Ziad, 2009, 2010, 2011, 2012 & 2013 (Cut The "The World's Ending In 2012" Crap!)

play around with what feels natural
don't let anyone mess up your swing

From Ziad.

I always love Ziad's emails. He writes in a way that I can fully understand. Reading him is like reading Enid Blyton. Not a single word bores.

I'm not paying Ziad a tribute. After all, he's well and alive and kicking ass.

Ha.

Sorry, Ziad.

The 2 lines came in 2 separate emails 2 months apart. I've been messing around with my swings since, and seriously, I enjoyed it. Tremendously.

Fun aside, the info gathered in the process is priceless. Had I not ventured/ fooled around, I wouldn't have found the missing pieces of the puzzle I've been searching for for the longest time.

Since the beginning of this year, D has been telling me over and over that all I needed to do was to stick to what I do best. Problem was, I hadn't the slightest inkling what that was. There was absolutely no proof that I was doing anything right in fact. D brought up the 200, 300, the occasional 400 and 500 daily gains - I mentioned the 800, 1000, 1200 and 2000 daily LOSS. D said that I was good at scalping. I said I needed to be good at LOSING. I know, I'm yawning too. Cut your losses quick, let your profits run. YAWN.

D's impression has always been that I am getting way ahead of myself, that I am not happy with my small consistent gains. He's totally right. I am indeed very unhappy. I have been miserable as a matter of fact. Trading was all about protecting whatever amount I had made for that particular week, and about not letting a few stop outs wipe them out. That's no way to trade!

Anyway, I really digressed.

This post is really to thank Ziad for his emails. If there's anything I do well, it's to have fun doing serious work. I just needed a reminder. And I will never let anyone mess up my swing. Not that anyone can anyway unless they know the way to my cave.

Something I found out about my trading in 2009 - the losses and the agonies were necessary. I don't know how else to put it across, and I won't attempt to.

That said, I'm not giving myself 10 years to enjoy the pain.

I graduated.

I'm serious. I always hated school.

This Business Of Trading

I'm NOT going to be trading today and tomorrow.

Something else has caught my interest - something I believe is knowledge that I have to have as a serious trader.

Until recently, I've never really given much thoughts to issues such as data feeds, robustness of trading platforms, and how my orders are processed (the routes they take to get to the Exchanges, the intermediaries involved, the clearing process etc, etc), coz they are hardly topics you'll find in your Trading 101 syllabus.

For some, the above might NEVER be an issue. But for me, having a thorough understanding of the workings within the industry and the order flow process is instrumental in guiding my decision making in the various aspects of my trading career.

As I've said before, I have no intention of changing my trading style just to get around a problem that I can readily fix by simply eliminating certain undesirable variables. The way I trade is the outward manifestation of my core beliefs and assumptions- about the market and the mobs that trade them, and about myself - as well as my personal values. I can't trade any other way except that which comes as 2nd nature to me , especially if it's one that gives me an edge.

It makes sense for me to look for alternatives that accommodate me, allow me to exploit my edge, and keep me in business.

If I were a farmer running a LARGE farming operation today, I'm not going to be using horses (inefficient, and could trample me to death), coz it simply doesn't make sense when my competitors are using tractors.

Jules Is A Mule (Part 2?)

Oct 5, Monday

I sat and watch the 6E trade within a 2-point range from 3am - 8am EDT. Didn't get an entry.

Switched to TF at 9:40am EDT, and sat and watch it print 5-points up in 5 minutes. Something told me that it wasn't the typical trending day where price hardly retraces 30% before resuming its way up/down. I kept chasing price up nonetheless. Got used to buying high I guess. Anyway, I was right for a while in the beginning, and very wrong after that.

For the life of me, I couldn't understand at first why a day without news (except for that one miserable release at 10am EDT) could get so erratic. Then I realized that a day without news means no edge for the big guys who like to fade crowd sentiments these days, and without them taking the lead, price's just all over the place. To put it simply, don't expect a chart to be normal when the day's not normal (after almost 2 news-packed weeks with different gods talking almost everyday, a quiet day is definitely ABNORMAL).

Took a look at 6E this morning (9pm EDT), and saw that had I waited til 11:30am EDT yesterday, I would have gotten the entry I was waiting for (a fake breakout on the downside, strong reversal up, finishing high at Fib Ext 161.8). Plenty of news from Europe's side yesterday from 4am EDT on, and the 6E chart was anything but erratic. But I had to trade the TF instead and give away 3.9 points.

Am extremely out of sync with market rhythm and spending every minute of my waking hours and using every ounce of whatever remaining energy I have looking for ways to get back in sync.

Don't tell me to step away, take a break, or read Dr Brett.

I'm moving heaven and earth, breaking my neck, and reading Secrets of Professional Turf Betting.

I am aware that I'll probably not stop losing money, and am totally prepared for a losing streak.

Doesn't mean that I'm going to let that happen.

But it's really not up to me, is it?

I'm not going to stop this time coz breaks are simply not constructive.

Really, how does one learn by staying out?

@ LORD TEDDERS (YOU'RE ALIVE!!!), TST, Scalpwiz, Albert C and UF:

Thanks for the notes you dropped. I've run out of things to say in response. Or maybe it's just coz that it's starting to dawn on me that as far as trading is concerned, there's really not that much to talk about. It's all in the "doing". And we can be doing all the wrong things at one point or another and it's so tiring and meaningless to justify each "wrong" move we make. I'm probably going to be doing a thousand things wrong , a thousand times each - and I'm probably going to be jumping from 1 min to 1 hour timeframe within the same day - imagine the explanation I have to do...Just thinking about it makes me feel like I want to puke.

That said, I'm going to continue recording everything that I do. What I won't do is EXPLAIN & JUSTIFY. I'm NOT going to turn comments off. If anyone tells me I'm a moron (why can't I get that out of my mind???), I'm ready with a standard boring "you're an ass-hole" response.

@Sean:

I'm not using TOS. D is the one using it. I use Sierra charts and trade on AT platform. If you're looking for good rates and superb service, send an email to Anthony (Infinity Futures) .
His email address: a.giacomin@infinityfutures.com

Stops

During the period that I stopped posting, I had made a number of trades that had wiped out all that I've made since Aug 1st.

My losing trades were entered based on more or less the same premises as those of the profitable trades that I had made in the first 2 weeks of Aug. The only thing that I had done differently was the way I managed my trades. I had cut my losses early and let my profits run, which wasn't exactly ideal in what was primarily a choppy/ranging market. I had also taken more trades per day - but had I not done that, I wouldn't have found out about my limitation.

What I learned about me after that exercise was that I am not as good as I thought I was. That short winning streak was not sustainable simply because I am not yet a proficient trader. Many of my winnings from the past were a result of my having sat on substantial paper loss. Because I was rewarded for not cutting my losses, I was hardly motivated to do a proper assessment of my trades. I was aware of this the whole time of course, which was the reason why I simply couldn't feel good about my results.

It was when I was doing what was right for me that I started to accumulate losses. It was when I went on a trading spree that I learned that I can only enter a specific number of trades a day beyond which I start having difficulty managing my emotions.

So my MO for winning has always been to stay convicted to my view of where price is going. On most days, it works beautifully. But it was extremely stressful trading, and on the days that I was wrong, I would take a loss that would affect me for days and weeks.

I personally do not believe that trading is easy. But it shouldn't have to feel like I'm walking on thin ice everytime I put on a trade. The discomfort of trading starts the moment you execute a trade, simply coz there's a likelihood you'll lose money on that trade. This type of discomfort is not the same as the mental strain that's caused by an unplanned event (trade going awry and you don't have an idea how far price is going to move against you, coz you have been profit-focused and have not prepared adequately for contingencies). The latter should happen as infrequently as you can help it.

I am now starting to use hard stops. It is not to eliminate discomfort. As a matter of fact, stop-losses make me feel so uncomfortable I'm now reluctant to trade. But I know for a fact that I need the protection of a stop-loss while I'm still learning the ropes. Stop losses are there to make the lessons I can't avoid less expensive. More importantly, losing trades make me review them over and over to find out what I have overlooked before I execute them.

Since my trades are based on very precise setups and signals, a stop-loss is necessary to get me out of a trade that's no longer valid as soon as it's invalidated. If I keep getting stopped out, it simply means that more work is needed to improve my reading of the market. If skill has nothing to do with my being stopped out, and it's the market that's doing something I've never seen before or have had very little experience with, then being stopped out would give me a chance to pause to do an objective assessment, which is something that's difficult to do when I'm still in trade.

There are many conventional wisdoms about trading that I dismiss as pure lies and myths, and there are just as many unorthodox concepts and philosophies on trading that I turn a deaf ear to (Just coz something is unorthodox doesn't give it more credit).

I have always stuck with whatever makes sense to me.

At this stage, tight hard stops make perfect sense to me.

Starting over.

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.

Call It Whatever You Want

Since the last time I published my PnL, I've been trading daily and getting mixed results. I TRY to feel happy about winning days, and take a more conservative approach after losing days, to no avail. Once I realized that daily PnL no longer tells me anything I don't already know about my progress, I stopped caring about that figure at the end of the day.

I've known for a long time now that I need to see continual improvement in anything I do for me to want to continue to do it. Patience has never been one of my virtues. I know that trading is hard, but it can't be so hard that one can't expect to make quantum leaps in a year, or 2. And that's what I'm looking for: quantum leap.

I've stopped reading trading books, and I've stopped visiting all blogs authored by doctors, and any blog that attempts to educate. Ever since I started trading, I've hardly followed conventional advices regarding trading, and I had made money (Yes, I am aware that 2008 was a year that many made money thanks to the crazy volatility, but hey, has any one of them attributed their success last year to volatility?) So, I'm going to continue to assume that many who make a darn good living teaching others how to trade don't actually trade themselves, and therefore know nothing about the real world of trading.

What I've found is that the best traders are mostly unknown and QUIET (not that they don't talk, they just don't attempt to teach and preach and get paid for doing that). Celebrity trainers talk a lot of crap. They are uninspiring at best. Listen to them, you'll take 10 years to see progress, if you don't give up by year 5.

I'm quite done complaining. The thing is, it's not anyone's fault that I'm frustrated. I was writing to someone on my blogroll earlier today, telling her that I'm the kind that ran before I learned to walk (actually, I never crawled and was always carried around, and then at 20 month old, I got up to walk) - and that's the way I am, and who I will always be. I can't be happy unless I'm absolutely the fastest and the best.

And I know without a doubt that to be a great trader, the first thing that I have to do is get rid of 90% of the books that I have read on trading, and stay away from negative people.

Since I started last year, I've never had a break of more than 3 days in a row. So I'm going to give myself a short holiday, and the time to think things through.

And since I'm not going to be trading, I'm turning my comments on.

So, go ahead, call me a moron.

Garbage Trades, Sweet D & Peerless Gremlins

So here I was, sitting by my screen everyday from 5/7am to 6pm, watching my charts, then resume watching at 9pm all the way to 12/2am, and the best setups just had to come during the time that I had to do my household chores, get dinner, and show my cats and D some tender loving care.

This has happened just way too often. I'm thinking that maybe I should start to JUST WATCH & DO NOTHING until 5pm (5am N.Y. time) when market starts behaving a little less erratic and schizophrenic.

D just called from his office to see how I was doing. I complained about having taken "garbage" trades AGAIN. D's response cracked me up. He said that it's good to recycle, and that if I can make money from garbage, I should do well with the more quality stuff. D's the sweetest - for a while now - and he's made me promise to REST on weekends and resume my skating routine (I used to skate in the evening 2 to 3 times a week - it's been a whole year since I last skated!).

Tomorrow is gremlins' birthday! The elder twin REMINDED me last week. She demanded very specifically for a birthday card only (no gifts, she said, just a card). The challenge: she wants a non-Hallmark, DIY card!!! She wants me to draw a picture of her and her sister. I'm in trouble. The only thing that I can draw is a very nice heart...and some ugly birds and flowers....

"You WILL write on the card "I love TT (the older twin), and on WW (younger twin)'s card, you WILL write "I love WW"".

It's apparent gremlins have my family's genes and none of their father's (one of the kindest, most gentle, most blasé men I've met).

Update (I WANNA CRY!):

No Time For Bad Trades

It's apparent that my best days this week were those where I hadn't the time to sit in front of my screen (staring at my charts) for 12 - 16 hours a day.

When pressed for time, I trade the best setup coz I have no time to nurse bad trades. I take a look at my charts for a few minutes and if within that time I don't see my favorites, I simply walk away. It was "Carrie Week". My friend was my priority.

Actually, I was prepared to take a trading break for the week to spend time with Carrie. However, it turned out that I had a few hours to kill each day while Carrie went out to meet her other friends here. I had used those spare time to go over my charts, and if I didn't see anything I could trade, I simply get dressed earlier and played with Al (didn't want to get stuck in bad trades that I had to nurse - coudn't let my friend wait for me). We usually got home way after the US market had opened, and I would scan the ES 5 min for my favorite setups. I was able to quickly make out what the trend was and where it was likely going. My eyes and mind were simply way, way sharper after being away from the screen for the entire day.

A more detailed review of the week:

Monday - Carrie had arrived in the morning and we were out the whole day. When I sat down in front of my charts for the first time that day, it was slightly before US lunch session. I took 2 trades while Carrie was in the shower. Stopped out on both. After Carrie and D turned in - which was 2 hours later - I recouped all my losses. Breakeven day : + USD 25

Tuesday - Carrie was out in the afternoon, and I took a few 6E trades. Then in the evening, when she was having a chat with D, I took a quick ES trade. Good day. Best day. + USD 487

Wednesday - Carrie went to an island nearby with a friend. I took a few 6E trades, then spent a lot of time sleeping (and didn't feel guilty, coz, hey, I wasn't supposed to be trading anyway). Took just 1 ES trade in the evening coz I had to be up early the following morning. Good day (albeit filled with blunders) +USD 375

Thursday - Spent the whole day with Carrie and saw her off at the airport. Got home shortly before the US session started. D was having a headache and I didn't want to keep him up. So my plan was to go for just 1 good trade and then call it a day. I had to be selective about my only trade for the day. Great day. 1 trade + USD 300

Friday - The first day of the week that I had the ENTIRE DAY to trade. D-day: -USD 575

Nuff said.

Lord Tedders once told me that his best days were those where he spent only a couple of hours in front of his screen. I always remember what he said, but it hasn't stopped me from doing stupid things now and then.

Once in a while, I must sabotage myself.

Maybe I don't love me so much after all.

Trading Is NOT About Winning...

...neither is it about losing per se.

Trading's just business - at the end of the day, all that matters is the bottom line.

Yes, you definitely need to LOVE this business - almost as much as you love your kids, your shoe-chewing puppy, your annoying girlfriend, etc,etc. Anyone who's considering- even albeit very remotely - TRADING (as opposed to INVESTING, and in reference to very short-term trading only) seriously, or is already a serious trader, will know what I'm talking about.

A post on the topic in question (by Ivanhoff , who writes for the Trading Goddess) that I like very much.

While there are heaps of articles and books out there that touch on the topic of "cutting losses" that I've always just outright ignored, this particular article strikes a chord.

Something to do with timing, I reckon.

Yes, I believe in using a stop loss now.

I've traded without it before, and while at first it was good to not have it (means you won't ever be stopped out - you get out on your own terms and in a losing trade, that's always based on how much PAIN you can take; and since I can take A LOT, the "big ticket" losses I've had in the past have been catastrophically disastrous for me - not so much in the monetary sense, but they definitely nearly broke my spirit), a series of good, hard lessons taught me that if I want to do this (trade for a living) for the long haul, I'd have to accept - perhaps even learn to embrace - small losses.

ES Trades 6/2 - Wrap UP

A day where too many mistakes were made:

1) The 2 globex- hour trades had given me a 5-tick and 8-tick profits before my stops were hit, which I should have taken, since my stop was not set to take a swing

2) The 1st trade after US market opened was a mess - it wasn't supposed to be taken in the first place. I chased coz I was trapped out. I was trapped out coz I hesitated when I had my signal to enter (in triple pink arrow was where I should have entered).

3) The trade that followed was another chase - and even more unforgiveable coz I hadn't a signal at all!

4) The last trade was the only one today that I can feel happy about : I had both setup and a valid signal, and I exited as planned (which was NOT to hold beyond 2 trend bars, and cover as and when trendline is hit)

Before taking the last trade, I was down USD 325. I have a daily loss limit of USD 400, and what that meant was that I had 3 choices:
i) take the next signal and risk blowing my daily loss limit
ii) enter only on hammers / very small trend bars
iii) call it a day

I learn today that if I don't make good decisions throughout the day, I'll end up having to make extremely difficult ones before the day's over.

Reply To Comments

Thank you, DT, Ryan, MVW, Cory and Sandy.

I woke up an hour ago, and the first thing I did was turn on my big monitor (I don't shut down my computer until it crashes LOL!) to look at my chart. And I saw what I expected to see. Price hitting 923.50. It went way beyond actually, to hit 928. It was the kind of action I had waited for for an entire week. And what did I do just before that monstrous candle appeared? I closed my last position (at the candle that I had indicated with a huge black arrow in my chart above).

I don't know if you recall that I wrote in my notes sometime last week, on one of my charts, that at around 345pm, when you see either a bear or bull trap, you can prepare to see bear/bull runs for at least 2 long legs.

In the chart above, you can see that sellers realized they were trapped at the candle before the one that I had exited. Price had gone 1 tick below the low of the bull candle at 335pm after luring sellers in with a "short" setup (the bullish 335pm candle had a high that's higher than the candle before and after it, and a low that's lower than them - a text book Outside-Inside-Outside signal for shorting coz the 2nd Outside bar is a bearish candle).

When price had gone 1 tick below, stop orders to sell were picked up, and sellers are now in an open position. What happened next was not what they would have expected - price closed right where their entry bar had opened. With just 30 mins to market close (and we know most don't want to be in position after 330pm), many would immediately send limt/stop orders to get out. The collective actions of sellers would send price soaring north until everyone who wants out is out, and of course along the way, some buyers would jump in and chase price up, sending price higher in matters of minutes.

The best entry for a scalper, would be the bar that I covered. The candle before it was the signal. That was the candle that surprised both sellers (who are now trapped in a losing position) and buyers (who are NOT in position and hope they are), who would then react in the candle that followed. At 15 to 30 mins before market close, you can expect price to just go in the direction of those who are scrambling for the exit. The profit taking point? When you see the first bearish candle (for a bear run).

When I closed my position and logged out of the AT platform, D chided me for giving up (strange, really, given that he's always the one that tells me to take it easy). I had to tell him I wasn't giving up, that I know that price would hit 923.50, but that there was no point in holding that trade for that profit target of 923 and capturing the day-end score coz the results were from a mixture of scalps and swings. What I wanted to capture was the statistics for swings and the figures for yesterday were invalid. I do want to beat myself up for messing up the very day that would have given me the stats that would validate whatever hypothesis I had on the strategy I was testing out.

Murphy's always just a click away.

What I had learned in few days' of experimenting with the holding method was that there is indeed an ideal hard stop that i can use even in scalps. And that is precious. The reason that I had wanted to give up scalping is coz my risk-to-reward ratio is just horrendous. I've never believed in 2R, 3R or 4R. But 1 for 1 - that seems appropriate. Or 8 ticks stop for 6 ticks profit - that's still very acceptable, to me. Many times, I was able to find entries with 3 tick risk and 3 to 6 ticks immediate profit (if I take it). Very short window to take profit before price does its usual - comes back to bite you.

So what I've decided to do is that I'll resume live trading doing what I'm used to doing, while continuing to paper trade the holding strategy. I probably can't do both at the same time, so D will help me to execute the paper trades on his computer (and in the process helping him to appreciate the benefit of WAITING for setups).

I'm NOT giving up. No way. I don't know what I would do if I don't trade. I'll probably be out causing trouble like I always do when I feel bored (I have the shortest attention span among the people I know) and aimless.

Thanks, again, guys, for the very thoughtful notes. I was surprised to see 5 comments when I logged on to my blog to do an AAR for yesterday. And I thought I hadn't really slept for that many hours! LOL!

Cory, those are black mambas. "Black" does not describe the color coz there are no "black" mambas - only green, metallic and brown and I think there's another color. I absolutely love them. They are very very nice to touch - their skin is smoother than mine LOL! Without their fangs, they are lovely creatures. They don't attack when they sense threat - they get away. And they are FAST! But once they are cornered, they retaliate and they are extremely accurate with their strikes. One dose of their venom can kill up to 15 adults. I love their eyes. Just stunningly captivating beautiful jewels.

Now that I'm feeling upbeat again, I shall wane off ice-cream (Sandy, are you psychic?!). I've had more ice-cream in a week than I've had in a year! LOL!

All's NOT good

I'm not posting my paper trading results for today. It's been a futile exercise., a total mess to be precise.

Was stopped out thrice right from the beginning, taking a total loss of 500. Was pissed, coz each time, price had gone 5 to 8 ticks in my direction, and the old me would have taken part of that before the stops were triggered.

So I did what any angry trader would do. I scalped my way back using 3 to 4 contracts each time, recovered my 500, and a little more. I know, it was stupid. There wasn't even real money on the line. But the main problem here is that scalping more than half of all those trades just totally defeats the purpose of the exercise

I know exactly what my problem is. I'm impatient. I'm controlling. I'm skeptical. I don't believe in waiting around for 20 points to drop on my lap one day.

So why did I even consider taking that route in the first place? I don't know for sure. But I suspect it's coz I'm IMPATIENT. I don't want to have to be good only 10, or 5 years later. I don't even want to wait 3 or 2 years for that matter.

I'm 3 years away from turning 40. For a woman, that's OLD.

All you guys out there, please don't say anything. If you're 40, You most probably have either one of these:
1) family - wife, kids, dogs, annoying/adorable relatives you hang out with once a week at least
2)friends
3)career
4)hobbies (including porn and such)
5) retirement account
5) Maserati

I'm just frustrated. I spent everyday thinking about how I've wasted another day of my life. I definitely am not looking forward to my birthday.

I don't know if I'll continue to paper trade next week. I've done this too many times - and each time I gave the "holding" mode another shot, I had felt like banging my head against the wall.

Yes, it's been years now - my mood tends to get really foul in June (And of course, the month before it as well).

Off to take it out on the only human being that's sharing my space now.

Break & Brooks & Bloggers

There are a number of reasons that I decided to take a blogging break. (By taking a break I don't actually mean that I'll stop writing altogether. I guess what I should have said is that I'll stop posting my trading results on a daily basis.)

Those that are extremely close to me already know that last year was among those I would label an absolutely "nightmarish year". It began bad, and got terribly out of control by May. It was during the worst time of my life that I began to blog regularly. Seabloke and my counselor thought it would be good for me to express feelings I never knew how to express (I remember telling my counselor that I was capable of expressing anger and anger only, and told her that I'd probably be her only patient who was too intellectual to buy into the notion that admitting and showing my vulnerabilities is going to help me move on) via journalling.

So, I had a jolly good time putting up my first few ultra expressive entries in May 2008. After that, I regretted my emotional outpour, and deleted the really weepy ones. Instead of writing about my extremely dark thoughts and negative feelings, I started to write about my trading activities and thoughts about trading instead. Trading distracted me from useless thoughts, and writing about it was beneficial to both D and me. D has always been too busy/lazy to do pre-market analysis, so I did that for him via my blog. Then I began to post my daily trading results, since I need them for review, and I couldn't find a better place to archive them than on my own diary. The rest's history.

Came May 2009, and I was reminded of all the bad things that happened in May 07 and 08. I feel sick everytime I'm reminded that there are those reading my blog that are the eyes and ears of someone I would not hesitate to slap if I were to run into him on the street. I was very close to wanting to keep a private blog, giving access to only the few who started reading my silly entries when I started writing last year. At the same time, I was also starting to become aware that I traded quite differently from the norm, and was constantly afraid of inviting questions that I couldn't respond to in a way that could be understood.

People like Lonely and Solfest would know that I frequently let my losses run and cut my profits short - I let my losses run until I know that I'm clearly wrong. 8 out of 10 times, I'd be right and I'll get out with a profit. I don't take things for granted - so when I'm in profit, I take them. While going over my past trades, it's obvious that my trades suffered a great deal when I started to get too afraid of sitting on losses. I bailed at maximun damage so many times I lost half my account in a mere 3 months.

My trading style would reflect that I've never been able to relate to the term "risk-to-reward ratio". Regarding entry - it was until I attended Michael's class that I learned about the proper way to enter a trade. And on profit taking - I'll cover whenever price stops moving. As far as trade execution is concerned, I can't think of anyone who does it more sloppily than me. I can never tell another person what triggered my decision to enter a trade. I can sit in front of my screen for hours without moving and all of a sudden, I see something, and I jump right in. No thoughts about stops, risk, where to take profit. If I'm right, I grab my profit and wait for the next sighting. If I'm not immediately right, I wait to see if I'm going to be wrong. If I see any signs that I could be wrong, I'm out. If I don't, I stay.

The thing about wanting to nail that perfect entry is that it's a tad similar to wanting to find the holy grail to trading. Sure it would be nice to find trades everyday that offer a 3R profit each. And I suppose a lot wouldn't mind if they have to wait days or weeks for that. But so many times, I see traps set up precisely to catch those who are after 3R profits. You can have all the patience, and all the discipline of an exemplary trader, but once you're after low risk high return/probability trades trading the futures, you'll be disappointed at best in the long run. I can't say the same about stocks, but in futures and forex trading, there's no such thing as a low risk high probability set up. Every entry is inherently very risky, and you will only have 50% chance of being right. Your probability of coming out with a gain is always 50%. If you have a tight stop of 2 ticks for a 2 point profit target, you'll be wrong 99.9% of the time.

That's just my observation, of course. And I actually don't want to be right about it.

That's why I'm studying Al Brooks (But even Al Brooks doesn't have a 2 tick stop. I believe he has an 8 point stop. Haven't got to that part yet, but I remember hearing it on one of his presentations.). Brooks gave me the impression that he has found a way to nail entries that are close to being "perfect". I'm going to have to go over 400 pages of his work to find out what his secrets are. For the past 3 to 4 weeks, I've gone over the entire June contract's 5-min charts to study them candle by candle, and my conclusion is that it's simply not possible to be consistently profitable (I'm not saying that I expect nil losers - that's laughable at best) if the focus is on R to R ratio. The gems are the riskiest trades - high risk high reward is the best the market has to offer. You will see trades with perfect R-R ratio when you do all your backtestings.

Try forward testing instead.

In response to a question over at my comment section, I have signed up for Sierra because I need data from the past 6 months to do all my research. TOS has only 20 days of intraday charts. I have now downloaded 5min charts for the u8,z8,h9 contracts on Sierra. And Sierra allows me to make notes very efficiently on the chart itself. I am now able to do on Sierra analysis and note-taking for 5 to 6 days' charts in the time that I used to be able to do only 1 on TOS.

To cut a really long story short, I'm taking time out to avoid having to think about upsetting events and people, and to do a lot of back and forward testing on concepts I didn't quite use to believe in ie. beautiful entries and money management (to me, money management used to mean NOT WIPING OUT MY ACCOUNT. Just that. Simple enough for me to grasp and follow).

I trade occasionally still, but most days, the only thing I do after market open is to OBSERVE price movements - and take notes of course. I haven't finished even chapter one of Brook's book. It's hard when my tendency is to go back to my charts after reading a few pages to check out the setups.

I most certainly hope I'll be done by June.

Oh, and those following Daytrader 233's blog, he's moved to: http://priceactionscalping.blogspot.com/

There are quite a few others who have started blogging. They should be on my 2 blog lists. If I've missed anyone, please let me know.

Cory, where's yours??? LOL!!!

A Trading Session Filled With "I Don't Know"s

Me Vs Wallstreet's latest post caught my attention, coz it talked about something D and I can definitely relate to.

During yesterday's trading session, D and I started off trading in opposite directions. I kept buying where he was selling. Soon it became clear that he was going counter-trend at the wrong time.

After 2 consecutive losing trades, he started taking cues from me

At one point, when I entered long on the ES, he went in long on TF.

After his order was filled, he asked if price was really going to go up.

I told him I had no idea.

He got a little flabbergasted. So I had to explain that it all depended on whether enough people were jumping in - if there weren't, we'd just gotta run.

I then asked where his "run point" was.

He had no idea.

I suggested that he scratched his position coz I had entered at a place where it would take him just a few ticks to know if he was right - and he wasn't.

He didn't want to bail. So I said fine, then he'd just have to see if price would come back up to a level where he can cover at a smaller loss, or at breakeven, or even with a little profit.

He asked if price would find support at the level I marked "support".

Again, I said I had no idea.

He gave up.

I pointed out another place that he should cover at a loss of 200, or risk 500 to see if price will bounce.

He asked if the long legged doji after the long bearish candle would halt price (I had told him to run after the completion of the long legged doji).

I said I had no idea.

Most of the time, these dojis don't reverse price on a downtrend, and the best answer I could give him was "I had no idea" coz really, I hadn't the slightest clue if that particular doji would be an exception.

He eventually bailed at loss of 400, right after the close of another long bearish candle that came after the doji.

I waited for the bounce, and got out with 300 gain.

D was disheartened, but I didn't console him (yes, I was mean). I asked on what setup had he entered. He gave me a blank look. Then he said it just looked like price was going up. I asked if he recognized that the small bullish candle he was looking at could very likely turn out to be part of a falling 3 method (completion of the method was right before the doji appeared). Yes, yes, I was nasty.

He asked what gave me the confidence to hold on to my position. I replied that I had entered on a very familiar setup, and knew where I would run. Before price got anywhere close to my stop, I was starting to see bear traps being setup, so I had no reason to run. Had it been the other way round ie. bull traps seen instead, I would be ready to bail before my stop was hit.

With me, it was all about seeing what's unfolding at every step and I just act accordingly.

Go with the flow; keep in mind that the only certainty about the market is that certainty doesn't exist.

The best we can do is to be very selective and trade only setups we recognize (coz we've seen them enough times and had backstudied them), accept that this very particular trade that we're putting on could just turn out to be among the 10, 20 or 30% that don't work out, and bail after the pattern we had entered on has clearly failed.

Right now, I'm printing out all the charts with my favorite setup highlighted, and I'm sticking them up on hard cardboards (I bought a dozen really huge ones) so D can stare at the setup day and night. When he starts to see them in his dreams, he can then start trading real money again. LOL!! Yes, he's volunteered to start paper trading (which he's never done!!).

And he's switching to ES!

And opening an account with Inifinity just to daytrade futures.

GIRL POWER!!!!!

The Lonely Trader's Latest Post on PRICE ACTION

I'm not writing, but I'm still reading.

A great post by Lonely. Astounding piece.

Got me thinking:

What, exactly, is PRICE ACTION???

H*** Cow!!

Talk about bear traps!!

What I've learnt about an Ascending broading wedge is that price doesn't stay below it even after breaking out. It will want to test the ceiling for at least the 3rd time first. If it's a broadening top, price will come down from the top only after the previous high has been tested (840 -850 in this case).

This is the reason that I only scalp a counter trend. When I trade (holding for more than a candle) against trend, it's usually coz I've jumped into the trade without first determining the general trend - or more aptly, the general sentiment - for the day.

Now is about the time that our friends in US would have gotten out of bed. Those who held their shorts from yesterday would see the uptrend (fresh eyes, unlike mine after having stared at the chart for 12 hours) and would want to cover before the holiday. I'm just guessing. Or maybe people are not so pessimistic about the many data that are going to be reported in less than half an hour after all. Who knows.

Hard stops - to use or not to use? Always a dilemma.

Was just telling D that on second thoughts, I'm staying away when US market opens. Charts get crazy pre-events - like a holiday!

Reply to Lord Tedders & Emini Player

In reference to my post on ES Trades 3/24,

Emini Player asked:
How tight/wide are your stops?
How much paper profit did you have before the trade turned against you?

and

Lord Tedders commented:
Jules,

You seriously think that a mechanical system will be good for you? I guarantee it won't take the stress away. I've walked down that road many times. It might work for some, but it won't help us "emotional" traders control our emotions.

I think your last sentence is truth, not sarcasm.

Best of luck finding your seed.

Emini Player:
The stop for my first trade was 2 points. It was based on the first candle that closed above my 25ema. Price went in my direction for 1.7 points before changing direction. I should have gotten out at 1.7, but I didn't coz I had overridden my system and gone in before it gave a signal. I was right in my direction, it's just that I got in too early, and obeyed one part of the system. Had I stuck to the entry signal, I wouldn't have been stopped out, coz the signal came AFTER price went up above the ema. Totally my fault here. I should have just taken 1.7, and counted myself lucky.

For the 2nd trade, my stop was the same - a close above the ema. But price was already trading very far away from ema when I entered. It was near the close of the market, TF was rather crazy with candles turning readily from bullish to bearish and vice-versa. I had 1 point before trade turned the other way - I was looking at a 4 point paper loss. I got out after the loss came down to 1.3 points, although TF has never closed above the ema before trade went back in my direction again.

In between the 1st and the 2nd, I actually had a winning trade - 1 point. This one went immediately in my direction. I took the 1 point - totally didn't wait for my system to give an exit signal.

I saw where my problem was after getting 3 hours of very good sleep :-)


LT:
To be perfectly honest, I think a mechanical system is good for me only if I let it take over completely. I have to trust it enough to get in and out based solely on its signal. But you know me, I can't let some signals take over my trading for me.

So what happened was that I obeyed an aspect of it, and override the others. No, it totally didn't take the stress away. I felt like throwing up everytime I saw a move that I would have otherwise taken a scalp on, and had to let it go coz my system says "NO".

For Mar 24's session, I actually ignored my system once, and went in before it gave a signal. Trade went 1.7 points in my direction immediately. I was too surprised to act, and let the trade go against me, and I ended up having to get out at a loss coz my exit signal was triggered (which was meant to be a stop signal - best part was that it wasn't supposed to be a stop signal, given that there was no ENTRY signal to start with. It was absolutely imbecilic - ME, I was the dumb ass!)

I think ther's a possibility that I MIGHT never trust any system enough to let it work for me. Mine is a very, very simple one that uses candle stick pattern, MAs and Bollinger band. And Fib of course. And I'm looking at just 1 chart (ie. 1 timeframe, coz I have the higher timeframe's MA on the same chart, allowing me to know its trend at all times). I think part of the reason that I don't trust it is that I was the one that came up with the way to deploy it. I just kind of put together all the things that I've used before that I haven't thrown out in disgust, tweaked the parameters in accordance to the prevailing market volatility, and used it in a way that I haven't seen any one using.

I'm a broken record, but I'm still going to say it - my mind's constantly in a jumble, and I keep getting caught in a situation where I trust the "Me" in real time, and not the "Me" a second ago.

I've resorted to recording my thoughts as I trade. So I've been talking to my pc a lot. But I don't play back at all now, coz I always find the person I'm hearing super ODD, so NOT me.

No wonder my doctor has been persuading me to get a brain scan (I have very painful headaches)....

Don Miller's Video, The Chinese Bamboo Tree, & My Turning Point

I have the habit of playing Don Miller's weekend videos as I study my charts. A moment ago, I was doing just that, except that I was really focusing on making out the price patterns on yen futures during pre-US market open, and then I heard my name mentioned. D, who was playing online poker, turned to look at me, with his usual now-what-have-you-done-this-time expression written all over his face.

Anyway, here's Don's video for this weekend: VIDEO - The Weekend Trader

God works in mysterious ways indeed. I was telling Lord Tedders how I felt like I've hit the wall, and I've been fretting over not being able to find my centre. I looked everywhere for an answer, without really knowing what the question was in the first place. I thought maybe I needed to see more of how others trade. I would visit a forum, and I would get right out by the first page of a thread. I revisited my books, and would feel like throwing up whenever I come across a trading "receipe" with step-by-step instructions on how and where to get in and out, and the indicators to use.

I got so sick of reading the technical stuff, I went looking for what I call "pleasure reads". The first thing that came to mind was a "bamboo tree" that Don mentioned a couple of days back. Got curious, and went to check out his posting on the "Chinese Bamboo Tree".

I can't describe the impact this posting has on me. Words getting in the way.

All I can say is that it gave me my questions and the answers to them.

Earlier, I talked about going back to my older postings to find out what I had done differently last year. The assumption was that what I did back then was the best that I could have done. But here's exactly where I get all confused, over and over: if it was so good, why did it feel so wrong the whole time?

After reading the bamboo tree story, it hit me that I had grossly under-estimated the magnitude of my predicament. I hadn't a seed to plant. While others have theirs and are simply always either looking for more fertile grounds to plant it, or looking to change it for another, I've never had a seed to start with- never thought about it, never understood it. I have nothing to put my faith in. I haven't a systematic way of going about trading - sure I make plans and I have an idea where I would buy and sell, but I never know exactly where I would get out. I basically have been exiting as and when I feel I'm no longer comfortable staying in the trade. Trading has always been all about my FEELINGS. And my feelings is about the last thing that I'll put my faith in.

To cut a very long story short, I realized that the way I had traded last year was the worst way to trade. I've fooled myself into believing that a net postive year means that I must have been doing things right. But in trading, as in many other things in life, early successes have proven time and again to impede further growth, at best. The absolute worst that comes from small victories in the beginning is the laying of a path for very painful, if not fatal, falls in the journey ahead.

What I can say about my result last year is that it's consistent with the outcome of almost everything else that I've undertaken. I have very competitive blood. I must win. And I'll do whatever it takes to win. Sometimes, all I need to do is to believe that I WILL win, and I would. So far, so good.

But I'm cursed with an extremely short attention span. How that affects my ability to continually perform needs no elaboration.

The method with which I had used to achieve a certain ratio of winning to losing trades is not even a strategy within a systematic business plan. I hadn't the patience to come up with the latter before I got started. My approach was purely tactical. There is no blueprint, no roadmaps, not even the simplest of plans. My "plan" was simply to "GET IN".

Without something that I could, and was willing to trust, almost every trade has been placed at my discretion, and getting out has of course always been at my discretion and based totally on my very fallible emotions.

I personally know a few discretionary traders that are doing very well, consistently. These folks have little emotions when it comes to trading. It could have taken them years to get there. Maybe some are just blessed with extraordinarily tough minds. In any case, I'm certainly not one of them. I might NEVER become anything like them.

If I want to start getting on the track that I've never been on in the first place, I have to totally change the way I trade. It can no longer be discretionary. It's going to feel ALL wrong I have no doubt about that. I'll start asking myself again why I'm even doing this. I'll start thinking about all the floor traders who had made it by scalping, or by any other ways they can't explain in words coz so much of it is about trader's instinct.

But I'm determined to see this through. I will trade only in a way that I can actually describe in plain English.

For weeks now I have been comtemplating deploying a very simple trading plan, which I've never gotten down to executing. Short-sightedness is the main obstacle.

But I've made up my mind to either do it, or stop trading entirely. Monday on, I will trade a very different way. It's a way that no longer has its focus on achieving consistently winning days. High winning rates is going to be totally irrelevant. Thanks to Don - whose complaint about having no losing days finally made sense to me earlier TODAY - I now realize that I had gotten my focus all wrong. The questions I have been asking were all wrong, and had gotten me no where near to where my heart really wants to go.

Don mentioned both in his comment and his video that I had brought up the word "strong" in my comment. So I have had "strong", "Bamboo Tree", "Faith" ringing in my head the whole day. And I had to end the para before this with a "heart" in it....

I get your message, my Mighty One up there.

I Want Out

Nursing a scalp gone really bad. My focus now is on exit. Not planning anything else until I've closed my position. And I definitely will close it today. Even a gapped up star on daily chart will not make me hold the short position. We're no where near price top. An evening star only works there (price peaks). What I'm seeing on both daily and hourly charts are telling me a rather bullish story (now, that sounds really familiar....did I say that a couple of days back??? why the hell did I keep selling then???)

I've mismanaged my trade big time. And I've broken my number one rule about not keeping a trade overnight.

I can continue to hold the trade and HOPE for the best - and if the best happened, I would have learned nothing. Or I could bail now, take a USD1k loss, and resume practice on scalping the way I did before. It's been 6 months now, and I still can't repeat what I did in Sept/Oct last year. Back then, running was my forte. Probably has something to do with the fact that I was entering on 5 contracts (ER2) each trade. I remember saying back then that I had wanted to reduce to trading just 1 contract so I can learn to HOLD a position, but was wary of a very likely consequence ie. that I'll get sloppy and not run when I'm wrong. 6 monts later, I'm living that very nightmare. Self-fulfilling prophesy, maybe. But it's looking more like I actually DID know myself very well then.

Now, I'm simply baffled. I don't know for sure why I had to fix what isn't broken. Perhaps it was the profit amount that freaked me out. It's extremely unproductive to think that if you can earn that much, you can also lose that much, coz I hadn't gotten there by gambling. I acknowledge that the market needs to be willing to move in the first place, but the rest is really just pure money management and focus. I was so willing to scratch whenever price didn't move in my direction immediately, or when it went against me by ticks! I was also willing to take ticks for profits. On rare occasions, I got a few points in under a minute. I always depended on the market to give me whatever it wanted to give within that single 3 or 5 min candle, and I was out.

Maybe what I really need to do is to go back and take a look at how I traded then. My style was certainly a lot less complicated. I look at chart patterns and only trade 2 to 3 of them, and I kept my eyes on the key S & R levels. And with the ER2 (TF now), I would use fib to buy/sell on retracement on a trending day. That was all. Nothing else. I didn't care about pivot points. And I didn't care about previous days' highs and lows. As far as I was concerned, they would have been key S & R on the higher timeframe, which I would plot on my 3 or 5 minute chart. Entries were ususally based on 1 min. I was able to focus on the "NOW" - no prediction on whether support or resistance was going to hold coz price was at historical high/low and such, or that it had gone up/down for days so it ought to be retracing, etc, etc.

Seriously, are other human minds able to process that much in a matter of minutes or even seconds? Am I the only one that has a brain that can only focus on ONE thing at a time? In scalping, for me, it would be on what price is doing NOW (eg. price is at support, and has formed a hammer; the next candle opens below the open of the hammer and is moving down - so the only thing I'll be thinking is that price is behaving oddly, and that I should just wait to see what happens next).

I really want to get out of this confused state. I have a very short attention span (I can't even stay depressed for more than 24 hours for crying out loud), and I'm wondering why I haven't gotten sick of being confused yet!!

ES 3/17 & Rant

ES 3min

Levels that I'm watching. Plus 776 & 782.

I have no idea if ES wants to test the high or the low, and I have no idea how I'm going to go about trading today. So far, using stops has been EXTREMELY uncomfortable and unnatural. If it takes doing something that feels totally unnatural to trade well, I'll choose sitting on a losing position over using a stop ANYTIME. Ok, that's not fair. Sitting on a losing position is absolutely in my blood, but damn, it's gotta be the most uncomfortable thing to do!

So far, scratching without waiting to be proven wrong, or outright sitting when my trade has not been proven a bad one has worked FOR ME (save the few times that I totally lost my mind and decided to inflict some REAL pain in order to learn). Trading without a hard stop has been stressful, but I feel in control. Putting in stupid bracket orders or simply a hard stop makes me feel like a really lousy stuntman that needs a safety net, or more aptly, a leashed dog.

I'm tired of wanting to do what's right. Why can't what's right be whatever that makes you money 80 - 90% of the time?? Now I've simply gone from feeling stressful to MORE stressful coz I really don't know what the hell I'm doing.

Why does wanting to be JUST me ALWAYS feel so wrong???