Nowler's Trading Journal

[Fill_Or_Kill]

and blame this on the rise of the machines, algos and "location" read ping time right?

Depends on your interpretation. You had a lot of people making a lot of money who had no real intelligent edge - the CME pit was a license to frontrun in its heyday and some of the old guys you meet from those days are about as unqualified as it comes. They eventually got shut down by smarter greedier people. I guess it's a pure form of merit based capitalism, and that can be ugly, devious etc.

Markets were seen as gambling... something unworthy of so called "decent" people for many years. They still are in many parts of Asia. Now going the Oxbridge quant PhD route is considered a high career.

 

[Quantt]

Not necessarily, I mean these days if you're trading in a high pressure environment, elevated heart rate, cortisol levels through the roof, uncertain - unlikely you have a long term edge. The only people I know who do this in the modern day and making money are trading penny equities. Everyone else who matters is either a PM (eurgh) or a quant. The sweaty manual daytrader cranking out 100 trades a day and finishing up each week is a modern day myth, ridden on the back of when it used to be possible to spread trade Bunds and 10 yrs post LIFFE many times a day. Or the SOES bandits if you're American. Daytrading outrights for a weekly profit - something rarer than hen's teeth.

Riding orders has a certain adrenaline kick to it because it's like getting away with free cash. You can't do that any more really so you shouldn't be getting rushes of adrenaline. Every edge has to be a practised one and should be tedious.

To say this industry is done for your average Joe to make his mark is understating it and I'm very sorry to see it.

Great post, another golden nugget!

Also after a year of trading your plan, you should get immune to excitement - winning or loosing... the only thing that would get me excited today is if there is a halt and someone offers to by the company I am in, offering 2-3 or why not 10 times the current price, but yet to happen after so many ears of trading...

 

[Brumby]

trade plan?...what do you mean by this? I am not a purely systematic trader. In fact, if I was made become a purely systematic trader then I would probably pack in all in. That would bore the life out of me! And for me to put exceptional effort into something, I must enjoy it.

Perhaps my understanding of this is a little off, but when I say a purely systematic trader what I am referring to is one of these people that has 1 setup and then aims to find that 1 set up in the market. If that set up isn't found then they do not trade. While if they are happy to do this, then more power to them, but I have absolutely zero intentions of pigeon holing myself like that. I come from a construction background and not once did we ever turn up to a job with 1 tool. I want to be able to look at a handful of charts and be able to identify different set ups, all of which I am experienced in using.

My original question to you on trade plan has nothing to do with discretionary vs systematic trading. So please don't go there.

You previously posted that your trade was based on some price action. My original question to you was simple and to the point. What price action did you see that became the basis of your trade decision? So what was it? How can you perform an objective post trade evaluation without referencing to the original basis of the trade? It is basic logic.

 

[Nowler]

My original question to you on trade plan has nothing to do with discretionary vs systematic trading. So please don't go there.

You previously posted that your trade was based on some price action. My original question to you was simple and to the point. What price action did you see that became the basis of your trade decision? So what was it? How can you perform an objective post trade evaluation without referencing to the original basis of the trade? It is basic logic.

I retract my use of the term price action. Maybe I am using it wrong...


I was expecting the downtrend to continue.
I simply wasn't expecting the price to make a higher high (1hr chart)... I believed the pressure was ultimately with the USD (Macro) but when it didn't really move and the Aussie economic release was coming I reanalysed and moved my stop behind the 38% fib level in order to brace for a potential move in the wrong direction as a result of the news. Even with a bit of a move against me I thought it would turn back without hitting my stop. My take profit target was the last low as I thought if anything, it would at least test that area again

I don't remember what I was thinking in regards to the MACD...I may not have even used it... I can't remember.
I clearly wasnt using it if I missed the divergence actually...
I probably also jumped into the trade too early. After such a surge for the USD last week I should have been expecting a breather.

I felt the USD was in control and I was just looking for an entry point where I could easily quantify my risk. There I was on for a 2+:1 trade and if it had have broke beyond it then I would have been looking to sell the AUD again.

Verdict: Bad analysis

EDIT: Sorry for so many edits. I was leaving out importing stuff

 

[Brumby]

I was expecting the downtrend to continue.

What was the basis of your expectation of a trend continuation?

I simply wasn't expecting the price to make a higher high (1hr chart)...

What was the basis of such an expectation? Remember the trend is your friend until it ends. In trading, anything can happen.

The reason I am asking is to understand whether your expectation is fact based or simply an opinion. If you understood price action, there were signs that demand and supply was shifting.

 

[Nowler]

What was the basis of your expectation of a trend continuation?



What was the basis of such an expectation? Remember the trend is your friend until it ends. In trading, anything can happen.

The reason I am asking is to understand whether your expectation is fact based or simply an opinion. If you understood price action, there were signs that demand and supply was shifting.

Opinion based I guess...
My trend continuation expectation was backed by the mantra that "the trend is your friend". I realise that it stops but with the macro USD pressure I didn't see it stopping yet. I was also going under the impression of the AUD being bearish (my belief of the sentiment). That was enough for me to take the trade.

I missed that MACD divergence though... that's very disappointing. If I had have seen that I would not have proceeded.

I dont understand price action then...

 

[Brumby]

Market sentiment is not static but dynamic in nature. It shifts as new information flow into the market place. You need to constantly digest new news and interpret how the market is adusting and reacting to new information.

[/IMG]

 

[Nowler]

Market sentiment is not static but dynamic in nature. It shifts as new information flow into the market place. You need to constantly digest new news and interpret how the market is adusting and reacting to new information.

Yep, I'll keep gathering the fundamentals.
I need to learn more on price action also... I understand a little on reading candles but not enough.

That AUD USD was the only trade I carried out this week. I have plenty of trading stuff to think about and work out, so I'll probably just wait till next week to trade again. In the meantime I will think over some of the things said to me here and decide what to do with it.

I watched about 4 trading/IB movies and a documentary in the last 3 days The movies were good to ok but the documentary on the 2008 crash was very interesting. I never really thought much into it when it happened but now I know much more about it. I also found out that I was born 4 months before the 1987 crash.

I'll update the verdict of month 4's target and set out month 5's at some point after the FX market closes.

 

[Nowler]

Anyone have any suggestions on exceptional price action educational tools? I would prefer if I didn't have to read, or should I say, solely read. I learn better from video with audio aids but will of course read as much as I have too.

Preferably free but willing to pay for it if it's cheap.

Thanks in advance

Ps: If you have suggestions on exceptional training tools other than price action then I'd live to hear it too

 

[dbphoenix]

Anyone have any suggestions on exceptional price action educational tools? I would prefer if I didn't have to read, or should I say, solely read. I learn better from video with audio aids but will of course read as much as I have too.

Preferably free but willing to pay for it if it's cheap.

Thanks in advance

Depends on what you mean by "price action". If you're including indicators, what is commonly referred to as "support and resistance", patterns (candlestick or otherwise), or any other tack-ons beyond price prints and volume, then you may want to look at the thread underneath my name. Whether or not it's "exceptional" I'll leave to others. But at least it provides an accurate description and explanation of exactly what price action is.

Video? No. But it's free.

 

[Nowler]

Depends on what you mean by "price action". If you're including indicators, what is commonly referred to as "support and resistance", patterns (candlestick or otherwise), or any other tack-ons beyond price prints and volume, then you may want to look at the thread underneath my name. Whether or not it's "exceptional" I'll leave to others. But at least it provides an accurate description and explanation of exactly what price action is.

Video? No. But it's free.

Cheers mate, I'll have a look.

I am lacking an accurate understanding of quite a few things so basically I want develop each dimension to level of high proficiency. Why I said "exceptional" is because I can find plenty of stuff myself but I was attempting to cut my workload by asking for stuff deemed to be the cream of the crop when it comes to educational/tutorial tools.

No video but free is fine :cheesy:

 

[dbphoenix]

Incidentally, don't dismiss what you're receiving from Brumby. It's worth a great deal of money and should not be valued less because it's free.

 

[Nowler]

Incidentally, don't dismiss what you're receiving from Brumby. It's worth a great deal of money and should not be valued less because it's free.

Of course

 

[Nowler]

Erm... There's no way of saying this without looking like a fool...

I didn't realise that I had an entry order to go short on the CAD SGD and it dragged me into the market today.
I let it run since the stop and take profit were in place and from eyeing up the chart in a support and resistance sense, the target seems reasonable.

I put this on Monday but forgot to put an expiry on the order. The spread was also elevated too. In fact, the higher than usual spread is actually the reason my entry was triggered. It went against me a bit but is in profit now. I'll keep an eye on it for the next hour or 2 and then close it out regardless.

Lesson learned: Ensure expiry is set when placing entry order! Routinely checking the orders section would help prevent such a silly mistake.

Even if this makes a profit, it was still an error on my behalf.

 

[Fill_Or_Kill]

Erm... There's no way of saying this without looking like a fool...

I didn't realise that I had an entry order to go short on the CAD SGD and it dragged me into the market today.
I let it run since the stop and take profit were in place and from eyeing up the chart in a support and resistance sense, the target seems reasonable.

I put this on Monday but forgot to put an expiry on the order. The spread was also elevated too. In fact, the higher than usual spread is actually the reason my entry was triggered. It went against me a bit but is in profit now. I'll keep an eye on it for the next hour or 2 and then close it out regardless.

Lesson learned: Ensure expiry is set when placing entry order! Routinely checking the orders section would help prevent such a silly mistake.

Even if this makes a profit, it was still an error on my behalf.

Do Oanda offer institutional stop triggers? If this happens to you semi regularly, you might want to ask them if they do "buy stop if bid" and "sell stop if ask" type orders. That way you won't have a trade triggered on a widened spread.

Edit - to add to this I'm sure this little "retail scam" has been fleecing people for many years and it's very telling that it's the default stop method for many retail brokers. If you run simulations of the number of orders you never should have been in due to spread popping and apply your average stop loss to said fills, you will see it's a huge cost and always favours the other side because obviously that position will never run in your favour if actionable price never actually passes your stop entry.

Edit 2 - probably one of the reasons the EURUSD is so favoured because the odds of this happening on that pair are far smaller.

 

[Nowler]

I don't see anything about it anyway but I will ask.
This has happened to me a few times. I only recently started to factor this in when setting my entries, stops and take profits.

The market did eventually go my way but I had that order there after a low that if broken would fall further. I was lucky here because once the spread dragged me in it immediately went against me. I closed out the trade with 1% profit.

Note: this was actually on my sub account, not the main one of this journal.

 

[Brumby]

Erm... There's no way of saying this without looking like a fool...

I didn't realise that I had an entry order to go short on the CAD SGD and it dragged me into the market today.
I let it run since the stop and take profit were in place and from eyeing up the chart in a support and resistance sense, the target seems reasonable.

I put this on Monday but forgot to put an expiry on the order. The spread was also elevated too. In fact, the higher than usual spread is actually the reason my entry was triggered. It went against me a bit but is in profit now. I'll keep an eye on it for the next hour or 2 and then close it out regardless.

Lesson learned: Ensure expiry is set when placing entry order! Routinely checking the orders section would help prevent such a silly mistake.

Even if this makes a profit, it was still an error on my behalf.

I already alerted you earlier in the week that the Singapore Reserve Bank was making an announcement this week as you said you were planning to trade CADSGD. If you bothered to research you would have found out that the Reserve Bank was making an important statement. Typically such events invite widening spread because risk is enhanced during news event.

 

[Nowler]

I already alerted you earlier in the week that the Singapore Reserve Bank was making an announcement this week as you said you were planning to trade CADSGD. If you bothered to research you would have found out that the Reserve Bank was making an important statement. Typically such events invite widening spread because risk is enhanced during news event.

You sure did Good call

I didn't realise that the order was still active. I normally have a 1-2 day expiry on my entry orders as standard for longer-term trades or 1-2 hours for the shorter term ones. This one must have been 1 week instead of 1 day.
I was finished executing trades 2 days ago as I wanted to focus on others aspects of becoming a trader.

 

[Nowler]

Month 5 Target:
- To increase my capital risk size per trade (mini account of €20) and push the boundaries in order to see what is possible.

Verdict: Successful - Kinda difficult to fail to risk more per trade Increasing the trade size to 4% per trade was interesting and I do see room in my trading for putting so much on a trade but perhaps scaling it on over 2 trades is smarter. When I put 4% on a trade off-the-bat then if it goes against me it causes a bigger drawdown. Likewise, when it goes with me I gain more winnings.

If I want to trade this account to build up a nice record to show potential employers at prop firms or whatnot, then I really don't want to have sharp dips in equity. To combat this, I will put on 2% of my margin on a trade and then if the trade allows, I will put another 2% on.


Month 6 Target:
- Reduce drawdown. Drop back to no more than 2% per trade (an additional 2% MAX if the market invites it). Drawdown is currently 51.08%...by the end of the next 4 weeks I would like it to be below 45% (soft target of course)

- Read some of the materials suggested to me in this journal - Technical Analysis for the Trade Professionals and dbphoenix's thread on "Trading Price"


Since I started this journal 2 weeks and 3 days ago, I am up 3.7%

 

[Brumby]

Month 5 Target:
- Read some of the materials suggested to me in this journal - Technical Analysis for the Trade Professionals and dbphoenix's thread on "Trading Price"

When you are reading Constance Brown's book, I suggest you also read the chapter on Elliott Wave. In that chapter she mentions she is dyslexic and how she deals with it in trading (Page 288 of the second edition).