Today Was Very Hard for Me.

[Nvesta81 10]

I'm afraid to post how much I lost. That bad.

 

I wish I could be prepared for days like this when stops get hit like they are magnets. Anyone else feel the pain today? I have to admit that it would comfort me a little to know I'm not the only one who got killed in this excessively volatile day.

[james_gsx 16]

Sorry for your loss. But it's part of the business, and you just have to keep your head high and look forward to Monday. I would say just take the rest of the day off, and relax over the weekend. Sunday night make a plan for Monday, and stick to your plan.

 

Now onto the harder things, why did you do so bad? Where you following your plan, or was emotion taking over?

[Nvesta81 10]

Sorry for your loss. But it's part of the business, and you just have to keep your head high and look forward to Monday. I would say just take the rest of the day off, and relax over the weekend. Sunday night make a plan for Monday, and stick to your plan.

 

Now onto the harder things, why did you do so bad? Where you following your plan, or was emotion taking over?

 

Honestly, I followed my plan, and the hard part to deal with is that on most of my trades the price action did do what I had predicted, just my entries weren't perfect so I would get stopped just before it went my way. The market was fluctuating 20 points like it was nothing (I trade the YM). I did have one impulse trade that I shouldn't have done. The only thing I can glean from this is that I should put wider stops on days like today and basically risk more for bigger targets. I haven't been trading futures for very long so I was surprised to see the DOW lose like 380 points in 30mins or so. The tape was going nuts.

 

Thanks for the kind words though, you're right, I will take this weekend to put my thoughts together and regroup.

[brownsfan019 17]

nvest - we've all been there and done that.

 

It's interesting to read how others view a day's action as I saw the big move down a substantial move, but everything in between as very nice action. Again, it's in the eye of the beholder.

 

If today as a tough day for your trading methodology, my questions would be:

 

1) How often does this type of day occur and hurt you?

 

2) How often do other 'non-volatile' days occur and how do you respond?

 

3) Did today's loss wipe out day(s)/week(s)/etc of profit? If so, why?

 

4) What does your statistical research say about today? Was this one of those days that hurt you and occur monthly, weekly, yearly?

 

If you can't answer these questions then you need to do more homework. You have to be prepared for volatile days and how you will hold up through them. Just saying the entry was no good is only a small sliver of the equation here. Take a step back and look at the bigger picture.

[james_gsx 16]

On days like this I find it best to widen my stops and extend my targets. Keep your head clear and just look for the opportunities the market has present. I know how easy it could be to have a bias on a day like this, thus ignoring a lot of signs the market gives you.

 

Next time you see such volatility, either don't trade and switch to the simulator to learn how to widen your stops. Or just extend your stops and targets by a few points and see how that works.

 

I actually made a live video today for one of my trades, I'm still debating whether or not I should post it. I made it for someone else, but I don't know if it would actually do you any good. It has more to do with planning the trade with your entry/exit than anything else.

[now123pivot 10]

Sorry for your loss - remember it happens to everyone and is part of this business. I am primarily a divergence trader and did ok today, but have a difficult time when the market keeps chopping to find a top or bottom. I, too, have considered larger stops for those days (and am considering developing risk tolerance rather than using a hard stop as hard stops can bleed you slowly).

 

In any case, take today off and go back to analyze what happened tomorrow or Sunday... then get excited for Monday because your next great trade is just around the corner.

[dandxg 10]

Honestly, I followed my plan, and the hard part to deal with is that on most of my trades the price action did do what I had predicted, just my entries weren't perfect so I would get stopped just before it went my way. The market was fluctuating 20 points like it was nothing (I trade the YM). I did have one impulse trade that I shouldn't have done. The only thing I can glean from this is that I should put wider stops on days like today and basically risk more for bigger targets. I haven't been trading futures for very long so I was surprised to see the DOW lose like 380 points in 30mins or so. The tape was going nuts.

 

Thanks for the kind words though, you're right, I will take this weekend to put my thoughts together and regroup.

 

 

Friend, stick to you plan. Don't get seduced by big money that need bigger stops. If it's not part of your plan for the day don't do it. This is how many ppl. have blown up in the last 9 months. I know how you feel believe I do. I have been working on some new trade set ups that have to been tested manually and I have missed alot of action in the last couple of weeks. I have a tip for you though. Find a S/R line(s) that you like and only take trades around there with your stop per your plan. Be selective, don't chase the market. In times of volatility like we have had off and on since last summer you will have discipline or you will most likely blow up. Pros consider risk amateurs only look at proft.

[dandxg 10]

nvest - we've all been there and done that.

 

It's interesting to read how others view a day's action as I saw the big move down a substantial move, but everything in between as very nice action. Again, it's in the eye of the beholder.

 

If today as a tough day for your trading methodology, my questions would be:

 

1) How often does this type of day occur and hurt you?

 

2) How often do other 'non-volatile' days occur and how do you respond?

 

3) Did today's loss wipe out day(s)/week(s)/etc of profit? If so, why?

 

4) What does your statistical research say about today? Was this one of those days that hurt you and occur monthly, weekly, yearly?

 

If you can't answer these questions then you need to do more homework. You have to be prepared for volatile days and how you will hold up through them. Just saying the entry was no good is only a small sliver of the equation here. Take a step back and look at the bigger picture.

 

Good post browns. I realized long ago that I make money in normal conditions not when Bear Sterns is on the verge of BK.

[james_gsx 16]

Speaking of S/R and following your plan. I was teaching my friend how to trade today, and I left for ten minutes and came back to a 6.25 ES loss and his eyes were wide open like a bug :rofl:

 

What did he do? He chased a huge candle down, and went short at SUPPORT with a -1200 tick, and a stochastic that had bottomed out. When I asked him what he did, he was trying to get the move. He didn't follow any part of the plan and didn't look at the big picture. He got lucky and went short at the very bottom, it was picture perfect.

 

15 minutes later a similar situation happened, he wanted to jump in with the candle and I told him to be patient and wait for one of the setups to appear. The candle started to retrace before our setup completley appeared, I told him we could have faded the move but the R/R wasn't in line with our profit/loss comfort level. I made him wait, and stay patient. Sure enough the buying resumed and it looked like we were missing the boat. Finally our trade to fade the candle setup, and I waited a few more ticks to get the best entry. Turned out to be a really good trade, and it showed him how chasing only leads to emotion and newbies get killed doing that by more experienced traders who take the opposite side. If you see a WRB and you're not already in it, don't chase it and wait for your setup to appear.

[OAC 10]

We better try to adapt to this market or get out of the game.

There is probably more days like this to come.

[james_gsx 16]

I agree OAC, I think next week will be a rough one.

[brownsfan019 17]

It just comes down to knowing how your plan operates in different conditions and how often those conditions appear. If you KNOW that a day like today happens once a month, then today was your once a month day (hopefully). If this happens more often, then you need to adjust. But I would not adjust after just one day like this b/c as another post said, it's not often you hear about a major bank in trouble. Today was a news day and those are to be expected.

[Minetoo 10]

We are finally seeing the true market effects of the recent abolition of trading curbs and the uptick rule. Adapt or die.

[markw 10]

Although my main trading chart is the 3 minute I also have up a 233 tic chart. This allows me to enter sooner or later if I want on the move. Also on days like this a huge bar on the 3 minute could be 2 to 3 smaller bars on the 233 tic. This allows me to use smaller stops and keep my risk low.

 

 

 

Mark

[darthtrader 10]

This is where I think it makes sense to try to get an understanding of how your setups work in different volatility environments. I don't see how you can beat monitoring the VIX for that. I don't see how you can really expect to trade the same if the VIX is at 15 vs it being at 30.

With higher volatility you almost have to expect to use bigger stops but hunt bigger game, otherwise your stops will seem like magnets just from price wiggling around more than normal.

Here is a 30 day and 1 year chart of the VIX with a kalman filter to get a picture of the trend. kalman filter is like a moving average for noisy time series so its a pretty good tool for the job. You can see yesterday was one of the super high volatility days in the past few years actually. The volatility trend is still up so you really do need to adjust for this.

[smwinc 20]

This is interesting. The Market Psychology section has had a few more posts recently than average.

 

We have had extreme days in an already extremely volatile market lately.

 

Friday 14th was a very big day. In 5 years of trading, Friday was the best day I have ever had, period. Friday, let alone the entire week, has truly been a gift as far as volatility.

 

We all trade differently, but something that applies to all of us is in these volatile days/week/months, you have to:

 

- analyse the market without bias

- analyse how YOU are behaving

- analyse how you think OR can see (if you trade with others) are behaving

 

We have continued to see the big moves and relative highs/lows for the day occur before the start of the US day session OR right near the open. I can't stress enough how useful it is to follow and understand the European markets.

 

Let's take a step back and look broadly at the last week.

 

Many big traders put positions on around the time the fed announced the $200 billion in 28-day Term Securities Lending Facilities (March 11th).

 

After a few minor pushes higher, on the 13th March it retraced back to the areas where those original long positions were initiated. This is a standard pattern you see over and over again. Government intervention causes a move, we retrace it, and bounce off it. Longs were still happy to be long.

 

March 14th - This is where it got interesting. Things did NOT go like a few people I know of expected. The Bear Stearns rumours were already out, and the market was not looking that great, and you're stuck LONG a few 1000 contracts.

 

Before the news release on Friday, we had NOT seen any big selling yet, in fact we saw buying come in on tests of lows in the European markets before the CPI figures. This was a great opportunity to take a long position with size. This good news release was the last opportunity to get OUT of big long positions.

 

By the time the US opened, institutional longs had already been liquidated, and the free-fall occurred basically because no one was there to step in.

 

As a day trader, in the long run day to day you are making your bread and butter. Recently we have been extremely lucky and been given multiple "home run" days. When you have fundamental events, they give you an opportunity to hit a move with size and confidence.

 

Take the time to analyse how you traded and hit it hard next week. We ALL pay the price of education multiple times throughout our trading career.

 

SMW

[Nvesta81 10]

Well the good news is I recovered most of what I lost Friday today. However, the bad news is I had to deviate from my trading plan quite a bit to do it. I guess it's not so bad considering these high volatile days need some adjustments made in the strategy one uses anyhow. I'm learning!

[james_gsx 16]

Glad to hear Nvesta! Today was just.... weird. Glad to hear you made it back, that's what you trade for. Each trade is really meaningless in the grand scheme of things, especially considering how many trades you'll take over your career.

[Nvesta81 10]

Today was just.... weird.

 

Very weird indeed! The market has been trading in and out of Friday's Value Area. It just can't seem to decide which way to go. Some incredibly profitable moves to be had though if a trader's timing is accurate and has the guts to hold on. Very educational day for me. Good luck everyone.