Live Journal Exercise – Learning to Trade an Edge like a Casino

[Mike B 624]

December 24, 2019 -

The fun but frustrating experience of moving and setting up my primary office for continues. Thought I had the internet and KVM switch fixed, but again this morning ended up having issues with getting the charts not to lag. See the image below. When your last price line market does not match your level two data, and you have a hard line connection straight from the router to your computer, it is time to call the internet service provider and ask how is it that I get better connectivity using a MIFI puck then I get from a hard line. Got great service as they showed up a couple hours later, tested my lines, replaced all the connections, and gave me a new modem. We will see how it goes on Thursday. Hopefully, it fixed it. 

Most likely not going to be trading for the next couple of weeks as things are going to get really crazy with my retirement and moving offices. 

[Rob C 826]

37 minutes ago, Mike B said:

December 24, 2019 -

The fun but frustrating experience of moving and setting up my primary office for continues. Thought I had the internet and KVM switch fixed, but again this morning ended up having issues with getting the charts not to lag. See the image below. When your last price line market does not match your level two data, and you have a hard line connection straight from the router to your computer, it is time to call the internet service provider and ask how is it that I get better connectivity using a MIFI puck then I get from a hard line. Got great service as they showed up a couple hours later, tested my lines, replaced all the connections, and gave me a new modem. We will see how it goes on Thursday. Hopefully, it fixed it. 

Most likely not going to be trading for the next couple of weeks as things are going to get really crazy with my retirement and moving offices. 

You described exactly the same issue. My L2 was active but not my charts or priceline. I guess we have the same internet provider. I did a speed check later in the day and it was normal. I find out tomorrow if it was a fluke.

Congrats on your retirement. Will you be trading full time?

HH2U2!!

[Mike B 624]

On 12/25/2019 at 9:31 AM, Rob C said:

You described exactly the same issue. My L2 was active but not my charts or priceline. I guess we have the same internet provider. I did a speed check later in the day and it was normal. I find out tomorrow if it was a fluke.

Congrats on your retirement. Will you be trading full time?

HH2U2!!

Yes, I plan on trading full time. 

[Mike B 624]

December 26, 2019. 

Did not plan on trading today as my focus was on identifying the issues in my new office that were causing my platform to freeze at the open. I think I have narrowed it down to my desktop at home and the BIOS. I can't seem to update it, so I may ended up having to build a new desktop sooner than I anticipated. In the meantime, I did a little re-configuring, so I can trade off the laptop until it is fixed. I might be able to get a couple of days of trading next week. I will see what happens.

[Mike B 624]

December 30

Yes another day of just watching the charts. One thing I was not planning on was all the extra stuff that you have to do when you changing paths in life. I got my office setup finally today, so tomorrow I am going to test it out. I might even have an opportunity take a live trade who knows. In the meantime I have been working on adjusting my journal and trading stats excel file to streamline the process. I hoping to have it complete by the new year. I hope everyone had a good trading day.

[Mike B 624]

December 31

Well ended the year on a positive note. I finished the year up doing some analyzing on my strategies and performance in various aspects of trading from data that I complied over the past calendar year. The moving average cross over strategy data and % of R is skewed because it does not cover the whole year, just the past 3 months.

Some interesting things I noticed is that I have a workable winning percentage with the 3 strategies I trade. As I did not focus the majority of the year on profit taking and managing the trade while in it, you can clearly see that the financial stats do not correspond with what the winning percentage of the strategy is. Currently, that is my main focus of improving. "Being able perform while in the moment." 

On to next year. Hope everyone has a great New Year

[Rob C 826]

Great stats Mike. Your win% for your 3 setups is amazing!!

Edited January 1, 2020 by Rob C

[Twin Traders (Bhavan & Bhuvan) 3]

Hi Mike,

                We wanted to thank you for sharing your experience and trading approach. My brother and I have learnt a lot from your journals. We are using OneNote for journaling and are planning to do a monthly report similar to what you have shared. This is a great example and will definitely help us to understand the nature of probability. We have not gone live yet. As of now, we are practicing three strategies on SIM - 5 MIN ORB, 15 MIN ORB and VWAP reversals. Still loads to learn and planning to go live starting next month.

Thanks again for sharing your trades , journals and experience.

Brothers

[Mike B 624]

January 13 - $AMD

It feels like an forever since I traded live. It was good to trade on the first day after retirement spending the day at home with the family and not worrying about whether or not I had to catch a train. Total focus on trading today and it felt great. I didn't take anything at the open. I was looking at $QCOM short, but I was not feeling comfotable with it as it had no news catalyst, so I stopped watching it. I came back in the afternoon and took a short on $AMD. In the beginning I could tell my emotions were getting away from me because I had not traded in a while. I calm myself down and decided no matter what to stick with my plan. As a matter of fact, that is my plan over the next month or so. Trade my plan and let the chips fall were they do. My stats looking back on the year say I will be profitable if I do that, so that is what I am going to do.

I took a partial at 1R and all out at 2R because we were within the last 1/2 hour of the Market. Looking forward to another trading day tomorrow.

Sample Set Results,

G S S G S G S [P(S)] P S P G S S P G 17 18 19 20

[Rob C 826]

Good to see you back trading. Great keeping a cool head when the price broke down below the 200MA. That's where I would have bailed and miss the move.

[Mike B 624]

Jan 14, 

I ended up not taking a trade today even though I should have taken a long on $DAL. Maybe because I had to travel to the airport or that I am not feeling well. Nope that is not the answer at all, those are just rationalizations for why I didn't take the trade. The true reason was because I was a little nervous, so instead of finishing my process on analyzing the stock and setting a stop limit order for an entry, I started looking at a couple other stocks to delay the decision. By the time I looked back at $DAL it was past my entry. I would have gotten a 1R and 2R partial before getting stopped out at the breakeven with the last little bit. Learning has occurred, tomorrow do not make the same mistake.

As you will notice I changed how I track my sample sets now. Instead of tracking a sample set including all trade strategies, I broken it down so I can analyze which strategy is most successful. I may change this as the year goes on based off my needs.

 

Edited January 14, 2020 by Mike B

[Mike B 624]

Jan 15, $PINS

I had an intersting morning as I seemed to just behind the price action all day. I think it is because I am a little sick and just tired in the morning trying to get going after the medicine. Came back in the afternoon and was able to get a trade on $PINS. I made a rookie mistake on my first trade as I entered a stop limit order with the wrong price. i.e I enter 12.91 instead of 21.91, so I got filled right away and than ended up getting stopped out quickly again. I disregard the trade and re-entered my stop limit order the correct way and executed the trade well. I was not over excited or anixetious while in the trade. i was pretty calm and just letting it play out and did not let the previous trade determine what I was going to do. I ended up getting a 1R, 2R partial and than stopping out at B/E. 

[Mike B 624]

Jan 16

Tough day to accept. I chickened out of taking an entry to the long side on $MS. I went through my process flawlessly, felt good and then at the very last moment I listened to my fear and canceled my stop limit order because I justified it by seeing an order down at 56.16 on the level 2. My stop was set at 56.10 and my entry order was set for 56.29. 

I think these are the toughest mistakes to deal with as you know better, but still make them. It was a total FOBW (Fear of being Wrong) that kept me out of this trade. My number 1 weakness that I confront every day. As I have to drive to San Diego, I figured I would trade between 8:00 and 10:00 which are not my normal hours as I wanted to get a trade in. Well at least my number 1 strength (discipline) reminded me different and I called it a day without taking a trade. Not sure if I will be able to trade to tomorrow, we will see how much sleep I get tonight.

Safe trading everyone.

[Mike B 624]

January 13 - 18 recap, 

This year I decided that I would post my weekly recap analysis in addition to my daily journal postings. Near the end of the year I felt I was not giving due diligence to the weekly and monthly analysis, so in an effort to keep myself accountable I figured I would post them in this journal.

 

Top Three Good Trends

1. While in the trade, I did have any issue with sticking to my profit taking plan. Whenever, I began feeling that mind was racing towards justifying why something would not work out, my mantra of discipline, courage, impartiality, patience worked well to calm my emotions.
2. Although, I gave into my FOBW a couple of times this week, I also faced it head on and conquered it. I have to remember, that you cannot pick and choose which setups are going to work or not work. It is random and the only thing you can do it take the entry when the setup appears if it meets your edge. Currently, my edge has a higher probability of working; therefore, take the trade and move on.
3. My ability to recognize my emotions is improving, even though I was not able to catch myself sabotaging my exits before they occurred, afterwards I was able to recognize them and have begun developing a process to prevent it in the future.

Bottom Three Bad Trends

1. I was not confident on my entry and sticking with my pre trade routine and execution. I had a lot of hesitation on the entry because of a feeling of being wrong.
2. I had several montage entry issues this week. I would enter the wrong number or flip the numbers. I need to come up with a smooth executable process for executing the entry of the price. This also goes for the excel worksheet which determines the outs
3. My emotions right near the entry point truly ramp up and my mind starts to focus more on the reason not to be in the trade instead of the reason to be in the trade.

 

Focus Areas Next week

1. My psychology right before the entry
2. Self-Sabotaging acts
3. Stop loss placement and why I am choosing that area for a stop loss

[vic 11]

Mike, amazing analysis and keep up the good work in 2020.