Trade 2 was an abberration; I deserved a lot worse than I got. I wouldn't say that I read the tape "wrong". I believe that I never read the tape "wrong" (keyword believe; let's not start a debate about this). Anyway, all the mistakes are because of my trade execution ability and personal limitations such as emotions, discipline, etc (it's important to emphasize that mistakes are always my fault and that I accept that responsibility). As far as saving commissions are concerned, I can honestly say that I couldn't care less about avoiding commissions. Please don't take offense, because it's nothing personal, but I am always skeptical of traders who are worried about commissions, slippage, platform fees, taxes, etc. I just concentrate on trading and leave the rest to the accountants. I can't imagine trading with a risk/reward ratio in mind although I do have loss protection measures in place (I'm not about to disclose that kind of information though).
Hi Afterburner, No offense taken. I brought it up in the context of being a bi- product of doing less trades (saving money) with the overall purpose of taking the emotion out of your premature exits. Good Luck, Tbill
I don't like how this statement came across. Basically what I meant is that trading based on default profit targets, stop losses, and risk/reward ratios is putting your own needs above the market's needs. I try to avoid that at all costs, and consequently I try to stay as flexible as possible. This may not be the most efficient method, but it works for me and my approach.
I messed up today and was lucky to have made the $4 that I did. I started trading at 2:15 EST. First of all, I wasn't seeing any definitive direction in the tape, and all that I had to go on was market action. Instead of just taking the afternoon off, I slipped into some old bad habits. Trade 1 (BOT 1249.5 SLD 1252.5) I almost got stopped out on this one. Also, when the market was at 53.5X54 it was painfully obvious that it wasn't going to go any higher, but I still didn't get out because I wanted more. Anyway, I came to my senses and got out at 1252.5. Trade 2 (SLD 1249 BOT 1251.5) First of all, there was no entry signal for this trade (it was just an impulse). Second, I received a buy signal at 1250 but did nothing (so I was short when I was getting a signal to go long). Then I let this trade go all the way to 53.5X54 where I considered reversing but thankfully I came to my senses on that idea (actually I didn't; I was waiting for it to penetrate 1254 but it never did). Then it went all the way back down to 48X48.5 (a profit!) but I still didn't get out because originally I had thought that the tape was pointing down. Finally when it was at 50X50.5 I put an OCA combination for 1248.5/1251.5 and 1251.5 got hit first (which didn't surprise me). I don't know what I did today, but it wasn't trading. The only thing that I can say in my defense is that since I started pure tape reading, the tape has usually pointed either up or down. This afternoon there was no clear indication (I thought it was pointing down but I wasn't getting any confirmation), which I haven't had too much experience with. Not that that excuses my actions today. Trade 1 doesn't bother me too much because at least I had some trade management going for me. Trade 2 doesn't even deserve to be called Trade 2 because there was no trading involved, it should be called Gamble 1. What bothers me about Gamble 1 is that I could see that the market action favored the long side. I knew Gamble 1 wasn't going to work, but I did nothing. Even when I had already been defeated, yet was given the merciful opportunity to get out at 1248.5, I still did nothing. I deserved a lot worse that I got today, and for that I am grateful. Hopefully I can learn from this experience. I think that my fatal flaw today was putting my own needs (my daily point goal) above the market. This becomes obvious when I consider that Gamble 1 was initiated at 3:20 EST (I was running out of time). Consequently, I was trying to force things even when I didn't have a clear edge (Gamble 1). I should also note that I've had a bullish bias since Monday (I'm not just saying that to try to look good either) but as of now my bias is bearish. I don't really use my own personal bias for anything other than a template, so for the most part it's inconsequential. I can't distinguish whether this bearish bias is coming from the market or from my disappointment about today (it seems like a gut feeling), so I need to be extremely careful. The reason I say this is because gambling begets gambling. Although I feel like trying to salvage the week (its been filled with wasted opportunities) I think that it will be best if I just let it go. As far as tomorrow goes, I need to concentrate on protecting me from myself. If I do any trading at all, it will be on the defensive. Right now, I am unable to log-in to IB to post an executions screenshot.
After-burner, I just wanted to drop a line and say thankyou for posting an excellent journal... PEACE and good-trading, Commisso
I can't justify trading today (it's a combination of several factors). Anyway, for some reason I've been thinking about how much I've enjoyed trading using the tape as my only guide. Even though this week has been pretty rough (Tuesday and Wednesday were really the only days I did any trading), I still look at it as a pretty good week. There has been a lot less conflict in my trading and consequently the gains have come with a lot less effort (effort is the best way I can think to describe it). Right now I'm feeling relaxed, and I'm looking forward to getting back into the swing of things on Monday. The main issue that I'm concentrating on right now is learning to not put my own needs above those of the market. I think that once I have become proficient at this my trading will reach a whole new level. But there's a lot involved in accomplishing this, and it will be a gradual process rather than an overnight transformation. Nevertheless, I am feeling very peaceful as it seems I've developed a new perspective on trading.
How about a quick tape reading lesson? Just something to get us started. I don't even know what exactly to look at, or look for.
Sorry to disappoint, but I think that is beyond the scope of this journal. I don't want to sound arrogant, but I'm not sure that tape reading can be taught. It can be learned though.
Since I had been doing pretty good the past several weeks, I wanted to increase my size. I wasn't anticipating that this would affect my trading, but unfortunately I underestimated the psychological impact. Trade 1 (SLD 1277 BOT 1276) This was bad, bad, bad. It went to 78.5X79 after entry (I had a stop at 1279 but it didn't get hit) Then, by pure coincidence (I think that I got some help from a technical move due to a double top) I was able to book a profit which I gladly did. At this point, I considered going long, but I thought that I needed some additional mental preparation and that I should just take a break. I got busy with some other things, and didn't come back until shortly before 2:00 EST. At this point, I felt like doing a psychological play off of Trade 1 by going long at 1277, but decided that it wasn't in my best interest. Trade 2 (SLD 1282 BOT 1281.5) This was actually a good trade, except that I didn't feel like trying to fight the trend of the day. Consequently, I was easily shaken out. Trade 3 (SLD 1283 BOT 1282.5) This was more or less a test. I had a lot of trouble reading the market today (actually I could see the trend but didn't want to believe it), and I was hoping for some clarification. Finally, I saw that I should be long, but it was already 3:40 EST so I decided to just let it go. I feel like I've wasted my afternoon. Looking forward, if I continue to have problems, I'll decrease my size. However, I'd at least like to give it another day before I decrease my size. I think that the major problem is that I was trying to fight the trend today. Also, I was having concentration issues. The best way to describe what happened today was that I was having an off day. The sooner I can forget about today, the better.