Discussion in 'Journals' started by johnnyrock, Jul 20, 2017.
My biggest loss:
For several months I had been making serious money trading Google options. I was working full time for an OTR trucking company out of Iowa. The job sucked ass!
I was unhealthy. Mentally. Physically. Emotionally. You say to take emotions out of trading. I am not a robot! On this day I wish I was. This was the day I would lose 20 grand.
I was over leveraged and over confident.
I was actually miserable. My job was simply a means to an end. 50 grand a year.
Chump change to the boy plunger.
No. That was not me. I was not the boy plunger. I was a former garbage man who wanted to buy his freedom. A slave for sure. I hated "Toby work."
You have read the book. That was Jesse Livermore. If you want big rewards you take big risks. He lived the dream. Until he shot himself. What chance did he have! Jesse didn't have access to all the great trading books, lightning fast quotes, execution and charts; we had it all. I would re-write the story. This time it would have a happy ending! Prince charming would have his way!
Who could tell me anything? Over the years I had my first big month in the summer of 2003 - eight grand in one month. On three separate occasions, in the years since, I have had three different days in which I had made four large in a single day. I have made $10,000 in two weeks trading on both the long and short side. But! I had a preference.
Because of that glorious eight thousand dollar month, I still have an affinity for the short side. I often seek out women who look like my ex. Nothing long term. That would be creepy. Just for the night. Some might say I am agraid of committment. I just want my freedom.
I would withdraw my last 6 grand two months later. It was back to "Toby work."
That is how I ended up at Heartland Express. As far as trucking companies operate you only ran sort of illegal. They paid well and got you home every week. More imporyantly you only ran about 2500 paid miles per week. You don't log the unpaid miles. That would give me time to trade. The DOT, at that time, only had access to your shipping paperwork and fuel receipts. I could pursue my passion, day trading. Who needs sleep? Drive all night, trade all day!
Let me tell you about this particular day.
The futures were down terribly. At least they had been earlier that night.
Across the pond there had been bombings in London. At the train station.
I guess there had not been enough time that passed. Or maybe I listened to too much news driving that truck. This felt like another 911. At least I am sure that is how Londoners must have felt. Sure, that saddened me, but the other part of me saw opportunity.
I would learn three valuable lessons this trading session. When the futures come roaring back you had best be sure you are on the right side of that tsunami. I was on the beach. Facing the wrong way. Lesson #1.
Before I placed the trade my stomach knotted up. That feeling had only happened to me once before when I took Heathers number. A beauty queen. A married woman. The one I pushed away. Thank God she left! A substitute would work fine. I still have an affinity for the beauty queens.
Lesson number two. Listen to your gut!
Google had been good to me. Day trading google options gave me the stake that I would use to buy my freedom. If everything went according to plan this would be the day that I headed to the nearest terminal, called a cab, and took a flight back to FL. First class if my google puts worked out. I was filled with anticipation waiting for the opening bell.
This day. It felt like a horse race and it would not last much longer. By this time I knew not to average down. In total I wanted 40 puts. I would buy 20 at the open and buy 20 more as the position moved against me. After all I could see obvious resistance, formerly support.
The trade, maybe, lasted 10 minutes. To this day my guess it was probably closer to ten seconds. I was bleeding cash! This tsunami of a market crashed through resistance. I was left lying on the beach. This would be my d-day. I need a medic.
The most important lesson I learned that day would be that what provides resistance, if you learn from it, can become your support.
This would be the first of many lessons I would take on leverage. I know better now. In fact I am better. Mentally! Physically! Emotionally!
This is "The Tale of the Existential Trader: the Legend of Johnny Rock." This is a true story and Elite Trader will be the witness. Comments are welcome. @JoeD can implore me to quit. But if he sticks around long enough, he too, will be a witness.
If I may give you some advice, I believe your methodology is not very good for a beginner. You try to capture trend days, in those days, typically if you are on the right side of the trend, you risk very little but can make a huge amount (relative to the risk). Its similar to what Taleb calls `convexity`. In those situations, you want to ride the winner for as long as you can.
Often times, people will be surprised how long things can keep going. Its human nature to want to get out of these and lock profits. Your system does exactly that. Its psychologically easy to liquidate when up and try to get back in on a counter-trend move but its probably very flawled. That is because it is a system that is fading the very essence of `convexity` trading. I would instead use a trailing stop (that is wide enough) and try to ride the trade to infinity. Perhaps have a core position where you do that and a non-core (say 2/5 of the position) where you play around with trying to `outperform` by doing what you are doing. You might find that the passive approach (that uses the trailing stop) will be superior to the more active one
Johnny, you magnificent trader, sorry I yelled at you. If you're peeping to see when I come in, please take me off Ignore.
Be careful Johnny, we are at critical resistance
Week 1 results. Paper trade with a $5000 account. 2 trades on the QM. $390 profit.
The PROTECTORS and the HELPERS:
In my estimation one sure fired way to increase page views, and POPULARITY, for a trading journal is to draw in the aforementioned ET types.
Follow @johnnyrock5932 on Instagram. Follow me on collective2. No, really, follow me!
Those two statements, if I am lucky, will draw in the PROTECTORS! God forbid someone should sell snake oil - the American dream.
Over the years I have learned that trading is a solo endeavor unless you are trading at a prop firm or hedge fund. Even so, if losses mount up trading would once again become a solitary endeavor. Unless of course some magnaminous trader would be so kind as to give you the keys to the kingdom.
I am always NICE to the HELPERS. After all they are here to help. Unless of course they mention FTT and I am reminded of Jack Hershey who seemed to be an affable sort, an American buddha if you don't mind the comparison, then they will be on my ignore list. Another group of HELPERS were the WOODIES. They seemed to have a hard on for anyone who might question the Woodster's motives.
However, they were only PROTECTING Woodie, or quite possibly, their own ego.
Then there are the rest of us who are simply attempting to improve our own trading while also dropping a nugget or two along the way. We have no axe to grind! It's not our way or the highway. In fact we are not seeking anything other than camaraderie with people who have traveled down a similar path only to find a methodology that fits their strengths like a glove while keeping as much distance as possible from the trader and his blind spots.
My blind spots were being over leveraged, over trading, and over confident. Traders will say that there is no pressure paper trading. Maybe they should post a journal! Talk about pressure. Losing money comes in a close second to losing face.
One's blind spots are only recoginized through the reflection of others.
That's why they are called blind spots.
Unfortunately as humans, when these are pointed out unsolicited, we don't receive it well. Even when we solicit feedback, we don't receive it well. Perhaps one considers themselves special and human social dynamics don't apply.
Perhaps a more productive mindset is to increase one's clarity and understanding of how markets really work.
That line of inquiry leads to an examination of one's basic assumptions that have been enculturated.
Whatever we focus upon grows.
If what you are engaging in builds trust in oneself then that is a very good path.
Signal or noise, to each their own.
Bear flag on the weekly. Nice narrow range this past week. I will be watching the short side.
Rules: one trade, one contract per day.
The facts: most days, over the long term, will not offer any trades. That's okay!
Because I am stalking, potentially, trend days I will not close my position until 3:30 pm unless my stop is hit.
Although I also watch the NQ, if given a signal in both markets, my PAPER trades will lean towards the QM until I build up this account.
PAPER TRADING PROVIDES THE PREPARATION TO PROTECT ME FROM MY PAST.
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