Jonbig04's Log

[jonbig04 10]

First off I want to disclose that I have yet to formulate a sound strategy, this thread will hopefully be the evolution of that strategy. Today was my first day trading (with fake money). I'm trying not to think about the fake money aspect. After all, when I go live with real money nothing will have changed unless I myself let the fact that I'm trading real money change me...and I'm determined not to. I will be trading the NQ E-mini exclusively for various reasons. My first and most important goal is to try to understand price action. As of right now I could care less about indicators. I think it is far more important to learn whats behind the indicators, rather than just relying on 2 lines crossing. In time I'm sure I will use various indicators just for simplicities sake, but not until I can see and understand them myself by understanding price action. I do/will be watching volume, but only in the context of price...e.g. what price was doing during high or low volume. Simply stated, I want to buy when demand overwhelms supply and sell when supply overcomes demand. I will try to find supply zones (resistance) and demand zones (support) and trade accordingly.

 

 

 

A little bio- My name is Jon. I live in Denver and have been on ET for around 8 months I would say. I am still very much into real estate (development) and am trying to balance it with trading...oh and I turn 21 on thursday :beer:.

 

Books ordered:

The nature of risk

How to buy

When to sell

all by Justin Mamis

 

The disciplined trader

trading in the zone

both by mark douglas

 

 

Thanks to dbphoenix and all the others who took the time to educate and explain the different elements of trading.

[jonbig04 10]

My replies may be a couple days behind. This is from 7/22

 

 

07-22-08 03:00 PM

 

Today was interesting. It was mostly devoted to figuring out the the hell to work Ninja Trader...I really need to figure out how to do a trailing stop (working on that now). In the midst of trading today I couldnt help but feel a familiar feeling creeping down my spine. The same feeling I get while I'm playing poker. I know that sounds weird, but its crazy to me how similar trading and poker feel. I knew trading was emotional, but damn keep your emotions in check is half the battle! Thankfully I'm no stranger to that battle (many many poker games) and it's nice to jump into something a scary and new as trading only to find myself on a battlefield I am very familiar with.

 

Today I over-traded. About 19 trades in all, and I would like to keep it to around 10-12. I did well in the beginning of the day. Started out with a 1.25 point loss on my first trade and then the next 7 trades were all winners (9.25 points). I should have just walked away then, but I guess I thought it would be cool to lose some money. 11 trades later I finished the day up 2 or 3 points I think. I had one trade go against me by 3.5 points, besides that the worst trade took out 1.75 points. The trailing stops I feel will really help me. I tried to have a mental stop of 1.25 points, but things just move to quickly and emotionally. Tonight I will figure out how to to all that. Tomorrow I will keep a journal of all actual trades. This will help show my reasoning (or lack thereof) and help me trade less. The chart is attached.

[jonbig04 10]

from 7/24

 

2nd day trading. good day over-all. still getting my stop strategy worked out, but im a lot closer.

 

anyways I made 9.5 points over all, decided to stop while i was ahead haha. charts attached.

[jonbig04 10]

Forgot the chart:

[jonbig04 10]

today is 7/29. My internet connection is fixed finally. I realize this journal is full of grammatical errors and everything else, but to me thats ok. I do write down my reasoning behind each trade...but its a bit crazy for an online journal. Here is a sample i was able to decipher and make somewhat public as per the chart on 7/24:

 

the move at 12:40 for example, it looked to me like the smart money didn't want anything to do with it at this price. To me those 3 short range bars in a row are all no demand bars, authenticated by the lack of any kind of volume. people holding it would have to sell at a lower price, and they did. eventually it reaches a point where smart money steps in a buys a boat load of it on its way down 12:54-13:00. The people who missed the up move come in late (13:03ish) and the smart money begins to unload it (13:04-13:06) on them sending prices lower yet again. My reasoning could be way off, but it did work on this day. If its flawed I will soon find out though.

 

As far as I'm concerned trading is merely a game in which I try to rack up as many points as possible. This helps keep money out of my mind along with all the profit damaging emotions that come with it. I'm in the game for 6-10 points and then I'm out. If I can manage that many. If not, I will lower and adjust my goals and expectations.

[jonbig04 10]

To the surprise of no one, i have dropped my points goal to 7-10 points. This is based on some calculating I did (assuming im only trading 1 contract at first) and works well with my financial goals.

 

Anyways, today was damn hard. I felt i had to scratch and claw for every little tick. Then that stupid earth quake came and volume shot up ten-fold in less than a minute, costing me 2 points. I hated that.

 

today's results +7.75 points.

 

Im pretty damn pleased with that considering how hard it was to make, coupled with today being only my 3rd day. here are the charts of my entries and exits. Appreciate any and all input. Thanks.

[jonbig04 10]

Still need to figure out how I can have a set strategy too eliminate emotional and rash decisions. Since I'm not using any indicators (other than VOL) its hard to me to have a set of concrete rules to go by.

 

I can't be the only price action trader that has had this dilemma though. There is really now way for me to back test is there?

[brownsfan019 17]

Still need to figure out how I can have a set strategy too eliminate emotional and rash decisions. Since I'm not using any indicators (other than VOL) its hard to me to have a set of concrete rules to go by.

 

I can't be the only price action trader that has had this dilemma though. There is really now way for me to back test is there?

 

If you are 100% 'fly by the seat of your pants' it would be rather difficult to backtest.

[jonbig04 10]

If you are 100% 'fly by the seat of your pants' it would be rather difficult to backtest.

 

 

Right. I wouldnt say I act impulsively ( I try not to), my trades are thought out in advance. Usually its something like "I will buy here if x happens along with y" etc, so its not "fly by the seat of my pants", but it is dependent on the price action of that particular chart, so I think back testing is out.

[cantana 10]

Still need to figure out how I can have a set strategy too eliminate emotional and rash decisions. Since I'm not using any indicators (other than VOL) its hard to me to have a set of concrete rules to go by.

 

I can't be the only price action trader that has had this dilemma though. There is really now way for me to back test is there?

 

You might take the extra step and inquire about db's e-book, since you're collecting books anyway. I'm sure you'll find your own answers to your questions there.

 

Just a thought.

[jonbig04 10]

Thanks. I try to read pretty much everything DB says :thumbs up:

 

I do have the beginning of his E-book (the journey intro and 1-3), is there more that I don't have? Just making sure I'm not missing anything. I will re-read everything tonight though. Thanks again.

[cantana 10]

Thanks. I try to read pretty much everything DB says :thumbs up:

 

I do have the beginning of his E-book (the journey intro and 1-3), is there more that I don't have? Just making sure I'm not missing anything. I will re-read everything tonight though. Thanks again.

 

Yes, much more.

 

What I had in mind that might be a help to you in translating the subjective fear/greed combo into an objective display of P/V was the section on Ws.

[jonbig04 10]

Yes, much more.

 

What I had in mind that might be a help to you in translating the subjective fear/greed combo into an objective display of P/V was the section on Ws.

 

:crap::crap::crap:

 

Where can I find this? I could have sworn I saved everything I could find that DB wrote...

[atto 20]

I do have the beginning of his E-book (the journey intro and 1-3), is there more that I don't have? Just making sure I'm not missing anything. I will re-read everything tonight though. Thanks again.

Contact him if you feel what he's posted is something you'd be interested in.

 

I applaud your young start and desire to learn. My word of advice: define exact setups you're looking for. For example, let's say you want to "buy pullbacks" (assuming bull trend). Define trend (define this in exact terms), pullback (same; along with any prerequisites that help avoid reversals), what is the exact entry signal, how you will manage risk, and how will you exit (doesn't have to be a specific point amount, could be at next resistance confirmation, climactic volume, etc).

 

This may seem like overkill, but it will simplify your trading, give you confidence in your edge, and allow you to actually backtest to verify that you have an edge. Start with one setup. Learn it backwards and forwards; learn nuances, when it tends to work, when it tends to fail.

[jonbig04 10]

Contact him if you feel what he's posted is something you'd be interested in.

 

I applaud your young start and desire to learn. My word of advice: define exact setups you're looking for. For example, let's say you want to "buy pullbacks" (assuming bull trend). Define trend (define this in exact terms), pullback (same; along with any prerequisites that help avoid reversals), what is the exact entry signal, how you will manage risk, and how will you exit (doesn't have to be a specific point amount, could be at next resistance confirmation, climactic volume, etc).

 

This may seem like overkill, but it will simplify your trading, give you confidence in your edge, and allow you to actually backtest to verify that you have an edge. Start with one setup. Learn it backwards and forwards; learn nuances, when it tends to work, when it tends to fail.

 

Thanks I will contact him. I will also take your advice to heart. I wish I knew what to call whatever it is that I'm doing. All I can say is that I try to buy when I think demand is kicking in and sell when supply is being dumped. If you can make out my chart I hope you can kind of see what I mean. I can even explain any particular entries if you would like me to. I'm not saying my reasoning is correct, but I do have a reasoning. In fact if you were standing over my shoulder I could give you an earful on why I am taking a particular position and what I expect to happen. I hope that makes some kind of sense.

 

jon

[atto 20]

I'm not saying my reasoning is correct, but I do have a reasoning. In fact if you were standing over my shoulder I could give you an earful on why I am taking a particular position and what I expect to happen.

That's a great start, because it shows you're actually thinking about it (better than most). I highly recommend you read The Phantom of the Pits. Don't let the price (free) fool you, you'd have a hard time beating the wisdom for any less . This may help you with position managment, helping you take an idea and make it as profitable as possible.

 

Push yourself to quantify your entries/exits. You will struggle when you add real money to the equation if you don't have something exact to fall back on.

[jonbig04 10]

That's a great start, because it shows you're actually thinking about it (better than most). I highly recommend you read The Phantom of the Pits. Don't let the price (free) fool you, you'd have a hard time beating the wisdom for any less . This may help you with position managment, helping you take an idea and make it as profitable as possible.

 

Push yourself to quantify your entries/exits. You will struggle when you add real money to the equation if you don't have something exact to fall back on.

 

I will be all over that tonight as well. I love the internet...so much free information. My exits right now are a problem, so I will work hard on defining a more exact exit strategy. Supply and Demand is all I think about these days.

 

As for real money...I'm trying to not think about it. I try not to let money enter at all into my brain. It's difficult. I just try to think of points...like I'm Kobe and I'm trying to score as many points as I can before the end of the game (or trading day). I believe its starting to work. I get frustrated when I lose points sure, but I don't get fearful or greedy (I try not to).

 

I am new to trading, but I am not new to teaching myself (with the help of others on the internet) a skill that few have. When I was 18 I started a mortgage company and had a ball funding loans, later on I incorporated a real estate development company; so I am not new to the dedication that trading demands. The only different aspect is mental. I can't really do something part way, its 100% or nothing (which has its good and bad), so right now I am thinking about trading or something to do with trading pretty much 24/7...the difference is I have placed kind of a mental filter in my brain. Every thought has to be screened to make sure its not borne out of fear (" I could lose $10,000 in one day) or greed ( I can make $10,000 in one day!). Hopefully it pays off. I mean works out...haha

[jonbig04 10]

4th day of trading=1st losing day. Damnit.

 

The reasons I lost today are many, but the awesome thing about trading is that its only yourself that you have to change.

 

1.Trading too much. Instead of waiting patiently for the optimum entry points, I pushed it. I wanted to make something out of every move. It was greed in a form i wasn't prepared to deal with. Its covered now though.

 

2. My stops. My trailing stop was too close. Looking back i was in early on some large (8-10 point) moves, however i was only able to capture 1.5-2 of those points. I can't have it all, but I should be locking in more profits then that when I am right,

 

3. Revenge trading. Internally I was trading with one thing on my mind: making back my losses. I need to make every trade completely independent of the last, regardless of its outcome.

 

 

I am going to set a limit on how many trades I can do per day. I'm not sure what it is yet, but I will think on it. My stops will also be adjusted. Tomorrow is a new day, however I sure didn't like ending the day with a loss...sucked.

 

today's result: -6 points

[atto 20]

From a few of your posts, it seems like you are trading to be right: catch the most of a move (and every move), have only winning days, have only winning trades, etc. Not saying you expect these, but that your ultimate goal is those things. To be bluntly honest (which I assume you want), this is the mark of a newbie. While that sounds good, there are no trading awards for being right.

 

Instead, your job is to optimize your P/L. You may say that the above is simply a means to this result, but I don't see the correlation as directly. Making profits is your only goal. Re-read the last sentence. It doesn't ultimately matter if you miss a move, if you get out too soon, if you have losing days, if you take a bunch of losing trades, etc. In the end, all that matters is your P/L. Be willing to be wrong; let the market tell you what's right. While you need to look at the above issues, you need to purely focus on P/L.

 

I personally struggled (and still do at times) with missing moves. I see a perfect hindsight setup, missed it (for whatever reason), and create excuses to get in ASAP. The underlying cause is the same that drives you to overtrade and chase losses. You have to learn to let those go, and wait patiently for the next entry signal. Some periods/days are good, some aren't.

 

In line with the Phantom of the Pits, I challenge you to avoid hitting your full stop loss. If the market is not proving you correct, get out. You'll miss a few eventual winners, but will avoid many more full losers. I'm not a scalper, but I think you should re-evaluate what types of moves you are targeting. Commissions will eat you alive as is, even if you have a moderately profitable day. I count 24 trades, which will likely be over $100 in comissions per contract (5 NQ pts), which almost doubled your losses for the day.

[jonbig04 10]

From a few of your posts, it seems like you are trading to be right: catch the most of a move (and every move), have only winning days, have only winning trades, etc. Not saying you expect these, but that your ultimate goal is those things. To be bluntly honest (which I assume you want), this is the mark of a newbie. While that sounds good, there are no trading awards for being right.

 

Instead, your job is to optimize your P/L. You may say that the above is simply a means to this result, but I don't see the correlation as directly. Making profits is your only goal. Re-read the last sentence. It doesn't ultimately matter if you miss a move, if you get out too soon, if you have losing days, if you take a bunch of losing trades, etc. In the end, all that matters is your P/L. Be willing to be wrong; let the market tell you what's right. While you need to look at the above issues, you need to purely focus on P/L.

 

I personally struggled (and still do at times) with missing moves. I see a perfect hindsight setup, missed it (for whatever reason), and create excuses to get in ASAP. The underlying cause is the same that drives you to overtrade and chase losses. You have to learn to let those go, and wait patiently for the next entry signal. Some periods/days are good, some aren't.

 

In line with the Phantom of the Pits, I challenge you to avoid hitting your full stop loss. If the market is not proving you correct, get out. You'll miss a few eventual winners, but will avoid many more full losers. I'm not a scalper, but I think you should re-evaluate what types of moves you are targeting. Commissions will eat you alive as is, even if you have a moderately profitable day. I count 24 trades, which will likely be over $100 in comissions per contract (5 NQ pts), which almost doubled your losses for the day.

 

 

 

In reading your post I could only keep nodding my head in agreement. Many times today during a trade, I would see something happen that I didn't expect (like 3,000 contracts in a matter of seconds) and while I knew I should just get out, I waited. Sometimes I came back from being 1.5pts down to being .5 points up, so I counted it a success, but the if i had simply cut my losses at 1.5 every time instead of hitting my full stop today's P/L would be VERY different, maybe even positive. What's strange is yesterday I was cutting my losses...but not today. I can't think why. :crap: It will be corrected and contained tomorrow though.

 

Hindsight is always 20/20, but the funny thing about trading is that hindsight is sometimes only 15-30 seconds ago, so I somehow think I can, like you said, salvage the trade or more of the time, make excuses to get in. This and not letting the market tell me my losses are the 2 reasons I lost today. Over trading, I think, stems from these 2 things.

 

Thanks again for your advice. I need it.:doh:

[brownsfan019 17]

I have a few observations... take it for what it's worth.

 

1) Holy cow you are trading... Wow. Your broker must love you.

 

2) Until you realize that you cannot and will not catch every single move or every single day, you'll always be chasing this dream.

#1 - if I am reading the chart correctly, that is a ton of trading going on for a new person. That's not necessarily a bad thing, but I'm sure you realize that commission costs will eat away at profits at that pace.

 

#2 - It took me awhile to come to peace w/ the FACT that there is no possible way that you can be in every single move of every single day. I too wanted to be in when the big move came. Problem was that you have to take trades left and right to be there.

 

My suggestion at this point would be to start crafting more precise entries, unless being a scalper is what you are setting out to do.

[jonbig04 10]

I have a few observations... take it for what it's worth.

 

1) Holy cow you are trading... Wow. Your broker must love you.

 

2) Until you realize that you cannot and will not catch every single move or every single day, you'll always be chasing this dream.

#1 - if I am reading the chart correctly, that is a ton of trading going on for a new person. That's not necessarily a bad thing, but I'm sure you realize that commission costs will eat away at profits at that pace.

 

#2 - It took me awhile to come to peace w/ the FACT that there is no possible way that you can be in every single move of every single day. I too wanted to be in when the big move came. Problem was that you have to take trades left and right to be there.

 

My suggestion at this point would be to start crafting more precise entries, unless being a scalper is what you are setting out to do.

 

Thankfully no one is getting rich off me yet (this is all fake money), but I wont be taking anywhere near that many trades from now on.

[james_gsx 16]

What?

 

Another 20 year old from Denver?

 

Do I have a clone? What part of Denver and why haven't I met you?

 

Just some quick advice I picked up from scanning through this thread. Maybe instead of trying to trade, and inadvertently over trading, just sit and watch the market all day without doing anything. Just watch the order flows, the way the market moves. You will pick up a lot more information, and from there you will be able to find specific trends that suit your personality. After a sizable amount of observation, you will be able to piece together a basic trading plan that works for you. It will be much easier to trade, because you will know exactly what you're looking for. When you simply jump in making 20 trades a day, you close a lot of doors and miss a lot of opportunities that come in the form of information. Just my .02 cents.

[jonbig04 10]

What?

 

Another 20 year old from Denver?

 

Do I have a clone? What part of Denver and why haven't I met you?

 

Just some quick advice I picked up from scanning through this thread. Maybe instead of trying to trade, and inadvertently over trading, just sit and watch the market all day without doing anything. Just watch the order flows, the way the market moves. You will pick up a lot more information, and from there you will be able to find specific trends that suit your personality. After a sizable amount of observation, you will be able to piece together a basic trading plan that works for you. It will be much easier to trade, because you will know exactly what you're looking for. When you simply jump in making 20 trades a day, you close a lot of doors and miss a lot of opportunities that come in the form of information. Just my .02 cents.

 

My clone? I'm not sure. Great now I'm afraid I'm going to find out we're clones and part of some clandestine government project from the 80's...would be alright if i found out we were born with all these special abilities and hand to hand combat skills that we've yet to discover. :fight:

 

I just moved to Denver 10 days ago, I'm not sure if you're familiar with downtown at all (its the only part I am even remotely familiar with), but I live on 16th and Glenarm...it seems pretty like a pretty chill place so far.

 

Thanks for the advice. I was going to do just that when suddenly...I started trading haha. I guess because my last 3 days were decent up days I got over confident. Think I just lucked out those days.

[james_gsx 16]

Yes, I'm familiar with that area. I often go to Avs games at the Pepsi Center which is relatively close, or I take Speer down to Cherry Creek. Sometimes I actually go downtown, but I try to avoid it with all the one way streets lol I'm up north around 120th.

 

Good luck, if you need help with anything in Denver send me a PM.