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

[Glenn Budde 356]

On 3/12/2020 at 4:29 PM, Mike B said:

Thank goodness for risk management this week. I have been on a negative streak and it seems all the trades I don't take work and all the trades I take don't work. The all reason to take every setup if it is within your edge. I did not follow that today with $MU and missed two opportunities that would have netted me nice gains. Instead I took a trade on $JD and it netted me -.5R. Oh well what are you going to do but learn.

 

I feel like I do the same sometimes. I call out trades in my small group and someone makes money in the group (not me because I didn't even take the trade I called out  ). Like you said, live and learn.

[Mike B 624]

March 23

It feels so good to be back in my normal routine and being able to trade the way I want to trade. The past 10 days or so has just be chaotic for me. There was a ton of factors outside of trading that were piling up and I just could not focus on executing solid trades, so last week I decided I would just have some fun and trade in sim with no worries of the outcome. This allowed me to try all kind of different setups and see if anything felt good. I didn't do any journaling or anything last week as I just didn't have time for it. But today was a different story. I was able to take 3 trades today all utilizing the same moving average crossover strategy. I took $JD in the mid-morning and $PYPL, $T in the early afternoon. I hit profit target on $JD and $PYPL, while getting a partial on $T. Overall it was a great day and definitely needed after 4 straight losers 2 weeks ago.  It just goes to show you that when you are able to focus and concentrate on trading your plan things work out well. When you go into trading with lots of external worries and stresses it definitely plays with your mind. Looking forward to tomorrow.

 

[Mike B 624]

March 24 - Not a bad day. Took a while to find a setup today and it took a couple stabs at it before it worked out. First trade I got stopped out on after testing the stop 2 times. When it failed to continue to sell off and I verified that I was analyzing the stock independently from the first trade, I jumped back in at the same level. This time it worked out, but I did a terrible job of managing the trade once I was in it. It had everything to do with the fact that I was trading my P&L at that moment instead of just trading my plan. Still came out on top, but it could have been a much better trade. Out of the two trades the one I lost money on was my best trade of the day.

 

 

 

[Mike B 624]

No trades today. It was a tough one as my setups would start to appear and then break down. I just  couldn't quite get to where I needed to be in order to enter. A look of mental workout today for minimal reward. Oh well tomorrow will be better.

[Rob C 826]

Mike, always impressed by your discipline not to take a trade. Hopefully I will have that strength one day.

[Mike B 624]

March 26, $CAKE

Took a trade on $CAKE in the afternoon. Got a good entry off the HOD and was looking to get back to VWAP. Everything was looking good and then some strange price action came in and stopped me out at break even. The wick candle you see happened in about 1 second. Quick pop filled me .20 cents above my break even and dropped right back down. Ended the day green so I won't

too much but that did not make me happy.

 

[Mike B 624]

March 27 - Took a trade on $MU, jumped in a little early. I should have waited for the break of the pre-market high. I didn't and got stopped out. I also should have also been looking for a long of the pre-market high once it bounced. Oh well. So next week I think I am going to reset my sample set as I am making some adjustments to my trade plan this weekend and want to start with a fresh slate to record the results.

 

[Mike B 624]

March 23-29

Weekly Report

Top Three Good Trends

1. I absolutely choose to fight the fight each and every day and face the unknown. My risk management is on point again which is what saved my week from be a total disaster and my execution of trades was not on.
2. I was present in the moment for each of my trades and was hyper focused on executing my plan after Tuesday when I was all over the place. My trading the last three days was right where it needed to be.
3. I accepted the fact that I am not in the zone and that I need to take a real look at what I was doing wrong and how to adjust for the upcoming week.

Bottom Three Bad Trends

1. Entries and managing the trade once I was in was a huge issue this week. I think upon the increase in risk, I once again started to doubt my setups which is crazy because they still work even in this market. I could tell that I am focusing on the outcome/future instead of focusing in on what I need to focus on which is the present moment.
2. My exits were the second big issue I had this week I was always worrying again about being wrong. My focus was not on executing it soundly because my mind was focused on future events or outcomes and a monthly goal that is not important. I put an arbitrary goal at the end of the month which this week put undue pressure on my performance.
3. Emotions got in the way of trading because I was looking at the past. I was unable to forgive myself for the mistakes I made and dwelled on them preventing me from taking other good setups when they presented themselves.

Focus for Next Week

1. I stop my current sample set and reset. No point in going down the rest of path when the beginning was so out of the norm that it would not be a good representation of the data that I was looking for. I have re-calibrated my trade plan and will go into exit week was a solid plan to execute regardless of the individual trades
2. Do not focus on individual trades, instead focus on completing 20 trades that meet your setup along with following your process. I have already paid for them so the only thing that I can do is make money by taking a trade that meets my plan.
3. Focus is on the big picture not the individual little movements as they do not matter. Plan your trade, trade your plan.

 

[Mike B 624]

Mar 30 $MSFT - Today it took a little longer to find a trade and to be honest I should not have taken either of these trades as they did not meet my setup. As the day went along I let myself slip. On both trades $MSFT made new 15 minute highs which should have prevented me from taking it short. This seemed to be my problem with all the trades throughout the day. As a trade would set up it would make a new 15 minute high/low before hitting my entry. I think I just got worn down and decided to take it. I got stopped on the first one, but my second trade I got a 1R partial that ended up being a full out, so today was a wash. I had a 1R loss and a 1R win. Looking forward to tomorrow as I am executing much better the pre-entry routine.

 

[Mike B 624]

Mar 31 - 2 stop outs and successfully have traded four straight trades outside of my edge. This is what I refer to as being out of the zone. Just like when I was playing baseball, there are some points in time that you are just not seeing the ball correctly. 

What to do when you get in a slump, revisit your journal, look for what you are doing wrong, reset and step back up. Risk Management is the key to surviving times like this. Off to run to determine a way forward.

 

[Mike B 624]

April 1,

Got back at it today. Took a short on MGM. I had a couple hotkey errors which effected my profit taking but overall the trade worked as I wanted. The first hotkey error occurred when I set my B/E and hit two keys at once. Second error occurred when I was putting in my limit order for the third partial and I didn't have a . in the number so it covered right away. I skipped the third partial area and set the range order for the last partial and B/E/. I almost got to 10.52 before the stock did a heavy reversal back to my B/E point.

 

[Mike B 624]

April 2nd - Frustrating day as I had a few setups starting to setup today, but then they all broke pattern right before the entry. The toughest was on $AMD and $MU as I had limit orders already set into the market waiting to get filled and both stocks ended up making a new five minute low before my entry, so I cancelled both orders around 1445. Wouldn't you know it both reversed and took off for a nice 4R move. Some days are just not meant to be. Process was followed, executed plan well, market decided I should not be paid today. 

[Mike B 624]

April 3rd - Not a bad day to sit out the open. I came back to the computer a half an hour into the trading and saw how choppy it was. I ended up getting into $MU as the Market started to roll over. For some reason today was the day $MU did not want to completely sell off. I got a partial and then had a hotkey error and exited my whole position while inputting my limit order for the profit target. My second trade was on $JD when the market started to bottom out. I took it long got a partial and then decided to manage the trade differently than my plan called for. I was reward for the bad behavior as I would have gotten stopped out at b/e before it made the run up. Overall a good day to finish a rough week.

 

[Mike B 624]

April 6

No trading today got less than 6 hours of sleep, which from my past performance means a negative day or I choose to watch the market and spend some time with the family. I opted for the second choice.

[Mike B 624]

Weekly review

 

 

 

Top Three Good Trends

1. I fought and fought through a down streak. I did not give up and kept my focus on what I need to do to improve
2. I took a step back analyzed my trades to identify what I was doing that was causing me to get stopped out. I found that I was trying to fight the general trend of the market and was getting stopped out when the market turned.
3. I was able to refocus my mindset on the things that matter and get it out of the outcome mood.

Bottom Three Bad Trends

1. In the beginning of the week I was focused on the outcome instead of the process
2. The first four trades I kept trying to force into my edge instead of letting the edge come to me
3. I let my discipline get loose because I was focusing on the outcomes.

Focus for Next Week

1. Sticking with my setup criteria and trading only when it is met
2. Sticking with my plan once I am in the trade. I need to quit worrying about the outcome and focus on maintaining the process.
3. Let the probabilities play out