Feb 022011

Yesterday was a mixed day.  My first trade on the bund was great, 240 euros.  Real.  That’s about my daily average for the bund over the past 2 weeks so I decided to do the rest on sim.  And I ended up making some more on sim so that was great.

And then the ES session.  I was on total tilt.  I saw another trader on Twitter get short and instead of sticking to my plan I found reasons to get short with him.  And then he had his stop around 3 pts so I found reasons to justify a wide stop that is completely not in my plan (I use 6 tick stop max).  And then I saw the real setup so I took that.

ES had gapped up refused to even start filling the gap.  Instead of believing in the market-generated information in front of me, I held on to my beliefs that the market was going to at least partially fill that gap.  Much to my peril.  I continued trading short and continued losing.  Eventually taking a 10 pt loss on that first position.  I almost broke every rule I have.

This is very strange because I have been improving.  And like an alcoholic who “has one little drink” I slipped up.  Thank goodness it was on sim.  Not that that is an excuse, just glad I can learn from the experience without paying money.

So I think I’m not yet ready for real money trading with my current trading plan (and I think the trading plan is not complete).  I have a few more issues to work out.  The cool thing about journaling and tracking my trades is that I know exactly what they are.  Writing about a total screw-up day is not easy.  But I’m tired of reading tweets & posts of traders doing everything perfectly.  I think we can learn more from reading about a trader’s mistakes.  Mine were not recognizing the strength of the move up and in not following my plan.

I’m also monitoring the bund behavior during the european afternoon session (US morning).  I’m considering trading 100% bund only.  The question is:  Do I do better on bund because it’s the bund or because it’s in the European morning.  I plan to find out.  I know ES too well, been trading it for 3 years.  And I think that can be a disadvantage as I “think” I know what it “should” do.  The economy, earnings, economic reports, the stock market, etc.  It all impacts ES in a very visible (although not intuitive) way.  With the Bund, I know nothing about it other than what’s on the charts and I think I trade much better that way.  I don’t watch the news and I don’t know anything about the European economy and its impact on the Bund.

  5 Responses to “A day on tilt”

  1. Hey,

    Do you in general find it hard to trade on “trend days”? I know I do, this is my biggest problem with FT71 method… Y’day I followed an experienced MarketProfile trader who also tried to short all the way up…

  2. TheMults – Yes trend days are my weakness. I accept the FT71 view that they’re rare (< 18%) and we can learn to live with this weakness. However FT71 also has some limits such as he will only try fading a move 3 times max. For me max loss on 3 losers would be 6 ticks * 3 trades * 3 contracts = $675. One has to be careful here but that should be acceptable. Let's say I only screw up 1/2 of trend days.. If my daily average was $200 for 82% of the days and $675 for 9% and $0 for 9%, that would be an expectancy of $103 - still positive. The problem is it's easy to go on tilt and that's where the serious damage occurs. The other thing is I have a pullback setup in my plan that FT71 doesn't have. And that should get me in on these moves during trend days. Unfortunately my judgement was clouded by my beliefs that we'd rotate lower and my open short trade and I missed the long pullbacks. But in theory if I were to strictly follow my plan I could have done much better. So this is my biggest weakness and an area to improve. I'm proud of the fact that Friday I went short from the top and got a big win. After that I recognized the trend day down and didn't try to fight it. I just stopped trading and made my weekly review video. That kept me out of trouble. I think my biggest problem are gaps. I always want to fade them. Dalton would say to go with them and he says it's very hard to do. He's right.

  3. Hey Michael,

    my 2 or 3 cents:

    During my trading sessions twitter is off and I do not surf the internet because I really know how it distracts my focus. Exception is my lunch break. Better doing some spreadsheet stuff and doing some breathing excerices.
    Twittering and trading is especially bad for me because it always confuses more or less if other people take the other side of your trade, especially if you respect them. E.g. On Monday I was short the FESX around 8.30 am and checked the old ft71 tweets. FT71 was still in his office trading and was long the ES. It was not nice to see my position take almost max heat before it turns, but it was much harder to stand all the second guessing which was a byproduc of this “twitter info”.

    Regarding trading only the Bund: Yes, go for it. Not because you know the ES to well. That is the target: To know one product very well. But because it is all about focus and there is nobody to interfere with your trading via twitter. And you can finish you trading at 5 pm. A better work-life-balance. Your wife will appreciate this.


  4. Excellent points Markus. I already unfollowed a few people today who trade differently than I do. I do not follow the #FT71 stream while trading because there is too much chatter for me, so it’s mainly FT71 and a few others. But I think I could do better without any twitter. Maybe a compromise would be to only look at twitter when the market is definitely in a “no trade possible” area. Who knows. Maybe no twitter at all, and just study the tweets at the end.

    Being done by 5pm would be great because I’d have one hour to review my trades & do homework. Maybe I’m doing too much. Commission is cheaper on the bund too. And no interference as no one tweets about Bund. The problem is every day I study ES after I’m finished and it just seems the moves are obvious so I hate to give up on it. But I can’t explain why I do worse on ES trading the same exact plan. Distractions from twitter could definitely be one possible explanation. Probably several things including my biases.

    Thanks for the feedback, I really appreciate it.

  5. Hello Michael. I read your blog off and on and I enjoy watching you evolve. I can really relate to this post. Cutting twitter off during trading hours (not trading today) was one of the best things I’ve ever done. At the end of the day I scrape the stream and put it into excel. I go through and delete everything that doesn’t involve FT. His trades, answers to questions, and opinions are the only things I care about. FT gives us everything we need to formulate our own setups/approach/style. Everything else is a huge distraction and hinders growth. There are some good traders on the stream, but I don’t care what their opinion/approach is. The only person I want to converse with about the market is FT. Any market talk I participate in with anyone else is extremely limited. I want to form my own ideas (the most important thing to me). Browsing twitter/blogs/forums/comments is just another way for the fear of being wrong to disguise itself (direct/indirect fear is something I continue to “whack a mole” with).

    The web offers great opportunity to learn, but at some point it becomes too much. It has in a way ruined the natural process of learning. A baby learning to crawl is the most pure form of learning there is. They have no insecurities and they don’t care about being right or wrong. With a little coaxing from the parents babies simply move their arms and legs until they figure out a way to move. Essentially you did this with the bund! Look at your results! 🙂 FT gave you a canvas and you painted a picture. I think if you completely cut off every resource that involves direct market chatter (don’t even look at them in your free time, minus FT) it would help tremendously.

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