Jonbig04's Log

[jonbig04 10]

-6 and very frustrated. I need 8 weeks straight of meeting my goal and this is week 8. Geeze market, throw me a bone.

[jonbig04 10]

-3

 

Gosh, nice losing streak aye?

[jonbig04 10]

I ended last week -20. Yes, thats negative 20. After much frustration, self pity, and finally comprehension I have pin pointed what went wrong. I may or may not have made it clear that 8 weeks ago I set a goal for myself. I wanted to have 8 straight weeks of netting 15-25 points- which is my definition of consistency. At the time, my best week was +5, so it was a tall order. I set my rules in stone and put on my poker face and worked hard towards my goal. To my surprise I started doing well. Fast forward to last week and I had done it for 7 weeks straight...so its somewhat disheartening to miss it on the last week. I've been hard on myself the past few weeks and especially the last few days, but I have to remind myself that 7 or 8 months ago I couldn't define "future" or even know about the NDX index. I didn't even start SIM until 5 months ago. With that said I am taking pride in my 7 week 15-25 point accomplishment. Even more so I never broke discipline. Not once. My rules put me in some stupid trades, and I've gotten lucky, unlucky, and everywhere in between. But I never broke my rules or lost emotional control. Some may say that it's not such an accomplishment when no real money is on the line, but let me say this: when you're 5+ weeks into meeting your 8 week goal which is a set number (meaning nothing you did last week above 15-25 counts, there is no profit carry over), you are wishing it was only a few hundred bucks on the line for each trade.

 

Anyways, now to find out what went wrong. I will be looking at this week and last week. Even though I was +20 or so that week, it was a tough week too.

 

The largest factor that stands out is that I was stopped out on 4 trades even though they went my direction. 4 may not sound like a lot, but I only need 1-2 trades per week to meet my goal, so 4 makes all the difference in the world. I now have to determine if this was something I did differently, or just bad luck. Someone mentioned the other day that there isn't luck in trading. I disagree. For example, if you have 30% accuracy that obviously doesn't mean 1 in ever 3 trades works every time. There are going to be times when you hit 2 or 3 good ones in a row, and yes times when you hit 5-8 bad ones in a row. Just like flipping a coin. It may be 50-50, but keep flipping it and you will surely hit heads and tail many times in a row. Any trade at any time can go wrong. Even if the most beautiful formation forms and you get a great entry...you could still be stopped out easily. Trading is just probabilities. Nothing is certain. We use PA to skew those probabilities in our favor so that, like the casino during a game of roulette, we always win over time. We don't have control over how each individual trade turns our, but we can make sure we are ahead in the long term. Lack of control in short term=chance. This is what I mean by lucky and unlucky. So, was last week a run of bad trades due to the natural odds of taking trades, or did I do something to deteriorate my advantage? I'm not sure yet, but I will find out.

 

The next thing is that we had quite a few range days. My strategy is very specific, and I get worked on range days, unless the range is large. I usually make out very well on trend days. If I had simply bought and sold predetermined resistance levels last week I would have made out like a bandit. With that said, before trading resumes in January, I am going to formulate a whole new reversal strategy to use in conjunction with my existing trend strategy. This is going to take a lot of work, but I plan on making any needed changes from above first.

[atto 20]

I applaud you for being so diligent through this process. So, out of curiosity, are you back to week 0, or sluffing it off? For some encouragement, you have done very well so far, and down week out of 8 ain't bad, especially when you have to consider that you don't take many trades.

[jonbig04 10]

Thanks for the encouragement. I now want to see 4 additional weeks of meeting my goal. So I guess you could say that I'm not starting at 0, but at about the half way point.

[jonbig04 10]

Missed my log yesterday. No matter because today was a lot like yesterday. I got owned on both days. The market has really been taking it to me lately and I dont like it very much. First I hovered over the buy button and accidentally clicked it, closed it out quick for a tick loss. I then shorted the R and it seemed like a great trade, a couple ticks heat and price went about 10 points my way, then came back and took me out. Bah. I then tried to short R, very near the HOD. Wel price made a new HOD to stop me out before dropping. Gosh.

 

Today I shorted the R was stopped, then shorted the ORL, and was stopped. Price continued past both to nearly a new HOD before dropping. I waited for it to retake both levels and shorted a flipped pivots, didnt work. Damn. Rough stuff.

[jasont 10]

Hey Jon it's great to see you still stick it out in the face of a losing period. Going by your past entries and your profit target points I think you might be able to find a correlation between the change in current market volatility and your results.

 

During the higher volatility periods the market made broader ranges making it easier for one to take 15+ points out of the market. Now with a reduction in volatility you will find it hard to make 15+ points on a move if the market only moves in a 20 point range.

[jonbig04 10]

Very true Jason. Gone are the +50 trades lol. Thats fine though, as traders we have to be able to adapt and overcome! Thanks for the input, I think I got my problems straightened out.

 

So I've made the adjustments. As i said, the problem was simply integrating the two systems, which one takes priority etc. I think I have it figured out. I've done some backtesting and I would have done very well using this system in that 1. I land some monsters, 2. I avoid taking the dumb trades that I took the last 2 weeks. Im pretty excited about continuing with this rule set, and I honestly believe this, or some form of this, rule set is what I need to meet my goal in any market conditions. I will have to get used to trading real time, but I think I have all the tools I need to achieve consistent, profitable trading. I just need to get used to, fine tune etc...

[jonbig04 10]

The market is a piece of shit sometimes. lol. Stupid thing came within 2 ticks of my +27 target, then reversed in no mans land. Bah, so annoying. Oh well, we can't control the short term variance of each individual trade (eg luck), what matters and what we can control is the long term expectancy.

 

Stopped on a long in the AM

-3, -3 ,-3

 

Quickly reversed and sold at EOD

+15, +13, +13

 

+10.5AVG for the day

 

Will be reducing stops and targets...2 ticks... Still pissed about it, I wanted that +27.

[jonbig04 10]

For laughs

 

Whats with this lame 20 letter requirement....

[jonbig04 10]

stop is now at 2.5, unless the market seems to get more volatile.

 

targets now at 12.5, 22.5, 33.75

 

should hit target 2 consistently and a target 3 every once in a while.

[jonbig04 10]

decent day, enjoyed chatting with you all

 

short in the AM

 

+12 (accidentally put the target 2 ticks too close, dumb), +22.5, +10 (EOD)

 

 

+15ish AVG

[jonbig04 10]

short in the AM, again

 

 

+12.5, +22.5, +17.5 for EOD

 

+17.5 or so average.

 

Good week so far! I needed it.

[jonbig04 10]

only traded 1 half of the day, complete accident-I only bought 1 contract, so I could only scale once. Worked out in my favor-just lucky there. Will explain in more detail later.

 

Long in afternoon +12.5

 

+12.5 for day.

[jonbig04 10]

I was suffering from a lack of sleep. I decided to skip the morning session today. Wish I hadn't, but who cares. I always whine when I get unlucky, so its only fair that I address the times when I get lucky, like this week. The week before x-mas was anomalous in that everything I did was wrong. I know my chances of making a good trade are around 1 in 3, but that doesn't mean that 1 out of every 3 trades goes well. As we saw, I can have (on anomalous occasions) many losers in a row. It's just probabilities, much like you can flip a con and have it land on heads 5 times in a row. It doesn't mean the chances aren't still 50/50. Anyways this week has seen the polar opposite of that negative anomaly, and I have to say the positive side is much more fun-but I have to keep in mind (just as I did in negative times) this isn't normal. So far this week I've had 4 out of 5 good trades for a total gain of 55.5 net points as of today. During my 2 weeks of crappy trading (really only 1 weeks was a bad week, last week I was more focused on testing and getting my system right, but I still have to count last weeks losses) I lost 28 points or so. It's good to know that 2 weeks of crappy luck (10 bad trades in a row or so) cost me 28 points, while 4 days of good luck nets me 55 points in profit. I'll take that any day. Besides, I fixed my problems (of which could be fixed) from last week. Anyways I'm pretty stoked, I think 55 points is my best single week, but I'm not positive, but there is always tomorrow.

 

Looking back over the last 10 weeks, I've had 8 profitable weeks, and 2 losing weeks. Looks like (I may be a little off on the numbers, but not my much I don't think) I've netted around 190 points, or about 19 points per week on average. I will not make the same mistakes I made last week, but I have no doubt the market will show me some more flaws. As long as I limit my losses when the inevitable bad streak happens, and capitalize off of the good streaks, and stay consistent. Anyone can have a good day, or week, or even a good few weeks, but i do feel as though a good 10 weeks is at least somewhat meaningful, and that time is the true test of a trader. I will stay humble before the market and continue to take what it gives me.

[jonbig04 10]

I had to run some errands today, and I figured since the goal was met it would be a good day. Man was I wrong! PA was gorgeous today! I took a stop early in the morning, and usually that stop would have set up my short, but I left before taking it. Too bad. Who cares though.

 

-2.5 for the day.

 

+53 net for the week.

[jonbig04 10]

Good week last week. It's just that, a good week. Now its over. On to next week.

 

As of now, I have a rule that I must sell at EOD (end of day) even if my target isn't yet reached. I am going to investigate possible holding after hours. We'll see what happens.

[JBWTrader 10]

Hi There JonBig04,

well done on your blog. Great stuff. Keep it up.

 

If you are thinking on going overnight have you considered limiting your "normal"exposure to do so ? I ask this as this seems to be common practice... and therefore at least something to think about.

 

also if you do go overnight ask yourself what are your personal skill strengths during the day and can these be applied to the night session. If they cant then you might want to reconsider...

 

Again well done mate and I have to say your discipline is a great example for other people to follow (including myself !!)

 

all the Best

John

[jonbig04 10]

Thanks for the advice and encouragement. As of now I'm looking into holding AH in very specific circumstances only, and yes limited exposure would be the main prerequisite. May not turn into anything, but I figure its worth a look. good trading! thanks again.

[jonbig04 10]

Owned today! -5. Usually i do well on days like these. Hmm. Missed the short in the am bc the market never pulled back for me. Oh well. tomorrow is a new day!

[jonbig04 10]

Rough rest of the week, I have been pondering some things and decided to hold off my log until I decided on a direction for my trading. In trying to figure out why this week was so rough on me, I think I have a few First of all, I have a new rule about taking trades during lunch; specifically the hours of 12-2EST. I have never had a single profitable trade in those hours, but have had a lot of stops. That rule saves me quite a few points. Too bad I didn't notice it sooner. I also have created another rule about points of interest that are very close together...in short, I've noticed that price always tests the furthest one if its more important, and the ones that are more historically significant will be tested. For example if you have 1200 and 1205 marked on a chart and are looking to short and price has broken both levels and is at 1195, always wait for price not to test 1200, but to test 1205...i swear it seems like it always tests the further one, and if you short the closer level, you get owned. Learned that lesson this week lol. So once again in trading, patience is required. Those 2 rules would have saved me about a lot of points this week ( i ended up negative 15) and netted me quite a few more ( i got stopped by 1 point as price proceeded to the more extreme level before dropping on a short that I had) . I also don't have many levels below 1178. So I just have to SOH during all this great trend action. I'll be fixing that soon. Also, in becoming more proficient with various reversal formations, I can wait for the trend to re confirm, (eg the formation fail) before trying to get in on the trend. I cannot trade the formations yet (save one) but I can use their information to save me a stop or 2. Something else that happend this week which suck a big one, a missed fill on a long at 1152.75 at 11:04 on friday. When I enter a long I usually buy the bid, this time the bid was never filled. Grrrrr. That alone cost me 19AVG points lol. Bad luck there. So with few fairly simple rules, I'm able to not only cut this week's losses substantially, but not lose any of the good trades I've taken (last week or the one I missed fill on). There was also a 15 pointer that I missed due to me strict rules (level and broken 1 tick less that required).

 

 

 

 

There is another issue that I have been struggling with, but I feel I must to whats right for myself. I am going to do away entirely with the points per week goal. My style of trading is to take relatively few (5-8) trades per week with small stops and large targets. With that in mind, a week is just too short of a term to measure and kind of effectiveness. With a small amount of bad luck or mishaps by me, I can easily end the week in the red (though never more than a very good week as we have seen). Also with a weekly points goal, it limits my trading during the end of the week. I can;t count how many weeks could have been much better if I had just traded instead of choosing to SOH for the week. There's no point is risking you're weekly goal, say if you're at +17, to make another 15 points. This is because the extra 15 points mean nothing (which is unrealistic) and if you happen not to hit the trade, the whole week is a failure as you have dropped beneath your weekly goal. I think an average points per week over as long a period of time as possible is much more applicable to real trading, and trading for a living. The longer period of time the less short term variance comes into play. I was red this week, does that mean my strategy is completely useless? Not really (although it does mean I have to address some issues which I think I have, but even so this week would have been mediocre compared to last week). Just because I netted 50 points last week, does that mean I will do that every week? Of course not. I only take few trades a week...so its just standard variance. Correct me if I'm wrong about this? With this in mind, I'm going to be paying much more attention to my average points per week over extended periods of time, which I think will be very helpful long term. I think we must view our trading through the lens of a lifetime of trades, not weekly or even biweekly...but as I said, I take very few trades so it's especially applicable to me. I'm also going to start testing out trading 1 contract with a minimum R/R of 9x (give or take). To me, and I could be wrong, but scaling out is purely psychological, and I am simply spreading the expectancy out because it makes things less stress full. I'm proposing an all in/ all out approach. Like I said, I won't be skimping on the r/r, but quite the opposite as I will be holding for longer for larger targets with no "feel good" of a scale out. Am I going to move my stop? Hell no. Am I going to move my stop to b/e? Hell no. All in, all out.

 

So to sum up, I've found a few very simple rules that would have helped me a lot this week. Those mistakes (or glitches in the rules) , some bad luck (missed fill, level not broken by enough by a tick), and the absence of levels in the 1100 range all combined to give ma shitty week. Oh well, problems solved. Bring on next week!

 

jonbig04

[jonbig04 10]

I actually end up netting quite a bit more historically like this, it just takes cohones.

[jonbig04 10]

-2.5

 

Long before lunch...too close, but my rules allow it. I new holding through lunch would suck. +8 to +1 to +8 to +1 and so on for a few hours. I got a great entry I thought (1186 at 11:50EST) , and if the uptrend did resume, I would likely be protected from the lunchtime chop. Of course the trend didn't resume. I'm starting to feel like if I hadn't entered...well you know. A little discouraged, but will trade the week out before I make any major adjustments of the rules...just feel like I can't do anything right.

[lewtz1520887470 10]

That was a great entry in my opinion. My only question to you is, what made you think the trend was still up? There were successive lower highs and lower lows heading into lunch. Volume looked pretty steady and it looked like selling pressure was in control - oh the glories of hindsight! Were you basing this off potential support from the swing high right at 10am or the opening range?

[jonbig04 10]

good question.

 

Like all T/A, trend is somewhat ambiguous..it depends on time frames, etc etc. The way I personally define trend has nothing to to with HHs or HLs. I choose to measure trend by how price is reacting to (if any) significant s/r levels of the past and present. As I saw it (barring lunchtime chop) if trend resumed the pullback was going to end there. I knew of course that my odds were 50/50 (much less with lunch around the corner). So yes, I saw the LH's, but to me the pull back was to be expected. If trend continued than I would likely net 20 or so points. If not, I would lose 2.5 and hopefully catch the short. That's the idea anyways.