Sunday, September 25, 2011

Weekly recap: Limited trading, but still gained insights

I had limited trading last week due to a family visit, and it will once again be somewhat limited due to more visits later this week.  However, I was able to get in some trades, still had minor bouts of overtrading, made about 1% gain for the week risking only about 15-20 basis per trade, and here are some other observations I made along the way.
  • In some ways, the ability to have limited time to trade kept me focused.  The more time I spend in front of the screen, the more likely I am to overtrade.  The state of my mind changes, likely due to impatience, fatigue, etc., but even more so if my first couple trades are losses.  I might need to take breaks that are longer to help calm the mind.
  • Even with limiting my trading time, it seems as though my usual pattern of starting with losses, then having to dig myself out of a hole still help true.  I'll need to find a way to break that pattern of starting off with losses.
  • On those "rare" occasions when I start off the day with a few wins, I seem to become more complacent and passive, looking to protect my gains, and therefore limiting my upside potential.  Quite the opposite of when I'm trying to dig myself out of the hole.
  • What I believe I need to do is to have a similar mindset as I do when I'm digging myself out of the loss.  However, I need to be careful -- What I don't know is whether it is the markets that are cooperating with my methods to create these big recoveries (i.e. lucky coincidence), or whether it's my mindset that truly changes and becomes more focused but yet aggressive when I'm underwater. 
During this period of limited time, I'm still continuing to read (and re-read) from Dr. Brett's books to consider how to implement new exercises and drills to enhance my strengths, and improve my self-discipline.  I'm amazed how every page seems to be packed so many great insights.  If only his books were available 20 years ago, I wonder what type of person (and trader) I would be today.

* * * * *
Here are a couple trades from last week:  One that was almost a classic Trader-X beyond the opening range low style setup, and another that is a forex swing.

FCX 5m sell below 7th bar - I wouldn't rate this setup too much more than a "B", since there were some choppy/wicky bars in the opening range, and the setup took place above the S2 pivot level.  But there was something about this trade that seemed compelling.

FCX 5m 09/21/2011
The first 3 bars created both a "fill in the tail" and descending triangle type of short setup, although it didn't look good enough to take.  But after the fakeout breakdown, it pulled back up, bounced of the vwap, and created a green shooting star bar.

I don't usually like to short on green bars, but this one looked compelling enough since it had the opening range low [btorl], a vwap line bounce [vlb], and descending 5ema all aligning together.  Perhaps the only negative was the S2 pivot level which was below the price action.

I exited the first 1/2 on the break of the 161.8% Fib extension, and then exited from remaining 1/2 when it approached the FE which was also aligned closely with the S2 support.

AUDUSD - I missed the big daily chart move down on this pair, but believe there might still be some more room to the downside.  Friday was a relatively choppy, narrow, and indecisive day.  But based on the trendline of the highs on a 15 min chart going back a couple days as noted below, I shorted this pair after it made a new low, and retraced back to the descending trendline, and broke below the prior 15 minute bar, at .9803.  My current stop is just above .9850 (yellow dashed line).

However, it didn't follow through to the downside, broke the descending trendline, and went sideways.  Last Friday, I exited my short position and regretted it.  This week, we'll see how things are looking in a few hours once the forex opens.
AUDUSD 15m 09/23/2011


Attitude Trader said...

Hey Grove,

I was doing almost no blog reading there for a while and when I came back I stumbled across yours (through Trader-X's link list).

Just wanted to say it looks great! Your analysis and introspection of your trading is impressive.

Good job!

Attitude Trader said...

BTW, you said,

"What I believe I need to do is to have a similar mindset as I do when I'm digging myself out of the loss."

I believe Don Miller has [an almost identical philosophy] that is one of the bedrocks of his success.

You might want to check it out if you haven't already.

Grove Under said...

Thanks much for the feedback!

I ran into Don Miller's website a few weeks ago, found it very interesting, but forgot to go back.

So thanks for the link to his post on always having the comeback mindset, this is very helpful, much appreciated!