"If You're afraid to fall, then you fall because you're afraid."
-- Daniel ILabaca
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found this video courtesy of @FuturesTrader71:
Fear of failure. This is an issue that occurs with many traders. The first time it happened to me, I took time off from trading. Now I think it is happening to me again.
To my knowledge, the recipe for dealing with such fears is to change my attitude. The primary concern should never be about being afraid to fail. As a trader, the primary concern should be about dedicating yourself to this craft, stalking the next setup, planning out your next trade, visualizing how you will perform when it really counts. The next losing trade is always going to be right around the corner, there is nothing that can be done to change that, therefore, there is also no purpose to be served in fearing it, or worrying about it. All paths towards the goal of consistency always goes through the facets of patience to wait for the right time and the right price to execute trades according to plan, and discipline to execute your plan in the same way, every time, day in, day out.
I think this is my interpretation of "living in the moment." Flush my mind of destructive thoughts, and replace them with constructive thoughts.
So it shall be with me, as I try to replace thoughts of fear of failure with thoughts of how I am going to plan and execute my next trade.
Tuesday, February 09, 2010
Choose Not to Fall
Saturday, February 06, 2010
The path to consistency
Consistency is the holy grail.
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Well, as this blog is my witness, i was unable to commit to 20days of posting the pre-market notes. As it turns out, there was a day where I could not find good trades, but I felt obligated to point out trades in my notes. So, the resolution to that conflict was to not write any notes.
However, once i stopped the first time, it was like undoing a good habit, which I do not want. So I will try a more modest goal, which is to produce daily pre-market notes for the remainder of this month. After that, I will re-evaluate.
Sunday, April 26, 2009
Euro Upside Exhausted?
Traded the EuroFx futures in the evening session.....
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Short E6M9 @1.3220, stop@1.3235, exited @1.3185
As mentioned in my Twitter tweet, I had a downside bias for the ES, and this also led me to a downside bias for the Euro as well. Euro opened Sunday Evening's session with a small gap down that was filled. But on the hourly chart, it looked like the odds were high of a continuation of the selloff that started near the end of Friday's session.
I watched the tape, and observed it spent more time in the mid 1.3225's rather than challenge the session high of 1.3241. So on the next time it made a new session low, I shorted. The retrace came as expected, but it was shallow, never exceeding 1.323, so my initial stop was safe!
Then I left my desk. I came back later to see it drop below 1.3190. My target was really 1.3155 (which is where it is currently trading as i type this post), but I covered my short @1.3185 for a couple of reasons:
1. I was not interested in holding thru a retrace that may go all the way back to 1.3220. As it turns out, the retrace never broke above 1.32, but who would have known that ahead of time?
2. If I had used the 9 or 20 EMA as my exit criteria, it would have gotten me out of the short at around the mid 1.3180's anyways.
3. I knew i would not have time to be at my desk to continue monitoring price action.
EuroFx futures (in general) does not move for more than 30pips without at least doing some kind of retrace, so I am learning to be at peace with hitting these small singles and doubles. I still long to hit those home run 100+ pip trades, but still have more mental preparation and tactical planning to do before I am ready.
UPDATE:
Euro is around 1.312 as I type. Yeah it sucks to have covered my short too soon. Kind of bittersweet irony to be talking about hitting a home run one of these days, and having a home run slip away right under my nose. But I knew I wasn't going to be at my desk, and I didn't want to scratch this trade, so I exited where I did. I suppose I still have some more learning to do in terms of finding the happy medium between not letting a profitable trade turn into a losing trade, and letting your winners run.
Saturday, March 14, 2009
VWAP re-visited
Review of Friday's trade....
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I was stopped out @753, gain of 2.75, but what hurts is that I left an additional 7 frickin' points on the table.
As usual, the timing of my entry was not the problem. The main issue was that i did not manage the trade properly.
There were two warning signs to exit the trade earlier:
1. Price could not break below overnight lows despite a downtrending VWAP
2. A series of higher lows and declining VWAP.
3. Time Stop - New lows made in the 10min frame prior to 644AM, but no new lows in any 10min. time frame after 644AM.
In terms of mistakes, I also failed to pay attention to TICK and ADD, two indicators that I usually use when trading ES. I was pretty close to the 10pts that I wanted to get out of the trade, and should have not been that greedy. Hopefully writing about this will internalize this lesson.
Anyways, once I started reviewing this trade, I also noticed that ES oscillated above and below VWAP, which as Dr.Brett has noted, is a good indicator of a range day. The earlier that I can recognize a range day, the earlier I can adjust my tactic to fade moves away from VWAP.
Looking back at my prior posts in the context of Dr.Brett's VWAP post, it looks like VWAP can help me to determine the market type for that session. This has given me some new ideas to try out for the coming week.
Thursday, March 12, 2009
For Future Reference
Summary
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I've had a bunch of small 1 to 2 pt losses in ES that added up to some frustation, and with today being rollover day, it caused my charts to load up strange (indicators are wacked), so I will take that as a sign to take a break, and post some charts to help me to internalize some important points to remember.
The above chart was Tues Mar 10/09. ES had run up +10pts in the overnight session, retraced a bit, then ran for another 10pts in the first 45min. of the session. Around the 7am reversal time, it paused again, this time forming a box play pattern. Going long after a 20pt run-up typically is not a recipe for success, so that just emphasizes how reliable this box play pattern is.
In this particular case, there was a retrace after the intial breakout of the box. So one would have needed a 2.5pt - 3pt stop (705.5 - 705), reward being at least 4pt target (712). To increase the profit potential, one could add to the position on the second break above 708.
Normally a series of lower lows makes for a good candidate to go short. However, this was a downtrend after the monster +42pt gap and run-up in the previous session. Shorts get a little antsy about a +42pt run-up, and when market gapped up, the first TICK retracement was a chance for the shorts to cover on the gap fill attempt. Selling accelerated on the break below 725 to confirm TICK retrace. Any reversal close to the gap fill level (716) would be a good long entry. In this case, ES ran 10pts from the reversal. If one missed the initial reversal, a break of the downtrend line presents a good second long opp.
Friday, February 27, 2009
Trader personality
Summary
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As I have mentioned in previous posts, patience (or lack thereof) is one of my weaknesses. To be more precise, I have the patience to wait for a high probability chart pattern to fully develop. But once I do take a setup, I find myself impatient in waiting for the tape to move and/or continue in my direction. This impatience has often led me to exit the trade early for a small profit/loss. Keeping my losses small is great, but missing out on big profits doesn't feel so good.
What I wind up doing is trade the first thrust, and exit on signs of a pullback. When price pulls back after the initial first thrust, there are only 3 outcomes: continuation (ie. pullback reverses and continues on in the direction of the first thrust), reversal (ie. first thrust fails), or sideways chop. In the current market environment, the probability of a first thrust continuing on after the pullback is not that great.
So what to do about it? Perhaps I need to find a better spot and better time to enter the trade. Which goes back to the point of requiring more patience.
Also, I can also re-start the practice of entering support/resistance levels as alerts in my trading platform. Also wouldn't hurt to read up on what Dr.Brett has to say about this.
Wednesday, December 12, 2007
Plan for the next couple of months
Even though I will not be actively trading for the next month or two, that has not stopped me from continuing to monitor the ES market. One thing that I have noticed is that in the overnight session, it is usually quiet, but if there are any big moves in the overnight session, then it usually is a precursor of a big move in the regular session as well. For example, this morning's bounce in the market was started off with a +13pt uptrend in the overnight session.
Of course, a big move in the overnight market is not a pre-requisite for a big move in the following regular session.
This year's big sector winners was the solar sector (which I mentioned a couple times in this blog), and shipping. The agricultural chemical sector started perking up in the latter part of this year, and should continue into next year. I am already monitoring AGU and POT for a pullback entry in my retirement account. Obviously I am interested in uncovering the next big sector, maybe this time I will be prepared to jump onto the sector trend.
The other plan for the next couple of months is to continue to work on my ATS. I've been trying to find time here and there to code up a very simple ATS. Progress has been a bit slower recently because of various distractions. Plus, I have to remind myself from time to time why I am doing some more coding after doing already 9+ hours of it at work.
Friday, November 09, 2007
The ATS as a Tool
-Anonymous asked:
"You mention that you want to train yourself to make trading decisions in a more mechanical manner... And that you're a programmer by trade, so what I'm wondering is- Why bother making realtime decisions yourself? Why not code up a fully mechanical system to react exactly as you want?"
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The answers to your questions - 1. Because I currently don't have the luxury of an ATS to trade for me, and until I do, I will have to make the trading decisions myself.
2. I've never really seriously considered coding my own ATS, probably because I know I lack enough willpower and motivation to see it to completion. Also, I cling to the belief that it will be easier to train myself to trade off my pattern catalog than it is for me to program an ATS. I realize that that may not be a true statement, but the motivation factor is real for me at this stage.
I know that there has been a debate of religious proportions going on in trading blogland over whether computerized trading systems will take over the world as we know it. I'm realizing now that I won't make it through this post without forming some sort of opinion about that issue.
My take.
No amount of artificial intelligence will know what the correct trading decision will be in the following situation:
The above chart describes an observable scenario - the Loonie topped out. But the topping action is unmeasurable (there are no parameters for the above top), unquantifiable (there is no pre-defined, rule-based characteristic of the above top), and unreproducible - every topping action is unique. So without these 3 qualities, a computerized system would be crippled and be at a huge disadvantage to the discretionary trader.
That said, however, an automated trading system guided with some human input (in terms of what to look for, and when to look for it), will be able to bank big coin in the above scenario.
I started this post with a bias that the discretionary trader will beat out an ATS in any given scenario. However, now, I am thinking more along the lines of using technology to my advantage. To me, it is not a question of whether the ATS is better than me or not, what I realize as more important now is that I should use an ATS, because I believe it can improve my trading.
So, even though I probably won't program my own ATS, it may be worthwhile to investigate some existing ATS products out there, or even the hacked quasi-ATS from Boogster. Thanks to Anonymous for providing some perspective on this.
Thursday, November 08, 2007
Trading Results for Thursday
Specialists win, Generalists lose.
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After my previous post about training myself to trade off patterns in my pattern catalog, I still went ahead today and made a trade based on tape reading.
I don't think I will trade the 7am reversal exclusively, but it's interesting to note that this is the third time this week that this pattern has occurred.
I just need more practice to trade off my pattern catalog. So the journey continues.....
Calling All Wolfe Wave Practitioners
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Linda Raschke identified a nice Wolfe Wave pattern in the intraday session last week:
So with that in mind, if you, or someone you know of, is a Wolfe Wave practitioner, then please refer to the following chart and let me know (assuming that today's intraday low of 1455 holds up as the swing low) if this is a Wolfe Wave.
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