Sounds cool. And 1.5 years, that's pretty quick I can say. Some of my friends are in more than 4 years. There should be quick realization skill that enables us to switch the system and indeed, that skill is important part of trading life.
So its been over a week since I re-opened my futures trading account. I have been trading 1 or 2 lots of ES / CL. I had two trades on ES which I lost both but on CL I have been more actively trading trying to take out the larger swings with trades lasting from a few hours to a day or two and its been going pretty well. I will add to a losing trade if momentum is set in my favor and I am just not exact with my initial entry. Will take a quick loss and not add if I am trading against momentum (using MACD on multiple time frames to read market momentum). Over all I am up 12% on my deposit balance but this means nothing really because of leverage and its only been a little over a week of active trading. Since this is a psychology Journal I may as well talk about how I felt during this week. It was a bit of an emotional roller coaster really. I had a couple of windfall wins in CL (making 1 - 2 CL points per trade). which made me feel quiet a high to be honest. I know this is not a good state to be in but damn if felt good to be right and be paid handsomely for it. This obviously made me less risk averse when it came to putting on future trades. The losers on the other hand made me feel terrible. Some of the losers I had I cut right away and others I let run a little more then I should have and because CL moves fast the pain was more then I was expecting. My wins were larger than the losers so it ended up being OK but still I am effected very negatively by losers and very positively by winners. I am a rookie when it comes to the emotions of trading. I am still trading with mental stops even in CL, because the best areas where market reverses there tend to be probes into obvious stop areas which would have shaken me out of my trades and chopped me up, had I put my stops there. I am reading a book right now which talks about how risk taking effects our emotions and physiology to try to get a deeper understanding into my mental state. Its called: The Hour Between Dog and Wolf: How Risk Taking Transforms Us, Body and Mind by: John Coates. Pretty interesting perspective on how your hormone levels are effected by your risk taking adventures. I am going to take a few day's off of trading now to reflect on the trading I did and also to let my emotions settle and to make sure I don't sabotage myself. The way I trade requires immense focus and I have not slept very much when I was holding trades over night. I've also quit smoking cigarettes and drinking alcohol in an effort to increase my discipline and not to have a vice for numbing my emotions.
I now wrap up 2 months of trading futures live. It has been an interesting journey of boom and bust cycles. I make money for a few weeks with some intraday trades or some swing trade ideas, then give a bunch back on one bad idea, rebuild up again then once again get caught wrong and give back. Let's just say that risk management is still something that I am trying to work out. Like they say, making money is easy, keeping it is the hard part. I started this latest trading experiment with a $20,000 CAD Account start of August. The equity peak I had in the last 2 months was $33,000. Currently sitting at about $24,000. My biggest losing trade is bigger than my biggest winner but my win rate is very high since I'll hold most losers until they become profitable or i'll average trades out. My biggest risk management tool at the moment is to keep withdrawing funds from the account and keeping just enough for reasonable margin and also to leave some room for averaging out of bad situations. Let's see what the last quarter of the year brings in.
Hm. That's respectable. I was going to suggest that your big losses might be the result of not being selective enough in your trades but at 40 trades/2months, it's not as if you're overtrading.
The big losses come from swing trades gone wrong. Obviously those require a much bigger stop point. Also I am a bit inconsistent in my sizing. I trend to go bigger for the trades that in my mind offer bigger payoff if I am right.
Well, I don't know what criteria you're using to predicate your trades but having the right idea is often more important than position size or potential reward. A person can do pretty well if they're good at picking winners - even if they size inconsistently or take money off the table too soon. In other words, trade selection. Food for thought.