After 3 years, I'm still here

[NOTE: This was originally written about 3-4 months ago, but not posted until now...I've been admittedly a lazy blogger).  Material changes have taken place since then and noted with red text.]

Yes, I haven't been blogging much, but I'm still here.  

It has been 3 years since I've gotten back into trading from a long time off, and it sure has been an interesting journey.  Late last year, I hit a bump in the road of life where my health condition lead me down a path with potentially very negative implications.  

There were many times when I wondered about my worst case scenario: how my passing away would burden my wife and 2 young children immensely; how devastated my children would be; how I would never be able to see them graduate school, attend their wedding, see their children, and so on.  

Oh those were depressing times.  Although I was still involved with the markets, it obviously didn't mean as much, and my performance reflected it.  During those times, trading became somewhat of a distraction from reality.  In hindsight, I should have shut it down completely.

After many tests, my heath issues luckily turned out to be nothing major, and I have pretty much worked myself back to "normal."  But it sure was a big wake up call and reminder not to take health for granted.

Seize the day.  This moment, right now, you own it.

* * * * *

Back to the world of trading, my goals and plans from last year are still in progress.  And I have continued to approach trading within 3 key areas:

1)  Discretionary trading:  

- Continue to be consistently profitable, but sizing up slowly and organically

- Focusing primarily on weekly options, with some swing trading via stocks 

- Creates a source of ideas for analysis and system development

UPDATE 8/2014: 

- Recently had too much volatility with weekly options, so I'm putting it on hold with a loss after being up as much as a much as couple hundred percent net with a small account.  The losses were all due to commissions, and I was gross profitable overall, but that doesn't count

- Given the high level of difficult trading weekly options, I consider this experience and outcome successful with many lessons learned

- With swing trading, YTD performance has been stuck, with all time equity highs acting as strong resistance

- Moving back to focusing on short term stock trading, which is how I initially started.  Going full circle.  

- This month, I've joined a trading Boot Camp program just to shake things up, and after starting with low expectation, I've been very positively surprised -- the program has greatly exceeded my expectations.  More about this in the future

2)  Autotrade programs: 

- Expanded and diversified this year beyond credit spread options to include futures

- Added to size up capital 

- Overall, has been profitable year to date

- Tracking/analyzing the signals from various systems have created a source of ideas

UPDATE 8/2014: 

- As noted in the comments section of the Spread The Trend post, this service has recently experience significant losses.  Letting the dust settle, and looking to write an update soon

- My options credit spread account is currently down over -40% YTD.  Will monitor over next few months to determine next actions

-  The futures autotrading programs are up about breakeven YTD since starting this year (they were up +35% as recently as last month), although it was up as much as +60% earlier this year (it's very volatile)

3)  System development / quantitative analysis:

- Programmed a few algo type systems, some with surprisingly solid results

- But not quite ready for prime time

- Positive benefit, program backtesting of ideas and concepts useful for discretionary trading

- Great area of focus when I'm in a slump with discretionary trading

UPDATE 8/2014:

- Scaled back significantly recently.  Will need to reevaluate longer term goals

- Here's my mental road block -- after all these years, I've come to believe that solid discretionary trading can provide returns about 4x vs. a solid mechanical system

- But discretionary trading can have significantly more wear and tear on the psychological and emotional capital.  There are definitely tradeoffs

How quickly things can change over a few month period.  But that can be pretty much "business as usual" in the world of trading.

Making The Turn / 2013 Trading Resolutions Revisited

I've winded down my trading for the month of June, since I'll be on vacation for most of next week.  And since we're at the halfway point of the year, it was a good time to do some reflecting and analyzing of my trading to date.

As of today (Friday, June 21st), I am up 15% for the month of June.  And based on the open positions I still have, it should not go down by more than a couple % points even if they are stopped.

On a longer timeframe, I have been profitable the past 6 out of 7 months.  Here is a chart of % returns based on closed trades (net of commissions) on my swing trading account for 2013.

My average number of trades have also consistently averaged around 22 trades a month.  No signs of overtrading.

TRADING RESOLUTIONS FOR 2013 - REVISITED

I wrote the following resolutions back in March 2013.  More details here.

1. Stop overtrading/revenge trading/daytrading
2. Lower expectations of returns and trade small to help build solid trading habits
3. Explore and implement other trading methods, products, and time horizons
4. Start thinking of returns based on % risk (R), not $'s

1) Stop overtrading/revenge trading/daytrading: ON TRACK
Based on the chart above, there is no sign of overtrading.  I've only had a handful of daytrades, and it's usually because I get stopped out quickly, or had such a good winner I needed to take some off the table.

There have been a few rogue trades, but it's a small % of total trades.  And revenge trading is nearly non-existant, since I'm no longer in the daytrading mindset.  Every trade I take is with the expectations of holding overnight and for several days or more.

I have also deliberately kept my account below $25k, so that I am subject to pattern daytrading rules (PDT).  This has been one of my best decisions.  TradeStation prevents me from entering the final trade that would trigger my account to get flagged under PDT.  This helps to prevent me from overtrading, and to get into the habit of thinking carefully about each trade I enter.

2) Lower expectations of returns and trade small to help build solid trading habits: ON TRACK
Trade small and often, is something preached and practiced by @TheTradingWife.  I've also watched @TheLincolnList daytrading live and consistently profitable for over a year with generally a few hundred share sized trades.  And those crumbs add up to very impressive daily/weekly/monthly returns. 

Following their examples, I've established small position sizes as a % of my portfolio for each trade, and that easily allows me to sleep at night.  This helps me to follow my rules and let each trade properly play out without interference or sabotage.

Letting each trade properly play out means I'm building good habits.  That's huge.

In the past, I used to want to make 25-50%/month or whatever crazy expectations of returns.  But a funny thing happened when I stopped caring as much about P&L returns and started to really care about simply following my trading plan -- it resulted in being consistently profitable.

As those who play golf are well aware, when you really try and swing the club hard, the worse off the shot usually goes.

3) Explore and implement other trading methods, products, and time horizons: ON TRACK

This probably requires a separate post, but the autotrading experiment has been very interesting.  The goal was to diversify my trading via other traders/trading services.  Similar to how you can diversify long term investments between various types/styles of mutual funds.

My timing to start was unfortunate based on market conditions, so I'm currently down about -10% year to date in my autotrading account.  But I've learned a lot and still see great potential.  In fact, in addition to my Global Autotrading account, I'm also in the process of opening up an autotrading account with Ditto Trade.

Compared to even 5-10 years ago, the opportunities today to diversify your trading opportunities are amazing.  In essence, you can now outsource your trading and manage it like a business.  Simply hire and fire traders/services based on whatever criteria and business plan you setup.

Here's an analogy.  There are an amazing number of talented people out there, such as musicians, that in the past would never have been discovered.  But YouTube has created a distribution channel where you don't need to be "discovered and chosen" by the old school record industry establishment in order to reach a mass audience.

On a similar note, we're entering a new era for talented and dedicated traders who don't have the right connections or pedigree in order to gain employment at hedge funds or premier investment banks.  Platforms such as Ditto Trader are a game changer for those skilled traders who want greater exposure and opportunity.  This is just the beginning.

4) Start thinking of returns based on % risk (R), not $'s: ON TRACK

There was a recent upgrade to TraderVue that has made it much easier to track performance based on R-Multiples.  I'm still in the lengthy process of updating my trade data to support the new reporting features based on R.  But once completed, this method of reviewing performance will provide a risk based return, rather than return alone.

I'm guilty of this, but it's so easy to say "I made a 2000% return on my options trade" without understanding the proper risk context.  Was your risk or position size of that trade 1% of your portfolio or was it 50%?  Because there's a BIG difference in the impact and risk of that 2000% return trade.

And as I've said many times before, thinking in % terms also helps make it easier to scale up.  Because over time, as I meet my goals, I plan on scaling up significantly.

HAVE I MADE THE TURN?

It sure hasn't feel like a switch suddenly turned on, at least not yet.  However, I am feeling a much greater sense of clarity and confidence with regards to what works for me, and my results indicate likewise.

But the efficiency of my trades are far from optimal.  I still make sloppy mistakes, and my execution still has a lot of work necessary.  However, my upside feels limitless.

It has only been about a  half year of consistent profitability, so in the big scheme of things, that's not much.  But so far, this track record is a huge accomplishment for me and I feel proud.  I set a goal, I'm accomplishing it, and I will continue to meet my goals and raise the bar.

It has been almost 2 years since I wrote the post about The Moment.  My moment is still here.  And I remind myself, "How Bad Do You Want It?"

My 2013 New Year's Trading Resolutions

Wow, time flies, has it really been that long since I last posted?  Well, now that it's March, most people have long forgotten about their New Year's Resolutions.  So it's time for me to zig while most zag -- better late than never.


TRADING RESOLUTIONS FOR 2013

1. Stop overtrading/revenge trading/daytrading
2. Lower expectations of returns and trade small to help build solid trading habits
3. Explore and implement other trading methods, products, and time horizons
4. Start thinking of returns based on % risk (R), not $'s

GOALS

• Overtrading/revenge trading to account for < 5% of total trades
• Too much intraday trading can emotionally charge my trading in a very negative way
• Even reducing my historical revenge/rouge trades (30% during my worst periods) by half would have a huge positive impact on my P&L
• Target consistent 2-8% returns a month
• Focus on limiting risk (not maximize returns) while building up good trading habits
• Initiate equity swing program, options writing, and further explore forex strategies
• Swing trading via newsletters/chat rooms/autotrading (target 50%+/year)
• Options writing via newsletters/autotrading (target 25%+/year)
• Forex strategies via alternative trading methods (target 100%+/year)
• Evaluate performance based on R multiples.  Reports and analysis are based primarily on %'s

TACTICS

• Stop daytrading
• Suspended my futures accounts
• Reduced equity/options accounts to significantly below < $25k to put PDT into play
• However, allow forex account for "penny slots" daytrading -- minimal absolute dollar risk
• Reduce % risk of portfolio per trade
• Average risk per trade <= 1% of portfolio
• Lotto plays <= .5%   (weekly options plays)
• Stronger conviction (rare) <= 2%
• Capture stop size as a metric to calculate returns based on R. Reports and analysis should focus on %, not $'s
• Implement autotrading initiative to explore other trading opportunities
• Research and initiate autotrading of equity swing trading newsletter(s)
• Research and initiate autotrading of credit spread options newsletters(s)
• Analyze and explore other forex trading strategies in increase # of trades and returns

RESULTS TO DATE

More details later, but based on implementing a large portion of the tactics above, I have been NET PROFITABLE both in my equities and forex accounts the past 3 months.

One of the biggest factors has been to SLOW DOWN.  Daytrading was fine when I started with profitable trades, but a few losing trades in a row often had the tendency to quickly snowball into revenge trading.  I'll eventually daytrade again, but not now.

Based on the past several months, I'm cautiously optimistic and looking to focus on even greater consistency with my overall trading process as I complete 2 years of full time trading.

Recap: Week ending 10/19 - Tough week but good finish

The week ending 10/19 was another tough week as I continued my long journey to find my way.  It ended on a good note, but it was full of difficult moments.

STARTED THE WEEK OFF WRONG
I started the week focused on maximizing P&L -- not on my goals to limit the number of daily trades to 3 and to limit my profit targets to +2.00 ES points.  I wanted to CRUSH the markets.  That should have been a big warning sign.  Sure, it felt OK that I ended up making a decent profit to start the week, but in the back of my mind, I knew I fell off the program.  I know was cheating myself.

CRACKS FORMED ON TUESDAY
Whether it was from guilt or who knows what, the cracks started to form on Tuesday.  Just prior to lunch, I called it a day barely exceeding my # of trades goal and although it shouldn't matter, I had a slight profit.  Nice job, I'm getting back on track.  But...in the final hour, I went on tilt.  I took what I thought was solid setup to end the day on a really good note, only to realize I totally read it wrong.  Yes, got greedy, got stopped out, revenge traded, and ended down a few points.  Ugh.

MONKEYS RAN AMOK
So when Wednesday came around, the monkeys ran amok.  Shortly after the NY open, I already had 3 losses in a row and it was all downhill from there.  My initial thought was, "We just opened!  How could I stop trading so early in the day?"  My will was weakened, I took one more trade, realized I did something I shouldn't have, which then snowballed into "what the heck, I blew it", and my behavior for the rest of the day ended up being yet another big ding to my psychological capital.

RADICAL SHIFT / DO SOMETHING DIFFERENT / DO WHAT WORKS
Just around that time, I realized that the S&P was in overbought conditions based on the interpretation of the daily charts that I have used for many years, primarily on the forex charts.  The high probability setups only happen once or so a month, and I just don't have the patience to simply wait only for those signals. 

$ES_F - daily chart - 10/19/2012

But I needed to do something different to change my ways and make new habits after a rough start to the week.  Swing trading has worked well for me in forex products, so why not try something similar to that in the ES?  And when I am swing trading, the setups are very infrequent, so it's much more difficult to get into the rhythm of impulse trading -- another plus.

THE PLAN
So Wednesday night, a plan was made to establish a swing short in the ES, very similar to what I do with the forex trades.  A couple indicators I use on the daily timeframe showed a nice clean overbought condition, so it was time to find a good short entry.  My target was 1425-35 area.  I entered the short Wednesday evening and by Thursday morning, I was up over +5 at one point.  But then came the big Thursday morning grind up where I got stopped out just 1 point before the erroneous Google earnings release that spooked the market around lunchtime.  It was tough to get stopped out so close to the highs, but I followed my trading plan and felt good about that.

I ended up taking a few solid day trade setups to end the day with a slight profit.  And after the market close, the daily charts looked just as bearish, or even more so than ever.  So Thursday night, I reentered the short, utilizing some good resistance areas from earlier in the day.  That short ended up being 1 tick below the high of the night and following day.

PATIENCE IS TOUGH BUT WORTH IT
At the Friday NY open, something strange happened.  The market gap opened below yesterdays close and ended up having an "opening drive" lower.  That means it sold off strongly after the open with very little rotation/swings higher.  This was very unexpected based on pre-market action as well as other factors. 

A very key point to remember is that when there is an opening drive, there's about a 50% chance for a trend day.  Since trend days generally happen < 20% of the time, those are pretty compelling stats.  As the ES tanked and continued to fall with minimal rotations higher, I knew there was a good chance it's going to be a trend day, and that trend days generally end at the extremes of the day -- in this case, the lows of the day. 

$ES_F 30m  10/19/2012

I couldn't be near the charts for very long, since the temptation to exit would become stronger, so I took frequent breaks.  Having patience to just sit on your hands on trend day is tough. 

But I ended up exiting once the market started to consolidate a couple hours before the close, weary of a reversal bottom that would rip higher into the close.  And most importantly, it was right in the middle of the 1425-35 range that I had targeted for profits.  I followed my plan, although it happened 1-2 days quicker than I expected.

As it happens more often than not for trend days, the market did end up closing at the lows.  I left about +6 ES points on the table, but I'll consider myself fortunate that I was able to book almost +24 points.

RANDOM QUESTIONS AND THOUGHTS
The week ended on a good note, but I still have many questions and issues floating in my mind that I will need to evaluate and address.  This last trade hardly resolves my many challenges.  So although both my financial and psychological capital have been somewhat replenished, there are still a lot more obstacles to overcome.

• Over the past couple years, I've been successful at simply swing trading, so why do I keep trying to trade more like a scalper that goes for big wins?
• Oh, but what would I do during most days just waiting for a swing setup?  One part of me likes the "action" of daytrading!  [** Flashing lights and "Danger Will Robinson!" alerts going off **]  Trading should not be something you do to help pass time.
• Ending the week on a strong note is nice.  But this only means I need to be extra careful not to be overconfident on Monday.  And how will I feel if the market tanks another 20 ES points...without me on board?
• Am I getting closer to the point where I will stop chasing success?  The pieces of this trading puzzle seem like they're starting to come together, but I've said/thought that many times before.
• Cough medicine and the recent correlation to trading performance, so strange.  But correlation is not causation!  Or maybe not?  If so, what does this really mean?
• Why is limiting myself to 3 trades a day so tough?  Sounds so easy, doesn't it?  What if I had originally set the daily trade goal to 6, would that have made any difference?
• Although I have my fair share of really tough days that have hit my psychological capital hard, I still believe from my core that my dreams of trading success will become true.  It's only a matter of time.

Back to the drawing board

Well, that didn't last long.  My plan was to focus strictly on only two simple metrics: 1) A max of 3 trades per day and 2) limit profit targets to +2.00 ES points.  P&L wasn't supposed to matter.  I didn't even last 2 weeks before I had a big blow up of my goals.  I had a couple days last week with around 30 trades.  What a disappointment.

Week ending Oct 12 / From Tradervue.com journal

It was like asking someone who loves and eats a chocolate bar every day to suddenly being allowed to eat only 1 tiny square after getting a job at a chocolate factory surrounded by thousands of bars.  Or someone who drinks 3 cups of coffee a day, to cut back to 1/4 cup.  And whatever other example you can come up with.  Not impossible, but very difficult.  And very much subject to the binge effect.

Then there are those days, like Friday, when I felt I was in such tune with the markets under unusual conditions.  I had barely 4 1/2 hours of sleep and felt emotionally "hollow".  I was also on cough medicine, both huge warning signs.  However, the lack of sleep and cough medication was a strange combination -- one which required me to only interpret and act based on what I saw on the charts, with very little emotion or mental chatter. 

Instead of looking only for setups, I also kept talking about the markets from a "story line" and "contextual" perspective, from both the bull and bear viewpoints.  That was different.  For example, when the better than expected Prelim U of M news came out at 9:55 ET on Friday morning, the market moved strongly higher with initiative buying. 

But something happened.  The market could not continue higher and began to stall.  Price action didn't jive with the better than expected news.  So when one of my favorite bearish chart pattern appeared, it screamed SHORT! 

There were many of these types of moments on Friday, and maybe that's one of the reasons why I keep trading with hope. 

Trading only a single contract, my MFE (Maximum Favorable Excursion) for all my trades on Friday was almost 28 ES points, double the RTH daily range.  Yes, it's not very likely to close out anywhere near 100% of your MAE.  But I ended up with about 1/3 of it which is so-so, but came oh so close to booking about 1/2 of it of my total MAE. 

Something was definitely different about Friday and I really hope it wasn't due to the effects from my cough medicine, because I'd rather not become some sort of cough medication addict to improve my trading!  So was it just a lucky day?  Was it just some false hope, like a slot machine that pays off just enough to keep you sitting around longer to ultimately lose everything?  Or was it an glimpse of more progress to come?

This weekend, I went back to review my blog entries from a year ago.  At first, it was disappointing to see that I've been essentially working on the same key issues back then as I am now.  Same story over and over and over again.  I feel like I've been spinning my wheels for an entire year. 

But the successful method I've been using for my forex swing trades have essentially remained unchanged.  And on another positive note, I do believe I'm wiser and better educated now from regarding trading methodologies vs. a year ago.  However, being smarter means nothing when a weak mental game prevents proper execution of trading methodology.

All of this raises even more questions.  I'll take some more time reviewing my journal entries from a year ago, to help understand what I did or did not do over the past year to address and take better control of my issues.  It's back to the drawing board.

In the past year, I also realize that my psychological capital has been hit much harder than my financial capital, but my will to succeed continues to burn strong. 

September update and new October goals

One of my primary goals for September was simple -- gain control of my overtrading by minimizing the number of trades per day.  The successful control I had through most of September surprised me (to average about 3 trades/day).  But as we approached the final couple days of the month, I let my overconfidence get the best of me and ended on a bad note. 

I was in "single parent mode" during the final days of September, which usually results in sub-par performance.  Add to that lack of sleep and being under the weather.  These were all major willpower weakeners.  I should have known better.

More significantly, I believe the minimal number of impulsive trades I had for nearly a month made me think I finally overcame my biggest challenge, I became overconfident and started to think the forbidden -- I now deserve to crush it and end this month with big profits.  Yeah, I started thinking about the P&L.

The only thing that got crushed was my psychological capital. 

October goals

In September, I had minimal regards for P&L since the goal was all about minimizing the number of trades per day.  So with the limited number of "bullets" per day, when I finally got into a trade, I found myself swinging for the fences more often than not, getting stopped out at breakeven many times even after being up 2 or 3 points and more.  It was a bit hypocritical, saying P&L was not important and yet still holding on for big moves.

So for October, I'm going to add on another simple goal -- every trade will have a +2.00 ES profit target, no more.  I may exit earlier if conditions warrant, but I will NOT be holding for the big winners.  That will happen in the future once I start scaling out of entries with multiple contracts, and then letting a runner run.

Therefore, I'm going to continue to keep my goals simple and easy to track for compliance: 
     1) Average about 3 trades a day (focus on solid setups)
     2) Profit targets at +2.00 or less (lock in higher probability profit targets)

In the big scheme of things, I feel pretty good that I was able to maintain control for a decent (at least for me) stretch of time.  So now, it's time to just step it up and execute.  Let's do it.

ZERO = progress

The month of September has been groundbreaking in that my propensity to overtrade seems to have slowed considerably, almost overnight.  It reminds me of the time when my son was almost 3 years old.  He constantly sucked his thumb and no matter what we tried, we couldn't stop him.  So we eventually gave up. 

But then not too long after we backed off, we realized that he had stopped, cold turkey, kaput.  I had fears of a relapse, a fakeout phase, but no, he never sucked his thumb ever again. 

I can only hope that I have the same experience with my history of rogue/revenge/over-trading, but I'm pretty sure it'll be something that I'll need to work on for as long as I trade.  But as of now, here is how I'm doing from the perspective of number of trades per day:

DATE   # TRADES
====   ========
5/5       5
5/6       1
5/7       7    <- 4 rogue trades, narrow range day
5/10      1
5/11      3
5/12      3
5/13     ZERO  <- Big trend day, but no trades     
5/14      9    <- Went overboard after ZERO day
5/17     ZERO 
5/18     ZERO      
5/19     ZERO      
5/20      3   

AVG/DAY = 2.7 trades   <- Big success, last month was 7.3!
GROSS P&L = +7.75      <- Big underperformance, but this metric 
                          is currently irrelevant

I started the month of September back from vacation with some of my old habits in place.  But on a good note, the trend in the number of trades per day has continued to decline steadily.  I'm quite surprised how many ZERO trade days I've had.

After sitting out of the big trend day on May 13th, I probably felt like I missed out and ended up going a bit overboard the following day on May 14th.  Shame on me.  But then I stepped up, and there were 3 ZERO days in a row -- I don' t think that's ever happened before.  Patience is working.

Interestingly, I haven't experienced withdrawal symptoms from reducing the number of trades.  I'm sure the chatroom I've joined as of this month has been a big factor.  I'll write more about it at another time, but the key has been the similar outlook and style that the moderators and many of the members have with my own.

I've also tried my best to increase the level of awareness regarding how I am feeling, and more importantly, removing myself from trading when I get those feelings of revenge or from bored twitchy fingers.  Constantly being aware of my overall psychological and physical state is something I've been working on for the past few months.  But it seems as though I am now better able to take action.  That's a big step.

One internal dialog I've started is to ask myself "How will I feel if I get stopped out of this trade?" before entering a trade.  If I know I'll be completely at peace with the outcome if I get stopped out, then I know it's a decent setup.  Otherwise, I'll pass up on the trade.  And if I impulsively entered a trade, I will exit it immediately.  I haven't counted the number of times I've avoided an entry this month, but it's significant.  That's good sign of progress.

All in all, this focus on considerably reducing the number of trades and becoming much more selective with my trade selection feels good.  As least to me, those days of ZERO trades indicate big progress.  I'm know I haven't been behaving this way long enough to turn it into a habit, so I'll continue to focus on: 1) minimizing number of trades, 2) maximizing trade selection quality, and 3) minimizing attention to P&L.

So ZERO = progress.  My behavior is changing for the better.  But I still have a lot more work to do...

View from the time out box

Since the family life has gotten a bit busier, I've gotten a bit behind with updates to this blog.  However, this post is something I wrote mostly late last week, and just completed the final edits today. 

*****

There have been a few times in the past when I knew taking a time out was the right thing to do.  Once again, I reached that point last week.  My psychological capital is running low, my day trading has gotten impulsive and undisciplined, and a "I don't care" attitude has taken hold a surprising number of times.  I feel good that I had enough self awareness to simply STOP.

Now that I've made that decision, I'm finally in the cool down mode and am at peace.  My goal is to take a couple weeks off to regain a clear mind, and work on my mental game as well as revisit and revise my goals and plans for the next chapter.

There were many warning signs.

• Although my forex swing trading continues to perform well at over a 100% return year to date, my larger ES daytrading portfolio has lost over 50%, a big chunk of it from this month.  This is red flag #1.  The P&L speaks for itself that something was not going well.
  
• Possibly due to boredom and greed, I started to experiment with scalping again.  I've always wanted to be able to put myself into and out of "scalp mode" on demand.  While I've found some setups that I've been able to execute well on the fast moving tick charts, the momentum of taking so many trades opened the door for revenge trading. 
• I started to focus on recovering my losses (i.e. the money) instead of following the proper process to simply trade well.  I got fixated on getting +10 ES point days, which I did accomplish a few times.  But it's a recipe for disaster, because when the markets weren't moving, I still tried to force home runs, and struck out to the tune of more than 20 ES points.
• Efforts on my daily journaling and overall analysis of my trades during this period went downhill.  It's as if I didn't care anymore.  I only wanted to hit home runs, and nothing else mattered.
• When I started to look at my bread and butter forex setups, I started to feel impulsive and tried to justify and force setups that weren't there.  Or tighten up on stops way before my rules and get stopped out.  I had a completely different mindset and process vs. the successful process I used most of this year.
  
• And worst of all, I could feel some trading stress spilling over into my primary role as father and husband.  I feel fortunate that I was able to catch this situation and stop it well before any flash point was reached.  Because that would have been absolutely inexcusable -- a clear deal breaker in my life.

A great relevant webinar
When I expressed my time out to some fellow traders, I received a great link to FT71's "Trader Intervention" webinar from Matt.  It's about a futures trader with about 2 years of experience who started with a $100k account only to see it get crushed down to $20k in several months. 

He regrouped by trading on SIM for a few months, and went back live to become consistently profitable for 2 months resulting in his $20k account growing to $33k.  Then he lost $32k in 2 days, leaving behind a $1k balance.  OUCH!  The monkey took control and won. 

Listening to this webinar was eye opening and somewhat painful, since many of the trader's challenges are so similar to mine, except my losses are peanuts compared to his. 

FT71's comments and coaching in this webinar was spot on -- including his first recommendation that he just needs to stop trading.  And FT71's question about how he was doing with his journaling during his binge made me crack up (because his assumption was right, the trader's journaling was nearly non-existent, as was mine).  It felt like FT71 was talking to me and his recommendations in the webinar further reinforced my decision to take a time out and regroup.

Where to from here?
Over the next 2 weeks, I'll be working on cooling down -- no more live trading.  That will open up the day so that I'll be revisiting my goals and plans.  Working on my mental game will also be one of the key areas of focus -- self-hypnosis, meditation, yoga, etc.

Another question I need to seriously consider is, if I'm doing so well with forex, why not just swing trade forex, size up, and forget about everything else?  That style of trading seems to flow naturally and is a strength of mine.  So yes, that's also in the picture.

And on a related note, I need to consider whether the method I'm using to daytrade the ES is in sync with my personality and style.  Maybe all this mental stuff is a symptom, not the cause.  Because if I felt 100% comfortable and confident with a system, would I be breaking the rules so often?  Something else I'll be evaluating.

I look forward to returning from my time out in June, a little wiser and better prepared.  And especially a step closer to becoming a consistently profitable trader.

End of Spring break, beginning of a new dawn

As Spring break comes to an end, it's now time for a new dawn.  It's time to start the engines back up and to get back into the groove of the markets with a new outlook.

One of my key goals was to not trade and to not even follow the markets.  But I have to admit, I had mixed results. 

Although I did not trade, I did start to put on some SIM trades starting Thursday night and a few trades on Friday.  However, I only focused about 20% of my time on the markets and ended up having one of my best SIM days ever.  In hindsight, I think there was a reason for that.

KEY GOALS DURING THE BREAK

MIND

• Read (or re-read) the following books on increasing my mental game:
• Heads Up Baseball by Ken Ravizza and Tom Hanson
  
• Inner Voice of Trading by Michael Martin
• Market Mind Games by Denise Shull
  
• High Performance Trading by Steve Ward
  

• I'm finally beginning to understand why I have run into many of the psychological challenges from trading (primarily revenge trading)
  
• One of the very interesting exercises Denise Shull recommends is one in which makes you think back your childhood, as well as your relationship with your mother and father.  I'll need much more time to really dig into those.
• So my understanding and control is far from complete -- I've only just begun that journey, and it may take a lifetime to master.
• Simply becoming aware of your emotions and recording them is key.  That then becomes a new data source, arguably more important than price!

BODY

• Increase my physical health
  
• Continued to attend cardio classes, at least 2-3 times a week.
  
• Made a commitment by signing up for yoga classes 2 days a week during lunch.
• Improve my diet
• Increase intake of fruits and vegetables, partially by juicing, as well as new grocery lists.
  

SOUL

• (Re)discover other passions and interests outside of trading
• I don't have a good counterbalance to trading.  So finding those other interesting may take longer time, but it is critical to my mental well being that I have a somewhat good balance of interests.
  
• Clarify higher level goals and reasons for why I trade
• Most of these goals eventually revolve around my family.  But I did not spend enough time during my break to clarify these goals to the level of detail that becomes crystal clear and invokes the properly level of emotion.
  

THE BOTTOM LINE
I was surprised that I didn't have enough time during this prior week to accomplish the many other goals that I had planned. 

But one big takeaway seems to be that by removing myself from the markets and reducing the number of trading decisions during the day, I will stay better "centered" so that I can better understand and listen to my emotional state of being. 

If my SIM experience on Friday was any indication of how trading could be from the mental perspective, I believe it will increase my overall success rate on all key metrics -- especially by NOT taking those dreaded and impulsive revenge trades. 

Now it's time to consistently put all the pieces into action, brick by brick, day by day...

Going dark - back in a week

I will not be trading next week, so this blog will likely be going dark during that time.  It's also a good time to take a break, given my focus on fatigue and mental meltdowns recently which has also resulted in losses. 

It has been about a year since I started trading full time, so reflecting on what I have learned and to recognize the progress I have made during this tough journey also seems timely.

One area of interest is the performance of my forex swing trading account vs. ES daytrading.  Assuming my open AUDUSD swing is closed now, I'm up around 150% net on that account since the beginning of the year.

However, both my ES daytrading accounts are down a combined 15% net (commissions and revenge trading are the biggest factors) since the beginning of the year.  There are other reasons for this disparity between my forex and ES accounts, but they are mostly psychological.

I will also need to develop longer term trading goals and work my way down to shorter term goals are in alignment.  Somewhere along the way, especially with challenges to my mental game, I've clearly lost my sense of the bigger picture.  Time to revisit.

So without the high intensity required for trading next week, I will be able to give deeper focus and thought to these and other bigger picture topics.  When I return, I will restart with clarity, purpose and a renewed mission.

Brick by brick

Total gross profits:  $87.50  +1.75 ES points
Total trades:  2 [0 scratch]
Accuracy:  50.0%
Execution score: 100%
Opportunity cost: $0

One of the examples Renato makes in his Diamond Setups trading room is that he's like a bricklayer -- focusing on building a wall, brick by brick.  And before you know it, you look up and realize you've built a big wall.  

From the trading perspective, he's just following his trading plan, patiently waiting for one good setup, and pulling the trigger.  His goal is to take small little bites every day, and over time, those little bites really do add up to some sizable profits. 

So starting this week, I decided to start making small little changes, not necessarily directly trading related, but activities outside of trading that have a direct impact my trading.  As I was spending time on the mental game this past weekend, I coincidentally received a link from "H" to a FT71 webinar regarding meditation.  In that webinar, FT71 identified 3 key activities of life that impact your ability as a trader:

1) Meditation
Meditation is something I haven't worked on, although I have purchased a biofeedback device called the Stress Eraser with limited usage to date.  I'll need to dust it off and put it to use.  Trader-X also had a great post regarding meditation about a year ago.

2) Diet
My diet is pretty good, although I can always work on cutting back on sugar, which generally wipes me out. 

3) Exercise
I used to work out at least 3 times a week (minimum 1 hour), but that has fallen to about once a week.  This is an area I can work on immediately.  So for at least 2 days a during the workweek, I will dedicate an hour of exercise prior to trading.

Today, I went to go exercise in the morning before trading, thinking that I could work out any impulsive energy that has been building up over the weekend.  I felt the positive impact of the exercise.  My mind was clearer, and there wasn't as much need to trade, for the sake of trading.  I only had 2 trades the entire day, so perhaps this will help minimize revenge/rogue/boredom trading.

I am serious about improving my performance as a trader, and will continue to evaluate and implement changes to my life that will positively impact my ability to trade.  It won't be a drastic change, but something that I will work on brick by brick, bite by bite, with clear goal and objectives in mind. 

Someday in the near future, I expect to look back and see great progress in many areas of my life -- not just trading.

Checkpoint: Review of 25 trades

Time Period:  March 1 to March 9

Total gross profits/per contract*:  $987.50  +19.75 ES points 
Total trades:  25
Accuracy:  60.0% if scratch=losses   [68.2% if scratch excluded; 72% if scratch=wins]
Execution score: 86%
Opportunity cost: $-62.50  -1.25 ES [execution errors have been net-favorable]

I lost my focus, I went astray, I was wandering somewhat aimlessly.  Gambler Grove started to come around, with influential whispers of "Hey, going for just +2.00 targets is a drag, man. Go for the big runners!  Feel that +10.00 trade!!"  And when I was weak, Mr. Revenge came for a visit.

Luckily, I've met some great people on my trading journey, and they helped me to get back on track.  I made a commitment on March 1st to take 20 trades and be consistent and disciplined to my trading plan, using +2.00 as the profit target and going for singles (forget about swinging for home runs).

This past Friday ended with 25 trades since the beginning of the month, so I've decided to base my evaluation on a slightly bigger sample of trades.  Overall, not a bad execution score, which led to a respectable P&L, especially given the market conditions this week -- which wasn't the most favorable based on my methodology and time frame.  The execution score started to slip slightly on Wednesday and got worse up through Friday.

Report from Tradervue: March 1 - 9th results

Breakdown of trades

Wins = 15  (12 full +2.00 ES target wins = 48%) * 
Scratches = 3
Losses = 7  (3 full stops = 12%)

Max drawdown = $-225.00  -4.50 ES

* Note: There were 3 trades, all +2.00 winners, that were taken simultaneously in 2 separate accounts, and the total profits for all accounts are included in the results.  However, they were still counted as one trade.

Execution Score
The letdown in my execution score over the past few trading days concerns me, especially since that's the metric of most significance: Am I following the plan, or not?

Could the execution score slippage be a sign of mental fatigue?  Getting temporarily worn down by the market conditions?  Or something else?  Not sure, I'm still evaluating.

On the bright side, I have deliberately passed on many setups over the recent days, to my benefit.  And as I have noted before, my current execution score and opportunity cost metrics do not penalize me for missing or passing up trades. For now, I'm fine with that.

Risk per trade
This is one metric I hold very sacred, my risk per trade.  My current risk per trade is currently around 1% of my portfolio, which equates to about $10k per ES contract.  But if my performance continues to support a relatively stable P&L curve/drawdown, I may start to explore the opportunity of adding additional contracts, assuming my overall risk per trade is <= 1.50 or maybe up to 2% of my portfolio. 

In the future
An objective I've kept in mind is to utilize a trading method that can scale up to 20 to 50+ ES contracts per trade.  I believe this current trading methodology, based on a variation recommended by Renato for his Diamond Setups method, and further refined with other DS members, has created a solid foundation that (in my opinion) can achieve that objective.

But what now?
I believe the best course of action is to continue trading on the current trading plan, based upon this exercise of evaluating a group of trades.  Take one good trade at a time, for 20 more trades, and reevaluate.  And then perhaps 20 more after that.  And so on.  I want to see how well the current trading plan works, under various market conditions.

Ultimately, my goal is to steadily build up the discipline to execute per my trading plan (whatever it is at the time) and burn it into a long term habit.

To coast, or not to coast...

Total gross profits:  $225.00  +4.50 ES points
Total trades:  3
Accuracy:  66.7%
Execution score: 100.00%
Opportunity cost: $0.00

I wouldn't categorize today as a true or very strong trend day, since the moves during the regular trading hours were more of a stair step or grind lower.  

Most of the "trend day" took place during the overnight Asia session, as well as just about an hour prior to the NY cash open.  That's good, because in general, I don't do as well on trend days.

Coasting...
I was fortunate to catch a few moves today during the morning session.  I exited my 3rd and last trade of the day by 10:30 AM, and ended up with an "average" profitable day.  But as I look back, I can't help but wonder if I'm limiting my upside, since I seem to go into a "coasting" mode after I reach about +4 in profits. 

...or not coasting
However, if I was down for the day, I probably would have continued to be on watch, and would have continued to pull the trigger, taking trades until the final minutes of the day.  This is the type of attitude that really helps to create those "comeback" days, where I dig myself out from -8 ES point days over the afternoon.

But...
There's "that voice" in my head which says, "Hey, you're up a solid +4 [or whatever] today, don't risk it.  Just take it easy.  Those little crumbs add up by the end of the week and month!"

But then again, on a day like today when I'm reading the markets relatively well, I can't help but wonder if I shouldn't really continue to push the petal to the metal and fight until the end, just like those comeback days.

...for now
Starting on March 1st, for the next 20 trades, my goal is to reestablish my discipline by going for singles (i.e. all out at +2 profit targets).  I'm about 12 trades into my goal, and most importantly, my execution score is currently 100%, which means I'm following my plan.  Right now, execution score is my top priority, nothing else matters.

Eventually...
Ultimately, my goal is to maintain rock solid discipline and continue to execute per my trading plan, so that it turns it into a habit that will be very difficult to break.  Sure, my trading plan will change and evolve over time, but to know that I have the ability to properly execute what's in my trading plan will give me the confidence to scale up.

I consider this 20 trade exercise as part of the ongoing process where I am earning my right to trade bigger.  Once I get through the 20 trades, I will evaluate my performance in greater detail, and will address other concerns -- such as whether I am leaving a profits on the table after reaching a certain profits for the day.  And also, help to determine when I should start scaling up.

Until then, I will continue to do my very best to execute my trading plan well -- full speed ahead!

Road to recovery thoughts

Total gross profits:  $400.00  +8.00 ES points
Total trades:  4
Accuracy:  100.0%
Execution score: 100.00%
Opportunity cost: $0.00

I was given some good advice the other day, as I went back on the road to recovery -- just trade the next 20 setups and simply use a profit target of +2.00. 

The last time I got into a rough patch, I was also very given similar advice to "hit for singles" by sticking with only a +2.00 profit target.  It worked, and I look back and wonder how I could have deviated from that plan.

So starting this month, I'm getting back to basics, and keeping my process as simple as possible so that I can begin to establish focus and trading consistency once again.

After 20 trades are successfully completed, I will evaluate my progress.  Right now, it's all about achieving a 100% execution score, every trading day.  And after reaching a certain profit objective, I will then earn the right to trade bigger, and with bigger target objectives. 

I'm not willing to trade larger now just for the sake of trying to recoup my losses quickly.  Because if there is something wrong with my fundamentals, increasing trade side is basically a recipe for financial disaster.

Some key points for my journey:

• Focus on identifying the best setups and executing them flawlessly
  
• I can not control the outcome of the trade, but I have total control in how I manage the trade
• Once my trade is closed, the outcome following the trade is irrelevant.  If a +2 trade could have been +20, so be it
  

Simply put:  I'll patiently wait for the very best setups, enter them without hesitation, manage the trade per my trading plan, and only use a +2.00 profit target for all trades.

We'll see how "simple" and "effective" this plan becomes.  I know it's tougher than it looks, but I'm ready to take on the challenge.  4 trades down, 16 more trades to go until the next check-in point.

Trader Development Cycle: Self-evaluation

Thanks again for the wonderful support over the past week.  I'm very fortunate to have met so many great people since I've started on this journey to become a trader -- from Trader X's blog, my blog here, and especially the Diamond Setups community.  It's people that make such a big difference in life, and I an really thankful for all the friends that I have met on this journey.

Where am I on the development cycle of a trader?
Now it's time to get back on track and start moving forward again, on my relentless quest to becoming a consistently profitable trader.  But before I start trading again too quickly, I thought it would be good to first take a breather and evaluate my development to date.  It's important that I understand where I am, so that I can better determine the path I need to take in order to reach my goals as effectively as possible.

Sources for evaluating yourself as a trader
Thankfully, there have been a few different sources that help to describe the various stages or phases that one needs to overcome in order to become a successful trader.  Recently, there have been three sources that have struck a cord with me:

1. FuturesTrader71.com (FT71) is someone who has been around for years, but I've only become aware and acquainted with him only in recent months -- oh the catching up I have to do!  He recently hosted a webinar for his brokerage clients-only (www.vankartrading.com), and one of the sections discussed was "The 5 Stages of Trader Development."  Andrew Menaker also had an article discussing a similar development framework.
   
   On a separate note, if you're a developing trader, you should seriously consider opening up a VK Trader account with VanKar.  The level of commitment, tools, education, and services they have and/or are planning on to help the serious retail trader (especially ES traders) is absolutely amazing.
   
   
2. "High Performance Trading" by Steve Ward describes in the first chapter of his book the three stages one must transform through in order to become a trader, and also mentions a development curve for traders he calls the J-Curve.  You can read the first chapter on Amazon here. 
   
   It's a great book that takes much of the psychological theory and concepts discussed by the Douglas, Steenbarger, Kiev, etc., and creates practical exercises for specific areas that are actionable.


3. 38 Steps to Becoming a Successful Trader from Tim Racette of www.eminimind.com breaks down the 38 various steps one must conquer in order to achieve success as a trader.  He mentioned that the steps were from a book by John Piper's called "The Way to Trade".
   
   Tim has a great website, focused on the ES trader, but applicable to nearly all markets and traders.  One good starting point is to read his Best of EminiMind post, which groups together various articles by areas of interest.
   

What did I discover?
I have included additional details and my evaluation from each of the various development frameworks in the Appendix section below.  But in summary, everything seems to point towards the same conclusion:

• I still need to master my methodology and trading rules
• From what I have learned from the Trader-X, SMB, Diamond Setups, and others, I know more than enough setups that have an edge.  But I need to stick with a methodology and master it.  I'm feeling good that I'm making progress narrowing down a method that works well for me.
  
• However, more importantly, it's my lack of discipline that has been the biggest challenge
• Being consistent with taking trades that are a part of my trading plan is critical, at least until I reach the point in the future where I can trade using "Unconscious Competence." 
• I have experienced some characteristics of a successful trader, but not consistently
• It's good to see that I have achieved periods where I have demonstrated certain characteristics of a consistently profitable trader.  However, I need to be able to stay in that zone consistently.
  
• This self-evaluation has brought me hope
  
• Although there are times when it doesn't seem like I'm very far away on the trader development cycle, I realize that the final steps will require considerable amounts of time and effort to accomplish.  And I'll probably never get "there", and will have to work hard as long as I trade.
  

As I settle into a consistently net-breakeven trader, I realize that one of my biggest challenges to becoming a consistently profitable trader will be time, and so I need to do my best to protect my capital (i.e. solid risk management).  Within the framework of establishing a trading process maintained with a high degree of discipline, I will also maintain patience knowing that there are no short cuts to the considerable efforts ahead.

OK, time to get back to work!

***********************************************************
Addendum
Included below are the excerpts from the various trader development frameworks discussed above, as well as where I believe I am for each respective framework, which have been highlighted in yellow. 

FuturesTrader71 (FT71): The 5 Stages of Trader Development

Stage 1: Unconscious Incompetence

• You believe that you can make a quick $ by trading and that it is a piece of cake.  Heck, it is just a video game. You fund an account
• You think you know but you really don't. Eventually, big loses are taken and reality sets in.  Hello monkey!

Stage 2: Conscious Incompetence

• You have finally met your monkey, took some big losses and you realize that you really don't know what you think you know
• You are led to believe that there is a holy grail out there, so you use a lot of indicators, buy lots of books and courses

Stage 3: Conscious Awakening

• You realize that it is not so much the system that makes or loses
  
• You come to terms with the culprit as your own psychology, attachments to money or being right; your aversion to accepting losses that prevents you from making it
  
• You begin to be aware of and are frustrated by your lack of discipline

Stage 4: Conscious Awakening

• You are a seasoned trader and you know that this is all about accepting the unknown
• You learn that losses are not all that bad, but there is a conscious effort to manage emotions still
• You stop seeking the approval or consent of others for your own trades

Stage 5: Unconscious Competence

• You feel no attachment to trades, wins, losses or the outcome whatsoever
• You are disciplined and your reactions and read on the market are occurring beyond thought
• You are militant about your homework, environment, tools, beliefs and goals

SOURCES:
http://www.futurestrader71.com
http://www.andrewmenaker.com/a-practical-approach-to-trader-development/

***********************************************************
The J-Curve from the book "High Performance Trading" by Steve Ward

• Learn not to lose
• Make money
• Break even
  
• Profitability

SOURCE:
http://www.amazon.com/High-Performance-Trading-Strategies-Techniques/dp/1905641613

***********************************************************
38 Steps to Becoming a Successful Trader from eminimind.com

Eminimind.com is a great website for not only the ES trader, but for trading in general.  See his "Best of" post for great articles on various aspects of trading.

Starting at #29:
 

29. We now see the importance of following our rules as we see the results of our trades when we don’t follow them.

30. We begin to see that our lack of success is within us (a lack of discipline in following the rules because of some kind of fear) and we begin to work on knowing ourselves better. 

31. We continue to trade and the market teaches us more and more about ourselves.   

32. We master our methodology and trading rules.

33. We begin to consistently make money. We begin to consistently make money.

34. We get a little overconfident and the market humbles us.

35. We continue to learn our lessons.

36. We stop thinking and allow our rules to trade for us (trading becomes boring, but successful) and our trading account continues to grow as we increase our contract size.

37. We are making more money then we ever dreamed to be possible.

38. We go on with our lives and accomplish many of the goals we had always dreamed of.

SOURCES:
http://eminimind.com/38-steps-to-becoming-a-successful-trader/

http://www.amazon.com/Way-Trade-Discover-Successful-Personality/dp/0273637541

Will it be a trend day or not?

Total gross profits:  $-62.50 -1.25 ES points
Total trades:  7  [0 scratch]
Accuracy:  57.1%
Execution score: 100.0%
Opportunity cost: +$0  +0 ES points

It used to love trend days

Trend days don't happen often, I believe around 10%, give or take, depending on who you talk to and how they define a trend day.  But if you catch the right day, and you enter a  trade using something as simple as a 30 minute opening range breakout, then hold on to your position and exit market on close, a day such as today would have produced decent results with minimal effort.

That was then, this is now:  Be aware (or beware?) of trend days

However, when trading based on key support and resistance levels, there's a possibility that you might get stuck trying to continuously short in an uptrend day (or vice versa).  I fell a little into this trap today, was down about 6 ES points at one point, but was able to scramble and dig myself out to almost b/e.

So now I find myself trying more frequently to identify whether the day is developing into a trend day or not, so that I don't get chopped up and waste emotional capital fighting the trend.  I'm getting better at:

1. Identifying the possibility of a trend day sooner rather than later, BUT...
2. Incorporating that bias to adjust my trading plan is something I need to work on 
   

Other area for improvement:  Tracking missed trades?

Another area for improvement is to track missed trades.  For example, today, I had at least 4 trades that I missed, either because I was not around to take them (time limitations), I simply missed them (was not prepared), or I avoided them (couldn't pull the trigger or decided to pass). 

In the past, I didn't give missed trades much weight.  But to know that I could have been up +6.00 by the time the NY session opened, does raise a lot of questions.  There was also another trade or two that I missed during the day, so all told, let's just say that I had "Missed Trade Costs" of at least +8 ES points.

Since my discipline of executing against my plan has improved significantly, once I maintain this level of discipline for this week and next, I will begin tracking the "Missed Trade Costs" so that I can better determine if there was anything I could have done to capture a greater % of those trades.  Just based on past anecdotal evidence, I believe that missed trades can account for a very large % of a day's potential profits.

Bottom line:  I'm going make sure I leave as little as possible on the table by the end of the day. 

Getting back to business

A scratch day
After a very hectic but really wonderful holiday week with family visiting, it's time to get back to business.  I'm still feeling a bit rusty, so I only took one trade which ended up touching my profit limit order at +2.00 ES points but no fill.  My stop was at break even/entry price so I let it ride.  Luck was NOT on my side, and I ended up scratching the trade. 

Renato does it again
Renato made a few calls, including his first of the year that I didn't take since I wasn't quite ready to pull the trigger.  It also "felt" like a tough trade to take at the time.  Yes, in hindsight, those are really lame excuses.

(Jan 03-10:03) RenaTrader: RES 1278.50-80

What was the high of the regular trading session?  1279.75 at around 10:25 AM.  You can't get much better than this and he makes these calls to sell the high or buy the low of the day quite frequently.  I wouldn't believe it if I didn't see this happen regularly, in real time, timestamped, over the past 3 months.

No New Year's Resolutions
Many people are making New Year's resolutions this time of year, but I'm not going down the traditional path.  Sure, I'm going to work on goals, but I believe they should be reviewed and updated on a regular basis, not just once a year and forgotten. 

Focus goals on process, execution, and the mental game
I'm also going to start setting more specific monthly or quarterly goals related not directly with P&L, but to the overall trading process and quality of execution, in addition to ways to improve my mental game.

I'll also need to monitor my mental well being and make it a point to NOT trade when I am not in the right frame of mind.  My biggest losing days are directly attributable (with near perfect correlation) to those times when my non-trading life was exceptionally stressful.

Changing my physical world as well
I'm also changing my work environment and will experiment with a standing desk as my trading station, in a new location, to determine whether I will be more alert, especially in the afternoon.  Increasing my exercise regimen will also help to increase my overall well being, both physical and mental.

And finally, my diet, especially breakfast and lunch, will need to be improved, since I've noticed that when I'm not properly nourished, I become mentally agitated, which definitely impacts my trading performance.

It's on!
Here we are, 2012, and I've been pressing forward for nearly 9 months trying to find a way to trade that works best for me.  I'm positive that I have discovered more setups with an edge than I really need to become comfortably profitable beyond my wildest dreams.  But I have yet to properly execute on a consistent basis.  So I will become more selective in my setups, focus on execution, and make it happen.  It's time to do it!

Winding down for the holiday week

Between the construction workers finally banging away and fixing our basement due to the hurricane Irene floods (how long ago was that already??), preparing for family visiting tomorrow, as well as endless other circumstances of life that popping up, it makes focusing on trading very challenging. 

Yesterday - Botched SIM again
However, I did do some trades yesterday (Monday, Nov 21), but then ran into the TradeStation SIM confirmation delays once again.  This threw me off track.  By nature, when I see a problem, I try and isolate it and determine the root cause or at least better understand what's going on. 

So I began finding excuses to put on trades just to try and make it "break" and replicate the problem.  It's OK to do in SIM, but it's not OK with a live account.  Needless to say, I ended up straying far from the trading plan and it's not even worth posting the performance.

Overnight trading and the "one trade" today
Last night, I decided to give overnight trading a shot, and I ended up fighting the trend, and shot myself.  And before I had to head out this morning for a doctors checkup, I shorted the ES at 1198 during the pre-market session. 

The trade gained as much as +18.75 on one contract, before it hit the bottom before lunch (where Renato made a Diamond Setups call at 10:57 AM to buy at 1182-80!) and it then shot up due to the IMF news about the liquidity line.

Since I was in and out all day today, I held on and it got within 3 points of my breakeven stop.  I thought it would be "tragic" if I got stopped out at breakeven, but hey, it would be a lesson learned.  Luck was on my side, and the ES drifted back down.  And then right around the close, more news.  New stress tests for banks.  It ended up closing +16 in profits, and I will hold it into the overnight session.

By the way, this trade won't count on the "official" performance report, either, regardless of whether it closes with big profits or b/e.  It's more of a rogue experimental trade that I had a "hunch" about.

The bigger picture
Looking back on the past few weeks, it's clear there's a big gap between my desire to go for profit targets of +2s vs. runners that go +10s and beyond.  It's not necessarily mutually exclusive, but it is much more difficult to do both when trading only 1 contract, so I'll need to work on a plan to get up to 4 contracts as soon as possible.  Lots of planning and goal setting work for me to do.

Well, time has run out and more non-trading duties call, but best wishes to all for a safe and wonderful Thanksgiving holiday break!

My strengths - Analysis of my best performing setups

Now that I have completed additional analysis beyond the preliminary trading journal analysis from 1 week ago, I know know which setups currently work best for me. Those setups will then be incorporated into my trading plan for next week. 

Improvements to Tradervue

But first, a significant change on my analysis has been the improvements made to the Tradervue trading journal by Greg, the developer of that website.  He has enabled the ability to split (and merge) groupings of trades to allow a more detailed ability to analyze your trading records.

Add to that the new ability for the use of the "AND" criteria in the filter, which enables you to analyze combinations of multiple tags (I currently these tags).  Based on my requirements and usage of a trading journal, this has really made Tradervue into quite a powerful journal and statistical reporting tool, and has made the results of this analysis much easier to generate.

Historical figures are even better

After I split some trades into more detailed records and retagged them, the revised figures now show that my profits were even higher than the results stated in the preliminary analysis last week.  At this point, the absolute figures don't really matter, since I already knew taking only A and B grade trades was the path to success.  The new data further reinforced it.

Focusing on my best setups

So for my next trading exercise, what I needed to do was to refine and focus which one of the A and B grade setups I would focus on, based on how well I did in the past (focus on my strengths).  I have to keep things simple, so that I can easily measure my ability to to execute.  Right now, I need to prove to myself that I have the discipline to follow a trading plan and to execute near flawlessly.

Here is the summary of the best/most interesting setups from my A and B trades.  Metrics are based on the R-Multiple:

"Setups" are the actual setups that trigger an entry, and I have tags for many different setup variations of each core setup (see glossary here) to produce better reports and metrics.  Note that in some cases, more than one setup tag will appear on a trade (which would drive some statisticians bonkers).  Therefore, although there appears to be a lot of setups in the matrix above, there are only 6 core setups in reality (see groupings by color coding).

"Setup conditions" are metrics for additional conditions that took place at the time of a particular setup.

Additional thoughts

I was a bit disappointed in the accuracy of the vlb (vwap line bounce) scalp trade (only about 50%), but I believe this is a factor on my ability to execute.  Therefore, I will be monitoring this closely.  I was also disappointed with the lack of success (and occurrence) of the 5 minute "quick hit" (2 bar opening breakout), so I'll be dropping those.  However, I believe the 15 minute version could likely work better, although I just don't have the data to prove it.  And I love the ascending and descending triangle setups, however, they don't occur as often, so I won't include them next week.

What next?

For my trades in the next week, I will focus on the following setups:

• pb2rz - Pullback to the retracement zone - the classic Trader-X setup.  As he says, it has great numbers, and you really can make a good living on just trading this one setup.
• btorh/btorl/btfe - Beyond the opening range high/low/FE - another classic Trader-X setup, this setup is generally based in conjunction with a cbo/cbd (consolidation break out/break down).

In the future, it will be interesting to look back and see how my trading evolves. But for now, I will focus only on the setups above, and prove to myself that I have the discipline to take only A and solid B grade setups.