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Day 33

July 1, 2009

 

No trades today.

 

While I did not trade the Watts System today, I have an automated system that took a nice profit in YM as it anticipated a up move in the overnight session. I was pleased with that. Furthermore, there was a lot of stuff that I needed to get done around the home office. So I spent my morning taking care of non-trading obligations. I'm also debating about trading tomorrow morning since it's just before the long holiday weekend. I guess I'll know if i should be trading or not when I see the price action in the morning.

 

Looking forward to reviewing my first full month of trading the Watts System.

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Attached are my statistics for trading the EC from May 27, 2009 to June 29, 2009. In short, I managed to keep my head above water. However, my performance has been horrible. Most notably, 1) not taking signals 2) and in a more general sense, not following my plan. While I think I'm narrowing down "when" or "when not" to trade I still often hesitate to act. Furthermore, I need to only take signals that I'm trained to take which at this time are trend continuation patterns. I have yet to practice or fully define the entry and execution of trend reversals patters. Thus, I should not attempt those, yet.

 

Here come the gory details...

 

attachment.php?attachmentid=11992&stc=1&d=1246989127

 

attachment.php?attachmentid=11991&stc=1&d=1246989127

 

So, sticking to my plan and execution without hesitation appear to be my biggest flaws. My risk management seems to prevent me from pole-axing my account into oblivion. In fact, I'm making money. Just imagine if I could trade well! The money will just pour into my account. heheh, :cool:

 

To fix my deficiencies I will start to record each trade via screen capture software. I actually think recording my trading process while talking out loud about my setups and what I'm observing with the price action will help in my performance. I will need to add this to my trading plan. These videos will also provide a great library of failed and well executed trades.

 

Onward I march.

5aa70ef944c3b_EquityCurveJune.png.f5af9a72065c021dd5b16d5744bad408.png

5aa70ef94862d_TradingSummaryJune.png.2d66765cf12b195bab2c3888c71f2a6d.png

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Day 36

July 7, 2009

 

Two Trades. Two Losers.

 

Today I traded like a complete fool. I watched an entire uptrend and did not take any signals until the very end and was stopped out - twice! Granted I was distracted with other non-trading obligations I know better. This is exactly what I'm talking about in my review from yesterday. You may be asking why I did not video record my trade. Well, yesterdays post about my review occurred after today's stupid trades. I've been slow at getting these updates out. Wednesday will be the day I start recording what I do.

 

Today typified all that is wrong. The market was throwing money my direction, but I was to frightened to grab it. When I did grab it, my hand was bitten.

 

P&L: ($150)

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Day 37

July 8, 2009

 

One trade. One winner.

 

Today's, action was much more choppy as apposed to yesterdays trending market. I was getting conflicting signals on my timeframes and thus, I was cautious. I did record several videos but the bulk of them never materialized into a trade. But I did manage to capture one quick scalp before my session was over. I won't bore you with the video but you can find a screenshot below. The price just moved below the fast SMA and I took the first valid signal. Very clean entry and the market moved quickly to my target.

 

attachment.php?attachmentid=12035&stc=1&d=1247100909

 

I recorded my trade today. Is it no wonder my trade was a winner? ;)

P&L: $100

Live_Trade_2009-07-08.thumb.png.9ca0ededfdffe0d0857a0c615043b453.png

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Day 38

July 9, 2009

 

Another day of no trades. I've been distracted this week with non-trading obligations and it's really showing. This should last just through this week so, one more day.

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I have enjoyed following your thread so far. I hope you are not dropping it. So after all of the work you have done trying out the Watts system what do you think of the system? Is it worth the effort?

 

One thing I wonder about is why not just program all of the rules into an automated strategy, then you would have no psychological issues to deal with. Have you tried automating?

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I have enjoyed following your thread so far. I hope you are not dropping it. So after all of the work you have done trying out the Watts system what do you think of the system? Is it worth the effort?

 

One thing I wonder about is why not just program all of the rules into an automated strategy, then you would have no psychological issues to deal with. Have you tried automating?

 

Thanks for writing. I've not given up. The last few weeks I've been busy, distracted and generally unable to focus on trading. For example, I design web pages as a side job - been doing that for years. Well, I had a project that needed some work for a demo that was coming up this past weekend. During the morning I would switch between working on my web page and trading the EC. Not a good idea. After suffering three losses in a row last week during market conditions which should have been easy for me I decided I need to stop trading to clear my plate.

 

My complete and total intention is to clear my plate of non-trading obligations and get back to focusing on the markets. This will be the last web page for me as I truly wish to focus my energies on trading. It's so much better than web design. No customers is one big plus. Anyway, I'm still around and sorry for not updating. I've been so busy I really had to cut back on posting.

 

As for the Watts system, I like it. It's the only purchased system I've made money at. Is it worth the effort? I thinks so. Time will tell. For such a low cost I would recommend it to anyone who wishes to day trade. It's a small price to pay for such massive potential rewards. It may not be for everyone but you won't know unless you try. Lord knows I have trouble executing trades but that's a psychological issue that can occur with any trading system.

 

I thought about trying to code up the system as well. I made a half-baked attempt months ago but like with many profitable discretionary systems there are always elements that prove very difficult to quantify in computer code. In the end I decided I need to learn to trade. I series of tools that could highlight price bars or somehow alert me to possible setups would be more useful. I might attempt to create a tools set in the future. But in my opinion the biggest obstacle is me and if the Watts system could be coded up someone much smarter than me would have done it already.

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I need help! I'm going back to my simulator for more training. Why? While it's true I'm muddling along making a little money with my live trading, I'm not happy with my inability to take every signal. The way to overcome this is to build more confidence in my trading skill and trusting with my system. So, starting Tuesday I'm going to take every valid signal without fear or hesitation on the simulator. I will track my progress as always and I hope this will demonstrate that by just following my system money will follow. By the end of the week if I feel more confident then I will revert back to trading with real money on the following week. It's important for me to accept that I can always revert back to sim trading if I feel my performance is lacking.This is not failure but simply acknowledging my weakness and attempting to fix it without losing too much cash.

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I need help! I'm going back to my simulator for more training. Why? While it's true I'm muddling along making a little money with my live trading, I'm not happy with my inability to take every signal. The way to overcome this is to build more confidence in my trading skill and trusting with my system. So, starting Tuesday I'm going to take every valid signal without fear or hesitation on the simulator. I will track my progress as always and I hope this will demonstrate that by just following my system money will follow. By the end of the week if I feel more confident then I will revert back to trading with real money on the following week. It's important for me to accept that I can always revert back to sim trading if I feel my performance is lacking.This is not failure but simply acknowledging my weakness and attempting to fix it without losing too much cash.

 

Thats fine to do that but make sure you are doing it for the correct reasons.

 

For example when I was trading awhile ago I was missing valid entries and getting really p$#sed off with myself and did what you mentioned above to no avail, but when I went to search for the source of the problem I found that it was just me trying to be a perfectionist and when I realized that all I had to do was focus on the probability of the trade then everything eased up and I was trading well again.

 

I still get caught up in the perfectionist thing every now and then but I have a message next to my screen to remind me to trade with probabilities.

 

Cheers and hope this helps

 

1pipatatime

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Day 38

July 22, 2009

 

The EC market was choppy today but I did manage to squeeze a scalp in this morning. Price moved above my moving averages then came down to test a consolidation area which consisted of both the 89 sma and 50 sma. I took the first signal near these averages.

 

attachment.php?attachmentid=12381&stc=1&d=1248283309

 

P&L: $100

Live_Trade_20090722.thumb.jpg.dff3cbe1e5b8fcdf2d7e51a997b6a483.jpg

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Day 39

July 23, 2009

 

One trade. One winner.

 

The EC market was still in range bound since yesterday. Attached is the video of the trade and you'll see I realize the range bound nature of the market and enter long at a valid entry on the 445-tick chart instead of my usual-89 tick in hopes of capturing a larger move. Well, it was not a huge move but it was larger than my standard scalp.

 

Here is the attached video capture of todays trade:

Live_Trading_2009-07-23_0800.swf

 

P&L: $150

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Day 40

July 24, 2009

 

One trade. One winner.

 

The EC market broke it's multi-day range to the downside overnight. But it was a fake as it strongly reversed upwards. I awoke and did a quick scalp before calling it a day. I'm off work today and was not even going to trade. But I gave it an hour and a nice pullback on the 445 tick chart allowed me to enter long.

 

Below is the attached video of today's trade:

 

Live_Trade_2009-07-24_0605.swf

 

Below is the screen shot of today's trade. Notice my entry signal is on my larger timeframe (445 tick).

 

attachment.php?attachmentid=12419&stc=1&d=1248436650

 

P&L: $100

Live_Trade_2009-07-24_0636.thumb.png.b88a85823c70daef2fa97d75ad1df91b.png

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Thought I might join you.

 

Only took one trade on the Euro today. Shorted a gravestone after a 50% retrace. Took 5 ticks on one contract and one tick on the other. Not great, but that entry did not offer a lot more.

Euro270709.thumb.jpg.039dfa665a977bf954f1c0089bfe0ba3.jpg

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What software needs to be downloaded to run these video files with .swf extension. I click on them but my computer tells me I don't have the proper player software to run them. Please tell me what site I need to visit to find the software download. Thanks.

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What software needs to be downloaded to run these video files with .swf extension. I click on them but my computer tells me I don't have the proper player software to run them. Please tell me what site I need to visit to find the software download. Thanks.

 

It's an Adobe's Flash file. If you have this application installed on your browser you can simply download the file to you computer, open a new browser window and select file->open. At least that's how I can get it to play. It works well with firefox.

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Awesome thread swansjr!!! Very rarely do we see anyone "show their cards" in so much detail and back it up with proof in videos/pictures, etc.

 

Keep it up!!!

 

Well thanks much. Happy to hear you are enjoying the thread.

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I've been getting sloppy with my trading discipline. It all started with the fading volatility over the summer. The EC market was just not trending much in the early morning. Then the kids are home which means, early morning soccer practice which distracts me from my screen time. I then got lazy about posting here at TL. Then lazy about practicing my trading on historical data. Next was laziness about video recording my trades…and so on…

 

Well, time to get back on the horse. I need to bring back my focus and discipline.

 

I've not been trading over the past few weeks since I don't feel confident. I'll first need to practice on historical data and reviewing my setups. During this hiatus from day trading I've also been reading "Reading Price Charts Bar by Bar" by Al Brooks. It's a difficult read but full of great information. It's defiantly not a book for beginners however, if you are interested in day trading I would recommend it. I've not completed the book and Al recommends to only study small chucks of his work at a time. Take it slow, in other words. What's interesting are some of the price patterns he points out on the ES market (which is his primary market to trade) can also be seen on my EC charts. This is of no surprise but it is my hope that a merger of these two trading styles may be of help to me.

 

At times the Watts system gives me too much info. There are many indicators on the screen and I find I'm looking at two or three time frames. This causes second guessing of signals. Brook's strictly uses one time frame and identifies excellent patterns based largely on trend lines. Again, my hope is I can simplify my trading by using a handful of Brook's concepts in addition to a single EC chart with the Watts signals. Brooks price action explains a lot more of what I'm seeing and as potential Brook's patterns play out, Watts create wonderful entry signals. In a very crude summary this is how I picture it: Watts nails down great entries while Brooks paints a bigger picture, locates key trading points and explains the "why". At least, that's how it looks now in hindsight.

 

To some it may sound like I'm still looking for the holy grail. I'm not. I'm simply finding out what works for me. Anyway, I'm still alive and working hard to become a successful discretionary trader.

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Day 41

September 3, 2009

 

Three trades. Two winners. One Loser.

 

Today I decided to jump back in as it appeared opportunity was before me. Now, it's been weeks since I traded and to be honest, by confidence has been bruised. Anyone, who has followed this thread, knows I've had difficult time pulling the trigger. I've spent the last few weeks casually reviewing my setups and watching the market.

 

My first trade I actually tightened my target to only 5 ticks. I did this purely for psychological reasons. I felt it was important for me to have a "win" more than anything. I then proceeded to take another trade with my full target. It was hit within seconds. My final trade was stopped out, by two ticks. Then the market rolled over. Seen that before. Not a problem.

 

I can happily state my three trades were all in the correct direction (short) and all were good trades. Overall I'm very happy. I was able to determine the trend and find my points of entry. I scalped all trades and was not focusing on runners. I still can do it. I feel really good about today.

 

 

P&L: $62

Edited by swansjr
Wrong Date

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I want to thank you for a great thread. I am a struggling trader and your videos are a huge help. I hope this starts a trend of people using video in their threads. I don't know if it is difficult to use video, but it sure is great! I was wondering if you could do another one or two videos of your setup and rules to take a trade. I went through all of your videos and one explained your basic setup and it seemed so simple. But, then future videos showed you passing on some tdes and then taking others. So then I became confused as to what you were using for your entry trigger. I hope this is not too much to ask? I also hope you will keep this thread going, it has really been great to see a method illustrated thru voice and video. Thank you!;)

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Day 42

September 8, 2009

 

Three trades. One winner. One loser. One break even.

 

Today I was taking long positions off my 445 time frame and was able to scape by with a small gain. It seems I was trading long near the top of a great bull trend that was taking place all morning. I know I've been sloppy with recording my trades and will work on that this week.

 

 

P&L: $44

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I want to thank you for a great thread. I am a struggling trader and your videos are a huge help. I hope this starts a trend of people using video in their threads. I don't know if it is difficult to use video, but it sure is great! I was wondering if you could do another one or two videos of your setup and rules to take a trade. I went through all of your videos and one explained your basic setup and it seemed so simple. But, then future videos showed you passing on some tdes and then taking others. So then I became confused as to what you were using for your entry trigger. I hope this is not too much to ask? I also hope you will keep this thread going, it has really been great to see a method illustrated thru voice and video. Thank you!;)

 

You are most welcome. I'm really pleased to hear you are gaining something from this thread. The basic setup is rather simple. But I found, at least during the summer months, that it was not always a great way to enter a trade. With the choppy summer action I found by combining my higher timeframe with my lowest timeframe I could pin point high probability entries. This may be unnecessary if EC starts to move this fall.

 

I should be more diligent in recording my live trades and I should make videos describing my setups exactly how they exist today. Creating videos has helped me explain, refine and solidify my own trading rules. Thus, they seem to be a win-win between me and those reading this thread.

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