4-30-09 Solid green for profit, solid red for position sizing

The p/l statement definitely doesn't reflect the mistakes made today. As those of you who follow the blog know, I control my losses with intelligent position sizing. Except today - not so smart.

The most important thing to recognize about emotions is that they are illogical. Thus when the market is at extremes it is the least logical. That is when we must be our most logical to profit. Simple, but definitely not easy. So can you spot today's mistake trade? That's right kids - the 2nd long entry.

I'm very forgiving of my first position in any trade (also the lightest), but my 2nd position shows (or should show) that the market has blown through all expectations and that emotions have shown themselves clearly. I did not wait for that confirmation. I knew that this was a mistake as soon as I entered! Duh.

No excuses.

P/l wise this was a +35 day on 37k.

LT

4-29-09 All was quiet before the Fed Meeting

Yep it's a ghost town this morning. No surprise since we've got a Fed Meeting this afternoon. No trades.

LT

4-28-09 Slugging along

This morning was just another one of these grinding slow trend days. Emotions were brief and the grind was long.

First trade went fine, however, the 2nd trade was really a patience tester and so disappointing to have gotten the relative entry correct and made so little money. Third trade was just too late in the day to hold.

Overall +15 pips on 37k.

LT

4-27-09

1. Sun Tzu said: The good fighters of old first put themselves beyond the possibility of defeat, and then waited for an opportunity of defeating the enemy.

2. To secure ourselves against defeat lies in our own hands, but the opportunity of defeating the
enemy is provided by the enemy himself.

3. Thus the good fighter is able to secure himself against defeat, but cannot make certain of defeating the enemy.

4. Hence the saying: One may know how to conquer without being able to do it.

Chapter 4 of the Art of War by Sun Tzu definitely describes my morning. I knew myself but I did not know my enemy. Most importantly I could not identify the emotions in a market that kept blowing off far earlier than I anticipated.

Overall -4 pips on 37k

LT

4-24-09

Well got back out of my funk of yesterday as best as reasonably could be expected considering the continued market ambivalence.

Most importantly managed to keep myself in a positive mental place and focused on trading well. Didn't catch everything I would have liked, but considering the pace of the market I felt I did reasonably well.

+22 pips on 37k for a +42 pip week.

Looking forward to a more active week next week. No change in trade size.

LT

4-23-07 Avoiding tilt

As some of you can probably tell this hasn't been my strongest week. The pace and conviction have been really lacking any emotion from which to base my trades.

This morning I got off to a poor start with a misread trading sequence that had me -35 pips in the whole (faded the break, exited, got faded on the break, exited).

From there it was aggressive recovery mode to keep me out of a slump. Managed to recover most of the damages for a total of -10 pips on 37k for the day.


LT

4-22-09 Trades

The EU continues its sleeper week this morning with lots of tight ranging movement. We finally made a play to the outside of the 15 min range just before 7:00 a.m. local time.

Managed to add a couple of pips to the pile. +20 pips on 37k.

LT

4-21-09 No Trades

Pretty quiet morning that never pushed the edge of the range. No trades.

LT

4-20-09

Pretty slow morning for the most part until about 7:00 a.m. PST when the markets broke down again. Managed to catch a piece of the break.

+10 pips on 37k

LT

4-18-09 Saturday Videos

I've just uploaded 2 new videos describing some of my trading ideas and thoughts based on Tuesday 4-14-09 trading.

Let me know what you think!

LT

4-17-09 No trades

We definitely had a sleeper morning here with the Euro just cycling in a very tight chop. No trades this morning.

+76 pips ($192) for the week on 25k. Next week will be stepping up size to 37k lots.

LT

4-16-09

The pace this morning was not highly favorable to the way that I trade. As you can see we were in a very slow but steady uptrend (on the 89 tick) corresponding to a retracement in the hourly downtrend. My timing here wasn't spot on as it usually is, simply because the market emotions seemed very dampened.

Total was +4 pips on 25k.

LT

4-15-09 Failure to Maximize Gains

That's what they will write on my tombstone, "Failure to Maximize Gains". Same damn mistakes as Monday. Too complacent! You can't eat like a bird in this business. You gotta be a pig when you got the market on the rails like I did today. You gotta go for the #$!& jugular and tear it's throat out. Instead I rationalized my weak will with thoughts like, "oh I don't want to wait for it turn against me", "I don't want to have to add to another position today, it's too stressful". NO!

I KNOW that eventually I will need to take my lumps in this game. It is inevitable. If I don't take advantage of when the market is favorable to my trading, I won't SURVIVE the bad times.

This should have been a +38 pip day, was actually +25 on 25k.

Yeah, pissed at myself. Need more focus. Need to get back to thinking that I am -50 pips in the hole and I GOTTA make it back.

LT

4-14-09

I seemed to have a lot better focus this morning, and a very good idea of what the market was likely to do. If you look on the hourly chart you'll see where I've drawn in a long standing support area 1.3229. Based on the hourly it seemed very likely that we would test this support. On the 89 tick chart you can see where I've drawn in what I consider the current range. Once we broke to the downside I was able to catch a few retracements before we tested support, as well as the eventual reversal (it became clear after 5:30 a.m. that reaction to various news items was half-hearted).

Overall a solid gain of +37 pips on 25k.

LT

4-13-09

Well couple things this morning. First, I am now trading my live account again; however, I am keeping my size down for the first couple of weeks just to convince myself that nothing has changed with real money on the line (mostly true).

Trading wise, this was a bit of a sleeper morning for the Euro I was a bit surprised to see it wake up. I managed to fade the trend reasonably well at the end, but I unfortunately missed the perfect retracement setup (which would have been worth 30 pips).

Overall, +12 pips for the morning on 25k, adding another $25 to the chip stack (as Don would say).

LT

4-10-09 Bank holiday

Well I thought I might sneak in a trade or two last night or even this morning, but the market is indeed sleeping. So instead, I've been thinking about my upcoming Mexico trip.

Total added to the chip stack this week = $408.59 or about 82 pips on 50,000. Had a great start to to the week and was fairly convinced I might have a shot at the $500 mark, but after Monday the action started tapering off. Back to work next week.

LT

4-9-09 Hanging out in the doledrums

Pretty uninspired pace this morning even with all the news. We are in a tight range bound market no doubt. No trades.

4-8-09 Slow morning

We are continuing to consolidate this morning after having a fairly decent retracement from yesterday's lows during the London session. The pace was so indeterminate I took early profits and decided to lay low. +12 pips

LT

4-7-09 No Trades

After a very volatile London session, there just weren't a lot of opportunities during NY. Was looking for a wholesale retracement that just never quite got there.

LT

4-6-09

A good start to the week here with +45 pips to start. Happy Monday? Isn't that a contradiction in terms?

LT

4-5-09 Yeah it's Sunday

Don't normally trade in the evenings let alone on a Sunday, but I just couldn't wait this week. Too pumped up to push my limits even further.

+15 on 2 X 50k lots.

LT

P.S. Yep I'm playing with MBT's platform tonight. I really like Oanda but am thinking of backup options as well.

4-3-09 Trading Reflections

This certainly has been an interesting week. I started off on Monday on the wrong foot, but quickly got back to the swing of things on Tuesday. On Tuesday I started visualizing my goal of making $300 for the week. Thursday was amazingly volatile as we saw the Euro strengthen. And Friday has been a good wrap up to the week.

I admit, that I am posting early on Friday. Why? I've made my goal and then some, and I've lost a fair amount of focus. Two things I need to do next week: 1) setup a qualitative spreadsheet of how the market day is setting up and how I feel (similar to Don Miller's spreadsheet, 2) I need to set a higher dollar goal for next week.

Today was +15 (ok I took a second trade at 1 cent per pip that made another +15).

For the week +87 pips and $455.55. The weekly goal was $300. I will be revising my goals over the weekend and will need to step things up a bit. Perhaps my 4 week goal should be closer to $750 a week.

LT

Trade or Die

What if I put a loaded gun to your head right now and said, “Trade well or die.” Could you do it? What if I threatened your family? Could you execute your trading plan, avoid blowing out your account and make money at the end of the month/year etc.? How about make 10% ROI monthly? How about 500% annually? How would you trade if your life was literally at stake?

For those of you who have never traded before or are relatively new, my guess is that you would roll over and die. But how about those traders who have been doing this awhile but are unsatisfied and/or inconsistent with their trading?

This may seem like a silly or extreme psychological stretch for most of you. But picture this. If you were a CIA agent, or a Navy Seal, or a Green Beret your life (and perhaps those whom you hold dear) would be on the line every day. In the book “Unbeatable” by Jack Schropp, the author states that many individuals fail to achieve their aspirations because they lack focus. As a former Navy Seal, he knows from personal experience that the ability to remain focused while waiting for hours in near freezing wastewater, in enemy territory, with no backup, leeches crawling on your skin, etc. is what separates the wanna-be recruits from the elite. He also states that you don’t get to this level of focus by being in your comfort zone. During Navy Seal training recruits are pushed to extreme physical levels and taunted by their trainers to test their ability to manage their emotions (see reality) even when things are seemingly at their worst. Sounds like a boot camp for lazy traders to me!

The problem for many struggling/breakeven traders (including myself at times) is that they have nebulous goals devoid of passion. They get started on the right foot but become complacent with where they are. Usually this complacency sets in at the top of their equity curve. How many times have you traded 90% of the day well, and then given back a great deal of profits at the end of the day/week/month? Being a “sunshine patriot” regarding your trading is easy. But how do you fare at the 11th hour, when the chips are down, you are feeling tired, and you just wanna quit? Are you gonna ring the bell recruit?

Here are some of the passionate affirmations I visualize to myself during my darkest trading times:

“Trading means freedom – I never want to be a slave to the illusory bonds of money”

“Trading means excellence (arête) – I will never know what I am capable of until I ask more of myself than I ever thought possible”

“Trading means understanding – By understanding the market I deepen understanding of myself”

“Trading means helping others – Only when I can adequately provide for myself and my family can I help others, whether this is financially, intellectually, emotionally, or spiritually”

What mental tools would you use to stay focused in your trading if your life and those you cared for was literally at stake?

LT

4-2-09 Taking the Hard trades

Looking at the result of the trades this morning looks like easy money. But the emotions were hot and it was hard to tell if we were going to sustain heavy buying interest or not. I'm particularly happy with the light sizing for my initial position in the second trade, but I'm left wondering if I failed to add heavily enough.

In any event +45 pips for the morning.

LT

4-1-09

Added another +15 pips to the pot. Pretty slow morning, pace wise, and was surprised we didn't make another attempt at the 1.3220 level.