Tradingjournals Quest... Turn $100 To $100K or To Ash

Discussion in 'Journals' started by tradingjournals, May 27, 2011.

  1. I created an account of $100 to trade it for the purpose of this journal, which is to run a number of experiments that would involve (1) some new entry/exit methods I developed as approximations of some more demanding trading models, (2) some new money management methods, and (3) to ascertain whether small-money vs. big-money has effects on trading psychology.

    I would be interested in reading input from experienced traders on how to keep a journal, whether it is worth it, and the metrics one should use to decide whether a journal is worth keeping.

    You can make your bets on which would come first: The double of the $100, or its turning to ashes. My vote is the A., but I would not hate to be proved wrong.

    Since $100 is small, I plan to trade currencies since one can trade with small amounts such as $100 sizes.

    Inputs and questions are generally not welcome, except from the real experienced traders or the real newbies who want to exchange views on trading.

    Also no input from sponsors is welcome here, as I do not wish to see sponsors jump on the thread and post filler material just to appear in front of traffic.

    I reserve the rights to the content of this thread. I also reserve the right to move this thread and its content to a blog.

    Let us start with a question. Suppose that one cannot stay in a trade beyond a time T (2 hours, 1 day, whatever). So the exposure time is fixed, but a trade can be closed early, and of course cannot be kept open after T time has elapsed since its opening.

    Q1: what are your favorite probs of success and the corresponding risk/reward?

    Q2. What is the theoretical payoff you would consider excellent? Payoff is here defined as expected value of gains divided by expected value of losses.

    Q3: Assuming an efficient market, is there a max value for the ratio in Q2?
  2. Made a trade earlier today. Shorted E/U when it was around 1.4330. Spread was high (7pips). Now pair at 1.4282. I took my profits. I am now considering the long side.
  3. Yukoner


    I recommend a journal, but would also add the following:

    1) How you were feeling at the time of trade exits/enters, and adjusting orders.

    2) How much sleep you had the night before.

    3) Any stress factors that come up during trading.

    There are more, but the point is that many things can effect YOU in your trade execution. So when you keep that daily journal, you may discover other factors that effect your profit and loss, outside of your typical trade plans. Its a good exercise to make a list of what else effects your trades.

    Good Trades,
  4. E/U now at 1.4381. I am taking my profits on long. +100pips. In my long entry, I was filled on half size only. Price retreat did not reach the limit order, and I was not watching price for the last 24 hours, so I could not add during to long during the up move of this evening.

    So a short summary:

    Number of trades: 2
    Cumulative gains: 145pips.
    Cumulative losses: zero

    Comment: I have to review my analysis of two days ago which indicates a possibility of a short at current prices and higher. As it is counter trend, I would have to review things more carefully. In case I go for a short, I will try to wait until I have a confirmation.
  5. Thanks Yukoner. As of now I have this feeling: I am not going to enter on short, although my feeling is that we may be in a top. The reason for not acting is because I have not re-evalued the analysis yet, the reward may be subject to limitation with the pair being bullish recently, and also because I do not want to lose some of the gains. There is also the concern for being stopped on violation of the top price, which in itself is not a concern, but is concern if it were to break the top getting me out, and then move down. I realize it is not a good thing to be concerned by the loss, but since I am not 100% convinced, I am currently skipping it.

    In sum, I am not totally convinced and clear as in the last two trades. So I should wait. Let me see if my writing it here will convince me to stay out until a confirmation and an analysis is redone. I am definitely not going to go long at the present time. I however have the feeling of the kind of : what if I missed on a down move if it happens? Maybe I should put this in the journal to assess what these sort of doubts cost me in opportunity and save me in terms of missed losses, and make a decision from there.
  6. what's the account size now?
  7. 100.52. Leverage is small (deleverage). You are intelligent.
  8. I cannot wait. I shorted at 1.4394. (current price).
  9. tell me if this is incorrect:

    145 pips ~1% gain
    0.5 leverage =0.5% or $0.5

    why is the leverage so small? will you use higher/lower leverage depending on your confidence in a given signal? what's the max leverage allowable for this account, 20x?
  10. ok

    i am sure you would retract your last statement if you saw some of my trades :)
    #10     May 30, 2011