Forums > Trading for a Living > Journals > My Path To Success

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Old Feb 22nd, 2011, 09:09 PM   #1
Join Date: Nov 2010
Posts: 983
This will document my path to success. As I feel I am the best in the world, I will be granted considerable freedom to make mistake but will be expected to produce to my highest performance.

What I Trade
I focus on direction. I have a mix of quantitative and discretionary strategies. I almost soley trade the ES. I won't be sharing my trades here but I will continue to audit the HYPOTHETICAL results at c2.

I don't feel up to trading ES contracts yet. So, I will be starting at NADEX with a 3k account. I will be testing the concept of extreme leverage in an attempt to double or triple my account. Money means a lot to me. However, serving my abilities is more important and the only way to serve is to trade because the world is a fool. I will thus trade based on my training and my feel with little regard for the dollars.

NADEX offers smaller contracts then the ES with spreads and binaries. The spreads have some limitations and some benefits that make them slightly different from the ES. I will be focusing primarily on the spreads. I will list the key differences I find if anyone wants them.

I do not believe in rules. However, I will trade based on my principles. I will describe these in future. Basically trade at my best, make the best decision. Never give in easily but always admit when I'm wrong.

Given my tiny account then I will have to risk considerable amounts. I will risk based on my confidence and the potential reward. My risk will be based on my starting capital which I can replenish in time, if required.

I will risk typically less then 10% of my starting capital on any one trade. But, I may risk up to 20% to 25% if I feel warranted.

The Path
My general principle is to trade at NADEX until I double my account to 6k-7k. At that point, I will have other savings and can start trading the futures. I may continue to trade at NADEX and sure why not continue to trade both -- whichever is best suited. However at that point I can trade the futures if needed.

I will reduce my leverage as I approach the 20k to 25k mark. Perhaps eventually, I will trade mutual funds and expand out. I'm busy in real life with work and school. I don't feel it would benefit me to set unrealistic time goals but I'd like to see some progress in the next 6 to 8 months. I will be expected to be the best that I am.

I can't know everything and may have to adapt my plan. The 3k does represent a significant portion but my no means all of my savings. I may have to trade the futures directly or change gears and try something else. However, I will not change gears lightly.

Purpose of This Thread
Hold myself accountable and serve my abilities to 120%. If I get treated with disrespect or trolls come then I could close thread at any time.

Starting Capital: $3,000
Old Feb 22nd, 2011, 09:15 PM   #2
Join Date: Nov 2010
Posts: 983
Available Capital: $2,158

I have had some difficulty in getting to match my futures performance because of various limitations of NADEX and learning curve. Note, this has nothing to do with hypothetical results. It because I am trading different instruments with different capabilities. I feel the spreads show some promise but haven't proven myself on them yet.

I am currently assuming a large risk to my account -around 24% to 25%. However, if things work out then I could be up 50% or more.
Old Feb 23rd, 2011, 12:47 PM   #3
Join Date: Nov 2010
Posts: 983
Available Capital: $2443

From time to time, I will share my insights. Intel is really battering the bulls. There has been capital flows out of Asian and world markets into the US market and especially the tech sector. It did not feel like a risk aversion play but a desire to capture more premium that investors felt existed in US market. Although, I recognized the risk.

However, HP's poor report is having a major effect. I don't get a feel that Libya is the major issue for the market.

I was short perfectly and reversed perfectly. And reversed again perfectly. However on my hypothetical account I made some big mistakes. I try to keep risk under $3500 and typically only take 2 contracts.

I made some brilliant plays but made 2 mistakes that have driven down my hypothetical account to over my comfort limit. First, I played with USD/CHF as a test and second, I took 4 contracts instead of my regular 2.

I also did something else I rarely do. I almost always call the exact top and bottom but have a principle that I never reverse immediately -- because I know I don't ALWAYS call the exact top and bottom. Based on my performance, I started to question this principle and reversed immediately. I don't know that I made a mistake. But, I do know that I've taken more risk then I allocated myself.
Old Feb 23rd, 2011, 08:40 PM   #4
Join Date: Nov 2010
Posts: 983
Available Capital:$2,051

My nature is one of being risk averse. And, I try to instill a little bit of controlled recklessness into my trading because I'm highly trained and know that I will make the best decision most of the time.

I have to be careful though of non rational recklessness. The elite trader is one who cannot be shaken out of a the right position but who gives like water when he is wrong. Quickly, easily, effortlessly.

I feel trading that this small of an account that I've not been as much like water. And, part of that is that I can't capture the smaller moves. It feels like that it is harder to "trade" without taking more risk. It feels like it is harder to break even.

Part of my reason for choosing a smaller capital versus going with the mini is that I wanted to be able to trade without undue worry or consideration. I wanted to demonstrate to myself that I could trade as well on the simulator as I could on the simulator. And, that's how I see. It feels the same except I do feel I'm a bit less scared then usual.

I'm a little concerned that I'm not fearful enough. I'm a little overconfident. And, I've been extremely busy outside the market with work and school. I'm a little concerned that I'm not performing at my level.

One good thing about NADEX is that I can see right now what my capital will be if the trade doesn't go in my favor. I've already lost and Gary Smith wrote how he realized that the trades could well be losers. He expected the worst.

If this trade goes bad then I'm going to have to take a look at my risk management. Perhaps, drop it down or be more specific with it.

I don't want to change anything. I may put a little more back into the account. However, I don't have that much in excess, very little.

But, I know I am very competent and capable. Yet, nothing is guaranteed in the market.
Old Feb 23rd, 2011, 09:10 PM   #5
Join Date: Jan 2005
Location: NYC-VA
Posts: 1,200 one day you lost 30% of your capital. how about restarting with some paper trading....just my 2c
Old Feb 23rd, 2011, 09:50 PM   #6
Join Date: May 2010
Posts: 788
Quote from forsalenyc: one day you lost 30% of your capital. how about restarting with some paper trading....just my 2c
I agree.
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