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Thursday, July 10, 2014

Bad Day at Black Rock

Well, I managed to get myself caught Long again in that nosedive yesterday. I can only say that my puny little contract at 103.35 may be my undoing. I'm already down ALL my profits since I started this on 6/25/14, and am into my principal for a couple of hundred.

The question was asked what was my entry trigger. I hit a support line on that Volume Profile indicator, and RSI and MACD had a momentary blip confirming "up" and I should have waited for additional confirmation, but it all dropped like a stone, and I wasn't on top of it. I know, I know, I know.

I was fooling around with other chart markers (which I don't know how to use yet) and I believe I got distracted somewhat to boot.

This is my learning tool and it appears I'm a slow learner. Let's hope my fund lasts to use the lesson. It's another 12 days, I think, before this contract expires. So can we all send oil up, up, up with our intentions? Please!

10 comments:

  1. yeah, me too. I went long /es at 1965 on a dip, but the dip continued... however I'm pretty close now compared to where it went (1948!) plus at the open I bought some SPY and IWM calls and those are pretty much negating my unrealized loss in /ES as of right now thanks to this bounce. And I'm pretty confident by the end of the day or week /ES will be back up there (thank you endless bull market) and I plan on keeping the contract until 1967. Besides that, first day in my real account was shaky. The fills, in my opinion, can be really difficult at times thus my strategy needs a tweek to accommodate. Before the tank I was down a little over $100 yesterday. Pretty sure I'll be at break even by the end of the day, so long as I don't botch up my calls...

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    1. Well, I think that's terrific for your first day, and your attitude's a LOT better than mine!

      It makes a lot of sense to me to get more methodical and mechanical about entry points. I admit I'm pretty hap hazard much of the time, because so often
      the moves are just within a channel and fairly predictable. But man, those unpredictable days can do a lot of damage, and I've got my complacency handed
      to me to eat like cooked goose!

      Anyway, if you start trading oil, let me know. I'm trying to get a few traders together to do a little skype or pow wow or something on a regular basis, compare
      notes and charts, etc.

      I'm proud of you, Adam!

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    2. I've looked at /CL and tried trading it a little. Much more volitle than S&Ps plus I don't really understand it's relationship to the broad market or world events. /ES is more my speed at the moment though I'm sure I'll keep checking back at crude.
      Ended the day still down slightly but whoa was I down this morning. So I consider the day a success. I'm still in my calls and still long ES at 1965. I'd love to go into the weekend with no futures position but I'm not selling down here, market will go up, it seems too dumb to realize that it doesn't have to these days.

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    3. Adam, a trader is only successful when they follow their plan (meaning they have to have a written plan in the first place) even if it means they lose money on the trade as long the loss does not exceed the maximum loss they planned for the trade. Also, you might want to reconsider making predictions that the market has to do anything as that kind of thinking leads to very dangerous behavior with often tragic results for traders. Eventually, and probably sooner than later, it will prove you painfully wrong. I have seen even very experienced and successful traders seemingly forget that and lose several hundred thousand dollars in a single trading session after being up a few thousand dollars because they just knew they were right --- WRONG! No one ever knows what the market is going to do. We can only try to trade the probabilities while using proper risk control to minimize losses when we are wrong.

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  2. Excuse me for being blunt, but I am doing it for your benefit. You are not exercising any effective risk control. You can't use a strategy where you only scalp only small profits, but then let your losses get huge because are you are HOPING for it to come back. That is gambling, not trading. The first rule of trading is DON'T LOSE MONEY, which pragmatically means minimize your losses. Without proper risk control, you will lose your entire account, especially when trading leverage futures products with such a small account. You need to be trading only setups that give you a profit objective of minimum of 2x but preferably 3x your stop loss, especially until you have successfully traded your strategy for a significant period of time. BEFORE you execute any trade, you must first determine what is the maximum loss you are willing to take on this trade and then put in a hard stop immediately at execution. Learn to celebrate taking small losses because it means you are following your plan.
    I am not saying the following article is the best or most appropriate for you, but only offer it as a starting place for your research on this topic:
    http://www.dailyfx.com/forex/education/trading_tips/daily_trading_lesson/2012/06/22/How_to_Build_a_Strat_part_5.html

    Hope it helps.

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    1. thanks, Dan. I'm off to read your article.

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    2. Dan, this was very useful. I've been so reticent about stops because in papertrading, it seemed they were a magnet, and losses just guaranteed every time
      I placed one. But I can see I'm missing the boat on this big time, so I REALLY appreciate you taking the time to write, and give some help to those of us
      who are still struggling. I've never traded futures before, so my options trading rules never really computed in this futures thing. I have a lot of research to do
      now, thanks to you. (if I survive this last trade, that is.)

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    3. You're welcome. Trading is easy ... but making money trading is hard.

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    4. Can you tell us a little about what you trade? (futures?) And would you have any interest in our Skype group forming to compare notes, learning and input?
      Are you making money? How long you at it? Inquiring minds....and thanks for your interest in our enterprises here.

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    5. BTW difficult to find books on risk management that are not written for the Big Boys in lingo I don't even comprehend (hedge fund talk). If you have any
      recommendations, love to hear them.

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