Thursday, October 20, 2011

Good opportunity, bad execution

The choppy and boring markets during the morning session today tested my patience and I lost.  I looked for trades that weren't really there, or simply had operator error.  I'd say I would score a D with regards to trade selection and execution today -- in other words, my trade selection on a few key trades plain stunk.  Not a stellar day, since the gap between actual vs. "should have" was large. 

The DS system itself, had I followed it properly, did just fine.  But once I found myself in some erroneous trades, I decided to let most of them ride instead of closing them out.  Or, I flat out selected a rogue non-strategy trade.  And yes, they ended up getting stopped out.  Happened at least 3 times, and the losses totaled over $700.

I thought this was going to be a losing day, but as Tom mentioned under the comments of the prior post, knowing that there will likely be another winning trade around the corner gave me a sense of relief and a sense of patience.  As a result of knowing this about the DS system, it has reduced the possibility for me to go on a revenge trade rampage -- that's a HUGE benefit to my P&L.

I felt pretty bad at the end of the day today, as if I had gotten beaten up bad.  But I was somewhat reassured to see that I made $139 net.  In the past, I would be down big for the day after feeling this way.  My initial interpretation -- the DS system, at least for my personality and style, has a good margin for error to minimize my mistakes.

After every loss, you can see in my cumulative P&L that I was able to chip away back into the green -- only to take yet another bad trade.  Had I been more disciplined, perhaps I could have ended the day $700 higher.  Regardless, it's reassuring to know that my theoretical "what could have been" was respectable.

Today is over, lessons have been learned, and now I'm looking forward to tomorrow, just a little bit wiser.


Anonymous said...

Hey Grove, Your writings are inspiring. I have been loosing trading futures for last 3 years as my personal mental and trading state gripped by fear of severe losses.
Could you share your $ES_F charts with explanations of your daily experiences ? Thanks.

Tajir said...


Great writings. I have known you from traderX blog and was inspired by your writing on this blog. I am wondering if Diamond setups can be used successfully by part time traders. I working full time and have couple of hours between 10 am to noon for day trading. thanks

Grove Under said...

Hi Anon,
I totally hear you on how this business of trading can really get you down.

One of the topics Dr. Brett discusses in his "Enhancing Trader Performance" book is how most traders literally get mentally traumatized through their negative trading experiences (my hand is raised!).

The book is very much worth a read if you haven't done so already. What's much more difficult than just reading the book is actually doing many of the various exercises he describes. That's when you'll know whether you're really serious about doing the work to improve your future trading success or not. Perseverance and a never ending desire to be successful is key.

Regarding posting my charts, I'm having some challenges with how to post them, since my new method is usually not as useful to explain via just one chart (for example, they could involve multiple timeframes lining up). And I also need to make sure to respect the proprietary nature of Renato's service.

But I'll do my best to figure out a way, and perhaps using the online journal might be a good way.

Thanks for your comment, and best of luck to your future success!

Grove Under said...

Hi Tajir,
There are some people in the DS room that are only there part-time for maybe a half a day or so. But for the purposes getting up the learning curve quickly, being there only part time will likely be challenging. It will just take a lot more time for you to learn.

I believe his method, even though it's well documented on his website, is best learned by actually being there. Asking Renato questions regarding the signals or setups as they occur in real time helps you to put all the pieces together much more quickly.

If you're in the trading room strictly for Renato's explicit trade alerts (i.e. given fish more than learning to fish), it is quite possible to simply take his signals without fully understanding his system. But I'd say a 2 hour window will be a hit or miss with regards to whether you'll get a trade alert.

Once you start to understand and get comfortable with the DS system, it seems very possible (for those with the appropriate personality) to take a dozen or two scalp type trades a day, which can potentially generate an average of maybe couple ES points for winning trades.

But that's a very aggressive short term strategy that Renato does not trade or alert. His style is much more conservative, so you might get maybe 1-5 trades a day (just my personal guestimate so far).

One consideration for you is that the DS system works well in the overnight markets. The forex and ES overnight sessions have been quite active recently. Not sure how long this will last, but there have been some great volatility and trading signals starting from around 3:00AM NY time. The only disadvantage is that the DS chatroom is not active during that time, so you won't have Renato to help teach and guide you.

Hope that's some useful info. It's just my honest opinion, which may or may not be valid specifically for you. But let me know if you have any other questions.

Thanks much for your comment, and best of luck to you! If you have the will, there will be a way to make it happen.

Tajir said...


Thanks for your honest feedback.

Grove Under said...

Hi Tajir,

I forgot to add yesterday, have you considered trading a higher timeframe due to your time limitations during the day?

Maybe you're already doing so. But there seems to be many folks out there on (at least on my Twitter feed) that are focused on swing trading.

It hasn't been as good for swing trading stocks recently, but the good times seem to come in waves. A few months ago, they were on some crazy runs.

Trading the forex with mini-lots is also a great way to start swing trading with relatively limited risk. The forex markets have been quite volatile lately, but using a mini-lot will help to minimize your losses to around $1/pip while you learn.