Great Thoughts, Bad Implementation

Wednesday 5/9/2007 ES Futures

How it went

Well… Not as good as I would have liked. My morning pre-market simulation trade, see earlier post, just set the stage for today. I wrote off too much of the morning signals and the price action after the FOMC “they” decided to “mix it up” and make a different price pattern. It almost worked, I started wanting to go short. I was too slow to draw my Fibonacci grid on the range of the report price action.

Luckily I slapped that grid on before getting short. The bad news is I let the long entry go by to wait for the next short signal. Now I’m watching the market go up without me. See the dark purple line on the chart.

Trade Log of My Trades.

Trade Pos. Entry Exit Entry Time Exit Time Result

1A Long 1510.5 1511.75 5/9/2007 8:57 5/9/2007 9:05 +0.75
1B Long 1510.5 1512 5/9/2007 8:57 5/9/2007 9:11 +1.5

My Take

1st half: 0.75 Points
2nd half: 1.5 Points

Trade Narrative and thoughts about My Trades

How not to Enter – I settled on an entry price a little higher to get into this trade. Price action did come back and would have given me a little better entry. This worse position made me not hold the 1st half as long as I intend. My thought was to bank some profits and see how long the 2nd half could run. Well... I changed my mind and decided to bank more profits to play with later. Since my entry was not as good as I intended, I decided to try to grab profits and get a new entry. We will see…

Really tempted – I almost tried to reenter my long. I decided it was too soon and too close in price and I did not want a bad "revenge trade" after a profitable trade. Glad I waited now. Volume is very light. I just may end up waiting until after the bomb drops. The FOMC announcement that is. I’m leaning to the up side right now as my guess for the price action after the report. Playing with some Fibonacci levels, the low so far today is around 1509 which happens to be the 62% retracement of yesterday's range. Bears need to break that to go lower. See the light purple line on the chart.

Three signals to buy at the Pivot when it was holding there for 20 minutes. I wanted to see a press through the pivot to hit stops. That would have definitely enticed me long for sure. Too late, drew the Fib for the day’s tight range so far. The Pivot just happens to be the 62% Retracement level and need I say it held – so far it is off to the up side.

Thoughts About Today

I need to stay in the game better. I could have done much better if I took some more trades with the plan to bail on the trade if the price action died for too long. There were definitely some dead spots, but I was on the right side for the trades I wanted to take all morning.

Just left that money on the table for someone else. :-(

After my comment about 1509 being the 62% retracement of yesterday’s range, I wanted to just place a “buy order” there and see if the market slammed down and hit it with the FMOC announcement. Would have made for a great trade. And somehow (much later in the day now) I started thinking short. Instead I should have seen the stop run below today's low and jumped on early to the up side. Live and learn.

Lessons Learned - Or still needing to reinforce

I need to stop trying to make up my mind for “what the market should do” and trade what I see.

I wrote off the morning as not good trading. While it was not the best I feel I should have taken more trades. Easy not that I see they worked. :-) Maybe these trades would be higher risk with the lower volume and tighter price action, but there were trades there that worked for decent profits.

I'd like to hear thoughts from others - am I better to stay out or jump into the fray more?

I either have to take some more risk or be content waiting for the “perfect” setup to occur. Knowing myself, I feel I need to get in there with more trades. Seems like days where there has been an “additional stop run” after my entry will repeat this scenario on future entries. Quieter days have not been putting in this additional move.

Trade Well, Trade Wise

John

Not My Best Day

Tuesday 5/8/2007 ES Futures

How it went

Not a good day for me today. I started out thinking good. My initial read was to get short, but I did not find setups that I liked. Then my signals started telling me to try some long trades. Here is where I got out of synch for today. I found myself still “wanting” to be short.

On the positive side – I was able to develop my average volume indicator. Please review my earlier post for more details. I’m sure it is hard to see the finer details, as is the rest of the chart (but until someone asks for better…) details. It’s the Blue line in with the volume.

While there are 1-minute spikes above the “average volume” level, you can see plenty of space more often than not between the Average level and the top of the volume bar. This tells us that volume was lower than average again today.



Trade Log of My Trades.

Trade Pos. Entry Exit Entry Time Exit Time Result

No actual trades. :-(

Trade Narrative and thoughts about My Trades

To start today - The NYSE Tick was the weakest that I can remember for some time now. That had me “anxious” to find a good point to get short. I could have settled for a couple of “ok” short entries, but nothing jumped out and said “get short here” to me.

I wanted to short just above 1510, but I did not have a “real” signal yet. So I waited. Darn, that trade is working. Then price consolidated just under 1509. Again I wanted to be short. I was "hoping" for a “head fake” to the long side so I could short that move, but we never got one. Looks like I still need to get ride of "Hope" in my trading. :-(

As my feelings of “missing out” started building I could tell I was not thinking as clear as I need to be. Now I start getting overly cautious wanting to make sure my “read” was correct and that my “emotions” are not trying to get me to take the “Hope” it works entry signal.

Trapped by the 62’s – Two 62% Fibonacci retracements that is. The first is drawn from the high after the open down to the low of the day. See the dark purple line on the chart above. The second was from the low of the day up to the swing high just before 10:00 CT. See the light purple line on the chart.

Price was trapped for over an hour and a half. I had a caution light, but my signals were telling me to try some long trades. There were too many signals for me to not try any. Either long or short, I should have tried some entries. Obviously the long side won out in the end. Big surprise right.

When price broke to the upside, we received the first NYSE Tick reading above 900. Now lets see if this is a sign of strength or the last stop run before going lower.

Sim it is - That is it. I’m going into simulation mode so that I’ll at least take some trades. I’m a little leery of a long here, but I should have been taking long entries for some time now. Will it continue? I have to get myself in synch. Sim long at 1512 shortly after 13:40 CT. Well… I got over protective when NYSE Tick pressed to highs twice and price action could not get moving back to the up side. Out at break even.

Forcing it – That last trade was a long signal, but I had warning indications of a possible turn and now I feel I should have been short instead. Am I just forcing myself to pull the trigger now? I try to minimize trades this late in the day, but since it is sim and I’m primarily trying to get back in synch I’m siming a short at 1512 shortly after 14:00 CT. When the NYSE Tick slammed down to a low at 14:09, shot back up at 14:10, and price had not done much I decided taking dumb trades late in the day would not help. Just close out the trade.

Done for the day. :-(

Thoughts About Today

Muted price action had me off today. Price did move, but I felt the swings were tighter than I like to see. I feel this contributed to my feelings of wanting to see better signals to take trades.

After passing on some questionable signals that ended up working I became more conflicted. I was having a harder time distinguishing a signal I should take from a signal I “Hoped” would work and wanted to take. By the time I figured out the trade I wanted, no “decent” second chance entries were offered. All I could have done was “Jump-On” the move.

I’m starting to think I have too many “unfiltered” indicators on my chart. I know I can not take all the signals (red and green arrows and dots on the chart) as trade entries. But I’m filtering too many out and I still have more signals that have not been coded into an indicator.

That said, I definitely need to get into more trades. Nothing ventured nothing gained.

Lessons Learned - Or still needing to reinforce

One of the biggest lessons for today is still to trust my signals. As price action wedged from 10:00 - 11:00 CT I started doubting the long side more. My entries are good the majority of times. When I’m “wrong” about the trend either turning or continuing I have a good chance of protecting the trade at or just better than break even or even bailing on the trade for a small loss.

There were a couple of points where I found myself saying I should be in the “last” trade. Right or wrong, I need to take more entries, do not force entries, allow room to work at first, and then be sure to protect the entry when counter trend signals are generated.

To some degree I did a good thing today. When I found myself out of synch and not sure which signals to believe in, I did not trade. I survived another day, I just did not contribute to paying the bills.

Trade Well, Trade Wise
John

Better - But Room to Grow

Friday 5/4/2007 ES Futures

How it went

Got off to a good start today. I felt much better about today. Felt in-synch for the most part with the market. I focused much better today and did a much better job at my trade selection. I had one issue with my charts. Something seems to cause my Volume based Investor/RT chart to recalculate and redraw. And when that happens I lose all volume breakdown indicator data for the current day. The indicators continue working on new data, but I have to re-download tick date to “rebuild” the indicators prior values. I hope Linnsoft can figure that out for me real soon.

It has been a while since I have had a day where the price action was this active and I took this few trades. All the other times I can think of were dead flat days that went nowhere.

I’m changing my format slightly. To try and save me some layout headaches, I’m going to list the trades all together in a single block and then have my thoughts and comments on each trade referenced below in a new Narrative section.

Trade Log of My Trades.

Trade Pos. Entry Exit Entry Time Exit Time Result
1A Long 1512.25 1513.25 5/4/2007 9:05 5/4/2007 9:11 +1
1B Long 1512.25 1514.25 5/4/2007 9:05 5/4/2007 9:30 +2
2A Long 1513.25 1514.25 5/4/2007 9:41 5/4/2007 9:50 +1
2B Long 1513.25 1513.25 5/4/2007 9:41 5/4/2007 10:08 +0

My Take Today

Captured Points +1, +2, +1, +0 = 4 Points

By simply managing these trades better and not taking any more trades, I had the option to double my profits. I managed too lose today and let some paper profits get away uncaptured.

Could have had +2, +3, +2, +1

Trade Narrative and thoughts about My Trades

Woulda Coulda Shoulda - Felt like just blindly buying 1509. We opened above this price and dropped down to it. This was such a strong level yesterday I figured we would at least get a tradable bounce there. Not really part of the plan right now so I passed. But I hate it when I’m right and pass up a good trade. May very well be the low of the day. :-( Have to trust your instincts sometimes.

Trade 1: A Good entry – As I watched some “high Risk” long entries go by my feelings of “Missing out” started trying to come back. I played some music, to sooth the savage beast, and just told myself to wait for the NEXT entry. Look, a good entry was provided. Price action made me sweat the entry for longer than I would have liked. But as I reviewed everything I was still confident I was in a good trade. It just needs to work. :-) I think I took the 1st half off too soon because of how long I had to wait for the trade to start moving. Then I tried to play lose on the second half to “let it run” and got stopped out at +2.

Trade 2: Houston we have reentry – I waited patiently for the next entry. There was a “weak” entry signal right after I got stopped out. The Volume Break down indicator tried to tease me into taking this one, but it really was not a good enough signal. I'll wait. Then there was a decent entry around 1513.75 or so. But wait… The last entry gave a secondary entry before it worked. I'll wait for one more push and take that entry. I got my entry, but I did it again. As soon as price stalled around +1 I took half off. I would have been better off if I just parked the stop “prematurely” at Break Even and let this trade work for better profits. After all, we are in a perpetual up trend and I have not been letting my longs run and I have been forcing too many short entries. Would have filled at +2 if I held. I hate to tell you this. Now I tried to let the 2nd half run and did not manage it close enough. Out at +0. :-

Hey Navigator, did we just miss our turn back there – Who is driving this thing anyway. Really messed up the last trade. Out too early and too late on the same trade. Missed all 4 of the clues.

1. We put in what could turn into a “lower top” just before 10:00 CT. Ideally this should have been a higher high if we were going to keep trading higher.
2. The Advance Decline is weakening and also not making a “Higher High.” The difference of the Advances and Declines has been trending lower for some time.
3. The NYSE Tick made a “lower low” thus far.
4. Volume started declining from 9:45 Ct until the 10:00 CT "Lower High."

Should I let this long trade try to run? You may be surprised, the answer is YES! But make sure it has a short leash with all of the above going against the trade. Always watch for the warning signs. I used too long of a leash and that one got away from me. At least I saw the clues before I tried getting long at 1513.25, but I need to get back in synch now.

Making Blog notes is helping me after I put on a trade with what I feel is a good entry signal. Typing notes helps keep me from second guessing the trade and actually makes me give the trade time to work. But I’d have to say it is hurting some as I’m not managing my trades as good (or close) as I should. I got caught thinking, let the market run to the “up side” when I should have managed the trades.

Flip a coin – A little after 10:30 CT and we are either trying to put in a turn back higher or we are trying to build up some steam to push lower. I have weak signals for both a long and a short in the 1513 area. I think I’ll pass and wait for the good signals and take them. No definite signs of a turn, so if anything I should be short. I had to say that to myself because I think I was starting to get to the point where I may have “forced” a long trade.

What did I miss – A lot! Technically it started when I passed up the short signal at what turned out to be the peak of my second long trade. You know the place where I should have protected some of the profits. The next few short signals were weak at best. There was a "should try" short signal just above 1511 that I missed in real time. Now I'm looking at a potential long at 1507.50 not ready to risk my (self minimized) profits yet.

You calling me short – I may not be real tall, but I should be short at 1509 or maybe 1509.25 for the entry at 11:45 CT. Step back; take a deep breath and focus. Now I spooked myself out of the last short thinking about the long I passed on. That long trade that is working so far. The 1509 area was troubling me too. It was so strong yesterday and now we are chopping back and forth around it trying to decide the direction. Now it looks like passing on that short trade was for the better.

Am I looking long now? – It’s getting close to noon, I’m leaning long again but the signals are saying be careful right now. I’d like to see the NYSE Tick press higher if we return to the upside. The last few NYSE Tick tops have been lower than I like to see for good sustained movement higher. So far there are no entries I like yet. Just a long under 1509 that should have had me protecting the short trade. (if I had traded it) Looking closer (a little late now) that long signal was at a re-test of yesterday’s Market Profile Value Area High (VAH). I think I missed a Long entry. :-(

Luke, Trust the Force – Just past noon. Price pushed back to 1509 again. What to do…. Feels like the market is trying to tempt me into a trade here. I passed. :-( It was a signal I should have taken. I’m having problems taking signals at these Market Profile levels. I don't know why. I should pass on other signals and wait for and take every signal at the Market Profile levels. In general, I need to trust my signals better. Especially signals in the direction of the trend.

Thoughts About Today

Reflecting back on today, while I felt in-synch, I did not act on enough of my signals. I started out good with the first two signals. Then I found myself starting to question the signals more and more and I’d have to say I started having feelings about not "giving back" what I have already made.

There were many more signals that I wanted to take and did not even list above. The worst signal would have produced a break even trade. Most entries had 2 or more points potential. I also lost focus or “checked out” this after noon a little early. When we were in the afternoon grind higher, I decided for the market that it was going to finish the afternoon too flat to trade. I prefer a bigger move or pull back to enter on and find these bigger moves to be more reliable at delivering profitable entries.

Lessons Learned - Or still needing to reinforce

Almost feels now like there are too many lessons to list. Well here goes:

1. Take each day and that day’s signals with the market action they produce.
2. Don’t let thoughts of mistakes already made, especially mistakes on prior days, take away from your focus on the market.
3. Every entry will not be perfect. Take more continuation entry signals in the direction of the last trend.
4. Trust the signals you see and consistently take the signals as presented.
5. Maintain focus, or let go of any trades that you “could have” taken.

The Biggest lesson today – My biggest take away today is combining focus and trust. I let myself get distracted with Blog notes and did not maintain enough focus on “what trade would you put on right now if you have to make a trade.” With good focus, I should have the anticipated trade direction "of the moment" in my head and just be waiting for confirmation to enter a trade or invalidation to pass on the trade and look for the next signal. This may be in my words, but this comes from reading the TraderFeed blog. Brett Steenbarger does an awesome job with his blog and Weblog. I think there is something there every trader needs to help them with their trading.

I’m not sure I found the blog entry I was thinking about. But in my search I was reviewing many of the great posts on the TraderFeed blog site. Here are several that I ran across, remember, and highly recommend every trader review, then review again. I'll go back through them.

Three Relentless Steps You Can Take Now Toward Becoming A Better Trader

Four Overlooked Qualities of Successful Traders

Five Guiding Principles of Trading Psychology

Six Keys to Trading Success: Lessons From a Successful Trader

Back to today. I think I started filtering out trades because I wanted to protect the profits I already earned. While I did not make any really bad mistakes today, I did not manage my trades well. I did not protect my paper profits in these first trades. I “Hoped” the market would just keep going in this perpetual up trend mode. As noted above, I could have doubled my take today just by managing these first trades better. We better not talk about the trades I did not take that would have worked. I have all weekend to try and forget.

On the positive side - I did not trade in the choppier part of the afternoon. It is too easy in these periods to “think” you need to jump on a more “before it gets away” when you should be waiting for your entry price or pass on the trade and wait for the next entry.

Trade Well, Trade Wise
John

Take the good with the bad

Thursday 5/3/2007 ES Futures

How today went

A couple of things had me off my game today from very early on. The biggest item was troubles with my data feeds, both for my charts and Ninja order entry. Usually I can depend on the Ninja Dome to “tell me what” is really going on. Well I’m not sure, but I hope today was a fluke and not related to my upgrade last night to the production release of version 6. I had been running Beta 8 without issues up to now. Hmmmm.

Or was I up too late last night starting a Blog. :-)

Anyway, I spent too much time after the reports came out comparing the Charts to the Dome trying to figure out what was happening. Or more importantly, what was accurate price action when I should have been watching my signals closer. When I realized I had a signal, it took too long to evaluate the signal and comparethe Dome to the Prices on the chart. I missed several good moves after the ISM reports came out. The trades ran away from me while I scrambled to verify.

I never felt “in-synch” with the market today. I was overly cautious from the reports until the end of the day.

Trade Log of My Trades.

Trade Pos. Entry Exit Entry Time Exit Time Result
1A Long 1503 1504 5/3/2007 8:49 5/3/2007 8:53 +1
1B Long 1503 1504 5/3/2007 8:49 5/3/2007 9:01 +1

Good Entry – One of my "Need to take" entry signals. Took the first half off early since I had yet to decide if this was the start of a trend change or just a counter trend teasing me by looking like it will work. This was were the first occurrence of my data feed issues started. Shortly after the reports came out, Ninja Dome froze. It made me press the stop at just the wrong time. The early stages of the report price movement knocked me out at +1 point. Prior to that, my stop was at break even and I had the possibility of getting 2 – 3 points if I pressed the stop at the right time.

Trade Pos. Entry Exit Entry Time Exit Time Result
2A Long 1504.75 1506.75 5/3/2007 9:39 5/3/2007 9:44 -2
2B Long 1504.75 1506.75 5/3/2007 9:39 5/3/2007 9:44 -2

Not a good idea – Bad read, bad hold, just a bad trade all the way around. While this could have turned into a “Lower High,” price also just put in a “Higher Low” just before this possible entry. I think I was leaning short after the report release. While there was a large “Buy Volume” spike in the 9:01 CT candle, it had been 40 minutes now without strong signs of continuing this up trend. There was a small clue at 9:28 and 9:29 that should have also kept me out of this trade. See it? Well… “Hope” killed this trade, or should I say my P&L. I felt I was in trouble when price popped up to 1506. The picture was becoming clearer, but I was already in this trade. What do I do. Price pressed back down and I could have closed out for less than a 1 point loss. “Hope” springs eternal, but not in trading. I could not hope hard enough to make the market actually go down. :-( I should have tightened the stop some at a minimum. Err.. Mistakes... mistakes on mistakes.

Trade Pos. Entry Exit Entry Time Exit Time Result
M1A Long 1504 ? 5/3/2007 9:37 ? 2 or more
M1B Long 1504 ? 5/3/2007 9:37 ? 3 – 4

Missed trade – Frankly, I should have bought the “Higher Low” before even trying this short. Then I would be holding a Long and "letting it work" for me and not taking the prior short trade. Makes for a bad P&L swing. This trade should have profited even more than the last trade lost.

Trade Pos. Entry Exit Entry Time Exit Time Result
3A Long 1507 1508 5/3/2007 9:47 5/3/2007 9:58 +1
3B Long 1507 1508 5/3/2007 9:47 5/3/2007 9:58 +1

Better get Long – Not my preferred entry setup, but the longs entries of late have not been pulling back and giving me an “ideal” entry setup. But the market has had no troubles going up lately. I have decided I have to take what I can get and not be so picky on the entries. I covered this trade when I had a strong short signal and at the same time we were up against a Market Profile level at 1509.

I'd like to think some day I'll actually reverse my position at these signals, but for now I need to eliminate mistakes and not introduce more by reversing my position. Too many bad memories of failed counter trend trades come to mind.

Trade Pos. Entry Exit Entry Time Exit Time Result
4A Long 1507 1508 5/3/2007 10:05 5/3/2007 10:25 +1
4B Long 1507 1508 5/3/2007 10:05 5/3/2007 10:25 +1

Lets try that again – Well, it looks like we want to make another run at the 1509 level to try and get through. Long again. :-) We went up on really light volume, when I did not see big volume that I felt could press us through 1509, I protected again.

Pass – Decided I was not trading at top form today so I should pass on some trades as I had to leave soon to pick up my daughter from pre-school.

Trade Pos. Entry Exit Entry Time Exit Time Result
5A Short 1505.25 1506.25 5/3/2007 11:51 5/3/2007 11:54 -1
5B Short 1505.25 1506.25 5/3/2007 11:51 5/3/2007 11:54 -1

What is the Rush – Well… right when I got back I wanted to know what I had missed. (I had missed too much already) The short trades I considered before I had to leave had worked. I missed out… so I felt. So lets dream a reason to be short and get into a short trade before this market keeps going without us. Wait… That usually does not work. Click… I’m in a trade. Not good. :-( It did not take long again to figure out I entered at a bad price and really did no have a entry signal. I just wanted to (already) be short.

Trade Pos. Entry Exit Entry Time Exit Time Result
6A Short 1506.5 1505.5 5/3/2007 11:56 5/3/2007 12:24 +1
6B Short 1506.5 1505.5 5/3/2007 11:56 5/3/2007 12:24 +1

Revenge is bitter sweet – My next trade probably needs to be labeled a “revenge trade” as I jumped too quick again wanting to get my prior loss back. I have a valid entry signal, I tried to wait and feel confident about the signal, then jumped on as price looked like the trade was going to move lower. What I did was jump on the head fake before the stop run that made the swing high. This last push higher would have also provided me the entry price I was targeting at 1507 – 1507.25. When we started forming a long signal I pressed the stop and harvested 1 point. There was not much more in that trade. Just a couple more ticks.

Trade Pos. Entry Exit Entry Time Exit Time Result
7A Long 1506.75 1508.75 5/3/2007 13:38 5/3/2007 14:00 +2
7B Long 1506.75 1508.75 5/3/2007 13:38 5/3/2007 14:31 +2

One more – One more setup to take. Look at that nice stop run to get long off of. I jumped back in too fast. Needed to use my Volume Delta to judge when to get in. There were two pushes down and I’m ended up getting long at the hesitation or the end of the first push. Price moved a point lower on the second push. I took the first half off at 2 points. I wanted to let it run more. I thought if we break 1509, it could be "off to the races" and lets go with all our contracts. :-) But when it looked like price was coming back I was not going to get less than 2 on my first half. Need to lock in some profits to make up for earlier mistakes. Hoped (again) that the second half could ride a push through 1509. No go. After 15 minutes of knocking on the 1509 door, I decided I had enough. Pressed my stop to +1 and placed the target at +2 to see which would win. +2 it is.

Had enough roller coaster ride for today.

Thoughts About Today

The market certainly did its job today. That is to trick me and as many other traders as possible in order to extract the greatest amount of cash. Maybe it is just me, or did others have a harder day today as well. I need to take more of my signals and let the chips fall. This could have worked quite well today, up to the points where I started chasing or forcing trades.

Lessons Learned - Or still needing to reinforce

Well, I did gross 6 points per contract. I know… sort of per contract as I enter with a full position risk and will exit half of the trade early and try to hold the second half for more gains. Most of today’s profits are from my final trade.

My problem today is that I missed more profitable trades than I captured. These days seem to turn into my worst days as I start feeling like “I’m missing out” and my trade selection standards seem to drop and I start "forcing trades" that I should not take. Today I gave back half of my profits to the market on trades that I should have had no problem filtering out.

I truly hope that I don’t need to post this lesson again, but I'd have to say that this is on my top 10 list of things I need to correct in my trading.

Trade Well, Trade Wise
John

My Start

Well this is my first post. Not sure why I'm starting a blog now, but somehow I feel it will help me become more accountable and internally strive to prefect my trading. I know I can be successful trading and that trading will provide me the life style and freedom I want for my family.

I have been trying to discover my trading style for too long now. I have purchased a few systems to "jump start" my trading. Like a lot of new traders, I wanted a system that just worked, was consistently profitable, and I would just follow the rules and make money. Not much to ask right?

Well.... I wish trading was that easy. I think many traders fail with that type of attitude. Just wanting to blindly follow a prescribed system and not really discover it the trading system "fits them." I have lost who to give credit to now, but I remember reading somewhere that the "Holy Grail" of trading is discovered in yourself, not in a magical indicator that tells you when to trade. That may sound crazy to some people.

I'm a firm believer that everyone is unique and has personality traits that may help or probably will hurt them in trading. We just have to find the right style of trading to fit our personality and not try to force our trading to work in an existing system. In other words, we need to understand the system and make it our own. We must trade what makes sense to us and work through issues like:

Markets to Trade

• Stocks, Indexes, Currencies, Options, ...

Time frames

• Can I trade all day or do I still work?
• Can I stay focused on the charts for the entire day?
• Can I only trade part time or do I want just a few hours to trade to enjoy my freedom and life.
• Do I like fast charts with a lot of decision points or should I slow it down and have fewer trade decisions.

Risk Reward

• Do I want to take on little risk, but I'm willing to harvest smaller relative rewards.
• Can I risk more and try for fewer but larger winning trades.

And more...

When I started trading stocks many years ago. I always had a short term focus and only wanted to hold a position for 1 - 2 weeks. I did not like what I felt was the roller coaster ride in buy and hold. I wanted to capture the swings in stocks I felt were cycling and make "more" than just holding on to a good stock.

When I was able to get into full time trading, I was interested in capturing the intraday swings available in the markets. My focus shifted into the Index Futures markets not liking the "hit" that I could receive when Stock earnings or other big news came out. I did not want to do a lot of research or to have to worry about how the market would interpret the news. My favorite was - Earning are up, above company predictions, but.... not above the analysts expectations.

Don't get me wrong. Trading the Stock Indexes, I still need to know when major reports are being released. I either avoid trading in front of the news or I may try to enter a position if I expect that I can "protect" the trade and only risk giving back some paper profits in hopes of getting an additional launch off of the report. I have long given up trying to interpret or anticipate the news. I just trade the price action that results.

I'm sure I have worked through most of the problems that new traders run into.

Over confidence - Jumping right into trading with some size before trading in simulation to get the feel of the market in real time. Let alone being able to "learn" how I interpret the system in real time while only risking paper money. If I had only one do-over, I would have started with "Sim Trading" and not "burned while I learned" at first.

Scared money - While I did not have any large losses per contract. I was just slowly whittling down my account more than I was building it up in the beginning. Then the overconfidence fades and one starts questioning if this is the right trade only to end up chase the trade once it is obvious that the trade is working. Now I'm in the market at worse entry price and will have a harder time defending the position in the normal market gyrations. Do I try to hold this "bad entry" for larger profits or will the market come back and test my entry and I should just take profits now while I have them..... The right answer is take the trade at the signal or wait for the next one.

Early success - One of my early success was letting my losses run and cutting profits short. err. wait. That is not right. For some perverse reason, I could let a trade go against me right away and hold (Hope) for the trade to turn around. But if the trade started working right away, I had a harder time when the market "tested my entry price" before continuing in the direction of my trade. And the ES loves to "back and fill" or back and test your entry more often than not.

I learned not to chase or jump on those sudden moves and expect them to keep going. Often sudden surge moves are fake outs to draw traders into a trade. If you are trading the ES, let it come back and fill at your entry or wait for the next signal.

Pulling the Trigger - I can say I have never had trouble pulling the trigger and putting on a trade. Actually I had the opposite problem. I was over trading and not filtering the signals and taking only the best signals. Remember - I want to captures those intraday swings. I must get everyone of them. Can't miss any.... err wait... Look what is happening, I'll get some good trades and turn around and give too much of it back trying to capture more moves in the chop.

I'm sure I have more bad habits and new trader problems that will come out in future blog postings.

It is time to actually make my trading start working for me. Otherwise.... well lets not go there yet.

So for now I plan to post most week days. Don't know for how much longer, just for now. I'm not into posting trades as they happen. Right now I don't want the distraction factor. Maybe latter I'll want to be distracted from the trade so I can "let the trade work" and not cut that winning trade short.

That is it for this post.

Trade Wise, Trade Well.

John