putting all my efforts

Discussion in 'Journals' started by darktrader, Apr 26, 2011.

  1. I'm not english mother tongue so my english is a little poor.

    - INTRODUCTION (very important to understand what trading for me means)

    I started trading in 2008, daytrading mainly the e-mini nasdaq, just before the financial crisis, the worst scenario for a novice trader, at the time I had around euro 400.000 (I sold an apartment) on my main account, now I have euro 120.000 ….
    I spend an average of euro 60.000 per year for living, so I've lost around euro 200.000 with trading.

    I'm selling another apartment but I will just get around euro 40.000 from it.


    My 120.000 are full invested in various stocks (very bad actually, banks, solar, and other battered stocks).


    - HOW I LOST euro 200.000
    everybody here knows which are the main errors of a novice trader:

    1) cut profits and let losers run
    2) adding to losers
    3) close trades under/near breakeven when I managed to recover
    4) overtrading
    5) betting too much to recover losses

    you can imagine what happen when a novice trader starts trading with markets that goes up&down 3% - 5% a day, I was so mad that once I started with one contract and I closed my position with 35 contracts on the mini nasdaq. Once I lost $50.000 in a couple of days.

    But I didn't give up, I have no choice I'm 38 years old and I won't find a job that gives me euro 5000 per month, I can find maybe a job for euro 1000.
    Also I have a 1 year old daughter and now we are waiting for another one...


    I spent the last couple of years trying to set my mind thinking in the opposite way I used to do:

    I used to add to losing trades: the opposite is adding to winners
    I used to take profits very soon: the opposite is to let the profits run and aim at big winners
    I used to let the losers becoming big losers: the opposite is to keep losers small
    I used to close the trade under/near breakeven when I managed to recover: the opposite is to close winners that comes back in profit or breakeven.
    I used to overtrade: the opposite is to make just a few trades
    I used to bet too much to recover losses: the opposite is to trade with small size

    anyway In this couple of years I made mistakes too, it is hard to change bad habits, and overall when you lost such big amount of money it is hard to reset your mind, I basically committed the old sins, but i began to lose the bad habit to add to losers, it happened a few time and a couple of them I really risked to blow up all my money, but I just did one progress, if i was losing 20.000 risking to blow up the entire account by adding to a losers and the position started to recover i tried to keep the position to make a profit from that position, instead of closing it when from -20.000 I went to -5.000. I think this is very important, I learned to let profits run even if I was in the worst stressed mindset.

    Another mistake a made was to try to catch a reversal by placing tight stops and insisting I ended up by making lots of trades with lots of small stops that when a market keep trending will result in a big loss.


    I started to notice that many times when I was losing money in a mad trade the market finally reversed near a long term support/resistance, like a trendline, 200/50 SMA, or a fibs.

    I started last year to apply this supports/resistances in the daily/weekly and monthly charts, and actually I was astonished on how the market seamed predictable when the market reached those points. Often with an unbelievable precision.

    So in December I decided to give my trading a last chance, I decided to build my own strategy based on DAILY/WEEKLY/MONTHLY supports and resistances and trying to do the opposite of the mistakes I used to made.

    I closed the bank account where I had my money and I moved all the stocks I own to another bank where I cannot sell them by internet, but only by going to the bank. This way I could not trade with leverage a big amount of money (I used to sell stocks and make some crazy trades with leverage, closing the trades and buy the stocks again)

    I decided to trade with a battered account I have with tradestation, where I had $2800 left.

    I payed a programmer to build a series of indicator for tradestation that helped me to see when several correlated markets reached a support/resistance, in various time frames.

    Finally in march the indicator was ready (even I need the programmer to fix some little issues and add some improvements).

    I moved to an office where I pay euro 660 per month.

    I started trading this stuff with just 1 contracts mainly on the NQ and sometimes YM - ES, and I recently added technical analysis for European indexes and futures such as DAX - FESX and FDAX.

    So far I'm up $1300 commission ($2700 - $1500 commissions).

    I made big improvements but still I had a few days in which I broke my rules, I know that I have to obtain good results for at least the next 6 month to only hope I finally managed to turn the corner.


    It is a DISCRETIONARY INTRADAY strategy and various very important points are still not clear, but I hope to fix them in the next months and suggestion are more then welcome.

    I manually draw trendlines – 50 and 200 SMA and FIBS replacement lines on several correlated markets on MONTHLY – WEEKLY – DAILY charts.

    Markets are:
    US markets, tradestation symbols: NQ-ES-YM-COMPX-NDX.X-INDU-INX-RUT
    EU markets, tradestation symbol: FDAX-DE:$DAX-FESX

    (the plan is to increase after some months of constant gains)

    I wait for more symbols reaching a support/resistance at the same time, I see if the support/resistance seams to hold and I enter the trade.
    Unfortunately it is a discretionary strategy and so far I haven't managed to apply precise rules.

    I use tight stops based on $ and put them just over the resistance/support .

    The rules are very unclear and I really need to find some precise, this is very stressful, basically I try to let the profits run and use trailing stops to protect winners.

    this are the only rules that are very clear, but also here I need suggestion.

    MAX DAILY LOSS: $200
    MAX DAILY PROFIT: don’t have an amount for this, but I have some basic rules about max loss from max reached profit, for example if I'm up $500 for the day I stop trading if I go from $500 to $300.

    Basically I'm trying to apply all the opposite of the mistake I made in the past, so I try to cut losses short and let the profit runs, sometimes it happen that I add to a winning trade. The goal is to have lots of small losses and a few big winners.

    I will start post my trades tomorrow, actually today is the worst day I had since I started with this strategy: last week was very bad, I lost all trading days for the first time for a total of $600, and I lost also yesterday $40, this is not so much if you consider that my max daily loss is $200, and that 1 day I broke my rules and lost $320.

    Today I started trading the fesx, there was some nice resistances, but they didn't hold, I made too much trades and overall I broke the $200 max daily loss, and I'm down $350.
    But starting from tomorrow this journal will help me a lot.

    So please follow my journal I really need your support!!
  2. short 1 NQ at 2398 in premarket even if there will be an important news in a few minutes, but there are resistance around this levels both in NQ and YM, I placed a stop at 2401 for $60 + TS commissions.
  3. added another contract, I added at quite the same price because I sow the markets didn't react to the news and I sow some bearish candles on FDAX and FESX.

    stop still at 2401 for - $105 + TS commissions
  4. stop hit, and entered short again (I know this is a mistake) with 1 contract at 2400.25 with stop at just 4 tick, why I shorted again ? becasue I was afraid that it was just stop running at 2400
  5. still short with 1 contract moved to breakeven becasue I'm afraid the market could go up at open to catch some stops, we are too close to yesterday high
  6. closed the short with a small gain because I sow the market going up, waited a little and the reentered short with a better entry price, stop very close anyway...
  7. moved stop to break even + 1 tick (commissions) as I'm gaining around $100
  8. stopped at break even
  9. re-entered and stopped again...
  10. short again last trade of the day
    #10     Apr 27, 2011