3-5-09 First Trade

Off to a slow start this morning. When the market is trying to tell you it's slow, it's slow. Must...pull...the...bananas...out...of...my...ears. Mkay all better now. Really.

Working on thoughts and expectations

I'm giving a lot of consideration right now to what I am thinking while I'm trading. Perhaps I even need to add this to my daily blotter. For most of the morning I stayed out of the market (even missing a really good trade opportunity) because I was worried about posting a losing trade. Eventually I realized the erroneousness of this thought process and got into the flow (mostly). Unfortunately, these expectations of being "right" or "making money" got in the way on my second trade causing me to close somewhat early. What's truly funny is that there is no real money on the line. It's just paper. But my thoughts are tuned to treat this as real trading, and as such my real trading problems are coming through.

Specifically, regarding the trade I didn't hold. There are 3 rules that came into play:

1) If I am up 1R or more and the trade falters 30% - bail out.
2) If I see volume coming on to reinforce my trade I will continue to hold the trade over 1.5 R until volume falters.
3) Typical profit target is 1.5R

These are all very fine rules and have been tested extensively. However, I had a doubt. After the trade began to falter say 20-30% ish, I thought, "I don't want a loser to start the day". And hit the exit. I actually strictly followed my rules. But it is like the Matrix - you have to know when to bend the rules, or even break them. Why? Because the reason price faltered was it was setting up to break out. Selling volume didn't come in, but buying volume temporarily stopped - only to be replaced by a dirth of buying orders moments later. A big part of my edge as a discretionary trader is "reading" the market. If I trade like a retarded robot I can expect to see results indicitive of that level of trading. Much like playing a musical instrument, I need to trust myself to improvise well when needed.

3-4-09 wrap up

Overall this was a fairly average morning for the Euro. I missed a couple of good setups by not being a little more on the ball. No biggie. One gripe is that I should have had 15 pips on the first trade I took. The volume was there, the money was staring me in the face (o.k. virtual money). Why am I so damn disciplined about taking losses but have trouble sticking out a win?

3-4-09

If we can break above 1.2560 this should be a good area for a long.

Time for some changes

We'll I think it's time for some changes. I would like to thank Jules and Lonely Trader for bugging me not to stop blogging.

Here's the deal. I lost my mind over the past few months. With several things really. Like I can't teach anyone how to trade (especially my independent wife - who by the way would rather knit than trade). Or that I need to say anything constructive/instructive in my blog (thank you Jules for pointing this out). Like do I really hate short-term trading, or am I driving myself crazy with expectations (or really the fear of other people's expectations)? Some days you just don't want to deal with that after having a multiple R losing day. Or be accountable in any way whatsoever.

The problem is that I lost sight of what this blog is good for. Namely it is my reality check. That if I have a really bad trade/day/week/etc. I can't hide under my pillow or stuff the brokerage sheet in the shedder (as bad as I want to sometimes). On the flip side, hopefully some of you will check my ego at the door if I beat the snot out of the market for a day or two (before reality comes back).

So with that said (and for the few readers who are left), I need to make some changes to this blog:

1) Needs to be less ugly. Help! Maybe time to go wordpress? Not sure.
2) I want to find a reasonably easy way to get some video up on the site. This will help keep me accountable knowing that people will be watching my trades.
3) Things are gonna get a lot more visceral around here. If I have a shit/good day you are gonna hear about it (thanks Jules).
4) You will be seeing a daily blotter. Right now I'm back to paper trading. Before you ask, no I haven't blown my account. But my confidence is blown (not by the market - by myself). I've had this lack of confidence with my trading occur before but didn't listen to my doubts. This time I will. I need to have that accountability to get back on track.

O.k. I guess that's all. Hehe.

LT

Shoutout to JJRVAT

First, a couple of you have asked where I've been lately. Still here. I'm working hard on putting together an adequate training regimen for my wife (who has expressed an interest in trading). I never realized until now how much I simply take for granted after trading for several years.

Secondly, as I've been trying to review my own learning process I am going back to internet resources that have helped me progress as a trader. That said, I wanted to give a shout out to JJRVAT and his thread on EliteTrader called Day-Trading 2.0.

This thread had definately influenced the way I approach trading and is probably one of the very best threads out there for the short-term (i.e. scalping) trader. The first ten pages or so are simply brilliant.

Enjoy.

LT