Friday, January 16, 2009

Trading ends early today!

Option X + 3 Day weekend = Probable chop. Yea, i'm sure they will slam them around back and forth in 10 point moves but it won't be fluid movement, it will be program slams that come out of nowhere. Not a lot of opportunity considering the amount of time required. So i'm choosing to start my 3 day weekend early today. In fact, i'm probably only going to be trading the first hour or two on Fridays from here on out.

Most Fridays are indeed crap to begin with but mostly I spend 6 and a half hours a day literally at the screens 4 days a week. No lunch breaks, no breaks of any kind. Its hard, intensive work and on a Friday quite frankly I think I deserve a break. If it hasn't happened in the morning most likely it isn't going to happen so why spend the time? I'm choosing to use Friday afternoons as a nice break from the action and a reward for the solid focus from rest of the week.

I took one trade this morning... looked like I was screwed for sure, but I stuck with it and the outcome was a par trade. No big deal. That's means I took another trade that my system protected me on. And starting next week another trade that would've gave me 12.50 in profits.

So a couple other things to mention. Statistically I have something close to a 50% chance of taking par on a trade. As you can see from my results on my spreadsheet that also equates to a total of over 120.00 in commissions thus far. In all of the cases where i've taken a par a tick would not make a difference in keeping me in the move or getting me out so i'm going to start next week by getting to par +1 tick. This will give me a bit of extra profit (137.50 so far had I been using it!) that will cover all of my commissions. Commission is a VERY REAL part of trading profitability as I proved with my backtest on my "Method 2". I found that by reducing the number of trades I literally was making more money by overcoming the commission fees. Speaking of "Method 2" I thought I would post up its equity curve so you can see how its doing so far. Banner week for it this week setting new equity highs and over 1900.00 in profits thus far during this two week period. The equity curve also looks identical to the one in the backtest but I think you'll agree the drawdowns are relatively minimal and the growth remains constant.

The other big news is that I finalized my newest trade setup last night. Its something i've been following for awhile after watching price action interact at various points on the chart that I was already watching. Using my same tools I was able to create a rule set that captured high odds (We're talking close to 90+%!!!) low risk setups that yielded a 1 Risk : 2 Reward setup. Yesterday alone there were two signals that went par (+1 tick) and winner (+3 points). They are simple, they work, and while they don't happen everyday (or every week sometimes!) when they do occur they perform.

I call them "You're Screwed" setups because i'm stepping in at a point in the market where the pit is robbing people of their stops and I just get on board to allow the pit to push the market for me as stops stampede into the market. Most importantly i've found this pattern on every currency, in every timeframe, all the indexes, they work everywhere! So i'm very confident in this additional entry and will be trading it live next week. I hope that this can supplement the loss of my other setup earlier in the week which needs tweaking to say the least.

And the last point. I hit my first goal this week of closing profits on the end of the week since we started of over 500.00. This means I can finally (after two months) get a haircut! Next goal is 1000.00 at the end of trading on a Friday and then I get to go to Buffalo Wild Wings for some scrumdiliocious hot wings. Small goals - but effective ones that I look forward to and work towards everyday. Furthermore this has been the most profitable week of trading thus far. We ended up grossing 412.50 in profits!!! Just think of how many signals I botched, that par trade mistake that cost money, the profits from all the par trades I didn't take and the five "You're Screwed" setups I didn't take this week. Next week is going to be every better for sure!!!

Enjoy the long weekend! I intend to!

Trade Results:



E-Mini Player said...

Good stuff man. S&P > FX :D

Matt said...

Tell me about it!

I kept tracking the EOT results...

I posted that the system had made around 1900 around 12pm... its 2pm and its raked in a total of 2287 now... 987.00 today alone, 1650 on the week, 67% win rates (but that can't last!).

One things for sure, it makes money and I can't wait till i go live with it!

Michael said...

Congrats on the good week, I like your goals!

Gustavo said...

Congrats man! It seems like you have a very good strategy. I actually saw your videos on L4P and found them very interesting. I'm also a recent 23 year old graduate and I trade the forex market. I'm trading live, but nothing big right now. I just want to make sure I have consistency first before I invest more money. I do check your blog every day just to check on your progress. I wish you the best and keep it up man! Wondering if you are going to post any more videos and also if you traded the forex market? There is a new show on BBC called "Million dollar traders" which is very interesting and thought you migth like it. You can find it on youtube. good luck!

Matt said...

Hey Gustavo! I'm glad my videos helped you! I had intended to do more videos but I had computer issues which forced me to reformat my HD and I lost everything. When I reinstalled windows the drivers for my Microphone have been screwed up so until I can figure that out i'm kind of out of luck for producing more videos.

I did trade the forex markets and I intend to in the future. I think they provide lots of great opritunity but for right now all of my money is consolidated into one account so I can trade the e-mini indexes. Most likely the next market i'm going to trade also is the NQ but i'm probably going to wait at least a month or so and keep pounding away at the S&P for now.

Thanks for the heads up on the BBC show - I actually heard about it earlier this week and watched the first episode on youtube. Very interesting stuff for sure!!! Very easy for me to relate to the fear/emotion the new traders are feeling.

If you ever start you're own blog for your own trading let me know as I'd like to follow your progress!