Monday, October 10, 2011

A New Beginning

I survived nearly 2 weeks of back to back family visitors, then being a single parent of my very young children for 5 days while my wife was out of town.  And as luck would have it, shortly after she left, we all became sick to various degrees.  All I can say is that it's over and that it was a "character building experience." 

Repeating the Same Mistakes, Again and Again...
During the past couple weeks, I did manage to find a few hours here and there to watch the markets and to trade.  But this is when I realized that things have really gone astray.  I was repeating some of the same patterns over and over again, until finally, I tried to really change things up and went to TNA/TZA once again, and overtraded even more than usual (if that's even possible for me to say) again

Unlike most of the other times I was able to trade TNA/TZA to recover from a loss, this time I ended up with a relatively bad loss in very short time.  In many ways, I was using trading/overtrading as an outlet for my frustrations in life, and my limited time to trade was also an incentive to try and force a killer trade before time ran out. 

Absolutely the wrong frame of mind for trading and absolutely the wrong way to trade.  Yes, this time I really changed things up, but for the worse.  Addictive, vindictive, and gambling behavior at its finest.  Sickening.

Chasing Success and Finding My Niche
As I began to try and understand what's going on in the middle of all this turmoil, I listened to an interview Trader-X gave to back in May of 2007.  One of the points he spoke about was "Chasing Success", which was also a classic post he wrote in September and again in November of 2006.  The message is essentially to focus on a single method, stick with it, and don't expand on it until you get good at it.  And oh yeah, don't overtrade.

I also read Dr. Brett's book on Enhancing Trader Performance, and a key point he made was that we all need to find our niche in trading.  If you're naturally inclined to be a swing trader using a mechanical system, it's likely that you're not going to do well as a scalp trader reading the tape no matter how hard you try and stick with it.  And vice versa.  A trader has to find the method that works best for their personality and strengths.  In some cases, it takes years of "Chasing Success" before someone finds their niche.  But sadly, most will lose all their money before they find their niche.

In Need of More Change
I refuse to become another losing trader that quits.  I know passion and hard work alone won't get me there.  I know I have the technical knowledge to be successful.  I know what needs to be done to be successful.  But I need more structure and discipline.  I need someone to help guide me.  I need an even bigger change with what I've been doing, because it isn't working.

I realized that I needed some sort of mentor or maybe join some sort of chat room that would help me to focus.  I would loved to have joined the great training program at SMB Capital, but I just can't commit the time at this stage in life, perhaps another time.  I was very close to signing up with one of several chatrooms that focus on stocks, but the only problem was, they focus on stocks.  My rationale was, perhaps it would be too easy for me to get back to my old ways if I continued to trade stocks.  I've been traumatized by stocks, so I needed to get away for a while and focus on a single or very limited number of non-stock securities.

Last month, I made a 10% return on my small forex trading portfolio, so I thought about sticking with that asset class.  My methods there seem to work well, so why not stay with it and size up?  But I felt that's not the area I needed or wanted help. 

I also know some traders do quite well focusing on just the SPY or ES minis and make 7 figures a year.  But SPY's are executed just like stocks, and that isn't a good idea since I needed to prevent the temptation to trade some other stock while waiting for a setup.  However, I was open to studying the e-mini after watching several folks on Twitter do well week after week trading only that security.

Discovered Through Serendipity
As I was surfing through Twitter, I randomly came across @RenaTrader mentioned as a must follow by someone who is generally quite blunt about what he thinks of others.  I had never heard of @RenaTrader, but since he was included with must follows of other people I respected, this carried weight.  The key point made was that @RenaTrader was one of the most transparent on the stream with his ES trades, and that he is one of the few that made their subscribers money. 

So I went to Renato's website, as well as his blog, looked around, liked what I saw and signed up.  I really liked his story as a prior diamond dealer, entrepreneur, and how open he was about his experience chasing success for several years -- losing considerable money (6+ figures) before he found his winning ways.  I also liked his track record of being consistently profitable (indication of discipline) over the past year with a high winning percentage rate.  He also makes it quite clear that he DOES have losing trades, which is something most other services don't seem to make as explicit.

Renato primarily covers the ES, USDCAD, EURUSD, and CL, so that was another match on my search criteria -- he didn't trade individual stocks.  The cost is a one time $345 to learn his entire system and to join his chatroom, which seemed a little inexpensive to me (also mentioned by many others in his testimonials).  He also appeared to be a positive person (without being over the top bubbly) with patience -- good signs of a teacher, and has several thousand followers on Twitter.  So with my recent trading challenges and what I was seeking, why not try it out? 

Going Well So Far
I joined Wednesday mid-day last week, began studying his setups and rules, and got the feel for his chatroom.  The voice that you read on his blog, website, and Twitter is essentially what you get in his chatroom.  No bait and switch there, so that's another big thumbs up. 

I then spent a full day Thursday and Friday in the chatroom and made some trades on my sim account based on his calls.  It will likely take a few more weeks of intense studying to really get the hang of it.  But so far, I have nothing but really good vibes from both Renato and the chatroom.

With regards to the learning curve, I believe I have a big advantage -- Renato's method of using Fib levels is similar to a method I used to trade Swiss Franc and Deutsche Mark futures back in the '90.  So it's something I have always believed in.  But my method never evolved to a point where it turned into a sound trading system.  If it was successful way back then, I probably wouldn't be writing this blog today!

However, Renato's methodology is much more explicit with regards to rules around risk management and trade management -- that is key.  Just because you know a certain level is significant doesn't mean you can make consistent money.  You need a tactic around it, and this is where Rena's system helps significantly.

Oh, and my performance on Thursday and Friday on the sim account?  Trading 2 contracts, scaling out half after 1.5 pts, I made about 12 pts each day.  Even including some mistakes as well as missing some good trades, I was about 60-70% accurate.  And I left a LOT of money on the table. 

Those were somewhat extraordinary days with regards to volatility, so I'm not counting my chickens yet.  Two days is nothing, so we'll see in two weeks or two months how everything is progressing.  It's still very early in my journey and I have a lot of studying to do. 

What Next?
I'm feeling much more positive as my New Beginning starts and in some ways, I feel as if I've returned to my roots and my niche with Renato's system.  I'm not abandoning stocks -- I'll continue to track setups, but I'm taking a break from trading them.  So my focus over the next month will be to learn as much as I can from Renato, see whether his system fits my personality, and then evaluate whether I can finally stop "Chasing Success."

More updates soon as I settle back to a "normal" trading life.


Tomross58 said...

Awesome post Grove as I have mentioned I am in a similiar situation as you and am determined to learn to trade well and master myself. I still trade stocks and am on Twitter everyday also and will look at Renatrader's site as it sounds very interesting. I dont trade futures but will give it a serious look. Just wanted to share with you here if you still have a hankering for stock trading, you may want to check out HCPG. They too are on stocktwits and have their own newsletter that comes out 5 days a week. They have a very simple (of course not easy) methodology and mainly trade breakouts and breakdowns. Also some support longs and resistance shorts. Basically they do their homework the night before and have their "alerted" stocks on their watchlist (maybe 5 or 10) and these stocks are usually ready to go. Even if you dont subscribe monthly ( about $45 per month) they blog and have invaluable information on their site that has really helped me. What to look for on entries, what to not do on entries, (seems like I have been doing things in a rearview mirror,,lol,,),,,Anyway,,,its a great site and really good information for the student of anything market related. I will look at the site you mentioned and hope you post more of your progress. Thanks


Grove Under said...

Thanks for the feedback. You're right, great recommendation on HCPG -- I really like their blog and style of trading. They are one service I will likely subscribe to once things settle down.

Today, the chatroom was closed due to the partial market holiday, so we'll see how things go starting tomorrow. I'll definitely keep posting progress updates!

Attitude Trader said...

Still impressed with your level of introspective detail and commitment.

Good luck!

Grove Under said...

Thank you, very much appreciated!

@RenaTrader said...

Thank you so much for the comments about our service, Grove, really appreciated, it feels really good to know other traders can take advantage from my experience in futures and currency trading, it does take lots of dedication to become consistently successful in this business.

Tomross58 said...

Really looking forward to your next updated post on your new Emini experience. I have only traded stocks and have for some reason gravitated to the SPY lately with a few other stocks mixed in here and there but mainly on the SPY and will say this,,,,just focusing on one stock (ETF) seems to me that I am cutting down the amount of decisions I have to make during the day. When I was looking at chart after chart I had to re-focus on a different pattern and my mind started to be like scrambled eggs,,,lol,,,but focusing on just the one stock (ETF) I think I am a little more focused and therefore I dont re-evaluate chart after chart and kind of get a feel,,,,I bring this up because I am wondering if you are finding this happening with you trading the E-minis?,,,,Hope its going well.


Grove Under said...

Hi Tom,
Totally understand the scrambled feeling! But yes, I'm starting to like really focusing on one security (well, and also the Euro a bit), so that's one of the key points I like. You get to know the behavior and characteristics well.

I'm writing an update on my experiences and the adjustments I've had to make, so I'll hopefully have it up by tonight or this weekend.

But so far, pretty happy with the overall service. A little confusing at first just like learning anything new. But now I'm feeling much more comfortable after a week. Much more to learn, but I feel like I'm making good progress.

Thanks for the feedback, more soon...