I have decided to post a journal in this forum for the sole purpose of helping myself with discipline. I have found that I eat away at my profits with trades that do not meet the exact criteria of my trading system. I hope to eliminate these 'out of character trades' by realizing before I take the trade that there is no reason to take the trade and I wouldn't be able to enter the signal for the trade into this journal. I have told myself before, several times actually, after a losing out of character trade, that this would be the last time I would do this because my profits would be so much better if I just stuck to the rules, PERIOD. I will explain my system in the next post. I will not give all details of the system being that systems apparently do not work after they are revealed. I'll post charts and identify the signals on the charts. This will be an evolving journal so the manner in which I post to it will change as I see fit.
I trade YM. I trade reversals. I use a 1m chart for daytrades. I use a 20tick chart for scalps. This is my first summer trading since I became profitable. It has freaked me out so far. I had no idea it would become this slow. (may be adding to my out of character trades) My scalp trades produced up to 14 trades a day even in May. Now if there are 3 or 4 good scalps it's good. 1m chart trades produce 3 or 4 trades normally. Now maybe 1 or 2 a day. Anyways, here's the first trade of the day. It was a loser but I followed my system perfectly. All conditions for entry were there. Entry was good. Trade came close to target, but did not hit. Waited patiently. Then stopped out. I was tempted to jump back in when I saw price reverse again after stopping me out, but I didn't because a trade signal was not present. This is good because a lot of time when my trades stop me out they then blast off. Because of this I am very tempted to jump on, however, when they don't blast off, and I look back and there was no signal, I feel real dumb for not following the plan.
Trade 2 for the day was picture perfect. I should add that I trade from my fulltime job currently. Starting today, I am on vacation, go back to work for 3 weeks and then resign and will be trading fulltime. I do miss trades when I am at my fulltime job. I missed all the scalp trades for 6/23 except one. Of course this one was the only loser of the day. I 'll post daytrade #2 now.
Here is the scalp for the day. All rules were followed. The divergence didn't really jump out of the screen though. The price action was kind out rounding at the top instead of forming very noticable higher highs/peaks. One of the rules is to take only the divergences that jump out. However this is an area that I do believe is open to change because there are some divergences that do not jump out and work. I believe this will be fine tuned through time and should not negatively affect trading to the point of not being profitable while it is being fine tuned.
6-24 On vacation now. Much better psychological atmosphere to trade due to not trading from work. No trades yet as of 10:09am east coast. Perhaps I will post the trades live in this journal. Time permitting. I did see a scalp that was screaming at me to take it. However I did not because some of the signals were not there. Like the higher timeframe being stretched from its 20sma and not enough of a prior run in place on the tick chart. I think that part of what gets me in to the 'out of character' trades is just wanting to trade. I am hyper by nature. I do everything better when I am doing it fast. I guess that's why I have chosen 1m and 20tick charts. Also, as mentioned before, this summertime trading is killing me. I am used to the 9:30a - 11:30a and 14:00 - 16:00 hours being very adrenaline-like. Keeping me glued for that next trade. Now, signals get close and then just do not set up. Actually, now that I am typing this I am realizing something: they get close and I take them anyways. Hmmm. Perhaps automation is the answer. I just need to be patient and KNOW that THEY WILL COME IN DUE TIME.
If you're that fidgety that you end up taking trades that do not fit your criteria, may I suggest keeping a book or even a TV by your computer so you can have something to do and glance back at your screen every minute or two? That should keep some of your urges subsided as you will not be concentrating on ever little price movement
Thanks for the post Igor. Now that I am trading from home I am going to start playing my guitar again which will really keep my mind off of every little tick. Also, I have set some audio alerts on Esignal so that I do not even have to look at the screen until I start hearing some dings. I'll definately be posting how this affects things.
tradersaavy, Interesting little system you've got going there. I can kinda see what you're doing. Can imagine it picking up on some big movements. However how do you cope with it jicking in and out of the MA in real time before it decides where its going? Seems to me that it could be awkward and potentially cost you a lot or are you able to get in and out within the spread? Do you scale in and out as well? Cheers.
Nice little scalp. Only trade of the day so far. Followed plan perfectly. Had all signals and so so looking divergence. As mentioned before I would like to only take the "jump out of the screen" divergences, but, I suppose when all of the other signals/filters are so strong they can carry the trade.
Hello Champion. In hindsight, it does get in right at the turning point of some big moves, however, I get out on the timeframe that I get in on and miss the big moves. I would like to see if the possibility exists to take partials if higher timeframes are set up in sync with the lowest time frame that the trade initiated in. Currently I do not scale in/out. Perhaps if I create a system somewhere along the lines of multiple timeframes being in sync this may be appropriate. As far as the 20sma cross: I do have a filter for entering. This is where my system paranoia comes in though and although I truly enjoy sharing info, I probably shoudn't give this info out. If someone can convince me that a system can be shared and it won't affect the system, I'll post the whole thing. I'm a tuff man to convince.