Little Lex's YM Daytrading Journal

well guys f.... it, I give up. This is my last post. I just don't have the discipline to do this...

Time to get myself a real job...

 

I figured you would quit. You never had the right attitude in the first place. Seems to me like you're making an excuse of 'lack of discipline' for taking bad trades. If you had a trained eye for PA, you would know the difference between bad trades and good trades.

On top of that, you are so wishy washy. One day your going to start a new journal (like that will make any difference) and the next day you made +$76 and u suddenly have confidence again.

 

Hi guys,

Some of you might be surprised to see me posting again after my last post. But I did not have the discipline to stop trading!

However I managed to change my trading style and therefore my trading results significantly. The tipping point was when I discovered that the description of the “amateur trader” in Carter's “Mastering the trade” fit me 100%. As a result of the change in my trading style I managed to be (slightly) profitable in July (not enough to pay the bills though) and profitable before commission in in August.

Now I am not writing this because I like to brag. Actually those results are nothing to brag about. I am looking for help concerning “fear”. The problem is related to winning trades. I have attached a graph (of an extreme example) to clarify my problem. Simply stated, I take my winners WAY too early. Therefore on winning trades I often take less than 10 YM points. I still manage to be profitable because my ratio of winners to losers is above 75%.

The strange thing is that this problem got more severe when my results got better. Better results should mean more confidence which should lead to less fear. But for me it is not working out that way.

Good trading to all,

LL

 

Hi guys,

The Dow has just now gone up by almost 900 points, then reversed and lost 500. It is impressive and certainly experienced traders can make good money in this environment.

However since I don't see myself as an experienced trader I find this market very difficult to trade without risking a substantial loss. As always, risk and potential return go hand in hand.

Any ideas on when the market will calm down and movements will get back to normal?

LL

 

Yes, when people stop throwing money at the bankers, which helps nothing, and lets the market bottom on its own. Then we will have a new bull market. All these bandaids are just like stops that get crushed on the way down, all they create is debt, but do nothing to fix the problems.

 

Its good to see ya back!

as far as getting back to normal-it wont be this coming Monday

 

I suppose the volatility isn't much of a problem if your risk / reward ratio remains favorable.

Instead of risking 15 points to make 30 I would need to risk 50 to make 100.

Several weeks ago I used an (arguably too tight) standard stop of 15 YM points away from my entry. In the current market that stop could be taken out in a few seconds.

I just don't feel comfortable so it would probably be better to stay away. On the other hand it is a shame to miss these kind of moves. But that's probably the way newbies think.

LL

 

Hey,

If you are not comfortable with the psychological stress of trading 2 contracts instead of 1, see if there's a way in your software to change the display to "points" instead of "dollars."

That way you'll see +7 points or whatever and it will look the same with 1 contract as it will with 10. Say you're up 10 points on two contracts, you won't get super excited cuz you're seeing $100 on there. You'll just see +10 points.

It's worth a try.

I've seen a similar phenomenon in weightlifting where someone goes to lift a heavier weight than they've ever lifted before (often when they add another 45lb "big plate" to the bar), and they are unable to complete the lift because they are psyched out. But if they loaded the same amount of weight on the bar using smaller plates, it doesn't look so intimidating and they get the lift.

 

Dear Little Lex,

I was browsing the net in search of my own advice and I saw your thread!

With all due respect, I want to help you. I couldn't help but to reply.

First of all, I've been trading for a little longer than you. I've gone through painful learning lessons and I've also banked a lot of $$ on YM NQ ES.

YM is hard to trade because it's wicked fast. But keep trading it, because you will find a method that will allow you to make bigger and better profits.

You MUST shoot for profits of, 100-250 points, and even bigger 500 pt trades.

100-200 points is actually easier than you think! There are indicators that you combine with S&R levels to get a broad sweeping signal to catch BIG points.

I won't tell you my system, as you must find it yourself. I never had the mentor to hand it down to me...I found it after losing, winning, and losing more.

Today I took over 200 points out of the YM and I even took a few out of NQ on the side. These large point gains are very feasible, even with a relatively tight stop.

try using a 133 tick chart with some different moving averages to find bounces and/or resistance "rejections" which are awesome shorts.

By the way I'm 20, so anyone can learn to take HUNDREDS of YM points out of the market! and it's easier than you think it is. You won't hit the big trades every time...in fact, I've been stopped out at break even a bunch of times...40pts isn't even worth taking, you need to find ways to catch 100-200 point swings.

You are closing out FAR too early. We've dropped THOUSANDS of points in the DOW and so you must find those areas of fear and panic and sell into the weakness.

If you are confident in your method, you let those good trades run. 40 pts is an easy scalp...anything less than 40 is simply failure. When the losses come knocking on your door, you'll be paying up! (trust me)

if you are trading these futures, learn how to stomach the pains of learning.

Futures is a game for deep pocketed and experienced players. Your little 20 pt stop is lunch money, and your 40 pt gain is what my watch is worth!

I'm not a big player, but I've learned how to swim with these sharks..and live! So I can't tell you everything, except you need a MUCH bigger profit target, when the situation is appropriate.

(for example 14:07 breakout 10/10/08, you took profit early, while most rode the beast to the top!)

...and 9:22 AM SHORT
...and 12:28 PM SHORT
very nice and easy trades. big points.

the biggest mistake of the new trader is taking profit too early! you WILL go broke taking a small profit! The saying that "you never go broke taking small profit" is BUNK and BOGUS. You need good sized winners to pay that "tuition" now or later...and a few hundred points in YM is like, nothing much anyways

so. look at a 200 sma. draw supports and resistance, use observations. then act accordingly.

if you haven't heard of market internals go search (advance and decline issues, go learn about those as well as $uvol and $dvol).

 

OH and by the way,

risking 15 to make 30 or risking 50 to make 100 is the same deal. It won't get you anywhere!

You need a R:R of 1:3 or better. I have traded as high as 1:10 !

risk 50pts reward 150pts 1:3

Example:

Trade 1: risk 50, earned 150

Trade 2: risk 50, STOPPED out (-50 loss, still +100 in the green!)

Trade 3: risk 50, STOPPED out (-50 loss, still +50 in the green!)

Trade 4: you finally hit a winner...risk 50, REWARD 150 pts (200 pts in the green!)


so at 1:3...you can stand to lose 3 trades for every winner. If you pick your trades wisely based off of a solid setup, this should be money in the bank.

This is a common futures R:R that the pros use. Pros do not bother taking 1:2 trades. In fact, the pros usually do not have a high percentage of winning trades...many small breakeven/small loss and a few big catches for profit to pay for loss and add profit...

1:2 is nearly suicide if you ask me.