Trading Journal [Mateus]

Mateus

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Hi,
This is where I will journal my progress with trading. I will follow the SLA method of DbPheonix and post my trades/questions about it. My journal will be restricted so please send me a message if you would like to make comments and I will add you as a contact. I will appreciate your input/comments if you can spare the time.

Thanks in advance
 
First Trade Placed

Hi, today I placed my first trade using the SLA method by DbPhoenix. I know now I didn't follow the rules exactly and could probably have done better than I did but I'm happy I got started. I am going to post the charts as I saw them at the time in this post and also as I have annotated them with hindsight in the next post.

As I still have the training wheels on I'm using a SB account to execute my trades. I have a small account open. I chose to do this because I've read that the instinctive reactions one takes when trading influence the level of success as much as or more than the actual trading strategy utilised. So I think I can kill two birds with one stone by getting to grips with both the SLA method and how I approach this mentally.

Please let me know what I did right/wrong.

Cheers
 

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Hi, today I placed my first trade using the SLA method by DbPhoenix. I know now I didn't follow the rules exactly and could probably have done better than I did but I'm happy I got started. I am going to post the charts as I saw them at the time in this post and also as I have annotated them with hindsight in the next post.

Hindsight charts posted below.
 

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I originally wrote these posts on Thurs 10 Sept, this is the date I refer to when I say "today". Apologies for any confusion caused.
 
You're to be congratulated on starting. Most people can't get that far. However, it's important that you start correctly, and unfortunately, in at least some respects, you're starting off on the wrong foot. Or feet.

1. You say you didn't follow the rules "exactly". This is of course necessary. If one can't or doesn't or won't follow the rules exactly, then he is trading according to some other approach. Or by feel. If the other approach has been thoroughly-tested and is consistently-profitable, great. Otherwise the trader will just spin his wheels. Or take off in reverse.

2. I don't know what you mean by "instinctive reactions", but in your original post, you wrote that

As I still have the training wheels on I'm using a SB account to execute my trades. I have a small account open. I chose to do this not because I want to make money so much as I think I need to experience the emotions and natural reactions you get when actual money is at stake. I have tried to use demo accounts but I don't think they work for me because the emotions aren't there.​

First, you should't be trading at all given that this is something new to you. To do so reflects a profound disrespect for money. Such an attitude will revisit you sooner or later, most likely sooner.

Second, there are no "natural reactions". There is nothing natural about reactions that are borne out of fear and/or lack of study and preparation. They are entirely avoidable. Nor is there any need to experience emotions. If there is any need at all, it is to trade emotionlessly. You say that demo accounts don't work for you because the emotions aren't there, but that's one of the chief objectives of a demo account. If you suddenly become emotional when you're trading for real, then you are either using the demo account incorrectly or you have not yet come to terms with your fear. Probably both.

Inadequate preparation, unfamiliarity with your trading system, and fear will all combine to sabotage you at every turn. Becoming a SLAyer requires more than good intentions. Simple, yes. Easy, no.

I write in the book that

the trading session must be approached. This is what examining context is all about. To do otherwise is no different from watching a play beginning with Act 3. Are the dailies and hourlies "hindsight"? By the time the session begins, of course they are. But that's what preparation is, studying what has happened up to the point where the trading session begins, just as an actor prepares the backstory of his character before he walks onstage (or at least the better ones do). Without it, the trader has no context within which to make choices, which means that the odds of his making the wrong ones are pretty much 50/50.​

Beginning with the hourly is a step in the right direction, though beginning with at least the daily is preferable. If you post a daily chart that goes back to at least the beginning of June, you'll see why. And noting that swing high and swing low on the hourly, whether in real time or not, is a plus.

However, you have not decided at the beginning of the session what you're going to do with all of this. So you miss the first trade at 0900. If you weren't ready at the time, those are the breaks. We can't trade 24/7. However, the trade, taken or not, matters. It sets the stage. A higher high is made. If one is focused on what he perceives to be a range, even though a range has not yet been established, he may view this higher high as a failure given that it falls back into the "range". If so, he will likely miss the significance of the subsequent higher low.

When price makes that higher low, you "feel" that it's a reversal. What you feel, however, has nothing to do with it. Rather than range lines, you should have a supply line running from the swing high downward (and please get rid of the colors; they will mislead and misdirect you). When that line is broken, then look for a retracement if and when price moves in the opposite direction (if it were a reversal in a range, you could enter the trade as soon as price bounces off the lower limit of the range (AMT), but there is no range here, so you have to trade the SLA.

Given the bar interval you've chosen, however, there is no retracement until 1000. If you want something earlier, you'll have to use a smaller interval. Do not enter based on "feel". As for feeling that price was headed toward the upper limit of the range, there is, again, no range and no upper limit. There is a higher high and a higher low. This may lead to yet another higher high or not. A demand line will tell you what to do.

As to the reversal at 1100, there should be no stop, trailing or otherwise. Trailing stops are indicative of fear. If you're afraid of what's being presented to you or if you are unsure of what it is you're looking at, then don't trade. Observe. A trailing stop is the trading equivalent of grasping at straws. The trade should be exited when the demand line is broken, not ten points lower (your non-existent range is again messing you up). After that line is broken then, again, you look for a retracement in the opposite direction. You have this correct, at 1125, but for the wrong reason: the reversal is long past. Whether you made a profit or not is irrelevant. The profit was a happy accident. You can't build a system of consistently-profitable trades on happy accidents. You state yourself that all of this "is contrary to the philosophy of the SLA" but you are nonetheless happy with the result. What you should be happy with is having traded well. The money is -- or should be -- the result of having done so. If you aren't trading well, then you will give all the money back, and probably then some. As for finding your feet, yes. And trading in order to get to know your weaknesses, yes. But not with real money. Getting to know your weaknesses is in large part what demo trading is for. If fear is a factor when you begin trading with real money, then you're not ready to trade with real money. One doesn't rid himself of it via repeated and continuing effort. Those who've been at this for five or ten years and still can't show a consistent profit will tell you so.

As for exiting your short because you figured that (were afraid that) the points you made earlier were at risk, the earlier trade has absolutely nothing to do with the subsequent trade (see A Final Note on p. 33; in fact, you should read it before the beginning of every session; see also Appendix F; re-read it every day if necessary). If you had been trading in the moment, you would not have exited until your demand line was broken.

I suspect that none of this is what you wanted to hear, but I'm not a pep squad. I've watched too many people fail because they didn't study, they didn't practice, they never learned their business, they never addressed -- much less defeated -- their fears. And so they'd plod on, year after year, before finally going broke or quitting. If you don't or can't or otherwise won't follow the rules of the SLA, then the SLA is not for you. Explore other options. Perhaps something black box would be more suitable. Otherwise, read, study, practice and don't throw away any more money with real-time, real-money trading.

Your journal is your own, by the way. It needn't be devoted to the SLA. You were smart not to confine yourself to any particular approach with your title.
 
You're to be congratulated on starting. Most people can't get that far. However, it's important that you start correctly, and unfortunately, in at least some respects, you're starting off on the wrong foot. Or feet....

Dbp, thanks very much for the response. Not exactly what I wanted to hear no but if I'm not doing things correctly then I would prefer to be told instead of carrying on in ignorance until I have lost all of my money. So for this I really appreciate your advice and observations.

You have given me lots to think about and address and I will do so. I have reread the SLA pdf you posted in your forum. (this pdf has 22 pages but you referred to page 33? Is page 33 from the full book?) Appendix F on fear you posted online also and I am reading this and taking notes.

I intend to continue with the SLA, despite my poor start. I think I can do a lot better, especially if I approach each trading session and practice observing the charts so I know what I am looking at. I think it's too early to give up now.

I am travelling on business this week so may not be able to respond much but I will try my best to check in from time to time.

Thanks again
 
23-Sept-15 — Keeping it Simple

Hi,
Back onshore with internet access now. I wasn't able to access any charts or even this forum last week. I made the most of the technology-free North Sea platform I was marooned on by reading most of Trading in the Zone by Mark Douglas. It's a good book and I think reading it now is good timing for me. I have also been referring back to the SLA pdf to identify where and how I approached things incorrectly and how to avoid doing so in the future.

One of the things I took from Trading in the Zone is that with the correct approach a trader can make the most straightforward and simple trading strategy profitable if they stick to the game plan and play the probabilities. For me this reinforces the quality of the SLA method and how it's written with the beginner in mind, I did not find any conflicting theories or suggestions in either document (although I haven't quite finished Trading in the Zone but doubt there will be any)

So I want to keep things simple in that I am going to follow the SLA as per the guidelines. Only by following the method correctly will I be able to determine if it is for me or if I need to look for something else. So starting afresh I have annotated charts of the FTSE.

All of these charts were reviewed at the same time. Just after 3PM UK time. I fanned the earlier trend lines because I could see that lower lows or higher highs were made that signalled a continuation. I plan to use my annotation for keeping track of this instrument and become more familiar with it. These charts and my comments are as I saw it at 3PM. I haven't had the chance to check what has happened since but will do after this post. I want to be honest as any mistakes I am making will soon become apparent.

Thanks

Weekly — Long term demand line broken and the LOLR has been down since June of this year.

Daily — Price broken to the low side of hinge. Prior to this price appears to me to have ranged between 6250 and 6000 for about 3 weeks. Which is perhaps showing the indecision of market participants. In any case price fell out of the hinge which is in tune with the LOLR on the weekly

Hourly — There was a large down move on the 22nd. I think buyers tried to keep price at 6000 (area circled) but there were to many sellers so it fell lower.
The supply line was broken early in the day of the 23rd, either at or just prior to the open. Using hindsight I see price breached 50% of the preceding down move and continues which perhaps shows strength? Price reaches 6060 which seemed to be in a demand level for the last few weeks. The demand line is broken after this price which may suggest that this level is now a supply level?

15 min — SL created from yesterdays swing-high and fanned twice as although it was broken, lower lows were made which signalled continuation. Third SL was broken in the morning session and a long could have been entered on the retracement of 2nd or 3rd candle after line break. First demand line is broken but price has broken the 50% mark mentioned above which suggests strength. Would a beginner exit here or stay in to see if a higher high is made? My lines were not drawn in real time so by this point I could see it was so I fanned the DL to the next swing low. The second DL broken at the previous demand line as mentioned above so perhaps this means buyers cannot go any higher at this time. I would look for a retracement/reversal here.

5 min — This would be the timeframe used to look for the triggers not seen on the 15 minute. I see a retracement for a short so would enter here. In terms of probability I would conclude the LOLR is in the direction of this trade and it is also near a price level that may now be supply.

I would probably have drawn a SL between the swing high prior to the break and the one just after 3PM. If this line was broken then exit the trade. Please let me know if this is the right approach or not.

As this occurred late in the trading day would it be wiser to simply observe the market instead of trading. Is it better to trade during market hours or do we stick to the rules regardless of the time?
 

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23-Sept-15

Just checked the see what happened afterwards. The proposed SL would have been broken (see green line). Demand line fanned again as price made another higher high (barely). DL broken and SL drawn. I don't see a retracement on this timeframe. SL broken and I'm not sure if the final DL drawn is valid as the slope looks very shallow. I guess volume is lower because most folk are in bed and not trading here now..

Until tomorrow.
 

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As this occurred late in the trading day would it be wiser to simply observe the market instead of trading. Is it better to trade during market hours or do we stick to the rules regardless of the time?

It's always best to observe if one is unsure of what he is doing. There is no inherent advantage to trading. Study and practice come first.

The rules apply regardless of timeframe or bar interval.

As to whether or not this is the best instrument to trade, that's up to you. I haven't characterized it, so I have no suggestions to offer. I see only what I've annotated below.
 

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27-Sept-15

Daily price isn't trending. Friday's increase cancelled/postponed a down trend as SL would have been broken if drawn.

DL broken on hourly, on the look out for a retracement for a short entry on the 15min per SLA rules. Dashed line at 6038.84 is roughly 50% of previous up-move. If price doesn't fall back to this level buyers have strength. If it does fall back here I will observe what happens as this may be a significant support zone. Seems to have been a price of interest in the past (see circles)

15min chart showing retracement. Will wait to see what happens at the open. Probably want price to fall a little prior to entering a short order. Swing high used to anchor the SL.
 

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28-Sep-15

Yesterday's SL was broken early in the day. Seen most clearly on the 15min. Not sure how significant the yellow zone is. I didn't see it yesterday and wouldn't have were it not for the 2nd swing high.

I fanned the SL just before 10am when I noticed price making a lower low. Came back home after work and saw that price had fallen all the way through the 50% marker mentioned yesterday and is now closer to the daily low of last Weds.

Not sure if its good practice to have adjusted the SL the way I did for this timeframe but this is shown in the book so I gave it a go. In addition the TL is supposed to track price not the other way around and the fanned SL didn't track price closely enough, in my opinion.

Strong move down today. I will be looking to see how the market reacts if price gets near the low of 23rd Sept.

I think there is a down trend on the daily, with lower highs and lower lows (although not every day - may have jumped the gun with yesterday assessment). Price tested 6263 on 16 and 17 Sept and failed. Since then it has been falling. I think falling below 6875 would confirm this.

The SLA doesn't say anything about price opening and closing at or near the same price on consecutive days as shown in the oval so I assume its not significant but thought I'd point it out in case [so that I know to ignore it in future...]

Comments welcome :)
 

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It would be helpful if you were to include a time/day axis. Where is "10am"?

Sorry. The interface I am using doesn't seem to show that into on an axis. Is the attached enough info? I fanned the supply line just before 10am. So before the highlighted bar closed.

I'm trying to get the same chart up on investing.com but having a little difficulty with their interface (I can't get it to save the trendiness I plot). Please bear with me.

Thanks
 

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Given that the proper entry was long before the bar with a dot on it, perhaps it would be best to start at the beginning:

[FONT=&quot]The first step is to decide what kind of trader you want to be. This must be addressed in order to determine whether or not the SLA/AMT is an appropriate choice.[/FONT][FONT=&quot][/FONT]


  • [FONT=&quot]What do you want to accomplish with your trading? Is it recreational? Supplementary income? A part-time job? Do you want to make a living at it? Even the greenest of the green knows whether or not he wants to make a living at it, trade only part time, trade for recreation, trade for the action, trade to have something to talk about with other traders (for whatever reason), trade only long enough to earn money to do or buy X.[/FONT]


  • [FONT=&quot]Do you have any idea what sort of trading is most comfortable? Long or intermediate-term trading? Short-term trading? Day-trading? Trend-trading? Scalping (the SLA/AMT is not appropriate for scalping)? (Note here that a short-term trader, for example, does not become a long-term trader just because his stop was hit and he didn't sell; a long-term trader doesn't become a short-term trader because he chickened out and sold too soon. Each of these approaches is selected deliberately and for thoroughly-considered reasons.) How patient are you? How adventurous? Are you a leader or a follower (most people think they're leaders)?[/FONT]
 
Db - I wasn't trying to identify an entry with the bar with the dot. Simply identifying which one was at 10am as requested. I wasn't really trying to identify specific entries with my post. Just make an attempt to assess the market an conclude what I thought was likely to happen next based on my assessment. I know that the objective is to identify entries but if I focus on that too much I will look too hard instead of getting used to tracking the trends/assessing conditions etc.

That said, thanks for posting those questions. I'm sure they will be useful. Answers below.

Given that the proper entry was long before the bar with a dot on it, perhaps it would be best to start at the beginning:

[FONT=&quot]The first step is to decide what kind of trader you want to be. This must be addressed in order to determine whether or not the SLA/AMT is an appropriate choice.[/FONT][FONT=&quot][/FONT]


  • [FONT=&quot]What do you want to accomplish with your trading? Is it recreational? Supplementary income? A part-time job? Do you want to make a living at it? Even the greenest of the green knows whether or not he wants to make a living at it, trade only part time, trade for recreation, trade for the action, trade to have something to talk about with other traders (for whatever reason), trade only long enough to earn money to do or buy X.[/FONT]
My objectives are financial. Initially I would like to generate a supplementary income. Long term I would like to make a living trading yes. I'm not really in it to show off or talk to other traders. In my personal life I only know one and we do not talk very often.

  • [FONT=&quot]Do you have any idea what sort of trading is most comfortable? Long or intermediate-term trading? Short-term trading? Day-trading? Trend-trading? Scalping (the SLA/AMT is not appropriate for scalping)? (Note here that a short-term trader, for example, does not become a long-term trader just because his stop was hit and he didn't sell; a long-term trader doesn't become a short-term trader because he chickened out and sold too soon. Each of these approaches is selected deliberately and for thoroughly-considered reasons.) How patient are you? How adventurous? Are you a leader or a follower (most people think they're leaders)?[/FONT]
I am not sure what I am comfortable with tbh. I'm hoping that will become clearer to me once I have spent time practicing. Initially I had thought short to medium term would suit me but this may not turn out to be the case.

Definitely not patient - although I can be when trying to learn difficult concepts/subjects (I did a technical degree)
On the whole not adventurous.
A mix of both a leader and a follower but lean more toward the follower category.
 
29 Sept

Hourly and 15min posted below. I don't have any time today to look at the wider picture or context. Pretty much only had time to draw the trendiness. I will spend some more time on this tomorrow.

Thanks
 

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Db - I wasn't trying to identify an entry with the bar with the dot. Simply identifying which one was at 10am as requested. I wasn't really trying to identify specific entries with my post. Just make an attempt to assess the market an conclude what I thought was likely to happen next based on my assessment. I know that the objective is to identify entries but if I focus on that too much I will look too hard instead of getting used to tracking the trends/assessing conditions etc.
There is some confusion here. You've been attempting to identify entry points on several occasions:

Third SL was broken in the morning session and a long could have been entered on the retracement of 2nd or 3rd candle after line break.

I see a retracement for a short so would enter here.

DL broken on hourly, on the look out for a retracement for a short entry on the 15min per SLA rules.

The objective is not to identify potential entries unless you are at the point where it is appropriate to do so. If you aren't, entries and trades should be the last things on your mind. Your interest in trading may be subconscious, but it will retard your progress.



Mateus:

Originally Posted by dbphoenix
Given that the proper entry was long before the bar with a dot on it, perhaps it would be best to start at the beginning:

[FONT=&quot]The first step is to decide what kind of trader you want to be. This must be addressed in order to determine whether or not the SLA/AMT is an appropriate choice.[/FONT]


  • [FONT=&quot]What do you want to accomplish with your trading? Is it recreational? Supplementary income? A part-time job? Do you want to make a living at it? Even the greenest of the green knows whether or not he wants to make a living at it, trade only part time, trade for recreation, trade for the action, trade to have something to talk about with other traders (for whatever reason), trade only long enough to earn money to do or buy X.[/FONT]

My objectives are financial. Initially I would like to generate a supplementary income. Long term I would like to make a living trading yes. I'm not really in it to show off or talk to other traders. In my personal life I only know one and we do not talk very often.


  • [FONT=&quot]Do you have any idea what sort of trading is most comfortable? Long or intermediate-term trading? Short-term trading? Day-trading? Trend-trading? Scalping (the SLA/AMT is not appropriate for scalping)? (Note here that a short-term trader, for example, does not become a long-term trader just because his stop was hit and he didn't sell; a long-term trader doesn't become a short-term trader because he chickened out and sold too soon. Each of these approaches is selected deliberately and for thoroughly-considered reasons.) How patient are you? How adventurous? Are you a leader or a follower (most people think they're leaders)?[/FONT]

I am not sure what I am comfortable with tbh. I'm hoping that will become clearer to me once I have spent time practicing. Initially I had thought short to medium term would suit me but this may not turn out to be the case.

What you are comfortable with and what is available to you may conflict. Daytrading is currently not available to you, so whether or not you are comfortable with it is not pertinent. For the time being, no purpose is served by studying anything less than an hourly interval, unless you are simply curious about smaller intervals. Even so, you shouldn't spend more than a few days on them, particularly as you can't observe them.

Definitely not patient - although I can be when trying to learn difficult concepts/subjects (I did a technical degree)

If you are not patient at all, trading may not be for you. Even those who trade tick charts must still be patient, assuming they know what to look for. You're going to have to come to terms with this and not just blow it off thinking it won't matter or that you can deal with it "later".

On the whole not adventurous.

Assuming you master basic SLA, this may present a problem when you go beyond it and have to become more flexible, not to mention potential difficulties with increasing size.

A mix of both a leader and a follower but lean more toward the follower category.

Your bread and butter will most likely be retracements rather than reversals. But even here you must focus on first-class entries, not second and third. The longer you wait for more confirmation (i.e., what other people are doing), the higher will be your risk.

As for the "wider picture", if you don't have time for it, then just set everything aside. This is much too early to start picking up bad habits.

Daily and hourly for now. Nothing further.
 
01-Oct-2015

Tracking the trend. Weekly, Daily, Hourly.
 

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300+ points is a tradeable range by anyone's definition. But note that the activity in the middle of the range, wide as it is, is very choppy. Therefore, what you observe at the extremes may be very different from what you observe in the middle.
 
05-OCT-2015 - Instruments

I have decided to look for an instrument that I have a better understanding of than the FTSE. I have chosen to look at the oil industry. The price of oil has an impact on a lot of the companies in the energy industry for various reasons. I am not an expert by any means but I have a level of understanding and knowledge about the oil industry I do not have with the FTSE.

I will use the oil price as the foundation because the price of oil has a large impact on the price of the companies I will look at. I'm not sure if I will end up trading it though. To begin with I will follow several stocks until I identify one whose price action makes the most sense. In addition, I need to be observing a stock with worthwhile trading opportunities for when the time comes to trade them.

Following multiple instruments is intended to be a short term measure. I would welcome suggestions as to which may be most beneficial to keep up with of those posted.

Coming up today:
Crude Oil
Seadrill
Transocean
National Oilwell Varco

Cheers
 
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