I wish to write a journal here, from the very beginning (yesterday was my first day live trading), in hopes that I may gain insight upon myself, and that I may help those who also are first beginning to trade. As I obviously have limited knowledge, this will probably become more closely a journal/my questions thread, but I will try to help any other beginners if I can. For me, I am 19, I have been studying to trade for roughly one year now. First with stocks, until the 25K rule, then switching to NQ and ES. I spent much of the time simply paper trading, and then spent the past few months using PFG Best's simulator. For most of the past year I have been trading in the mornings, working from noon on until December when I was fired (very much thankfully ). I am now still trading mornings for the next couple months until I finish a current part time job (though it is flexible and I may trade full days on occasion). For my setup, I am trading only the NQ e-mini's through IB. For data feed I use Esignal, and Ensign for charting. As for my trading 'strategy', I will admit that I have gone to a largely discretionary method, as opposed to the mechanical methods I had for some time attempted to create and use. I do keep some SMA's up (10,20,40,200), and a couple Stoch's (14,9,7, still fiddling with them though). I generally trade from the 1-minute, and use a 3 or 5 minute chart up to keep an eye on the bigger picture during the day. I generally like to go for 10+ point moves, and I set a maximum of 5 point stops (though I like 3-4 points if I can). I will be trading only 1 contract for at least the first month, and generally will trade from about 9:45 to 12:00. Today I was being very cautious, basically I just wanted to have a profitable first day, and was really not concerned with how much I made. So for most trades, I got in, and then just got back out after a small profit. 10:00 Short +1.5 1154.00-1152.50 I just waited on most of this drop thinking a reversal would happen around the close or yesterdays low. I did short it toward the end, but it was a stupid trade. I mainly just wanted to jump in and out quickly a couple times to get used to the program. It would have actually turned out to be a decent trade had a held it for a few minutes. 10:05 Short +0.5 1147.50-1147.00 This was also just learning, hit sell, hit buy, just trying to get a feel for trading and IB's software. 10:25 Short +1 1160.00-1159.00 Got in at the first pullback. Had I held this with a 5 point stop it would have been decent, but again, I was just trying to get a few points and not lose anything. 10:36 Short +3 1154.00-11.51.00 Got in after the second pullback thinking it may keep going to the LOD, just got out for a few points though. Was wrong in any case as it consolidated and reversed shortly after. 11:09 Short +0.5 1157.00-1156.50 This was a mistake, for some reason when I entered a Short order earlier, but did not transmit it, it would not let me cancel it, or even transmit it. So I was trying to fix it. Turned out I just had to exit IB and reopen. 12:02 Long +1.5 1166.50-1168.00 Waited for it to pass through yesterdays close, got out at the small consolidation a couple points later. Points +8 Trades 6 Win/Loss 6/0 Profit after Comm. $131.20 Well, nothing spectacular, but I'm quite thrilled for my first day. I will say I am very surprised at how emotions fight you during trading. Although I read it constantly, I suppose I thought somehow I would not be affected. I suppose on the good side though, I was only afraid, and in no way greedy and trying to get more. I would think this is better as if I lose it will be due to getting chopped with small losses, rather than letting losers grow to large. Not that I have any intention of losing of course Ben "Education is a progressive discovery of our own ignorance." - Will Durant
Ok, now for my first question. I know there have been a lot of discussions on Discretionary vs. Mechanical trading. Honestly I enjoyed the safety of knowing what every trade was and the exact reasons I got in. However for the past couple weeks I found that I can just tell when a move happens based more on patterns and such. But it's really not something I can put on paper. Is a mostly discretionary method good for a beginner to work with? Or could I be more susceptible to trading with my emotions? I do have losses limited, so don't believe I will break those and take any major hits. But I don't want to be tempted to start getting caught up and trading every little move simply because I think I 'see' something there. Honestly I do know that when I used to mess up and do this while paper trading I would lose large amounts, but lately if I did this it would actually turn out to be profitable, even though it was not very good trading. While paper trading I did have several different strategies on paper and to backtest, and while some were profitable, they still held some decent risk, and did many stupid moves. And really I never saw any great advantage to following a hundred indicators and such versus just watching the basics (even just one MA) and trading the swings. So is it fine as long as I keep the money management in order? Just take a whack at it and see if I win or lose . Thanks, Ben
Good start on your trading. I for one would be interested in reading a journal. Always something to learn from successes and mistakes. My advice, don't get carried away with your position sizes too quickly. This last week has been a shorters paradise. It won't last forever.
Nebeno, Great first day, congratulations. I think you have the right idea. Regarding systems versus discretionary, I would say experiment with both and see which suits you better. Many of us use a little of both. We use systematic approaches to decide on direction, for example, then work the trade using discretion. It is very useful to have a handful of setups that you are confident in using, so you are not just sitting there all day on pins and needles wondering if you should do something. Today should be very interesting. A big gap up off an oversold market. Do you have a plan?
good trading but it could be just beginner luck. If you can do it consistently then there is no need to change.
I don't doubt at all that it was luck I had a couple decent trades, but for the most part I think I just got lucky to not have any losers, mostly I did some lousy trades. As with paper trading I hope I can look at it as good and bad trades based on if I held up to my 'rules' and didn't trade from emotions, as opposed to just how much money I made. Well, with a nice big gap like this, I think my plan will just be to sit on my hands a bit. It may start with a big rally, but I think I'll just watch it untill about 10 and let the market tell me the plan. I would think it's going to pop for a bit and then just chop for part of the day, but from the first 15 minutes here it doesn't seem to be doing much exciting. Honestly I haven't seen to many 50 point gaps, so I may just even watch today, I'm in no hurry. Ben
Well that about sums up what we have gone thru over the past 2 years. A new trader expressing understandable unfamiliarity over the "rare" 50 point gap. Rewind to 1999...."Oh man were only gapping 50 points, looks like a boring choppy day today." Well maybe that's a slight exageration but you get the point. Nice job Ben, it sounds like you have a level head on your shoulders, just try to keep it that way. Good luck.
Well, another mysterious 60pt gap. IT'S MAGIC! So much for all the poor shorts waiting for a trend reversal to cover. Glad I'm not one of them.