Jasper's Last Stand

Discussion in 'Journals' started by jasper6, Jan 2, 2007.

  1. jasper6


    I have been trading since the year 2000.

    My introduction to the market was in selling a vertical industry website to a NASDAQ traded company in June, 1999. I received cash and restricted stock - about 50/50. At the time of the sale, the stock was trading just above $20. From June 1999 to March 2000, the stock hit a high of $143. On paper, my net worth topped out at over $2,000,000.

    Not knowing anything about the stock market, I couldn't believe how much money could be made! Too bad my main experience in hindsight was at the top of a bubble. Since I didn't know what a costless collar was and didn't protect myself, I didn't sell out until over a million of the paper profits had evaporated (still hurts to think about).

    I was hooked on the market, though. When my consulting agreement ran out at the end of 2000, I spent a year reading about 50 books on trading. The beginning of my search for the holy grail.

    I started daytrading tech stocks in the Autumn of 2001 and promptly lost $30,000.

    I switched to the ES after a year or two and paid even more tuition. When the ER2 came out, I started to trade it since I liked the daily range, the extended moves and (at the time) the lower noise level.

    I am now five years down the road and am pretty much a breakeven trader. I still trade one lots. I have studied every indicator and system known to mankind. None of them seem to have worked very well. They are mostly great when the market trends and horrible when it chops.

    I have suffered from "triggeritis" on occasion - sometimes lasting for months. I have read "Trading in the Zone" countless times and have the Five Fundamental Truths tacked to the wall.

    Bottomline, 2007 will be my "make or break" year. There is only so long that you can live on your savings. So long that you can go without a steady income. I can't even bring myself to think how much income I have lost by trading as opposed to having a job. Over $500K for sure.

    But, I like working for myself. I like not commuting, dressing up or playing office politics. I like owning my time and the freedom trading provides.

    My goal for 2007 is to work toward $1000 on the average day or $200,000 per year.

    I am using Ensign Software for charting after trying nearly everything. They have the best support out there and are constantly making improvements. New releases almost weekly.

    I use IB for a broker and for quotes to drive Ensign.

    My total monthly outlay, including a broadband cable connection, is under $100. I pay $4.80 RT on trades.

    I only trade the ER2. I don't look at anything else. I only use range charts since I like how they look. I use one indicator - a volatility stop (15,3). I trade the volatility flips and use a 1.5 point initial stop. I am still working on better exits, more patience with trades and trying to outguess the market.

    I am posting here to try and force more discipline. More discipline to quit discriminating on edges and to let the chart tell me what to do.

    I don't bother with TICK, TRIN, news or anything else. The chart is either long or short and that's it.

    I use 24 hr data.

    I am hoping to add an additional contract for each $10K in equity that I earn. For simplicity's sake, we will assume I am starting with a $10K account and trading one lots. At a 1.5 pt initial stop, this is a 1.5% risk per trade.

    I am hoping to make 3-5 trades per day. I have found that the fewer trades I make, the more money I make. Days I have made 8 or more trades are usually the worst. The indicator constantly has you going in the wrong direction.

    So there you have it. I don't know if I will post in real-time, but I will trying to upload charts when I can.

    Since the system is so simple, it shouldn't be hard for someone to replicate if they are so inclined.
  2. hey jasper,

    sounds interesting. looking forward to your journal.


  3. jasper6


    Here's an example of what my charts look like . . .
  4. jasper6


    Suggestions are welcome. Particularly as they relate to better exits or filtering out bad trades.

    What I would prefer NOT to have suggested is how adding multiple indicator layers or multiple timeframes with a zillion new rules would be just the ticket.

    Been there and done that.
  5. I trade ER2 fulltime and its price action is very suitable for a volatility based methodology.

    Although I don't know exactly the specifics of your methodology...if its volatility based you are going in the right direction.

    However, you mentioned you don't look at anything else (other markets???) and I believe that will be problematic when trading ER2 because of its volatility.

    Will be lurking and reading with interest.

    Good luck.

  6. romik


    Hi Jasper,

    What you are doing is almost exactly what B1S2 has recently done in both ES Journal & FX Journal. He was implementing a breakout/down method using current reaction highs/lows as entry/reverse points. Looking at your chart that's basically what that blue indicator is showing you, where a previous reaction high/low was and upon a break of that level you either go long/short/reverse.

    What B1S2 did also introduce is adding size after each losing trade, taking it to initial size after a winning trade & scaling in once in a trade. From what I understand you will only be trading 1 lot, so his method of increasing size will not benefit you. As long as volatility is there, you should be just fine. All the best!
  7. jasper6


    Tough Start -6.0 points in the chop
  8. hi jasper ... have you ever considered trading other markets ?

    have you ever considered trading ETF's ?

    have you considered scaling down your goals ?

    good luck and health to you in 07
  9. Hey good luck.

    I also daytrade ER2 and it provides great reward with the highest nausea lol.

    Today's chop also ate me up a bit but then I caught the surge trend after the ISM report to end the day positive. It was nasty for a while there and even though I learned my lesson never to trade during a volatile opening (after 4 day rest with futures surging) or significant economic report (significant because market dying for some news). Better to sit back and let it chop and sooner or later the trend will establish itself.

    Naturally your method will do worse in a fast choppy market sine reaction highs and lows are taken out back and forth. I would look away initially during the chop for a few minutes and then study the chart to look for the true break from the chop.

    Sometimes looking at a 5-minute chart along side your current chart will help get the bigger picture during a wild chop and get you in a little bit after when the trend has started and avoid some of the chop. Then you volatility stops will keep you in for the ride.

    I know this is hindsight for you but if you look at the 5 min chart, the 10:00 - 10:05 candle was a strong bullish engulfing with high volume. Then the market battled it out for another 5 minutes before resuming in the bullish direction. I jumped in too early at 10:02 but the 5-min chart kept me in the position since the bars were building on each other.

    So if I did the right thing and stayed out of the chop (which I did not do because trading is like crack), then the longer-term chart would have helped me determine the breakout from the chop and then I could enter and let it ride.

    Anyway, I did the same thing you did but eventually made money because I added to my position as the trend established itself.

    I know you do not want other indicators so I merely suggest using a longer-time frame chart (5-min) along with the short one to gain intraday perspective. It has really helped me.
  10. jasper6


    Still long from 799.20. Will consider a LT chart to filter trades. In essence, only in the direction of the LT trend.
    #10     Jan 3, 2007