Thursday, December 15, 2011

A wheel fell off today

Thursday, December 15

Total gross profits:  -($300.00)  -6.00 ES points
Total trades:  30  [5 scratch]
Accuracy:  40.0%
Execution scoreFAIL 
Opportunity cost: $ [Didn't bother to calculate]

Over the past couple days, it was pretty clear that the wheels were starting to wobble. Well, today, one of the wheels fell off. I'm lucky I didn't end up totaling the whole car, but I did suffer some damage.  Due to the number of trades, the commissions are a bigger factor and will bring the net loss closer to -9 ES points.

The problem was entirely mental:
* Lack of sleep - that's life, it happens. But I can choose not to trade.
* No patience - I felt like I needed to try and trade every turn on a tick chart.  I couldn't walk away and wait for a the right setup.
* Rattled mindset - instead of being relaxed, I was way too rattled and scattered.  Lost focus of my plan.
* Focus on profits, not process - mental chatter was "gotta get some profits!" vs. "must follow process"

From the very first trade, I had a mindset that I needed a winning trade. When the first couple ended up being breakeven trades, I tried to press harder, resulted in a full stop loss, resulting in the need to make it up. 

I was constantly looking for setups that weren't really there or clean.  Upon my trade review, I even noticed that I even became fixated on a particular pivot level that was not very relevant throughout the day (which resulted in a few bad trades). 

This type of mindset carried on through the entire day and the performance figures speaks for itself. My usual stats are relatively consistent, but today, they are very much out of the normal range.  When I focus on profits instead of process, it's clear that I can get into trouble.

Sure, the market was perhaps a little slower and choppier, not so unusual as we approach opex and the holidays. But I can't blame the markets, I take sole responsibility for my actions. 

I will regroup, reset, and adjust my frame of mind -- learn to slow down, focus, and match the conditions of the markets.  Focus on process NOT profits.  Failure to do so will result the other wheels to wobble and fall off, possibly leaving me stuck in a ditch!


Tomross58 said...

Hey Grove,,

I didnt fare much better yesterday either. Still on sim I couldnt get profitable. I took a couple of Renas calls and bailed early on one because numbers were coming out and that trade was a day maker in itself. My stop is much tighter than Renas and was stopped out on 2 others that did work under his risk management numbers not mine. Then near the end of the day I took another trade and was in it for what seemed like an eternity and I got out with a couple tick profit only to see it go 4 pts in my favor and would have never stopped me out. Seems like when it rains it pours.
Actually that last trade was 1.75 in my favor and I moved my stop to 1 tick profit and of course got filled and it took off. Spilt milk I guess, just have to clean it up.
But it was an exhausting day as I am trying very hard to predict Renas calls so I can stand on my own. Well,,,I am not there yet and will make it my goal today to make an improvement on one thing. I will try to give my trade some breathing room. I have great patience waiting for a set-up ( I just am not sure its a good one yet but getting better ) but I do not have patience when in a trade.
Today is Friday and not a good trading day so we must take that into account. I see you have made great strides and yesterday was a bump in the road and today is a new day.


Grove Under said...

Hi Tom,
Isn't it amazing how Renato "simply" follows the rules, and good things happen? The rules are really simple, but so difficult at times to execute due to our own mind games.

I've also had many of those +1.75 trades that end up stopping out, very disappointing. But I'm looking to see if there's something I can do to reduce those by better stop placements.

Today ended up being a roller coaster day, but at least I ended up almost breakeven after being down a lot. A few lessons learned in the process, so it wasn't entirely a wasted day.

It sounds like you're starting to get up to speed on the system which is great to hear -- keep it going!