Continuing to trade live in sim this week for practice sake. Even through the un-ideal low volume conditions both methods are making consistent profits as they should. I've placed a large emphasis on making sure what works today, worked 10 years ago, worked in the volatility post 9/11, the low volatility lull from 04-06, and through the high volatility we've seen in the past two years. As far as i'm concerned, its as important to know your method works now, as it is to know it worked in a completely different market 2 years ago, 5 years ago, 20 years ago. Markets change, a robust method should continue to function through them all and both methods have proven to do just that.
As far as trading goes. Rather than the January 2nd start date previously discussed (this Friday) i've decided to hold off until Monday. Friday will most likely be low volume as many traders will be taking the day off through the weekend. Thus, i'll start up fresh on Monday and let the chips fall where they may. Also, i'll keep a Excel spreadsheet that i'll post screenshots of daily. I'll post a Broker confirmed blotter of all trades at the end of the month to confirm the validity of my daily activities. However, its a much larger process to blur and crop out account numbers every day than it is to just post a record of trades taken from a worksheet.
Enjoy New Years and we'll see you all back here at 2:45PM on the 5th!
Tuesday, December 30, 2008
Monday, December 22, 2008
December 22nd Update
Just a small update. Today I wired all of the funds to my trading account. Everything is coming together and should be ready to go in January. I spent the weekend refining my last setup and its stop management and entry filter and came up with some really great stuff. This setup is proving to be that perfect last piece to the puzzle.
The type of trading I do right now is precise and effective, but lacks the ability to jump into big blow away trends... at least it did. This fifth setup is so robust i'm actually going to record it as a second methodology when I post my results daily. But lets just say this... its the most promising method i've developed in a long while and i'm constantly surprised as how well it performs each day. Over a random 3 day period last week and last month the system pulled out over 1000.00/contract in profits and above a 60% win rate each time.
I've attached a chart of today's trades from both methods combined. As you can see, we didn't win them all but what we did do is win the majority, take more profits than losses, and came out on top like we do most days!
Today's Results: 7 Wins, 2 Losses, Net: +9.75, +487.50/Contract
Basically, i'm getting everything ready to go and i'm just making finishing touches on everything in preparation for my January launch date. I'm VERY optimistic, but well aware of the daunting task that lies ahead. But i'm well prepared and ready to take on what the market throws my way and excited for the start day. I feel like i've spent the last 3 years building my business and its finally ready to open its doors to the public. It should be an interesting ride and I invite you all to watch!
Happy Holidays!
The type of trading I do right now is precise and effective, but lacks the ability to jump into big blow away trends... at least it did. This fifth setup is so robust i'm actually going to record it as a second methodology when I post my results daily. But lets just say this... its the most promising method i've developed in a long while and i'm constantly surprised as how well it performs each day. Over a random 3 day period last week and last month the system pulled out over 1000.00/contract in profits and above a 60% win rate each time.
I've attached a chart of today's trades from both methods combined. As you can see, we didn't win them all but what we did do is win the majority, take more profits than losses, and came out on top like we do most days!
Today's Results: 7 Wins, 2 Losses, Net: +9.75, +487.50/Contract
Basically, i'm getting everything ready to go and i'm just making finishing touches on everything in preparation for my January launch date. I'm VERY optimistic, but well aware of the daunting task that lies ahead. But i'm well prepared and ready to take on what the market throws my way and excited for the start day. I feel like i've spent the last 3 years building my business and its finally ready to open its doors to the public. It should be an interesting ride and I invite you all to watch!
Happy Holidays!
Friday, December 19, 2008
December 19th Update
Pretty active and smooth session considering it was quad witch today. Had some nice follow through on trades and overall a very successful session. Took 4 standard method trades, 3 off the 1 minute and 1 of the 620T for a total of 4 points. Not huge, but not embarrassing either!
I most likely won't be posting at all next week as i'm taking it off to be with family for the holidays. I'm wiring the remainder of my funds to my trading account on Monday so we'll be all set for our January 2 start date. I'm cautiously optimistic and hopefully by that time I will have this 5th final setup in concrete terms that can help us make an impressive break out of the gate!
Trade Results:
+200.00
Weekly Results (Not including FOMC event):
+587.50
I most likely won't be posting at all next week as i'm taking it off to be with family for the holidays. I'm wiring the remainder of my funds to my trading account on Monday so we'll be all set for our January 2 start date. I'm cautiously optimistic and hopefully by that time I will have this 5th final setup in concrete terms that can help us make an impressive break out of the gate!
Trade Results:
+200.00
Weekly Results (Not including FOMC event):
+587.50
Thursday, December 18, 2008
December 18th Update
Pretty boring day. Lots of pars, two losses and one win. I spent the majority of the day working on a new setup and it looks to be pure gold. So i'm going to continue working on that for the rest of the week as it looks more promising than most anything i've ever seen before. It did +25 points on the 1 minute chart in the past two days alone! Low risk, high reward, lots of trades, lots of winners. I like!
Trade Results:
-37.50
Trade Results:
-37.50
Wednesday, December 17, 2008
December 17th Update
Good day today! Yesterday I did take a long after the FOMC had been released that was good for 250/per but since I said I wasn't going to trade yesterday we are going to leave it out of the results. Typically about an hour after the FOMC things are pretty good to trade so thats what I planned on and it worked out nicely.
So last night I took a look at some tick charts. I used to trade tick charts exclusively. A lot of the moves that 'blow away' from me on a time chart are able to be captured on the tick chart. So I added one to my workspace today and have been using it to trade off of in addition to my 1 minute chart. We'll see how the results are but I think it should be on par with the 1 minute and should serve as a great addition.
So as far as the trades went... 4 Trades. Took a double top off the 1 minute this morning for 337.50/per, two par trades in between off the 1 minute and 620T and then caught a nice reversal for 225/per this afternoon during the selloff using the 620T. All in all, a well managed and executed day.
The illustrated view of some of the trades:
Trade Results:
+562.50
So last night I took a look at some tick charts. I used to trade tick charts exclusively. A lot of the moves that 'blow away' from me on a time chart are able to be captured on the tick chart. So I added one to my workspace today and have been using it to trade off of in addition to my 1 minute chart. We'll see how the results are but I think it should be on par with the 1 minute and should serve as a great addition.
So as far as the trades went... 4 Trades. Took a double top off the 1 minute this morning for 337.50/per, two par trades in between off the 1 minute and 620T and then caught a nice reversal for 225/per this afternoon during the selloff using the 620T. All in all, a well managed and executed day.
The illustrated view of some of the trades:
Trade Results:
+562.50
Tuesday, December 16, 2008
December 16th Update
FOMC day today. Which means no trades for me. I take this day off every time. Things are dead and sloppy ahead of the announcement, and jolted and erratic after. I feel this type of price action erodes the edge of a typical trading day so I leave it alone.
Spent the day honing techniques and setups and doing backtesting. Fun fun fun!
Spent the day honing techniques and setups and doing backtesting. Fun fun fun!
Monday, December 15, 2008
December 15th Update
Executed well today, most things just blew away in spurts today. I got caught inside a nasty wedge in the 3 minute this afternoon and it cost me 137.50. Two trades, 1 par, 1 loss. Shit happens, not a big loss (much smaller than all of my winning days) so we move on to tomorrow!
In other news, I completed my testing on the 3 minute charts and I will be trading 3 minute signals live in January as long as they are under my $ Risk cap. It added over 2k in baseline profitability with the 3 minute signals in addition to my 1 minute trades. If I was allowed to take every trade there was over 7k in profits :). This will be my last week mock in the ES as I intend to take next week off for the holidays. I'm also thinking of trading the NQ because it works even better with my method due to the nature of its moves (less backfill than the ES) but I think i'll hold off on that until we see what the results are like in January, and if I even make it through the month without having to print out a resume... At any rate, worst case, monitoring 4 charts, is a piece of cake in comparison to the 48 I use to monitor on a daily basis!
Trade Results:
-137.50
In other news, I completed my testing on the 3 minute charts and I will be trading 3 minute signals live in January as long as they are under my $ Risk cap. It added over 2k in baseline profitability with the 3 minute signals in addition to my 1 minute trades. If I was allowed to take every trade there was over 7k in profits :). This will be my last week mock in the ES as I intend to take next week off for the holidays. I'm also thinking of trading the NQ because it works even better with my method due to the nature of its moves (less backfill than the ES) but I think i'll hold off on that until we see what the results are like in January, and if I even make it through the month without having to print out a resume... At any rate, worst case, monitoring 4 charts, is a piece of cake in comparison to the 48 I use to monitor on a daily basis!
Trade Results:
-137.50
Thursday, December 11, 2008
December 11th Update
Not much to report. UBER SLOW DAY in the S&P today. I was bored out of my mind. I would post up a report for earnings but they were just +.25 today (1 tick) or 12.50 on one trade. Everything else blew away from me. There was a salty little 3 minute trade I took for +8.5 but i'm not recording 3 minute trades here because i'm pretty sure i'll just be trading the 1 minute for starters in January. Typically the larger timeframes require larger risk on the trades because the swings are larger. That being said, the 3 minute trade today was actually smaller in risk than some of my 1 minute trades so i'll be review all of my data and see if its worth taking both timeframe signals come January.
Trade Results:
+$12.50
Trade Results:
+$12.50
Wednesday, December 10, 2008
December 10th Update
Today was a great day of trading. I came in, executed my plan without flaw, and had some great trades. The one "loss" was a par trade. Tradestation regards par trades as losses due to commissions. As far as i'm concerned a par trade is a winner because it means my system got me to a point of no risk and the trade just didn't work. That being said the par trade did stop me out by 1 tick and then went to my target. Thats life right? I also missed a trade around 9:20 AM this morning because I was a super tired and slept in an extra 20 minutes. C'est la vie right? But probably realistic because you won't get them all. One or two are gonna slip through your fingers during the week due to something and thats just trading.
Long story short. I'm very proud of my performance today. I saw the whole picture I was ready and anticipating my positions before they appeared and I pounced on every opportunity given with perfect management. The results of that type of trading are shown in the profits.
Trade Results:
Long story short. I'm very proud of my performance today. I saw the whole picture I was ready and anticipating my positions before they appeared and I pounced on every opportunity given with perfect management. The results of that type of trading are shown in the profits.
Trade Results:
Tuesday, December 9, 2008
Do you have the resolve?
Well this blog is going to track yet another turn in our trading career. After a stint in forex over the past 6 months we are going to get back to the S&P 500 futures e-mini and Nasdaq 100. And i'd like to take a moment to talk about this shift in my career.
Over the past 6 months I was using the forex markets to hone my trading skills and methodology with relatively little risk while keeping a live account to learn with. All i've been doing is trying to keep my accounts alive while I got my consistency up and approach down pat. But lets face it... 50 pips on a mini lot won't put food on the table. So I came up with an ultimatum for myself over the weekend. Take what i've learned and put EVERYTHING i've got left back into my futures trading account. As far as i'm concerned I feel like I've spent the last year spinning my wheels. While friends and family are off bettering their careers, their lives, and their experiences i've been stagnant in my growth within all of those areas. I'm sick of it.
I started this blog to chronicle the journey of successful trading. I wanted a historical record of all the crappy trades, the horrible decisions, and the evolution of a methodology. But I haven't walked the path. I've just stayed still at the starting line and talked about the path. That ends now.
Its important to note that all of this hold up was very necessary in my career. Its one thing to soldier on risking everything in your name with no plan, no consistency, and no management in your approach. Its quite another to have a calculated, profitable, and consistent trade plan and method. I now have the latter of those two options and I intend to use it come January. The hold up is over.
I'm putting literally EVERYTHING I have left in the form of capital into my trading account that includes a loan from my parents. Just enough to get me over the margin requirements and give me about 5 back to back max loss and max risk trades before kicking me under margin for the next day. (An event I should point out has never remotely come close to occurring). Some might say this is risky and dangerous. It is. In an ideal world this is way over leveraged. I don't live in an ideal world so this is what i've got to work with and i'm going to make it work. The point is this - one way or another i'm going to go out with a bang and (quite literally) give it all i've got.
Worst case? I get knocked under margin and I go out and get a job. I've got a shiny new degree, lots of business experience, and a nice smile. I'll make those work for me to get my new capital funding for a while. I'm not giving up on a dream. I've had a taste of what success in this field is all about and can't justify working a career that imposes limits on how much I can make an hour, a day, a year, a lifetime. All it will mean is that I find alternate means of financing to make a go of it again with a new eduction, a new method, a new resolve. I can't give up on something i've worked day and night towards, made every sacrifice towards over the past 30 months and walk away. If I was going to do that, I could've done it a 1000x's before I got to this point. I didn't. I don't intend to now.
Best case? You know those goals I have on the side of this blog? We go after them systematically one after another. What do I have going for me? Experience... 2 and half years of losing money and learning from it the hard way. A systematic unemotional approach to trading. I know the dangers of becoming giddy or depressed during the trading day. All of my trades are approached without bias or fear. Furthermore, my system is focused, robust, and proven. Over the past month on the S&P 1 Min chart (the timeframe i'm going to go live with) there were 59 trades, a 88% win rate, a max loss of 237.00, 3 losing days, and 7200.00 per contract in profits.
I'm going live January 2nd of 2009. I need time to get checks cleared, wire transfers completed, and for the holidays to pass. I don't want to go live the week of Christmas where the charts coil up and die. Between then and now i'm siming live everyday with my Tradestation account, posting real time results here every night and preparing for battle in January.
So one way or another stay tuned. You're gonna see a trader put it all on the line and either succeed or fail right before your eyes. So what it comes down to is this: The time is now. I'm betting on me, my parents are betting on me, and i'm betting it all. I don't intend to disappoint and I invite you all to watch.
Trade Results for today:
Over the past 6 months I was using the forex markets to hone my trading skills and methodology with relatively little risk while keeping a live account to learn with. All i've been doing is trying to keep my accounts alive while I got my consistency up and approach down pat. But lets face it... 50 pips on a mini lot won't put food on the table. So I came up with an ultimatum for myself over the weekend. Take what i've learned and put EVERYTHING i've got left back into my futures trading account. As far as i'm concerned I feel like I've spent the last year spinning my wheels. While friends and family are off bettering their careers, their lives, and their experiences i've been stagnant in my growth within all of those areas. I'm sick of it.
I started this blog to chronicle the journey of successful trading. I wanted a historical record of all the crappy trades, the horrible decisions, and the evolution of a methodology. But I haven't walked the path. I've just stayed still at the starting line and talked about the path. That ends now.
Its important to note that all of this hold up was very necessary in my career. Its one thing to soldier on risking everything in your name with no plan, no consistency, and no management in your approach. Its quite another to have a calculated, profitable, and consistent trade plan and method. I now have the latter of those two options and I intend to use it come January. The hold up is over.
I'm putting literally EVERYTHING I have left in the form of capital into my trading account that includes a loan from my parents. Just enough to get me over the margin requirements and give me about 5 back to back max loss and max risk trades before kicking me under margin for the next day. (An event I should point out has never remotely come close to occurring). Some might say this is risky and dangerous. It is. In an ideal world this is way over leveraged. I don't live in an ideal world so this is what i've got to work with and i'm going to make it work. The point is this - one way or another i'm going to go out with a bang and (quite literally) give it all i've got.
Worst case? I get knocked under margin and I go out and get a job. I've got a shiny new degree, lots of business experience, and a nice smile. I'll make those work for me to get my new capital funding for a while. I'm not giving up on a dream. I've had a taste of what success in this field is all about and can't justify working a career that imposes limits on how much I can make an hour, a day, a year, a lifetime. All it will mean is that I find alternate means of financing to make a go of it again with a new eduction, a new method, a new resolve. I can't give up on something i've worked day and night towards, made every sacrifice towards over the past 30 months and walk away. If I was going to do that, I could've done it a 1000x's before I got to this point. I didn't. I don't intend to now.
Best case? You know those goals I have on the side of this blog? We go after them systematically one after another. What do I have going for me? Experience... 2 and half years of losing money and learning from it the hard way. A systematic unemotional approach to trading. I know the dangers of becoming giddy or depressed during the trading day. All of my trades are approached without bias or fear. Furthermore, my system is focused, robust, and proven. Over the past month on the S&P 1 Min chart (the timeframe i'm going to go live with) there were 59 trades, a 88% win rate, a max loss of 237.00, 3 losing days, and 7200.00 per contract in profits.
I'm going live January 2nd of 2009. I need time to get checks cleared, wire transfers completed, and for the holidays to pass. I don't want to go live the week of Christmas where the charts coil up and die. Between then and now i'm siming live everyday with my Tradestation account, posting real time results here every night and preparing for battle in January.
So one way or another stay tuned. You're gonna see a trader put it all on the line and either succeed or fail right before your eyes. So what it comes down to is this: The time is now. I'm betting on me, my parents are betting on me, and i'm betting it all. I don't intend to disappoint and I invite you all to watch.
Trade Results for today:
Monday, November 24, 2008
November 24th Recap
Traded perfect today, just didn't get paid in full due to time constraints. I had two trades today, I got in them around 11:30 AM, held them (sometimes in considerable pain) to 2:30 when they finally started working as they should've. I got to textbook reduced risk and par on both but they dropped from the par level down to pretty close to the entry when it was 3:00. My trade rules exit positions at 3PM without exception so I did just that and came out with about 30 pips cumulative. As you can see both went on to the take profits (the green horizontal lines) but did so after rollover and without me. Thats just trading. I traded well today, took solid setups, managed them well, and didn't break any rules. Just sucks that I made +30 rather than the +120 pips I had put these positions on to get.
Its a short week for me this week. Trading through Wednesday and then calling it quits for the remainder of the week to enjoy thanksgiving with the family.
Trade Results:
EURUSD: +17.80
AUDUSD: +11.40
Heres the AUDUSD setup:
And the EURUSD setup:
Its a short week for me this week. Trading through Wednesday and then calling it quits for the remainder of the week to enjoy thanksgiving with the family.
Trade Results:
EURUSD: +17.80
AUDUSD: +11.40
Wednesday, November 19, 2008
November 18th Recap - When Bad Things Happen to Good People
So today started off with me a bit down in the slumps about yesterdays performance and screwing up on that one order. So I made a point of double checking all of my orders today. But apparently not well enough because another order slipped and kicked me out of a position I was trying to get my stop to par on and ended up exiting me prior to my target being hit.
I had one good trade that worked without fault. The other two were PAINFUL. Unfortunately the EURUSD trade came up to my stop and apparently through it by a partial tick and exited me for a max loss and then went right down to my target. So now I need to make a point of giving my stops not 1 pip, but 2 at their initial stop values so I don't get kicked out of a move by my broker.
The last screw up of the day was in the GBPUSD. I had been holding this trade through ups and downs for the better part of 3 hours. By the time I got it to work so I could get to par it went down and stalled 5 pips from my exit target. Fine. I held through a wave back up close to my stop and it fell down again. At this point it went down and retested the lows. I had already been stopped out of the EURUSD short so I was wanting to lock in profit and end the day on a good note. I saw it retest the lows and then engulf. I'm thinking to myself... ya know, I should just bail, its over. So I did. AGAINST MY RULES. Then of course the next bar went straight down to my target. Go figure. It wasn't a huge difference, but 20 pips of profit is 20 pips of profit.
So all in all, we had a profitable day, but a day that was 100 pips shy of its full potential of the 4 trades taken due to either order entry errors, bad luck with the broker and needing a 1 pip wider stop, and bailing on my management. Disappointing to say the least.
The good thing of note is this. The results if I had been using my old initial stop management? 3 Losses, 1 win. Yup. This new wider initial stop turned 3 losses in the 3 wins (if it weren't for my own mistakes).
Trade Results:
EURUSD: -49.00 (High Ticked Out)
AUDUSD: +16.10 (Order Error)
GBPUSD: +50.10 (I'm a pansy)
USDCAD: +30.82 (Worked so fast even I couldn't screw it up)
I had one good trade that worked without fault. The other two were PAINFUL. Unfortunately the EURUSD trade came up to my stop and apparently through it by a partial tick and exited me for a max loss and then went right down to my target. So now I need to make a point of giving my stops not 1 pip, but 2 at their initial stop values so I don't get kicked out of a move by my broker.
The last screw up of the day was in the GBPUSD. I had been holding this trade through ups and downs for the better part of 3 hours. By the time I got it to work so I could get to par it went down and stalled 5 pips from my exit target. Fine. I held through a wave back up close to my stop and it fell down again. At this point it went down and retested the lows. I had already been stopped out of the EURUSD short so I was wanting to lock in profit and end the day on a good note. I saw it retest the lows and then engulf. I'm thinking to myself... ya know, I should just bail, its over. So I did. AGAINST MY RULES. Then of course the next bar went straight down to my target. Go figure. It wasn't a huge difference, but 20 pips of profit is 20 pips of profit.
So all in all, we had a profitable day, but a day that was 100 pips shy of its full potential of the 4 trades taken due to either order entry errors, bad luck with the broker and needing a 1 pip wider stop, and bailing on my management. Disappointing to say the least.
The good thing of note is this. The results if I had been using my old initial stop management? 3 Losses, 1 win. Yup. This new wider initial stop turned 3 losses in the 3 wins (if it weren't for my own mistakes).
Trade Results:
EURUSD: -49.00 (High Ticked Out)
AUDUSD: +16.10 (Order Error)
GBPUSD: +50.10 (I'm a pansy)
USDCAD: +30.82 (Worked so fast even I couldn't screw it up)
Monday, November 17, 2008
November 17th Recap
Didn't have time to update on Friday. It was a horrible day. Down -133 pips on two trades. But it brought something up to the surface that needed to be dealt with and the end results are going to be very profitable in the long run. I took two back to back max losses. Now one trade was a trade that ended up being a double top and reversing. However I got short out of the rejection and was rattled out of my position on a retracement before it walked right down to my profit target without me.
This has happened over and over and over again. So I decided to delve into the issue a bit more with some backtesting of my live trades taken over the past couple weeks. The results were staggering. Over 22 trades using my tighter initial stop placement ended with a net -38 pips and a 57% win rate. By simply changing my initial stop to the previous swing high/low my win rate went to 81% on the SAME TRADES and overall profitability increased from a -38 to a +232. I can't even begin to tell you what a difference that is.
Basically my findings supported what I had long suspected. For those of us who don't trade pullbacks into a trend it is not only improbable, but unprofitable to try and achieve a 1 risk, 2 reward scenario. I had been placing stops at points in a trade that would allow me to keep this "holy grail achievement" that all traders are supposed to use to be successful right? The reality of the situation is this: The 1 risk, 2 reward is a falsely coveted rule of trading for a lot of people. We try and achieve that risk situation because we believe (and are told) it will grow our accounts faster and with less risk. The reality of the situation is the exact opposite. By taking on a bit more initial risk I can stay in my trades regardless of the whipsaw after i'm in them.
In fact my backtesting concluded that I was only flat out wrong about a move where I lost the entire initial stop less than 10% of the time. Those kind of odds make this kind of risk strategy well worth it in my opinion. It would be one thing if I was hitting 40% win rates, but with less than a 1 in 10 chance of taking a max loss on a trade the larger initial risk equals more profit, more of the time.
Pullback traders are able to automatically place stops at the low and by trying to call tops and bottoms to pullbacks can achieve low risk, high reward setups and sacrifice a lower win rate as a result. However, we don't all trade like that, and thus, we need to accept higher initial risk values as long as we have a sound and scalable method that performs higher win rates to offset the higher initial risk.
I also did some testing on scaling out of a position on partials at various targets in the trade but we'll leave that summary for tomorrow. I found some very interesting things!
As for today, I took one setup (the only one that fired off today) and it worked perfectly up to my profit target.
Trade Results:
USDJPY: +29.86
This has happened over and over and over again. So I decided to delve into the issue a bit more with some backtesting of my live trades taken over the past couple weeks. The results were staggering. Over 22 trades using my tighter initial stop placement ended with a net -38 pips and a 57% win rate. By simply changing my initial stop to the previous swing high/low my win rate went to 81% on the SAME TRADES and overall profitability increased from a -38 to a +232. I can't even begin to tell you what a difference that is.
Basically my findings supported what I had long suspected. For those of us who don't trade pullbacks into a trend it is not only improbable, but unprofitable to try and achieve a 1 risk, 2 reward scenario. I had been placing stops at points in a trade that would allow me to keep this "holy grail achievement" that all traders are supposed to use to be successful right? The reality of the situation is this: The 1 risk, 2 reward is a falsely coveted rule of trading for a lot of people. We try and achieve that risk situation because we believe (and are told) it will grow our accounts faster and with less risk. The reality of the situation is the exact opposite. By taking on a bit more initial risk I can stay in my trades regardless of the whipsaw after i'm in them.
In fact my backtesting concluded that I was only flat out wrong about a move where I lost the entire initial stop less than 10% of the time. Those kind of odds make this kind of risk strategy well worth it in my opinion. It would be one thing if I was hitting 40% win rates, but with less than a 1 in 10 chance of taking a max loss on a trade the larger initial risk equals more profit, more of the time.
Pullback traders are able to automatically place stops at the low and by trying to call tops and bottoms to pullbacks can achieve low risk, high reward setups and sacrifice a lower win rate as a result. However, we don't all trade like that, and thus, we need to accept higher initial risk values as long as we have a sound and scalable method that performs higher win rates to offset the higher initial risk.
I also did some testing on scaling out of a position on partials at various targets in the trade but we'll leave that summary for tomorrow. I found some very interesting things!
As for today, I took one setup (the only one that fired off today) and it worked perfectly up to my profit target.
Trade Results:
USDJPY: +29.86
Wednesday, November 12, 2008
November 12th Recap
Another boring day. Lots of action in the A.M. that I was not in and a lot of midday consolidation that I found myself monitoring. But one nice setup formed this afternoon minutes before my cutoff time for taking trades and it worked almost effortlessly down to its target. The frustrating part is this: it would've essentially erased yesterdays loss but due to my one mistake i'm still in the hole for the week right now. Regardless I traded today perfectly and can't ask anything more of the outcome.
In other news there were massive 4H and 1H trades this morning and yesterday that were 110% textbook that i've been monitoring. I wanted to make sure everything is working as it should on every timeframe and not just on the 5 minute. Today's profit off of three trades would've been around 1000 pips. Yes. 1000. So obviously i'd like to move towards taking trades on longer term 15M, 60M, and 240M charts in the future but I feel that I need to get my accounts a bit larger before I start putting on some of the longer term trades. For example a short in the EURJPY last night would've required almost a 300 pip stop... Thats a bit too much of my account than i'm willing to risk at this point.
But i'm happy to report the trades are flowing on all timeframes just as consistently as the 5M. In the future I think they will serve as a very effective tool in smoothing out the equity curve and acting as a hedge against losing trades on one timeframe by supplementing them with winning trades on a different timeframe.
Trade Results:
USDJPY: +36.88
In other news there were massive 4H and 1H trades this morning and yesterday that were 110% textbook that i've been monitoring. I wanted to make sure everything is working as it should on every timeframe and not just on the 5 minute. Today's profit off of three trades would've been around 1000 pips. Yes. 1000. So obviously i'd like to move towards taking trades on longer term 15M, 60M, and 240M charts in the future but I feel that I need to get my accounts a bit larger before I start putting on some of the longer term trades. For example a short in the EURJPY last night would've required almost a 300 pip stop... Thats a bit too much of my account than i'm willing to risk at this point.
But i'm happy to report the trades are flowing on all timeframes just as consistently as the 5M. In the future I think they will serve as a very effective tool in smoothing out the equity curve and acting as a hedge against losing trades on one timeframe by supplementing them with winning trades on a different timeframe.
Trade Results:
USDJPY: +36.88
Tuesday, November 11, 2008
November 11th Recap
Horrible day. Should've been 1 trade, 1 loss. Ended up being two trades two losses. Somehow I managed to put on a position that wasn't even a remotely valid trade. Then I was in it and I realized what the hell I had done. Goodbye to 20 pips. That was my only mistake but it was a big mistake. I just got sloppy and didn't double check my grids prior to entry. Disappointed more than anything. 99% of the action occurred this morning and all I got left with was the consolidation to chop me around in the afternoon.
Trade Results:
USDCAD: -38.13
GBPUSD: -19.50
Trade Results:
USDCAD: -38.13
GBPUSD: -19.50
Monday, November 10, 2008
November 10th Recap
Boring day. Most moves occurred prior to 8AM this morning. I had two trades today. One went about +25 before stopping back out at par and the other did the same thing... went +27, I got to par, and it reversed from there. I thought I had adjusted for the spread but I ended up taking a 1 pip loss on the stopout. Thats the only bad part about having a variable spread broker. You can't always be spot on with your stops if you are trying to get out with X amount of pips. All in all, I took the two trades that really had any chance of making money, but both just didn't want to go to a target to pay me and that was the outcome. Perfect entry, managment, and execution. Can't do anything more than that.
In other news, I didn't update friday because there were no trades taken.
Trade Results:
AUDUSD: -1.00
USDCAD: +3.10
In other news, I didn't update friday because there were no trades taken.
Trade Results:
AUDUSD: -1.00
USDCAD: +3.10
Thursday, November 6, 2008
November 6th Recap
Rough day. Markets didn't move ANYWHERE today. So I had a great day yesterday only to follow it up with a horrible one. Typical. What it did cement was the need to keep that management solid. Because the results for this week look to be hinged on yesterdays performance. And without that extra +30 pips from that management mistake the week can literally become negative territory due to one mistake.
Now today I took great setups, textbook management, but the problem was none of the markets followed through, and the two that ended up doing what I wanted didn't do so within the time constraints of my trading hours. So I had to flat one position at par and close the other out for a loss at 3PM because I exit all positions at that time everyday regardless of where they are. They ended up working but I wasn't along for the ride.
So it ended up negative, and by a large amount.
Trade Results:
USDCHF: -17.91, +0
EURCHF: -11.89
AUDUSD: -27.00
EURUSD: -27.00
Now today I took great setups, textbook management, but the problem was none of the markets followed through, and the two that ended up doing what I wanted didn't do so within the time constraints of my trading hours. So I had to flat one position at par and close the other out for a loss at 3PM because I exit all positions at that time everyday regardless of where they are. They ended up working but I wasn't along for the ride.
So it ended up negative, and by a large amount.
Trade Results:
USDCHF: -17.91, +0
EURCHF: -11.89
AUDUSD: -27.00
EURUSD: -27.00
Wednesday, November 5, 2008
November 5th Recap
Good day today! Had to be patient to make it work. I sat on my duff for 7 hours before I got a signal at 1:30 PM this afternoon. But during that 7 hours I was constantly measuring and waiting for potential setups. I saw the entire picture and I was ready for it. Then around 2:00 PM I got 3 signals all at once. I scrambled to enter all of them and actually got into everything... then I was trying to place stops/targets on 3 different positions as some were already shooting to par stop levels and target profit levels. It was a hectic 10 minutes. But the setups were golden, the management on all but one was flawless. After those three positions were flat I was so flustered from what had conspired I just covered my earlier position from 1:30. It was against my management rules and I should've held. I got +17 out of a position that hit the target for +45. Other than that though I'm really impressed with the method and my execution.
I'd been a little down in the dumps after a fairly lackluster start to this week but i'm glad we are finally getting some pips under our belts! In fact in one of my accounts i've seen a 44% account increase in capital in under three days of live trading. Not only that but i'm currently sitting at a 80% win rate on these trades. Pretty damn impressive if I might say so. Onward and upwards!
Trade Results:
USDCAD: +17.02
AUDUSD: +2.00
EURUSD: +21.00
EURJPY: +44.60
I'd been a little down in the dumps after a fairly lackluster start to this week but i'm glad we are finally getting some pips under our belts! In fact in one of my accounts i've seen a 44% account increase in capital in under three days of live trading. Not only that but i'm currently sitting at a 80% win rate on these trades. Pretty damn impressive if I might say so. Onward and upwards!
Trade Results:
USDCAD: +17.02
AUDUSD: +2.00
EURUSD: +21.00
EURJPY: +44.60
November 4th Recap
Not much happened today. Only one trade signaled which is actually nice because it proves that the method was able to keep me out of the crap I didn't want to be involved with anyway.
Trade Results:
USDJPY: +23.01
Trade Results:
USDJPY: +23.01
Monday, November 3, 2008
November 3rd Recap
Not much time to update tonight so we'll keep things simple. Traded a perfect day today. Nothing really happening. Got screwed by literally 2 ticks on two trades stopping out for a max loss before going onto my profit target without me. That being said, I still had two winning trades to offset the two losers. Ended up net negative by a bit but remember again everything is muted and on hold until the election is over. I might not trade tomorrow due to the election.
The important point here is this: I traded a perfect day. No flaws, solid setups, perfect management. Done deal. Move on to the next day and repeat.
Trade Results:
AUDUSD: +40
EURUSD: +26
USDJPY: -29.47
EURJPY: -47.39
The important point here is this: I traded a perfect day. No flaws, solid setups, perfect management. Done deal. Move on to the next day and repeat.
Trade Results:
AUDUSD: +40
EURUSD: +26
USDJPY: -29.47
EURJPY: -47.39
Saturday, November 1, 2008
A Fresh Start...
As many of you might've noticed, the updates to this blog have stopped over the past month. I had to do a lot of soul searching, method revision, and planning to get where I am right now. The trades i'm taking now, and the method i'm trading are 110% different from anything posted on this blog previously, therefore, the past is well, the past and is no longer relevant to the achievement of my goals. So I decided to delete all of the previous daily recaps and wipe the slate clean.
I got back to basics by trading a methodology that I have been learning (and trading) under the direction of my mentor for years (since I started trading). However, I never really made it work. I complicated the situation by trying to trade everything or nothing, by trying to reverse engineer out the losses, and expand the wins. When in reality if I just would accept that losses happen and its part of the game then I would be extremely successful applying this methodology. I do have one tweak that I use to pull out the key swings I want to play, and frankly, I believe it to be a pseudo genius application that works amazingly well with my mentors' method. Together, they are EXTREMELY powerful and PROFITABLE.
So while I was out of town this past week I got back in town and was able to perform a forward "backtest" of this past weeks' price action and see where the entries and exits would've been. Following pure entry rules, no interpretation or bias, the system pulled out nearly 700 pips over the past 4 days and a 75% win rate. Now that's something I can put my faith into. So I traded from 9:00AM to 11:00AM on Friday and was able to take 1 trade for +56 pips in the USDCAD using the exact rules.
Starting Monday I will be trading both of my FX accounts with the intention of using the performance that I demonstrate over the next month as a piece of hard evidence that I can provide to clients before they allow me to trade their capital. Yes, that's right folks, I've been approached by three individuals over the past two weeks that all are offering capital for me to trade. But before I take their money and start to grow it along with my own, I want to know that I can demonstrate one month of consistent results and error free trading for myself. This should provide baseline potential return figures as well as an idea of max drawdowns and win rates that can help assure these clients that i'm a capable money manager. It will also allow me time to look into the legal ramifications of trading other people's money and any taxation issues i'm going to run into.
Here's the thing... I really feel confident in what i'm doing for the first time in, well, forever. I think I have a rock solid methodology and rule base to pull money out of any market and time frame. What I lack in consistency and sticking to the rules will fix itself as I start to gain confidence in letting the trades ride, and the edge I have prove itself, not to mention the added accountability other peoples money brings into the equation. For the first time in a long time i'm looking forward to Monday's open and the opportunities that lay ahead. Monday quite literally is going to be the start of systematically checking off every single one of the goals outlined in this blog and I can't wait to get started.
And let it be heard here and now... i'm not changing ANYTHING in my setups from here on out. I've done the dance with every other system and method out there and somehow was fortunate enough to have stumbled onto the most robust and profitable method of them all right out of the gate. Its time I recognized that and stopped trying to find the holy grail and buckle down into the ATM machine i've had all along. I'm so confident in this method that i'm literally just pulling up random stocks, markets, and time frames to see how powerful and robust it really is. I'm actually enjoying what I do with that giddy feeling I found years ago when I was attending my first trading presentation.
Long story short. Success begins Monday - and i'm bringing my A game.
I got back to basics by trading a methodology that I have been learning (and trading) under the direction of my mentor for years (since I started trading). However, I never really made it work. I complicated the situation by trying to trade everything or nothing, by trying to reverse engineer out the losses, and expand the wins. When in reality if I just would accept that losses happen and its part of the game then I would be extremely successful applying this methodology. I do have one tweak that I use to pull out the key swings I want to play, and frankly, I believe it to be a pseudo genius application that works amazingly well with my mentors' method. Together, they are EXTREMELY powerful and PROFITABLE.
So while I was out of town this past week I got back in town and was able to perform a forward "backtest" of this past weeks' price action and see where the entries and exits would've been. Following pure entry rules, no interpretation or bias, the system pulled out nearly 700 pips over the past 4 days and a 75% win rate. Now that's something I can put my faith into. So I traded from 9:00AM to 11:00AM on Friday and was able to take 1 trade for +56 pips in the USDCAD using the exact rules.
Starting Monday I will be trading both of my FX accounts with the intention of using the performance that I demonstrate over the next month as a piece of hard evidence that I can provide to clients before they allow me to trade their capital. Yes, that's right folks, I've been approached by three individuals over the past two weeks that all are offering capital for me to trade. But before I take their money and start to grow it along with my own, I want to know that I can demonstrate one month of consistent results and error free trading for myself. This should provide baseline potential return figures as well as an idea of max drawdowns and win rates that can help assure these clients that i'm a capable money manager. It will also allow me time to look into the legal ramifications of trading other people's money and any taxation issues i'm going to run into.
Here's the thing... I really feel confident in what i'm doing for the first time in, well, forever. I think I have a rock solid methodology and rule base to pull money out of any market and time frame. What I lack in consistency and sticking to the rules will fix itself as I start to gain confidence in letting the trades ride, and the edge I have prove itself, not to mention the added accountability other peoples money brings into the equation. For the first time in a long time i'm looking forward to Monday's open and the opportunities that lay ahead. Monday quite literally is going to be the start of systematically checking off every single one of the goals outlined in this blog and I can't wait to get started.
And let it be heard here and now... i'm not changing ANYTHING in my setups from here on out. I've done the dance with every other system and method out there and somehow was fortunate enough to have stumbled onto the most robust and profitable method of them all right out of the gate. Its time I recognized that and stopped trying to find the holy grail and buckle down into the ATM machine i've had all along. I'm so confident in this method that i'm literally just pulling up random stocks, markets, and time frames to see how powerful and robust it really is. I'm actually enjoying what I do with that giddy feeling I found years ago when I was attending my first trading presentation.
Long story short. Success begins Monday - and i'm bringing my A game.
Thursday, August 28, 2008
The Goals: What are they, why do they matter, and how do we accomplish them?
Lets talk about the goals i've set, the entire point of this blog, this profession, this life i've chosen to pursue. This is necessary not only to explain the goals to you as it is to re-establish their importance for myself. The goals are not ranked in any order, all of them overlap, establish, and play on one another. But they all serve to establish the final goal, which is SUCCESS.
10 Lot Contract Trade Size:
This is a big one. This may be the biggest one. So lets spend some time on it.
I want to have built up my accounts to the point where I can trade with an adequate, proportionate, risk to my account size, 10 standard lots in both Forex, and in the E-Mini's. Why is this important? Well to accomplish this it would mean that i'm achieving some of my other goals like a 60% win rate, but more than that it would mean i've achieved consistent, demonstrateable success on a large scale. On a 10 lot basis I can pretty much make all of my dreams come true and work towards adding more size in the future. Lets take today, it was a crappy day with lots of mistakes, but I still came out ahead +21 pips. Ok, not great, but trading a 10 lot thats 2100.00. In one day. Yea. I could feed myself for awhile on that.
As i've spoken to before, and will undoubtedly again pros don't hunt massive amounts of pips everyday, they hunt a consistent small amount and do so with LARGE SIZE. Its much easier to get 10 pips a day than 100 pips. So why not get 10 pips a day using 10 lots and make your 1000.00 rather than try and make 100 pips a day using 1 lot. Its the same amount of money, except one has much more market risk involved and a much lower probability of consistent success.
60% Average Win Rate:
Pretty self explanatory. I feel that this system can be 60% successful in real time trading over time. If I can manage to achieve that it will not only prove the system but provide for an nice equity curve and constant account growth with the appropriate use of risk and reward on my trades.
Creation of an "Oh Shit" Fund:
I'd like to have a savings account created and built with trade profits that are put away for a rainy day. Not retirement or anything of that sort, but specifically relating to trading. Lets say taxes come due that I have a slush fund available to draw from to pay them off without touching my trade capital. Or if the worst should happen and I blow out an account, that I have enough put away to refund and start anew. And if I was unable to work for whatever reason that I could reasonably cover all of my expenses for over a year, if not two. I don't like playing things tight, and I like to have a big safety net. I don't have that net now but I want to re-establish one as soon as possible. Roughly, the fund should be at minimum 20,000.
Creation / Completion of LLC:
I'm working with Traders Accounting currently on setting up and establishing an LLC to house and incorporate all of my trading activities. There are lots of taxes involved with trading so doing whatever I can to minimize those costs proactively through the creation of an LLC should pay off huge dividends in the long run. Initial set up costs are projected at 1700.00 to go through with it.
New Trading Workstation:
Fairly simple... I'm currently trading off a laptop (with a semi-busted screen) and a second 17" flatpanel. Hardly ideal. I have to structure my charts in such a way that each currency pair takes up about a 3" X 3" square on my screen. I'd like to build a new trading workstation with 4 22" widescreen LCD's to trade off of. So I don't have to strain my eyes to see everything and everything can have a screen of its own so I don't have to go tabbing through various charts and broker applications. Conservatively this project would cost around 2500.00 depending on how carried away I get.
I'd also like to migrate over to the MultiCharts platform so I can just pay for a lifetime license and eliminate my monthly fees with Tradestation. However, I would have to find another brokerage that can provide data to feed MultiCharts. Multicharts licenses are 1500.00
Well that's about it... hopefully it will all start falling into place over the coming months!
10 Lot Contract Trade Size:
This is a big one. This may be the biggest one. So lets spend some time on it.
I want to have built up my accounts to the point where I can trade with an adequate, proportionate, risk to my account size, 10 standard lots in both Forex, and in the E-Mini's. Why is this important? Well to accomplish this it would mean that i'm achieving some of my other goals like a 60% win rate, but more than that it would mean i've achieved consistent, demonstrateable success on a large scale. On a 10 lot basis I can pretty much make all of my dreams come true and work towards adding more size in the future. Lets take today, it was a crappy day with lots of mistakes, but I still came out ahead +21 pips. Ok, not great, but trading a 10 lot thats 2100.00. In one day. Yea. I could feed myself for awhile on that.
As i've spoken to before, and will undoubtedly again pros don't hunt massive amounts of pips everyday, they hunt a consistent small amount and do so with LARGE SIZE. Its much easier to get 10 pips a day than 100 pips. So why not get 10 pips a day using 10 lots and make your 1000.00 rather than try and make 100 pips a day using 1 lot. Its the same amount of money, except one has much more market risk involved and a much lower probability of consistent success.
60% Average Win Rate:
Pretty self explanatory. I feel that this system can be 60% successful in real time trading over time. If I can manage to achieve that it will not only prove the system but provide for an nice equity curve and constant account growth with the appropriate use of risk and reward on my trades.
Creation of an "Oh Shit" Fund:
I'd like to have a savings account created and built with trade profits that are put away for a rainy day. Not retirement or anything of that sort, but specifically relating to trading. Lets say taxes come due that I have a slush fund available to draw from to pay them off without touching my trade capital. Or if the worst should happen and I blow out an account, that I have enough put away to refund and start anew. And if I was unable to work for whatever reason that I could reasonably cover all of my expenses for over a year, if not two. I don't like playing things tight, and I like to have a big safety net. I don't have that net now but I want to re-establish one as soon as possible. Roughly, the fund should be at minimum 20,000.
Creation / Completion of LLC:
I'm working with Traders Accounting currently on setting up and establishing an LLC to house and incorporate all of my trading activities. There are lots of taxes involved with trading so doing whatever I can to minimize those costs proactively through the creation of an LLC should pay off huge dividends in the long run. Initial set up costs are projected at 1700.00 to go through with it.
New Trading Workstation:
Fairly simple... I'm currently trading off a laptop (with a semi-busted screen) and a second 17" flatpanel. Hardly ideal. I have to structure my charts in such a way that each currency pair takes up about a 3" X 3" square on my screen. I'd like to build a new trading workstation with 4 22" widescreen LCD's to trade off of. So I don't have to strain my eyes to see everything and everything can have a screen of its own so I don't have to go tabbing through various charts and broker applications. Conservatively this project would cost around 2500.00 depending on how carried away I get.
I'd also like to migrate over to the MultiCharts platform so I can just pay for a lifetime license and eliminate my monthly fees with Tradestation. However, I would have to find another brokerage that can provide data to feed MultiCharts. Multicharts licenses are 1500.00
Well that's about it... hopefully it will all start falling into place over the coming months!
Friday, August 22, 2008
Where to start?
I have been getting a surprising amount of emails and messages asking where I learned all of this stuff, how to get into trading, what kind of money can be made, etc. Its a great subject, and a daunting one for people trying to break into the profession. So I thought we could take some time and discuss the matter in brevity.
So why is this stuff so hard to get into? Information. Tons of it. The good news is it exists; the bad news is because you don't know anything about the topic you're unable to discern the scams and the crap strategies, analysis, and education you see laid out before you. Whats worse is for every piece of analysis, indicator, or strategy available there is someone, somewhere who disagree and has 9 different reasons why you should discard it and do what they do. It becomes a nasty catch 22 quite quickly.
Trading is simple. Not easy, just simple. At least it can be if you don't fall down the rabbit hole of using twenty different indicators, and a trading chart that rivals an air plane telemetry system. Less is more. The simplest strategies are outright the best. I talked to a trader yesterday who makes roughly 50k a week in the Forex markets trading 100 lots. His system was literally one of the most basic, rudimentary, simple systems ever devised. But thats why it works. If your system stops working, it is most likely how you are trading it, and not the system itself at fault. Emotions come into trading at each entry and exit. You need to be aware of this and how to handle it. Buy "Trading in the Zone" by Mark Douglas before you ever place a trade. If i had it would've saved me thousands in losses and months struggling to get back on my feet.
So you want to learn more? Here are the basics of where to start.
http://www.babypips.com
http://www.traderslaboratory.com/
http://www.tradethemarkets.com
Babypips is a great new free educational site. The best i've ever found. If it was up when I started over a year ago it would've saved me months of research. Trade the Markets is a popular educational vendor. Their systems do work. Sign up for their free video webcasts and check out their archived videos here. Traders Laboratory is a relatively new site that is vastly expanding and has loads of great content, postings, and videos that should teach you a LOT.
If you're interested in trading the methodology I do with my mentor shoot me a message and i'll refer you too him. Its not cheap, but its the real deal. You can see his free public videos here.
So why is this stuff so hard to get into? Information. Tons of it. The good news is it exists; the bad news is because you don't know anything about the topic you're unable to discern the scams and the crap strategies, analysis, and education you see laid out before you. Whats worse is for every piece of analysis, indicator, or strategy available there is someone, somewhere who disagree and has 9 different reasons why you should discard it and do what they do. It becomes a nasty catch 22 quite quickly.
Trading is simple. Not easy, just simple. At least it can be if you don't fall down the rabbit hole of using twenty different indicators, and a trading chart that rivals an air plane telemetry system. Less is more. The simplest strategies are outright the best. I talked to a trader yesterday who makes roughly 50k a week in the Forex markets trading 100 lots. His system was literally one of the most basic, rudimentary, simple systems ever devised. But thats why it works. If your system stops working, it is most likely how you are trading it, and not the system itself at fault. Emotions come into trading at each entry and exit. You need to be aware of this and how to handle it. Buy "Trading in the Zone" by Mark Douglas before you ever place a trade. If i had it would've saved me thousands in losses and months struggling to get back on my feet.
So you want to learn more? Here are the basics of where to start.
http://www.babypips.com
http://www.traderslaboratory.com/
http://www.tradethemarkets.com
Babypips is a great new free educational site. The best i've ever found. If it was up when I started over a year ago it would've saved me months of research. Trade the Markets is a popular educational vendor. Their systems do work. Sign up for their free video webcasts and check out their archived videos here. Traders Laboratory is a relatively new site that is vastly expanding and has loads of great content, postings, and videos that should teach you a LOT.
If you're interested in trading the methodology I do with my mentor shoot me a message and i'll refer you too him. Its not cheap, but its the real deal. You can see his free public videos here.
Welcome!
This is the first post in the new blog. I've setup this blog to track the progress of my trading on a day to day basis. It will serve as a way of keeping my trades (and performance) accountable to myself and other traders tracking my progress.
This blog is a continuation of my old blog By Age 22, that wasn't updated faithfully and wasn't fulfilled as my trading career waned over the past year. I hope to pick up and start anew in this blog! I have a lot to achieve this year!
This blog is a continuation of my old blog By Age 22, that wasn't updated faithfully and wasn't fulfilled as my trading career waned over the past year. I hope to pick up and start anew in this blog! I have a lot to achieve this year!
Subscribe to:
Posts (Atom)