I had another bad/losing day today. Next week I have to really put my focus back into cutting my position size way down and slowly dig myself out of the hole I put myself into.
I'm getting too easily distracted by these late day extreme conditions and then find myself revenge trading in order to work myself out of the hole. It's funny how you could read all these books about trading and position size, and end up ignoring everything for the sake of trying to make lost money back.
Anyway, I'm going to really have to re-tool my plan and start back next week with very small position size and a more solid focus on what my plan is. What am I doing trading this market (as a beginner) after 3:00p.m.?! I resolved a long time ago (back in the days of less volatile markets) to NOT trade the last 45minutes to an hour of the day, yet here I am trying to scalp moves in hopes of bringing myself into the green.
1 comment:
Todd,
I'm very new too, and I trade the 3am window. If I lose money before lunch, I usually get my money back trading the after 2pm session. When you trade the same instrument everyday, you will get a fairly good sense of what it will do at 3pm, based on what it has been doing from session open to then. The first hour and last hour are best for scalping - for reasons you should already know. At 3pm, the bond market's closed, along with the other markets, and econ data are usually released way earlier in the day.
The market these days are just plain havoc and difficult to trade, whatever time of the day you choose to trade in. D lost 5k last week in just one bad trade that he entered during the 9:30 to 11 window. He sat on the trade at first, then finally bit the bullet and got out with a loss that til this day he was still not willing to talk about (I figured the amount coz I can do basic math and I took the balance I knew before and compared it with the balance today taking into account he hasn't had losing days after that day).
It happens. When you have lost up to a certain amount, it's really your experience and gut feel that's guiding your next move. Based on the way that NQ - the instrument D and I are trading now - behaves intraday, and based on the point we enter, we will decide if it's wiser to sit or get out. Most times, we sat and got out unscathed. But the behavior of the instrument we thought we figured out is acting strange these days, just like the market, and almost every other instrument out there - experience has become irrelevant.
D lost a substantial amount coz he was trading a bigger contract size. Just yesterday, he told me he was adamant about sitting on a losing trade until it turned around and he was ready to lose another 4k coz he had had enough of the market taking all his stops. I stared at him in disbelief, totally speechless. Then I told him that the market doesn't care for his tantrums. He knew what I meant and went back to his computer to cut his loss. The market was really volatile and came back to where he entered and he made a few ticks. LUCKY for him.
And D used to be the conservative one between the 2 of us. He was happy making a few ticks every time and a hundred bucks' profit a day used to really make his day. Then he started trading bigger sizes and threw rules out of the window - sometimes out of frustration, most times out of sheer desperation. Let's face it, we know rules are meant to be broken (sorry, but that's from the bottom of my heart). If you're trading very small sizes, you can afford to exercise discretion in desperate situations. But if you're trading big sizes, there's no room for defiance.
What I'm saying is, size does matter, and perhaps is the only thing that matters in a mad market like today's. I know I'm repeating what you said. I just want to share my experience even though you are not polling.
I'm writing to let you know that you're not the only one doing what you did. We are all programmed to be irrational . It takes time to become a machine :-)
If you have something like IB's booktrader, it will really help your trading. I don't know about stocks, but as far as futures are concerned, transactions become very transparent when you trade with booktrader. When you're wrong, it's easier to see you're wrong. I'm reading an ebook that's written very recently on the topic of tapereading (not the tapereading that we are generally aware of, there's more to it than meets the eye). I read a quarter of it before market opened, and basically just applied what i read, and all but one trade turned out profitable (i think it's the entry dated Oct 23 on my blog). I was basically just tape reading that day coz charts had become quite a challenge to read, and CNBC was just getting plain annoying.
If you're keen to know more about the book, let me know.
You have a good weekend.
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