Today's Trading Hell

[AbeSmith 10]

Hello. Today was a bad trading day for me. So I was thinking I would show my chart and describe the trades I made and perhaps some of you more experienced traders might be able to fill me in on what I’m doing wrong. So here it goes:

 

I’m using the 2 day chart, 15 minute candles, and pivot points. I’m not using stop loss. Here is an image of my executions today.

 

 

Notice the lables B(X) and S(X), B for buys and S for sells, and X representing the order of the execution. The orange B(X) or S(X)’s are longs and the purples are shorts. As you can see I made a total of 12 trades = 6 roundtrips. 2 roundtrips were shorts and 4 roundtrips were long.

 

And here is the chart:

 

 

The first trade B1, at 9:15 central time occurred on the candle where the B1 arrow is pointing to. Notice the arrow only shows the time frame, not the price. The price for B1 was 13688. I bought it right after seeing the previous candle print a green overlapping the previous red. It was a bullish signal which I remembered from my readings. So I bought 2 contracts quickly at 13688. But I should have paid more attention to the brown pivot point right above, at 13690. It was a resistance point only 2 point above my entry point. A bearish signal, which should have alerted me to not buy or buy with a tight trail. And sure enough, the price dropped around that point and I ended up selling at S1, 13676, a 12 point loss.

 

The next trade, B2, at 10.01 C.T., and 13696 price occurred after I saw a lot of buying volume pushing the price through the pivot at 13690 and I quickly jumped on that trade, thinking back to things I heard about going with the trend and buying high and selling higher. But after just 2 minutes I got the jitters and sold at a loss, from 13696 to 13688. But I was wrong because the price fluctuation was short term and the price rose higher and higher breaking 13700. So at B3 I bought at 13700 at 10:24 C.T., but sold by 10:38 for 13701, a 1 point gain. Some reasons I sold this time was because: 1. The volume trend of that price move was downward. I read in a book that a price move up that has down moving volume trend is a weak move. 2. The price was reaching the red pivot point which I figured would be a resistance point. I don’t know exactly how pivot points are calculated, but I know they are strong support and resistance signals.

 

Then I got an idea that it would be a good time to short. I had never shorted before but I decided that because of the lowering volume trend, potential resistance pivot point at 13710, and peak of lunch time which I hear is not a good trading time, that these factors were a high probability setup for a short. So I decided to short around 13710. So I shorted at S4, 13707, 11:04 C.T. But I got really nervous. One reason is that my IB workstation was acting up. I had to press the transmit button several times until the transmit window popped up and I remembered that shorting carries infinite loss potential, probably irrelevant but that thought coupled with what if my connection goes out or what if TWS F's up made me anxious. And also, because it broke through the pivot point I got scared of the potential of a breakout. So I sold quickly at B4 for a 2 point profit. Then shorted again at S5 and sold at B5 for a 1 point profit. But I wish I had more patience because the price dropped all the way down to 13680. At 13680 I noticed the green pivot which was a strong support signal and the price bounced off of that. So I thought it was going up again so this time I bought at B6 for 13689, but the price was not going up so I sold at S6. Fed up with the stock market and having a total loss of $200 I called it a day and was planning on going to see transformers but decided to write this log. The lessons I learned are:

 

1. Not having confidence in your hardware and software can make you jittery. My unreliable internet connection, unreliable TWS software which has acted up more than once, and lack of general experience in stocks were making me very anxious. Also, lack of very specific trading plan made me anxious and unprepared. Some greed was also probably getting in the way, becuase he greed made me jump into a trade without thinking of a plan but instead thinking about not losing potential profit.

2. Pivot points are powerful support and resistance indicators.

 

And I have a question I was hoping someone could help me: How does short selling affect the price?

 

Any help, as always, would be very appreciated.

[Dogpile 10]

other than having;

 

poorly thought-out trade set-ups

bad execution system

and clear impulsive trading behavior

 

all looks good.

 

seriously, bro. you have a lot of work to do. not sure where to start. you need to have a well thought-out gameplan and strong discipline or you are going to blow your account out fast.

 

I would suggest you first learn to read multiple timeframes -- a higher timeframe for the set-up and a lower timeframe for the execution. trading off candlesticks in a single timeframe with some pivot points is not going to work for 95% of us. some small fraction of traders with incredible innate ability can do what you are attempting but I would go short this concept as a rule.

[AbeSmith 10]

other than having;

 

poorly thought-out trade set-ups

bad execution system

and clear impulsive trading behavior

 

all looks good.

 

seriously, bro. you have a lot of work to do. not sure where to start. you need to have a well thought-out gameplan and strong discipline or you are going to blow your account out fast.

 

I would suggest you first learn to read multiple timeframes -- a higher timeframe for the set-up and a lower timeframe for the execution. trading off candlesticks in a single timeframe with some pivot points is not going to work for 95% of us. some small fraction of traders with incredible innate ability can do what you are attempting but I would go short this concept as a rule.

 

You are right. I just want to clarify that I looked at the monthly and weekly chart, then the 2 day chart. Are you saying I should do 5 minute candles instead of 15minutes. I tried that but on the 2 day chart the 5minute looked too smooshed. And I prefered the 2 day chart because I could compare yesterday's moves and because it added an extra pivot which was significant today but did not show on the 1 day chart.

[MrPaul 10]

Oh boy they saw you commin'!:p

 

Before I go too deeply into anything, what books are you referring to?

 

And also, have you looked into any low cost chart services like Sierracharts? Those IB charts are just tough on the eyes.

 

I have some advice for you, but I am really interested in what trading literature you have been getting into first...

[Dogpile 10]

personally, I use the 2-3 daily set-up for kind of a high level structural bias... then use the 15-min chart as my core 'higher timeframe' and 2-5 min charts for my execution timeframe.

[dalby 10]

generally speaking, a 5 minute chart or a tick chart is better for playing pivots... i use a 15 min (and market profile) for frame of reference

 

also...

 

if you actually said "i'm not using stop loss" you CLEARLY should not be trading futures.

 

are you kidding me?

 

today was a phenomenal trading day for me, fwiw. the market tells for a big sell were everywhere, support and resistance were clearly defined and well respected, etc.

 

as much as i like narrow range fade days like yesterday, days like today are a gift!

[brownsfan019 17]

Welcome to the futures biz abe.

 

I'm not going to comment on the trades as you will find over time if your trading plan can work for you. No one else can decide that.

 

A few observations:

1) Why no firm stop loss?

 

2) What is your commission round turn for 1 contract? I wasn't exactly sure looking at the snapshot.

 

3) Have you done backtesting on this trading plan and is a day like today to be statistically expected? If so, no worries. If not, I would worry.

 

One last question - this was done on a simulator, correct? Today should have been a good learning lesson for you since NO real money was on the line. You should be on a simulator for MONTHS before ANY real money is at stake or you will quickly be out of this game.

[AbeSmith 10]

Oh boy they saw you commin'!:p

 

Before I go too deeply into anything, what books are you referring to?

 

And also, have you looked into any low cost chart services like Sierracharts? Those IB charts are just tough on the eyes.

 

I have some advice for you, but I am really interested in what trading literature you have been getting into first...

 

Hey Paul. The first book I started was Toni Turner's beginner's guide to day trading online. I read about 100 pages of it but it wasn't going smoothly, so I dropped that book and picked up The Complete Idiot's Guide to Daytrading Like a Pro. At first I shunned that book because I have a bias against these Idiot's books as "fake books" and also didn't like them calling me idiot. But I bought it and after finishing it I have to say it was an excellent beginner's book that made sense to me. Very straightforward and lacking the motivational green tea mumbo jumbo of Toni's book.

 

Then I read this neat little book which I don't remember the name of it, I think it was called sticky charts or something. I read that at barne's and nobles without purchasing it. It was very good beginner's book about trendlines, chart patterns, and reading volume. I also read at barne's and nobles this 50$ book, I don't remember the name, I think it was Tricks of Daytrading or something. It was ok. Then I bought The Market Maker's Edge by Josh Lukeman. I'm still reading that but it seems like a good book. After I finish that I will go back to Toni's book.

 

I'm also reading the beginner's forum from the beginning to the present. I got 2 more pages to go on that. I have to say it is very excellent.

 

To answer your question about Sierra Charts, I did look at them for a moment and did install their software but I was not very impressed. It seemed a bit crude, but I will look at them again because I did not spend much time looking at it.

[AbeSmith 10]

generally speaking, a 5 minute chart or a tick chart is better for playing pivots... i use a 15 min (and market profile) for frame of reference

 

also...

 

if you actually said "i'm not using stop loss" you CLEARLY should not be trading futures.

 

are you kidding me?

 

today was a phenomenal trading day for me, fwiw. the market tells for a big sell were everywhere, support and resistance were clearly defined and well respected, etc.

 

as much as i like narrow range fade days like yesterday, days like today are a gift!

 

You are right. If you see my charts you can see that even I was correct most of the time with the overall trends, and that is not too bad considering that I had 12 overall trades. The problem was that I was too jittery...well one of the problems...LOL.

 

I probably would have jumped back in the market during the Fed meeting for a short but I was feeling beat and also my internet connection was acting up.

[brownsfan019 17]

ABE - HERE'S THE BEST ADVICE YOU WILL RECEIVE TODAY AND I'M SURE COOTER AND OTHERS WOULD AGREE:

 

STOP TRADING

REAL MONEY OR NOT.

 

I can tell by reading your posts here that you are literally winging it thinking you can outsmart the pro's from a quick read of a couple books at B&N that you didn't even buy!?!?!?

 

Remember Abe, futures are zero-sum. That means while you are losing, another person/bot is taking your money from you and vice versa. There are many good traders, some even here, that will take your money all day long as you wing it. I don't know how much you have to play with, but if you lose $200+/day, it's not going to take long to eat away your account.

 

You need a foundation to build your trading 'house' and right now you have money to burn with no regard for starting w/ the basics.

[AbeSmith 10]

Welcome to the futures biz abe.

 

I'm not going to comment on the trades as you will find over time if your trading plan can work for you. No one else can decide that.

 

A few observations:

1) Why no firm stop loss?

 

2) What is your commission round turn for 1 contract? I wasn't exactly sure looking at the snapshot.

 

3) Have you done backtesting on this trading plan and is a day like today to be statistically expected? If so, no worries. If not, I would worry.

 

One last question - this was done on a simulator, correct? Today should have been a good learning lesson for you since NO real money was on the line. You should be on a simulator for MONTHS before ANY real money is at stake or you will quickly be out of this game.

 

Hey Brownsfan. I'm not exactly sure why no firm stop loss. I think I felt I wanted to do mental stop loss, and because I felt it takes time to place those stop orders and cancel or modify them. Really I don't know why, and don't know if a firm stop loss would have turned out better or not.

 

I see that my comission is 4.26 per contract, and thus 8.52 per roundtrip. Is that too hight?

 

No backtesting was done. I'm not sure how to do that. And as far as a plan is concerned, I don't know what to say. I described my though process above, but there is no particular strategy or theory behind it that I can name.

 

To answer you question about the simulator, unfortunately it was not on a simulator. I have a paper trading account and traded on it a couple of trades before but I found it more useful for learing the software rather than trading, because when there is real money on the line it is a different story. You know, I just don't feel that it was working out for me. But it may be better for me to trade 1 contract instead of 2 since I'm just starting out.

[AbeSmith 10]

ABE - HERE'S THE BEST ADVICE YOU WILL RECEIVE TODAY AND I'M SURE COOTER AND OTHERS WOULD AGREE:

 

STOP TRADING

REAL MONEY OR NOT.

 

I can tell by reading your posts here that you are literally winging it thinking you can outsmart the pro's from a quick read of a couple books at B&N that you didn't even buy!?!?!?

 

Remember Abe, futures are zero-sum. That means while you are losing, another person/bot is taking your money from you and vice versa. There are many good traders, some even here, that will take your money all day long as you wing it. I don't know how much you have to play with, but if you lose $200+/day, it's not going to take long to eat away your account.

 

You need a foundation to build your trading 'house' and right now you have money to burn with no regard for starting w/ the basics.

 

You are totally right Brown.

[brownsfan019 17]

I don't even know where to start Abe. Honestly, no idea.

 

Based on your other post:

1) Have a firm stop loss. If your software is too slow, get rid of it. Consider Open ECry - nice software that is free and great commission rates.

 

2) 8.52 round trip on the YM? Wow, you get a terrible deal. What broker gave you this 'deal'? Again, check OEC.

 

3) No backtesting = good luck winging it.

 

4) Trade on the SIM for MONTHS. JUST DO IT. No real money yet!!!!

 

All I can say now Abe is that you are just learning how to crawl, but playing with professional sprinters. You have to learn to crawl and walk before considering running, let alone sprinting with the pro's.

[AbeSmith 10]

I don't even know where to start Abe. Honestly, no idea.

 

Based on your other post:

1) Have a firm stop loss. If your software is too slow, get rid of it. Consider Open ECry - nice software that is free and great commission rates.

 

2) 8.52 round trip on the YM? Wow, you get a terrible deal. What broker gave you this 'deal'? Again, check OEC.

 

3) No backtesting = good luck winging it.

 

4) Trade on the SIM for MONTHS. JUST DO IT. No real money yet!!!!

 

All I can say now Abe is that you are just learning how to crawl, but playing with professional sprinters. You have to learn to crawl and walk before considering running, let alone sprinting with the pro's.

 

Thanks for the good advice Brown. You are absolutely right. I need more practice. I didn't know I was getting screwed by the commission. I use Interactive Brokers, bundled comission rate.

 

I think I misspoken about my comission before. I said 4.26 per contract, but I was trading 2 contracts at a time, so it was 4.26 per trade for 2 contracts.

[ItalianSharp 10]

Wow, when I read this post for the first time I thought it was a joke...no offense, I seriously had a nice laugh and figured to congratulate with you for starting this funny thread...

 

But then, reading your replies to other posters, I knew you were for real!!!

 

You should immediately stop trading real cash. Invest your money into some trading education first...probably the best idea would be to get yourself a mentor for a few weeks until you learn the ABCs of trading.

 

Don't even do the simulator stuff at this stage. It'd be worthless because you have no trading plan and it sounds like you are a very emotional trader.

 

Just forget you ever started trading and start from scratch again. Reset your brain to zero and re-program yourself.

 

I had the best laugh when you stated that you have no idea how pivot points are calculated yet they are very important. LOL

 

My advice is:

 

- stop trading immediately

 

- invest the money you save from trading into education

 

- get yourself a mentor whose trading style is similar to the way you'd like to trade

 

- if you have no money for mentoring, look for someone in this forum who trades in a similar fashion as the way you trade and then bust his balls all day long.

 

Good luck and stay positive, the road is long but if you are determined enough you'll see the light one day.

[AbeSmith 10]

Wow, when I read this post for the first time I thought it was a joke...no offense, I seriously had a nice laugh and figured to congratulate with you for starting this funny thread...

 

But then, reading your replies to other posters, I knew you were for real!!!

 

You should immediately stop trading real cash. Invest your money into some trading education first...probably the best idea would be to get yourself a mentor for a few weeks until you learn the ABCs of trading.

 

Don't even do the simulator stuff at this stage. It'd be worthless because you have no trading plan and it sounds like you are a very emotional trader.

 

Just forget you ever started trading and start from scratch again. Reset your brain to zero and re-program yourself.

 

I had the best laugh when you stated that you have no idea how pivot points are calculated yet they are very important. LOL

 

My advice is:

 

- stop trading immediately

 

- invest the money you save from trading into education

 

- get yourself a mentor whose trading style is similar to the way you'd like to trade

 

- if you have no money for mentoring, look for someone in this forum who trades in a similar fashion as the way you trade and then bust his balls all day long.

 

Good luck and stay positive, the road is long but if you are determined enough you'll see the light one day.

 

Thanks ItalianSharp. It is very funny. I can't say that I'm sad. Actually I wasn't sad before, dissapointed and a bit frustrated, but sadness did not occur. Thanks again for the good advice. And happy to hear that you had a good laugh.

[Dogpile 10]

<<Wow, when I read this post for the first time I thought it was a joke...>>

 

this occured to me to but given how long the initial post was, didn't think that was the case.... but then the part about the Barnes & Noble book reading without buying got me on the joke track again. that is some funny stuff. so funny it sounds fishy. so at this point, I am leaning more to the joke side.

 

kind of like "I read part of a 'how to play poker' book in the Bellagio lobby without buying it, then jumped into the high stakes no-limit game... I lost. what you all think went wrong?"

[brownsfan019 17]

If it's a joke, Abe did a great job with the story as he got me!

 

If it's not a joke, hopefully he will heed to some of the advice here and start at square one.

[TinGull 10]

For my 2 cents....I still consider myself new at this; it's been about 10 months now since I started day trading futures. I had started out trading option spreads before that and learned a lot about the market during that period. Day trading is intense, and I'll give my little bit of advice assuming the thread isn't a joke.

 

Like brown said...these markets are serious professionals who are out there to take your money...and they don't even send you a "thank you" card!! On the first day of learning how to play the violin, do you think you could go and play with the Boston Pops? Nope. I'm still in the "high school" orchestra with my trading....maybe moving up to the collegiate level soon.

 

 

10 months later and I'm now just getting the hang of things. I've been trading 1 contract for almost this entire time, and really just this week have started trading 2 since I feel MUCH more comfortable with how I'm trading. So, my first bit of advice...trade as little size as possible. Even maybe start day trading something like a few shares of SPY or DIA or something where your account can't get hit hard while you learn. You'll be learning forever...seriously.

 

Use a hard stop. There's very few people who are consistently disciplined enough to use a mental stop and use it each and every time without fail. I know I'll never do that. Hard stops are the way to go IMO.

 

Definitely get a mentor. I wish I had done it sooner. Someone who can guide you through the learning process.

[Guest cooter]

Welcome to the futures biz abe.

 

I'm not going to comment on the trades as you will find over time if your trading plan can work for you. No one else can decide that.

 

I beg to differ.

 

The market decides for or against you rather quickly each and everyday.

 

Abe found out the hard way today.

 

And in case you didn't get it the first time around:

 

ABE - HERE'S THE BEST ADVICE YOU WILL RECEIVE TODAY AND I'M SURE COOTER AND OTHERS WOULD AGREE:

 

STOP TRADING

REAL MONEY OR NOT.

[Nvesta81 10]

As a newbie futures trader I have a few questions I need to ask.

 

I know that tape and pivot levels are important things to look at, and volume etc... but I guess that's what I'm really wondering, is what other 'clues' do you guys keep on your radar to feel comfortable enough to pull the trigger when it's time? I mean I often second guess myself in stocks when I reach a S/R level, because things look like will bounce off and just when you think you confirmed the move it changes.. how can you really 'know'? At the end of the day I think the only real advice one can offer to a newbie is to learn money management above all else.. because there is definitely a gambling element to this, but I would like to hear more from veteran future traders. I'm eager to learn as always...

 

Oh, if you guys could point a newb to some "can't skip" reading material, I would appreciate it!

[brownsfan019 17]

Great points Tin!

 

Here's my question and I'm sure others are thinking this - for those recommending a mentor, where do you go/start? I personally never really had a personal mentor and I'm sure many would like to know where you went and/or how you found one. There's your obvious vendors out there and who knows where to start there...

 

Just wondering how you guys found a worthwhile mentor - whether paid or not - and if you want to, post contact info here for others to consider.

[Guest cooter]

 

I see that my comission is 4.26 per contract, and thus 8.52 per roundtrip. Is that too hight?

 

 

For a newbie like you - actually no.

 

Why? Cause you need to feel the pain before you enjoy the pleasure.

 

Futures trading is a rewarding business, but it comes with a very steep and hard learning curve, and you are just starting out on your journey.

 

Welcome to the jungle, grasshopper!

[brownsfan019 17]

I beg to differ.

 

The market decides for or against you rather quickly each and everyday.

 

Abe found out the hard way today.

 

 

You're right Cooter, I meant to say that Abe needs to find a trading style that is profitable and works for him. The markets will teach him quickly whether he can cut it or not.

[Guest cooter]

That's if this guy is for real.

 

 

I will tell you and everyone here more about myself:

 

I am very new to trading. I was joking about the professional trader bit, but you probably know that already. Anyways, I am 31 years old. Graduated from law school 2 years ago. Oh how much I hate law. I tried studying for the bar and really disliked it. So I decided to forget about it and do something that is more pleasant and fits my personality. So on 7/7/07 I bought a lottery ticket, but it was not a high probability setup...lol.

 

With a law degree, I'm sure he can do far better than this. Clearly, trading does not yet fit his personality - if those trades are any indication.