Finishing up my taxes for 2017. IB allows me to look at my last 3 years of Form 1256 which is basically futures contracts. I'm glad I examined that data in detail. I take it back! My biggest losses were NOT due to shorting index futures! Whew! Amazing what looking at data vs anecdotal memory. I know this is so crazy not knowing this, but when you have 4 different trading accounts, a FT job, and trade other instruments, it's hard to keep track of everything. My goal is do thorough analysis going forward. IB has 3 years of data. Before that I didn't really trade and focused on my corporate job. Here's the first high level cut. The base year is 2015. HORRIBLE losses in futures. All superconcentrated in NG. I was trying to pick a bottom and loss big. That tells me position sizing was totally out of whack in comparisons to my account size. Also countertrending! 2016 the total loss is HALF of 2015 losses. So delta in improvement. The biggest losses were ZW and NG! In third place was NKD(Nikkei futures). In all 3 cases trying to go long and time the bottom. So my biggest losses were trying to go long. Not shorting! I think I did lose money shorting index futures but they were in drips. I think when you lose a little here and there everyday trying to short the top on the index market, it might feel like you lose a lot. But those were nothing compared to my concentrated long positions in trying to time the commodity bottoms. Ahh... Insights from data. This is surprising given that's the analytics service I provide to others yet I haven't crunch the #s for myself. hehe 2017: I'm actually UP. I was net positive across almost every type of futures contracts I traded! WHOA! I have too many accounts and my memory is faulty. But I actually lost a lot of money in equities buying TVIX on my Robinhood. Again, concentrated position. Armed with this data, I think I have renewed hope in my futures trading. I thought I was not improving... Without slicing and dicing more, these were the 2 major sources of trading mistakes. 1) Position sizing. Too concentrated positions. Super huge positions 2) Countertrend trading: Timing bottoms and tops In 2018, I have mostly gotten rid of #2. And I haven't really trade large. This can potentially point to a positive year for 2018 if I keep those in mind.
Actually, I haven't totally gotten rid of countertrend trading bias. I have only lessen its insidious effects. Today was a perfect day for shorting. For me to short correctly, I like to catch the beginning of the trend. Since I missed the beginning of the short trend, I was so afraid of the spikes up that I decided to go long. Bad idea. At least I didn't get hurt badly like on feb 5th . But I still feel "stupid" for not taking many short signals out of fear of spikes up. So I went long thinking it bottomed out. So the basic question here is how NOT to be afraid of strong trends and enter the direction of the trend mid-way when it's already evident and going one way for a long time. I don't want to short at the bottom then get hurt when the spikes come. I guess it's all just a fixed sized bet. If I really emotionally recognized it as a probabilistic bet with fixed loss then I should not be afraid to short even after a trend was already in place. In fact, I did short it too but I got out too soon fearing the spike up when had I held on it would have made my day.
===="Easier" to make money going Long than Short?==== "easier" to make money when one knows what one is doing, especially if each trade is a reverse position from the previous trade i.e number of shorts equal number of longs
Knowing what to do intellectually and actually doing it in real time are 2 different things. That means I need a hella lot more practice to cement that X->Y association and make those thinking automatic. If I only listen to the quiet voice in the back of my mind.. To convert intuition into automatic trading habits requires drilling them in..
No, the simple rule is if you want to do it don't, if you don't want to do it then do it, if it's uncomfortable it's probably correct, if it's painful it's probably wrong, if it's easy it's probably wrong, and if you're not sure do nothing, unless you are fighting then keep adapting until you find an exit, that one is tiring so give up for the day or week.
imho its not that intellectual knowledge here is converted to practical its the other way around also, one should forget about the intuition and voice in the back of one's mind as for the "easiness" imho short trade is faster way to make money, compare to the long one, just because markets fall faster than their rise
Today I went long when the trend is up. Made some. A good indicator that the trade is good is when you enter it goes your way right away quickly. Tuesday, I was trying to time bottom because I thought I already missed the short window since I was midstream even though my signals and intuition told me there were more room to go. I notice sometimes you get it right near the local bottom and it bounce right. A lot of time it goes down right away then you know you are definitely wrong(a stop loss helps there). Or just sideways. That's an indication to get out. On Tuesday it just went sideways and I stayed in when I should get out. The only good stock/futures/instruments are the ones that goes up when you are long and goes down when you are short. I realize there are so many different "plays" that you gotta master in your playbook for certain days in the market. Like you have to keep in mind what to do on a strong up day, strong down day, up then down, down then up(reversal), sideway markets, etc.
Progress. Another good process day. It's not about huge P&L at this stage. It's about identifying the right setup in real-time and entering long or short when I should be. To create consistency. Once consistency is achieved with the right trading habits, then scaling up can be done. I'm glad I stayed out of the morning downdraft in YM. I resisted the temptation to time the bottom though several times it would have made money. I have successfully got rid of the bad habits of trying to time the tops. Now, I'm working on getting rid of timing the bottom. Yes, there are very selective signals to get in at the bottom. And very selective signal to time the top. But they don't occur very often. Just gotta be very careful. Then I had to take my daughter to school. Came back and I missed the long signal that would have gotten me into the rally. It already happened. Nice 100pts+ rally. Oh well. There will be plenty of other trades. The point is to get rid of bad habits and instill in good habits. Keep doing that and it's just a matter of time before great results come through. Good progress. 2018 is my comeback year!
I think that short term horizons such as scalping or swing trading long and short is very difficult. Those that can do both have very good risk management skills