Tuesday, February 7, 2012

Trading in the fog

Tuesday, February 7, 2012

Total gross profits:  $-87.50 -1.75 ES points
Total trades:  3  [1 scratch]
Accuracy:  50.0%
Execution score: 83.3%
Opportunity cost: $75.00  1.50 ES points

I'm still a little under the weather, with not enough sleep, while being in single parent mode, as well as starting the day a bit late, so I should have used my discretion and just watched. 

But the lure of the markets was a bit too strong even from deep within the fog, especially since I sat out of the markets yesterday.  I could have ended the day with nearly a scratch, but greed took over and I tried to let my single contract go for much more than a +2 so that I could have ended the day with a profit.

Which brings up another point -- the power of scaling out.  Renato has talked about it often in conjunction with the DS system, and he also mentions from time to time how it's more difficult trading an all-in/all-out style vs. scaling out, unless you're scalping.

I recently opened up an account with VanKar Trading, using their version of OEC's platform called VK Trader LT.  It's supported by FT71 and he has had various presentations regarding the use of their proprietary trade analysis software, called VK Trade Analyzer.  So far, they have been great from the service and value add perspective.  One recent presentation on the VK Trade Analyzer module showed how using a scaling out methodology helps to reduce the overall risk on your trade, and seeing that take place in real time and why it helped to reduce risk was an eye opener.

So my next goal will be to ramp up to 2 contracts so that I can scale out of one contract quickly to reduce risk, and to then enable me to have a runner that could go for a big run.  Holding onto winners and letting them ride is a strength of mine, so I believe this should enable me to comply better with my overall trading plan and personality.

But first, I'll take things easy, get my health/schedule back, so that I can approach the markets from a position of strength instead of trying to make sense of things from within the fog...


Tomross58 said...

Hey Grove,,

Good to see you back and hope you are feeling 100% soon.
When I first started with Rena I was using only 1 contract and it was all in all out. I took profits at 2 pts and losses at 2.25. This worked well but not when only taking a couple trades a day. I think you need more trades to make a good day. So its more for scalping. So I went to 4 contracts with the full stop. Just my luck I hit a couple full stops and it was too much for me. I am sure that I would have made it back since but it spooked me enough to scale back for now. Confidence is a big thing as we know.
So I am now trading 2 contracts. The ability to scale out at first target is a big help. As you mention you are good at letting a winner run and I think you may find that is going to be a big help. You will be able to protect your profits knowing that if managed correctly you can relax. Did I just use the word relax?,,,,lol,,,Actually I did and we can.
I remain on my sim account as I had the bumps in the road early with Rena and now am finding out what is best suited for me. I was mixing and matching his strategies and that wasnt good. I wanted to point out that having 2 contracts is much better but since I am on sim I cannot truly recommend much to anyone until I am back live trading which I hope will be soon.
Lets learn more today,,,talk soon


Grove Under said...

Hi Tom:

Thanks much for the well wishes. And great to see that you've found a happy medium with 2 contracts, and that it has worked well.

I should have started to trade on SIM with 2 contracts much earlier, even while trading live with 1. But now that I have 2 separate accounts, it'll be much easier to keep them separate. However, I still need to fine tune the process with multiple contracts, as well as getting used to the new DOM.

Looks like you're on really good track with SIM, so I'm sure once you transition to live trading when the time is right, you'll do very well. Keep up the progress!