Took my first live trade today since December. Made 8 ticks...7 after fees...in the micro ES. I'm planning on transitioning slowly to live trading, trying to make just 8 ticks a day. However, I might not trade live everyday. I plan to be very selective in waiting for a high probability set up. All day yesterday and even some last night I thought through the purpose of this journal and how best to use it now that I'm transitioning to live trading and I've decided to take a break from posting updates. The reason is that it might be a bumpy ride and I don't want the added stress of writing on here if I have a bad week. If I mess up, I'd rather keep it to myself. I created this journal to document the story of how I learned to trade a specific method that was graciously shown to me. Scalping for 8 ticks is just one way to use it. It's actually a really good system for trend trading, and that was how I originally planned to trade it. However, I seem to do better with small targets. I hope to update occasionally and someday show that I have learned to trade this method well. If I can think of a way to use this journal for this next part of the journey, then I'll start posting regularly again. Live trade:
Well, I've entered a new part of this long journey of becoming a consistently profitable trader. I knew it was coming, and there's not a whole lot I could think of to do beforehand to prepare for it. I have struggled with following my rules when trading live, and suffered the consequences. I kind of imagined I would leave my journal alone for a while and pop back in someday to report that I have accomplished making a living off of trading. But, that may be a long ways away yet. And since this journal is meant to help me stay on target as well as document the things I'm learning along the way, I think it's probably time I use it to focus on building very strict habits and following rules very carefully. I don't plan to share how I'm personally doing in trading for a while. It's too hard when trading live, or going back to SIM for a while, to share my successes and failures because they are on a roller coaster ride right now. However, I will share this, in case anyone imagines something worse than what happened: I did NOT come close to blowing my account, as I used to do a couple years ago. Unfortunately, I did have to re-learn what I had hoped I had already learned: that I can't afford to lose self-control when trading. And calmly telling myself that I'm not losing self-control, just suddenly changing my rules, is STILL losing self-control. So, every now and then I think I'll post something I've read or watched that has something to do with self-discipline. This past week got me thinking to how easily foolish decisions can be made, in trading, and in real life, where the consequences are disastrous. How many times have I heard of very successful traders, even professionals, who lost self-control and lost way too much money? And usually in a very short time period. The following are a few excerpts from: "Stupid decisions that can ruin your whole life in a second" found here: https://agileleanlife.com/stupid-decisions/ THERE ARE MANY STUPID DECISIONS THAT CAN DESTROY YOUR LIFE IN A SECOND Stupid decisions are decisions with very small gains and a possible colossal negative impact on your life. Stupid decision = high risk, small reward They’re the opposite of smart risks, which are risks with a small downside and a huge upside. With stupid decisions, you can destroy your life in a matter of seconds. You do one action that you might regret for the rest of your life. Examples of plain stupid decisions are: Driving drunk Jumping into the water without knowing how deep it is Not wearing a safety belt Dangerously driving any kind of vehicle, like speeding and so on Engaging in a physical fight (if you aren’t really protecting yourself) Sleeping with a prostitute or your best friend’s wife Having unprotected sex Cheating on taxes or breaking the law in any other kind of way Taking on a huge debt just to enjoy a lavish lifestyle Travelling to a country with dangerous diseases or war zones Marrying too soon Exposing yourself in an investment you don’t understand Quitting your job without having a strategy of what you will do next Cheating on your exams Having somebody else write your diploma thesis or copying it from somebody else Stealing at your job or cheating at your company in any other way Getting into business with people you don’t know All these decisions have small benefits and huge potential damage. By driving drunk you may save some time and a few dollars for a cab, but you can kill yourself and others. Fines are only a small thing in the whole picture. EXPERIENCES LEAD TO BETTER DECISION-MAKING There is a saying that good decisions are a consequence of experience and experience is a consequence of bad decisions. In other words, you make a mistake, you learn, and next time you make better choices. That kind of logic makes complete sense. You always start by being wrong, you’re always wrong before you are right. That way, you develop true wisdom with years. There is no other way. You have to fail in life, you have to make mistakes and you always have to try new things, which leads to many missteps. It’s completely okay to fail, it’s completely okay to take smart risks and it’s completely okay to experiment. Sticking only to safe has never led to a successful and happy life. We are made to explore. Stupid decisions have nothing to do with failure and learning. Stupid decisions are plain stupid. But that doesn’t mean you shouldn’t learn and gain experience in a smart way. Stupid decisions have nothing to do with failure and learning. Stupid decisions are plain stupid. You can always tell the difference between a smart risk that didn’t pay off, validated learning based on failure, and a stupid decision. You want to be smart about making mistakes. You should make mistakes in a controlled, manageable and risk-reward justifiable way. Last but not least, you want to start making good decisions as soon as possible, because they accumulate over time and accumulation gives you a great unfair advantage, like a good starting point does.
I think I came across the solution to "maintaining self-discipline" when trading. I recently began going through The Mental Game of Trading, by Jared Tendler, M.S. The beginning of the second chapter is about mapping your emotions and that's when the bell went off in my mind. I used a similar approach to sort through a problem (not trading related) many years ago and found it extremely helpful. Each time the problem occurred I wrote down whatever was going on at the time, and what I thought might have been contributing to the event. What surprised me was that there were usually similarities between triggers causing the problem and that led to being aware each time I noticed a triggering event and that led to being prepared to handle the problem correctly. Hmm, writing this out makes me realize that I should be using this method with trading too. Writing out observations makes it sink in better than just thinking about it. At least for me, it seems to help more. So, I need to start writing out the triggers that I see that make a good trade. I've done this before, just got out of the habit. I haven't gotten far enough into this second chapter to know the specifics of how he is suggesting using mapping. Maybe I'll learn some new ways to add to what I've used in the past. What I like about this is that I already know it's a method that works and that he's applying it directly to overcoming problems emotions can cause when trading.
I've been spending quite a bit of time learning how to put visual alerts on my chart. I have a lot of charts open, though not visible when I trade. I also have hidden most of the alerts because I don't want to use them now, but don't want to erase them either because I might want them in the future. Every day last week I kept hearing dings from one of the alerts going off and it was very annoying because I couldn't find the chart and alert that had the audio. Finally found it on Friday and came to the realization that I do like having an audio alert, as long as I know what it's telling me. So, I've been working on making more alerts and I plan to see if there is a way to personalize the audio file so I can have it say something, but for now it's just a ding. I'm kind of hoping that eventually I have a good alert system so that even when I'm half-awake in the early morning trying to trade, I'll have an alert to tell me, "This is where you should take your trade of the day" and then it would work and I'd be done for the day. But I'm far from having my alerts working that well. Even if I don't get that far with building an alert system, I'm finding that the visusal alerts help so that there are not as many factors to consider quickly when placing a trade. Also, the alerts can be easily checked going through lots of historical charts for their accuracy. I did figure out how to do automated backtesting using just the alerts for entries with a preset stop loss and target. But so far, I only have alerts that works sometimes really well and then stop working. Also, on Sierra Chart, the way I'm using it gives differing results each run through, and it's because it's only estimating the entry and exit price. I found it is more reliable to retest on a 1 speed setting, which means it is not speeded up. So, I have to run tests overnight, or for an afternoon because it takes so long. Still, it's interesting to do and see the results. I don't want to rely on automation, like a robot, for live trading. I'd rather just use the signals to help determine a high probability trade.
I keep trying to get alerts set up on Sierra Chart that will give good signals on a 5 minute chart, and sometimes I think I'm close to getting just the right indicator settings, but then, so far, it's just not consistent. I'm just using the simplest form of alert system on Sierra Chart...just the "color bar on alert condition" and then I combine several of them. And I'm using regular, common indicators to try to get a signal in alignment with what my method is. My method involves watching a lot of things going on in a chart, and I'm wanting to simplify how much I need to focus on to make a quick decision for entering. The alerts I'm currently working on, and I think I made some good progress with today, will sometimes get the right 5 minute candle, but then will often give off both buy and sell signals while the bar is forming. "Sometimes" and "Buy and Sell" signals given off at the same time are not exactly what I have been hoping for. I might have to settle with using them to provide a little extra confirmation to what I already do.
Just trying to sort out my thoughts regarding trading signals: If I keep one chart with signals to go short and another chart with signals for going long, then I wouldn't have the annoyance of seeing an opposite direction signal go off close to the signal for the right direction. Basically, it would be keeping the entry signals separate from being filtered by a larger direction, instead the filter would simply be done by pulling up the chart that was in the direction I want to trade in. That would save a lot of time and possibly frustration in trying to get one chart to filter too many things. The more I think about this, the more I like the idea. I'll have to see if it's easy to use in real time, because switching between charts might be cumbersome.
And I should have one chart that focuses on the trend, so I would use that one to determine whether I pull up the long or short trigger chart. So, 3 charts. One for determine which direction to go and the other two for finding the entries. Might be too confusing when actually trading. I'll have to try it to see.
Today I learned how to put text on a chart that corresponds to an alert condition! When the conditions are met for a downtrend, the blue box will disappear and a red one with the short alert will pop up.
Well, yesterday and today I discovered how to use Ninjatrader's built in strategy tester. I'd used Bloodhound (a product from a vendor that makes strategy testing and building simplified for Ninjatrader) for about a month last year using a free trial. But I didn't realize Ninjatrader could do some of that on it's own. So I've been finding free strategies and running them since last night and even this morning, instead of trading, because I keep finding new things...that usually don't work, because they are in the free section. But then, I did just now find how to put one part of what I'm already doing into a prebuilt (free) strategy tester and ran the results and found positive results with it...then discovered the period of the day results. That I knew Bloodhound had, but of course, I'd never looked at the strategy section that Ninjatrader had on it's own. So, I just now looked at the hour of the day table and found that after 10 am CT it works best, up until the close of the day, and the hour around the close of the day had the best results. Although it probably is calculating trades using the time they were closed, so the trades were probably entered into before 10 am CT, and the average holding time was 30 minutes, so about 9:30 CT give or take some was the best time of day for trend trading. I know I'm scalping, but I can't scalp well unless I have a good trend. Although I think if this works consistently, then I might as well just trade a trend...only if I can really be confident that it is a real trend I'd be getting into. Now, what's difficult about it is that it's just one thing tested on a prebuilt strategy. I have no way of changing the exit plan or putting in a trailing stop on this one. Bloodhound was definitely easier to use for building complex strategies. Bloodhound couldn't manage the trades by putting in stop loss and target management, although you could use an exit strategy. One of their other products has trade management. So, I never really got that far with strategy testing all that I use. But I did get enough done to know that it works. Unfortunately I didn't save all of my work, just some of it, so I have only limited screenshots of some of the tests that I ran using Bloodhound. Ninjatrader is definitely easier and quicker to run backtests on than Sierra Chart. Sierra Chart has a limited way to build simple strategies using indicators, but backtesting them accurately is difficult...if using their easy backtesting system. There are more complex ways to do it and there are reasons I'm not attempting them for now. I have an easier time building a complex alert system on Sierra Chart than I can on Ninjatrader....I think. It looks like building strategies in Ninjatrader requires programming or code writing, which I really don't want to try on my own. It would be easier to just buy Bloodhound, but then, I ran out of ideas for testing Bloodhound without being able to manage trades. I'm not sure I even need to go down this path. I can't test the strategy I'm using exactly as I use it, but I do have enough that I can know approximately when it works and how to trade it. It is all helpful to know for my goal of building an accurate alert system using Sierra Chart because then I know I'm not just believing something should work, but I have the data that proves that it has worked in the past. I can also narrow the conditions for making it work better than what the generalized Ninjatrader tests were able to do....things like filtering out chop conditions....except, as a trader, that's where I still have a hard time staying out of trades. So, I'm also trying to find a way to alert for chop conditions....that might be a lot harder to do. Kind of wish I could find a (free) prebuilt strategy that builds a rectangle around the ranging/choppy areas before a breakout happens, or maybe a flag pattern or triangle outline. But then, if I would just draw the lines myself as I trade, it would probably work better and I'd be more aware of watching for it than if the lines just appeared when the strategy thought they should appear. So, now I have the solution for that: I need to avoid choppiness by always drawing lines around the suspected choppy areas. I know to do this, but I get lazy and forget important things. Well, I didn't trade yet today, but I think I've made some real progress this morning by sorting through a lot of things that will affect how I trade.
As someone who codes in NinjaTrader, their NinjaScript is just c#. It may seem intimidating for nonprogrammers, but it is actually quite easy once you take a little time to familiarize yourself with templates. It also helps that NinjaTrader has a very active support forum, that can actually help solve your programming problems as long as you ask very specific questions. For example for identifying the current account and existing orders: NinjaTrader.Gui.Tools.AccountSelector chartTraderAccountSelector = Window.GetWindow(ChartControl.Parent).FindFirst("ChartTraderControlAccountSelector") as NinjaTrader.Gui.Tools.AccountSelector; account = chartTraderAccountSelector.SelectedAccount; if (account.Orders.Name.StartsWith("Stop1") && (account.Orders.OrderState == OrderState.Accepted || account.Orders.OrderState == OrderState.Working)) //move stop losses //Get order for profit target and move it based on logic here You wouldn't need to know how to write the this from scratch. And once you have this, then you can easily move the stop loss based on your own logic. For example, trail the stop loss by 1 tick above / below the previous bar, and skip the trial on inside bars: if (CurrentBar > 2) { if (Low[1] >= Low[2]) { Values[1][0] = High[2] + .25; } else { Values[1][0] = High[1] + .25; } if (High[1] <= High[2]) { Values[0][0] = Low[2] - .25; } else { Values[0][0] = Low[1] - .25; } } Bloodhound is nice because it makes it more approachable. But personally I prefer the complete customization approach of doing it myself in NinjaTrader. After all, since NinjaTrader uses c#, you have the complete power of .Net framework available to you to make your code as simple or complicated as you need.