For The Umpteenth Time: I'm A Scalper

Total: 3.5 Points

I entered the 1st trade at 9:33am, and wrapped up at 9:54am.

25 trades: 4 losing (highlighted above)

I realized that I've been using all the wrong time frames to trade the TF (maybe even the ES too.... On NQ, I used the tape and 1min last year and it was pretty darn good).

I used to be good at running, and that was because I wasn't using 3, 5, or 10min charts (actually, NEVER 10 min, as I recall)!

I'm doing this for maybe another day on sim.

Then I'm going live.

Afterall, this was exactly how I traded when I first started ie. it's nothing new.

Why I switched to 10min yesterday, I really haven't the slightest idea.

My most educated guess is that I woke up yesterday morning feeling OLD.

I forgot that D said that I'm a 16-year-old trapped in the body of a 37-year-old.

Really, 10min charts kill my brain cells.

So do 3 and 5 min charts.

I can understand using 5min for forex futures, but for TF during active hours, opting out of 1min chart last year was the single biggest mistake I made.

D has always thought that I'm an extremely extreme person.

I guess I'm just wired that way.

Can't learn any other way.

Definitely no baby steps.

Update:
I was chatting with J and told him I was in and out of the market 25 times in less than 30 mins (20, to be precise, and I totally forgot the Chicago PMI data release!). J said that's a lot of work. I said it's the easiest day for me in the longest time. Really, I'd rather focus intensely on my chart for half an hour than to stare at it for 8, 12 or 16 hours. Looking at my charts for too long makes me see things that are not there, and overlook things that are there!

TF Trades 9/29 (Tues) - Hitting A Stone Wall

D's result:

Mine:

Humbling...

What happened:

TF 10min

TF 5min

Clearly, had I used the 5mins, I would have not entered my first trade. I would be expecting a falling 3 method (bearish), and wouldn't have bought. And I would have gotten in at a better price for the 2nd trade had I entered on a 5min.

That there were screw ups on the AT platform hadn't helped. I couldn't get out of my losing trade at 1.2 point loss when I knew it was going awry, and I couldn't get out of my winning trade when I was getting 1.9 points. D asked why I wouldn't use the "Flatten" feature. I don't know. I guess I was just too busy feeling pissed to look for alternatives.

D had a talk with me before we turned in. He commented that I am bruised and yet on the surface I am fighting ferociously and a tad too aggressively - to the point that I would not hesitate to revamp my entire trading method in a bid to improve my results - when what I need to do is really to just go back to doing what I'm good at doing.

And I have to agree. It's just that I'm really not sure now what is it that I have been good at doing.

Pressing on nonetheless.

D said I'm more of an engineer than him. How ironic that we were in the same engineering lectures in our first year, and I was the one that opted out to pursue another degree - despite my very good result in the subjects that bore me the most (ENGINEERING, PHYSICS) - while he stayed and got his masters!

Definitely seeing a pattern here.

TF Trades 9/28 - Done With Scalping

Above is a 10min chart of TF. This is the way that I'll be trading from now on. There are fewer entries, but that's a good thing for me. My target is more or less set after the first 30min ie. all entries will have the same profit target. Stop loss is set a tick or 2 below/above signal candle for all entries.

Missed my first entry when I switched to the lower time-frame charts to take a look (feeling insecure). When I came back to my 10-min chart, price has moved almost a point above where I would have had wanted to enter. Had I taken the trade, I would have to risk more than what I was comfortable with. So I gave it up and waited for another signal.

I got my signals. D asked why I was buying high. I said coz it was going higher. It's a 15 - 17 point day. D asked how I knew. I said coz price had come up from an almost round bottom low, and then broke out of OR and closed strongly, and that OR was near to 10 points. Basically, I was trading based on what I know about TF.

I'm not an expert trading the 10min timeframe yet (which explains why I tightened my stop unnecessarily on my first and second entry) , so I'm going to stop blabbing. Will share more as I go along.

Logics Of Trading

D has a BSc in Computer Engineering and a Masters degree in Electrical Engineering and has another major in Accounting.

He's the kind that should totally stay away from trading.

But today, D nets a 1 to 2 point profit on a daily basis trading the TF. His losses are so small it makes me mad. His stop-loss is 7 TICKS. On choppy days, if he chooses to trade, he will lift his stops and use a mental stop instead but he's never lost more than 1 point per trade.

Which makes me wonder, how does a person so logical and controlling manage to win consistently in trading?

When D started trading the eminis, he knew next to nothing about them. Everything he knew about trading the ES and TF, he had learned it from me. D doesn't like to read (again, makes me really mad that he aced all his examinations in university). He doesn't even bother listening to tapes that teach one how to trade. He can put up with a 2-hour session with me once in 3 months where I share with him some of my trading methods, and a 15-min session every evening before the US market opens where I tell him what to watch out for. And that's about it. He paper traded for a few days and has gone live since.

In the first 9 months that he began trading the eminis, he would constantly ask me where market's heading. And I would tell him I think price should be aiming for this and that level. And D will watch. After a few minutes, he would ask again if price was really getting there, and I would tell him that it should unless it doesn't.

Sometimes he would enter a trade based on what I said, and in the middle of a trade he would ask if price's going to hit his target. I would tell him there's a possibility it would, but I really don't know for sure. That's my standard reply to his questions. And he would be totally flabbergasted. "I thought you've done all your analysis??"

Blaming. Hmmm...

And I would ask him instead what his exit plan is.

"What exit plan???!"

I would then stare at him in disbelief and then give him a "you're so DEAD" look that would make him so mad he would exit his trade immediately and storm out for a smoke to cool down.

Once I asked him how much he's willing to give away for the bet he's taking. He looked at me as if I was crazy. He's trading to make money, not to lose money, so I could understand his reaction. I told him that he should take trades based on how much he wants to lose, and not based on how much he wants to win. How much he loses is entirely his choice. How much he wins is not, assuming that he's gone in on a high probability setup (validating his decision to enter).

It took him months to digest what I said. The controlling and logical part of him just couldn't grasp a concept that focuses on "losing" rather than "winning". Every time I hit my 2 to 3 point profit in one trade or via a few scalps, he would ask why I hadn't sounded him out that there were opportunities. And I would tell him that the risk is more than what he would be willing to take.

"But you were sure that price is going there right???"

"Absolutely not. Which is why I had entered on a relatively tiny candle that allows me to use a smaller stop. But that tiny candle is still too huge for you (D can't stand giving away more than 1 point on any trade, while I WAS comfortable with a 2 to 7 point stop in ER2/TF)."

"But you were fairly confident about the trade right, after all your research and studies???"

"I'm never sure of anything, honey, and I don't want you to blame me when the trade goes awry, so, no, I'm not giving you any tips. Go take a cold shower."

And D would storm out to get a smoke.

There were occasions where I have taken over trades he simply couldn't manage (it's hard for me to see D nervous, coz D's almost always COOL) and helped him make profits that he would never let run had he traded on his own. But as much as I can help it, I encourage/force him to make his own trading decisions.

After 1 year of lousy coaching from me, D's now as independent as my cats. On that few occasions that I had wanted to interfere, he had told me nicely to leave him alone and that he's on top of things. I'm impressed.

D's losing days are few, and his losses are in ticks. He takes an average of 1.5 points from the market each day, and he trades EVERY DAY. I took a look at his chart that day out of curiosity, and was shocked to see that nothing on them had changed. Absolutely NOTHING. He has been using the very same charts with the same indicators that I gave him on them (which he doesn't use at all coz I never taught him how to use them), the same methods that I taught him before (he hasn't learned anything else on his own - coz, well, D DOESN'T LIKE TO READ) - mainly bull and bear TRAP setups, failed breakouts, failed flags, failed everything - checks with me about the trend for the day everyday before the session begins, watches for traps, and goes for TINY signal candles (the fact that candles on the eminis have been tiny these days has been a blessing for him).

What makes D an outstanding engineering student (D's NOT an engineer today. He's a slave-driving banker) had made him a consistent trader. He has used logics in a way that helps him in his trading. Yes, it's logical to listen to me coz I'm usually, if not always, RIGHT. Muahahahaha!!!!

Ok, seriously, I think the reason that D is a much better trader than me today (I'm not even trading, and he's been trading daily) is coz D is ok with being BORED. He's not interested in trying out new things as long as what he's doing is making him money. He has been determined in the right way. Despite the many times that I had played pranks on him, and my not answering his questions directly, he had pressed on, believing that he would get consistent one day. Now, he doesn't even recall the silly questions he asked me before (eg. why price hadn't gone where I said it would go). He looks at how much he stands to lose if he's wrong, before he considers anything else.

And yes, I nearly fell out of my chair when I noticed his standard 7-tick stop-loss for the TF. "You mean you can make money with that kind of stop???"

"Yes, honey, you can"

And then he went about doing his own thing, never offering any tips on how he did it.

UNGRATEFUL CREATURE.

D trades on IB mainly, and sometimes on AT platform. IB's DOM is acceptable to him. He looks at just one chart, while I look at too many charts now. I have 3 screens, he has 1. I read too many books, he reads none. I spend too much time watching charts, he spends 2 hours per day - 15 mins before market open and then for about 2 hours when he's trading. I have almost halted all trading, and he is trading daily and has had no losing weeks for 3 MONTHS now.

Something's very wrong with the picture.

Either that, or something's very wrong with me.

JIMMY,
See? Engineers can be very good traders :-)

I've turned comments back on. The community's getting too quiet...

TF - Messy

It's:
post-trend day
post-FOMC day
2 consecutive days with home sales data release
FRIDAY

Experience told me to stay away. And I'm glad I did.

Sim traded instead. Was all over the place:

TF - Posting Of PnL

TF Sim Trading

TF 3min

Giving up 6J and all the other forex futures for now. I like to trade something that I can trade almost everyday and forex futures are just not in that category.

So I'm back trading TF, and have finally settled on a method of trading it. The method is still highly discretionary, but I'm comfortable coz I know TF and am working within a familiar structure. There are certain rules that I observe now and setups that I stick to. I'll trade a few of my preferred setups once the context allows me to trade them, and am giving up the ones that call for wider stops.

It's been a long break for me. Much of it I spent doing some meaningless soul-searching (biggest achievement: buying USD 100k of URE at 4.80 for my aunt, and selling it 2 weeks later ie. last Thurs right at market open, at 6.66 helping her earn more than USD 32k - URE follows TF's trend and is easy for me to monitor - before market started to go into a range, and this had D suggesting that maybe I should really swing trade coz I tend to get a sense of where market's going....ha ha). Some good came out of it though. I shan't say more. Let's say I finally decided that NOW is the time that I quit berating myself for a past that I cannot change, and start doing what's necessary to move on.

I owe a big THANK YOU to those in my circle of trust (just a handful of you and you know who you are). It's strange that while I find cyberspace a highly dangerous place, I've shared with my trading/blogging community the most intimate details of what's been eating me. For the first time, I have 3rd opinions, and I am receptive (SURPRISE!). I haven't the slightest clue on how I'm going to go about expressing my gratitude now. But I'll know what to do when the time comes.

Thank you Ed, Cory, PT, EJ, JK, James, MVW, Jack (J), MM, Solfest, JE, Jimmy, De'Trader, UF (I know you really meant to say something LOL!), Sage, Lonely, Leon, Daytrader, Jaya, my coach Michael, my broker Anthony, for having listened to my rants for the past days/weeks/months and given me a shoulder to cry on.

JE, have you gone private?

I'm posting my TF results (live trading) starting tmrw.

6J Trades 9/16 (Wed) & Decapitated Hanbok

Total: + USD 237

6J 5min

6J 5min (close-up)

Everything Else That I Look At:

Posting resumes today. I will be posting monthly or bi-monthly statements beginning Oct (details of trades available in monthly statements).

That said, I'm not trading the 6J everyday.

A precious lesson that I've learned in the past few months of trading forex futures is that I can't trade them the way I trade index futures.

In a month, there're only 8 to 10 days that FX futures are nice to trade.

That's probably coz I've not figured out the "structure" for trading the 6J, 6E, and 6B on an intraday basis, which I did for the TF (and to a certain extent, the ES).

Seabloke got her twins some Korean dolls when they attended Pilot's wedding in Korea. The younger twin insisted that Sea take a picture of her doll to show D (she brought the doll along when they dropped by mine yesterday), and insisted on beheading the doll. She attempted to get the older twin to do the same, but the latter refused (whether she was appalled I have no idea - nothing really freaks my family out).

The picture that totally cracked D up (D adores all things evil):

From 3K to 11K in 30 Trading Days

(Update: Just noticed that my subject title was misleading. It read "from 3k to 8K", which is incorrect, coz Michael's profit is 8K. So it should read "from 3k to 11k")

These statements are not mine.

They are Michael Woo's.

After I announced that I was going to show that it's possible to double one's trading account in 2 months starting with as little as 5K, Michael started his own project, and he started with 3K.

In less than 2 months, he's turned 3k into 11K (my math sucks, so do your own - all I can see is that that is more than double the amount he started with).

He sent me his statements a few days ago, as a way to spur me on.

I nearly cried when I received his email.

Truth is, after I stopped posting, I've gone on a trading spree to find out my fatal flaws.

I found them, and I'm glad it wasn't too expensive an exercise.

All of us will have to pay our dues to learn something about the market and about ourselves.

I had stepped out of my comfort zone to explore what is out there, and within me, that could ruin my trading career if I continue to be blind to them.

I did so because I sensed that something was amiss even though I was making - according to D - very good progress in my 5k project.

I have to say, that I don't regret my decision to take a step back to evaluate the feasibility of continuing the project. I recognized that I was making money at the expense of learning and growing and I knew that the result would not be a sustainable one.

Michael, on the other hand, has had many years of experience doing what he's doing now, and is the perfect candidate for an "account doubling" project. His trading result is a clear demonstration of what one can do when he can confidently and faithfully apply his winning strategy in his trading day after day, week after week, month after month, year after year.

It took me 2 full days to go over all his trades and I am confident that I know now exactly what he was doing, and how he managed his risk. What he does supports what Carl has posted on his blog recently, which is actually a comment that Ziad has left on a trader's blog that was posted on Emini-Player's.

Michael has kindly allowed me to publish his statement. I decided to remove the details of his trades coz I think that's only fair to him.

I am very fortunate to have Michael as a friend and a mentor. I knew him when I signed up for his basic trading course last year. I paid him less than USD 1200 for a 5-month course (that was AFTER I paid more than twice that amount for another basic trading course which still leaves me wondering today if it was worth it).

Like I said many times before, I have a very short attention span, and always run before I learn to walk, so needless to say, I didn't complete the 5-month course, and instead sat in the intensive 2-day version, without paying an additional cent.

Michael introduced me to eminis last August and took a day to show me exactly how he traded the TF (ER2 back then). I was very much a scalper, and a very ignorant one, and simply couldn't grasp the significance of what he was showing me.

In the 12 months that followed, we would meet up now and then to talk about everything under the sun, and I would hear more of how he traded, and he would tease me about my fear of losing money.

Let me be clear - Michael has NEVER once criticized the way I traded. Whenever I shared my frustration over my lack of progress, he would ask what I was so afraid of, and give very zen response which would take me days to fully digest and appreciate.

Michael is the kind of teacher that makes you think, and allows you to explore, yet periodically checking up on you and providing updates on his own progress (in a way, showing you how he does it), without making you feel that he's in any way imposing his philosophies and strategies on you.

It's taken me an entire year to grasp the essence of his every seemingly light-hearted remark on how a REAL trader trades.

Within that one year, I've made many mistakes, some rather costly, and I gather that's what they call "paying one's dues".

But I don't believe that one has to keep on paying.

If you are really serious about trading, keep a positive attitude and build the mental toughness that you need to stay in the game.

Conscientiously STUDY THE MARKET and seek out a truly wise and experienced trader that has a good heart and temperament to guide you.