This month was a really interesting month. I learned a lot about myself and my trading. And I realize I have a lot of work to do.
Last week I wrote my plan for this week, which was:
- 3 pt max stop, and ideally get out with losses of 2 pts or less
- Trade more with the direction of the value areas
- Be more thorough with my homework so that less decisions need to be made while trading
- Start up the journal again (yes I slacked off)
How did I do?
3 pt stop
I kept a very detailed (painfully detailed) log for the past week. I took 42 trades. in 9 of those I moved my stop wider than 12 ticks and left it in the rest. Here are some stats in ticks:
Avg MAE when stop not moved: 3.27
Avg MAE when stop moved: 14.33
Avg P/L when stop not moved: 5.88
Avg P/L when stop moved: -11
Did moving the stop increase or decrease performance? -11 ticks was what I got. If I didn’t move it, I would have had -12. So it appears not to have affected it. In that case, better to leave the stop and avoid taking a big loss (which I did a few times this month). So that’s another goal going forward. My total average MAE was only 5.64 ticks and so I’m even considering a 8 tick stop. I was surprised at this stat: 1/2 of my trades had an MAE of 4 ticks or less! I find that amazing. I am studying this further.
Trade with value area direction
Average P/L trading against VA direction: -1.79, with VA direction: 5.56
If I use the day’s trend, defined by the market making new highs (up) or new lows (down):
Average P/L trading against intraday direction: 1.67, with intraday direction: 3.00
If trading with VA trend and intraday trend: 8.83, and against both: -2.63
This makes a good case for trading with both the VA trend and the intraday trend. Requires a lot of patience as there would be days without any trades (when VA trend & intraday trend are opposite directions for example).
I’m going to collect more data and continue analyzing this.
Be more thorough with my homework
I need to do more work on this as we’ll see below.
Start up the journal again
I kept a detailed trade log but I think a word doc to summarize each day would be very useful as well.
In the detailed trade log I gave myself a grade based upon how well I executed my plan. At first it was very subjective but this week I graded each trade. The results were surprising in that I had an average grade of C. I think this is a result of my plan not being clear. I need more details in both my trading plan (general) and my homework (specific). I also think I am looking at too many things which make decision making difficult. I missed a lot of trades. So I want to simplify as well. I will be removing some charts from my desktop.
So how did I do? I compared my July results with June a few days ago, not much changed in the past few days (small wins). This month was slightly less than last month due to 4 days vacation. On a per day basis it was 18 euros less. That’s ok because I feel like I’m improving and controlling risk better. For example if I fade less then I may make less but with less risk (meaning I can trade bigger size and make more). For this past week, I did almost exactly my weekly average over the past 3 months.
So another profitable week and my 3rd consecutive profitable month. Now I need to work on my plan, do more homework, and focus on my execution. I realize that success in trading is there for anyone who puts in the hard work and time. I imagine a lot of traders don’t do any preparation and make decisions on the fly, which could be responsible for their performance. And those traders who do put in the time & effort are rewarded. It’s really hard to do an hour or more of homework every day but it’s absolutely necessary.
Hope you had a good week and I wish you a great weekend.