When do you stop?

Today I'll be talking about the daily stop loss, since yesterday I had a strange day, I started it at up, then made another money, combined I made my profit for the day, which was roughly 150$, and then I started plunging down, and kept going all the way to my stop loss..

So here is what I realized yesterday, I should always start with my initial stop loss of the day (1.5% of capital), and once I'm up with profit, just move the -Daily stop loss- up, which means sometimes I can earn 100$ on a profitable day, or on days like monday when my method works well, I won't stop myself after earning 200$, but rather at 800$ profits, it's what they say "cut losers short, and let winners run" :) I always realized it on stocks, but now I starting to learn my lesson on my equity curve.

So many lessons to learn trading, let's hope I'll stop paying my tuition soon.

Bad week.

I'm not sure why is it that every time after I have a great week, I just blow it out the next, but I think it has something to do with "overconfidence", which is a bad state to be at.
This week I had been trading, thinking "my method is working, I don't have to stop with my stop loss limit of a day", at least I traded only 1 contract which made me lose less money than in my really bad days, but still, I should really stop trading after losing 1.5% of my equity, because after that each trade seem reasonable, even if it's 2 minute scalp of just 3 points, which makes you pay a lot of commission.

I know how to have good days of winnings, but what I need to control of is the losing days, not letting them effect my equity curve, and now they are just making it freefall everytime they happen, and if this keeps on, I'll be going bankrupt in a matter of weeks, this is how bad it has been, and now is the time to change.

I will have a losing days, everybody does, but that fact of the matter is that I need to make them as small as possible, and let the profitable days run.

Great week!

Had a busy weekend so I couldn't post about thursday and friday, but here goes.. Thursday I closed +165$ after commissions, and friday +114$, I really starting to get the hang of day trading, and I'd like to talk about the most important thing about trading.

Self discipline, this is the most important trait in day trading, without it you are lost, I've lost a lot of money in the last few week, sometimes 2K$ a day, but I still had faith, which led me to better understanding of what I am doing, I saw that whenever I stop the trading day, and paper trade, no emotions involved, I "make money", even if it's on paper, it convinced me that money can be made from the markets, it's just that I have to discover what in myself is not letting me grab it.

This week had been great since I traded only on signals, and not on "2 minutes scalp" that just got me losing money, I only did what my method had told me, except on monday when I lost 90$, which is not too bad since after losing that money I saw that keeping my way would have got me winning money, so to make stuff simple, discipline discipline discipline, this is the most important trait, if you can wait for the right moves, and just enter with speed and power, you can make a lot of money.

I noticed that most of this week I traded for about an hour, and still managed to make 1-2% on my account, which means that heavily overtrading is not recommended, when you can just wait for the 5-15 minute moves that just makes the day like in my last posts.

How I trade Futures

This is how I trade Futures, I've got fairly simple rules, and when I keep them I make money on the long run, I'd like to share the rules with the world, and if anyone will follow them, he will make money.

Money management:

This rules will keep you alive in the markets on the long run, and they are probably going to save you from having a heavy loss.

1. Risk only 1% of your account each day, once you got to that point of losing a percent, leave the computer, don't let your emotions take over.

2. Trade only 1 contract per each 11K$ in your account, if you trade more than that you will make money faster, but when you lose, you'll finish the day after 1 losing trade, which is bad statistics and the odds are against you to make money right on the first trade of the day.

3. Always move your stop loss in the direction of your trade, never against it.

4. Finish a day after making 2%, or if you traded a lot that day and you are going to pay a lot of commissions, just finish the day either in a minimum amount of profit, or with your daily risk money (%1 max!)

Technical analysis:

1. Enter on simple situations, like channel breakout, support break, or riding the trend the market is currently at, I find that what works most of the times is watching the 15 minutes chart for a channel (longer time frame trend) that is broken, usually after it breaks the market surge in the other direction.





2. Time frames setup - Look at the daily for long term trend, then on 3 days 60min chart for possible support and resistance levels, 15 minutes chart for the current trend, and 5 minutes chart for your entry, always look for confirmation that what you are doing is right in all of the time frames.

3. Pivot points and support and resistance - The experts are looking at it, so you must do it too, whenever you get close to one of those levels, scale out of the trade a little to minimize risk, usually the futures will get stuck in those levels, but once it breaks it, you can buy or short for a nice and FAST profits.

4. Exit method, stop loss at -10 points, profit taking is on the usual break of a trend, and when you are at 10 points profit, higher your stop loss to +5, this keeps you away from a side going market.

A little disclaimer - I'm not recommending anyone trading with his money, I do not offer trading advise , I merely here to post my progress, my technique, and the way I trade, in order to learn to do it better.

Things could be better.

I didn't post in the past few days, but I finally got the feeling of trading again, and lost the rush of andrenaline, or addiction, whatever you call that feeling of being hooked to the screen, hoping your "trade", which is more like gamble when it comes without indicators system or method, praying you will earn some money..

Eyes unfold now, I'm in trouble, finally I see how bad I've been doing, while still hoping to do good, since my system does make nice results, I'm unable to keep it.

I've decided to read "Come Into My Trading Room" again, which is a great book about trading method, money management and pshycology, I'm now seeing how many mistakes I've repeatedly made, and start get discipline again, Today I logged all of my trades, and finally there were few of them, so I wasn't overtrading like friday where I put about 40 trades one day (commission will eat me eventually if I won't change).

Here are the trades of today, hope it teaches you guys some stuff, because it sure did teach me that my rule about setting stop win at +5 points in YM after I'm up 10 points is crutial for times were market is moving sideways at times.

Just to note that I will not trade the first one and a half hours for now since I want to know the direction and theme of the day before I enter a trade, today for example YM seem to pull the market up, and today I wasn't home most of the time anyways so I took such a little amount of trades.

Finally starting to pay off my tuition

Well I've got to admit, I had another profitable day, and it feels great! I'm up 190$ net on YM today, and things starting to feel right again.

I started the day going +135$, and then went down to +20$ after 3 bad trades, but I kept doing my best, not letting any good trade lose me money, and kept my stop loss the way I wanted, and it basically have been another good day.

I think that I pretty much understand how to make money in a days where the market does moves like today, Mini-sized dow (YM) moved about 130 points up and down intraday, and I took 54 net home, which doesn't seem so good, but it is for me since I want to make only 32 points a day average.

A mistake I didn't do today was not leaving a trade without a stop when you go to eat, at one point I was +12 points on a trade, and wanted to go to eat, so I just put a +5 points stop win and went to eat, a little reminder, this kind of behavior had cost me about 2000$ one day, when I was on 2 YM contracts and went eating pizza.

My profit / loss now is -23.9% since I started day trading Futures, and I finally start paying off my tuition which cost me so heavily (more than 4K$).

Finally, losing day is not so big.

Friday I was -130$ on the money, and It's good, finally I didn't make stupid mistakes, didn't risk more money than I could have won, and waited with discipline for trades.

I realized that on days like Friday, where the market is almost not moving, it is hard to make money future trading, but after the market closed I paper trade it and saw that my method of waiting for 10 points gain, and if it happens moving the stop loss to +5 points, which means preserving profit, brought me +30 points on the day, I should always use it, but anyways it has been a good day as far as following my trading plan, and that's what matters.

My trading is developing rapidly, and I know that soon I'll be making money since in the long run, my method is working, I should just follow it, and wait for days like thursday where I extracted 60 points from the dow jones.

Have a good weekend and good bye for now.

Yet, another good day

I'm up 276$ on the day (after commission), and I hope it stays this way.

What I did today was just following the bigger trend, instead of fighting to understand where the market is going in the next couple of minutes, I started going with the flow, and I really got in sync with the market, today I had a very good discipline, my stops were reasonable, I didn't get away from the computer without having a stop loss market order in my broker, and it saved me once.

I had to go help out my dad for a couple of minutes, so I put a stop loss in the broker, and when I came back I saw that I lost Internet connection, and when the Internet did work I saw that YM was down 20 points from where I entered, but my stop loss was 5 points above my entry (what we call stop win:), so I managed to earn money while not even watching the computer, I really believe that I'm developing in my trading every day.

Today I had 90% winners, which is usual for days that have certain main trend, I just join the market on the move and watch my profits run, +60 points on the day is very good for me, my goal is to get +32 a day average, so when my account grow I'll just add to my quantity, which is now 1 since my account size is so small, I'm not trying to reach the sky, but getting 32 points a day can be achieved in 2 hours of work.

On the personal side, I've just had a nice BBQ with my friends and it was really fun watching them all on my birth day, I think this is going to be my best b-day yet :)

It's my birthday!!

Today is my birthday, and I finally grow up in age, and mentally as well, I'm 23, and I'm happy : )



Last two days have been bad, I've repeated my old mistakes, and I glad to say that I think I found the reason.. It's something in me that I have to change, I'm changing it lately but it's still there.



You know it when you drive you car, and the other driver doesn't let you pass? so after you do pass him, you start rushing ahead "making up" for the lost seconds of when the other driver didn't let you pass? well.. maybe you guys aren't like me, but I'm one hell of an impatient guy, I can't wait a second, since I was a little kid I wanted it all here and now.



Now it's time to change, being a day trader require some core characters, for example diligence, you must see the light at the end of the tunnel, positive thinking, you must believe you will make it, self dicipline, you must be able to put your stops on the right place, these and more the the required day trader's characters.



But the one I lack most is "Patiance", this is the key element I lack, today I took 3 "Home run" trades, each given me about 120$ gain on 1 YM contract, and I still didn't finish the day green.

I've made so many "rush trades" that came without any real trigger, I was just simply bored.. and thought I'm right, this what got me to lose money the last few days, from now on I promis myself, I'll be more patiance, I will trade only on real trigger, and not a "revenge scalp trades" which I made, yesterday I even rise my quantity to 2 contracts so it made my losses bigger, I think after making the same mistakes twice, I learned my lesson, at least I hope I do, because this tuition becomes very expensive.



I still think positive, and know I'll make it trading, but I see that I still have a lot to learn, good bye for now

Today -150$



I've had a bad day today, looking at the day I made only about 3 mistake trades out of 14 trades, which makes me think I improved, but still I'm not exceeding my expectations, which is trade my method and always make money.





The mistakes today consisted of not following my method, which manifests itself as one of the trades I took, was after the trend line broke down, I took a long position to try and stay with the current uptrend, and that was a mistake, my trading style says that after a trend line is broken, I sell the current position and short / buy long to the opposite direction.


Right after mistake #1 I took a short too low, which I then decided to stop before it hit my stop loss (-10 points), and the trend kept going down right after I covered my short, it seems like one mistake leads to the next, tomorrow I'll try to avoid both.





This is how the market looked today :



My method, in paper trade, produced only 9 points today, which is unusual to my method, because usually it produce at least 25 points, I guess it's just happened to be a day where the market didn't move so much, and deceived my method a lot (false breakout of trends etc.).
My method usually means going with the current trend, get in sync with the market, and when it catches the market, it should make me nice profits.

Having a good day..

Since it's the first post about a trading day I'll just say few of my methodologies.

I'm trading mainly the YM now since I don't have enough to day trade stocks, usually a breakouts of support and resistance throughout the day, and I risk 10 pts each trade, to win at least 12 pts, unless I'm entering a scalping spree (happens in flat market).

Discipline is the key on my style of trading, and I've had a day where I lost 2000$ so it taught me a lot about taking my stops seriously.

Today I took only two trades, first one at about 9:40, took short YM 13531, since I believed the market is continuing the downtrend, which it didn't, and the market changed direction rapidly so I couldn't catch it at 10pts lose, so instead I catch it after 14 pts lose, and took long at 13549, which became the trade of the day for me, and it made me 54 pts gain so I decided not to trade more today, and keep discipline doing that, I "could" make more money today because the market made few more big trends, but I'm fine with not taking the trades since I've made enough money today, PNL 192$ (1 contract) after commissions.

This is a nice day for starting my blog, hope you guys enjoy, learn about what I do, and most of all have fun reading.