Tuesday 11/9/10
Quick stats:
19 trades
Predominant 15min trend was: down
Trades with predominant 15min trend: 4 wins, 8 losses
Trades against predominant 15min trend: 4 wins, 3 losses
(interesting how this correlates with my chart comment of possibly misinterpreting the trend – could be that the trend was not clearly up or down on this day)
-2.5381% account change
Wednesday 11/10/10
Quick stats:
28 trades
Predominant 15min trend was: down
Trades with predominant 15min trend: 11 wins, 4 losses
Trades against predominant 15min trend: 7 wins, 6 losses
0.9375% account change
I learned several important things today. One thing I learned is that my trade units are still too leveraged. I know this because when a multi-leg trade got scary, it used up way too much margin. Emotionally, I also switched from “business trader” mode to “hobby trader” mode and almost didn’t care at one point if the account would blow up. Those are two strong indications, in my mind, that the leverage is too high. I will immediately cut leverage in half beginning tomorrow. My goal is for consistency and not thrills. If I don’t treat this like a serious business then it never will become one.
dusktrader,
Sorry for posting on your thread again, but those charts are from OANDA correct? If so where did you get the pop ups that show 5:30 news release? Thanks
Hey crashtriple, it’s no problem at all if you want to comment on this thread.
The news thing is just an overlay graphic I added in my chart journal. I get that from Forex Factory’s calendar. I usually only pay attention to the red ones. I like to include them on my chart journal so in retrospect I can see what the fundamental climate might have been during my trading session.
(I wish it was more automatic than that, but it’s not)
PS: yep I use Oanda
Thursday 11/11/10
Quick stats:
39 trades
Predominant 15min trend was: down
Trades with predominant 15min trend: 20 wins, 2 losses
Trades against predominant 15min trend: 14 wins, 2 losses
0.7600% account change
Beginning today, I’ve also cut my units in half and also increased account equity 5x to $50. My hope is that this will help keep emotions better in check.
(Note: I did not trade Friday 11/12)
Monday 11/15/10
Quick stats:
11 trades
Predominant 15min trend was: down
Trades with predominant 15min trend: 7 wins, 0 losses
Trades against predominant 15min trend: 0 wins, 4 losses
0.3374% account change
There is something to be gleaned from each trading session. I believe in serendipity. You should never look at your trading as a failure, or a waste of time. Sometimes you just have to keep looking until you find the gem. There is always a gem of wisdom, but sometime’s it’s buried, and sometimes you have to “sleep on it” before you can really see it good.
One thought I just had after studying today’s charts… I wonder what effect trading against the (pre-defined) predominant trend has. I am going to review quickly and add this to my Quick Stats.
Looks promising. 
When I saw your thread this pic came to my mind:
LOL… I do trade in my underwear most days, because I’m up at the crack of dawn. I usually wrap up in a nice fuzzy blanket and I always wear socks. I’ve got the heat turned down to 64 during the night so I can save more pennies for my trading stake LOL.
Tuesday 11/16/10
Quick stats:
19 trades
Predominant 15min trend was: down
Trades with predominant 15min trend: 19 wins, 0 losses
Trades against predominant 15min trend: 0 wins, 0 losses
1.0089% account change
Wednesday 11/17/10
Quick stats:
20 trades
Predominant 15min trend was: down
Trades with predominant 15min trend: 18 wins, 2 losses
Trades against predominant 15min trend: 0 wins, 0 losses
1.1555% account change
Thursday 11/18/10
Quick stats:
16 trades
Predominant 15min trend was: up
Trades with predominant 15min trend: 16 wins, 0 losses
Trades against predominant 15min trend: 0 wins, 0 losses
1.2004% account change
While the account change is inline with what I’m looking for, I do not feel that I did a very good job trading today. I am still recovering from a nasty cold. But moreso, I think the predominant trend is questionable at this time. The 1hour trend seemed to be down (possible trendline break) but the 15min trend seemed up. I’m attaching chartshot of the 15min trend. I think the theory of taking trades only with the predominant trend has worked well. What I’m not 100% sure about is if that trend should be from the 15min chart, or perhaps something smaller like the 5min chart?? In any case, the volatility was higher and there was definitely upward pressure. Spreads were generally higher today on Oanda.
pic of the 15min trend when I started
Friday 11/19/10
Quick stats:
3 trades
15min trend bias: down
Trades with 15min trend bias: 3 wins, 0 losses
Trades against 15min trend bias: 0 wins, 0 losses
1.5879% account change
Firstly, I’ve decided that the 15min trend should not be taken at face value. If you look at the first chartshot below, you can see that it is clearly in an uptrend. However, I don’t want to be so rigid that I can’t use discretion to protect my trading. So I’ve decided to start calling this a “trend bias” based on the 15min trend. In this chartshot, it’s pretty evident to me that the likelihood as of 4:30am is for a move down, at least in the shortterm that would affect the 30sec charts that I trade on. This seems more responsible than blindly restricting myself to longs-only “just because” the 15min trend is technically up. I think I’ve made the right decision with this thought. What I’m still not 100% convinced on is whether I should be looking at the 15min trend or 5min trend (with regard to the shortterm 30sec movement).
Overall I am not happy with today at all. I am still sick but that is no excuse. If I make it to 7pm tonight without ibuprofen, it will be the first 24hour in several days (I think the fever has finally broken).
The reason I’m unhappy is because today’s trading felt extremely uncomfortable. You can see from the stats – only 3 trade ideas could be executed. There should have been closer to 20 for a scalping method. That means I got stuck into some stacked trades that really tied my hands. (Sidenote: I actually considered the idea of having a separate Oanda subaccount that I could scalp in also, while waiting out these stacked trades – has anyone ever done that before? It’s really frustrating to see lots and lots of trade possibilities in the ranging conditions like that upper yellow 15min trendline, but be unable to take advantage of them.)
Probably, I should have decided to not trade at all today after seeing Bernanke on the radar last night. Even worse, I continued trading after it became obvious that volatility had gone crazy. That lack of discipline will really hurt me if I don’t get it under control. For this reason, I consider today’s trades to be extremely bad form.
dusktrader,
What is your allowable drawn down; you’re cut off point for scaled trades? Some of those scaled trades in look very steep. Also what are your position sizes since you said you changed it up a little?
Scaling:
I have decided to start scaling again as I do agree it is a huge portion of this method. But I have changed it a little that maybe you would be interested in to accommodate for the missing out on trades.
Basically what I do is consider each scale in its own trade, in a sense. Meaning, say I am on my 3rd scale in, I am still using a scaled larger position but I maintain my trading rules if that position moves about 3-5 pips in my direction I close that trade individually. Then if the market decides to go back to exactly where the original 3rd scale in was placed I simply jump back in and I am now back exactly where I was but I also “banked” 3-5 pips while inside of my scaled position. And those pips are the ones that add up because of the larger position size I have on
This has worked well so far because as you have notice you could easily make 5-10 trades sometimes but are stuck in a scaled position. Also what is nice is that if the scaled position reaches my hard stop of 1.5% draw down I close out BUT I may have made .25-1% in gains during.
Hi crashtriple,
I do not have a plan for dealing with scaled trades right now. I know I need to fix that. Rather than a hard stop level, I strongly prefer to train myself to have intuition to know when to just take a loss. For example, I’ve tried to note on my chartshots the few cases that some of these extreme scaled trades have occurred – usually there is an early indication that I should not keep scaling. If I could just recognize that in realtime, I could work on having conviction to take the loss. The problem is that this situation occurs so infrequently that I don’t have very much practice. (Over 400 trades (technically) in November so far and I’d say this situation has come up only a handful of times at most.)
I really hate hard stops. In fact when that emergency stop hit this morning, it really pissed me off because I was definitely not wanting to get out of the market at that point. I feel like in some ways I “revenge traded” to compensate for that, which I know is wrong. But I was targeting a logical level so at least I had a plan. Still, this could not be called scalping when I’m needing huge amounts of pips like that.
I think I understand what you’re saying about treating scaled trades separately. I actually tried to do this initially, but then got burned by the FIFO rules. I guess if you “keep up with it” then you could conceivably make that work. But I’m such a visual person – I prefer to trade entirely by the chart and minimize numbers and calculations. With FIFO, if you have a 5-legged trade and you want to close the 5th leg because it became profitable, for example… closing that will actually close the first trade. This seems to screw up the Oanda average position line, unless I am mis-interpreting this. 
I rely heavily on that avg position line to know where to get out. I basically determined the idea wasn’t possible.
(But, it would be possible, for example, to continue scalping in a sub-account while the scaled trade works itself out. In this way, I’d be gathering pips while just waiting for the bigger move. I think in this scenario I would not want to scale at all. I might try this sub-account thing next week.)
Oh, I forgot to address your question about position sizes. Yes I did cut it in half somewhere earlier on in this thread. The current position size for my $50 account is 125 units per trade leg. So if I scale into 2 additional legs then I would close it with 375 units.
The # of units I’m using is a little bit arbitrary (I’m not exactly sure how I arrived at that figure) but I do know that I can scale and scale and scale until I’m blue in the face and it doesn’t seem to make too big a dent in my available margin (so far anyway). It also doesn’t make me queasy at this level, so that was really important.
I’d like to have a way to optimize this a little better. One thing I’m planning to do with these chartshots is go back and calculate the actual in-trade drawdowns on these crazy scaled trades. If I knew how many cumulative pips that was, I could come up with a formula to limit my risk based on a known typical drawdown. I should be maximizing my units with this figure in mind, and to keep my risk objectives in check.
Right now my primary focus is consistency. I would like to prove that I can be consistently disciplined to take only good-form trades. I’d like to show that I can return a profit every single trading session. After that, I can start optimizing things and throwing more money at the trading plan.
I struggle with this as well… the best I can suggest and what I question myself over and over again is "Am I getting a good price within the trend?"
I ask myself that question a lot near the high end of the last couple hours’ price range and the low end of that price range.
Great thread!
Devour vitamins and get some sleep this week-end,
I have no doubt you will do amazing things next week!
[QUOTE=dusktrader;229752]I think I understand what you’re saying about treating scaled trades separately. I actually tried to do this initially, but then got burned by the FIFO rules. I guess if you “keep up with it” then you could conceivably make that work. But I’m such a visual person – I prefer to trade entirely by the chart and minimize numbers and calculations. With FIFO, if you have a 5-legged trade and you want to close the 5th leg because it became profitable, for example… closing that will actually close the first trade. This seems to screw up the Oanda average position line, unless I am mis-interpreting this. I rely heavily on that avg position line to know where to get out. I basically determined the idea wasn’t possible.
QUOTE]
I’m am a little confused on this statement. When I am doing the scaling as I described, I will click on my last trade placed ( in the dialog box that displays P/L, Position Size, % P/L etc…) and it will bring up a ticket window. At this point I can do multiple things including closing that one specific trade buy hitting submit. Now if you try to close a trade buy using the one click entry feature then yes I do believe it will close out the first trade placed in comparison to the open trades that you have. Maybe your reffering to something else and i am not familuar with FIFO?
Ahhh… gotcha. Maybe you can do it that way then, I’ve never tried it. I don’t like to look at numbers when I’m scalping. Some are necessary evils but I don’t like to do math in my head. So I guess for that reason, I consider it “too much thinking” to dig up a specific trade leg and make that kind of adjustment. That’s also a lot of clicks of the mouse and/or keypad.
I’m not knocking your idea here, I think it could definitely be valid. I am searching for uber-simple though, and any type of math calculations mid-trade like this would push me over the edge I think. As it stands right now, I don’t do any math at all. For stacking and unstacking trades, I have a series of unit levels already jotted on my pad so I don’t even have to think about it.
Personally, my opinion is that the more we can eliminate the math, the more we can focus on the psychology of the movements.
PS: by FIFO I am referring to the First-In-First-Out new rules, which I thought could be why the platform always closes the first trade first (makes sense). I could be wrong on this…
PPS: I recently noticed something else about scaled trades. Frequently they are what I consider still “good form” / there is no reason to let the trade idea go sour. But… since I do get stuck in them longer than a simple 1-leg trade… then I should try to cover this opportunity loss with a higher-cranked profit. Pip-siphon alluded to something vaguely similar to this in one of his posts where he defended the stacked trades and said that he made his most money on these (I think, if I’m recalling correctly). If you think about it… a trade is stacked when it passes through a known resistance level to the next one. This is further winding-up and should eventually lead to an even more forceful snap-back. Additionally you are adding leverage with each leg stacked. So when it finally does snap back, I only need one or two pips beyond the average-position line to rack up a huge gain. I don’t target a specific $ or pip amount but I do look at it in retrospect and I’m happy to see that in most cases… all that time waiting through the legs… that I’ve managed to accumulate enough profit to more than justify the equivalent profit I would have made on individual scalps, had I not stacked during that period. Does that make sense?
Monday 11/22/10
Quick stats:
12 trades
15min trend bias: down
Trades with 15min trend bias: 12 wins, 0 losses
Trades against 15min trend bias: 0 wins, 0 losses
1.0546% account change
One thing I’ll have to decide this week is whether or not to attempt trading at all on Thursday or Friday morning. I’m leaning towards “definitely no” on Thursday. But possibly no Friday either. I got burned real bad a couple years ago trading during this highly illiquid time. But that was also a swing strategy so it was even more stupid. But I could already “feel” the lack of liquidity today so I’m leaning towards sitting out Thursday and Friday (I could call it “learning from past stupidity” LOL.) I know the market is illiquid because the Oanda spreads jumped more than usual today, ranging from the typical 0.9 up to about 1.7 at times. I don’t bother too much with the spreads as long as I’m still seeing logical moves. But sometimes when it’s really quiet you get giant candles and instantaneous jumps, which can be scary if you’re on the wrong side of the momentum. Today was actually pretty moderate in my opinion, and while there were some giant candles, they pretty reliably respected the downward bias I had already identified from the 15min chart.
Tuesday 11/23/10
Quick stats:
10 trades
15min trend bias: down
Trades with 15min trend bias: 10 wins, 0 losses
Trades against 15min trend bias: 0 wins, 0 losses
1.4163% account change
Today was a comfortable trading day, it actually felt really easy and predictable. It felt like I was rehearsing something I had already done many times before. What’s weird about that feeling is that I’m taking money from the market and it doesn’t seem like it should be this easy. I just sit back in my chair, chomp on my oatmeal cookie, and push a button. It’s weird. (I’m not used this this.)
Speaking of comfort: lately I’ve been having these UNcomfortable feelings about how I will know when the time is right. You know, that time when you finally can say “wow, this is really working – I think I’ll go take out a mortgage on the house and sell all my stuff so I can beef up my trading stake” – heehee, well I wouldn’t go that far, but still I wonder about this all the time. How do I know if I’ve practiced enough? How do I know if I’ve paid my tuition in full yet?
I took a step back though, on my commute to the dayjob. If I’m trading well and the unknown feels uncomfortable, then maybe that is not necessarily a bad thing. What if the moment I get “comfortable” with things, I start to slack off? What if I get c-ocky and start doing things that never happened during my trading exercises? What if this is the reason for the so-called “beginner’s luck”? It does seem possible that things may never feel perfect. That I must always remain vigilant yet humble towards the market. Trading is fun and challenging and playful and stress-reducing. It is a lot of things. But at the end of the day, it is a business, one that is critically important to big-picture dreams and ideals. So I want to always keep that in perspective. Maybe there will never be an “aha” moment where I say “NOW I’m ready to go balls to the wall.”
