WEEK 2 ................
right....I’m sorry if i kept you guys waiting for this update, I needed a break after nearly killing myself with trying to learn everything about candlesticks, I however have decided that to become a successful trader it is important to memorise the candlestick signals as knowing how to read and interpret the signals properly along with market structure will give me an edge as to when and where to enter on a trade.........hope everyone enjoyed there Easter......
so week 2........this week was a 4 day week due to the Easter holidays but to be honest it was a boring week, the first 3 days was really quiet and it is times like this that you develop the discipline that differentiates the novice from the pros. Boredom trading is one thing that was taught to us from the start and this week it certainly was put into perspective. For a trainee just starting out I would say boredom trading ranks up there in the top 10 NO NO rules.
Sitting there staring at the screen waiting for hours on end patiently for a good entry point but because the market is ranging/no data/traders on lunch, there is none and so begins this battle within yourself, this little voice in your head that goes..."go on, just one trade, it might go up", the greed , the boredom all charging at you all at once trying to get an advantage to make you trade.........my advice? get out the old Mario kart on the Nintendo Wii!! seriously though it is hard and we had 3 days where the market was just ranging but once you have overcome the boredom trading it will make you mentally and emotionally stronger and you take one more step closer to becoming a better trader, I personally took the time to brush up on my candlesticks as I knew that if I sat there for too long I would have succumbed to the inner devils in me, however I was quite pleased with myself as I managed to hold my discipline and only traded once I had a strong conviction of my reason to trade.
The one day that anything did happen was Wednesday when Wells Fargo(one of America’s biggest banks)released there earnings report which was better than expected, now in these obvious window of opportunity I would have jumped straight on this trade by pressing the buy at market button but being a trainee like I am, I was eating bl00dy noodles at the time it came out, so not only did I miss it but I had to watch in agony as it went higher.....and higher........and higher!!!! now if I was a newbie like I was 2 weeks ago(still am) I would have just jumped straight in(this was a good 10 seconds later) but discipline has taught me that I had to wait for the right entry point and so i did.......(trust me this was hard, watching the market go up and up but you have to keep the discipline cos if you don’t and go in at that moment a number of things could have happened such as hitting a resist/retracement/trend reversal etc and then you would have been f**ked!)
And so I waited and waited and waited, times like this your emotions really play with you cos when the ticks go higher you start thinking “man I’m missing all that profit” and when you start thinking like that it is hard to trade effectively as your judgement is clouded by greed. However I did manage to hold my discipline and entered on a MA support which suffice to say paid off and I closed on profit. I made in total probably 3 trades( I think) and managed to finish the day on a positive taking my total positive days to 6 out of 9 trading days.
Something which I want to bring up as well that happened during one of my trades this week was Trader influence which predominantly affects trainees. What do I mean? well I entered a trade going Long at 84400, at the same time Superman (one of the senior traders) also done the same……now usually when you enter a trade you do so because you have a conviction that it is going one way or another dependant on the outcome of your technical analysis, now my analysis was telling me it was heading for an uptrend however before it did it retraced a little, not much, say about 7 or 8 ticks if I can remember correctly, now normally I would have just let it be as I had convictions in the trade however Superman decided to bailout as he thought it was a trend reversal and wanted to cut his losses so now because of what he did , subconsciously I am thinking “well if he’s bailing out and he’s a senior trader he must be right, I’m bailing too”, so bail I did and what happened……you guessed it, it was a small retracement, totally within my stop loss which was a few ticks under the minor support, once it hit that support it went into an uptrend. Suffice to say I was absolutely gutted, however like I took it on the chin and moved on.
The important lesson here was to believe in your own judgement, never let another trader influence your decision as it can become a costly mistake.
Now I’m going to give an example of one of my day’s trading last week, for all those that don’t know I am currently a trainee futures trader trading the Emini S&P 500, because of the time difference this is done in the afternoon, so 2.30pm our time would be 9.30am Chicago time which is when the cash markets open.
1pm-Market review/preview
1.15-2pm-Fundamental analysis
2.15-3pm-US Cash market opens-trading
3pm-Fundamental analysis
4pm-Technical analysis
5-6pm-Trading
6-6.15pm-Market review-story so far
6.15-9pm-Trading
We are currently trading 1 lot on the SIM which equates to $12.50 with a 18 tick/$225 maximum loss for each day,
Q&A- you are logged on in a virtual trading room alongside your co-trainees and your mentor hence you can ask your mentor a question any time you like, whenever you like from 1-9pm, the emphasis here is to create a trading room environment as if it were like in a physical trading room.
I have also included a quick run down of my P&L for the week, I am also pleased to say that I have been consistently making a profit for the past 6 days out of a possible 9, bearing in mind that the first few days we were getting to grips with the charts and trading platform.
Monday-$370-Positive
Tuesday-$62.50-Positive
*Wednesday-$187.50-Positive
Thursday-$112.50-Positive
* I actually made a loss of $175 on my first trade that day due to a retracement, with only 4 ticks left before I was out for good the day(would have been twiddling my thumbs all day), I very nearly lost that too as your first reaction is “damm gotta make it back quickly” so then your tempted to just put a trade on to try and recoup your losses. It is during times like this that your discipline and emotions is severely tested. With 4 ticks left I knew I had to keep it cool and have strong convictions on my next entry point. I did in the end managed to turn that loss into a $187.50 profit which can do wonders for you mentally/emotionally as not only have you recouped back your losses but also made a profit. Had I made a loss for the day I would have been beating myself up over it but you have to learn to accept losses as it is part of the game and I have already learnt from previous(and financially painful) experiences that the key to being a successful trader is being disciplined and keeping to the game plan, in my opinion probably the reason why I have been consistently positive for the last 6 trading days.
So as you can see the emphasis is heavily based on trading as the best way to learn to trade is to TRADE. You can read all the books in the world about trading however it is real live trading experience which will define and shape you as a trader. The mental and emotional roller coaster you go on cannot be replicated by simply reading a BOOK!
So that was pretty much the week in a nutshell guys, as I said it was pretty quiet during the run up to Easter with the market quieting down……should be a great week though when I get back as it’s earning’s report season and as you all know it can add a lot of volatility to the market which in turn means trading opportunity.
The most important lesson I learnt this week was to not boredom trade, it was a constant battle in my mind and even though at times I really wanted too, I didn’t. In my mind discipline is my key to a successful trading career and I intend to continue this love affair, even though at times I really question it, I know it will guide me through. Until next week……………
I may contact Amplify if your experiences continue like that.
