Aug 062011

A few days ago, I wrote that I planned to go back to sim to work on my risk control.  Then I thought it over and I decided that if I saw some good setups I’d take them with real money.  And I’m glad I did.  I got a huge catch on Friday.  I expected more to the downside and shortly after the open we got a double top at the open swing high.  I got short and held for a gap fill.


In this chart it looks like I took a small profit, but the huge range on Friday makes the chart look deceiving.

This is the biggest day trade I remember, ever.  I’ve never let one run like that.  So I thought I’d write about how I did it.

I had some support levels in between the cash gap level and the break out of the open swing.  I only had one contract on because I knew I would need wider stops due to the volatility.  So I figured 4 pt stop with 1 contract would give me the same risk as 2 pt stop with 2 contracts.

Unfortunately this meant I couldn’t scale out when buyers started coming in.  I thought it might not make it and I almost took profit around 1208.  Monday I had a big losing day and I was still negative for the week so I figured I would go for the gap fill which would put me positive.

I just watched the rest of the session as I didn’t want to risk giving back my profit and ending up negative for the week.

So it all worked out and I ended up with my 13th positive week in 14 weeks of real money trading!  But all is not perfect.  If  my losing day on Monday was equal to my average winning day, I would have finished the week with a large profit.  And as in the past few weeks, that’s my focus for next week.

In the weekly P/L graph (left) you can see the volatility has taken its toll on my trading.  But I’m slowly learning to adapt.  Fade less, use bigger targets with trend, and cut losses quicker.

Next Wednesday we leave for our annual summer vacation.  I’m still undecided if I will trade real money during this time or not.  Our little one takes an afternoon nap which means I’ll be at home in the afternoons when ES opens.  If I do trade I plan to be very selective.  In any case I probably won’t write as much over the next 3 weeks.  So I wish everyone good luck in the coming weeks and enjoy the rest of your summer.




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