My ES trading was great last year and I thought I had it made. The first couple weeks of January were OK too. And since then my ES trading has went down hill. This has prompted me to start trading Euro, Crude, & Gold and to see if I could do better on those markets. And I have. So why have I not done well on ES?
The first reason is the current market conditions. A look at a weekly chart will make it very clear. The orange arrows point to volatile areas and the blue arrows point to slow grind up moves with very little volatility.
I think it’s not reasonable to expect the results in the current market. I suppose some traders are able to adapt to these different market conditions. I’m not yet able to do that, at least not quickly enough. By the time I adapt the market changes again.
This is why I don’t believe in mechanical systems and backtesting. A system that works well in that volatility is going to perform differently in the slow grind up and vice versa. And this applies not just to automated systems.
Now I can’t blame all my problems on ES. I have many areas to improve. One of them is I feel I’m not prepared enough. Another is I sometimes don’t stick to my plan. So I thought maybe to overcome these I should start posting my plan to my blog. I have been tweeting my plan now and then, but I think posting my plan and the resulting trades and an analysis of what I should have done would be very interesting both for me and for readers. The basic idea is if I am posting it to the blog regularly, I’ll be less likely to blow it off.
An example, yesterday I said my bias would go to bearish below 54. However my bias for NQ, Euro, Crude, & Gold were all bullish and all we did was poke below 54, we didn’t build value down there. So I was quick to flip my bias to short in order to allow a short on a pullback of 54. I really believe if I had done better planning I could have seen that a 3 pt drop below 54 was not enough to change my bias and I could have went long 51 (which was one of my support levels) and/or 54 instead.
So I need to be better prepared and I’m hoping the blog will help me do that. I will give this a try next week and see if it helps me improve my trading. My blog will be my journal. And I hope you will find it useful, and if you can give me feedback to help me improve that would be great as well.
I will close by sharing my sim results for Euro,Crude,Gold which are quite encouraging to me.
I plan to go to real money on these markets very soon.