Friday, April 9, 2010

Rangebound Today; Nice Gain Yesterday.

I committed to this trade. Not sure if I could've done this with real money. I widened the stop to exactly where I would be convinced that this would be a short. I was convinced that this was bullish and I set it and let it go.

The target was a little more than the stop amount, so basically the target was the depth of the base, which is about the only technical area I could come up with.

I saw it as a bullish cup and handle with very bullish internals, especially the TRIN dropping significantly from the bearish to bullish area.

Then it flattened out and I walked 5 miles to go pay a bill. When I returned I missed nothing.

Been very busy searching for an old check for taxes so I haven't been posting as regularly but will return soon.

Monday, April 5, 2010

Countertrend Trading Fighting Market Internals


This much gain in a countertrend trade fighting the market internals should be taken. The internals by this point should be supporting this trade but they really aren't and this is still in an uptrend, so this should have been exited and considered a scalp. I didn't and it moved up to stop out that was even wider than shown here because I widened it to over the prior bar, bad move.

With six ticks of gain, I should have at least moved stop to break even.

It's funny how real this all feels even tho it is the simulated account. I've been trading live for so long that I take this seriously and forget it's sim, which actually helps the process.

Thursday, April 1, 2010

Range Breakout Attempt Failed


No, you can't break out of this range, this time.

60 minute chart of NQ. 60m reversal bar pair.

Wednesday, March 31, 2010

I Think I learned Today

There's nothing like sim trading to let yourself make mistakes and learn from them without the influence of real money.

Real live trading and real money is not the way to learn.

We learn from our mistakes, the saying goes.

Do you want to pay for every lesson in hard dollars? I sure did for 18 months and I'm really not as far along in the process as one would expect.

There are loads of additional and impeding thoughts and emotions that go with real money loss and gain that complicate the purity of the lesson.

Today I can say, I impulse traded because I thought I saw a setup, but then while in the trade I realized that if I had just spent a few moments to analyze the situation in the way that I already know how to do, I would not be seeing red and losing here. But I can also say, hey, don't do that. Kill this trade, and move on.

Now what if there was real money involved? I would definitely not be so purely analytical about the lesson because I would now also have additional thoughts and feelings around this simple lesson. I might not even get to the lesson at all. I might not learn anything.

I might feel guilt, loss, grief, depression, anger, frustration, fear, greed, need, shock, despair, doom, having to cover the loss, paying, reloading account maybe, telling someone about it, and on and on and on and on. I guess you can say I've been there.

Today I have nothing but lessons. Here is a post by Dr. Brett regarding learning:

Awesome End of Day Drop


Wow. Did you see this? It is a fantastic drop with plenty of time to enter short and two great 5 minute reversal bar pairs. Then a close on low bar and bang bang bang. All the way down. Ouch.

I think I must have been busy blogging.

What a day.

Gain Final Trade of Day - Very Good Call


I liked the handle on the cup & handle formation there, but it was going very slow.

I had a snack. I sat down and saw that there was a break under prior 2 five minute bar lows and it formed a bottoming tail bar with a close on high. Entered long there and managed it well.

Saw that ES was at resistance and was potentially forming a double top.

Monitored internals and they were ok, had some decent gain so I advanced my stop to break even plus one.

Not happy when I was one tick away from stop because of severe pullback. So I decided then and there that I would exit on the next push. So I tightened up my target stop and it hit.

I was out and it was pretty accurate as price reversed there and then made a lower high and another nice reversal pair and dropped severely in the final half hour.

Exit Was An Entry


Looking back at the prior trade, I see that there was a very nice bull flag and my mistakenly early entry was lucky to be pulled up and out. However, there was a small bar that closed on it's high and indicated an entry if there hadn't been one earlier on the bull flag.

Used Al Brooks H2 But Incorrectly


So I was thinking that I would take H2 here. Great idea, only it wasn't H2, it was H3. And taking H3 long is a bad idea since Al Brooks theory states that after a failed H2, everyone expects two legs down. Great.

So in this trade I was thinking how internals were only falling very mildly. Price was holding up ok. I was so near to stop out I decided to try and manage my way out of this. Then some internals dipped and price did not. I then widened my stop to under support rather than at it.

Then NYSE TICK dipped and price did not indicating some bullish strength.

Then to fix my inability to find highs, I placed a line on close for NQH10 on top of my NQH10 candle chart to drill home into my head where the darn highs actually are.

This helped because I also noticed that two legs down happened after the H2 failure. So like magic price held on and started looking bullish.

Price then popped up out of this range and I exited with gain on a new TICK high.

Not the best exit considering this is a trending day and I'm still exiting thinking 'range' in my head. Price continued up a lot and that shows I wasn't paying attention.

I was more concerned with the thought of my gain rather than the market telling me that it was ready to continue trending here. ** common error.

Note To Self - Do Not Scalp


Scalp is an excuse for me to drop my discipline and gamble because it is a tighter stop and target. Always a loss for me.

Problem here is that NQ is doing it's normal thing of moving around more than ES.

Here ES is firmly entrenched at the top area and not breaking over it.

NQ is dancing around like usual and broke out over this top.

Going long here is not good because the pull back wasn't a moderately stepping down with bullish power, it was a chop right down reversal from the prior high. That's bearish and too much of a strong pullback to be entering long at that point.

Error; should not have traded there.

More Loses At Same Point As Earlier Post


Here's more detail into prior loss and 2 more after that.

I was too eager to trade (sim) and make up my sim gains so that I can trade live again. Well, it doesn't matter what the reason is, if it isn't based firmly on the facts of the market formations, then I will lose.

There was fantastic opportunity here in these rare trend follow thru formations and setups. I blew them all.

If I am going to trade live, I will have to make sure I don't repeat this kind of garbage trading.

Impulse Trade - Not Enough Time In Analysis


This was a mistake. My thoughts at entry were to jump in on this pullback in the downtrend. But there was a really strong bottom formation with BT bar testing the low for a double bottom and also a reversal bar that passed the prior low and reacted sharply up on that bar.

NYSE TICK also was divergent there and it was also making higher lows and there was a strong support point right at my entry short for an additional double bottom confirming the trend change and this is also a bull flag at that point.

This was a pause for the new trend direction to be continued. Big mistake.

Gap Fill At Open With a Small Gain


Gap fill long at open. Used old method of advancing stop to plus 3 ticks over break even. Not a good idea in this volatile open especially when I am very convinced of the NASDAQ 100 futures contract price rising to fill the gap.

I ended up getting only the stop advance when NQM10 rose up to fill gap solidly.

Included the NASDAQ 100 futures contract tick chart here as well to show the volatility and how the price made 3 really solid attempts to fill the gap each making higher lows and higher highs before pulling back. Very nice moves, very poor management on my part.

See later posts for a good exit I just made.

Faded Base Breakout On ES Double Top & NYSE TICK Weakness


The title says it all.

I saw ES had a double top.

NYSE TICK was pulling back and was making much lower highs than on the prior push where price didn't move nearly as far, creating a massive divergence.

Shorted this with stop loss set over prior bar.

Don't Fade Incomplete Bar


I attempted to fade this tall bar, but it wasn't complete. It's a 5m breakout of a base that doesn't have internals supporting it at the end of the day.

I got stopped and then decided to try it again.

See next post for the much better timed trade.

This was too low odds, but I did keep a very tight stop, but over all a mistake.

Range Trade Wrong For Trend


I'm so used to getting burned on my trend trades when market isn't trending and since I recently had some successful sim trades fading trend trades in a ranging market, that I made the mistake here of fading the trend. Oops. But I realized this and killed it.

I Love Sim Trading

I was able to work out a lot of things and renew lessons on impulse trading and how that feels and why it's so bad. Taking sim seriously is so good to do, I feel the same way as live trading and then have to remind myself it's sim and I feel relieved. I made adjustments and learned stuff and really looking forward to massive sim gains and then at some point reload account. This is gonna be good.

Tuesday, March 30, 2010

MATD?

I think I may have finally seen a good example in the market of Don Miller's concept of, 'morning after trend day,' MATD.

I don't know if it is true that there have been fewer trending days lately, but it seems like it to my limited experience in the market. It may just be that I am more observant of trend vs range than I was earlier.

Monday trended, I was surprised. Today opened with a gap up and it looked like a strong trending day was going to continue yesterday's trend day. But seriously, how often does that happen?

So Don has a theory that often, the day after a trend day has traders psyched up for more trending. There is an attempt made to trend that fails and is able to be faded.

It looks to me that this is what we have here. This chart is NQ 5m and the nice bullish pullback that continued up sure was a strong bullish move and then ouch. A continuation that failed with a long legged doji and it looked, at the time, that bulls could be pissed off by that. Looking back, it seems they were and the gap was closed by a ten point drop from the top.

Don is away for a week, I wanted to ask him if this is what he means, but I am certain enough that I can post this. If it weren't for the flooding over here I would have sim traded this with a short under the bar that closed on it's low. OTOH, it is at support in an uptrend, so you would have to really believe in MATD if you were going to counter trend trade this baby.

Monday, March 29, 2010

Sim Trade Gains & Loses

I sim traded a lot, and made some mistakes, but learned from them. Net loss on the day, but the mistakes I made were more experimental and I worked some things out with them. I have a hundred screen caps and notes from today.

In summary, I observed the problem with wide stops, taking trades when the current direction is weakening, not taking gains when they are looking realistically like the leg will now pivot, waiting for more - greed, and ending up with a stop loss.

The good moves were, excellently judging internals pushing while price is resisting and the end result being follow thru to the downside on my short TR7. Other good was realizing that the minor break on weakness seen by top tails was not going to continue, killing it before large stop loss, and reversing the position for a gain. TR5 & 6.

TR3 was good. TR2 was a very quick move that I took and as soon as I did, I realized that I was reacting exactly as those few who were driving price down on high emotion, I reacted fast and shorted as I saw the reversal up fail to downside, but this was a very tall bar and price was down at support and these bars were tall and volatile and I immediately knew that this was a trap, and I got trapped and took it and rode it and felt what it was like to be one of these traders. It is good and safe to do this when doing serious simulation like this.

Sunday, March 28, 2010

Knowing Versus Acting THE PAYOFF

In the Matrix, Morpheus says to Neo, "There's a difference between knowing the path and walking the path."

There are plenty of things that I thought I knew about but changing habitual behavior is huge and knowing about changing or even how to change or why to change habitual behavior is important, but it surely is nothing near the actual change.

What you don't see here in this blog because I have left it out, is my blow up on Friday, March 19, and Monday, March 22. That's because I have been trying to make sense of it and find the meaning before just putting it out there looking very stupid.

Ok, so the point to all of this directly regarding trading is to not trade trend strategies in the absence of a trend. Sounds very simple. Many things are. However, when dealing with changing habitual behavior, nothing is simple. The simplest rule could be the hardest thing to change. Try to tell an addicted smoker to stop. Some do, but those who have a problem with that find it difficult. Habits are hard to break.

I also knew about the part that is missing from what I know about the Pristine method, and that is fading moves.

On my own, after having things that triggered my frustration, I have faded trending moves, as well as taken trend method setups in the absence of a trend. These two things are what made up most of my losses.

Fading the extremes in a range is the answer, and the opposite to taking the trend-style setups in a range. *** This is where George Costanza Does the Opposite came into play a while ago.

There are those times where I am out there on my own, not having a rule to follow for the action I am seeing real time, that gives me the chance to use my intuition, but not having an expert trader's intuition or 'instinct,' leaves me with nothing but my trend method trading techniques in the range. That is why GCOPP worked the few times that I tried it two weeks ago, because I was taking opposite trades to my trend trading style and there was no trend. So this is the big, gigantic, revelation that I have assembled from all of these posts.

***THE PAYOFF for you all to read these semi-dramatic posts. They actually lead somewhere. Somewhere is something that I can use, but I think that the process might be valuable to observe. That is doing, analyzing, searching, introspecting, analyzing, observing, and eventually, coming to a conclusion that is a lesson.

In this case, a lesson that I "knew" about forever, but never deeply knew enough to feel and be able to walk it until in desperation, and after being unable to trade because of desperate trading in deep frustration, blowing out my account and then being forced to be analytical and process it all. The result is that I will be sim trading this new revelation of missing the lesson, until I see real results, then reload and carry on. I don't give up easily this is not over for me.

Range Into Trend - Thu Mar 25, 2010

I watched the market range most of the morning then break out into some nice trending action. I realized something big as I was forced into thinking and not trading since I haven't reloaded my account and I'm stuck sim trading or no trading.

Thursday, March 25, 2010

Wednesday Similar to Tuesday

There have been very long periods of no opportunity lately. But today, Thursday, Dr. Brett Steenbarger had some very good posts regarding this. I thought about it and realized some important stuff that I'm trying to condense.

Wednesday, March 24, 2010

Patience Required Tuesday


Very low volatility yesterday. It looked like no opportunity, but not true. If anyone had the patience, I didn't, there was a setup. The 5m and 2m charts were congested, but the 15m was the one to watch. I do watch it, but I don't usually take setups with it. Seen here, it was a really nice inverse head & shoulders with a perfect reversal pair of bars at the neck line for the move.

Monday, March 22, 2010

Stop Out OK

Planned to take NQ long after a breakout of the prior high. I did that and was stopped out. The internals were supporting the long as they were nicely bullish, but after the stop out I realized something. The prior legs were around 12, 5 minute bars long. I went long on a bar that was over the prior bar's high, but only after 6 bars. This leg was not done correcting. Since this was in a bullish environment for the day, the stop took a while and I was actually able to advance it as price advanced over prior bars.

So this loss was good. It was a valid entry and based on valid analysis and the market just wasn't ready to move at that point and this stop out proved it to me. With a little more insight, however, I think I could have passed on this one, but I would not place this trade in the 'mistake' category.

Summing the 2 sim trades for the day, the sim account is still up a bit.

NYSE TICK and Current Conditions



Really Nice Example of NYSE TICK Divergence and Extreme at a Pivot Top

The +1,000 TICK extreme happened at 13:05. NQ had a taller bar and both 5m bars of NQ & TICK closed with top tail. Notice that prior to the TICK extreme was positively one-sided TICK and that is bullish, but not very strong. Price moved up nicely anyway and the purple line is the advance decline line, ADD. It was rising so combined, this is bullish. I wasn't trading here because it was midday no follow thru time, but this was an exception to that.

Then the divergence came as NQ price continued to a higher high, yet TICK did not also notice ADD leveling off. There was a setup in there for a short if you wanted to scalp it.

The moving averages are still strong and I was not thinking short at all today so the bounce on the prior support and MA's and the little double bottom was nice and there was a very minor TICK divergence there also as second bottom had a slightly higher low on the TICK. From here it looks to me like a test of the highs and at that point we've gone a long way already today considering recent sizes of moves and I wouldn't expect another surge, but it is possible and if internals support it, I might buy the first pullback after a strong move up past 1951 NQ. Still on simulator.

Also, notice that the TICK extreme came at the end of a move up that was moving while the TICK was not at those very high levels of +900 or over +1k. So this +1k extreme was not confirmation of strength, but an indication of the end of the leg, more indication of at least a pivot and the leg down lasted for many TICK bars.

Gap Fill Gain At Open


Saw the 5m entry after bar closed on high and the gap to be filled. I couldn't hit the button fast enough and had to enter a market order. Took very little heat and it was on increasingly bullish internals so the heat was very short lived. Exited on gap fill for about 10 tick gain. If I was playing 2 contracts it would have been good to let second one run as internals continued bullish moves. I'll need a few more of these sim gains before trading live again.

Edit:
What was missing here was implementation of the GCOPP to my incorrect 'instinct' of taking a gain and exiting a 'winner.' I forgot about that as the action was moving and I was making screen captures.

Saturday, March 20, 2010

George Costanza Opposite Modified

The interesting part of this George Costanza Does the Opposite, GCOPP, is that I somehow knew where to use this and where it does not apply.

This is really important because it is tuning up my trading. I am not 100% wrong in trading. I have certain areas where I think that I must be using instinct. Or some kind of intuition or less-than-fully-conscious reasoning.

Where GCOPP was applied by me successfully was where the character, GC, actually stated his predicament in the Seinfield show. He said that every 'instinct' he had was wrong. He was really only applying that to certain parts of his life. Obviously, "every," decision wasn't wrong or he would be dead. The analogy to my trading does not apply to all of it. I know that some of my decisions are also correct. I have lots of proof of that. So the $1.6 million question, is, "Where does this apply and where does it not apply?

($1.6 million was made by Don Miller last year trading e-mini's)

Wednesday, March 17, 2010

George Costanza is a Better Trader Than Me

I just had 2 for 3 and the 2 were better than my last 50 live trades. I'll cap the charts to post later.

George Costanza Does The Opposite - Trade

After a long losing streak of sim trades, I did the opposite. Looked long, I shorted. As of 12:20pm, still alive after 1/2 an hour.

Simulated Trading


Not reloading account right now. Paper trading, sim trading only. Quadro NVS 280 Nvidia card died, no dual monitors for now.

Yesterday NQ was strange. I wonder what's going on with the market, is it me or does it look like a lot less volatility and a lot less opportunity than there used to be.

Monday, March 15, 2010

Mind Trap & Changes

I pressured myself. That caused stress. I was unable to function in that state of mind. Nothing I did made sense. Not going to post the ugly messy charts. I have to go back and take a look at the trades I made when I was 14 gains of 15 trades. I am also going to arrange it so that I am not using scared money. This new arrangement will take a while. In the meantime, I am going to sim trade and post those trades for sure. I'm still feeling very positive and optimistic almost even more so than ever before somehow.

Thursday, March 11, 2010

Gain - Much Needed - Gap Fill Play With Perfect Execution


Trade one Thursday, March 11, 2010

A Gain. Setup was after a confirmed double bottom, with a small consolidation at high with internals supporting with some gap to fill above with target at the gap fill point and stop under the inside bars that consolidated.

Wednesday, March 10, 2010

Lost Again - One Day Left as a Full Time Trader


Hit maximum daily loss today. I have one reload left, possibly 2.

I had a really strong feeling to short where I thought longs were trapped, but I decided to wait for "confirmation" that the Pristine Method teaches. So I waited patiently, or so I thought, and found their "Money Bar" setup and shorted it. I got trapped as this wide stop setup failed and as it failed, it became a strong setup for the opposite direction, a long, but too late for me. It had some decent follow thru to the upside.

I was also considering Don Miller's "Morning after trend day," as price popped over prior day's high just before this short. I should have stuck to my normal convergence of all internals that I normally use and not try to counter trend trade. Live, lose, learn, leave.

This happens and at some point there is a limit to how many losses any account can absorb.

2 Lessons From 2 Mistakes & a Kill

1: Rule broken, 'no initial breakouts or breakdowns.' From this error, learned, or burned in idea of, at least on NQ, every breakout and breakdown turns into a shake out. So never jump in on one. I took one and got shaken out and price continued. It happens, but I should have known better since it almost always happens.

Trade 2: Killed for right reasons, but slipped about 5 ticks on exit.

3: Good entry, but, especially after 2 losses, I was less than optimistic so I advanced my stop assuming I was going to lose again. Of course my advanced stop hit and I only got 2 ticks, then price moved for 12 points.

I won't be here much longer if I don't capture the moves that follow thru. I have good entries and I need to let the gainers run even if I made no more mistakes. Even if I was never stopped out again and killed for break even every time, without the runners, there is no trader trading and gaining. I have 2 days left if I don't capture any decent gains in these next two days.

2 lessons.

Monday, March 8, 2010

Accuracy & Level Headed Restraint in the Face of Frustration in a Range Day


Traders can become personally invested in a bias or a position taken. They may fall into defending their belief in being right or wrong. Other psychological influences on a trade could also be wanting to be in a position, letting a position ride, embracing the risk even if it has increased, etc. Today I was successful in killing a trade for the right reasons.

This seemingly insignificant event is significant to me since I've had a lot of interference in accurately assessing the current status of a position that I am in. Another interfering thing is anxiety. Frustration with the position and the market environment could also influence clear thinking.

The morning was in a range. When this happens, midday is a good time to stay near the trading platform since it is more likely to move then. Today I split anyway and went out to lunch knowing this. When I returned for the pm session, generally around 2pm, I saw that I did miss a couple of opportunities. I didn't let this affect me. Unfortunately, it was back to ranging in pm.

My only trade was based on internals and price, as they all are. In the trade, I reviewed my anti-anxiety notes on index cards and this worked again for me. I cycled thru all the internals and price and determined that there was a change in the market environment and it was highly likely that my position was not going to follow thru. I decided to kill with a market order and I was filled at break even. Only lost fees.

The market did turn around but not in a setup that I was able to enter. Later near the close, I got strong feeling of intuition that the move over the most recent high was going to break out. I resisted trading because I know that many times I've lost on that kind of trade, but back in Q4 2008, an end-of-day move like that might have exploded 10 points. I was programmed for high volatility back then when I started so I know now to resist certain feelings that are incorrect intuition and to only be fully conscious of all decisions based on my trading plan. I sure was glad I just watched it. It did what it does lately, nothing. NQ moved 3 ticks on the breakout that I sensed and then pulled in near the close.

I feel as good as if I had a big gain. Earlier today I didn't; I felt like trading was hopeless but I now know how to manage my mood better and I'm optimistic, and ate food. Psych for me is tricky, but I can manage it so much better thru my painful trading struggles for the past 18 months.

Friday, March 5, 2010

Loss and Gains Thursday & Friday Mar 4 & 5, 2010




Chart 1 is the breakdown I took that was a mistake, one of my rules is to not take breakdowns. This one made no sense considering that there was a big reversal up from the lows.


















Chart 2 after I regrouped and reset, I was able to function and got stopped out on a stop advance. Possibly too soon, I don't remember.















Chart 3 is from today. I entered the wedge on a bullish increase in internals. Exit was nice, looks like I sold on the ask. I had the order in there for a while.


Personal Discovery - Cyclical Moods

I have been digging deeply into my psychology for a long time. I thought I found out why I had a losing streak a few weeks ago. I realized that I was in a bad mood because I was upset about something specific and it lasted a couple of days and ruined my trading after a long gaining streak. It was more evident at that time since I've only had a couple of streaks of winning in a series like that.

What I discovered yesterday, however, was that, yes, maybe that time was a bad mood, but more importantly, I have ups and downs. I cycle through them. It sounds simple, but how else would I have discovered it besides being involved in a performance activity? In any other activity, a low state wouldn't matter at all. However, in a performance activity where your every move is judged extremely accurately by being quantified in gains and losses, the performer's details are amplified.

So these moods change how I think. I need these two moods. I am creative and deeper and feeling more in the low mood. It may not even be a lesser mood, it could be just as good as the other, not really needing to be judged, but really identified and managed. I will not trade in mood 2. No way. But now that I know about it, I am looking forward to it because it is a part of me and I have a lot of things I can do besides trade while in state of mind I'll now call creative. I refuse to call it, '2,' or bad or 'low' anymore.

There actually are things that I want to do besides trade and I never really knew when to do them, especially since I've been wanting to study and trade and analyze, etc. Now I know when to do art, music, writing, etc.

Trading was only supposed to be an instrumental goal, while my creative goals were intrinsic. I feel a great weight has been lifted. I now know myself much better. My obsession is not quite over, but contained. I am really psyched, it's like I can now manage my life for the first time, with just the slightest little new awareness. How could it have taken this long? Did I never try and stretch myself this hard? I feel freed from the confusion of my own personality attributes.

So I pounded the heck out of my drums and guitar last night and I think I almost feel like I can activate these states. Knowing that I was in creative state earlier in the day, I was able to re-enter it later at night. I don't even know if I know exactly how to describe this new competency.
At least I knew last night that I was up late engaging that mood and this morning I knew I was up too late to get to the trading platform right at the open. I took my time to properly prepare for trading no matter how late I was since I now know there is no shortcut in prep. Then I was fine missing some moves, then I stuck with it, then I analyzed correctly, gained on a scalp, took lunch, etc. Functioned.

"Know Thyself." I made a step in that direction. So this journal entry is mostly a personal one. Like a real journal, but I am posting it anyway. I feel elevated and calm.

I'll work now on the technical post to come next regarding yesterday's mistake that lead to this mood lesson, and the second scalp, a gain, and today's gain on a trade scalp.

Thursday, March 4, 2010

Bad Day, No Comment

Repeated an old problem. Made mistakes. More tomorrow.

2 Trades Wed 3.3.10


Funny, I forgot to put up the trades I took today. First was break even after advancing stop after it was ahead 6 ticks, and that was the perfect move. Second was a kill since it was nearing end of day and it was up at prior high and price failed to move higher on a NYSE TICK push up to prior TICK resistance point which said to me that it was out of fuel. Also the best thing to do at the time.

I didn't trade off the 1m chart, but these were so fast they look better on the 1m.

Wednesday, March 3, 2010

Link To Great Post by Dr. Brett

Dr. Brett Steenbarger posted a link to an older post that is really good. Keeping Grounded as a Trader: How to Avoid Going on Tilt.

It's one of those things that seems obvious but you know you wouldn't have thought or written it. I can visualize other people at work over reacting now and laugh at how weird it would be. I'm also picturing my trading with a loss or stop out or mistake and not taking it hard any more. I'm also realizing that I already know this in all my other occupations. IT, Music, Art, driving, etc.

The guy is good, really good.

Account Equity Chart Cheating


I shaved off the first 2 days from prior and this one looks a little better. It's cheating, but I did it anyway. This will improve. I am totally dedicated to it with my entire existence.

Lost on Errors Chart


Here's the chart to go with yesterdays' errors. This morning I realized that this error had a deeper mental component. I have missed the entries on the opening surge on most of the recent days. It wasn't ok with me, I guess I wasn't over it. I didn't know that about myself, so once again, a thought or feeling that was just under the surface, in the mildly subconscious, influenced my actions.

I have worked out many of those over the past 18 months. Why else would I break two of my rules? How could I allow that to happen? Because a stronger thought or feeling in my subconscious over ruled my conscious thoughts. Tricky stuff. So this little f*ck*ng programmed in 'virus,' ruined my mental operating system. My question to Dr. Brett is, How do I find these and eliminate them?

It's not all bad, of course, because I knew pretty soon that I was wrong, I tightened up my stop, and let it hit and did not re-enter. I knew something serious was going on. There were legit opportunities later on, but I guess I was subconsciously freaked out more than I admitted to myself since I just didn't trade again. Not a bad thing.

Today, there was a move up. This time, I felt the frustration, said something to myself about how it sucked, then calmed down and correctly analyzed that there was no opportunity. Then when midday arrived, I saw an entry after trend change, but I was hungry, I called the entry on StockTwits, then I went and ate food. I was ok with that. That is actually an improvement also. Then I dealt with missing opportunities all the way down. Then I correctly entered some setups on the bounce and correctly killed one and broke even on other. I was functional. And now because of today, I feel great. This is how I want to feel. This is my goal.

Researched Anxiety Last Night

I found interesting stuff. A guy who has a method for sale for $177. Reviews of that guy, and lots of other stuff too. Most of the stuff was regarding people who have an anxiety syndrome that affects them all day. I only get it when I'm in a trade, but I watched a youtube vid of this guy and he did share a bit of useful info.

I know how it messes me up & Dr. Brett has written about it. I am disgusted by it so I am going to stop it. I was able to trade today, it was a great trading day, but not in the right sessions.... On trade 1, I employed what I learned and I actually had almost none. I was in shock but it was really, really nice!

It was a hectic afternoon session, and trade 1 was a breakeven, trade 2 was pretty risky for some reasons I'll go into later, but I did have some anxiety, but again I fought it with the new info and it definitely helped. Then I was able to kill the second trade with only 2 ticks, but that was not a bad thing, it was an appropriate kill ...this time.

This is too much, once I start typing I can't stop. It's probably better that some people don't know how to type so well. :-)

In conclusion, I am PSYCHED. Because I was able to get the courage up to trade, make pretty good non-mistake trades, and make a dent in my anxiety in the trades, and finally, NO LOSS. Two trades and broke even including FEES. And it's very cool also to be using StockTwits and be involved in communication in this biz that can be you and your computer, if you're not in a prop shop or something like that.

Slow Morning, Fast Midday


The first 2 1/2 hours were hard to sit through. Mostly overlapping bars on all time frames. Two sets of ranges with quad tops with topping tails on them. StockTwits comments were confirming how slow the volume and momentum were. On this type of morning, midday sometimes wakes up. I went and got food, and missed the first short. Not expecting increased follow thru, I didn't mind, but then the momentum picked up and retraced the entire am gains in less than half the time. It was a nice move.

Tuesday, March 2, 2010

Lost on Errors

One of my trading rules is to have NQ aligned with ES but today I entered a long on NQ over the highs while ES was only rising from a pivot into the trend channel and was rejected from the top and my NQ long got stopped out. Other rule I broke was that the setup needs to be on the 5m as well as the 2m and the setup I took was really poor. Not sure what happened to me today. I lost a point and a tick and didn't trade after that. Definitely missed some decent setups.

Monday, March 1, 2010

Equity Curve but Only Very Recent


This is only the last 2 weeks because I just can't show any earlier...yet. I intend to reach my goals and improve on this. After it has improved, I may show earlier mess. I have never been this consistent. So I'm posting this to show that I finally am starting to trend upward. Gotta start somewhere.

EOD No Trade


Another one of these days of open move, then flat. The one I missed was the only one I found.

Great Entry No Patience.


The longer I am in a trade, the more I start to think it's going to fail. Not sure if this makes any sense, but I guess I've been there so many times. OTOH, I've never traded entries that are this good, ever. This entry is awesome. I waited for confirmation and placed my entry aligned with other time frames and internals. I might make a list of how to think while in a trade to take my mind off of the amount of time I am in a position.

It will go something like this:
~Amount of time doesn't matter
~cycle observation around charts of 2m, 5m, 15m, TICK, TRIN, VIX, VOLD, ADD, 100tick chart
~check on reasons for entry continuing to exist
~rather than killing with a market order, consider tightening target
~only tighten stop loss to under prior pivot on one of the charts – choose one, even 100tick
~do not make stop loss arbitrary
~repeat this list now.

Sunday, February 28, 2010

Friday Lightening Fast Breakeven Scalp

I had to do it. I was reading about a scalping method that I never heard of before. Look for Al Brooks. I had a 2m chart up and I saw the scalp setup near the end of the day Friday. I entered and moved up my stop to breakeven really fast as price was ahead 3 ticks. My stop was hit and luckily, no slippage, only lost on fees and commissions. I remember now, that Al Brooks said that he doesn't go lower than the 5m chart for this method because lower time frame charts have far more entry signals and he can't work them that fast. So I sure was lucky on the 2m BE stop out. And that was it for the day because I was unprepared early. Yea, I did it again, I got carried away studying the new stuff night before in a obsessive studying fit. However, I managed it well by knowing this about myself and not giving in and doing any damage. It was the final day of the month and there goes another one that's almost a gainer. I feel good about March.

Thursday, February 25, 2010

Gained; Hard Day but Good End


Drop premarket continued at the open, then we based for a very long time. Then a vertical 20 point pop took it to another long base. Very frustrating, but I didn't let it get to me. Then that base finally broke out and there was a perfect pullback right down into to the top of that base for a classic entry. I entered and then killed my winner instead of letting it run. Price moved 8 points, I got one. I think I am getting anxiety due to being under capitalized. However, if I continue to have excellent entries like this, even with small gains, I will eventually be confident enough, have a bigger account cushion, and have less anxiety in the trade to let the winner run.

My emotional state of mind triggered tunnel vision and I was unable to see my increasingly bullish internals that confirmed that the price was strengthening. It all pointed to being able to stay in the trade longer. It still feels like progress because I never let the waiting get to me as I had in prior days, even this week.

So with the goal of less frustration from waiting and missing moves (see earlier post) going well, the next psychological goal is meditating with being long in a winner and not having anxiety and making a list to follow in order by rotating my focus around the screens to actively monitor the state of the market. That's what I'll be practicing for the next few days.

Wednesday, February 24, 2010

No Trades, All Analysis.


Market moved pretty wildly today on the news, but after looking at it some more, I realized that the news seemed to only temporarily take down a chunk of the strong upleg that did continue and then pull back before midday. That's why this chart is so ugly. I over wrote it with corrections to my original analysis.

I also didn't want to trade because, in the past, when I had anything new to look at, I would get excited by that, and try to trade it in place of everything else in my system. Well, I guess I worked enough on that problem, I don't have it any more. I also didn't have that problem when I recently added MACD and Ichimoku indicators on a couple of charts.

What was new, was Al Brook's micro trend lines and his H1, H2 and L1, L2 breaks from them.

I ordered his book on Amazon; also got the 1st 50 pages from Wiley. Just discovered T2W. It looks like a really large and active site, where have I been?

Back to reading now. I know I missed a lot of entries today, and the work that I did yesterday really, really helped me be OK with not trading the big moves today and not freaking out about it. I am dedicated to progressing thru any and all remaining issues that I have. Intensity hopefully won't alter my being in "mind #1" (see Psychology of Trading) but if I think it might, then you can bet I won't be trading. Enough, back to studying.

Morning; Been Meditating on Missing Moves as Well as Communicating With the Trading Community.

It's pretty cool to be able to add to my coping skills, the ability to reach out and communicate with the trading community. see Dr. Brett's Coping.

I made an index card regarding missing moves:

Missing Big Moves is a Fact
They help you find the direction
mm happens all day & night and in LIFE
mm is ok, it is a challenge, you may have only missed the start, so stay focused
(potential setups may include: 123, doji, pause, micro trend line)
mm is a part of my system
mm is better than losing in high volatility
Get over it
mm could lead to a setup when done

I have been constantly placing my mind in the trading position of looking at my monitors and visualizing that I just missed a move and I have been reprogramming myself to not care, not react, not allow it to bother me. Technique from Dr. Brett's Step 4 in Coping post.

I also discovered an awesome post in the blog of, My Trading Edge, that has a video by a guy I never heard of, Al Brooks, and I ordered his book on Amazon. I already incorporated his MICRO TREND LINE into my system. I combined it with NYSE TICK extremes and will be observing it today. Thanks to My Trading Edge for that!


Have a good day, traders. - J

Tuesday, February 23, 2010

A Loss, a Gain, and a Goal; Tech & Psych Today.


After the opening volatility there was a nice flat 2m base and we were all waiting for the Consumer Confidence report. The base broke, I watched. 20 point NQ drop in 15 minutes. There were a couple of pauses that were entries, but I've never been able to trade these am moves that we have had for a long time now because my trading plan calls for using established support and resistance of intraday internals that haven't printed yet.

In the low volume, low volatility, no opportunity aftermath, I was analyzing and started thinking how all of the internals never seem to align much lately and how my system is difficult to follow for that reason. I was wondering if there was a priority or if it is so discretionary that I might as well just follow price. What I didn't realize is that I was feeling frustrated from missing the move and I allowed it to influence my behavior, an old habit. So without confirmation, that my system requires, I anticipated a double bottom, went long and got stopped out. It took a while for me to figure out what happened. At first I thought it was just a good stop but as I realized and documented everything, it was a painful mistake.

After lunch I was almost fully back to the right mind. Found the bear flag, saw that it failed and there was a bull flag following it. I didn't enter after the bottoming tail bar long, that was a nice signal that I noticed too late. Then I was given a lot of extra time, as price was going slowly, to enter the first pullback after the bull flag uptrend confirmation. Small gain, but it really helped.

I then documented again, and missed the next couple of dips that also followed thru, but I was just glad to have recovered.

Experience today shows me that I need to realize how much I am affected by not being in on a large move. I keep trying to rationalize it away so it won't affect me, but that doesn't work. Somehow, I need to know it, rather than deny that I am feeling, and then have those feelings sneak in and mess me up. I have to somehow confirm, accept, observe, or admit that I have been affected and then somehow deal with the feelings, in order to remove them or minimize their potential impact, before they affect my thinking. I don't want to give in to them, I am trying to control them, I am trying to say that they aren't there, but since I can't do that, I can try to cover them up, but they are too strong and they influence my thinking and mess me up and I make a mistake.

My plan is to consciously say to myself that I saw a large move. That's a start. It is getting me into that feeling already. Then, I will say to self that my trading plan does not include that large move, however my plan does have an edge that works. Then I will put the index card up that says, “The plan works, bring up the documented charts with all the gains of my plan from the past.” Then I'll pull them up, or remember them.

Question: Does anyone know where Dr. Brett Steenbarger references this in his 3 books? I have them all and I'll be searching tonight. It could be that this is everywhere in them. Leave a comment, thanks. - J.

Monday, February 22, 2010

All Psychology Today; Bad News Good News

Summary: Up late, schedule was off, stuck to rule of no trading if not sufficiently prepared. Didn't trade, learned a lesson, no regression, am session messed up, stopped at noon, (another rule, no midday trades bc of low volume little follow thru) tried pm session, had low energy, passed on some setups that actually followed thru. Missed the big one at end of day. No gain, but more importantly, no loss, because I never once regressed or allowed frustration or anger or boredom, etc, to affect my behavior.

Details: Last night I had a weird thing happen, it never happened before with trading. I had anxiety thinking that I might regress and repeat old habits that got me into trouble. So I blogged it and didn't get to sleep on time. I made a plan and put it on the blog. My subconscious worked well for me, I woke up 3 minutes before my alarm exactly 3 hours before market open like I had in my plan. Subconscious works in our favor a lot, luckily. Even without enouth sleep it knew the plan. Then I decided to sleep more. I also decided to miss market action and prepare; in the past I actually did, many, many times, try to trade without the prep and paid for it.

So that's why I say the bad news is the anxiety night before, the schedule lapse, the missing action, the no trading, the less than confident analysis leading to passing some setups, and another day of psych rather than tech. No trading gains.

The good news is that I was disciplined in my control of my errors. I knew what I did wrong, corrected it as best as I could, did not allow it to negatively influence my equity, never once lapsed into poor trading or old habits, knew I was feeling off and decided to not have 100 percent confidence and therefor analyze and work just as hard, but not execute. This may seem to be not so big, but it is for me because of my prior behavior of doing all those things that I managed to not do today. No trading loss.

So I post this even tho it's rather embarrassing for a reason; I actually progressed in the psychological trading realm. I am far much less of a mess today than the prior 20 months. This is ugly, but my handwritten journal from that period is far worse! This is the end of the adjusting, imagine the beginning and middle....

I'm getting that feeling I got Thursday, it may all click soon for me, it may not, but feels good for tomorrow.

Sunday, February 21, 2010

Sunday Night Thoughts Regarding Monday

So something happened last week. I feel different, and I traded perfectly, in the zone Friday. I need to continue that this week. I'm gong to get a little new-agey on it now. I'm having a hard time consciously describing all of these changes that sum up my new functionality. So I am meditating them into a rounded beach stone because it took a long time and a lot of work for the waves and sand to curve the rough edges into this smooth surface. This stone represents the changes I've made and I am anchoring my new polished ability to this polished stone. The intangible changes will be more solid for me to remember and focus on with this rock. It is a symbol of my new reality. It is disturbing how many times I've regressed so I just need to know that I am now dedicated to this card on my desk that says, "Passionate adherence to the strategy is what it takes to succeed." Most likely something I got from Dr. Brett's blog.

So the plan is sleep in 1/2 an hour. Up with 3 hours to spare, prepare, read documents regarding my method, trading plan, items to remember, checklists, and know that I am now doing it right. So I will extend the "passionate adherence" to the rest of the day that takes care of the trader, not just the market hours and trading plan.

Sometimes Mondays are sloppy, I don't have to trade. Feels like time to re-read my good-psychology page.

A Great Post Link and I added 2 Pages on Psych Stuff

While reviewing my new pages on Psych stuff, I remembered that I had read something regarding pain on Dr. Brett's Traderfeed blog. I searched and found it: "...rarely do we stop to consider that trading is creating pain for 80% or more of its participants." Here is the link to his post: Painful Truths About Trading

As I read my 'bad-psychology' new page updates, I realized how much pain was involved in my transformation. I don't think it was a bad thing, since it worked, and I needed to go thru it. I wouldn't change anything considering where I feel I am now. Dr. Brett makes a good point though, that it surely isn't ever going to be mentioned in any list of requirements to get to be an improved trader! I can smile now as I say this. Also, what I went thru is similar, but certainly not a path required for other beginning or losing traders to take. It was just mine, although there will be some similarities, I would hope no one else needs to take that much pain! (still smiling)

There is a need, however, to somehow find out if the process and pain is actually beneficial. In my case, I knew it was. I don't know the answer, but in Dr. Brett's post, he does mention the destructive results some traders end up with, and that is a good warning. My unique circumstances worked constructively for me. I just can't list all of them here. That is where an outside opinion definitely would be worthwhile.

I am going on and on here as if I was a great trader already. So I'll end this here and work hard this week to continue my very small and very recent start at being the trader I need to be. I am very optimistic, however, and I will post my results this week. Gains or losses. Losses or Gains! - J

Friday, February 19, 2010

Good Time Jus Now. Here's the Two Trades I Just Took and Gained. I'll Explain In Later Post.

Just feel like posting this now, before composing an explanation post, like usual. I planned the trade, traded the plan. Ok, the first trade was moving very fast, I advanced my stop to plus 3 ticks like I said I wouldn't, but that's actually ok since NYSE TICK was at an extreme. (BTW, this is only the NQ 100 tick chart so trade lines can be seen since 2m chart they can't be seen because the trade lines happen in one or 2 bars.) So I was processing whether to be upset with myself or not, but somehow I got over that quickly as *** my original plan that I tweeted to Stocktwits started to appear, which was to watch the breakout and take the retrace. so there was the retrace, and just becuase I just exited a trade, there was no reason not to re-enter especially since it was a gainer. (in past mistakes I would be doing screen caps and analyzing) So I took the retrace and decided a modest target here was appropriate considering the volatility, proximity to the end of January's resistance levels, and the NYSE TICK had already gotten extended. So that's my thoughts during the trade as they are fresh in my mind. I do plan to mark up some screen caps with arrows and lines later, but I need breakfast. Good luck traders.

Thursday, February 18, 2010

End of Day Analysis - I Found the Entry of the Day And Screwed It Up But It's Not All Bad


So I am getting to feel better regarding my new lack of urgency to trade and my new lack of compulsion to trade and my new respect for risk and I can go on and on, but that's already in my 800 handwritten pages of my personal journal. The part of today that is not all bad is that I am not trying to trade anymore. I am just analyzing and finding the entry. Once again, I did. So it's not all bad.

The reason why I wasn't really ready for the entry is the remnant of my prior trader self. I was doing all the right things today, however, and this is just crazy, but not nonsense, I was just as pessimistic of my chances for success as I had become due to my prior trader self's poor trading. So here I was today, being a skilled analyst, but still not believing yet how far I've truly come. I am giving myself time to get it, even tho I really don't have time, I don't have any other choice. I am going to keep analyzing and find the "the" entry and one of these times, I will take it and I will have the right stop and it will work out fine. When doesn't matter any more because I am allowing myself to do it when I feel I'm ready. Maybe just writing this here will speed that up. Maybe it will be tomorrow. Stay tuned.

Another Embarrassing Error

I analyzed, I stalked, I got distracted, I pounced, I was in the simulator. I missed the setup at 2:18pm. There will be another and I will be ready for it.

I Now See a Potential Bull Flag With Support on 15m


With prior post suggesting bullish bias, I am now considering a bull flag situation. I will be looking for strength and pullbacks unless this all changes.

Interesting NYSE TICK Formation With Upside Break Here


Centered over zero and moving average over zero with both extremes coming in and a bit of a break to the upside here at midday.

Wednesday, February 17, 2010

Chart From the NY Traders Expo Tuesday Morning NQ Trade Feb. 16, 2010


It was the only move of the day. They were lucky to see anything. After this, the market was super flat. I didn't trade with them since it was something different from my normal routine. I learned a long time ago not to mess with anything that distracts me. I can't see from my low quality screen captures where the exact entry & exits were but the video will probably be available to view eventually on their website.

Tuesday, February 16, 2010

No Trades but Watched Great Trades Streaming from NY Traders Expo

I was there yesterday, Monday, and it was really great. Found good NY pizza and fresh Bass Ale across the street. I mistakenly walked west to 8th ave from the Marriott and was glad to see the good stuff away from Times Square.

The traders traded the NQ this morning. The video will eventually be available on the Moneyshow website.

Sunday, February 14, 2010

Baby Step Towards Helping Myself With My Risk Aversion That Causes Me to Ruin Good Trades With Wrong Stops

I decided that on the stops that are too wide for me, to take the chance of missing the trade, or waiting for a possible retrace and enter with stop or retrace peak, rather than original.

This doesn't really guarantee anything either, it could still test the original top, but I think it might be a little less likely.

I'll see how it goes and post it, of course.

Saturday, February 13, 2010

When To Break My Rules.

On my Friday, Feb 12, 2010 early trade, I entered a trade based on a signal from the 2m chart. During this trade, I realized that I had a rule to only enter based on 5m signals and I had broken that rule. So As price moved up towards the 5m high of prior bar, where the signal should be, I saw that as potentially resistance. So I decided there to kill the trade since I am really dedicated to only trading the plan. I had problems earlier not trading the plan and being disgusted with myself regarding that, I really wanted to stick with this change. Blogging is a part of this. Here is the link, again, to Dr. Brett Steenbarger's blog regarding disgust: http://tinyurl.com/yhxxpkq. I wasn't thinking clearly enough to realize that if the 5m prior bar hi was broken, then this trade was fine, since I would be in at the right place. I exited on the kill with only 2 ticks gain, but of course, price moved up 10, and then paused and then 10 more points for something like a 20 point gain. Not a total loss, since this confirmed to me once again, that I am able to find a good entry. I wasn't able to move fast enough to re-enter, I also take extensive screen captures to make slides of my trade so I was distracted.

The interesting thing that happened on the same day, was the formation of a setup that I did not enter on the 2m trigger, but waited for the 5m trigger and took it. This time, however, the move from the time of the 2m trigger to the time of the 5m trigger was a really good move and, btw, it would have helped me on my mistake I made in this trade, if I had actually entered on the 2m trigger. So after the trade, I analyzed the charts and realized that there were enough internals at the time of the 2m trigger that were strongly supporting that entry. By the time of the 5m entry, the market AND internals were ripe for a wiggle or minor retracement. What this means, is that the 5m entry, no matter how good it was, had a location of the technical stop that was wider, much wider than the stop location based on the 2m trigger and the 2m was actually better. This leads me to opening up this rule and allowing greater discretion regarding this part of the plan, 2m vs. 5m triggers.

My mistake was using the wrong stop location for the 5m entry. It happened to be the amount that was enough for the 2m stop, interestingly. So I had an arbitrary stop rather than a technical stop and it hit right at the very peak of the minor retracement/hop/dip/pause/wiggle before price followed thru to my intended direction that I had analyzed correctly, and btw, worked for hours waiting for, stalking the market, to snipe it at the best time, which actually was the best time. So that was the one thing I did well, enter. My pattern of errors here is in the management, not entry, so at least I'm improving something.

In conclusion, I now give myself the option of the 2m entry only if it makes technical sense in price pattern and internals.

I'm delaying next post, see link as to why.

http://tinyurl.com/yhxxpkq

Maybe I'll post my final trade from Friday at some point....

Friday, February 12, 2010

Lesson Was Finally Learned By Me & Here Is the Result - I Stayed Out TODAY


I promised I had a lesson coming that shows that I finally followed the lesson that I learned many times before. So I stayed out of this long this time for the right reasons. Yes, it takes me a long time and a lot of repeat lessons before I can change my habitual behavior.

Here is the result, I stayed out of premature long where I would have lost on a stop out, and this also shows me entering long at the right place. ...of course this was all messed up, so learning one thing is nice, I have a lot more to go.

And left is the adjustment I made in interpreting NYSE TICK. I waited for the crossover of the zero line to complete at the lower area of where TICK support theoretically exists.

I'm Not Feeling So Good Now


I was in early once again, on a move, and then exited before I could get any decent gain. OTOH, I am not fudging or messing with the rules and the plan. So in this case extreme discipline got me out (because long signal wasn't on 5m but on 2m) in the long run, this should be a good thing. It just isn't good now as I see over 10 NQ points go without me. That tiny little green line betwen bars was my entry for 2 tick gain :(

Good feeling tho on a decision I made just before this long. I'll work on that post now. Post to follow this one in a minute.