My 'humble attempt to trade' journal

Discussion in 'Journals' started by Audi_R8, Dec 19, 2008.

  1. Audi_R8


    I'm going to try my best to use this journal to collect my thoughts and put together something to attempt to extract profits from the big bad ES contract (yes, the ES! :p).

    A few thoughts...

    - It seems the handful of known pro equity traders on this board say that trading the ES is probably not the road you want to go down if you want to succeed, and I completely agree with them.

    I realize that trading equity offers advantages you simply cannot get from trading futures. Unfortunately the only thing I can trade at the moment is futs (for a couple of reasons) and I want to trade so I'm going to give it a shot anyway.

    - I heard a saying a while back: "A bad plan is better than no plan at all" I believe this clearly applies to trading in that without a plan you're completely screwed. How can you analyze your trades when you have no or only a half assed reason why you took them? Of course your trading plan is going to be flawed all over the place in the beginning but the rules will be adjusted as more and more trades are place and more knowledge is gained.

    - I'm going to steal some ideas off previous posters just to get me started. I read an old journal by no_pm_please where he was trading the ES and had some decent rules. I have no idea if his ideas work but you have to start somewhere. Maybe I'll take some stuff from his journal.

    - I don't really know what my trading plan is just yet. Thats what this journal is about. Just to get myself to write things down and progress.

    - I'm going to paper trade for a bit (i know, boooring) to see what happens. Luckily you can paper trade the ES and its basically like the real thing as far as execution.

    - hopefully this thing evolves and progresses, if not, oh well. I may decide in a couple days that I don't feel like doing this and just stop posting. We'll see.

    - I've never been much of a writer.
  2. Good luck and don't give up after a week like I did!:)
  3. Audi_R8



    5 Minute bar chart (slow chart)

    Volume - Looking for volume diverging with price (sign of direction change)

    Keltner Bands (2,20) - A Measure of volatility that allows me to start looking for an entry and set a stop loss

    1 Minute bar chart (fast chart) - So I can look for a more precise entry

    Volume - Looking for volume diverging with price

    RSI - Again looking for divergence (Not really looking for an exact number like cross 70 or whatever)

    Trade philosiphy - I'm going to go with a Mean Reversion type strategy.

    Again, I don't really have any exact rules yet.

    Today's trade:

    1. Wait for price to reach upper or lower keltner band.

    2. Go to 1 minute chart and look for RSI divergence AND volume divergence.

    *RSI note: I have 7,3 as my settings on ensign but that looks just like 14,3 settings on Quotetracker (not sure whats going on there)

    3. Enter in opposite direction of trend (short upper band, long lower band)

    4. Set stop loss at width of keltner band divided by 3.

    Exit strategy (the hard part and what makes or breaks any system IMO)

    I feel like you're better served if you take fat chunks from the s&p. I think you need to be greedy
    so collecting profits at the lower band I feel like is not enough. So for now I'm just going to
    add my stop loss to the lower band and see how that works out.

    Sell @ 901

    Stop loss 4.25pts or 905.25

    Target - lower band + stop loss (4.25) That turned out to be 890 + 4.25 or 885.75

    Exit @ 886.00

    P/L +15pts. (paper trade)

    <IMG SRC=>
  4. Pekelo


  5. Nice! Looks like you will make a killing at paper trading.

    I never figured out why is it so much more difficult to trade with real money.

    Also keep track of your profit factor (gtoogle profit factor). Based on your PF you will need to plan a certain number of trades per month to be able to achieve some sort of consistent income per month. It does not matter how you do from trade to trade. If your PF is 1.5 you will need about 60 trades per month. You should look at your result after that. If your PF drops under 1.5 re-evaluate your system.

    Do not change because you got 3-4 losers in a row. Do your 60 trades and then evaluate.

    I hope you have this going for at least a month and let see how you do after 60 trades.

    (You could go with 60 trades in a quarter. Then you will have to count on consistent income every quarter. )
  6. Audi_R8


    Hi, interesting and I'll look further into all that as time goes by. Not sure how many set ups this method will create. I guess we'll see. I don't even have concrete rules yet to know how many trades this will generate.

    I do see what you're saying though about systems that are not very active.
  7. I'm pretty damn sure you're able to see things much better when paper trading because the stress factor is nearly absent. Replicating the same success with real money, however, will be difficult but not completely impossible. But that's the only way to succeed in this jungle.
  8. Audi_R8


    Trade 2

    Price hit the lower band

    volume diverged on the slow chart

    went to the fast chart

    noticed RSI divergence and volume divergence (that may be redundant)

    entry: 880.50

    stop loss: 974.25

    target: 899 (figured that wouldn't be hit due to time running out in the day, so holding till close basically)

    Exit: 884.50 about 30 seconds before close.

    P/L +4pts (paper trade)

    Total 2 trades +19pts.

    ps: what was with that crazy bar AH?

    <IMG SRC=>
  9. Audi_R8


    First trade signals were pretty clear.

    Went in my favor a few points but then stopped out about an hour later. Maybe move stop loss to Break even in the future? Not sure.

    Second trade signals weren't very clear.
    Thats were having precision instructions on when to enter or exit trade comes in handy.

    Anyway, lost on both trades.

    buy @ 875.25
    stop loss hit @ 872.00
    loss -3.25

    buy @ 858.00
    stop loss hit @ 854.50
    loss -3.5

    Total +12.25 (paper)

    <IMG SRC=>
  10. Audi_R8


    <IMG SRC=>
    #10     Dec 22, 2008