Sunday, May 31, 2009

Where do we stand


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I've read more than a couple of traders that have been calling for a continuation of Friday's last minute short squeeze into a potential multi-day rally in the coming days. That could very well turn out to be a correct prediction.
However, we really haven't worked off the overbought conditions created by the 2month rally that started back in early Mar/09. Also, the $NYSI is still over 1000, another sign of overbought conditions. If we do rally from these levels, I will watch the $NYSI still to see how that all gets resolved, who knows, maybe it is not as reliable an indicator as I make it out to be.


I've been following Don Miller's blog a lot lately. I've noticed that I don't blog about my losing trades as often. Part of the reason has to do with laziness on my part, and there are those times where I just don't have the desire to talk about my screwups. But slowly I am realizing that there are still many parts of the "process" that I need to work on in order to attain the goal of consistency. Don Miller's technique of grading his trading performance at the end of each session was something I was trying to do, but just did not have the capacity to keep it up after a while.
I've also been using Twitter more, and that took away from the time used to blog here.
The solution as I see it is to be more disciplined with my time. My trading session ends when I go to work, but now in order to everything that I want to do (and to write about it on this blog), I need to enforce a definitive end to the trading session, even if it means missing out on some trading opportunities, and especially if I just came off a losing trade.
There are two simple things that I want to do: grade my trading performance each day, and write about it (even if I don't feel like talking about it), and start documenting some "set and forget" trades. Simple tasks, but tasks which require a committment on my part, hence the need to organize my time by enforcing an end time to my trading session.

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Wednesday, May 20, 2009

(Mis) adventure with the Yen


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long 6JM9@0.010460, exited @0.010477

I changed my stop to 0.010405, and held the Yen overnight, and basically waited until the trade was profitable before exiting.

Despite this being a profitable trade, there were oh so many things that went wrong with how I managed the trade:
a) I didn't sell when it dropped below .010443, ie. I moved my original stop lower.
b) I didn't use bracket Trader
c) I got into a "hunkering down" mentality which prevented me from being objective about EURJPY, which meant I incorrectly passed up trading opportunities, esp. on the EUR side of things

Even though I was confident that the Yen was in an uptrend, I still should have taken the small loss and wait for the better entry. This shows that I still have trouble taking the punches from time to time, and must continue to work on that aspect of my trading if I am to deliver consistent results

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Thursday, May 14, 2009

Taking The Punch

They say that to be a good boxer, you have to have the ability to take a good punch.

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I had just woken up to see that the Euro was on the upswing. The swing low during the overnight session was 1.3535, and in fact the Euro double bottomed at that price level. It looked like it wanted to challenge the overnight highs, so i got long @1.36.

No worries, the structure of the chart indicated that this was just a pull back. It was safely above VWAP, so I added to my position @1.3592 and again @1.3581. Then the test of my patience began.

I pre-calculated my breakeven point (91), and when I saw price recover to 1.3597, I thought well, good, just take out my worst entry (1.36), and I will be in a very comfortable position. Except that never happened. So I stubbornly held it while it drop back below my breakeven point.

Euro probed 1.3595, and when it failed to break above 1.36 again, I unloaded one position @1.3593. Then I sat and waited to salvage this trade. Then the triumvirate of fear, uncertainty, and doubt paid their visit yet again. Euro went sideways for a while, and as time wore on, I wanted more and more to get out of my position. As a result, I failed to observe that this sideways action stayed above 1.358 the whole time, and in fact there was a semblance of a mini-box pattern setting up. So when it broke out of the boxed range, I sold my remaining positions @1.3585 and @1.3594.
So, net profit out of the trade was around -$15. The frustrating part was that had I just stuck to my original plan of waiting for price action to take out my worst entry @1.36, I would have netted over +$200 profit. Instead, I had to eat a -$15 loss.

The only silver lining out of this fiasco was that I did not let my emotions go out of control. In the past, I probably would have went on tilt and try to revenge trade my way back to profit. Instead, I ate the frustration and loss, and stepped away from my station so that I can mentally recover from this trade.

In trading, like in boxing, success really comes from the ability to take these hits and recover.

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Monday, May 11, 2009

It's The Mistake


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Yesterday I had a pretty good read on the evening session. For example, I didn't get worried when JPY futures dropped below my entry point, as I could tell from the structure of the chart that it was just the Asian traders taking profits and closing out their positions. My CAD short was spot on. EUR short also worked out well.
In fact I was feeling on top of the world with a 100% win rate.

Then came the North American session. I made one trade in ES and it turned against me for a 1pt loss. I made that back with a EUR long. However, I started getting tired, and decided to take a small nap before waking up again to head out for work. I woke up from my nap to find that I was short the EUR @1.3583, and EUR was currently 1.3627 !! What the heck happened? Then i remembered that I left a open order to short EUR before I took my nap. Talk about your dumb mistakes. Then it got worse when I tried to make up for that lost mistake by shorting EUR @1.3628. It almost worked, but I wasn't patient enough to hold that short all the way back down to 1.3583. It wasn't the lost profits that I was frustrated with, it was more just the one momentary lapse in concentration which screwed up my performance.

Trade Mgmt was decent, and could have been better with more patience.
Entries were good.

Focus & Alertness: was pretty good until that one moment of sloppiness in my part
Patience: could have salvaged my loss if i had waited longer with my EUR short @1.3628
Discipline: stuck to my plan for most of the session
Staying Out of Trouble: was pretty good until that one moment of sloppiness.

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Saturday, May 09, 2009

Ridonkulous !


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The McLellan Summation Index ($NYSI on has me convinced that Mar 9/09 was the low, and everyone is waiting for a pullback to see whether that was the low. However, this pullback refuses to materialize, as every reason to sell (eg. hitting resistance levels, bearish candlestick patterns, technical indicators flashing warning signs) has only been temporary, and resolved to the upside.

The bullish strength of this current market must be respected. For me, that means now is not the time to be agressive, but rather, it is more a time to sit and wait to see how this all gets resolved.

The Euro has been just as tricky. I was leaning towards a short bias as it approached significant resistance @1.35, but that was resolved to the upside. I'll need to do some more analysis of the Euro charts in different time frames to see if there is anything interesting enough to trade off of.

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