Made 9 ticks! The 2nd trade was in line with my plan to try to time the trade with the trend. I didn’t hold onto it because I was glad to finally have a little bit of profit after such a long losing streak. Also, I didn't want to risk giving any back, so didn’t take any more trades today either. If I can become consistent at making more trades like the 2nd one then I will get more confidence to hold onto them.
I think I'll start recording my trades and explain what I'm thinking as I'm trading. Simply knowing that I'll be recording should help me stick to my rules carefully. It should also help identify things that I'm doing wrong. However, the main reason I decided to try it is because I think I can better judge my emotional state when reviewing a recording, than I can by looking at a chart. I don't plan on posting them here. Then why I am I writing about it on here? Because things I put in this journal I tend to follow through on. Things I don't post here to try I usually forget to do. I'd be less disciplined without this thread. I might sometimes mention how the recordings are helping, if it seems like they do help, in case anyone who happens to read this thread might be helped by it too.
Lost 24 ticks The recording revealed that I'm "self-talking" the right way but not doing what I'm saying. I'll say, "I should close this trade." But I don't close it. I'll say, "I shouldn't take a trade, I should wait." But I do take the trade. I said that my entries were late and that I didn't know what was likely to happen. But I didn't stay out. I even changed my strategy for the last trade (wanting to scalp) without thinking it through and then I wondered why I had opened the trade. I'm not sure the video revealed anything helpful. It did show that I'm not making good trading decisions and I guess that's helpful. I'm not sure what to do to fix it. One thing that I've been thinking about for a while is that I should go back to trading something like I did on the NQ with the 10 ticks stop loss and 10 tick target. I was really slow at improving my win rate and it never made much money, but it did help me to focus on trying to get good at one thing, with the plan that I would increase the target size after getting good at the 10sl/10tp. I think I need to do this on the 6E because I'm entering moves way too late, not taking reasonable profits, setting my stop losses too far out for what I want to be using, and my targets are usually 20+ ticks away and I can't recognize yet when that is a reasonable target, so I hold for too long on losing trades and let winning trades reverse. Plan: Try 8 ticks stop loss and 8 ticks target for tomorrow. Rules: 3 losses only per day. Unlimited winning trades. No adjusting the stop or target (for now). That's a really frustrating way to trade, but it is helpful for learning to let the trade play out and trying to pick better entries rather than poor entries that you "fix" by closing early (which I have a tendency to do.) Also, by using a set 8 tick sl and 8 tick target my win rate will be a better reflection of how well the trades were taken than if I fiddle with the trades. After fees and commissions are factored in, it will end up as about a 9 tick sl to 7 tick sl which means I'll need to have a higher than breakeven win rate to cover fees. With 3 losses allowed in a day, I need to have 4 winning trades to make $15.00 for the day: 3 losses = $165 (fees included) 4 wins = $180 (fees included) Net gain=$15.00 4 wins out of 7 trades is a 57% win rate. That is what is needed to have a slightly above breakeven. My maximum loss for each day will be capped at $165. Trading this way does not make any sense at all. Risking $165 in losses and possibly, if I'm lucky, making $15 on a good day. Why am I even trading? Let's hope I can get a consistent winrate that's much higher. This sounds better: 3 losses and 5 wins in one day is a 62.5% winrate. The drawdown would be $165 and win amount $225 and the net gain $60. I wonder how hard it will be to get a 62.5% win rate using 8sl/8tp?
I guess I hadn't check my winrate. After the losing streak from the last couple weeks, I figured my winrate was close to zero percent, but apparently it isn't. I need to bump it up by 20% while using 8 sl/8 tp to begin making a little $ each day.
Also, I'm not losing site of the bigger goal of catching trends, and I'm still making my way through my trades from the last month to refine my plans for both trend trades and 8 sl/8 tp trades.
If you can follow your plan and only take the entries that in hindsight you can say are justified, then you will lower your loss rate and that alone will increase your win rate.
Thank you!!!! I'll keep working at following the rules for both entries and exits on my original plan and hold off on resorting to only 8 tick trades.
I think I've found the best person to keep me accountable to trading my plan. It's my mom!! She said she doesn't mind if I call her each day after I'm done trading and explain to her how I did in following my trading plan. She doesn't know a thing about charts, but I don't necessarily need her feedback. I think the process of talking through how well I did in following my plan will help me to do better. She's not the kind of person that would be upset by any of it anyhow....some people might get concerned if I were to tell them I didn't follow through on my plan very well, but she won't be. She'll like the phone call.
I lost 24 ticks. Why? The recording of the trades had a lot of "I don't know what it's doing, but I think it will go..." before entering each trade and a lot of uncertainty after entering the trades. It seems like my observations of the reasons for and against taking each trade are correct, meaning I'm seeing what is going on in the chart, but my interpretation and response is not correct. For example, for the last 2 trades (losing longs) I saw that there was a downward push in the trend and I saw that we were at a place where a small uptrend began but might not have the strength to keep moving up. I knew price could retest the lows although I didn't think it would continue to trend lower (but it did). Where I went wrong was: 1. Watching the 1 min candles to tell me direction of the overall trend (don't know why I tend to do that)....this is faulty thinking. 2. Thinking that price was more likely to reverse and trend upwards than to continue to trend downwards. I'm not sure why I often (wrongly) think there will be a trend reversal at a pullback, but it's also faulty thinking. 3. Didn't stay out when there wasn't a CLEAR set up. Why? I wanted to be in a trade/catch a move. FOMO. 4. Being willing to risk $ on an unclear setup. (Demo for now, but that's not how I want to trade real $). 5. Didn't rely on my indicators/setups to enter those 2 trades. I'm trying to work so hard at this and still not following my plan. To sum it up, I listened to myself and didn't wait for the setups in my plan. I took trades based on "It might go up." What do I plan to do about it? I think I have a lot of wrong thinking that needs to be corrected. Going through my trades meticulously to critique them for what would have worked and why they didn't work should eventually help. Also, I'm still not used to the way the 6E moves. There is a lot of overlap in the candles compared to the NQ so I need to become more aware of how I might be trading the 6E as I would the NQ and really try to understand it's uniqueness. I'm posting a 15 min chart comparing the 6E and NQ because the 6E seems to really respect the 15 min candle boundaries and I couldn't remember how the NQ 15 min candles looked. There are some noticeable differences between them, at least for today, and that could explain some of why I'm still confused with the way the 6E trade.
"However, when looking over my trades very closely, I find that the majority of the losing trades have been due to my lack of self-discipline to follow the rules exactly." studentofthemarkets Nov 10, 2019