Working on Consistent Profitability

[tlow]

Hey Guys,

So I decided to start another ES mini journal. My goal is to learn what it takes to become more of a serious trader and look to earn more income through trading and, if possible, move to full time trading in the long run. I've paper traded off and on for awhile and I have found that I don't take it very serious and the same kind of emotions aren't involved so I'm giving it a go for real. My live trading has been going on for a couple weeks and I would like to document it from here and get some feedback.

My goal is to average 3 points on the ES per day. And then be able to do that for 4 weeks straight. I will only trade 1 contract until I can do this. I will keep my stops fairly tight and do my best to learn how to let the winners run. I also want to try and limit the round trips to 5 per day. I mainly use tick charts but I may be switching over to volume charts. I also like to look at 5 min and hourly charts to get a broader view.

Now I know there are plenty of threads like this...that start and stop 2 weeks later. Hopefully, this won't be one of them. I have the next couple months off work so its a good time to learn what it feels like to trade full time. I welcome any and all criticism but make sure it is meaningful and to the point IE -stupid noob you are going to blow up your account vs you may blow up your account because....

I also have to give some credit to Matcha because her journal, in my opinion, is an example of how to learn so hopefully this journal can emulate her journal.

So here it goes...

 

[tlow]

8-23-2010
Day1:

-1st two trades were ok...I felt good about the entries but I saw the momentum dying on the Timing and sales and that's why I moved the stops to the B/E. In the long run, I need to see if I need to follow my feel and exit or move the stop as I did today.
1st: +0.00
2nd: +0.00

-3rd trade was crap...was busy doing something else and not paying complete attention.
3rd: -1.75 pts

-4th trade was good but i need to let it run further, I went back on my notes prior to the trade and picked a target of 1063.50 (around S1)...think I was premature moving the stop or maybe didn't give it enough wiggle room.
4th: +4.00pts

Total Trades: 4
Winners: 1
Losers:1
B/E:2
Avg. Win: 200.00
Avg. Loss: 87.50
Total Win: 25%
Total Profit: 112.50
Total points: 2.25

-Let me know if this chart isn't coming across properly and I will resize it so you don't have to scroll sideways.

 

[Bolimomo]

Quote from tlow:


-Let me know if this chart isn't coming across properly and I will resize it so you don't have to scroll sideways.

Sorry the displays are a bit small to read.

Be kind to us seniors.

I think 25% to 50% bigger would be very good.

 

[Went Fishing]

Tlow

Welcome and good luck in your trading future. I have two questions and two comments. What time zone are you in and does that chart say "Missed entry walking dog"? If so that was a costly urination!

I like your attention to the details on the (maybe a little small) chart, that will serve you well in the future.

"In the long run, I need to see if I need to follow my feel and exit or move the stop as I did today."

I have no problem accepting the fact I'm wrong. But letting a trade turn around on me and retrace the entire move and take me out at b/e? Here's a tip, never let a winner turn into a loser. I know that's easy for me to say but when you can smell the bugs on the grille of the truck.... it's time to step out of the way! Take a little money, no one will mind!

<*)))><

 

[tlow]

Ya sounds good...I will give you guys something a little bigger...uhhh awkward

Thanks for the input so far. Those little kinks and quirks, like moving the stop to b/e, are coming forward full force now that I am trading for real. So hopefully with enough time I can move towards iron all those things out.

I am in California on PST. And yes, I was walking the dog. In my mind (hopefully Im right), that is what I am looking forward to the next couple of months...living like a normal person and not staring at the computer all day but still trading. I didn't really have a choice on the dog, he likes to sleep in and when he wakes up he is bouncing off the walls and I wont be able to concentrate on what I am doing because I will have to watch him to make sure he doesn't tear my place apart. Ahhh the joys of owning a 1 year old boxer

 

[tlow]

What a crappy day for me. Pretty much the worst trading day, I've ever had. Just went against everything I am trying to do. Its 9:00am and I am done for the day because I am trading like poo.

The Market was going to open down big, so I wanted to wait to see where it would go after the open. Stayed in a pretty tight trading range for the 1st half hour...I knew that 1050.00 would be an area where it would bounce around a lot so I wanted to wait for some strong negative movement before entering. I missed the entry that broke below the channel and I should've just stayed out until things became more clear. But i got "all excited" and shorted on a crappy pullback with way too aggressive an entry and didn't wait for more confirmation. Got stopped out a minute later. Dumb. I think housing news came out...

Do you guys look at the news for the day? Do many of you play the news or wait for more obvious things to develop? i guess pure PA guys probably don't care, but I feel like I should at least know whats going on for the day.

Market is pretty negative so I will try and stay short most of the day, unless a HUGELY obivous reversal or positive trend develops.

Trade 1:

7:03- Short 1046.75
7:04- Stopped out to cover at 1049.00

-2.25 pts not a great way to start the day...with a dumb trade.Missed the entry and it was all downhill from there.

Trade 2:

8:16- Short 1052.00
8:35- Stopped out to cover at 1056.00
-4.00 pts

Man, I have no idea what I was thinking on this one...maybe I thought it was going to break below that trendline/triangle formation. The most frustrating part is in my notes I wrote down,"starting to form trend reversal, watch bearish signals to make sure they are not just pullbacks." And even put a HH? on the chart. Went against the trend...everything was wrong. My stop was WAY too big also, I think I threw up a prayer after I realized I was in a bad trade, shoulda gotten out with a small loss. The more I write about this trade the madder I get at myself.

Uhhh...why am I not following my notes?

Trade 3:

8:38- Long 1057.25
8:55- Stopped out, sell at 1055.25

-2.00 pts

This trade was screwed up also..my entry was late due to my last trade. And to compound the issue, i didn't exit when I should have. Again, wrote in my notes, "this is 3rd wave up, look for exit as soon as momentum dies...so I should been out with a small profit or minimum B/E. Saw Momentum die around 8:42-8:43 but stayed in the trade. I think this was the cause of the huge loss of my last trade.

Total Trades: 3
Winners: 0
Losers:3
B/E:0
Avg. Win: 0
Avg. Loss: 137.42
Total Win: 0%
Total Loss: 412.50


I think the live trading for me is going to be about controlling emotions, getting used to psychology, and staying out of bad trades/exiting right away when I know Im in a bad trade. I am sure this is how it is for most people new to live trading consistently so I need to keep at it and be smarter and follow my notes. I cant do this, I will blow up my account in a couple of weeks if I keep this up. On a positive note, my notes are saying the right things and I am doing a good job of keeping notes. So if I can work out my stupidity/emotions, I think I will start going the right way.

When I started this a couple weeks ago, here are the general rules/goals that I wrote down and always need to remember:

1.) Capital Preservation
2.) Capital Preservation
3.) Consistent Profitability

I am going to get back on the horse tomorrow. But man this sucks. I see why days like these are so hard and why its so hard to become a professional trader.

On another note, I am using photobucket to post the images and this is the largest size they will let me use. What do you guys use to post the images? Is there a better way to post the charts or another site that will let me use larger image files?

 

[Went Fishing]

Tlow

Easy big fella .... take your dog for a walk/run.... this ain't easy.

I really can't post now,,,,,,,,,,,I'll be back!!!!!!!!

Is there a better way to post the charts or another site that will let me use larger image files?

Boli said, "Be kind to us seniors. "

I just hold down control and tap ++++(on numbers pad) to enlarge anything I'm trying to view on the web. It's the color that makes me want to puke(sorry) "Be kind to us seniors. "

Can you SIM with that rig??

<*)))><

 

[Bolimomo]

Quote from Went Fishing:


.....
I just hold down control and tap ++++(on numbers pad) to enlarge anything I'm trying to view on the web. It's the color that makes me want to puke(sorry) "Be kind to us seniors. "

I love you, man!!!!! You have saved my eyes! I have never learned this trick.

 

[volente_00]

Quote from tlow:

What a crappy day for me. Pretty much the worst trading day, I've ever had. Just went against everything I am trying to do. Its 9:00am and I am done for the day because I am trading like poo.

The Market was going to open down big, so I wanted to wait to see where it would go after the open. Stayed in a pretty tight trading range for the 1st half hour...I knew that 1050.00 would be an area where it would bounce around a lot so I wanted to wait for some strong negative movement before entering. I missed the entry that broke below the channel and I should've just stayed out until things became more clear. But i got "all excited" and shorted on a crappy pullback with way too aggressive an entry and didn't wait for more confirmation. Got stopped out a minute later. Dumb. I think housing news came out...

Do you guys look at the news for the day? Do many of you play the news or wait for more obvious things to develop? i guess pure PA guys probably don't care, but I feel like I should at least know whats going on for the day.

Market is pretty negative so I will try and stay short most of the day, unless a HUGELY obivous reversal or positive trend develops.

Trade 1:

7:03- Short 1046.75
7:04- Stopped out to cover at 1049.00

-2.25 pts not a great way to start the day...with a dumb trade.Missed the entry and it was all downhill from there.

Trade 2:

8:16- Short 1052.00
8:35- Stopped out to cover at 1056.00
-4.00 pts

Man, I have no idea what I was thinking on this one...maybe I thought it was going to break below that trendline/triangle formation. The most frustrating part is in my notes I wrote down,"starting to form trend reversal, watch bearish signals to make sure they are not just pullbacks." And even put a HH? on the chart. Went against the trend...everything was wrong. My stop was WAY too big also, I think I threw up a prayer after I realized I was in a bad trade, shoulda gotten out with a small loss. The more I write about this trade the madder I get at myself.

Uhhh...why am I not following my notes?

Trade 3:

8:38- Long 1057.25
8:55- Stopped out, sell at 1055.25

-2.00 pts

This trade was screwed up also..my entry was late due to my last trade. And to compound the issue, i didn't exit when I should have. Again, wrote in my notes, "this is 3rd wave up, look for exit as soon as momentum dies...so I should been out with a small profit or minimum B/E. Saw Momentum die around 8:42-8:43 but stayed in the trade. I think this was the cause of the huge loss of my last trade.

Total Trades: 3
Winners: 0
Losers:3
B/E:0
Avg. Win: 0
Avg. Loss: 137.42
Total Win: 0%
Total Loss: 412.50


I think the live trading for me is going to be about controlling emotions, getting used to psychology, and staying out of bad trades/exiting right away when I know Im in a bad trade. I am sure this is how it is for most people new to live trading consistently so I need to keep at it and be smarter and follow my notes. I cant do this, I will blow up my account in a couple of weeks if I keep this up. On a positive note, my notes are saying the right things and I am doing a good job of keeping notes. So if I can work out my stupidity/emotions, I think I will start going the right way.

When I started this a couple weeks ago, here are the general rules/goals that I wrote down and always need to remember:

1.) Capital Preservation
2.) Capital Preservation
3.) Consistent Profitability

I am going to get back on the horse tomorrow. But man this sucks. I see why days like these are so hard and why its so hard to become a professional trader.

On another note, I am using photobucket to post the images and this is the largest size they will let me use. What do you guys use to post the images? Is there a better way to post the charts or another site that will let me use larger image files?

You are trading a vehicle that exhibits quite a bit of mean reversion.


By chasing price and shorting breakdowns and longing breakouts you will get stopped out the majority of the time.


I will give you a simple rule that will help you over the long run.


In ES, never short it if the market has gapped down from the previous S&P close. If the gap fills that day then you can take a short.

If cash is gapped up then never enter a long with the gap underneath. If the gap fills that day then you can take a long.




You may miss some opportunities for using this rule but over time it will outweigh them by saving your butt.



Also you need to read the book


The Disciplined Trader


Before you trade anymore real money.


http://prismintraday.com/readings/Disciplined_Trader.pdf


The emotion in your post alone tells me you have lots to work on mentally before you can make progress and this book will get you headed in the right direction.

 

[Roark]

Quote from tlow:


On another note, I am using photobucket to post the images and this is the largest size they will let me use. What do you guys use to post the images? Is there a better way to post the charts or another site that will let me use larger image files?

No need to use photobucket. Just upload the image with your post (use the browse button). If you want the image to show inline so that others don't have to click on it to view the image, click on it after you have uploaded it, copy the url of the image, and then edit your post to show the url as an inline image. Entertaining journal - hope you keep it up.