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Gav's trading blog - Perseverance, Consistency, Confidence

Gav

STOP! Wait Wait…Somethin’ is goin wrong here

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STOP! Somethin’ is wrong here..

stopsign.jpgThough I thought of writing this in my monthly review later, I just can’t help thinking of the cause/reason of my mediocre March performance. OK, I am not losing any penny, instead, I am just having a FLAT month with a whopping 0.9 R profit to date. The months-long flu and cough and chopfest of stock index futures after the big sell off might be part of the reasons, but I am not using these as execuse.

Here are what I did this month.

I started a new strategy which is more like a scalping strategy. After flipping through charts after charts after charts, I decided to jump in with some real money. Well, things were not as rosy as I had thought. I hit problems like spread, confidence, order execution speed etc. I stopped this after I started feeling uncomfortable.

Secondly, instead of focusing on NQ only, I started expanding my trading basket to ER2 and ZG. This move was fine, but it was just too fast. I jumped into two instruments that I had never/rarely traded. So, the movement, speed, spread and risk level scared me a little. I lost confidence for a while. I have stopped this monkey act immediately and taken out ER2 and ZG immediately. Now I again focus on NQ.

Third, I am timid. When I am facing the situation that the risk required for a trade is far below my R, I hesitate to increase my positiong size. So, even though the trade painted out a nice picture in the end, my equity growth is still mediocre.

Solution? I don’t have it all now. The only ’emergency action’ I am taking now is focusing on One product One stup again. And I need to push myself to increase position size when opportunity comes.

OK. Now go back to trade.

Dummy day trading #63 20-Mar-2007: ZG Long trade closed

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Does Gold always rally once a day? Just kidding. I got in long position around 1036am , trying to get into second rally. However, I was wrong. I was stopped with -1 R loss.

There seems to be some problem with Tradestation order execution. My stop order was not honoured immediately. Though I saw there were numbers of ask and bid orders. It hanged for a couple of seconds before it came back to fill my order. Phew….

Anyway, here is the dumb trade. Very bad entry. I need to be patient a little bit more. I am still FLAT for March.

[photopress:ZG200tick20mar2007.jpg,full,alignleft]

Journal note: Phileo at Phileo’s Picture Windows did two nice trades on ZG. I was wondering, if I am again having the same problem of missing the forest again. I tend to over concerntrate on tick-by-tick action instead of stepping back a little and look at the bigger picture. There were indeed some nice dummy spots to get into ZG trade today, and , well, I missed it all.

Dummy day trading #62 19-Mar-2007: NQ Long trade closed

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After the mistake of first trade (got it too early), I decided to give it another try, as market looked really strong today. I got in NQ futures around 1035am. And that was a better trade. Since the medicine was running in my body, I decided to use moving average to trail my stop and get out the trade fast.

Not so bad, second trade closed with +6.51 R gain. I think it is good enough for this sick trader. Alrite, time for me to get some sleep now.

19 Mar 2007
19 Mar 2007

Dummy day trading #61 19-Mar-2007: ER Long trade closed

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Man, I should not have traded today. I was on medication to cure my throat infection. But, I changed my mind when looking at strong premarket. Here it is, I paid for my impatience. I got in ER too early and get chopped out. I hate this feeling. Anyway, here is my dumb trade of the day.

One trade closed with -1 R loss.

[photopress:ER22min19Mar2007.jpg,full,alignleft]

Things to consider when designing a setup

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I read Joe Ross’s chart Scan Newsletter, and he mentioned some considerations when looking/designing setups. I find it to be useful.

  • Do I see something that happens frequently, at least as often as often as I want to trade?
  • When the event or setup takes place, does it offer me the range of movement I need to be profitable?
  • Where would I place my protective stop, and how often would it be hit?
  • Is the daily range sufficiently large that I can get the ticks or points I need to make money?
  • Is there sufficient volume at this time of day for me to easily be filled?
  • Do I get decent fills in this market?
  • What kinds of orders can I use to accomplish what I would like from this setup?
  • Am I able to find more than one setup in this time frame, and how well can I answer the questions already asked for each setup?

Trades 14-Mar-2007

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No dummy trade as mentioned in my Twitter box.

I made two trades on ZG today. Both were losers. First trade exceeded my R as I was using stop order instead of stop limit order as usual. That’s a mistake. First trade ended with -1.31 R loss. Second trade was stopped with -0.68 R loss (Trailing stop was triggered). End the day with -1.99 R.

I have two losing days in a row with more than 3 losing trades. I will stop trading for the week to prevent myself from revenge trading.