST TIC....

1. Excellent point - I will definitely do more backup planning when I am trading on exchanges. Not needed for spot fx.
2. I have MC and I do use it to watch the market. But for order entry, I go back to TWS. Maybe I should change this - I will surely look into this. Thanks Naka! for bringing it to my attention.
3. Not necessarily....For swing trades, I am least bothered if i entered at price x or price x-15 pips or x + 15 pips. For these kinds of trades, I need to focus my attention and energy on analyzing the expected direction of the price over next 1-3 days, rather than execution. E.g. If euro is at 1.29 and I expect it to go to 1.27, I will just enter short, without worrying about euro going to 1.30 before coming back in my favor. I do not want to 'miss' such trades, doesn't matter if I could have gotten a more favorable price to enter or not. Often I will add as I get a better price to enter. So, I might short 20k at 1.29 and then 20k again at 1.295 and 20k more at 1.30 and probably start scaling out beyond 1.3050 or put a full stop at 1.305. So different trading styles mean you need different amount of precision.

Quote from nakachalet:


and pls do not tell us that those brokers were your relatives or something

DID YOU SAY--sell high and buy low....?

LOL, I think it would have been better had Peterfly been one of my uncles But alas, it was not to be!

Btw, my trading style is generally buy high and sell higher and sell low and cover lower.

Again, thanks for all your inputs!

 

[shopster]

Win or lose, everybody gets what they want out of the market. Some people seem to like to lose, so they win by losing money.

I think that if people look deeply enough into their trading patterns, they find that, on balance, including all their goals, they are really getting what they want, even though they may not understand it or want to admit it.

A losing trader can do little to transform himself into a winning trader. A losing trader is not going to want to transform himself. That’s the kind of thing winning traders do.

Systems don’t need to be changed. The trick is for a trader to develop a system with which he is compatible.

I don’t think traders can follow rules for very long unless they reflect their own trading style.
Eventually, a breaking point is reached and the trader has to quit or change, or find a new set of rules he can follow.

This seems to be part of the process of evolution and growth of a trader.

Feelings naturally appear during trading.
The feelings we don’t like seem to have roots deep in our unresolved issues.
Somehow they get stuck and do not finish passing through, and can cloud the judgment and interfere with trading. The feelings we do like seem to pass through quickly without much trace.

I suggest getting to know your feelings, by experiencing them, expressing them, letting them pass through and finding out they are pretty much all good ones.
Jet engines work best when they are open at both ends.

A trader at one with his feelings feels nothing between himself and executing his method.

I usually ignore advice from other traders, especially the ones who believe they are on to a “sure thing”.
The old timers, who talk about “maybe there is a chance of so and so,” are often right and early.

I don’t judge success, I celebrate it. I think success has to do with finding and following one’s calling regardless of financial gain.

The elements of good trading are cutting losses, cutting losses, and cutting losses

To avoid whipsaw losses, stop trading

Ed Seykota

 

[gmst]

Update for week 25 ending Jan 20, 2012 :

+800$ for the week.

For a change, ES trading this week contributed + 400$ to the bottom-line. Hurrah!!!!

Today was most interesting. After taking 4 trades from Asia to 2hrs after London opening, I was up 800$ on my fx trading. After that I had a rare thing a series of losing trades - something like 8 losing trades in a row before NY open and lost all those 800$

There were two reasons - market was pure range based and the range was wide. Had I kept my trades for 30 minutes more, most of those 8 trades would have been profitable eventually, as my direction was correct. Importantly, I had a strong feeling after being +800$ for the day and (+1800$ for the week) to walk off for 2-3 hrs. Instead I didn't do that - that caused all the difference. Walking off for 2 hrs would have refreshed me and I would have traded more tactfully.

This Week's Stats:

Withdrawal: 0$

1. Week PL: +800$
2. Start Equity: 3.9k
3. End Equity: 4.7k
4. Maximum equity run-up: 4.9k
5. Max Win day as % of that day's start equity: 12%
6. Max Loss day as % of that day's start equity: -3%

Below stats are from Journal start day:

Withdrawal: 1100$

1. Total PL: -1400$
2. PF: 0.96
3. RoI: -19%
4. Max. DD: 82%
5. Current DD: 26%
6. # of winning days 52%, # of losing days 48%
7. Av. win day: 15%
8. Av. Loss day: -14%

 

[gmst]

Shopster, Thanks for the feedback that you give in very intelligent style!

I have graduated from a blowup trader to a boom and bust trader, and am soon going to graduate to a consistent successful trader.

Actually, I have become a consistent successful trader considering my fx trading only, with a good PF and other ratios. I will post some results in next 2-4 weeks about that.

The new journal that I am going to start soon will utilize all these learnings and will prove to be a successful journal, not a struggling journal anymore.