Nice one, it hurts when you take those hits. I was positive like 12 out of 13 days and on the 14th trading day I lost 65% of what I had made out of the previous 13 days. Managed to pull it back and have a decent month to boot. You have held your trade during the tough time (being negative) and now just ride it up to the next resistance at the end of the month
Another day, another lesson learned. Mean reversion strategy off the open would have been great had I taken my profits and ran. Unfortunately I tried to squeeze everything I could out of the trades and it ended up costing me. For example, faded PPL off the opening move. Trade came in my favor 18 cents. I was looking for 20. 18 cent profit turned into a 20 cents loss...too stubborn to run a trailing stop, too stubborn to just let it go. Log the trade, learn from it, and move on. Funny how what got me into the rut will fight me getting out of it: THE MASS BETWEEN MY EARS! Goal tomorrow as it is everyday, stick to my rules. I still have half of the year end trade on but will be taking it off MOC tomorrow. Net P/L -1800 on 18k shares
The hits definitely hurt but I will keep my head down and grind away. My biggest enemy is me but over time, I will take charge. Good job on your comeback after the 65% loss. That says something about your ability to trade through the tough times. A positive attitude will take you a long way in trading.
Week ending 1/14: -9000, +1200, +3300, -1800, +100... total -6200 on 139400 shares Not what I expected after Monday's performance but just glad that it did not turn into a bigger drawdown like in the past. After Monday I tried really hard sticking to disciplines which helped stabilize things. Still fighting bad habits but it is all part of the psychology of trading out of a rut. I took off the 2010 year end trade. Glad to have held it into the 2nd week this year. It netted an additional 1k to the 9500 I made on it last week. 2 bad trades that stand out Friday that I need to learn from are NANO and BP. I dropped close to 1k on them combined. I will be implementing a list of stocks to track on each strategy instead of just looking at all NYSE and NASDAQ. This should allow me to resist the temptation of taking trades on stocks that I am not overly comfortable trading due to volume, etc... Will be off the last week of January due to a move. Going to miss fed meeting but this is one of my psychological goals for the year: resist the temptation of "fear of missing out". On top of that, moving is stressful enough and I don't need anymore stress while trading.
I like your effort here - your journal. Keep it up; it should be helpful. I'm gravitating towards mostly Pairs trading myself. And I want to gradually get into automation. I'm looking at several programs. All I have right now is a basic Excel spread alerts program. Are you adding 1 or 2 legs at a time, or do you put the full position on all at once? I ask because you seem to be taking some pretty big swings. marc
Pairs in my opinion are difficult to trade intraday right now. Too much drift in the market along with one side causing the move makes it tough to trade them. Not saying it is impossible; I know many that are still trading pairs and are quite successful. For me personally, I am giving them a rest until I can figure out what to adjust in my trading style to trade them again with confidence. I am looking at stretching out my time frame as well as reducing size and spreading out layers. In the past, I would add one leg at a time. Depending on the time of day, I use to consider adding 2 and sometimes 3 legs at one time but volatility is just not there anymore. I have tried the full position trade all at once but the pair needs to be at an extreme and a tight stop loss is required, otherwise it can really hurt if it continues to go against. With this style you get less hits but if you are trading the extremes, probabilities are definitely stacked more in your favor. Because it seems that pair moves are now caused by one side, I would rather just try to trade the one side intraday. As an example, take a look at UPS FDX on Friday. It saves on execution cost and if I am wrong, I just run my stop and move on. Fwiw, I stopped trading pairs completely last Monday. My swings this week have mostly been caused by year end trade along with mean reversion strategy. I hope to show more stability next week with some adjustments. Automation is something I am also looking into for pairs. I have always been very stubborn with stops in them so this could possibly address that part as long as I am disciplined enough not to override them. Hope this answered your questions.
as far as a little psychology, or emotional stuff - having read both of Mark Douglas's books several times, and finally seeming to go nowhere slowly with them - I found Brett Steenbarger's "The Daily Trading Coach" more usefull marc
You touched on something That I'm currently on. the Trader psychology, an am wondering if you would share how Dr. Steenbarger id different from Mark Douglas. I am also curious what hurdles you are currently working on overcoming (if you are willing to share). As it would not be fair to ask without sharing myself I have dealt with a number of issues, and done some damage, such that I tend to face a lot of anxiety when I am in my trades. In advance... Thanks
I read Trading in the Zone....great book. 2nd time I have heard of Brett Steenbarger so will check this one out as well.
Not sure if this is a question for march21st or myself but I will answer the question about current hurdles. I can't speak for Steenbarger versus Douglas since I have not read Steenbargers book. My 2 biggest hurdles I am working to overcome right now are trading according to my plan and remaining unemotional during trades. I have accepted that the markets are going to do what they are going to do and I have no control over it. If I get emotional, it will only lead to poor entries and exits. That is why I trade with a plan. The plan was put together for a reason. Plan the trade and trade the plan...for me I have to keep it that simple.