The Trading Journey of Lurker

[firewalker99]

First Trade

Short from 13311. Covered at 13309. Out +2. Sat through a large move against, then covered on a limit too close to the entry. Price went at least another +15 in my favour. Cutting a profit prematurely through desire to be flat.

Did you set a limit order for a target and a stoploss in advance?

 

[lurkerlurker]

Did you set a limit order for a target and a stoploss in advance?

No 😱

Second Trade

Entered on a limit which I had been trying to cancel when it wasn't filled on the way down. Held it until the 30 point stop was hit. Lost 32 due to a 2 point slippage. So, net -30 for the day.

Took the profit too soon on the first trade, let the loss on the second trade run too long.

Not much more to say on that point really. Hopefully a better day tomorrow.

I have £60 of the £90 I had in the account this morning. Margin for the Dow is £45, so if I lose £15 tomorrow I won't be able to place further trades (though I could lost more on an open trade). Considering some FTSE in the morning....

I want to get a nice trend day in tomorrow. I'm a complete buffoon for losing pips on a day like today. Absolutely gutted. In fact, I'm tempted to take some more time off if I can't manage these emotions by tomorrow.

 

[ceydababy]

Make setting your STOP the FIRST THING you do after opening a position. Then you don't have your "emotions" getting in the way. Once it is set there is only one way you can move it...

I know with every position I enter that the most I can lose is 25 points including spread.

My exits still aren't that red hot, but I am making money by keeping a tight stop relative to my gain.

Remember there is no logic in running a 30 point loss and snatching at 5 points. To make money your winning trade ratio needs to be outrageous.

 

[lurkerlurker]

Quote for Today

" It isn't uncomfortable to lose when the loss is not accom-
panied by a poignant vision of what might have been. That was
precisely what I could not keep my mind from dwelling on, and of
course it unsettled me further. I learned that the weaknesses to
which a speculator is prone are almost numberless."
​

-Reminiscences of a Stock Operator​

I shouldn't have traded today. I understand that now.

Tuition for today: £30

 

[lurkerlurker]

Make setting your STOP the FIRST THING you do after opening a position. Then you don't have your "emotions" getting in the way. Once it is set there is only one way you can move it...

I know with every position I enter that the most I can lose is 25 points including spread.

My exits still aren't that red hot, but I am making money by keeping a tight stop relative to my gain.

Remember there is no logic in running a 30 point loss and snatching at 5 points. To make money your winning trade ratio needs to be outrageous.

Sorry -my post was ambiguous. I set a 30 point stop (TradIndex minimum) on both trades. I didn't set an exit limit. I use mental stops, but they are prone to both slippage and discipline lapses.

 

[jacinto]

i smoke. i am a chain smoker. i think i only desire and enjoy about 10% or less of the fags i smoke a day. 😱

i wish i only smoked when i really wished to enjoy it rather than lighting up by impulse :?:

trading, at times, can be like chain smoking. need to chill out. only trade because there is a reason to trade, and not because you have to. then, you will be 😀

rules to survival

1) preserve capital = dont smoke
2) preserve capital = dont smoke
3) preserve capital = dont smoke
4) make profits = coffee after lunch and a nice fag
5) preserve capital = dont smoke
6) make profits = evening drink and a fag
7) preserve capital = dont smoke

dunno if i make my point. 😎

 

[lurkerlurker]

As an ex smoker I can relate to that.

I stopped when I realised

1. I was deriving pleasure from as little as 3 fags a day (the rest were lit for habits sake)
2. I was spending a small fortune on tobacco products
3. I was paying more tax than I ought to because of smoking

You have a good point. Dinos gave good advice earlier, and I was about to finish at +2 for the day, after that limit I set wasn't filled on the way down. Unfortunately, the market bounced up though my sell limit before I pulled it.

i smoke. i am a chain smoker. i think i only desire and enjoy about 10% or less of the fags i smoke a day. 😱

i wish i only smoked when i really wished to enjoy it rather than lighting up by impulse :?:

trading, at times, can be like chain smoking. need to chill out. only trade because there is a reason to trade, and not because you have to. then, you will be 😀

rules to survival

1) preserve capital = dont smoke
2) preserve capital = dont smoke
3) preserve capital = dont smoke
4) make profits = coffee after lunch and a nice fag
5) preserve capital = dont smoke
6) make profits = evening drink and a fag
7) preserve capital = dont smoke

dunno if i make my point. 😎

 

[firewalker99]

Sorry -my post was ambiguous. I set a 30 point stop (TradIndex minimum) on both trades. I didn't set an exit limit. I use mental stops, but they are prone to both slippage and discipline lapses.

Not only are they prone to slippage/discipline lapses, but more importantly they will get you into serious trouble once you start to have "technical problems"... suddenly no data feed, connection lost, oops and just before news. I've seen it happen and it can be a real pain. Trust me, you don't want that to happen.

 

[lurkerlurker]

Not only are they prone to slippage/discipline lapses, but more importantly they will get you into serious trouble once you start to have "technical problems"... suddenly no data feed, connection lost, oops and just before news. I've seen it happen and it can be a real pain. Trust me, you don't want that to happen.

I suppose that leaves CMC with a tighter spread and closer stops (with decent executions too). Higher margin requirements though. I might as well wire the funds.

My preference for TradIndex is due to the fact that they offer a "Daily Future" contract for the Dow, with the same spread as the cash contract (5) and a fixed expiry. This means I can use the futures prices. With CMC, I either have to stick to the cash price on the "rolling cash contract", or trade the June Future with a seven (7) point spread....

 

[lurkerlurker]

Not only are they prone to slippage/discipline lapses, but more importantly they will get you into serious trouble once you start to have "technical problems"... suddenly no data feed, connection lost, oops and just before news. I've seen it happen and it can be a real pain. Trust me, you don't want that to happen.

Your fabled connection losses just happened with TradIndex. I'm short and somehow their connection seems to be down. Not me, since I am posting here and have a caching DNS (bind) which is working fine.

Edit - closed the trade by phone at +9. Retrospectively I got quite a nice fill there. Market still floating around my initial entry, considering another short on it.

 

[jacinto]

posted these charts in the dow thread, but want to have them here too.

first chart is the wave analysis, the next 2 are the plan for the long, as it were.

please bear in mind that in the dow thread this was done the other way around as it should have been done. posting the last 2 charts first, and the first chart last.

all the best

jacinto

edit: clearly, i didnt trade this and all is hindsight

 

[lurkerlurker]

posted these charts in the dow thread, but want to have them here too.

first chart is the wave analysis, the next 2 are the plan for the long, as it were.

please bear in mind that in the dow thread this was done the other way around as it should have been done. posting the last 2 charts first, and the first chart last.

all the best

jacinto

edit: clearly, i didnt trade this and all is hindsight

Longs until that bar is broken then (the consolidation indicator).

Thanks for mentioning the hindsight thing. I feel a bit of a ninny at the moment. Better luck next week!

 

[firewalker99]

I suppose that leaves CMC with a tighter spread and closer stops (with decent executions too). Higher margin requirements though. I might as well wire the funds.

My preference for TradIndex is due to the fact that they offer a "Daily Future" contract for the Dow, with the same spread as the cash contract (5) and a fixed expiry. This means I can use the futures prices. With CMC, I either have to stick to the cash price on the "rolling cash contract", or trade the June Future with a seven (7) point spread....

Fair enough, but with "they" I was actually refering to the mental stops you mentioned, not TradIndex 🙂

 

[jacinto]

Thanks for the input. I use a 5 minute chart for the YM and tick, with a 1 minute chart for entries. Both charts have a 100 minute EMA.

The charts you posted were very very useful indeed. At first I didn't recognise the market, not ever looking that far back (I take 5 min or days, nothing between). That is a glaring flaw in any method I am using. Ouch.

In retrospect, even on a 15 minute, why didn't I see? I am far too focussed on the short term, and that is an issue which needs to be address. I don't wish to scale, and a SB spread makes that impossible. I need to look at longer timeframes and look to hold for longer. Even a 15 minute would have shown a failure to make a lower low combined with the higher high quite easily.

Oh dear. Looks like I need to make some effort to consider my timeframes and exactly how to trade this beast. 5 min charts don't seem terribly appropriate - perhaps I should use them for entries instead, and take a 15 for trend? Hmm.

lurker,

no need to change the time frame you use to trade IMO, the only thing is that you should keep other time frames on check. what i mean is a combo.

I tend to use a 1 day, a 4 hour, 1 hour and 15 minute combo to understand what is going on. and my entries are typically based on the 5 min chart, at times the 1 min chart.

basically, what i am saying, is the 4 time frame combo is for setups, the 5 and 1 minute are for optimal entries once the setup is there.
EDIT: that means the rule is simple No setup = No trade

EDIT 2: Sorry, keep on changing what i say. what I mean is that the time frame you use is of no difference, but the methodical approach to reading price in different time frames does give a difference. and the difference will be to typically be on the right side of the market.

hope it makes sense.

j

 

[barjon]

I think what jacinto says is extremely important - ie: I favour a set-up timeframe (in his case, it looks like cross verification through four) then a drop down to a lower timeframe for entry/exit.

In my case, my set-up is based on the daily candles and informed by the weekly which establishes a "kill zone" and entry target limits. I drop down to lower timeframes (mainly hour, 5/10 minute) to see how the daily candle is being formed and to enter in the "kill zone" if the action looks right.

Incidentally, I don't day trade, except for fun, because I don't regard anything below daily as representing a "true" trading period with traders opening and closing their books. Thus, I don't see how they can be relied upon unless looked at in a daily context. Just my prejudice - sorry guys 😈

good trading

jon

 

[brutusdog]

my input.

Hi Lurker,

i know i said i would post here a little way back but been so busy with work and trying to trade didnt want to do it until i had time to do it justice as this thread is probably the best insight for budding traders around...

right fwiw having viewed your trades on the dow thread and what you have put down here, firstly well done. i wish that when i started messing around with this 7 years ago i had the balls to do the same i am sure that its the fastest way to improve.

from my experiance ( i have blown my acount twice, both times in my early days) it doesnt actually matter how you trade, fundamentals / indicators / gut instinct or the phases of the moon whatever.

the no 1 aspect of all traders that make the 5% is that they know themselves. they believe in what they are doing and why.

look in the mirror, why do you want to trade, ok we all want to make money but trading is very personal...it is an exercise based only on you. you make the decisions. you win you lose. there is no other person responsible for you success. from this it is possible to say we are all trying to make money by proving something to ourselves. why.

the next thing i think is important is to alter your view of yourself. ok we all get peed off when we lose or make a hash of something but if you are able to say

ok i cocked that up because.....but its ok because that is a part of my journey. it is a step on my way to being a successfull trader, and i am one step closer to fullfilling my goals.

to start viewing yourself as a success and seeing yourself happy in what you are doing is a big part of moving forwards. if you can make everything you can do a positive then no matter what happens you will be a step closer.

never ever even in jest compare your performance to that of anyone else. it does not matter. the sole issue of your performance is that its yours, ok so some one else calls all the turns of this or that and that is great for them but if you only take 20 pips and they take 120 it does not make you any less of trader or a person, just unique

one mans meat is another mans veg as they say.

ok just re read some of that and it is a bit pshcobable but i really think that the most important aspect of trading is mentality and visualisation, once the human mind fully believes something then making it happen is supprisingly easy.

also never forget what a chart is, not the actual value but a representation of what traders think about the price of a stock / index .

all the best for the weekend and the coming week.:cheesy: :cheesy:

 

[lurkerlurker]

lurker,

no need to change the time frame you use to trade IMO, the only thing is that you should keep other time frames on check. what i mean is a combo.

I tend to use a 1 day, a 4 hour, 1 hour and 15 minute combo to understand what is going on. and my entries are typically based on the 5 min chart, at times the 1 min chart.

basically, what i am saying, is the 4 time frame combo is for setups, the 5 and 1 minute are for optimal entries once the setup is there.
EDIT: that means the rule is simple No setup = No trade

EDIT 2: Sorry, keep on changing what i say. what I mean is that the time frame you use is of no difference, but the methodical approach to reading price in different time frames does give a difference. and the difference will be to typically be on the right side of the market.

hope it makes sense.

j

My system produces setups only on the short term charts (5 min). What I could do, however, is to go back to the hourlies before I actually place the trade, and if the hourlies don't agree with the direction of my trade, I could review the entry.

I agree with your second edit that observing what the market is telling me in more detail across more timeframes will limit my exposure to bad trades on the wrong side of the market.

I can't go on making 9 and losing 30.

 

[lurkerlurker]

I think what jacinto says is extremely important - ie: I favour a set-up timeframe (in his case, it looks like cross verification through four) then a drop down to a lower timeframe for entry/exit.

In my case, my set-up is based on the daily candles and informed by the weekly which establishes a "kill zone" and entry target limits. I drop down to lower timeframes (mainly hour, 5/10 minute) to see how the daily candle is being formed and to enter in the "kill zone" if the action looks right.

Incidentally, I don't day trade, except for fun, because I don't regard anything below daily as representing a "true" trading period with traders opening and closing their books. Thus, I don't see how they can be relied upon unless looked at in a daily context. Just my prejudice - sorry guys 😈

good trading

jon

My system uses Price and Volume, S / R levels, RSI and NYSE Tick divergences. I can't use the latter two on a longer timeframe, but I think maybe looking at the hourlies to establish "entry zones" where I would be prepared to buy or sell would be a good idea.

I can then decide what levels I wish to trade at before the market even trades there, and when the market does get into these zones it is a simple matter of getting confirmation for the trade, and picking an entry on the 5/1 minute charts.

I'm writing that down now as it is a very good idea. I think part of my premarket setup will now include a list of potential trades I would be willing to take if they were confirmed by my other indicators. Such prospective trades could be called by long term price /volume (and S&R) on 30, 60, and 240 minute candles.

 

[lurkerlurker]

Hi Lurker,

i know i said i would post here a little way back but been so busy with work and trying to trade didnt want to do it until i had time to do it justice as this thread is probably the best insight for budding traders around...

Thank you - I see a lot of good things developing on this thread. I really want to get to the day where I am posting regular positive pips. I feel that would be an inspiration for newer traders to read parts of this thread from my initial blunders to finally consistent profits.

right fwiw having viewed your trades on the dow thread and what you have put down here, firstly well done. i wish that when i started messing around with this 7 years ago i had the balls to do the same i am sure that its the fastest way to improve.

from my experiance ( i have blown my acount twice, both times in my early days) it doesnt actually matter how you trade, fundamentals / indicators / gut instinct or the phases of the moon whatever.

the no 1 aspect of all traders that make the 5% is that they know themselves. they believe in what they are doing and why.

I was initially sceptical of that comment, but on reflection to my best trading week where I was truly "in the zone" I had belief in myself and my trades. If I had been able to continue in that belief I would have most likely grown my account by 30% per week ever since. Unfortunately, my attitude that week turned into overconfidence towards the end of the week, I took a big loss, and haven't traded well since.

look in the mirror, why do you want to trade, ok we all want to make money but trading is very personal...it is an exercise based only on you. you make the decisions. you win you lose. there is no other person responsible for you success. from this it is possible to say we are all trying to make money by proving something to ourselves. why.

the next thing i think is important is to alter your view of yourself. ok we all get peed off when we lose or make a hash of something but if you are able to say

ok i cocked that up because.....but its ok because that is a part of my journey. it is a step on my way to being a successfull trader, and i am one step closer to fullfilling my goals.

Letting go of losses is an important part of personal development in this line of work. I need to be able to say things like:

I lost 34 points yesterday. My first winning trade was closed at +9 due to platform failure, and I had to cover by telephone. It was a good trade. My second trade was closed out at -13 due to realising I was wrong about short term market direction. My third trade was high risk involving a short near resistance at 13300. After waiting to get a good short entry, the market took off north and I was stopped out -30 within seconds. That was a difficult trade to call, I was wrong about it, my system was wrong about it, and the only thing which could have saved me was a look at the longer term charts (see the ones Jacinto posted earlier on this thread - they ruled out bearishness for the remainder of the day - I couldn't see that on my shorter term charts). The real mistake there was taking the trade before the market had shown its hand by breaking 320 or rejecting 300.

I will avoid bad trades like that in the future by:

confirming any trade on a longer term chart
waiting for confirmation on breakouts like that in the future
using tighter stops (the entry was such that I was shown wrong within 15 points, and should have closed by market order at that stage)​

to start viewing yourself as a success and seeing yourself happy in what you are doing is a big part of moving forwards. if you can make everything you can do a positive then no matter what happens you will be a step closer.

That is something I am finding difficult, but I agree that no measure of sustained success can be achieved absent that mindset. I am trying to work on that....

never ever even in jest compare your performance to that of anyone else. it does not matter. the sole issue of your performance is that its yours, ok so some one else calls all the turns of this or that and that is great for them but if you only take 20 pips and they take 120 it does not make you any less of trader or a person, just unique

one mans meat is another mans veg as they say.

ok just re read some of that and it is a bit pshcobable but i really think that the most important aspect of trading is mentality and visualisation, once the human mind fully believes something then making it happen is supprisingly easy.

also never forget what a chart is, not the actual value but a representation of what traders think about the price of a stock / index .

all the best for the weekend and the coming week.:cheesy: :cheesy:

Mentality and visualisation is very important. I should work on seeing myself calm during trades, rather than seeing myself make a profit. I'm still quite nervous when trading, which is silly as I have traded 9x this stake size more calmly.

Thanks for all the input - this is truly an excellent post.

Everyone, I'll keep you all posted on my trades on Monday. Have a good weekend.

 

[lurkerlurker]

Trades for Week Beginning 3 June 2007

Attached are my YM trades for the above week.

Number of trades: 5
Winning trades: 2
Profit: £11
Losses: £76
Net P/L: (£65)

Average loss > average win.
Losing trades > winning trades.

Overall, a bad two days, but lessons have been learned.
Details in charts.