Full Lockdown in Effect

I'm sure you could almost have predicted it -- I decided to trade the live account today.  And it was likely going to be a big day -- one way or another.  So what happened?  Well, I was up $500 (5 pts/car) this morning between Renato's DS calls as well as my usual scalp trades.  I was starting to feel the zone and flowed with the trades, just like good 'ole SIM days that generated great results last month.  And at this rate, I was going to have a pretty good day.  But...

The trigger
But there was a trade on the DS alert late morning that stopped out, and for whatever reason, that knocked me out of the rhythm.  The DS is expected to have at least 2 losses for every 10 trades, so having a loss isn't unexpected.  But this was one of those trades where *I* did not set the original stop properly thinking it wouldn't get all the way down there, so I was scrambling around trying to adjust it as it started to go against me. 

After the loss, a small shift in my mindset was triggered.  The next few trades were not necessarily hit 'em out of the park revenge attempts, but the voice in my mind to make up the loss quickly was getting louder.  "You gotta go back in there and and get it back!"  This began to corrupt my discipline, made me anticipate entries, and I started to see setups that were not really there. 

A slow and gradual meltdown
Every trade I entered started to go against me almost immediately, and instead of taking this as a warning sign to regroup, I began to start looking for even more trades -- I had to get back into a trade. 

I ended up taking some breaks to cool down, but once again, all I could think was -- I needed to get back on board a trade.  The wheels started to wobble, and they finally fell off.  This ended up being one of my worst days.

The worst part
Sure, I feel embarrassed by my performance.  And sure, I feel like I'm walking around with my tail between my legs. 

But here's the worst part -- many people cared enough to take the time to send me great actionable advice and suggestions that would have prevented a day such as today, and I did not act.  I feel as though I let those people down and ignored them.  Far from it, I am a person who listens to what others say, takes them to heart, and acts on them -- which explains why I feel this way. 

Saving grace?  This game is far from over, and there is still time to implement the great suggestions.  You can count on that.

Full lockdown
As of tomorrow, my live account will be under full lockdown.  It's back to SIM, 100% for all trades.  My live account has suffered another direct hit, but I am far from being out of the game.  My decision to allocate $10k/contract has kept me well in the game.  In the past 7 months since I've started trading full time, I've experienced this a situation a few times, and knowing when to call a TIME OUT is critical. 

I'll need to work on the criteria to remove the lockdown, but it will have some element of how close are my actual executions vs. the signals from the system.

Monday, November 7
Total gross profits:  -x,xxx,xx   [Too embarrassed to disclose, but I WILL eventually]
Total trades:  29
Accuracy:  27.6%                   [Wow, very obvious how rogue trades were involved]
Contracts per trade: 2

NOTES:  Another gap up day, but one that filled the gap and continued lower to test the PP pivot, then an extended 1-2-3 / consolidation reversal pattern formed to go higher.  As the bottom was forming, the Berlusconi news popped the market higher, and then steadily crept up to close at the highs of the day.  In hindsight, it wasn't that different of a day, but my approach after a solid morning session ended up being a huge FAIL. 

Lessons learned
So it didn't work this first go around with the $ES_F, but what did I learn? 

• Know your tilt triggers -- An oldie but goodie.  After the first loss (or first few losses) of the day, my first reaction is to go back in and try to get it back quickly.  This results in revenge trading and overtrading.  And getting in one rogue trade makes taking the next rogue trade that much easier.  It is critical that I wait for a good setup for the first trade.
• Pulling the trigger -- I have no problems pulling the trigger after a loss.  In fact, I have a problem pulling the trigger too often after a loss. I'll need to find ways to minimize this.
• SIM vs. live -- I knew to expect differences, and yes there were, especially with the fills.  But what I didn't anticipate was my psychological reaction to the differences.  When I see trades that hits my +2.00 ES target but don't fill, there have been many instances where I let them go to a full stop loss.   And worse of all, I did not prepare properly to determine how I would handle those situations.  This happened a lot more often than expected, and was a trigger in some cases for non-plan trades. 
• Weekly goals - I need a very solid and crisp plan on what my strategy and goals will be every week.  I have mixed too many apples and oranges together with regards to my trading plan.  When given a specific task, I deliver, so it's time start doing this again.
  
• HUGE opportunities - The more time I spend time in the DS chatroom and study the system, the more it becomes clear that DS and the variations to better suit your personality can really provide some really huge opportunities.  And as you grow, the ES market is very liquid, so the fills will not usually be an issue for the retail trader.  Therefore, the more I see this system in action, the more I realize the enormous potential.  That's what keeps me going.  
  

Today was one of my worst days with regards to trading.  But do I still believe?  YES, without question.

**TILT**

Well it looks like the ugly gremlins from my big owie day last week ended up coming back today.  And this time, they brought reinforcements.  It resulted in a day worthy of this:

Today will be an example to all of what NOT to do when trading.  Following Renato and the Diamond Setups would have resulted in essentially a scratch or small profit day on a very few trades.  He lead the room properly and those that listened, didn't get hurt.

I've read countless articles from others regarding overtrading, revenge trading, going on tilt, lack of discipline, [insert ways to self-destruct here], etc.  And like many other developing traders that eventually become consistently profitable, it looks like the rocky path is what I must also endure while working through my challenges before it all finally hits home, or until I run out of money.

I was fully aware that I was not in the right frame of mind from the onset of today, but I took this as yet an additional challenge to face -- as if successful trading itself isn't enough already!  In the morning session, I was doing well given the circumstances, scratching instead of being slightly profitable due to some missed opportunities.  But I was generally following the rules.

The Trigger
When the markets shot up after lunch stopping me out of a short position, that triggered my tilt.  I noted to myself that the trend had changed, and that I shouldn't fight the trend -- it uses up your emotional capital, so I should only look to be buying.  However, when your thoughts don't sink into your actionable consciousness, and you also combine that with fatigue, it's a real death spiral in the making.

Emotionless Trading - The Wrong Way
Whether it was partially due to the fatigue, I experienced little in terms of heightened emotions.  It was just a matter of getting back up mindlessly after getting stopped out.  A zombie with a mission.  For those who have raised children, it's a similar feeling to being awoken in the middle of the night countless times to sooth a crying baby...night after night after night....until you're so numb, you're in a state of autopilot.
 
To SIM, or Not To SIM -- Revisited
My account is now down net 15% in a span of less than a week.  Red flags are waving everywhere.

So the big question now is whether I need to go back to SIM.  I'm leaning towards it.  However, here's the quirk -- I have reason to believe that I respect the SIM account more than the live account.  Huh?  Yes, for whatever reason, it's easier for me to trade the live account with less discipline vs. the SIM account.  I have no reason why, but maybe it's some deep seeded programming bug deep within my brain that only a voodoo doctor can remove. 

Therefore, going back to a SIM account might only result in a false sense of confidence once again, only to see me fall off the tracks once I go back to trading a live account.  But then again, trading a SIM account will not results in losses to my real capital (nor will there be actual gains).  Best for me to just sleep on it, and decide in the morning on a clear and hopefully well rested head. 

Patience and Discipline
Renato has made countless comments that it takes discipline and patience of following your trading rules to become a successful trader.  On days like this, I know I have failed on both counts.  I feel as though he's speaking directly to me, the guilty party, although I know it applies to everyone. 

I still strongly believe that I can make it as a trader.  Whether it's futures, stocks, or forex, it's clear that when I follow the rules, the profits are there.  Simple as that.  So what is keeping me from achieving consistency?  My mind.  Similar to how athletes or others in various performance fields have coaches, perhaps I need to consider working with a trading psychologist.  I'm sure it's not cheap, but then again, the losses I'm currently enduring ain't pocket change, either!

Defeated and feeling the pain today, but I'll be back at the game tomorrow -- everything starts new again and the score is back to 0.  There's nothing else I'd rather be doing. 



Monday, November 7
Total gross profits:  -1,612.50
Total trades:  22
Accuracy:  31.8%
Contracts per trade: 2

NOTES:  Uhhhh...WTF just happened?

From a Hyperspaz, To a Zen Master

First, let's get this out of the way.  After the big loss yesterday, I'm happy to report that there was no big 2nd day meltdown.  But then again, this was no big monster game comeback, either...although that requires some explanation below.

Friday, November 4
Total gross profits:  $375.00 
Total trades:  10
Accuracy:  50.0%
Contracts per trade: 2

NOTES:  The employment report created the usual havoc for a few minutes, creating a nearly 15 point up and down move that went nowhere.  For whatever reasons, after the dust settled, it seems as though the levels today were in harmony with reality, and my ability to read the overall trend was also in sync with the outcome of the trades.  I was in the zone.

However, just because I was "right" doesn't mean I made money.  My fills were out in left field in the un-zone zone.  Either my entry limit orders or my target target limit orders were not filled.  I no longer get the benefit of SIM fantasy fills, can't easily utilize MIT orders in TradeStation, so my "missed opportunity costs" ended up being at least +6 to +8 ES points over 3-4 trades.  In other words, this day had the potential of being a very solid day.  But the realities of getting fills (or not) just goes with the business -- I'm never going consistently enter all the possible setups or execute all my orders perfectly.

Sure, I'm somewhat disappointed it wasn't a huge day.  But I'm actually satisfied that even with all the misses, I ended up having an "average" day.  Yet another example of the margin of error this system provides me.  I'm also relieved that what has worked in the past month has continued to work today.  Both Renato's DS alerts in the room (which went 5 for 5) as well as the scalp setups I take, were working as they normally do.

During the final hour, there were a few more signals that worked for +2 profits, but I was fatigued and thought it was best to stay on the sidelines.  However, my confidence is stronger because of this experience, and I can't wait until next week to keep moving forward.

* * * * *
Yesterday, a Hyperspaz -- Today, a Zen Master. 

Well, perhaps not so extreme on both sides, but I believe I've returned back to the pre-live account trading mindset, and it fees like I made a big journey.  I can safely say that I've gotten all the "what's trading the live account like" out of my system, so I was able to get back into the zone today.  But every day is a new learning experience, and I'm sure there will be something else I'll face as a challenge in the days ahead.

Based on the past week or so, here are a few random thoughts:

• An unexpected but very positive surprise has been all the great like-minded people I have met through this blog and the Diamond Setups room. Extremely valuable and very appreciative.
• Yes, fills really are different in SIM vs. live account.
• "Only $1.20 a side commissions!" from my broker is a typical marketing diversion tactic.  After exchange and other fees, it's essentially double that figure.  Much greater hidden fees vs. stock commissions.  At least they scale it down with volume.
• It's easier for me to enter a trade (and overtrade) on a live account vs. a SIM account -- because it's the real deal (call me strange).
  
• MIT orders seem very appealing (even more so since I can't easily use them) and would likely increase my profitability.
• When the markets are really in tune, the DS support and resistance levels work, I mean they can be REALLY accurate.  But without the proper trading rules, they don't mean much.
  
• Mind over matter - the biggest challenge to successful trading.
• When you're really in tune with your trading system, the challenge is not whether you can follow the rules with discipline.  It's whether you can properly execute your orders accurately and promptly.

My goal over this weekend will be to rest my mind and body.  I'll need to recover from whatever minor bug I've had over the past week as well as all the relentless learning my mind has endured, so that I can be well prepared for another challenging and exciting week. 

It has been a LOT of work getting to this point, but I'm really enjoying this journey and truly believe the best is yet to come.  Is it Monday yet?!?

OUCH! For real

An imaginary post-game interview with trader Grove Under...

Interviewer:  Grove, what happened today?

Grove Under:  I got crushed.

Interviewer:  Oh, I see. What would you say was the primary cause of getting crushed?

GU:  I had a bad day.

Interviewer:  Okay...any other specifics you can give to explain what happened?

GU:  After unintentionally trading my live account yesterday, I decided to intentionally start trading my live account today.  So I guess I was a little too "amped."

Interviewer:  Amped?  Well, any other particular insights you can offer?  Such as from your typical list of "excuses"?

GU:  Well, I actually felt good today mentally and physically and truly believed that I could get through this day with a solid performance, even after a tough start with a full stop loss.  And I'm still feeling generally positive, even with the mediocre outcome.

But since you asked about my excuses, I spent much of the morning pretty amped and trying to force trades, just so I can see how the fills are with the live vs. SIM account.  I also had some nervous energy from finally starting to play the real game.

And having a big loss on the first trade of the is also a weakness for me -- it usually triggers revenge type behavior.  All those factors cascaded into a mini-death spiral resulting in 33 trades, many that were not part of the system.  Yes,  rogue trades.

Interviewer:  Oh, it sounds like you sure did go overboard.  How did Renato's DS system and the trading room do?

GU:  The DS system had the first full stop loss in something like 16 or so trades.  Even Renato and others in the room said this was a tough market to trade today.  If you don't recognize a trend day early enough, you pay dearly in more ways than just money.

But Renato had less than a handful of calls that ended up being being slightly positive by the end of the day, even after the full stop loss.  He did a great job navigating the calls.  Many others in the room had a small loss to slight gains.

Interviewer:  And how did you specifically do?

GU:  Oh, I ended up, ummm.... [unintelligible]

Interviewer:  Excuse me, Grove, are you still there?

GU:  Yes, I'm here. 

Interviewer:  What was your performance today?

GU:  Uh...I was down -$950 gross.  Real money.  On the bright side, it was less than 10 points per contract [sarcasm].  And with 33 trades on 2 contracts, let's just say my broker is happy with their commissions.

Interviewer:  WHOOAH!  OUCH!!  Didn't you just have a big "solid day" on your fantasy SIM account to start off November?  And after yesterday's botch-up, weren't you going to "step up your game" during GAME TIME today?!?!

GU:  Easy...don't rub it in.

Interviewer:  OK, let's put it another way.  How are you going recover from this devastating setback on both your trading account as well as from all the pain from deep within the depths of your traumatized psyche?

GU:  Huh?  In the big scheme of things, this wasn't a disaster.  We're talking about a 6% loss on the portfolio, which is nothing to sneeze at, but it's far from blowing up the account.  I've definitely had worse days.

Now it's a matter of getting down to the basics and waiting for the markets to come to me, for the setups that I know work over time.  It's as simple as that.

One point that helps me to move on is recalling how Michael Jordan would usually recover and have a strong game after a mediocre one.  I truly believe it's the ability to recover from setbacks, such as this, that will help define how well I will succeed in the future. 

Interviewer:  Any other final thoughts?

GU:  Mistakes made, lessons learned.  This isn't the first bad day, and it won't be the last.  And now that I got all this "what will the fills from trading the live account be like" out of my system, it's another thing out of the way.

And yes, it's time once again for me to "step up my game." Let's do it!

* * * **
Thursday, November 3
Total gross profits:  -$950.00
Total trades:  33
Accuracy:  48.3% (excludes 4 scratch)
Contracts per trade: 2

NOTES: A tough, choppy, slowly creeping trend day that ended up being a chopfest for yours truly on the first day of intentionally trading the live account.  The ES opened gap up, went down to fill  the gap, and gradually stepped higher throughout the day.

In order to gain the sense of fills, there were many pressed trades that should not have been made, as well as many trades where I manually exited at breakeven or at a loss, when they eventually made their +2.00 targets had I just let them go.  If I had selected a profit target of 1.50, it would also have changed the outcome significantly in a positive direction.  And during the final hour, it's clearly evident on the P&L how I tried to force my way out of with less than favorable trade executions.

Is it SIM or is it LIVE?

One quick moral to the story I have to share, without even telling a story first is -- you should avoid operating heavy machinery (and especially trading) when under the weather or if your mind is scrambled and not feeling so clear.  OK.  Then add the FOMC announcement dimension to the mix, creating a FUD (Fear Uncertainty Doubt) loaded trading environment, and that makes for a dangerous combination. 

Therefore, I said to myself early that it's a good day to take it easy and be very cautious -- just sit back and watch unless a really great opportunity comes up (i.e. Renato gives an alert). 

Do I always listen to myself?  No, I'm still working on that, so moving on...

The other important item of discussion is that you should always be aware of how to log into your SIM account vs your LIVE account.  Tonight, when I went to download my trades to update my Tradervue trading journal (which by the way, now supports OpenECry), I realized that I was logged into my live account the entire day.  Oh.

I didn't even notice it during the day...Not even once...After 7 hours of starting at my screens...And even after executing a over half a dozen trades.  Did I already say how you should avoid trading when...

I still remember complaining to everyone about my first trade, which went up as high as +1.75 (not quite reaching my +2.00 target order), that it doesn't really count because I got a SIM fantasy fill.  My order was to buy was at 1235.00 limit and the price never broke below that bid (ensuring a fill on a limit order).  So I assumed this was yet another SIM ploy to make me feel good so that I finally start trading live and begin paying real commissions.

I knew I would feel a bit "dirty" telling other I booked profits on a fill that would not have been very likely, so I ended up raised my stop to b/e and let it get stopped out -- made my conscious feel better, at least at that time.  I also noticed some other limit orders taking a bit longer to fill and thought "Wow, they must have changed the SIM parameters to make it seem more real!"  Well, it sure wasn't "they" that did it.

Now the question I need to consider since the seal has been broken is...do I just move forward with trading live...is it GAME ON!?!  And if so, why couldn't I have started yesterday when I had a nice solid day?  I'm going to sleep on it and decide tomorrow, with hopefully a clear mind.

Wednesday, November 2
Total gross profits:  -$25.00
Total trades:  7
Accuracy:  40% (excludes 2 scratchs)
Contracts per trade: 2

NOTES:  FOMC days generally tend to raise a trader's FUD in anticipation of the news.  So I was being extra cautious and had 1 trade before lunch (as described above).  In the final 30 minutes, well past the FOMC hype, I had 4 trades (out of 7 total).  There were some great +2.00 scalp opportunities in addition to Rena's calls (I think he had 3 or 4 calls today, all positive assuming aggressive entry criteria) that I missed fills or botched during the morning and early afternoon due to being overly cautious.

So instead of being up +6 to +8 points by the afternoon, I was essentially flat.  In hindsight, I felt the pressure to press some trades in the late afternoon to "make up" lost ground, and was very fortunate that this incident didn't blow up and result in much damage.  The cumulative P&L curve in the afternoon speaks for itself.

Well, that's enough drama for a day that should have been quite uneventful!