The Evolution of a Trader

C

CNC

I have been planning on keeping a journal of my daily experiences for a long time now. Everytime I am about to start, I make a trading mistake and lose the drive to do it. Well, today is no different, I made a bad trade, one that should not have been made, and I lost money. I came to the realization that I NEED to document these occurances in order to learn from them and relive them everytime I make a new journal entry.

At this point in time I have been trading full-time for 2 years now. I consider myself a trader, not a great trader, not even a good trader yet. I believe a good trader is one who consitantly makes 6 figures year in and year out. Although I am not at this level yet, I have the potential and skill to make it happen. My problem, right now is my emotions; greed and fear. Like most traders who are trying to take it to the next level, this is the biggest obstacle to overcome. My chart reading, tech anaylsis, and overall knowledge and feel of the markets is very advanced in my opinion. I am very close to taking my career to the next level and feel now is the time to start this journey and document my experiences. I do this for my own educational reasons and hope to look back many years from now to see how I evolved from a trader into some greater. It is also my hope that when all is said and done, I may be able to help other traders become better traders through my documented experiences day in and day out. Thank you and here we go.
 
Over the years I have developed a good understanding and developed a good strategy to scalp the QQQQ. I look to achieve .20 a day while playing the Q's and feel this is where I am most comforatble. One problem I always seem to face is that I get bored playing this symbol day in and day out and tend to trade other markets even though it is my full intention to only play the Q's. Often, when I trade these other markets, I make the mistake of trading just to trade and make trades that are less than optimal. I need to concentrate on strictly trading the Q's or the NQ because that is where I will build my initial wealth, I know this. I need to STICK to the Q's.
 
That's what all new traders go through. You really have to be an automoton when it comes to trading. I think one of the biggest mistakes traders make early on is to trade for the excitement. This naturally leads to overtrading, which can be hazardous to your pockets. Trading is a rather boring job if you are doing it correctly. If you are trading it for the excitiement, I really see no difference between that and recreational gambling.

You can be a master at reading the markets, but that is meaningless if you can't check your emotions. It's that important.

You will know when you are in check with your emotions when you can make (or lose) a few grand in a day and not think anything of it, but rather just another day at the office.
 
Hi CNC,

Good luck with your journal. I am in some what similar boat, but my biggest problem is staying focused. I trade of 1 min charts (DAX futures), and this time frame requires undivided attention. I find myself distracted (various thoughts, something on TV and so on) a lot, and miss good entries. I am disciplined enough not to chase the trade, if it is missed, but it sucks to miss a good trade because you were not focused.

Up until recently, I also had a trouble with pulling the trigger on every valid signal. After reading "Trading in the zone" by Mark Douglass and some posts from ET members on a thread that I started, I realized that it was fear that caused it (I thought I did not have it, at least not so much to cause my hesitation). The other thing that I got from the book, is that you do not need to know how your trades will pay out to make money in this business. This realization is very new to me, but even in such a short time span (few weeks) it had great improvement on my trades. A lot of things became all too clear for me after reading "Trading in the zone".

The remaining issue for me is focus. We obviously need a decent systems to put odds in our favor, but the main obstacle lies within us. I have great system, and still it takes me a lot of time to over come my shortcomings.

Regards,
redduke
 
This is purely an observation and not a comment of any sort. I was thinking of this last night and did a mental calculation. I am currently working in an IT field as a full time professional. I have been doing this close to 20 years now. My current salary and other conpensation total in excessive of 6 figures and I would say this is fairly common in this field.

If I were to convert that into trading income, I would have to have close to be making $700 gains on each trading day consistantly. I am using 220 trading days to calculate. I am not even sure how many there are in a year.

If I could say that a large number of IT professionals with 20 years of experience can earn 6 figure salary and conpensation. Do traders in similar years of experience earn the similar income, or majority of them earn a lot more, like in the millions?

I know I am not quitting my day job. Trading for me just a very sparce activities throughout the week day. I am simply wondering if such comparison is even close in any type of scale. Feel free to flame....
 
Fh2000,

I hear what you are saying. I have been in IT for about 10 years, make 6 figures, and if I would be willing to travel I can get $100-$120 per hour ($200-$240 K per year). And if $1,000 per day is all that trading would be able to provide, I would not even bother.

The great thing about trading is increasing the size. Let's say you consistently making profits with 1-2 contracts, you make additional capital and add another 1 and so on until the market tells you how much it can handle. It is possible to make 7 figures in trading, just requires tremendous dedications and a lot of hard work.

Regards,
redduke
 
You hit the nail on the head when you said that if youre trading the right way it is quite boring. To me, success in trading equals consistency over a significant amount of time. I'm a huge believer in keeping a journal of some sort, or at the very least logging your trades (when you got in, out, and taking note of any marekt conditions occuring during which time)

I did this for a while manually and I wouldnt even keep much detail but I always dreaded spending the extra time to jot things down. I'm using TraderDNA now as an automated trading journal, and it pretty much does everything for me. I dont really have to mess with anything, not even interpretation, as its all done for me automatically now. At the end of the day I look at the report it sends to me and can see in 10 minutes what exactly happened during the day, what i did, what the market did, etc..

Also, I've been organizing all of the daily reports in a massive journal by the P/L box reading for each day, so I can look back on any particular day and review what happened. I'd recommend doing something with an automated journal, as you can spend more time interpreting the readings taken and scores for the day, so to plan an adjustment for your next session, etc...
 
Thank you for your replys and encouragment. It is appreciated.

Today was an interesting day. Ahead of the energy inventories, I expected Unleaded gas to rally due to the fact that the inventory expectation was rather large and I expected it to not be met. This was an impluse trade, one that should not have been made. I need to avoid trying to guess what will happen when big numbers are expected to come out in any market. I do not do this often, but sometimes make a trade on a gut feeling.

Well as it would have it I went long gas @ 2.046, the inventories came out higher than expected along with crude higher than expected. This lead me to believe the enery sector would fall some so I stopped out @ 2.028. Interestinly enough, the gas market would soon rally to 2.17 by the end of the day. Although I lost money on this trade, I stuck to my plan to stop out if the numbers came out better tahn expected, I guess that is a positive I can derive from this trade.

Overall this trade should never have happened and I need to stick to what I know, not gamble with reports. I hope this will be the last time I do this, albeit it is not very often.

I waited the rest of the day for the FED meeting. Everything came out as expected and the market acted like expected, with a headfake.

The Q's broke through .78 and .72 which I like to trade off of and went stright to .55. After some time, the market was oversold and looked ready for a bounce, I went long .61 and 1700 on NQ. Q's went straight to .80's and could not break the 200ma on the 1 minute. I thought it could and will hold this position expecting 42.06-.08 on Q's. Stop is a break of 41.50.


Tommorrow I plan to scalp the Q's and NQ.
 
That seems to be the big advantage to trading over regular job. It's way more difficult to scale your IT skills up without starting your own company. In trading you just add leverage and work the same hours.

Traveler
 
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