The E-mini Adventures of Brutus

Thanks all for the encouraging words. Sorry I didn't give any more details yesterday, I was just really angry about my trading. Yesterday I dropped around $550.

Time to start fresh and re-group ...
Brutus

 

lol, that is the best quote ever.

 

While I haven't maintained this journal for a while I have been still actively trading the NQ and ES futures over the months.

I started my index futures endeavor in July of 2002, trading exclusively the NQ. Then in the beginning of September I started trading the ES only.

Over the nearly 7 months I have been trading the e-minis I have traded only one contract at a time and made 569 round trips for a total cost $2,731.20 in commissions. During this same time I have lost 2,957.50 in actual futures P&L. Add the commissions and futures loss and I am down $5,688.70 total from my 7 months of trading.

The whole idea behind my trading was to develop a "gut feel" for the market and trade accordingly based on that. Pure discretionary trading, no system, no real rules, just gut feel and a few ideas. I expected to lose money as I started to trade because I thought it would take time to develop a "feel" for the market. Well 7 months later I have yet to get that "feel". It seems like I have gotten nowhere in the last seven months. Maybe my idea that you can develop a "feel" for the market was invalid. Or maybe one can but I just don't have what it takes. Or maybe you need a concrete system which you can enhance by throwing in a little "gut feel".

Well, I am giving up on pure discretionary trading. Maybe I was crazy to trade like this in the first way ... without a system ... without solid rules. In any case, I moving my focus on to developing a system or systems that I can use in the ES/NQ markets. After waking up each day and trading for the last 7 months, I am going to miss it. I'm not angry or bitter at my losses, looking at things now it seems like things could have been alot worse. I'm just disappointed in myself for not "getting it" yet. I have not given up on trading, I just have a changed focus now. Maybe system trading will be more my thing.

Now on to develop some systems ...

Brutus

 

Hi Brutus,

Are you going to be trading with real money while your trying to develop a mechanical system?

Will it be 100% mechanical or in combo with discretionary input?

Also, most good traders that are profitable...takes well-over a year or years to develop a "feel or intuition" for the markets...especially the Eminis.

Trading the Eminis without rules (criterias) only makes it that much harder to develop a "feel or intuition" for the markets.

I know a few good traders that say they trade by their gut or feel...however...after a little digging into how they trade...they were actually using a few simple rules (critierias) and then secondly used their gut or feel to determine if they will take the trade or not.

Simply, a pure "intuition trader" is a difficult task for even veterans.

Good luck with the system...that keeps most traders busy for a few years as they develop it into something useful...same as with discretionary trading.

NihabaAshi

 

Brutus,

I think totally gut feel trading is very difficult, even for people who have traded for many years. I think the best approach is to be discretionary but rule-based. Probably you can derive a few useful rules just by examining your past trades and seeing what worked and what got you in trouble.

 

Brutus,

Get a copy of Mark Douglas' Trading in the Zone. I think he will provide a mental framework for what you've been looking for.

Cheers,

kp

 

Brutus,

I wanted to share some experience, strength and hope with you.

Having just recently turned profitable, (not just by myself - I've had some coaching from a very kind, experienced trader) I can sympathize/empathize with your plight.

I can tell you, I lost a whole shitload of money the first six months I traded - many many thousands. It seemed that no matter how hard I tried or what I did, I kept making the same mistakes over and over - I found out I was emotionally invested in those habits.

I would like to share some humble opinions with you - these things really helped me.

It has been most helpful for me to learn this one thing -

IT IS NOT REALLY ABOUT KNOWING WHEN TO TRADE SO MUCH AS KNOWING WHEN NOT TO TRADE.

And this only has a little to do with time - it's mostly about price action. When to stay out the most critical trading skill IMO.

FIND INDICATORS/SETUPS THAT KEEP YOU FROM ENDING UP COUNTER-TREND.

The moment I did that, I turned profitable. For me, counter-trend trading was death. I was always trying to pick tops/bottoms. And I kept getting run over.

LEARN HOW TO TELL A TREND PULLBACK FROM A TREND REVERSAL. WATCH THE MARKET INTERNALS.

TICK, TRIN, ADV/DECL, UP/DN VOL are crucial IMO

This will save your ass over and over if you can do it a lot of the time. You won't get faked out/ stopped out as much.

Don't give up - this skill can be learned. I'm living proof.

Best of luck and PM if you want to swap chart pics - we can study them together.

BTW - I wholeheartedly concur - Trading in the Zone is one of the top 3 best books I've ever read - not just for trading, but for life as well - the principles contained therein are powerful. A trading must-read!!

Paul

 

Thanks all for the comments.

I already have "Trading in the Zone" by Douglas and I think it's an excellent book. I also liked "The Intuitive Trader" by Koppel even more. I should re-read them sometime.

I'm looking into some type of opening range breakout system right now. It was discussed here at ET in the "keep it simple" thread. I'll have to do some backtesting on it and see what I think. Acrary also posted a couple of systems that I would also like to look into.

I'm also considering writing software for a trading simulator and giving that a try in my quest for a "gut feel". The only problem with that would be I might not be as emotionally into it as with trading cash on the line. Something for me to think about as well.

Brutus

 

My eyes perked up when I saw you mention writing some code for a simulator. I've been urging any programmer I encounter to make one.

In the meantime I'm using PFG's simulator. It actually works quite well: $30 a month to trade the E-Minis. I started on it back in January and have done very well. This is after burning up my account three times in real trading.

You're probably aware of PFG's simulator, but if not, you can sign up at www.pfgbest.com.

Cheers,

kp