Taking $36,192.23 to hopefully more than $36,192.23

J

jedwards

Inspired by neke's thread, I've decided to try to start my own journal. I'm not sure I will have neke's level of dedication and honesty, but I hope I do. I think it will be a good way for me to keep track of my efforts.

I'm a terrible discretionary trader. I know this about myself, because I'm overly emotional and my PnL is proof. I've been trading a few different systems that I developed but because I futzed with the targets and stops all of last year, instead of having a 40% gain, I ended up with close to a 50% loss. So my goal is to use this journal as motivation for me to stick with my system and not move stops or targets.

I trade using automated strategies using Ninjatrader on Zen-fire and IB. Last year, I traded the TF, HSI, DAX, corn, and soy. This year, I'm going to focus on TF and HSI, and selectively trade corn and soy. My automated system produced 3 months of massive losses for the DAX at the end of 2010 which destroyed me, so I will avoid trading DAX until the results start looking better.
 
Week 1

TF: 3 wins, 2 moved stops.
Corn: 2 wins, 1 loss, 1 break-even.
HSI: 2 moved stops.

Total: 39183.36, up 2991.13 (+8.2%)

Overall, a lucky week for me. 3 wins in a row on TF is nice, my system usually produces 2 wins, 1 loss, and 2 moved stops per week. This is the strategy I have the most confidence in, so I ended up leveraging much higher on this trade than the others (5-8 contracts per trade instead of the recommended 3-4).

Notable deviations from the trading plans:
M: I didn't trade corn because I didn't like how the automated trade wanted to go short when the markets were trending up, so I avoided the trade. I ended up saving myself a full loss.

T: I took the corn trade but my ATM strategy was messed up, and it didn't set any targets, so I closed my trade immediately for a gain of 4 cents. Theoretically I would have made 6 cents.

W: -I took half my TF contracts and set the target to 1/2 the target because I didn't believe I could get 3 wins in a row on the TF, so I convinced myself to be happy with taking some money off the table so I missed out on a full win.
-On HSI, I incorrectly set my strategy, so my trade never fired off. It was a moved stop.

Th: I took the corn trade, but instead of following the plan, I instead took 2 contracts early, and then left the last one with a 2 cent stop and let it ride. Of course, I got stopped out for a break-even, instead of taking a half-win.
-on HSI, the price action blew past my buy-stop-limit order, so I never got filled. It would have been a full-win, but there's nothing I could have done about this one.

F: I didn't like the corn setup, so instead of trading the regular number of contracts, I traded 1 contract and took a full loss. I sim-traded another strategy and made 6.5 cents. (With regards to sim-trading, I'm a rock star.)

This journal is already paying off, because after going through the week, I feel like an idiot for messing with my targets and stops. Hopefully my list of deviations shrinks quickly.
 
Quote from CollegeTrader:

http://www.elitetrader.com/vb/showthread.php?threadid=213133 be positive dont start the new year doubting yourself.
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Thanks, actually this is my New Year's resolution. I've found that I kept thinking too negatively and ended up doubting that my trades would work, so I ended up cutting my profits short. But going over the theoretical results, it would have been awesome so this year, I'm determined to see the trades go through.

The best thing for me is to set up the trades the night before and just sleep through until 7-7:30am, when the trades are likely over (I live on the West Coast). I doubt I can do that, since I'm always worried there will be a technical problem with my trades, but hopefully I can end up doing it.
 
Quote from jedwards:

Thanks, actually this is my New Year's resolution. I've found that I kept thinking too negatively and ended up doubting that my trades would work, so I ended up cutting my profits short. But going over the theoretical results, it would have been awesome so this year, I'm determined to see the trades go through.

The best thing for me is to set up the trades the night before and just sleep through until 7-7:30am, when the trades are likely over (I live on the West Coast). I doubt I can do that, since I'm always worried there will be a technical problem with my trades, but hopefully I can end up doing it.
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If you doubt you can do something or if you believe you can do something either way you will be right.

Actually, I just wanted to wish you the very best of luck with your journal.

FWIW, I find the more information I put in and the more honest I am the more I get out of it LATER. That is when I go back a year or so and read what I wrote and see what I was thinking and actually how I improved and/or changed.

Again best of luck with your journal and with your trading.

RW
 
Quote from Robert Weinstein:

If you doubt you can do something or if you believe you can do something either way you will be right.

Actually, I just wanted to wish you the very best of luck with your journal.

FWIW, I find the more information I put in and the more honest I am the more I get out of it LATER. That is when I go back a year or so and read what I wrote and see what I was thinking and actually how I improved and/or changed.

Again best of luck with your journal and with your trading.

RW
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Thanks Robert. I agree, total honesty is something that will be really helpful, especially after I go through this in a couple of months to reevaluate my progress.
 
Week 2

TF: 1 win, 4 full losses
Corn: 2 wins
Soy: 1 win, 1 break-even
HSI: 2 wins, 1 loss

Total: 34739.44, down 4443.92. -11.3% for the week, -4% YTD

Wow, a really brutal week for me.

4 full losses in a week for my TF is statistically improbable, the 2nd worst week in 4+ years of backtesting. The only other time was was last October, when I took 5 full losses in a row, the first week of when I went all-in in my TF strategy and got ripped to shreds. It took 7 weeks to make all my money back that I lost in that week. I did find a change in my TF trading strategy which will move my initial stop to just past the closest fib level, and in backtesting it produced smaller drawdowns, so hopefully that will mitigate some losses going forward if I survive.

Notable deviations from the trading plans:

T: -I didn't trade ags today because of the crop report on Wed. Not trading the day before the crop report is part of my trading plan, because that day produces poor results for me. It ended up saving me from a full loss.

W: -Corn went limit up so I didn't trade today.

Th: -I traded soy using a different strategy, and because I was already in this trade, I decided not to trade corn, which turned out to be a full win, so that was a mistake on my part.
-Today was the first day I didn't increase my stop on the TF by a few ticks and it would have ended up saving me from a full loss, which made me investigate a new stop strategy.
-Forgot to setup my HSI trade, so missed out on a full win.

F: Used my new algorithm that increases my stop but it didn't help me out today.

At this point, I should set some sort of limit for when I should close up shop. I'm thinking once I get to 20k total. I will think about that this weekend.
 
Quote from jedwards:

F: Used my new algorithm that increases my stop but it didn't help me out today.
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Do you mean it increases your stop size, or makes the stop larger after entry based on certain price action (which I know sounds like a bad thing, but can be useful at times as long as a max loss is honored).
 
Quote from NoDoji:

Do you mean it increases your stop size, or makes the stop larger after entry based on certain price action (which I know sounds like a bad thing, but can be useful at times as long as a max loss is honored).
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I have a hard stop and hard target once the trade is activated, but if the trade goes my way a certain amount, then I move the stop up, to limit my losses. I've found that this is more profitable than keeping a steady target and stop.

However, I found that by increasing my stop slightly, I decreased the number full stops I took. In my backtesting I've found that if I moved my stops just past the closest fib level, that seems to help in terms of dropping the number of full losses, from 47 last year down to 30, which is significant. So I made the change last night and I'll use it going forward, hopefully it works out.
 
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