Nov 292010

I traded well in the US morning.  Then after dinner I saw the big move up and I had been watching 84.00 as that was resistance earlier in the day.   I went short with a 1/2 position.  Then it went up to the CLVN.  I had known that was a possibility ahead of time so I entered the rest at 86.50.  And it kept going up.  I should have taken a 6 tick stop but I cracked under pressure and didn’t.  I was then watching the naked vpoc and I normally always short those so I did at 89.50 and I closed everything out at 87.25 for a half point profit.

I get an F for that trade and the ES session.  First, shorting a new high is NOT in the new trading plan I’m working on.  In fact I wrote this during lunch:

By defining the trend in this way, it will not be possible for me to fade a new high or low of the session.  This is extremely important.

Can you believe I wrote that and then stupidly shorted the market as it was making a new high?  Then I stupidly didn’t stop out from my first entry at 84.25.  A 6 tick stop would have had me out by 85.75 for -6 ticks.  Then I could have shorted 89.50 and gotten at least 3 pts down to the CLVN.  So 3 – 1.5 = 1.5 points profit.  Without more than 6 ticks risk.

Instead my way I put myself at more than 6 ticks risk and if the market had continued up I would have been in big trouble.  I would have given back a lot of gains from the past few weeks.

So by writing it out this way I got to drill it into my head that I must keep my stops and I must follow my plan and avoid this situation all together.  The worst part is I got away with it again!

So I’m aware of the problem and it’s a lot of work fixing it but I’m on it.  I think I’ll go back to Ninjatrader with the ATM I have the automatic stop.  With X_Trader I always neglect to set my stop.  I know that sounds stupid & irresponsible but maybe I can trade more disciplined with the Ninjatrader DOM?  Ok next step I’ll start putting 6 tick stop systematically with X_Trader and see if that will work.

Sorry for all the ranting but I figure if I humiliate myself publically maybe I’ll be less inclined to repeat this bad behavior.  If I do it again I’ll post a picture of me naked.  Just kidding.  And maybe you’ve done the same thing yourself?  Maybe you’re doing it now.  If so let me know and we can kick the bad habit together.

Update: The P/L I posted was from Nov 24, I forgot to change the date.  I just posted the correct date.  I’ll fix the excel so that if the date isn’t current it will be highlighted.  I didn’t notice because the results were practically the same as Wednesday’s with only 1 tick difference.

  7 Responses to “ES Results Nov 29”

  1. HI,

    I’m bit lost, when was 84 resistance?

    Is the P/L box from 11/24 or today?

    Enjoy reading your blog!


  2. Exactly like my bigest trading problem ,
    I have been working on it
    Still no end in sight.

  3. Wasn,t that just happen to Rena’s CL trade the day before?

  4. And this is the Guru FT71 ‘s solution a while ago

    @matrudenko No, but I can send you a big steel-tipped boot to kick urself with. Exercise discipline! Discipline = $$ #FT71

  5. And this yours – the future Guru

    if I humiliate myself publically maybe I’ll be less inclined to repeat this bad behavior. If I do it again I’ll post a picture of me naked. Just kidding.

    Same —- typical response——-

    Maybe we got to think ” outside of the box ” to solve this issue ?

  6. J – 83.50 – 84.50 was support during the globex session, around 11:50am European time. Then price dropped below and this acted as resistance. I drew this as a level and when price went up to it later in the US session I thought it would at least bounce a point or two below which would give me a good trade. The fact that it rose so quickly was a clue that the OTF was driving the move and I shouldn’t have faded it.

    ch_profits – yes Rena did the same thing. I’m not saying it’s bad in general to do that, although SMB & many other traders say it’s bad. I’m just saying it’s not in MY plan. Being aware of it and admitting it is the first step. For me it doesn’t happen often so I’m making progress. My problem is every time I’ve done it I’ve gotten away with it and that helps to reinforce a bad habit.

  7. “Can you believe I wrote that and then stupidly shorted the market as it was making a new high?”

    As a matter of fact, yes! I can assure you Michael that precisely the same thing happened to me not too long ago. One core component of my trading plan is a) no averaging down unless it was planned in advance and b) not letting the market go against me by more than 2.5 pts on ES (or 25 cents on SPY). Well guess what, I had put this down in writing and in the same week managed to violate both rules at once (actually during one trade), leaving me with a nice loss equivalent to 5 pts on ES, as the market was not so forgiving in my case.

    So, yes, I can fully relate and understand that it’s one thing to write something down and another to really “feel” it. In an attempt to address this issue I run a monte carlo sim over the weekend using actual trading results and had a very interesting experience: Of a sample size of 175 trades I took all losers which were greater than 2.5 pts. (fortunately there were only a handful) and cut them to 2.5 (so as if I had actually followed my plan at all times). Well, all I can say is that the increase in the overall expectancy and the decrease of risk of ruin was so large that I am still in shock. Hopefully this will drive the point home for me once and for all 🙂

    Anyway, great article and I enjoy reading about your progress!


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