I continuously make the same mistakes over and over and over. The attached chart shows a buy in ES off 2min. chart.. Trend is heading UP (on this timeframe) BUT:: What I failed to see was the Trendline I have annotated. (wasn't annotated at time of trade) and my plan says to not take a long when a TL is present after coming off of a lower swing low like this. but for some reason I don't see it or notice it in the heat of battle. Until after the trade Is this my subconscious doing things to hurt my trading or just stupidity and laziness for not drawing the line as it develops?? Edit: One thing I also wanted to point out was that I've become a breakeven trader lately.. after years of losing.. and everytime I get my account to a certain level.. I give it all right back with trades like the one attached. this has been an recurring theme for about a year now.
Possible causes... 1. You have distractions while trading that prevents you from noticing key price areas until after the fact when the distractions are no longer there. You forgot to draw that trendline or you did not want to draw that trendline ? (there's a critical difference) 2. You've made some recent changes in your trade workstation setup (e.g. monitors in a different position, changes in the home office or trading equipment) that doesn't allow you to efficiently use the information you see on your monitors. 3. You've stopped reviewing your trading plan every morning prior to trading because you think you have it memorized. 4. You weren't prepared to trade and then you enter the trading day late to the game...some tasks weren't completed (e.g. identify important price levels via trendline). 5. You're using inadequate charting software. Thus, if price levels are a critical aspect of your trading...you should be setting audio alerts when those key price levels are reached via your software. If your software doesn't have such a capability...its time for you to get one that does. 6. You're burnt out and really don't want to trade. Mark
Hi Flashboy, yes the PM sentiment was long. You referred to it as "Trend is heading UP" and qualified it to the 2m bar duration. For me, the bar duration is somewhat arbitrary and is merely a choice to view what exists outside it. I'm sure you knew that the AM sentiment was short, so you were able to detect that the sentiment had changed to long for the PM. This is an important skill that you have acquired. The "error" that you made was one of poor timing. I put "error" inside quote marks because it's relative to the trader. If your intention had been to play the long sentiment into the close you would not be asking the question that you ask in your post. Neither in your post nor in your attached chart do you explain what made you think or feel the timing was optimal where you entered. Also you do not indicate where you sidelined. You just give the price and the amount of your loss in dollars. There is no indication that you thought the sentiment had changed from long to short so I'm thinking the dollar amount of the loss was the reason for your exit I like to look at the ES in terms of ticks and points. You took a negative 4 pointer there and on a normal summer day this might be a significant range in the ES even at the PM startup. Since you've been monitoring the ES for a long time, you know as well as I that what we're seeing is not the usual first week of August PM trading. Labor Day has come early this year. Now, to get back to the timing issue, you obviously want to do the best job you can as you leave the sideline and participate. Personally, I like to play it safe when I'm trading so I like to be able to "wash" any entry I make. This requires that I have reference points on my chart that reflect the sentiment direction and how it's unfolding. Sometimes I use the word "trend" to describe what's on the chart. Sometimes I use the word "channel." I find the best places to enter is at the extremes and never in the middle, with one exception which isn't important here. Of course you can draw lines in a direction different from the sentiment, as you did on your chart after you debriefed. Those lines are very useful to get the best possible timing. When used in conjunction with the lines you draw for the sentiment direction, they can give you extra confidence or tell you to wait a bit. When you get good enough, you may even decide to get off the sideline for a quickie before you take a longer hold trade in the sentiment direction. Cheers.
Van Tharp, the famous trading coach tells a great story. He once worked with a trader who was a member of CBOT. This trader would always make $200,000 a year. Anything above that he would find a way to give back. year after year he was stuck with this 200k profit ceiling. During their work with Tharp, they realized that the traders father was an alcoholic, an abusive alcoholic. I forget the exact details of their session, but it was something along the lines that his father once told him, that if he made a lot of money he would end up like him. The stress would drive him to drink. His father apparently made 200k a year. After their work together, later that year, the trader called back and told tharp he finished the year up 600k. so their were able to resolve the conflicting parts. They did the NLP parts resolution exersice, something to look into if you like. http://nlppracticegroup.blogspot.com/2009/12/integrating-conflicting-parts-visual.html
Flashboy, You mention in the past (several years ago) that you trade while at work (at your other job). Were you doing such today for that particular trade Mark
Hey Mark, Yes I do still trade while at work, good memory. Your point about being distracted is right on the money. But there's more to it than that. It's also my emotions.. I talked myself out of taking that tade near the movg. avg. which would have been the less riskier entry. and then as I notice the market starts moving i convince myself that i'm missing out and I jump in late. that entry should have not been taken there EVEn if that TL wasn't present.. my entry according to plan is at the movg. avg. for less risk. I'm still very emotional when trading because of many factors but mostly cause I NEED the money. I know I shouldn't be trading at all under those circumstances
I recommend blogging or journaling. I trade best when I write my plan down before I open the position. When I write, I write as if I'm writing to an audience. This is the important part. Writing with the belief that someone will read it forces me to explain my reasoning and often times makes subconscious thoughts pass through my conscious mind. I list every reason for taking the trade or passing on it, and, having things written down encourages me to stick to it. Some people have a checklist, but I always skip doing it after a string of wins. I get lazy. But if my mentality is that I'm helping someone else trade my system (even if just imaginary) then my brain is in teaching mode and I go through every signal and indicator accurately stating what my system says it means. The result is that I don't miss much, and I don't make dumb mistakes much.
solution: 1) trade less, with bigger time frame. 2) put trade on and let it run, either stopped out or reach target. One little secret: don't carry your smartphone, and don't look at the quotes all the time. Better thing is to trade the last 5 minutes if you can sit well. I feel your pain, this is the process you have to go through.