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PositiveDev's trading journey


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With regard to trading away, aside from connectivity, would this still not have worked if you had stuck to buy/sell targets?

 

I don't think I would have started playing around with my indicator, at the moment if I get bored I watch CNBC for a while during trading. I wouldn't have lost money on that non-trade first trade. Don't tell the girlfriend but the only reason I was in Starbucks was because my girlfriend insisted I come with her to meet some friends that day so I kicked off in Starbucks instead of staying at home and coming after. Very pissed off with her (but I didn't say anything).

 

 

Today was better;

 

Had a better today today, thankfully.

 

Buy signal at 18:25

Screenshot2011-03-15at193531.png

 

 

Bought at 18:25, filled at 2254.

 

E-mini NASDAQ buy and sell back points

Screenshot2011-03-15at193503.png

 

I sold at 19:23, filled at 2266. Very happy to score 12 points but not so happy to see the market continue higher...especially as closing early was not part of my new plan, but I didn't want to see the market come back and hit my 8 point trail. Losing money on the last few trades has not been pleasant but I suppose I wanted to make up for that. The last few trades has made me think that perhaps I shouldn't be swinging for the big scores on each trade, my 8 point trail stop can easily get hit while the market sweeps up and down and I can be losing points where I should be gaining them.

 

The markets back at 2263.50 as I write this so maybe that was a good call...

 

Edit - There was also a sell signal at 19:50 (GMT) however for me that is ten minutes before the close, so signal was not taken.

 

 

Also I found a great series of short films about pit traders - Floored, watched at the weekend, very interesting stuff.

 

The full set of films can be found here http://www.babelgum.com/clips/5002880

 

Edit 2 - Now just absolutely kicking myself for not taking the last sell signal;

 

Screenshot2011-03-15at201846.png

 

 

The market was at 2264 at 19:50 then dropped 20 points within 20 minutes - absolutely maddening.

 

 

The reason I didn't take the last signal is because I have a rule not to take a position into the close, that's just down to inexperience and fear really. It's not like the market ceases to be as it does at the weekend close. I can't believe that, even if I'd traded it and held until the close it would have been at least another 8 points.

 

Would have, could have, should have.

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Sell signal at 14:10 today

Screenshot2011-03-16at142645.png

 

 

Ok, I was away from the markets earlier today, I got home at 14:20, spotted the signal and went short E-Mini NASDAQ at 14:26, filled at 2245.50. It just so happened that had I been around at the time of the signal I would have gotten filled at 2244.50 so that's good that I got in at a slightly better price. I took a picture of screen shortly thereafter as per above. Now I refreshed my indicator charts as the trade progressed. The market then rallied to 2249.50 however I didn't get stopped out as I'm now using a 4.25 point stop. But on refreshing my charts I then see this;

 

Screenshot2011-03-16at160123.png

 

 

You can see that I then saw a skewed double top, the second top of the double top was higher than the initial top. There is slightly more data on this chart than was there at the time, I'm just showing this to explain how the signal changed upon chart refresh. It should not do this as it's a historic data point. I then decided it couldn't be trusted as a concrete signal so decided to wait until the market came down to a better price, I left a buy order in at 2246, and got filled. End of trade. Then in the next 15 minutes;

 

 

E-mini NASDAQ sell and buy back points

 

Screenshot2011-03-16at171005.png

 

The market initially fell to 2222.50 by 15:02, rallied up to 2235.75, then back down as low as 2212.25. I'm confident that had I left the trade on I would have gotten out 20 points to the good on the way down to 2222.50.

 

There are different ways to look at this. Firstly, I ought to have been available to see the signal develop however I had to be at an appointment earlier so wasn't available to trade from the open. Had I been around at 14:10 I would have been filled at 2244.50, then stopped out at 2248.75 prior to the sharp down move. So it was fortunate that didn't happen. On the flipside I was into the trade with pretty good timing but exited due to an issue with the signal, when it could have been an easy 20 point score.

 

On balance what I take from this is further encouragement, as I am seeing the possibilities in this business. Yes sometimes things won't work as planned but it's clear to see there are profits to be made if I continue along this path.

 

I did have a data issue previously and decided I would refresh the chart to see if the signal remained, it didn't so I exited. Even now if I refresh the chart sometimes the signal appears, other times not. I emailed ThinkorSwim about this when it first occured. I have not yet heard anything back from them.

 

On the plus side the amount lost was minimal.

 

On the negative side I should have made money.

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Today has been a very tough nut for me to swallow. I've lost discipline and as a result lost out bigtime.

 

There was a sell signal on my indicator working on QQQQ. What I do throughout the day is monitor my indicator working on SPY, QQQQ, DIA and IWM. If I get a signal on any I take the trade but trade it using E-mini NASDAQ. As the markets are closely correlated I just use the E-mini NASDAQ to trade the signal. That's how it's supposed to work.

 

The sell signal was at 17:10 using my indicator working on QQQQ;

 

Screenshot2011-03-16at192204.png

 

Just to give a backdrop to today I have been closely keeping tabs on the situation on Japan and was well aware the market could take a hit to the downside and therefore had been particularly on the lookout for sell signals.

 

So the sell signal was at 17:10, at the time I was reading a forum (not this one), I came back to my charts 2 minutes after the signal and saw that the E-mini NASDAQ market was at 2216 when it had been at 2219 at the point the signal was generated. Due to this I chose not to take the trade.

 

I then watched as the market went all the way down to 2186.50 before coming back up. Then there was a buy signal on my indicator working on IWM at 18:25;

 

Screenshot2011-03-16at192341-1.png

 

 

Due to feeling pretty destroyed having missed the signal at 17:10 and also being aware the major risk to the market at present is to the downside, I also didn't take the signal.

 

Here are the points where I should have firstly sold to take the first trade at 17:10, and bought to take the second

trade at 18:25.

 

Screenshot2011-03-16at193135.png

 

I was feeling dejected at the loss of discipline here. Today should have been a very big day for me and it wasn't. The one at 17:10 was a home run for the taking, the one at 18:25 would have also yielded potentially 20 points (that's when I'd have closed it).

 

During the time I've have been completing this journal I've noticed that for me it's much more painful to see an opportunity loss like today than to have a typical trade loss from a stopped out trade. When I see a day like today I can see the potential I have and although what happened is embarrassing to admit, it makes me believe that I have the potential within me to become a good trader.

 

Days like today make me want to trade even more. I think I will write down a list of rules and reminders and keep it in front of my workstation so I stay focussed and don't get distracted again like this.

 

One day I will no doubt look back at this and be able to laugh.

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Well today's market wasn't very interesting for me. I was watching my indicator like a hawk with CNBC on, nothing to do and not really able to do much else as I had to remain focused.

 

It became clear towards the close there would be nothing for me to do so I decided to take a look at the results of my time trading futures so far;

 

 

Screenshot2011-03-17at203322.png

 

The results are bittersweet, gut wrenching and very encouraging.

 

Total gain so far = 1.5 points (although really a loss due to commissions)

 

The bittersweet part is that had I started with the 8 point trailing stop, took all trade signals that were offered to me by my own indicator, and left the trades alone to be stopped out by the trailing stop the total gain so far would be 110.75 NASDAQ points. I went back and checked and checked again because I couldn't quite believe it first time round.

 

The gut wrenching part is that of the 110.75 points, 57.25 of those should have come yesterday, they were offered on a silver platter to me yesterday but as already described, yesterday did not go to plan. Yesterday was a very unusual day I think, even with that stripped out the potential gain was 53.5. I don't know whether that would be considered good or not but to me that's very good.

 

This is very encouraging for me as I can see that if I am disciplined, take all signals, and see out trades to their proper conclusion with the 8 point trail stop then there is clearly money to be made here.

 

There were two drawdown periods, each 5 trades in length, each 16.75 points. If the drawdown periods continue to be interspersed with big points gains as has happened so far then the sensible approach appears to be to continue to use the same indicator, with the same rules whilst exercising proper discipline and diligence to stay on track.

 

A 4.25 point initial stop combined with an 8 point trailing stop as part of an OCO order when each trade is initiated. Discretion only to be used when a trade is open and the market close is approaching or in very exceptional circumstances. If I get a signal then I take it, if it changes due to data issues I will remain with it and not pre-judge the outcome as I did before.

 

It's a relatively simple strategy but I quite like it that way and although it's a small sample of trades it might be viable longer term, only time will tell.

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Buy signal at 14:35 today on my indicator working on SPY

Screenshot2011-03-18at143435.png

 

Filled at 2225.50

 

E-mini NASDAQ entry point

Screenshot2011-03-18at144929.png

 

A decent start to the trade with the market heading up but....

 

Screenshot2011-03-18at152710.png

 

The market peaked at 2233.50 and came back down to hit my trail stop at 2225.50, filled at 2225, for a loss of 0.5. Not too sure why I got filled at 2225. Will need to take a look later. My trail stop trails the last price (rather than bid or ask) so perhaps the market just moved down fast through my stop before the order could get routed to the exchange and filled at 2225.50...?

 

I have to expect this trade to happen if I'm playing the long ball game, I'm looking for a few trades that provide a lot of profits rather than a lot of trades that provide few profits. It seems counter-intuitive, I think a lot of people would be looking for a high win/loss ratio but certainly based on my admittedly small sample of trades it appears to be better to focus on the result of a set of trades in terms of profitability rather than what % of them were winners or not. I would think that drawdown periods are the risk inherent in the type of strategy I'm using.

 

Something else I'm also doing now is putting the private setting on my platform so I am unable to see my account balance. What I noticed is that during trades my eyes would gravitate to the account balance, watching it head up and down, ultimately pointless and not at all relevant on an individual trade. Made me relax more during the trade, so definitely worth doing.

 

Another thought that I had that makes me more relaxed about trading is - If it doesn't work out, it isn't going to change my lifestyle. Whereas if it does work out it will change my lifestyle in a big way. I think it must be incredibly liberating to earn a living through trading. It's not the money per se, it's the freedom and choice that it enables you with - that's what I am seeking through trading.

 

 

I also recently read;

0471443069.jpg

 

 

Victor Niederhoffer was one of the top hedge fund managers up until the Asian crisis in 1997, he was heavily long Thai bank stocks, and they cratered (Also a world champion squash player - an interesting guy). There's a lot of interesting material in the book, one of his suggestions was to always enter orders a few ticks away from the current market price, theory being that you will most times invariably be filled however over time this mounts up. I think it's maybe more relevant for a longer term strategy such as a hedge fund might employ but I may take a look to see what impact it would have had on my trades if orders were sent 0.5 points away from market price when my indicator signalled for me to get into a trade..............................that's for a day when I have some spare time.

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It's quiet for me on the indicator front right now for the indices so I took a look at my DBDT indicator working on Crude oil. There was a sell signal at 15:00 (GMT) that was just after the high of the day. I only spotted this 10 minutes ago - it's 17:03 (GMT) right now. [i write my blog throughout the day]. A clear double top in my indicator is a sell signal.

 

DBDT indicator working on Crude oil (USO used as a proxy for WTIC futures as I am unable to use my indicator on actual Futures)

Screenshot2011-03-18at165543.png

 

Sell signal point on E-Mini Crude Oil futures chart. Sell signal at 15:00 was $0.15 and 5 minutes after the high of the day.

Screenshot2011-03-18at170815.png

 

 

Very interesting stuff, there was a buy signal a few days ago that almost caught the exact low of the day in Crude and today my indicator almost caught the exact high of the day. I'm going to have to complete a study of signals given on Crude oil to see how my indicator performed on it using a more substantial number of signals covering the last few weeks. If it works well perhaps I can include it in my trading plan.

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I've had a quick look back at the last few days to check signals my DBDT indicator picked up on Crude oil;

 

Signal chart showing;

7th March sell signal at 19:25 GMT

8th March buy signal at 17:00 GMT

9th March sell signal at 16:05 GMT

Screenshot2011-03-18at211656-1.png

 

Just a quick apology to people who are not in Greenwich Mean Timezone (GMT), this might help;

 

* Eastern Standard Time ( EST ) is 5 hours behind Greenwich mean Time (GMT)

* Central Standard Time ( CST ) is 6 hours behind Greenwich Meantime (GMT)

* Mountain Standard Time ( MST ) is 7 hours behind Greenwich Mean Time (GMT)

* Pacific Standard Time ( PST ) is 8 hours behind Greenwich Mean Time (GMT)

 

In the next few charts I show the equivalent signal points, that is where the point of entry into the trades would be, based on the signals above. The first two show charts of USO (Crude oil ETF) as I can only get minute tick data back to 9th March for the actual futures. The 3rd chart is a chart of E-mini Crude oil futures.

 

 

 

For the sell signal on 7th March, on USO, the sell signal was given at $42.61, the market went up a further $0.11 from the signal point then fell to $42.41 by the close. I would think $0.11 in USO would equate to around $0.25 in Crude, so there might have been around $0.50 available in that trade using Crude futures.

 

7th March USO 19:25 marked

Screenshot2011-03-18at212755.png

 

 

 

For the buy signal on 8th March, the buy signal came within 1 minute of a low for the day. It wasn't the low of the day but a higher low. Nonetheless it would have been an amazing entry. In the Crude futures the market rallied $1 from 5pm onwards, before pulling back.

 

8th March USO 17:00 marked

Screenshot2011-03-18at212920.png

 

 

For the sell signal on 9th March, the sell signal came at a great point, the opening price at 4.05pm was $105.45, the market then sold off by $1.50 over the course of the day.

 

9th March E-Mini Crude 16:05 marked

 

 

Screenshot2011-03-18at212512.png

 

 

So all of these were pretty bang on as entries for trades.

 

 

There was also a buy signal on 15th March at 18:30;

Screenshot2011-03-18at213440.png

 

 

15th March E-Mini Crude 18:30 marked

Screenshot2011-03-18at224512-1.png

 

 

This last one was following a low but the price only went up $0.40 following the signal so not quite as interesting as the others.

 

 

I'm going to have a serious think about trading Crude as well now but I know it's a volatile product.....and the E-mini contract is illiquid at times.

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Today I was on my way back to my flat from the local town centre to be ready for the market open, I called my girlfriend to see if she wanted anything from the local store, she did, I bought some food etc and the guy behind the counter asked if I wanted any more coffee milks, "Yes, ok" I said, as he knows I like to buy them in bulk. He spent ages in the storeroom then came back and said he didn't have any more. I had a bad feeling at this point as I knew I would be late for the market open. I have very rarely seen my indicator give signals immediately after the open but I ran home anyway, just in case.

 

I got home at 13:39 to see that there was a buy signal using my indicator on DIA at 13:35...

 

Screenshot2011-03-21at172816.png

 

The market was 4 points higher from where it was when the buy signal was given so I left it but as I was watching this my girlfriend was listening to Muse and this part of their song Hoodoo played;

 

 

http://www.youtube.com/watch?v=gXpXzO2De1U

 

I thought this was very strange at the time but then I just thought, "It's just a co-incidence, these things happen"

 

I then recorded the part of the Hoodoo song to put it on this journal here using an unregistered screen recording program "Snap X" but being unregistered it puts text all over the video so I re-recorded the part of the song with only a tiny square of the black part of the youtube video, (which was a simple still with a black background), then when I play the video I recorded back, part of the way through text appears "Bid 0". I was like - what the f.....

 

I've no idea where that comes from. What a very peculiar chain of events.

 

Anyway I'm posting this whilst in another trade that came about from the following sell signal on SPY at 15:25;

 

Screenshot2011-03-21at152630.png

 

As it was shaping up I really did not want to take this signal as the NASDAQ had rallied so much. Then I recalled that often the hardest signals to take can be the best ones so went for it as it was confirmed at 15:25, sold at 2268.25;

 

Screenshot2011-03-21at172253.png

 

 

 

 

Well it was a very decent spot to get short but I just got stopped out by my 8 point trailing stop at 2264;

 

Screenshot2011-03-21at184202.png

 

 

 

 

Overall I'm pleased with the signals on my indicator today. I think the fact that I wasn't available at the open is more down to a lack of professionalism, rather than discipline. I'm glad I took the last signal, I need to just take all the signals that are offered despite what I may or may not think will happen in the markets. That last one just looked completely wrong and it turned out ok.

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I had a busy day today, lots of signals and 3 trades; [Posted late due to technical problem with GEI)

 

The first signal came at 14:20, a buy signal on IWM;

 

IWM1220.png

 

Bought E-Mini NASDAQ at 14:20, filled at 2257.25

 

The market rallied up to 2264 then came back out and triggered my trail stop at 14:53, filled at 2255.50 for a 1.75 point loss;

 

Buy and sell back points

Screenshot2011-03-22at201829.png

 

There was also a sell signal on IWM at 14:35 (E-Mini NASDAQ was at 2261.50 at this point);

 

IWM2235.png

 

This signal came during the first trade.  I decided to ignore it since I was already in a trade.

 

 

 

 

The second trade came as a result of a sell signal on IWM at 14:55, two minutes after I'd got stopped out on the first trade;

 

IWM3255.png

 

I shorted the NASDAQ at 14:55, filled at 2256.25.  I was then stopped out at 16:22, filled at 2260.50 for a 4.25 point loss;

 

Screenshot2011-03-22at202655.png

 

During this trade there were sell signals given on both SPY at DIA at 16:00;

 

DIA sell signal;

DIA400.png

 

SPY sell signal;

SPY400.png

 

Again as these occurred whilst I was in a trade I ignored these.

 

 

The third trade came about as a result of a sell signal on IWM at 16:35;

IWM435.png

 

Shorted at 16:35, filled at 2258, the market did then drop to 2250.50, rallied back up, and then sold off again back down to the 2250.50 level, I thought I'd just allow the trade to continue to see how it might develop as there was still and hour and a half until the close however the market rallied into the close so I closed out at 19:57, filled at 2257 for a 1 point gain;

 

Screenshot2011-03-22at203101.png

 

 

 

The net result of all of the above was a loss of 5 points.  Today I executed my plan well taking the signals as they came and acting decisively in the market, all the fills were within a few seconds of the signals.  I didn't have anything prepared for what happens if I get a signal in the opposite direction during a trade therefore I just let the trades develop according to the original plan with the 8 point trailing stop.

 

In hindsight this doesn't look so smart, had I used the sell signal at 14:35 to exit the first trade the result would have been a 4.25 point gain on that trade, and a 1 point gain overall for the day...

 

I hadn't expected another signal during a trade as some days I don't even get 1 signal however clearly this type of situation will come up sometimes.

 

A more agressive way to react to the sell signal at 14:35 would have been to reverse the first trade and go short, that would have then been stopped out for no loss at 16:25.  The next signal at 16:35 would then have been taken.  This would have resulted in a 5.25 gain overall for the day.

 

This is about identifying a consolidation day fairly quickly.  From 00:00 until market open the market ranged between 2249 and 2264, a fairly narrow range.  Over time when I gain a bit more experience I can perhaps adjust my plan dependent on market conditions.  The overall result was a loss of 5 points whereas if I'd simply had one trade stopped out it would have been a 4.25 point loss so all in all it's ok therefore I will continue with the same plan and rules.  With the 8 point trailing stop this type of day is inevitable on a non-trending day.

 

Over time I should be able to build a better picture of my existing strategy and whether it's a profitable one.

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Screenshot2011-03-20at152359.png

 

DSC_1587.jpg

 

 

I thought it might be interesting to post a bit about the place I trade from, since emotions, stress etc can affect performance I think it's important to have a clean tidy environment without too many distractions. Thankfully the girlfriend has OCD like Monica in Friends and she tends to keep it in good order. We are very fortunate to have purchased a home with a nice view just about a year ago, it's not a particularly large flat but it is in a peaceful location and it suits us. Helensburgh is on the West coast of Scotland.

 

 

It's very unusual in the sense it's white throughout, we are glad we made that decision as it always seems very calm. I'm quite sure trading environment has to be considered when trading since when I tried to trade from a busy Starbucks a week ago it was highly stressful and the results were not good.

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[Due to technical problems with GEI I will continue my blog with today's entry, although there will be two days missing as it's too time consuming to recreate the posts from elsewhere as I would have to go and find the pictures again].

 

 

Buy signal at 14:25 on QQQ today;

 

QQQ1425.png

 

A nice entry today, bought at 2315.25, market rallied up to 2329.75. The market then seemed to react to Fed hawk Charles Plosser talking about exit strategies and monetary policy reversing course, the dollar certainly caught a bid and that seemed to provide too much of headwind for the futures. The market came back and took me out at my trailing stop, filled at 2321.25 for a 6 point gain.

 

E-Mini NASDAQ buy and sell back points;

Screenshot2011-03-25at195345.png

 

 

Whilst in this trade I also got sell signals on both SPY and QQQ at 16:05 (a couple of points away from the high of the day)

 

SPY sell signal

SPY1605.png

 

 

QQQ sell signal

 

QQQ1605.png

 

 

 

In this respect the trade was very similar to the first trade I had on the 22nd. On that occasion and this occasion the correct action was to switch from long to short. Particularly so on this occasion as I would have banked 13 points on the way up, then the short would have made some also (possibly up to another 15/16).

 

Trading certainly makes you feel and look dumb sometimes. I have to say I have only been trading futures since Feb and I did think I would make a profit during March, that remains to be seen. What I am fully sure of now is that I came into this under-prepared. My attitude was, well I've got this great indicator that can give me great entries however I did next to zero thinking on exit strategy.

 

I updated my trades so far;

 

Screenshot2011-03-25at211051.png

 

 

It's might be hard to see as it's getting bigger.

 

There have been 30 trades.

 

10 have been winners.

 

1 was stopped out at breakeven.

 

I am down by 2.5 E-Mini NASDAQ points on the trades ($50) and the equivalent of 10.5 points on commissions ($210).

 

As I have been cataloging the trades I have taken down information such as the initial stop required to withstand initial market moves before the market headed in the direction of the trade. I've kept this information for both the winning trades and those that would have been, had I acted on the signals. I worked out the average stop size required and it came out at 1.64 NASDAQ points. This seemed very low but I checked and there were only 3 trades that required a stop of 4 or greater, and of those the highest was 4.5 (I was stopped out on that one).

 

This is a big plus for me as it tells me my indicator is doing it's job and providing good entry points.

 

The grey rows are 4 signals I did not trade - it's a rather unfortunate fact that, using my 8 point trailing stop, these would have yielded a total of 73 points. That is Murphy's law in action. Thinking back to Wednesday 23rd March the first 4 signals I took were losers, why couldn't those have been winners and the ones I missed have been losers huh!

 

The first of those was not taken as the signal was 10 minutes before the close. I don't take signals just before the close. The second was missed whilst I was reading a forum. The third was missed as I was feeling bad about missing the second. The fourth was the one I didn't act on today as I was long when that signal was confirmed and I chose to ignore it.

 

I take this as a huge message from my indicator to me - "Take all the damn signals or I will make you feel bad for ignoring me".

 

The win loss ratio so far is 33%/66%. Had I taken all signals offered the win loss ratio would be 47%/53%. A marked difference and confirmation (as if I need it) that if you have a system you have to take all the signals because, invariably, the ones you don't take will be winners, in this case they were all big winners.

 

At this point part of me thinks I should consider more deeply the 8 point trailing stop, as the system is really reliant on printing big winners from time to time, and there will no doubt be periods when they don't come along as much. Of course I would not be saying this had I taken those 4 signals, I would be dancing from the bloody rooftops because I would be up 75.5 NASDAQ points. That's a lot to me as I'm only on an average type salary for my day job.

 

The average points gain for all of the signals, that's trades and the the signals I didn't take, is 11.55 points.

 

Had I started trading futures with the 4.25 point stop and 8 point trailing stop and taken all signals I would be sitting with a 125.25 point profit right now.

 

For the signals I did take, had I used a 3 point stop along with the 8 point trailing stop I would be sitting at a 16.25 profit right now.

 

Had I used a 3 point stop from outset and taken all signals I would have been sitting with a 109 point profit right now.

 

 

 

My girlfriend is unaware that I am writing about trading just now and she has just told me an interesting fact she just read on the internet - 60% of human communication is spent lamenting one's current situation! How apt!!!

 

I would really like it if some of the more experienced traders on BMT could comment on this strategy of mine, particularly the 8 point trailing stop. Part of me feels it's too aggressive, another part of me thinks the approach is too passive as I'm not controlling the exits. Part of me feels it's not right to leave so many points on the table (then again I suppose I wouldn't have this view had I been up 75.5 points).

 

Another part of me feels that I am onto something as I would have scored big had I followed my own system but then again I also think how can someone who has been trading futures for little over a month come up with a really good system for trading futures? That's surely just not realistic, or is it?

 

Perhaps I'm just questioning things too much.

 

 

 

I have come on really far from where I was six months ago - I'd been trading options and getting nowhere, just churning my account. The real turning point for me was when I started using Hypnosis. I was listening to a variety of pre-recorded sessions covering different areas - Positive thinking - Success - Deep Sleep - Stress Free - Relax. It was only within a few weeks of starting hyposis that I developed my indicator (August last year).

 

You can download them to an iphone if you search for "with Andrew Johnson" in the Appstore.

 

Some can be downloaded free here - Free hypnosis MP3 Downloads - Deep Relaxation, Weight loss, Stop smoking...

 

 

I have also previously used Creative Visualisation - I need to go back to that and work on it more as I think that is one of the keys. This is the book that got me started on that aspect;

 

Screenshot2011-03-25at231813.png

 

 

http://www.amazon.com/Secrets-Creative-Visualization-Phillip-Cooper/dp/1578631025

 

 

Another aspect I really believe helps is physical fitness, I typically do 10K a few times every week although not so much lately due to trading.

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I would really like it if some of the more experienced traders on BMT could comment on this strategy of mine, particularly the 8 point trailing stop. Part of me feels it's too aggressive, another part of me thinks the approach is too passive as I'm not controlling the exits. Part of me feels it's not right to leave so many points on the table (then again I suppose I wouldn't have this view had I been up 75.5 points).

 

Another part of me feels that I am onto something as I would have scored big had I followed my own system but then again I also think how can someone who has been trading futures for little over a month come up with a really good system for trading futures? That's surely just not realistic, or is it?

 

 

 

Another aspect I really believe helps is physical fitness, I typically do 10K a few times every week although not so much lately due to trading.

 

You could just take a week out and paper trade both strategies, or paper trade one strategy and the other real and vice versa.

 

As for creating a good trading system in a month, I wouldn't underestimate yourself. The problem with investing and trading, there is too much noise and opinions out there which not only drowns your own thinking, but complicates the process.

 

I find physical fitness most benificial. It stops you overthinking.

 

BTW, what is BMT?

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You could just take a week out and paper trade both strategies, or paper trade one strategy and the other real and vice versa.

 

As for creating a good trading system in a month, I wouldn't underestimate yourself. The problem with investing and trading, there is too much noise and opinions out there which not only drowns your own thinking, but complicates the process.

 

I find physical fitness most benificial. It stops you overthinking.

 

BTW, what is BMT?

 

You know, I was just thinking, "Is anyone actually interested in reading my blog?" and I just saw your post there.

 

I'm not interested in paper trading to be honest, I've never really done that. The difference is a bit like playing a computer racing game or actually racing a car. Quite similar but very different. One involves risk, one doesn't. I'm sure DrB won't mind me referencing it here since it specifically relates to trading - there's no general market discussion or anything like that on there.

 

In fact there could be an opportunity there perhaps, as I'm sure other people on GEI might also be interested in more about the trading side and people on BMT might also like a decent venue to discuss the market, geo-politics etc...the guy who set it up has a background in programming and is now a full time trader.

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Very low volume today early on;

 

 

$TVOL NASDAQ - 6 day - 5 minute timeframe

Screenshot2011-03-28at212147.png

 

This is a chart of $TVOL for the NASDAQ, showing today and the previous 5 days cumulative volume on a 5 minute time-frame chart. For today and the previous 5 days I've used blue lines to show 2 hours after the open. I've then added red lines to show what the cumulative volume for each of the days was after 2 hours. It's clear today is on target for being a low volume day.

 

The NASDAQ Advance issues minus Declining issues also kicked off in a tight range;

 

NASDAQ Advancing issues minus Declining issues - 6 day chart - 15 minute timeframe

Screenshot2011-03-28at170434.png

 

These factors suggested a range day early on so although I'm still monitoring my signal charts, I think the probability for a large move today is low. [Written at 16:30 earlier today]

 

 

 

Early on I had a look at my indicator for Crude oil and I saw a possible double bottom shape up;

 

DBDT indicator working on USO

Screenshot2011-03-28at154530.png

 

When I use my indicator on Crude there are gaps in the black lines between the days so where one ends and another begins can effectively be viewed as a straight black line.

 

It wasn't an exact level double bottom, therefore not a confirmed buy signal, so I passed on it.

 

I always look at my indicator on a 5 minute time-frame chart, any lower than that and there is too much noise in the data, any higher and there could be too much lag between a signal being generated and a trade being executed.

 

Using a 5 minute time-frame chart for my indicator means that once a double bottom shows in my indicator I have to wait 5 minutes for it to be confirmed as a signal (this is for the next part of the chart to form, and is because at any point within the 5 minutes it could become invalidated). This is generally an acceptable lag for intra-day trading. I previously haven't looked at the indicator on higher time-frames when trading futures as that means more lag between a signal appearing and it being traded in the market (eg a 10 minute time-frame signal chart means waiting 10 minutes for signals to be confirmed to trade)

 

Now later on the day I checked it again but using a 10 minute time-frame chart and a clear double bottom shows, confirmed at 14:50;

 

Screenshot2011-03-28at165255.png

 

The signal was a confirmed buy at 14:50 - Here's the equivalent point in Crude;

 

Screenshot2011-03-28at164915.png

 

 

This is just a learning point for the future. Previously I hadn't used the 10 minute time-frame signal charts due to the lag factor, however if a signal to trade is given on a 10 minute chart and the market hasn't moved much in the previous 10 minutes then I can consider the opportunity as still being live and therefore tradeable.

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Got buy signals on both SPY and DIA at 15:25;

 

SPY buy signal;

SPY1525.png

 

DIA buy signal;

DIA1525.png

 

Filled at 2315.

 

Due to the low volume and choppy Advance Decline position I opted to monitor the trade with a tight initial stop of 3 points. The market went up to 2318 and came back to 2315 so I moved my stop up to 2313.50 (just below the previous low) but there was no interest in higher prices so I got stopped out at 2313.50 for a 1.5 point loss.

 

Buy and sell back points;

Screenshot2011-03-28at191050.png

 

I hadn't intended on taking any signals today due to the low volume but since two appeared at the same time it was better to trade it with a tight stop than to ignore it completely.

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A reasonably good day today;

 

A classic buy signal on my indicator working on SPY at 15:05, a very wide base double bottom;

SPY1505.png

 

 

The market was rallying while I was waiting for 15:05 for the signal to be confirmed so that was quite frustrating but I don't want to pre-empt signals, got filled at 2306.50.

 

The market rallied up to 2320.50.

 

At 16:30 it looked like we were shaping up for another low volume day today, we had the same volume at 16:30 today as we did yesterday 2 hours after the open.

 

6 day TVOL on NASDAQ

 

TVOL1630.png

 

 

 

Then I had a sell signal on SPY at 16:35;

SPY1635.png

 

 

I didn't act on it immediately, I hesitated a few minutes as there had been a sharp move up in the Advance-Decline for the NASDAQ, similar to Wednesday last week when the market rallied most of the day;

 

 

 

 

 

Thankfully I closed my position at 16:50, filled at 2317.50 for an 11 point gain, although it should have been closed at the time the sell signal was given, when the NASDAQ was at 2318.50.

 

As a result of the low volume and sell signal at 16:35, I then went short at 16:53, filled at 2318.75 with a fixed stop at 2321.75, just above the high for the day.

 

NASDAQ buy and sell points for 1st trade and sell point for 2nd trade;

Entryexitentry.png

 

 

The market sold off down to 2313.75, I moved my stop to 2318.50, one point above the recent high, looking for a further sell off, but it didn't come. The market rallied up taking out my stop, gained a quarter point for that.

 

NASDAQ buy and sell for 1st trade, and sell and buy for 2nd trade;

Daystrades.png

 

 

All in all a pretty reasonable day, a gain of 11.25 points. I should have been more decisive in reversing my initial position though. I had planned to only close and not reverse a position if I got a signal in the opposite direction to an active trade but then I just thought why should I treat a signal any differently just because I already have a position on?

 

I think I was concerned that the market would continue rallying and a bit distracted by my Advance-Decline chart. It looks like the hesitation only cost me a point. Reversing the position and moving the stop to protect the breakeven point on the new position left me with a no risk position on and the possibility of further points so that was a good move.

 

Had I ignored the sell signal and not closed the first position I would have been taken out by my 8 point trail stop as the market went from 2320.50 to 2312.50 and then rallied back up again. It's just as well I listened to my indicator this time.

 

Looking back I will need to be more decisive next time to reverse position as it means I'm realising a gain and then immediately risking part of that for a further gain, really a win - win situation. Although no doubt some day I will reverse and the market will continue in the original direction.

 

Looking back at today and other days it's interesting that often the correct decision to make is the one that feels the hardest to do...

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You know, I was just thinking, "Is anyone actually interested in reading my blog?" and I just saw your post there.

 

I'm not interested in paper trading to be honest, I've never really done that. The difference is a bit like playing a computer racing game or actually racing a car.

 

Hi Perishabull,

 

Just thought I would second C.P's comments somewhat. Read your blog at least weekly, not that I can say it benefits me, as i'm not really a massive chart trader - probably a bit too lazy to get properly interested. But I find your blog interesting, as I always look to learn from others (b.t.w you can see from the number of thread hits, others must read, but maybe don't know what to comment?)

 

As for paper trading, mentioned recently on another thread it does come in handy; it taught me there is little point holding SUK2, other than as a short term play once the downtrend falters. To use your analogy, saved me my wing mirrors :D

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Well I had a brilliant day today - I traded really well :)

 

It started off with a buy signal on my indicator working on SPY at 15:15;

SPY1515.png

 

 

Bought at 15:15, filled at 2326.75.

 

NASDAQ buy point;

Screenshot2011-03-30at214517.png

 

I have to say I really thought I was about to get stopped out when the market went down to 2324 but...

 

The NASDAQ rallied up to 2338, leaving my trail stop at 2330.

 

 

 

After the high at 2338, the market spent the next half hour or so consolidating then I got sell signals on my indicator for both SPY and DIA at 18:00. I closed the position as soon as the sell signals were confirmed at 18:00, filled at 2335.50 for an 8.75 point gain, then a few seconds later went short, filled at 2335.75, adding a fixed stop limit order at 2338.75, 0.75 points away from the recent high.

 

Sell signal on SPY at 18:00;

DIA1800.png

 

Sell signal on DIA at 18:00;

SPY1800.png

 

Following the high at 2338, the market then just consolidated for what seemed like a very long time, nearly 3 hours.

 

As I have been doing lately I kept an eye on the volume;

 

6 day $TVOL chart

TVOL1625.png

 

 

Volume 2 hours after the open was slightly higher than the two previous days, but not to a significant degree.

 

What I found interesting was the fact that the S&P500, Russell 2000 and Dow Jones Industrial Average all broke to new intraday highs as the day progressed but the NASDAQ didn't follow suit, failing to clear the 2338 high made just after the open.

 

At points I felt like closing the 2nd position but I stuck with it right to the end, looking for a sell off, and it did come, kicking off at 20:47. Once the market moved below my entry by a couple of points I moved the stop to breakeven. The market went as low as 2331.75 so I moved my stop down to 2334, looking for further downside, it didn't come so the market stopped me out at 2334, for a 1.75 point gain.

 

NASDAQ buy point, reverse position point, and position close out point;

Screenshot2011-03-30at210738.png

 

Screenshot2011-03-30at211821.png

 

A score of 10.5 points today, not massive but I think I did pretty well compared to what was on offer. Before the open I considered shorting as soon as the market opened, just based on gut feel, but I decided against it as it's not in my plan. After I get a lot more experience I can start to consider discretionary trades.

 

I followed my plan to the letter today, reversing my long position when I got two sell signals, and I managed the exit well on the second trade. What a sense of achievement today. Amazing.

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A positive result today;

 

Sell signal on SPY at 14:45;

SPY1445.png

 

 

Also a sell signal at the same time on DIA, similar chart to above.

 

Sold short at 14:45, filled at 2336. The NASDAQ then sold off down to 2327.50, before rallying back up and touching my trailed stop at 2335.50 for a gain of 0.50 points.

 

 

Then I got sell signals on both SPY and DIA at 16:05;

 

SPY sell signal at 16:05;

SPY1605-1.png

 

Shorted the NASDAQ again, this time filled at 2336.75, the market sold off once again down to 2327, before rallying up to 2330.50 by 17:05. At this point I got a buy signal on DIA....

 

DIA1705.png

 

...so I closed the position, filled at 2330.50 for a gain of 6.25 points. I then went long a few seconds later, filled at 2330.50. The market then rallied up to 2335. At this point I was feeling a bit jaded having not slept properly last night. I was up over $200 and thought about closing the position and stopping trading but I decided against it.

 

I was a bit distracted at this point and wasn't monitoring my indicator regularly enough. I checked it at 17:38 and it looked as though I'd just missed a sell signal on SPY at 17:35;

SPY1735.png

 

 

After some hesitation I closed the position for a 2 point gain, filled at 2332.50, then I went short, filled at 2332.25 using a 3.25 point stop placed above the recent high. The market then rallied taking out my stop, filled at 2335.50 for a 3.25 point loss. I was a bit annoyed with myself for having missed what I thought was a genuine sell signal and acted too quickly before properly assessing the situation. Looking back at it, I think I thought I'd missed something when I really hadn't. It's not really a clear cut defined signal to trade as the others were so I should have just kept my long position.

 

Thinking back to when I was $200 up I should have closed my position then and gone and done something else as I was quite tired. Had I not made that mistake I possibly would have got about 14 points for the day.

 

In the future I think I'll just close out any positions if I feel the same way again, you really have to be alert and on top of your game to trade, the markets will always be there the next day.

 

The result is still positive with a gain of 5.5 points for the day. I got some excellent signals using my indicator once again but as it was a strictly range bound day there weren't any large moves. At the weekend I think I'll categorise the different types of signals I get on my indicator.

 

There are some, like the ones I used for the first three trades, that are excellent, really clear cut emphatic signals, and then there are others that are not so clear.

 

I think it may help the decision making process in the future if I grade the different types of signals I get and print them out so I can have it in front of me while I'm trading. Then next time, if there is any doubt, I can refer to it.

 

1st trade short and stop out point, 2nd trade short and reverse to long point, 3rd trade reverse to short point and then stop out point;

 

Trades.png

 

 

Volume 2 hours after the open was similar to yesterday;

 

TVOL.png

 

 

 

Well it'll be interesting to see how April kicks off, there have been many months over the last year where the market rallied sharply at the start of the month...

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There were no signals today so no trades.

 

My time trading futures so far;

 

Screenshot2011-04-01at222506.png

Screenshot2011-04-01at230134.png

 

 

 

Total gain so far is 22.75 NASDAQ points however commissions equivalent to 15 NASDAQ points means an actual profit of 7.75 points so far. My aim was to make a profit by the end of March and I've achieved that. I took March off work to trade my indicator full time to test it and see if I have what it takes to develop a career as a futures trader.

 

Although the profit is not as large as it could have been (had I acted on all the signals) the potential I see is propelling me along.

 

For all the trades, the total points available based on using an 8 point trailing stop from the start was 135 NASDAQ points. Of course I didn't start with the 8 point trailing stop, I decided on that part of the way through. And I missed some of the signals on my indicator as a result of not having rock solid discipline from the start.

 

I was typically risking 4 points on each trade.

 

Another way to look at it is that I risked (4 points X 43 trades) 172 points, for a potential gain of 135 points, or 78% potential gain on capital risked (or 69% with commissions factored in). In my view that is impressive for just a few weeks. The largest drawdown was 16.75 points.

 

The average stop required for trades that profited was just 1.51, showing that typically my indicator gave accurate entries into trades.

 

17 out of the 39 trades taken were winners (43%).

 

The average points available across all trades was, 10.3 points. That's interesting as I had started out with a 10 point profit target for each trade. Further to this there were 15 trades that would have netted 10 points if a 10 point profit target had been used. However if the 10 point profit target strategy had been used the total potential gain would have been 89.5 points, less than that of the 8 point trailing stop strategy.

 

As a result of this what I'm going to do is take advantage of the flexi-time arrangement at my work. Thankfully the work I do means I can come and go to some extent. What I've decided to do is work extra hours one week, to enable me to then take all the afternoons off work the following week, so that I'm home in time for the market open. This means I will now be trading full-time every other week from now on.

 

I've caught the futures trading bug for sure.

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I want to make a correction to my post from 1st April, I mentioned that there were no signals that day, I should have been clearer. I was back at work that day and got home 2 hours before the close, there were no signals from when I got home (19:00) until the close. I've gone back and checked and see that in actual fact there were two signals.

 

A buy signal on DIA at 14:55 - [Classic buy signal]

Screenshot2011-04-04at195242.png

 

A sell signal on QQQ at 16:50 - [standard sell signal]

Screenshot2011-04-04at195452.png

 

Equivalent buy and sell points on E-mini NASDAQ;

Screenshot2011-04-04at200757.png

 

 

Quite clearly had I not been working and followed my plan, Friday would have been a stunning day, 28 points using the 8 point trailing stop. This is more evidence that I am on the right track here.

 

One day soon I'm going to be writing about trading signals like that and I am very much looking forward to that day.

 

 

Now that I see this I will be taking my laptop to work each day and taking a (very) late lunch in order that I can monitor the market for at least 40 mins before going back to work. Approximately 20% of the signals I get are in the first hour of trade so this could very well be worthwhile.

 

Until retiring my father was a veterinary surgeon and for years it had always bothered me that I hadn't found something that I was passionate about that I could pour all of my efforts into in order to find true success and happiness. I think I have found it now.

 

I want to operate in the futures market with the clinical technique and precision of a surgeon. That is my goal.

 

I am in the process of classifying the signals I get on my indicator so from now on I will have a classification above the chart eg [Classic buy signal].

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