lurkerlurker
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Trading Summary, 22 May 2007
Placeholder for my trading summary.
Please remember that I must do this, assess my trading today, read and understand all the helpful messages and web links I have been given, and reply to messages posted by other traders. This will take some time. I will get back to you all individually - your feedback is important to me. Once again, I am touched and humbled by the level of respect, patience, and tolerance I have been shown.
I am 62 pips down for today - to add insult to injury the market "came back" to a better position than my worst entry of the day, a short which by accident I closed at the top. I've made two trading errors today, an error being defined as something I didn't actually intend to do. Once was selling instead of buying (which was when I attempted to close my 45 short at 55, and instead doubled my position). By the time I realised what I had done, I covered the second position at a 10 pip loss and then just couldn't cover the remaining position, given that my daily loss limit had been exceeded, my mental stop was 55 and the market was now higher than 65, and I had taken an unexpected £10 loss from a mistaken trade. The second error came about when I had a buy market order ticket open. I hit execute instead of cancel, near the top of the move.
Trades follow:
Instruments: DJIA.
Platform: SpreadBetting (CMC)
Trades Executed:
DJIA //CMC don't give statements until after midnight the same day, so this is manually transcribed from MM. If anyone knows of a better way, please mention it - otherwise pardon my slowness.
Buy 13,552 15:08:39
Sell 13,533 15:19:44
Buy 13,544 15:28:56
Sell 13,537 15:51:48
Sell 13,550 16:31:02
Buy 13,350 16:02:13 //I am enriching my broker. When I refine my plan, there is a new rule going in: "no breakeven exits, except when you have moved your stop to breakeven in accordance with rules, and are stopped out". This manual cover (cause: chicken****), plus one later in the day (cause: chicken****), cost me over 50 potential pips.
Buy 13,535 17:02:13
Sell 13,543 17:32:45 //A profit!!
Sell 13,545 17:43:28 //A silly short to take - the beginning of my serious problems - I was under my loss limit for the day before this trade went wrong - bear with me about my definition of wrong
Sell 13,555 17:54:55 //This was an accident - I tried to cover on a market order, sold instead of bought in my haste. Pet peeve: bookies who set "minimum" stop losses - I couldn't set a SL for this price, the best I could get was 57, so I decided to "set doors to manual"
Buy 13,565 17:55:31 //Yes, I'm not too quick on the uptake. Nor did I have the sense to cover my entire position. I just reversed the mistaken trade. At this point, I was out 20 pips more than expected. Panic set in, and I was unable to act.
Buy 13,580 18:50:40 //Accident. For all of you calling bull**** at this point, go back and read my timestamped non edited posts on the Dow 2007 stage about the resistance around 85. I was actually threatening to average down, remember. This is exactly what I was moving to do. My pre-filled-in order ticket needed cancelling so I could place another sell order. Well, I hit process (not back) instead, and bought a high. Sickening.
Sell 13,575 18:58:53
Buy 13,574 19:33:17 //The one that got away. I've attached todays chart anyway (no indicators though). If anyone can find any reason (and there certainly isn't one in my published plan) to cover a short at this price, I'd be eternally grateful. I'm chalking it up to fear / panic / general lack of confidence in my trades after such a bad day. I'll take responsibility for intentionally covering though, because that was what I did.
Net result: -62 pips.
Each trade, step by step (recollection aided by scribbled notes, and postings on Dow 2007 thread)
Trade One
First off, I missed long signals because of a misguided "no trades before 3pm (London)" rule. It has been suggested that this is silly. Modification to strategy: I will not trade the open, however the rest is discretionary. I am permitted to trade at 2:40 (or a little before) if I see an entry.
First trade of the day, a misguided long from 52 (no clear entry signal). I say it best here, at 15:20.
I then observe
This set a further negative thought pattern of "needing to make X pips". Giving myself an unrealistic target reinforced negative self talk that I would end the day down.
Trade Two
Long from 13,544. The entry was by the book. The exit, however, should have been at 41 (DEMA cross), not later on when I finally realised it wasn't going anywhere. Account down £26 for the day. Feeling pretty gloomy. Strangely enough, I am finding myself worrying about a loss of an insignificant sum. I think this is more to do with what failure at trading represents, rather than the actual loss. I am sure if I had lost 26 pence with FinSpreads I would still feel gloomy. I need to work on that. Since this sum was within my daily loss limit (£30), I was quite prepared to lose it.
Trade Three
Good short entry at 50. Near enough strong resistance, and I waited for confirmation. See that little gravestone doji on the attached 1 minute, four bars later? The top of this is what scared me into covering at a break even. Consider how risk adverse I had become by this point. Refusal to accept the possibility of another loss. There was no other reason to exit that trade. For fun, the bottom of that move was 25, and it was obvious the move was over at 32. Lets call that +18 left on the table due to the above mistake. As an aside, I believe strongly in assessing the consequences of a bad decision, as well as the decision itself. We have a fixed quantity for losing trades. For pips left on the table for reasons such as these, I'll pencil in an "opportunity cost", if you will, in the amount that would have been gained if I had followed the system. Again, the chart is attached, and those of you with charting systems can stick the DEMAs on and see the system exit at 32.
Trade Four
Long from 535. Entry by the book, according to the system. Firewalker has pointed out that there were numerous long signals at this price during the day. This was one I actually took! I talked in my strategy post earlier about defining zones, and I think that should be repeated.
I should have been fully aware that another buy signal at this price is significant. I should have further realised the market was offering me another change to capitalise on what had been a missed opportunity. I exited this trade at 17:32. See the 1 min candle? It looked a wee bit bearish to me, and I was anxious to lock in my first profit of the day. Note no signal was given to exit (according to my system).
Trade Five
This is where things went badly wrong. Comments above in trade summary say it all. I had intended to stop this at -10, and when that went pear shaped, I intended to hold, shorting again around 80 if a sell signal was given. Usually I dont add to a losing position, but as my stop was missed (see above) and I had an additional expense of an erroneous unintended trade, I thought I would make an exception. Instead I covered instead of cancelling the buy ticket. Two very costly mistakes
Trade SIx
This one had the potential to make everything right. Textbook short, and I think I should get some kudos for calling it correctly, if that sort of thing counts for anything. My previous experiences didn't stop me from jumping on board this low risk, high upside trade. I had calculated risk / reward as 2:1. Target was 45, stop was 90. I was good to go. Then I chickened out on a minor pullback, for +1, because I wanted to call it a day.
Referring to firewalkers admonitions against overtrading ("consider what you would have if you held X position as you were supposed to), I'm pencilling in a missed profit of 35, not including potential pyramiding sometime after 2m, 3m, 5m, 10m, 15m and head and shoulders confirmations.
Okay, so what do I take from this. First, the following rules of my plan were broken
In short, there are two problems here. Failure to stick to the plan and follow the rules is one. All but one losing trade (if I am counting right) was entered or exited on a rule break. Second, the flat or winning trades would have been much better if I had obeyed the exit rules. The second problem relates to the frequency of trading. I can see three good trades the system made today. The short from 13550 at 16:30 ish. That held until 32 (system exit) would have been good. The second good trade was the second opportunity to go long from 35. The third trade was obviously the short from 75. Those three trades had especially strong entry signals, and did not trigger a genuine exit signal until significant profits (>+15) had accrued. When I covered these trades, I did so prematurely without adequate cause.
This post is rather long, and I believe it is necessary to stop it somewhere. This is the end of my daily review. To follow; replies to those who have commented, followed by a revised strategy which I aim to adhere to without question.
*The massive profits that would have been generated by this move (no loss for the 45 short as the market came back, plus the difference between 80 and 20, plus the difference between 45 and 20, for a total of +85) in no way justify this attempt.
Placeholder for my trading summary.
Please remember that I must do this, assess my trading today, read and understand all the helpful messages and web links I have been given, and reply to messages posted by other traders. This will take some time. I will get back to you all individually - your feedback is important to me. Once again, I am touched and humbled by the level of respect, patience, and tolerance I have been shown.
I am 62 pips down for today - to add insult to injury the market "came back" to a better position than my worst entry of the day, a short which by accident I closed at the top. I've made two trading errors today, an error being defined as something I didn't actually intend to do. Once was selling instead of buying (which was when I attempted to close my 45 short at 55, and instead doubled my position). By the time I realised what I had done, I covered the second position at a 10 pip loss and then just couldn't cover the remaining position, given that my daily loss limit had been exceeded, my mental stop was 55 and the market was now higher than 65, and I had taken an unexpected £10 loss from a mistaken trade. The second error came about when I had a buy market order ticket open. I hit execute instead of cancel, near the top of the move.
Trades follow:
Instruments: DJIA.
Platform: SpreadBetting (CMC)
Trades Executed:
DJIA //CMC don't give statements until after midnight the same day, so this is manually transcribed from MM. If anyone knows of a better way, please mention it - otherwise pardon my slowness.
Buy 13,552 15:08:39
Sell 13,533 15:19:44
Buy 13,544 15:28:56
Sell 13,537 15:51:48
Sell 13,550 16:31:02
Buy 13,350 16:02:13 //I am enriching my broker. When I refine my plan, there is a new rule going in: "no breakeven exits, except when you have moved your stop to breakeven in accordance with rules, and are stopped out". This manual cover (cause: chicken****), plus one later in the day (cause: chicken****), cost me over 50 potential pips.
Buy 13,535 17:02:13
Sell 13,543 17:32:45 //A profit!!
Sell 13,545 17:43:28 //A silly short to take - the beginning of my serious problems - I was under my loss limit for the day before this trade went wrong - bear with me about my definition of wrong
Sell 13,555 17:54:55 //This was an accident - I tried to cover on a market order, sold instead of bought in my haste. Pet peeve: bookies who set "minimum" stop losses - I couldn't set a SL for this price, the best I could get was 57, so I decided to "set doors to manual"
Buy 13,565 17:55:31 //Yes, I'm not too quick on the uptake. Nor did I have the sense to cover my entire position. I just reversed the mistaken trade. At this point, I was out 20 pips more than expected. Panic set in, and I was unable to act.
Buy 13,580 18:50:40 //Accident. For all of you calling bull**** at this point, go back and read my timestamped non edited posts on the Dow 2007 stage about the resistance around 85. I was actually threatening to average down, remember. This is exactly what I was moving to do. My pre-filled-in order ticket needed cancelling so I could place another sell order. Well, I hit process (not back) instead, and bought a high. Sickening.
Sell 13,575 18:58:53
Buy 13,574 19:33:17 //The one that got away. I've attached todays chart anyway (no indicators though). If anyone can find any reason (and there certainly isn't one in my published plan) to cover a short at this price, I'd be eternally grateful. I'm chalking it up to fear / panic / general lack of confidence in my trades after such a bad day. I'll take responsibility for intentionally covering though, because that was what I did.
Net result: -62 pips.
Each trade, step by step (recollection aided by scribbled notes, and postings on Dow 2007 thread)
Trade One
First off, I missed long signals because of a misguided "no trades before 3pm (London)" rule. It has been suggested that this is silly. Modification to strategy: I will not trade the open, however the rest is discretionary. I am permitted to trade at 2:40 (or a little before) if I see an entry.
First trade of the day, a misguided long from 52 (no clear entry signal). I say it best here, at 15:20.
I then observe
This set a further negative thought pattern of "needing to make X pips". Giving myself an unrealistic target reinforced negative self talk that I would end the day down.
Trade Two
Long from 13,544. The entry was by the book. The exit, however, should have been at 41 (DEMA cross), not later on when I finally realised it wasn't going anywhere. Account down £26 for the day. Feeling pretty gloomy. Strangely enough, I am finding myself worrying about a loss of an insignificant sum. I think this is more to do with what failure at trading represents, rather than the actual loss. I am sure if I had lost 26 pence with FinSpreads I would still feel gloomy. I need to work on that. Since this sum was within my daily loss limit (£30), I was quite prepared to lose it.
Trade Three
Good short entry at 50. Near enough strong resistance, and I waited for confirmation. See that little gravestone doji on the attached 1 minute, four bars later? The top of this is what scared me into covering at a break even. Consider how risk adverse I had become by this point. Refusal to accept the possibility of another loss. There was no other reason to exit that trade. For fun, the bottom of that move was 25, and it was obvious the move was over at 32. Lets call that +18 left on the table due to the above mistake. As an aside, I believe strongly in assessing the consequences of a bad decision, as well as the decision itself. We have a fixed quantity for losing trades. For pips left on the table for reasons such as these, I'll pencil in an "opportunity cost", if you will, in the amount that would have been gained if I had followed the system. Again, the chart is attached, and those of you with charting systems can stick the DEMAs on and see the system exit at 32.
Trade Four
Long from 535. Entry by the book, according to the system. Firewalker has pointed out that there were numerous long signals at this price during the day. This was one I actually took! I talked in my strategy post earlier about defining zones, and I think that should be repeated.
I should have been fully aware that another buy signal at this price is significant. I should have further realised the market was offering me another change to capitalise on what had been a missed opportunity. I exited this trade at 17:32. See the 1 min candle? It looked a wee bit bearish to me, and I was anxious to lock in my first profit of the day. Note no signal was given to exit (according to my system).
Trade Five
This is where things went badly wrong. Comments above in trade summary say it all. I had intended to stop this at -10, and when that went pear shaped, I intended to hold, shorting again around 80 if a sell signal was given. Usually I dont add to a losing position, but as my stop was missed (see above) and I had an additional expense of an erroneous unintended trade, I thought I would make an exception. Instead I covered instead of cancelling the buy ticket. Two very costly mistakes
Trade SIx
This one had the potential to make everything right. Textbook short, and I think I should get some kudos for calling it correctly, if that sort of thing counts for anything. My previous experiences didn't stop me from jumping on board this low risk, high upside trade. I had calculated risk / reward as 2:1. Target was 45, stop was 90. I was good to go. Then I chickened out on a minor pullback, for +1, because I wanted to call it a day.
Referring to firewalkers admonitions against overtrading ("consider what you would have if you held X position as you were supposed to), I'm pencilling in a missed profit of 35, not including potential pyramiding sometime after 2m, 3m, 5m, 10m, 15m and head and shoulders confirmations.
Okay, so what do I take from this. First, the following rules of my plan were broken
- Maximum daily loss (accidental, but broken, and I continued to trade)
- Maximum loss per trade of 10 pips (broken by first trade, subsequent trades)
- Limit overtrading - if losing, limit to three trades
- Exit rules (I frequently exited for emotional reasons: fear, greed, indecision, lack of confidence, panic)
- Being aware of price "zones"
- Averaging down - I had intended to do this at 80, and only a mistake stopped me*
In short, there are two problems here. Failure to stick to the plan and follow the rules is one. All but one losing trade (if I am counting right) was entered or exited on a rule break. Second, the flat or winning trades would have been much better if I had obeyed the exit rules. The second problem relates to the frequency of trading. I can see three good trades the system made today. The short from 13550 at 16:30 ish. That held until 32 (system exit) would have been good. The second good trade was the second opportunity to go long from 35. The third trade was obviously the short from 75. Those three trades had especially strong entry signals, and did not trigger a genuine exit signal until significant profits (>+15) had accrued. When I covered these trades, I did so prematurely without adequate cause.
This post is rather long, and I believe it is necessary to stop it somewhere. This is the end of my daily review. To follow; replies to those who have commented, followed by a revised strategy which I aim to adhere to without question.
*The massive profits that would have been generated by this move (no loss for the 45 short as the market came back, plus the difference between 80 and 20, plus the difference between 45 and 20, for a total of +85) in no way justify this attempt.
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. The ring is dominating you and if you don't throw your obsession into the fire you will wither away. 
