Trading Log 2010

[NoviceTrader1 10]

Greetings everyone, This is my first post in this forum, and it will be a log of my daily trades. I believe that publishing a log of my trades can only help my trading and make me more accountable for my progress as a trader.

 

I am 21 years old and currently in my last year of university. I have been trading futures(live and paper) for the last 8-10 months. I have tried many different strategies and systems, and have gotten very little in the way of profit. I have recently started trading grain futures with a purely discretionary approach. I trade off of S&R and any patterns that I see in these markets. This approach is working very well since I started and I believe that I am on the path to being a good trader.

 

To give an idea of my trading approach I have a screen shot of a trade that I would make. After entering, as soon as I have some cushion on a trade I will move my stop to break even and continue to move it and attempt milk the trade if it acts well. My positions last anywhere from hours to minutes, depending on how the market reacts.

 

Starting tomorrow I will add screen shots of my executed trades(winning and losing).

[NoviceTrader1 10]

Here are some other trades, made in Soybeans a couple of days back. I exited these trades, after they look to be consolidating, or they violate my stops. I enter my stops by observing volume by price, and determining support and resistance by volume at individual prices.

[NoviceTrader1 10]

These are the trades mentioned in the above post. Also attached is my current account value.

Edited February 12, 2010 by NoviceTrader1

[NoviceTrader1 10]

P/L: +251.80

Account balance: 3,862

 

Today was a decent day as far as trading opportunities in Grains. Wheat had little volatility, while Soybeans had a good trend day. Most of my trades were profitable, with some break-even to small loss trades. I am finding that I am prematurely moving my stops, and this is turning profitable trades into break-evens or small losses. This is something that I will be aware of and try to remedy.

 

Here is an example of a small fade trade where I moved my stop to break even, and ended up getting out at break-even instead of allowing room for the trade to work.

Edited February 12, 2010 by NoviceTrader1

[thalestrader 14]

...I am 21 years old and currently in my last year of university. I have been trading futures(live and paper) for the last 8-10 months. I have tried many different strategies and systems, and have gotten very little in the way of profit. I have recently started trading grain futures with a purely discretionary approach. I trade off of S&R and any patterns that I see in these markets. This approach is working very well since I started and I believe that I am on the path to being a good trader....

 

I believe you are as well ... Good Luck, and keep the log going.

 

Best Wishes,

 

Thales

[emios 10]

Hey Novicetrader1, I'm going to be 21 on Sunday, just wanna say that it's great to see someone of my age who is doing the same thing as me! this is the most effective way to trade in an environment which is becoming more dominated by algorithmic trading...my equities trading has suffered as a result of it...pray they don't hit the futures too badly! Are you at university?

 

Good luck, and keep up the solid work. Discipline is the key!

 

Emile

[NoviceTrader1 10]

Hey Novicetrader1, I'm going to be 21 on Sunday, just wanna say that it's great to see someone of my age who is doing the same thing as me! this is the most effective way to trade in an environment which is becoming more dominated by algorithmic trading...my equities trading has suffered as a result of it...pray they don't hit the futures too badly! Are you at university?

 

Good luck, and keep up the solid work. Discipline is the key!

 

Emile

 

It's also good to see someone my age pursuing a similar goal as mine! I am in university and will be graduating at the end of the year. My intermediate-term is goal is to build up a solid P/L and get in at a prop firm over the summer. After I graduate, the sky's the limit. What are your goals as a trader, would you like to pursue a career in the field?

[NoviceTrader1 10]

P/L: -147

Account balance: 3715

 

Today was a limited opportunity day, at least for somebody with my trading style. I did make two trades, I was stopped out of both of them. The first trade was made after a break of a coiled range, the second trade was made after the failed break with the reversal. Both breakouts were false, and eventually reversed. As far as I can see, both trades were relatively good, and I would make them again in a similar situation...if anyone has any comments it would be appreciated.

[emios 10]

P/L: -147

Account balance: 3715

 

Today was a limited opportunity day, at least for somebody with my trading style. I did make two trades, I was stopped out of both of them. The first trade was made after a break of a coiled range, the second trade was made after the failed break with the reversal. Both breakouts were false, and eventually reversed. As far as I can see, both trades were relatively good, and I would make them again in a similar situation...if anyone has any comments it would be appreciated.

 

Hey there! Oh well, you lose some days, you win some...Personally, I am more comfortable with a breakout above a horizontal line of support/ resistance, as I find that entering after the break of a trendline wedge can result in getting headfaked, this is what happened with the first trade...therefore, if I had entered, it would have been above the level of 964. However, I wouldn't have entered the trade, as none of the candles managed to close above this level, indicating that there were either latent sell orders resting at the level, or that simply buyers had lost interest, as they perceived price was too high. When there are traders in the pits playing call spreads, as is the case when there is a ranging market, their entry points have to be precise, as they operate on such small margins. Also, note the VOLUME. This is key for me, I would only enter a breakout on high volume, knowing that I can effectively 'surf' the momentum wave up, and sell into that buying when I have made some profit. Not only did price not break and 'hold' 964, the thrust up was on very low volume, which suggested that the move lacked conviction.

 

Ok, second entry...I would have probably entered at 962, considering that this represented a break from the range. The volume supported the move, which is good enough for me. Whether this was a scratch trade or a loser is dependent on profit targets to be honest. I would have moved my stop above the 'wicky' green candle which followed the two bearish bars, so I would have stopped out for a small winner, barely better than BE. However, there was a run up to the top resistance level, which price was not able to close above. NOTE THE HUGE VOLUME WITH A FAILURE TO BREAK AND HOLD HIGHS- POTENTIAL SELLING CLIMAX. This is what happened. I would have entered on a break of 962 to the downside, so long as the volume supported this. As it happens, in this case, it did. Price is currently 959.50. It will be interesting to see what the reaction is in the next market session, we could see a test of the lows of 955 and a rebound.

 

Hope I have been of some help. After all, I'm a youngster like yourself and learning new things every day! I'd be interested to see what more experienced traders would make of the chart...

Edited February 16, 2010 by emios

[emios 10]

I've been daytrading us equities for the past year or so, with varying success. However, the intraday stock market is manipulated by complex algorithms which detect volume surges, which has made determining a 'true' breakout more and more difficult. I have since adapted a swing mindset, stocks generally tend to respect s/r on the daily chart more than the 5 min. I find that looking at finviz.com for my levels is very useful indeed, then I can assess whether that stock or etf has a good chance of rebounding off those levels.

 

Future plans...Well, I'm currently at Oxford studying Modern Languages ( not a financial course, I know!), and I'm hoping to get a job trading equities or commodities at Credit Suisse when I graduate, which will be two years from now. However, I know that, given my background and the rise of the 'quant' traders, that this may be nigh on impossible to achieve. Therefore, I'm trying to widen my skills, in order to follow a more standard Investment Banking path...hoping to complete a CFA designation in a few years, and might take a law conversion, focusing on corporate acquisitions and mergers.

 

That's the plan, anyway. It's not an easy world anymore, and given the stringent reforms that may be headed Wall Street's way, it's about to get a whole lot harder.

[NoviceTrader1 10]

Hey there! Oh well, you lose some days, you win some...Personally, I am more comfortable with a breakout above a horizontal line of support/ resistance, as I find that entering after the break of a trendline wedge can result in getting headfaked, this is what happened with the first trade...therefore, if I had entered, it would have been above the level of 964. However, I wouldn't have entered the trade, as none of the candles managed to close above this level, indicating that there were either latent sell orders resting at the level, or that simply buyers had lost interest, as they perceived price was too high. When there are traders in the pits playing call spreads, as is the case when there is a ranging market, their entry points have to be precise, as they operate on such small margins. Also, note the VOLUME. This is key for me, I would only enter a breakout on high volume, knowing that I can effectively 'surf' the momentum wave up, and sell into that buying when I have made some profit. Not only did price not break and 'hold' 964, the thrust up was on very low volume, which suggested that the move lacked conviction.

 

Ok, second entry...I would have probably entered at 962, considering that this represented a break from the range. The volume supported the move, which is good enough for me. Whether this was a scratch trade or a loser is dependent on profit targets to be honest. I would have moved my stop above the 'wicky' green candle which followed the two bearish bars, so I would have stopped out for a small winner, barely better than BE. However, there was a run up to the top resistance level, which price was not able to close above. NOTE THE HUGE VOLUME WITH A FAILURE TO BREAK AND HOLD HIGHS- POTENTIAL SELLING CLIMAX. This is what happened. I would have entered on a break of 962 to the downside, so long as the volume supported this. As it happens, in this case, it did. Price is currently 959.50. It will be interesting to see what the reaction is in the next market session, we could see a test of the lows of 955 and a rebound.

 

Hope I have been of some help. After all, I'm a youngster like yourself and learning new things every day! I'd be interested to see what more experienced traders would make of the chart...

 

Thanks for the insight. One thing that I would note, is that every market tends to be unique. From my experience grains tend to break on low volume, high volume, and everything in between. I have seen many breaks happen on low volume and on normal order flow...I think this will be evident as i continue to update this log. On both trades I entered by judging support and resistance levels through the DOM(depth of market) and volume by price.

[brownsfan019 17]

Good luck on your thread and journey! That's great you are starting at such an early age getting into this!

[NoviceTrader1 10]

I've been daytrading us equities for the past year or so, with varying success. However, the intraday stock market is manipulated by complex algorithms which detect volume surges, which has made determining a 'true' breakout more and more difficult. I have since adapted a swing mindset, stocks generally tend to respect s/r on the daily chart more than the 5 min. I find that looking at finviz.com for my levels is very useful indeed, then I can assess whether that stock or etf has a good chance of rebounding off those levels.

 

Future plans...Well, I'm currently at Oxford studying Modern Languages ( not a financial course, I know!), and I'm hoping to get a job trading equities or commodities at Credit Suisse when I graduate, which will be two years from now. However, I know that, given my background and the rise of the 'quant' traders, that this may be nigh on impossible to achieve. Therefore, I'm trying to widen my skills, in order to follow a more standard Investment Banking path...hoping to complete a CFA designation in a few years, and might take a law conversion, focusing on corporate acquisitions and mergers.

 

That's the plan, anyway. It's not an easy world anymore, and given the stringent reforms that may be headed Wall Street's way, it's about to get a whole lot harder.

 

That is great man, glad to see you have some goals set for yourself. As long as you put your mind to it, you can achieve it my friend.

 

Even with the rise of algorithmic trading, there are opportunities to be found and exploited. Swing trading is definitely a viable alternative to day trading. My next venture will actually be swing trading equities, I will start pursuing this when I reach a certain balance in my account.

[NoviceTrader1 10]

Good luck on your thread and journey! That's great you are starting at such an early age getting into this!

 

Thanks, I appreciate it

[NoviceTrader1 10]

I have midterms next week so that may interfere with my log slightly, I will try to get in as many trading days as I can throughout the next week or so.

 

P/L: -190(don't have the exact numbers in front of me)

 

 

I had a rough trading day, I found myself making mistakes and becoming impatient and making bad trades. Looking back, I should have been profitAble today. I won't be posting any screenshots as I don't have the time and I know the mistakes I made. I will take this as a learning experience and move forward.

[brownsfan019 17]

You might get more out of posting the charts of the days you made mistakes on vs. the perfect days.

[NoviceTrader1 10]

P/L: -188.92

Account Balance: 3348.84

 

I didn't get a chance to trade yesterday as I was studying for a mid-term(fun times)...I have to take a mid-term in a couple hours and need to do a little last minute studying so I will make this log quick. I had a chance to trade for a few hours this morning, and It was a down day. I'm essentially flat on my account for the last two weeks.

 

I took 3 trades today, all three were losers, one I cut short and the other two I was stopped out. If you look at the trades, I entered an advanced order a tick above/below where I see S/R established. I usually enter a couple ticks away from S/R to make sure I don't get caught in any false breaks...this strategy would have kept me out of these trades. I am attaching 1 and 5 min charts of the individual trades.

 

My observation is that the consistency is the key for trading these markets, I have to trade my strategy and stick around for those days where price action is more tradeable. The ability to distinguish a day with choppy action, and one with established ranges and breaks is also key. I was only able to trade for 3 days this week, and 2 days last week. I will have to make a commitment to trading these markets day in and out and stay disciplined.

Edited February 19, 2010 by NoviceTrader1

[james_gsx 16]

Have you considered taking your strategy and doing the exact opposite? I don't mean that in a rude way, just curious. Most of your entries are in such a place where theoretically they work, you'd get the breakout and limited risk. But in reality, those are usually false breakouts intended to get stops, and traders looking for easy money in a breakout. Hence why you see a few ticks go in your direction, then quickly reverse back into the triangle, or range.

 

 

I haven't done much day-trading in the last year, so someone please correct me if I'm wrong.

[brownsfan019 17]

There's no right or wrong answer. Some people trade breakouts, others trade reversals - some win and some lose with each method. There's very good breakout traders and very poor breakout traders; there's very good reversal traders and very poor reversal traders.

 

I personally hate trading breakouts for the reason gsx mentioned - you will encounter quite a few fakeouts UNLESS you can filter them to the point that you get in the reliable ones most of the time. Simply buying new highs and selling new lows is a losing game IMO but if you can filter out the bad ones, then it can easily work.

[bakrob99 11]

If you look at the large down candle to the left of your consolidation pattern... to me it suggests a rejection of higher prices as the selling was strong. Here's the tough part to realize: For the traders who shorted the top of that bar... they profited from the down move and when price gets back there they are going to do it again. I know that sounds simplistic but in my experience it is the simple logic that works. If it were the 3rd time - it would be more likely to be able to breakthrough ... but the 2nd is still most likely going to be faded.

 

In my experience... the best way to tarde breakouts is to pick a direction and be a (in this csase) buyer at the lowest price possible near the low channel and that allows you to scale at the breakout and then hold the rest without losing money if it pullsback. In other word, the best way to be a breakout trader is to enter before it breaks out on a pullback.

 

Oliver Velez has some webinars and educational recordings where he describe this technique. You can find them with a google search.

 

Good luck with your trading.

[NoviceTrader1 10]

If you look at the large down candle to the left of your consolidation pattern... to me it suggests a rejection of higher prices as the selling was strong. Here's the tough part to realize: For the traders who shorted the top of that bar... they profited from the down move and when price gets back there they are going to do it again. I know that sounds simplistic but in my experience it is the simple logic that works. If it were the 3rd time - it would be more likely to be able to breakthrough ... but the 2nd is still most likely going to be faded.

 

In my experience... the best way to tarde breakouts is to pick a direction and be a (in this csase) buyer at the lowest price possible near the low channel and that allows you to scale at the breakout and then hold the rest without losing money if it pullsback. In other word, the best way to be a breakout trader is to enter before it breaks out on a pullback.

 

Oliver Velez has some webinars and educational recordings where he describe this technique. You can find them with a google search.

 

Good luck with your trading.

 

I appreciate your input, but this log is more for myself than anything. I am using it as a tool for commitment and a way to look at my mistakes. I am well aware as to how these markets trade, and I am continually refining my technique and my trading strategy. I trade breaks, and this is the strategy I will be trading as long as I see fit. If you have any suggestions as to how to differentiate between real and false breaks or S/R it would be appreciated, other than that thanks.

[emios 10]

Hey there...try looking at longer term S/R levels...on the daily for example, and then enter based on your criteria using a lower tf chart. The problem is that there is a lot of price manipulation at s/r levels, surges in volume can be due to algorithmic activity...this is what is causing the 'false breakouts' as they are called. Day trading has been difficult for me recently, and I realise that my personal breakout strategy is losing its effectiveness...it is very similar to yours by the looks of it. Part of the game is being willing to adapt to changing conditions. HFT is here to stay, and there is nothing that we can do to stop it, though no algo operator (was talking to one today in fact) is willing to take on a huge position, such as would be the required with longer tf s/r levels...the risk is too high for them. Hope I've been of some help!

 

Good luck with the trading mate!

[bakrob99 11]

If you have any suggestions as to how to differentiate between real and false breaks or S/R it would be appreciated...

 

I am sorry ... I thought it was obvious. When you see a big fat red candle like the one to the left in your chart, don't take the break until price gets through at least the majority or all of that red candle. It is controlling the price action.

[NoviceTrader1 10]

That bar is within the opening trading range, if you observe any soybean, wheat, or corn chart...you will notice that these "bars" don't usually play any meaningful roles as pivot points...especially on trend days.

[NoviceTrader1 10]

Took two trades today, one was profitable and the other was not. Nothing much else to add...off to study and will be back at it tomorrow.