Recently I wrote about the Auction Process and that has been my focus this week. I’ve traded this week on sim with the exception of one trade that was too good to pass up. My results have been much better than anything in the past months. I’ll post the results this weekend once the week is finished but I wanted to write about my “break-through”.
I feel like I’m starting to understand the auction process. This week when I made a mistake I was able to recognize it immediately. In the past I’ve felt lost and FT71 would make a comment and I’d have a lot of trouble understanding why. This week I was much more in sync with FT71’s tweets. A few times I had on a trade and he’d talk about targets and my target orders were already on my DOM at exactly the same levels he tweeted. Here is an example from yesterday:
There are still plenty of things I don’t understand especially real time but I really feel that I’ve made progress in the past week.
Here are a few changes that I made:
- I trade 3 contracts so that I can scale out and stay in the trade for the big wins (such as Dalton’s “Destination Trade”)
- I trade only one market and focus intensely on the auction process. I keep asking myself FT71’s 3 questions.
- Since my losses are small (3-6 ticks usually) and the payout is large, I’m not afraid to “try it”. I’m accepting that the next trade could win or lose and that the next trade is just one of many.
Now this week has been on sim so the question is can I do this with real money? It’s hard for me to stay in a trade with real money, knowing I could give back the open profits. Here is an example of an open bund trade as I’m writing this:
It stopped short of my target and it’s pulling up to 74. But I’m leaving it alone. 60 is well ahead of the destination so I think it will get filled. Yesterday I let it go and left for lunch and came back to find it filled. I realize that in the past I was so fast to grab 3-6 ticks that I was missing out on some great opportunities. And now I’m working on capitalizing on these opportunities.
When wins are small (my expectancy hoovered around 2 ticks for a while), missing a trade is not that big of a deal. But when wins are big, missing a trade can be the difference between a profitable day and a losing day. So my current focus is on better understanding the auction process real time in order to eliminate mistakes. I’m not sure if I want to go back to real money next week or stay on sim. For me the learning process is continuing and I think it’s better to continue the learning on sim without the psychological issues of trading with real money. If I can trade better next week then I’ll have more confidence to trade real money the week after.
I hope your trading went well this week.