my journal

[Yamato]

Indeed, it was a good day. And by your actions you are proving to yourself that you can exercise discipline. Even people with automated trading systems need discipline, to not interfere, to ensure the systems are watched over, and, very rarely, help the system if it fails (e.g. as with your pending margin call.) You did good, keep doing it. The fact that you had a losing day means nothing. They will happen. As you said yourself, taking a small loss is a happy event -- you would've in many cases lost more had you not had the discipline to cut your loss short (in this case the discipline is of course enforced by your system, but it's also you as you now do not tamper with them, which is exercising discpline as well.) As an aside, you'll likely of course have losing weeks as well at some point. But, that should not faze you either...

It's amazing to me the wisdom I read in posts by people who, like you and gladiator, qualify themselves as "newbies". I reached the truths you speak of, so naturally, after 12 years of trading. And I still have not fully understood them, nor put them into practice. I think this is because, for one reason or another, the journals section of this forum tends to attract a very high and specific quality of people: intelligent, sensitive, generous, patient, etc.. This place, for some reason, is like the Harvard of all web sites. Seriously, if I posted this stuff in any other place other than here, I would have gotten, rather than a dozen mature and intelligent posts (whether by a "newbies" or not), a majority of insults, smileys, and "ur gay" posts. At best, just superficial posts. I think journals are perceived as boring, so the superficial crowd stays away from them. And then, regardless of age and trading experience, you only get the thoughtful, reflective, introspective, analytical crowd. Just in case, my assumption is true, I will try from now on to look as boring as possible. I read somewhere else that another writer was doing it, I think it was a philosopher. To get rid of all superficial readers.

Regarding what you said, I agree on everything. I think it's very wise as usual. I need to be absolutely disciplined, or let's say I cannot allow myself to tamper at all (that's the only discipline I need) now that I have a small capital, because if and when my capital will increase the pressure to act irrationally and restlessly will increase as well. I know it from getting to about 25-30 thousand (to me a lot of money) about four times this past year and a half, and acting irrationally and going back to zero each and every time. Almost like a car that's going too fast, at those heights I tend to lose control of the situation. Because up there (like in your quote) my emotions are magnified, not just by leverage, but also by a big capital. Basically losing or winning 3 thousand in one day does not leave me indifferent: it makes me restless. Either extremely excited (and that leads to mistakes: overconfident trading) or extremely frustrated (and that leads to other mistakes: revenge trading). Unfortunately, I cannot see my trading in terms of % gained/lost, which would make it the same every day, a comfortable experience, something one can get used to. Unless I enforce a complete non-tampering principle, I know once I'll get back up there (30k or higher), the pressure will be very strong again. I need to be entirely automated by the day I get up there again.

 

[Yamato]

PLAN FOR POWER OUTAGES AND TRAVELLING

Ok, so here's my plan for the near future. As soon as I'll have some extra money (I'll need 2000 dollars), hopefully in a month if everything keeps going like this, I will do two things:

1) Have my friend, whom I met on the internet, and who's an ISP, buy a nano computer (no fan) and a UPS and run it non-stop at his place, in the States, so I will be able to rely on a server even when I go on vacation and cannot run a connected computer all day long from where I am. Also, I can use it for power outages at home.

2) Buy a HP 6730B, which seems the best deal quality/price, so I could both use it for problems like tomorrow's power outage from 9 am to 10.30 am, when I'll be at work, and also use it to connect to the nano server when I'll go on vacation and run everything from there via a remote administration application.

Essentially, both server and laptop could be used for power outages, but the server is superior to the laptop in that it can be used as a server when I travel, but then laptop is needed as well, in order to connect to the server. On the other hand, the laptop could be replaced by an internet point or by someone else's computer, but the server could not be substituted by anything, least of all by a laptop, since, if you are travelling, having a laptop is useless in keeping a constant live connection (as you move the connection will fail, and the battery will run out). So the conclusion is that the first thing I should get is the nano computer and UPS, and do everything needed to have it run from my friend's house, non-stop. Then, lastly, I will buy the lap-top and hopefully by then prices will have dropped below 900 dollars.

Ultimately, I would say that I'll buy the server+UPS in November and the laptop in December.

 

[Yamato]

Ok, back home.

So, for yesterday I lost another 220, on top of the 400 I mentioned, because the ZN lost that on the overnight trade started yesterday. For today, I am making 100.

So, once again: day before yesterday: break even. Yesterday: -620. Today: 100 (so far).

The week is still a positive one, overall.

For today losing 100 right now. The week is still positive.

 

[Yamato]

I just looked at it, at the charts. At my 4 positions open. Now, according to positions and positive/negative correlations only one position is not coherent, the GBP. The others all say that the Bond/Bund will go one way, and the stocks/forex/oil will go the other way. If that happens, and it looks like it will, I could go from -100 of now to +2000. And then I'd be happy and I'd get over some people who stared at me as I was leaving the bank, against whom I am still holding a grudge and having a feeling of frustration (why do people dare to look at me? what gives them the right to look at me without my permission? why can't I have them killed?).

I just looked at the markets again and now I am losing 400. It looks really bad, and it looks like it won't go my way, but you never: I may still end the day with +2000. Of course, it must be mentioned that if I had started the trades and were losing 400, I would be already at Hail Mary stage. But I am not the one who started the trades, so I can afford to stand at the side and root for my team.

 

[Yamato]

Wow, pretty bad. Since they are all (but one) pointing in one direction, and therefore they are all wrong and right at the same time, and now they are wrong, they are making me lose right now 1000 dollars. I am still hopeful though. Worst loss, so far, in weeks. -1300 now.

The one that's causing me the biggest loss is the CL. Were it up to me by now I would have taken it personally and doubled up a few times already on the CL. But luckily it's not up to me. Were it up to me, I would have turned today into a win or bust situation, with a higher than 50% chance of blowing out my account today, because usually I take the wrong side.

But the strength of the systems is that they do not double up, they cut losses, and they let winners run.

Losing 1100 now.

 

[Yamato]

Wow, pretty bad... still losing about 1300.

 

[Yamato]

Wow, losing 1800 now. Pretty good test for my discipline. Most of it because of the CL. If the day ended now, and I lost 2400 between today and yesterday, I would have to say that I broke even for the week.

 

[Yamato]

Down 2300, most of the loss from the CL.

 

[Yamato]

Ok, losing 2500. Now that I've done my duty in informing everyone of my losses as well as my profits, I can rest. It's starting to make me feel pretty depressed. I will definitely not touch anything though: no tampering. I'll let you know in case the balance dramatically improves. If it doesn't, I'll be too depressed to post anything for the next few hours. The week is below breakeven. Lost 500 to 1000, more or less.

 

[Yamato]

Ok, to sum it up, the situation is just the same right now, and am losing a bit over 2500 for the day. So between yesterday and today I've lost 3100. Let's see how well I can handle this and keep my cool in the next few days. This is a big share of my capital. But my systems never failed like this before, and won't likely fail again. I don't believe this is the beginning of any drawdown. If I keep at it, it will just keep making it all back. I won't even discontinue trading on the CL, which caused me the whole loss today. Today alone is its largest drawdown. The good news is that there were no bugs whatsoever and everything is running perfectly, not just here but also on my friend's server (for tomorrow's power outage). So let's celebrate that at least. If I'll keep my cool all this will be forgotten in less than a week. If I don't, I'll blow out my account. It's funny but that's the way it works with automated trading. If you worry things go worse than if you don't do anything at all.

 

[Yamato]

Wrong. Thought again. I disabled the CL system. I can't afford to have another 2000 dollars loss. I wouldn't be able to be serene with this mother ****er running at home and potentially causing me another 2000 dollars loss. Let's pretend I never enabled it. It gave me 2000 a few days ago, and now it took it back. I am fine. Let's keep it disabled until I reach a level where 2000 is just 2% of my capital. This is tampering, I know, but not the kind of tampering that always got me in trouble. This is prudent tampering: the opposite of my usual tampering. This is just setting the best parameters for my system, and something I would do even when everything is turned off and the markets are closed. The tampering that makes me blow out my account is a type of tampering that is beyond my intellectual control, and that doesn't consist of thinking and thinking again. It consists of feeling and acting on impulse.

 

[Yamato]

A-ha... this is really comical. The loss has increased to -3500 if I sum yesterday and today. What's funny is that, as I usually do when this happens, I will now let those I treated to the restaurant treat me to some snacks from the vending machines. That's how poor I am feeling right now. And thank god I didn't quit my job.

What's good is that I have learned during these past two weeks that I can rely on myself not to interfere with my systems whether they are doing really well or doing really badly. If I add to this that I now have about 3 months worth of forward testing with no red weeks, except this one maybe, then I can easily see that nothing can stop me now, except if I am so unlucky that I get a huge drawdown in the next few days.

I'll now eat lunch at the vending machines, instead of treating others to the restaurant, and, in two weeks, I should be back at such a level that I can treat people to lunch again. Right now I'll spend like 3 dollars a day to eat, and 20 dollars to ride a cab to and back from work. I won't stop doing that even if my capital goes to zero (it did many times and I didn't stop). I am a big fan of taxi drivers, their biggest supporter.

Besides, not everything is going badly. I now have the best roommate anyone could ever wish for. A polite lady, that I apologize to, whenever I swear. She was born in London actually. She doesn't listen to the radio, she has no radio, she doesn't whistle tunes all day long... I can't find anything to complain about. So I guess that means I have to make sure I don't abuse her rights. Today she even offered me a snack, but I didn't eat it immediately because, as I told her, I had just brushed my teeth. Then, later, I apologized again for not eating it immediately, and she said she wasn't offended.

The CL has been really exciting all this past week, like a borderline girlfriend. Too bad I can't afford its potential drawdown anymore. She, too, left me, when I ran out of margin (I had to use it for trading, and I refused to spend it on her).

No more restaurants for 2 weeks and I'll be ok. Come in with the milk and hold the bag at a 45 degree angle.

 

[Yamato]

Systems are running better than ever. No bugs in the past few weeks. I guess I need to be paying some compliments to myself to see the good things in my situation, after having lost 3500 in two days. 37 perfectly organized and automated systems in one excel sheet and not one bug. Self-recording, self-archiving, self-statistics. I'm a goddamn marvel of modern science. And of course I am not a programmer. Political science major who worked his ass off. My worst grades were in Math, which I failed repeatedly, in highschool and college. I had to take 6 summer schools in order to finally pass the two math requirements and get my degree: I failed those classes about 10 times. I just didn't see the point of studying math and doing those exercises.

Change your heart
Look around you
Change your heart
It will astound you
I need your lovin'
Like the sunshine

Everybody's gotta learn sometime
Everybody's gotta learn sometime
Everybody's gotta learn sometime

 

[Yamato]

Back at the office. The systems are running on my friend's server. Had some problems with account update and eur and gbp charts and updates and strangely they seem to be happening only when I am connected via teamviewer. When I connect everything is working fine, and from that moment on, things slow down, stop updating, as if I was taking all the bandwidth and RAM, and excel was kept from updating. I should try vnc as well to see if the same problem happens, but my friend doesn't have much time to configure it right now.

Other than that, here at work, everything is just perfect. Nobody is bothering me. I can work almost as well as if I were home.

 

[Yamato]

Holy cow... just connected to my friend's server and systems are technically running perfectly. But once again they are losing money. I am down 500 at the moment. So that's 4100 so far between day before yesterday, yesterday and today. I simply cannot believe that I will lose money today as well.

However the good news is that some people, some of those are reading, having been bothered by all the showing off of the previous week and beginning of this week, will now be glad to find out that I am human and that I've had a very lousy week actually.

I am not glad to find out, but I am relieved to find out that my system is not infallible and will not make money that fast after all. It was too hard mentally to accept getting rich so fast. But thank god it was the system that lost. I would not have forgiven myself for doing it in its place, just because I wasn't prepared to get rich, also because then I would have my own discretionary trading drawdown (which never ends) PLUS the system's drawdown: which is how I blew out my account several times in a year. I blew it out because I lost on both fields at once. Otherwise it would not have happened.

The record of 12 straight positive weeks since I started is still standing though. It's going to depend on today's trades, some of them closing on monday, whether this week will be my first negative week. So far I am down about 2000 or 3000. But I have not counted the other half of the systems, those I am NOT trading due to lack of capital, which could have very well made money.

Anyway, if anyone ever gets annoyed by my posting "i made this" and "i made that", just remember that I blew out my account several times this year, and that I've lost every year for 12 years (since the start) via discretionary trading. Actually I did start with paper trading, in 1997. There was a newspaper paper trading competition, with some prizes, and I participated. Ha... I thought I was going to win it. But I did make money, maybe 50% in a few months. Then I thought it was easy, and I started with real money, and in the first two months I doubled (yes, actually it's not true that I lost every month for 12 years, which I've been saying repeatedly). Then my colleagues gave me some of their money (they actually made me take it: I didn't ask them, ever). Well, in March 1998, right after my borderline girlfriend left me, within two weeks, with options, I had lost all their money and all my money. And that was just the beginning of 12 straight years of losses. I kept losing money with options from early 1998 to early 1999. That was the beginning of my trading.

 

[Yamato]

From 10k to 50K journey journal

This is going to be my "from 10k to 50k journey journal" from now on. I will write it until I'll bring this 10k to 50k, and then I will stop because it means I have learned enough about myself and trading, and I don't need to worry about it anymore. Until now, for about 2 years, I've been going back and forth from 4k to 30k, many times. It just seemed that 30k was too much pressure for me, and it made restless and irrational, so much as to do something unprofitable, one way or the other. If I'll manage to get to 50k, it will mean that I am ok on my own. And that I won't need to be worrying about faulty money management or my self-defeating compulsive discretionary trading tendencies.

Right now what I seem to be learning is to not touch my systems at all, whether I am winning big (thousands last week) or losing big (thousands this week). "Not touching" means not deciding to close early any trades opened by my systems, and least of all to open any trades out of the blue, by discretionary decisions. I don't know if my systems will still make me blow out my account, but for sure my discretionary trading has caused me to do it many times in the past years, so that's lesson number one to be learned. By next week I can definitely say, even though I didn't count the days exactly, that I've been off of compulsive discretionary trading for a few weeks, which is quite good for me - but not a guarantee it won't happen again. On the other hand, I don't feel the pressure to do discretionary trading increasing, but rather decreasing. Not tampering is becoming like a good habit, like brushing my teeth or going to bed early. And I can definitely say that I've never been so aware of the validity of not tampering. I've never been so aware that it is a good thing. Primarily because of my forward testing: my systems have not had a red week in 3 months of forward testing so far. So there's no reason why I shouldn't trust them. Conversely, I also have 12 years of forward testing of my discretionary trading: lost money every single year. So things have never been so clear and so much in favor of full-scale automated trading.

 

[Yamato]

Hey guys, I am losing another 1000 dollars today. This is amazing. Great great lesson. I am not touching anything and I am as calm as anyone can be. That's because I learned that I cannot tamper no matter what. This is great. I have lost 4600 in 3 days, and I am still resisting the urge to make it all back with discretionary trading. This is great... yes! I learned!!!

Let's dedicate a song to my beautiful 37 trading systems: smack smack... I need you!

YouTube - The Beatles - I need you

 

[TomTom]

Hey guys, I am losing another 1000 dollars today. This is amazing. Great great lesson. I am not touching anything and I am as calm as anyone can be. That's because I learned that I cannot tamper no matter what. This is great. I have lost 4600 in 3 days, and I am still resisting the urge to make it all back with discretionary trading. This is great... yes! I learned!!!

You only need to work 3-4 hours 2-3 days a week and have a 5-10K pot to generate £2k a month
Many times a year we have brilliant oppertunites and it is on thouse times me personelly go from 4-5 contracts to 22-25 contracts. It is the big trades that pay the bills the smaller trades are petty cash.

I will be going a free siminar or Webinar soon, you more than welcome to come along.
Yes its free, I earn my cash trading.
If you want to buy me a beer after well, thats up to you ?

Regards
Tom

 

[Yamato]

Thanks, but no, thanks. Sorry, but I quit. I don't do discretionary trading anymore. Thanks for your invitation though.

 

[Yamato]

Losing 1200 for the day. Total of about 4800, let's round it to 5000. Pretty depressing, but still I did not touch anything. No discretionary at all. With the way I used to act, I'd have done something by now, and blown out my account.