Elenmirie and her Quest for the Holy Pips

Trading Discussion Trade Journals
41

More on nethack. I can learn a lot about my trading style from my playing style in nethack, as compared to my teammates and others…

I am not a creative player. I like to do the same strategy that’s proven to work. I kind of have a list of things that I need, and I have to have all of them before I proceed my game. For this reason, I’m not a pioneer in new variants, unless they are very close to the original version.

In trading, that means I need to find a strategy that works for me and stick with it.

I don’t like to do long setups, or long games. My style is not super-fast (although I have tried speedrunning) but unlike some players, I don’t like to set up a base camp that I keep returning to. I like to get on with it, and move from one stage of the game to the next with little pause in between.

In trading, this means (I think) that I don’t want to trade lengthy terms. I know some think day trading is a fool’s game (including Alexander Elder, to a certain extent), but all the indications are that it suits me. I like getting in and out quick. The thought of carrying a position overnight fills me with dread. How will I relax to sleep? I’ll be up peeking at the Asian session all night!

Also, I have a strong impulsive streak. I don’t like waiting to look around at everything before I make a move. Some players do, they will take as long as it takes to look around at everything they can see. I take a look to see if there are any major threats, then make a decision quickly. If it’s the right one, that’s a bonus.

In trading, I think this means that I will try to assess the situation quickly and make a move. That may be a plus, because unlike nethack which is a turn-based game, not a real time one, time and the tides and the forex markets wait for no one.

Now this last one is pretty negative. Despite being a good player by most measures, I have an abysmal ascension ratio. That means, I win very few games as a ratio of all that I start.

This is partially a result of some early and persistent bad habits that I had, which involve starting games and quitting repeatedly until you get some specific starting conditions. That’s called start-scumming and opinions vary about how cheaty it is, but the public servers allow you to do it.

But worst than start-scumming, is sometimes I get into a mode of play, when I have died a couple of times usually, where I get really, really reckless. I just play reckless. And I don’t stop, I just keep going. I’ve spent whole days in tournaments in that mode, and it’s really difficult to get out of.

That’s why my ascension stats are so bad compared to most at my level.

That scares the living crap out of me in trading. That means, perhaps I’ll have a prediliction for just trying over and over in a losing game, digging the hole deeper and deeper, until… what? I lose everything?

Okay. I’m going to try to think about this and come up with some new rules.

42

It was a day off today, because of the bank holiday in the UK. No London session, no trading. So I took the time to dig a bit further into the triple screen system. It’s a little bit strange, because the name (triple screen) and a lot of the words used to talk about it seem to imply that you will be looking at three different charts on three different timescales. For instance, Dr Elder keeps referring to the “intermediate” chart. So I was thinking that there will be one above and one below the intermediate one.

Last week I used that misunderstanding to find an excuse for a premature entry into a lovely uptrend, remember? Still blushing about that one.

The trouble is, all the discussions of the system seem to spend a lot of time on the second screen, and then just gloss over the third. They don’t actually say to go down an order of magnitude in timeframe. So, after reading what’s in the book (that’s “Come Into My Trading Room”) several times, and reading some stuff on the internet that attempts to explain the system, I think I’ve worked out what’s going on.

If someone is reading this and think I’ve got it wrong, please let me know.

The main thing about the third screen seems to be a way of selecting good entry and exit points when working without real time data, so that you only have the daily chart. He makes the point also that paying for real time data is not necessary, and may harm the beginner “who may slip into day trading”. (Ha.) This is an artifact of the time when it was developed and written… I do remember in the 1990s that if you wanted real time data, you could expect to pay a lot for it. Level 2 quotes, they called it, IIRC. I never had it, I just have heard of it.

So all that jazz is only relevant if you’re going to try to do the system without real time data, which in today’s world doesn’t seem like a thing anymore. Certainly not in forex. Interestingly, I found that system for the third screen described on investopedia, but totally devoid of discussion on why you would want to adopt it. They had something like 5 or 6 different ways to do the second screen, in great complex and wonderful detail, and then did a gloss on the third screen. Maybe whoever wrote the article didn’t understand it either.

Fortunately, once I twigged on that detail–which is stated clearly in the book, I just had to read it five times to realise how clear it was!–Dr Elder does actually describe what you should do for the third screen if you do have real time data. It’s not a separate chart, just some techniques for deciding on entries and exits.

Okay… so now I’ve made a system to try from the triple screen method. It’s got some things in common with Cowabunga, namely that it uses a higher timeframe chart to identify the prevailing trend, and then a lower timeframe chart to find opportunities for trades in the direction of the trend.

So the first screen will be the one hour chart, with a 22-bar EMA and MACD on it. Positive slope of EMA and positive MACD histogram mean uptrend (long trades allowed), negative EMA slope and negative MACD histogram mean downtrend (short trades allowed), contradictory signs or flat slope mean no trend (no trades allowed.)

Second screen will be the 12 minute chart. This is because I’m sticking right on the rule of 5… your trend-finding chart should be five times longer timeframe than your intermediate one. The system would perfectly well allow the 15 minute chart to be used, but I’m going to try it this way. On the 12-minute chart is a 22-bar EMA and stochastic oscillator (default settings). Long signal when price is below the EMA and stochastic is oversold. Short signal when price is above the EMA and stochastic is overbought.

Third screen is the 12 minute chart with 2 envelopes, both with 22-bar EMA. The inner envelope is calibrated to contain about 90% of the prices; the outer one calibrated to contain about 99% of the prices. This calibration is done by trial and error and eyeballing it, not very scientific, really.

The outer envelope is my addition, it’s for setting stops. The inner envelope is from Dr Elder, and it’s for gauging exits.

So, the idea is, for long trades, once a buy signal occurs, get in at a price below the EMA, and set the stop outside the larger envelope. The target is the upper boundary of the smaller envelope. If the trend up is strong you may wait for it to go through the boundary, but if it looks weak, grab profits as close to the line as possible. Of course, it’s the other way around for short trades.

If I can swing it, I’d like to try doing Cowabunga and Triple Screen in parallel for a bit, just to get a feel for how they compare.

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43

More G<d$/-mn, F?&%?g RULES!*

Okay, it’s time for full disclosure. I really am a risk manager. Or at least, I spent a good number of years in the risk management department of a global insurance company. We were the ones that were always telling the underwriters what they couldn’t do.

They loved us for it! … Not.

And we were also the ones telling the regulators why we should be able to take the risks we were taking. They loved us too. Or rather, they loved to torture us by asking us for more detail, always more detail.

Oh yes, they kept us busy. And a good time was had by all.

Now I’m trying to get my own business going. I have to be the all in all… I’m the risk taker seeking profits, the risk manager limiting losses, the regulator keeping everyone honest, and the board of directors who want maximised profits and minimised risks, all rolled into one. I’ve got to play all those roles, and play them well. So which one takes precedence?

Okay, my first priority is to make money. As it is for any business, even a non-profit one needs to be in the black so it lives to play another day.

But, with limited capital and little chance of re-capitalising if it all goes tango-uniform, surely the first priority is not to lose money.

This kind of suggests that I need to play it super-paranoid.

Luckily, I’ve found a friend. Yes, it’s Dr Elder! Bless him. He’s come up with more rules for me to follow, and I’m pretty okay with that.

Here are the rules I started with:

Never risk more than 2% on each trade.
Never have more than one trade on at a time. (Later maybe we relax that, but in forex, correlation risk is a thing.)

Then I evolved:
Set the position calculator to 1.5% rather than 2%, to allow for slippage.

There, all safe now! Right? RIGHT???

Using those rules, I blundered my way to a 10% loss in about 3 weeks. Okay, yes, I screwed up a lot, because I am on a steep learning curve. But if I carried on like that, I’m wiped out in 6 months if I’m lucky. Sooner if I’m not.

Which would be great, if my objective was to be wiped out slower than most. But actually, I’d quite like to not be wiped out at all.

Now I’ve got Alexander (we’re on a first-name basis) on my right shoulder telling me more rules. Here’s what Alex says:

Yes, you are free to risk 2% on each trade. But if you go down 6% in a month, you have to stop trading for the rest of the month.

Really, Alex? The whole rest of the month? But, but…

Yes. You are out of action for the rest of the month, if you lose 6% of equity so far.

Crap and corruption!

But that won’t happen, because you’re not going to be trading anywhere near that.

I’m not… Hang on. What are you saying, Alex?

Oh, you know what I’m saying. I’m not trusting you anywhere near 2% of your equity, until you prove that you can handle it. You start with a standard position of 1000 units. If you can turn a profit on that over two weeks, you can do 2000 for the next week.

Um… I’m hardly going to make anything, Alex!

Correct. And you’ll hardly lose anything either. You would rather your amygdala takes over, perhaps? Heart pounding, palms sweating…?

Well, no, of course not, but…

Furthermore, if you have a losing week, just one, then you lose 1000 units off your allowed position. If you’re profitable for two weeks following, you can have it back.

ALEX!

You have to earn it, you understand?

Yes. But…

No buts. You’ll thank me later.

I doubt that, you controlling sunuva wotsit!..

So, dear reader, them’s the rules. That might, just might, keep the fight-or-flight thing under control when I first go live. Which is not soon, but it will come.

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44

Excellent thread, following along on your journey!

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45

Glad you are here, my friend!

46

So today things are back to normal, more or less, with the end-of-summer holiday weekends finished in the UK and US, kids back in school, etc etc.

I set up a fresh demo account so that I can try this business of limiting position sizes etc. The theory is that there’s a psychological effect that helps you stay cool when trading, because the amounts are relatively small. It seems to work for me. This is practice for when I have my real hard-earned on the line… I think it will help with the amygdala thing.

So today there was a setup on my triple screen system… a nice downtrend from about 08:00 this morning, and then a rally just before New York opened. So I took the trade and ended up with 32 pips. That sounds nicer than “ended up with a couple of quid!” But that’s the rules… it was a nice trade and my new demo account is in the black. That’s what matters.

2 Likes
47

A win is a win. Can you share how you’ve set up the Cowabunga system? Stock settings or did you fine tune it to your liking? And did you take @anon46773462 advice and add in some price action approaches to your system/strategy.

Thanks for sharing!

48

So, I’ve just been on a rollercoaster ride.

The good news is that my account (demo, that is) is quite healthy. The bad news is, I’m not sure whether I deserve a pat on the back for cool-headed quick thinking, or a kick in the backside for not following my system. Probably the latter.

Here’s what happened:

So this was my second “real” day trading my triple screen system. I say “real” because last week + Monday this week was just in the doldrums. Yesterday I had a nice textbook trade in that system and scraped some pennies loose.

Today looked much the same to start, a continuing fairly well-defined downtrend on my first screen (1 hour chart with a 22-bar EMA + MACD histogram with default settings).

So I spent the morning keeping an eye on my second screen (12 minute chart with 22 bar EMA + stochastic with default settings) waiting for a little rally to sell into. It came just before midday, and I took it although the stochastic wasn’t quite into overbought territory. It was heading there, and I thought, well, if it does go up further, I’ll consider selling another lot. It didn’t do that, so I watched it go below the EMA line, but unexcitingly nowhere near the bottom of my inner channel. I decided to hang on, and drew a line on the chart about halfway to the bottom line of the channel that I’d be willing to take the money and run.

And then… a BIG green candle appeared. I mean, that sucker was HUGE! It blew right through both my channels (the one that’s supposed to contain 90% of prices and the one that’s supposed to contain 99% of prices), and of course through my stop, because that was set just outside the 99% channel.

I think it was because Theresa May gave a little talk about Brexit in Parliament after PMQs. I couldn’t find anything else that might have triggered it. These days, if a back-bencher locks him or herself in a third-floor broom cupboard somewhere in Westminster and whispers something about Brexit, the market jumps up, spins around and either dives behind the sofa or dances an ecstatic little jig, and it’s anyone’s guess which one it’s gonna be.

But anyway, back to our story… so there I was with a stopped out trade and staring at a huge breakout. My first thought was “short that puppy! It’s bound to fall back to the average line.” Now, that has nothing to do with my triple screen system. In fact, my first screen had just gone nuts because of this sudden move, and it could have been interpreted as an uptrend. But with a huge lurch like that, I basically would interpret that as a stand aside signal.

So what I did was completely off-piste according to the system, but I don’t think it was entirely daft. The move was so sudden and so extreme that I thought it was inevitable to fall back into the channel and towards the EMA line… all of that of course was moving up to meet it.

So I shorted with a position size of 1000 and a stop set 10 pips above the high of the big green candle–in these conditions my usual stop-setting technique was meaningless. It went up some more. I took another short position with a higher entry point, same stop. It went up some more and I did it again.

This could be heaven or this could be hell… Okay, so I went and practiced piano for a while to calm my nerves, keeping an eye on the chart. It went up some more, and the whole thing was underwater for a while. I kept thinking, it may take a while, but it will come back to the fold, back into the channel and towards the EMA.

I could have been horribly wrong, and that would have been a big loss for my little demo account. But I was right. In fact, it came down almost as dramatically as it went up, just after London close, and I was there to push the button at the right time and got out quite advantageously. It came down through the bottom of the inner channel (the 90% one) but didn’t breach the outer one (the 99% one) and I thought “good enough for me, I don’t care what it does after this!”

What it did after that, was go back to the EMA line, where it is currently hovering like a tiger mother.

So that more than cancelled out the earlier stop out, and I’m net positive for the day. But do I deserve congratulations, or a kick up the backside? Was I being smart, or reckless?

More importantly, if this was real money, would I have had the composure to let that run as I did? It was a bit too exciting.

The saner behaviour would have been to accept the stop-out, shrug and say, “oh well, can’t win 'em all” and sit out the rest of the day, let the batshit crazy market do what it wanted to. There was no way that could have been predicted; it wasn’t linked to economic news. Politicians can open their mouths any old time, and there’s naught you can do about it.

But on the other hand, I’m kind of happy that I grabbed the opportunity when I saw it. Hm.

Hm.

49

I’ve switched now from the Cowabunga system (which has its merits, and helped me quite a lot to learn more about how this all works), and am now using a personal variant of the triple screen system as described by Alexander Elder. Just got started with that one, the jury’s out on how it will work long term.

As for price action, I’ve not really got that far yet, but I think the next book I’m going to read is on that topic. Yes, still on a steep learning curve!

50

Hello E, from what I recall, you are either the first, or one of the few who has read DR Elders material on this site, even though he has been recommended numerous times.

I have a recommendation, when you have a profitable trade, do not celebrate it. When we celebrate our minds will like the “feeling”, read this as the release of endorphins etc, this generally leads to overtrading. Also do not celebrate because it can take us too high, generally a loss will feel twice as bad, as our minds can become conditioned to receiving the “chemical” after a trade is complete, so when it is a negative number, it hurts the brain even worse, the brain is waiting for feel good chemicals and it gets feel bad chemicals.

Try to weed out these words, hope, happy, sad, joyous, etc. From your trading lingo, it will help you keep a more centered base.

The Ever Centered VIPER

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51

Well, that surprises me, because I was led to his book because it was top recommended on the Babypips book list! But he does speak to me. I call him Alex. I talk to him in my mind (yes I do!)

My new demo account is called… Alex. He is watching over my shoulder. And I ask myself… What would Alex do?

That is an interesting observation that rings true. I thank you!

I think you are right about that. Today was the first time I went off my system for logical, technical reasons, as opposed to emotional, hopeful ones. It happened that I was right. I think my logic was sound. But sound logic doesn’t guarantee success, it only makes it more likely. It could have gone the other way.

Gosh, I feel a quote from the Tao Te Ching coming on… Here it comes.

“Success is as dangerous as failure.
Hope is as hollow as fear.”

Yes, that will do.

Thank you for the food for thought, and I’m glad to have your company here on my thread, the ever-helpful Viper!

52

My first screen is ambiguous this morning (stand aside signal) so I can muse a bit on yesterday’s events.

Pip Daddy explained it all with regards to the two lurching movements yesterday in GBPUSD. There was a Bloomberg report suggesting that the UK and Germany had relaxed their stances on Brexit agreement. That triggered that 'UGE green candle that stopped me out, and that I then shorted. Then later representatives of the German and UK governments respectively both said that nothing had changed. That triggered the big red candle that gave me some nice profits on the short.

Now that triggers a few musings on cost of doing business. Namely, do I need to pay for a news feed?

Thus far my expenditure on this business has been £17, for a used book. My income has been £0, and will remain so for an unknown period of time until I decide that I’m ready for the next level. Then it is quite likely to be tiny (but hopefully positive) for the near-term, and I intend to keep the profits in the business with the intent of eventually bootstrapping a small account into a larger one.

Thus far I have resisted temptation to pay for subscription services for anything. Tradingview keeps offering me all kinds of wonderful things (including more than three indicators on a chart) if only I’ll part with a tenner a month. Various alert services want the same.

But my business can’t afford it, so I accept the restrictions on service. I find I can manage with what’s available for free, and what’s provided with my demo account. (Note here that it doesn’t matter what I can afford, or what my household can afford… the business has to support it. And the business can’t.)

Yesterday’s event made me wonder whether I should shell out for a news feed. A quick search shows that you can have a Bloomberg news feed for a promotional price of… a tenner a month. (There seems to be a collective decision by the internet that this is a price point that will suck people in.) Do I need to accept this as a necessary cost of doing business?

Well, first, would having such a feed have made a blind bit of difference to what happened yesterday? Realistically, no. The first lurch upwards happened in the space of a minute. Even assuming that I’d been a) at my computer, b) paying attention to the news feed, and c) immediately cognizant of the implications of that particular news item, I doubt I would have been able to react fast enough to prevent being stopped out.

One thing I noticed when I was looking at prices, was that many of these feeds are advertised as being machine-readable. That means that computers are reacting to it. No, I don’t think I would have been able to react fast enough to get out of that trade any more favourably than my stop loss did.

So, my stop loss did exactly what it was there to do.

Another possible argument for a news feed would be that although it wouldn’t have saved me from the stop out, at least I would have known what was going on. I did a quick search through my usual news channels, and found nothing to explain this big movement. If I’d had a Bloomberg feed, presumably I would have seen the news item and known that this was the likely culprit.

But… so what?

I could tell that something had moved the market. It wasn’t scheduled economic news, because I was monitoring that. It wasn’t a major world event like a war, a big diplomatic spat, or a major development in Brexit negotiations, because that would be making “breaking news” headlines. Does it really matter what it was? I guessed it was a Brexit-related rumour, which turned out to be the case. (I thought it might be Theresa May’s speech, but it wasn’t that.) Would the information that it was this Bloomberg report about the UK and Germany have caused me to do anything different?

I don’t think it would have.

So I’m going to keep a tenner in my pocket, every month. No paid news feed.

But aside from that, what about my reaction? Was it reckless or wise? I’ve been mulling this over, and here’s the result.

First of all, it’s important to remember that we are not ever dealing with certainties. We are dealing with probabilities, and all the indicators that we clutter our charts with are basically tools to ensure that the probability is in our favour when we decide to make a move. Probability in favour is not a guaranteed win, but the law of large numbers says that if you do things a lot with probability in your favour, then you will be ahead in the end. A positive expectation.

So, there I was staring at a chart that was decorated with a bunch of stuff that’s supposed to tell me where the probable price action is going to be. When the price lurched wildly out of those probable zones, my first instinct was to think that it will probably come back to them.

So I’m going to conclude that it was not a reckless action, it was a quick decision made on the basis of the information that was in front of me.

That’s not to say that I did everything right. Putting 3 times my current position size limit on it was a bit reckless. If it had lost, then I would have been in a position very difficult to recover, thus opening up the temptation to violate rules in an attempt to recover faster.

I note that this was all still well within my overall risk tolerance, so it wasn’t terrible, just unwise.

So, fast forward to the time when I’m running a proper trading business, what would be the optimal way to handle a situation like this?

First, define “situation like this.” That would be a sudden substantial move against the trend which is not explained by either scheduled economic news or breaking-headline news (such as a war, alien invasion, or major diplomatic incident.) The theory is that big world event news could change the market longer-term, so coming back to the average is less probable, or put differently, the near-term outcome is less predictable.

So, if this were to happen, either I’ve been stopped out of a trade, or I wasn’t on one at the time. That is immaterial. If such a thing occurs, it seems like the best course of action would be to put a contrary trade on with a position size less than 1/2 that allowed by risk tolerance.

Setting the stop is tricky, as the onset of sudden volatility means that the usual means of choosing stops won’t work. I think I would stick with what I did in this case, and choose a stop 10 pips away from the high or low (as appropriate) of the initial lurch. That gives quite a lot of room, but keeps a safety net on it.

If conditions seem right, I can then pyramid up using the rest of the risk tolerance.

There. Now I have a plan for the next time this happens. Which may be a long time… or, times being what they are, it could be this afternoon.

53

Worth remembering two points here:

  1. no matter how fast and reliable a newsfeed is, it will still only be able to tell you after such an event what happened. These kinds of unexpected reactions to unexpected events will always be, well, unexpected! That is the nature of our market. To be honest this GBP move was nothing compared with what the market is capable of, for example, back in the days when the BofE would announce a full 1% change in bank rate, and not to mention the (rare) Black Swan type event when the Swiss Central Bank uncoupled the CHF from the Euro.

So the only real benefits of a news feed are maybe some commentary before a known release and the fast details of an unexpected event which helps in assessing if there is likely to be further follow-through.

  1. We are not concerned with the P/L of individual trades. Whatever our stop and target level policies are, they should work to provide a net gain over a period of time. It is too easy to get sucked into the mechanics and attributes of a single outcome, especially resulting from a flash move like this, and start adjusting things according to it. That may, or may not, be a good thing.
5 Likes
54

Thank you to the folks that are following me and sharing their wisdom! I really appreciate it.

Today after all the major news from the US was done, I took two opportunities shown by the triple screen system.

An uptrend had formed on the first screen (around noon) and at about 15:20 a buy signal came up on the second screen. I exited that when it got near the top of the inner channel, as it didn’t look enthusiastic about going through it, and took 20 pips.

Then another (albeit weaker, because the stochastic was a bit iffy) signal formed at about 16:15. Since it looked a bit anaemic after I entered it (the first screen trend was still there but looking weaker), I got out as soon as it kissed the EMA line with 11 pips about 15 minutes later.

That’s me done for the day.

I’m pretty sure my mindset has changed since starting out… I’m a lot calmer and, dare I say it, more clinical about what I’m doing. The first time I had a successful demo trade, I was dancing around the room. Now, the first thing I do is make sure I’ve documented it, and ask whether I could have done anything better. I think that’s progress!

Not that I have anything against dancing around the room in general, but I think you all know what I am talking about. It’s what the Viper said yesterday… don’t get ecstatic when a trade comes out well; don’t get despondent when a trade goes wrong.

Now I’m thinking of a Rudyard Kipling quote:

“If you can meet with Triumph and Disaster
And treat those two imposters just the same…”

Maybe he was talking about the Law of Large Numbers.

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55

Today the overall trend was up from about 10:00. I took a long trade at about 10:40, and was off it with 13 pips by 10:55. Hindsight was, it could have done a lot better if I’d been more patient. That’s something to work on.

I sat out the NFP festival, because I didn’t have a clue how to trade that. I did observe what happened though, it was interesting and educational.

After that was over, I took a trade that I probably shouldn’t have, just before 14:00. I had to sit on it until nearly London close to scrape off 4 pips, and glad to have them. (I would have closed when London did anyway, positive or not.) Friday afternoons… I should probably make a rule that Friday mornings are okay if I’m available, but Friday afternoons are off limits.

So the total for today is 17 pips.

Now I’ve set up weekly stats so I can track how I’m doing. This is my first week reporting.

Number of trades: 9
Positive trades: 8
Negative trades: 1
Success rate: 89%
Average risk/return: 0.37
Average P/L per trade: 20 pips
% change in account equity: +0.6%

I won’t be trading Monday next week, out on a hiking day trip.

Good weekend to everyone!

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56

not bad, not bad at all.
well done.

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57

Great tip. Thanks for sharing!

58

Yea, there’s too much to learn. Need to remember that it doesn’t all happen in a day, or week or month, or year.

Good for you. Numbers look solid.

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59

Back on the “job” (sort of) today! I had a real (as in paid) job with a tight deadline due this morning, so was a little late paying attention to the market. We had an uptrend on the first screen this morning, and GBP/USD obligingly took a dive, allowing me to grab 19 pips on the return to average. That was a 9-minute trade.

At that point, the first screen turned ambiguous so I sat out until the afternoon, when a clear downtrend developed. The price just breached the 22-bar EMA, and the stochastic was headed towards (but not yet in) overbought territory, so I went short. I got out 14 minutes later with 10 pips, because I moved my stop to protect some of the gain and got stopped out. I probably could have done slightly better on that one, but I’m not beating myself up over it. It was sound practice to do that.

29 pips for the day.

I have noticed that since the beginning of September there is a lot more volatility in GBP/USD. I’m not sure if that’s just because everyone’s back from holiday, or Brexit jitters, or some of each.

Yesterday’s hiking was cut short due to horrible weather… we went around an archaeological site called Vindolanda instead, which is a Roman fort and accompanying village. The soil conditions there preserve a lot of things, like leather and wood, that would normally not survive. The best bit is a collection of “post cards” which were wooden message tablets that we used like, well, post cards. There’s one with the commander’s wife inviting her friend to her birthday party. There’s another with a centurion writing, presumably in desperation, to request more supplies because the men had run out of beer!

The more things change, the more they stay the same…

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60

Today is not such a good day.

Why? first off, I had a piano lesson scheduled, first one with a friend who teaches, and he didn’t show. Nor text or call. I was all nervous about a lesson and nothing happened. That left me jittery for the rest of the day.

And then, I had technical troubles with my computer that I use for trading. This had some consequences that I’ll talk about later on.

A positive thing though! I’ve been working on a puzzle posted for September, with a decent prize in IQCash, for several days now. I tried to whack a square peg into a round hole with a sledgehammer on day one, and got a mention as a probable second or third prize winner for effort. Well, today I solved it properly, the first one to do so. So I scooped the lot. In today’s IQCash valuation, something on the order of £50. Happy Days!

Gather your rosebuds while you may.

But my trading day was marred seriously by technical problems. My Firefox browser was crashing every five minutes at best.

I have chased the problem to its source, I think… this was happening on two machines that I use for different purposes, and so they have quite different configurations. However, I think I now know what happened.

Four trades today, which was about three too many.

First off, I got over-excited and caught up in demands on my time, and ended up with two (stacked up, naughty, naughty!) trades that yielded only four pips on over 30 at risk. Poor. (If I’d sat on it for longer I would have done better, but emotional panic set in. Poor again.)

Next one, not so bad. 11 pips on 44 at risk, sounds awful but actually quite in line with my strategy. It was an A-rated trade, only one today. The first two were C-rated, the last got an F.

Then a disaster. My browser was crashing so often that I couldn’t do anything, much less exit the trade when I wanted. I was going to lose on this one anyway, it was a crap entry and everything moved against me. But the technical problems kept me from exiting when I realised it was crap, so I kept on it helplessly and got stopped out for more of a loss. -38 pips.

So, -22 pips for the day.

As I read what I just wrote… yes… the stop loss did its job. Never, never, never, place a trade without a stop loss. I know this. You know this too. I’m not ever going to do that, but you might, so heed my words! Never think that a stop loss is for wimps. A stop loss is for traders that live to trade another day, nothing more and nothing less.

Just to say, this was nothing to do with my broker, the technical problem was on my side. I think I now know what caused it. I’ve removed the problem, I think and I hope.

But it is absolutely chilling to think… what if this wasn’t pennies of monopoly money, but hundreds or even thousands of real money at risk?

Crap. Sobering.

Worth thinking of contingency plans, in case of equipment failure. I will do that next.