My journey to long term consistency

[DrSafari]

I have finally analysed my system and these are the results:

Out of 44 trades 31 were winners and 13 were losers.

The total amount of profit was 242,98
The total amount of loss was 133,96

P/l = 109,02

I have a profitable system! This is keeping in mind a very bad spread which probably costs me around 1 point per trade. This is taking into account that I did include the last error trade. This is taking into account that I used a pessimistic approached and included losing trades which I think I wouldn't take anymore now.

However, they do include a couple of "virtual" trades. Trades I did not enter in my demo account but took a mental note of. Although I have been careful not to be influenced, it is possible that I subconsciously only included winning trades. So here are the results without those winning virtual trades:

27 winners and 13 losers

profit = 219,36
loss = 133,96
p/l= 85,4

Still profitable. Even if I include ALL error trades it would still be profitable. I can simply see this because the amount in my demo account has risen since I put the system in place. I think it's fairly safe to assume I can start trading this with real money for a small amount. I will wire some funds (1000€) beginning of next month.

Trading Level 1: Complete! :smart::clap:

On to level 2!

 

[DrSafari]

I'm set up to start trading for real money. I've found a broker, Fortrade, but there's good news and bad news. The good news is that I can trade the Nasdaq index with leverage just as I wanted. The bad news is that the spread is even higher than on plus500. I don't think it will matter too much and I'll still be profitable, but of course this is easily calculated.

I quickly did it and it would mean my p/l would be 30.8 points less. In both the normal and the pessimistic calculations this still leaves me with a profit. A lot of brokers still don't accept belgian clients so I don't exactly have a lot to choose from but I will continue to look for brokers with better conditions.

Let's see how I'll do with real money. Another issue is that I don't know exactly how much I will be risking per trade. The platform says I can buy 9 contracts max, and the leverage is 1:50 but they don't give the actual cost per contract. I guess I'll see this as soon as I've made my first trade.

 

[DrSafari]

I just noticed I can see how much I risk if I put a stop loss. That solves that issue then. Let's take this system live!

 

[Nowler]

I just noticed I can see how much I risk if I put a stop loss. That solves that issue then. Let's take this system live!

Good luck with it mate!
Not that you need luck...but you know what I mean

 

[Niklasco8]

Great journey so far. All the best.

 

[DrSafari]

Good luck with it mate!
Not that you need luck...but you know what I mean

Thanks, I appreciate it!

 

[DrSafari]

First trade with my live account, of course a loser. Always a bummer to start off with a loser but I have enough experience by now to not let this affect me.

(Btw from now on the charting will look a bit different because I am on a linux machine and because I'm using a different broker)



Long NASDAQ-100

Net P/L: -8.88 points (37 euro's, a bit too much risk for a 1000 account but nothing spectacular)

Amount: 5 contracts

Opening Rate 6110.88
Close Rate 6102.00

Open time 16/10/2017 16:34:54
Close Time 16/10/2017 18:15:19

Stop loss: fixed stop below lowest low

Entry and exit on a 1m chart



Reason of closure: SL got hit

Comments
No colours on the chart because I haven't figured out how to properly use the linux version of something that resembles paint (it's kind of a drag). Anyway the first arrow is the open and the second the close obviously. My level where I would put a trailing SL in place was around the gray horizontal line, a bit lower at 6115 but price never got there. Followed my rules but it's a loser, it happens.

Btw I still do my preparations but I don't draw them out anymore since it's a serious pain in the ass with these linux tools.

 

[DrSafari]

Long NASDAQ-100

Net P/L: +19.46 points (14 euro's)
Amount: 3 contracts

Opening Rate 6051.67
Close Rate 6071.13

Open time 19/10/2017 16:13:56
Close Time 19/10/2017 16:22:32

Stop loss: fixed stop below lowest low

Entry and exit on a 1m chart (5m charts are not available on new broker but I was watching price on another 5m chart too to see where to enter)




Reason of closure: "trailing" stop loss got hit.

Comments
Big move (>25) so had to look at the 5m chart to determine if setup has been triggered. First blue circle is entry, second one is exit. (The tool for drawing really sucks on linux) I had determined up front a daily level of 6070 where you can also see price hesitated. I put in a mental trailing stop (because current broker doesn't support trailing stops). Price went a bit above that so I closed the position when it dropped back to 6071.

I knew there was a good chance price would keep rising afterwards (which it did in hindsight but not visible on this chart), but that's not the system so I abided by the system (which is good!)

More than double the points of profit than last trade but only traded 3 contracts instead of 5. My actual monetary profit is more than half lower than my loss last trade so I'm guessing spread is not calculated in the open quote here (have to check that out)

 

[DrSafari]

Long NASDAQ-100

Net P/L: +2.40 points (6.12 euro's)
Amount: 3 contracts

Opening Rate 6070.73
Close Rate 6073.13

Open time 24/10/2017 16:03:27
Close Time 24/10/2017 16:18:49

Stop loss: fixed stop below lowest low

Entry and exit on a 1m chart



Reason of closure: "trailing" stop loss got hit.

Comments
Classic setup, however I noticed that there could have been a level at 6073.00 as well so I put a mental trailing stop loss at that level which got triggered at the red dot. Could have been a bigger profit if I had not defined it and let it go up to the 6077.00 level which I also had defined. But such is the name of the game. Can't complain about this trade really.

 

[DrSafari]

Short NASDAQ-100

Net P/L: +4.80 points (+12.21 €)
Amount: 3 contracts

Opening Rate 6072.53
Close Rate 6067.73

Open time 25/10/2017 15:52:38
Close Time 25/10/2017 15:55:09

Stop loss: fixed stop above highest high

Entry and exit on a 1m chart




Reason of closure: "trailing" stop loss got hit.

Comments
I was a bit late cause price had already moved quite a bit but I figured I still had enough leeway to take a sufficient profit (and I was right). Put a trailing SL after price reached 6066.00 and this proved to be a correct move. Excellent trade.

 

[DrSafari]

Correction

Now I know why I didn't make the expected amount of profit with the 19/10 trade. I logged the wrong entry level. Instead of 6051 I opened at 6065.48 which would only mean a profit of 5.65 points

 

[DrSafari]

Short NASDAQ-100

Net P/L: +9.75 points (+25.19 €)
Amount: 3 contracts

Opening Rate 6241.63
Close Rate 6231.88

Open time 30/10/2017 15:45:27
Close Time 30/10/2017 16:14:02

Stop loss: fixed stop above highest high

Entry and exit on a 1m chart


Reason of closure: "trailing" stop loss got hit.

Comments
Entered at a reasonable point. Price stagnated for a while after which it plunged downwards. I had the level 6222 and 6206 defined but kept my eye open for any other levels I did not define up front. I saw one near 6229 where I drew the red line. The chart is pretty compact so there is more time passing on a shorter distance on the chart. Anyway I put a mental trailing SL there and got stopped out at 6231.88.

Good amount of profit but I could have had more had I not defined that level "in real time" . Price went up to 6222 where it hestitated a bit but then continued to plunge towards 6210 and beyond, but that's not visible on the chart.

I have mixed feelings towards this trade. I have a nice profit but it could have been more. The level I defined in real time seems correct cause price did hesitate there for a while..... still if I hadn't... Well **** it. You can't expect to catch the whole move all the time. The system proved to work so I will continue in this way. I just have to be careful I am not seeing levels where there aren't any. That's the only danger here.

Of course what we see on this chart is a confirmation of a second trading system I am thinking about. When price plunges or rallies, then seems to hesitate for a while, often times price will continue to plunge or rally. In this case that system could have been combined by my current system and I would have kept my position open. But this is something for the future. First step to put the new system in place is defining the setup of the trade and backtest it, probably go back and forth between that until I get a good result. Then demo trade it... and so on.

 

[DrSafari]

Long NASDAQ-100

Net P/L: +10.49 points (+27.01 €)
Amount: 3 contracts

Opening Rate 6219.64
Close Rate 6230.13

Open time 02/11/2017 15:26:34
Close Time 02/11/2017 15:43:15

Stop loss: fixed stop below lowest low

Entry and exit on a 1m chart


Reason of closure: "trailing" stop loss got hit.

Comments
Big drop so looked at the 5min chart to enter. Setup got triggered so I entered. Price stagnated for a while until it began rallying up. I had a S&R level defined at 6225 so I put a mental trailing stop once price hit that level. I went well beyond that and eventually dropped again after which I closed the trade. Good trade.

And again confirmation of price going up. Stagnating for a while and then soaring up again.

 

[DrSafari]

Damn, just missed a profitable trade because the setup was juuuust very little outside of my triggers, but I thought it would be valid anyway. I decided not to take the trade cause this kind of thinking could set you off on a slippery slope. Obviously I have mixed feelings now. Missed profit or a missed trade always hurts more than a losing trade does

Oh well, I'm sure I made the right decision long term wise.

 

[Nowler]

Oh well, I'm sure I made the right decision long term wise.

I'm pretty sure you made the right move too mate.
Well done!

 

[DrSafari]

I'm pretty sure you made the right move too mate.
Well done!

Thanks Good not to have given in to greed indeed.

 

[DrSafari]

Short NASDAQ-100

Net P/L: -4.70 points (-12.09 €)
Amount: 3 contracts

Opening Rate 6307.53
Close Rate 6312.23

Open time 13/11/2017 16:38:17
Close Time 13/11/2017 16:55:07

Stop loss: fixed stop above highest high

Entry and exit on a 1m chart



Reason of closure: exited a losing trade.

Comments
Setup got triggered and trade first went my way but then reversed too soon. I didn't see this trade working anymore so I exited. This is not exactly written down in my system that I can do this. However, price went beyond the S&R level (the red line) and didn't bounce off of it, and later you can see it became support. I used my best judgement here. I did not act out of fear and wasn't thinking irrationally. I should not make a habit out of this though (or add a clausule to the system, but reluctant because I am making profit)

 

[DrSafari]

Long NASDAQ-100

Net P/L: +7.15 points (+18.16 €)
Amount: 3 contracts

Opening Rate 6249.98
Close Rate 6257.13

Open time 15/11/2017 16:03:26
Close Time 15/11/2017 16:17:18

Stop loss: fixed stop below lowest low

Entry and exit on a 1m chart



Reason of closure: trailing SL got hit

Comments
Setup got triggered after a big move down. Price reached a predefined S&R level after which I put a trailing SL that got hit at the exit time. If I had ignored it I would have had atleast twice the profit but that is trading. This always hurts more than a loser to me. But you cannot expect to take full advantage every move. You should be glad and lucky if you happen to catch one once in a while. Still a good profit so let's just continue like this, stay humble and not get greedy.

 

[DrSafari]

No trades this week. Wednesday I couldn't watch the markets and thursday was thanksgiving in the US. No opportunities for my system presented themselves on the other days.

Patience, patience.

I was thinking of wiring another 500ish euro to the account since I still have it parked on my plus500 account. But let's try to get to 1100 first before doing that.

 

[DrSafari]

Psychological trading issues.

Two losers in a row I have to document. I don't have yesterday's chart anymore but I still have it in my memory (a crude version then ). I'm still in profit net wise but much of it is gone now. I believe I have learned something again though. I want to talk about that first before I document the trades.

Both trades have a common trait and that is that the setups technically got triggered but neither of them were very clean. If I review the last few trades of my demo account they all had very clean setups when I took them. I was very much profitable then too. This is what I need to do, only take trades with a clean setup. I remember the mindset I had back then. If I was doubting about taking a position I didn't take it and wasn't time pressed or anything, it were the last few trades of my demo account testing and whether that took another month or two more months didn't matter much to me.

I remember that the times I did take a position I had a feeling of "this setup is so clean I cannot NOT take it", this is in stark contrast of the two trades I took yesterday and monday. I was doubting about them but rationalised that technically they fit the setup so I took them.

So psychologically, what was going on here? This here is exactly why you should trade with small amounts first if you're going taking your demo tested system live with real money. I've read before that you should have the exact same emotional attachment to your real trades as your demo trades, so that one single trade isn't that important to you to win or lose. This certainly has truth and emotionally I think I put as much value to the demo trades as to these real life trades (in both cases I just want the system to work in the long run).

The thing that ****ed me up however was the feeling that I wasn't doing enough. I had a return of 50+ euro on a 1000 account in a month and a half. I started calculating how much money I had to have in my account to start trading for a living given that rate of return. Turned out I can already do that if I put all my networth in my account. Because I am so close to my goal (yeah, right) this created a false sense of urgency. Together with my far from ideal work situation at the moment this made me a bit pressed for time. Reading about others taking many trades per day and putting in (seemingly?) more effort in it than me all helped strengthen this feeling.

The thing is, I was a better trader when I wasn't really motivated to trade, I went through the motions but I was at the end of the testing phase so the most work was done. Same goes for the beginning of the testing phase. You don't know yet whether your system works and it will take a long time before you can analyse the results so there is not really any excitement to trade. I wasn't reading that much on the forum here or in trading books either. It's like I just mechanically did what needed to be done but nothing more. Like the lazy student in school who does the bare minimum to pass. This is quite the contradiction that this attitude gets the best results. Less is more is very much applicable here. I do not claim that this applies for everybody (but I do suspect there is some truth in this for most) but it seems to work for me.

What happened now was that I made some real money and got excited to trade again. My motivation went up by a lot and I was happy. This caused me to take trades with a not so clean setup (but technically still fitting the system). Playing into this was the fact that last week there wasn't any trade and I started wondering if I wasn't being too restrictive. All of this caused me to take these trades. Good thing I realise it now, we are only talking about 2 trades and statistically it's pretty likely of this happening but I keep monitoring my objectivity and I must conclude it was compromised for these last two trades too.

Again I have to remember that it's better to err on the side of being too careful than the other way around.

So how do I fix this
I am going to add to my system to only take clean setups. Vague and subjective, I know. But I'm afraid that if I define it precisely that it will get too complicated and too technical. I know by now what I'm looking for. I know when I doubt and when I have a feeling of "I just HAVE TO take this trade".

Also: no fantasising about the future anymore. No future calculations or anything anymore. This is just a second testing phase. The fact that this is with actual money doesn't make it any less of a testing phase. I have only just finished level 1 and am now on level 2.

Let's set a concrete goal before I think about what the next step will be and before I will scale up. Before I can scale up -by how much is to be decided- I first have to double this account. I need to reach 2000 first. This will probably take a while and will hopefully install the same sense of "anti-urgency" as with my demo trading.

That's it, in next post I'll post my updated trading plan and I will add this goal too.