Confessions of A Trading Newbie: Daily Journal

#1

I started trading in my demo account on Monday after several days of study. The support, interaction and trading systems are truly impressive here. It’s really remarkable when I started to understand and accept that there’s a solid reason for each of the rules, strategies and patterns. Altering or tinkering with them is a foolhardy mission, because they are in place for specific reasons after years of study and testing. Any inspirational ideas we have based on feelings or a few experiences with them doesn’t alter the long term reality of it. Being naturally suspicious I scrutinized everything and was only reassured each time, finally coming to the stunning conclusion that they had thought of everything. Now I’m sure some of you are going through or have gone through a similar learning curve that I’m in the beginning stages of. The strategies and tools are so clearly presented that I thought it would just be a matter of memorizing and implementing them. No way would I run into all those mistakes that Darrell, Lori and John said I would stumble through.
Well I’m here to tell you everything they warn us about can and will happen, sometimes so insidiously that you’re not even aware it happened until someone points it out. Usually I have an excuse for why I avoided, forgot something or broke a rule. The truth is it’s difficult to prevail when you’re trying to simultaneously learn the basics, implement the advanced stuff successfully and rush into profit. It also doesn’t help when I get so excited about a new lesson that I don’t finish learning the previous one. They keep reinforcing that idea but subconsciously I must think I can brute-force the learning cycle.
So I reset myself mentally yesterday and realized I had to re-watch the video lessons. I had to slow down and really understand it instead of trying to rush into it all at once. I was so excited I couldn’t sleep and stayed up all night studying, and that was after studying and trading for twelve hours yesterday. I spent a wild time this morning using the new powerful plays, so enthusiastic and sleep-deprived I was unaware of all the mistakes until I went back to review the new lessons afterward. It’s mind-boggling how many important details were in a muddle until they were experienced and re-learned. Needless to say I’m still taking 2.350 steps forward and 5.800 steps back. If only there was a real-world Iron Condor to cover that.
As you can see in my chart/trade journal below it was certainly exciting. Which is code for the opposite of what you want to do as a successful trader, but I keep remembering to give myself permission to make mistakes and enjoy the learning process. I thought it might be a good idea to start a daily trade journal, especially after hearing Jason talk in the Elite room about how that was when it started to work for him. I also wanted to share it with you fine folks, every trade so I can have some accountability for the excuses and self-deception. And if you’re in the beginning phases as well, maybe seeing how someone else is doing on all of their trades can assist you in some way. It’s a difficult process already with assistance from friends. On our own it must be damn near unreasonable. And that’s why I know it’s worth it.
Any critiques are appreciated, nap time! Cheers and success to you all,
Jesse

#2

Wow! Love your post. You’re definitely on the path. Slow it down, be picky. Look forward to your next “Journal” entry!

#3

Day two I was going to follow gcnish’s advice and slow it down and pick only the most powerful set ups. I was really surprised at how fast the market was moving and when I thought I saw a cluster right after I opened my charts I made a trade only to realize the cluster I thought I saw wasn’t there anymore. Got lucky on the trade and made another promise to be patient. Skipped the next few clusters then ran out of patience and took a sketchy one, but using some good excuses I turned it profitable. As I’ve heard many times getting lucky doing the wrong thing might be worse than failing when starting out. My emotionally influenced trading continued through the day and got out of hand.
It’s a strange feeling to be aware of all the rules and strategies I’m violating as it happens but unable to think clearly enough to stop in the moment. I was encouraged because I didn’t make about half the mistakes I made yesterday. They were unfortunately replaced by a slew of new ones. But as long as we keep making mistakes forward momentum will be our learning ally. Got into a discussion with a family member over some power play specifics and realized with shock that I had a couple very important fundamentals incorrect this entire week. The best one being that I had somehow gotten confused and was entering trades after the close of the second bar instead of the reversal bar. I realized with horror that I was giving up 5 ticks plus whatever time it took me to scramble for my strategy notes and find the right contract as the bars shot away like a bullet.
You REALLY don’t know what you don’t know until you discuss your trades with others. The glorious difference it suddenly made to be able to leisurely check all the PP indicators, find the correct contract and set a stop trigger, then sit back and relax while the cluster bar gathers momentum to hit your trigger can’t be understated. Amazing, life changing stuff that little detail makes. Everything is important. Not just what we instinctively choose to believe is important. I only learned this for the last trade of my session and you can see the emotional havoc it created for me as I had to scramble each time. The stop loss trailing info we got today feels like it’s a tool that will help stop being indecisive and nervous at the beginning of each trade, leading to correct decisions unclouded by fear. Another small detail that absolutely means the difference between success and failure. Well, it can only get better from here. Let the cogitation continue!
Happy trading everyone,
Jesse

#4

Thank you, much appreciated! That will be my mantra for sure. :smiley:

#5

If you haven’t tried market replay yet, you should definitely give it a try. I would go as far as to say EMPHATICALLY that our opportunity to be successful in any reasonable time-frame isn’t there if replay is avoided. There are two major advantages: The speed of replay allows us to see a deeper level. We see how different strategies and market patterns interact. We also get more experience making mistakes and learning from them at a faster speed with less time in between sessions. I shudder to think how long it takes to learn this while trading in a live market, it might even be years compared to months.
I read the post about Lori’s rules for fast track learning and told myself I would stick with each of her rules. Of course I would… but I found myself unconsciously modifying them a little or combining different tools and strategies in creative ways to combat my last win or loss. A little change or ignoring one small detail changes everything, it really is that important. John and the Power Rangers aren’t repeating things and giving us warnings because it makes a small difference, it IS success or failure.
Ok… so regarding Lori’s rule to not interpret practice as collecting ticks. I didn’t really believe deep down that it was such a core requirement that I couldn’t add my own style and try to be profitable and learn at the same time. I tried to stick with not worrying about the ticks. I failed for a while, even forgetting that making correct decisions was the point. I finally believed her when I saw that if my focus is to keep my ticks positive I’m subtly adjusting my emotional parameters for whether I take a trade or not after each win or loss. In the moment, with my nose one inch from the profit/loss board, it feels like I’m learning quickly… but the sad truth is I’m wasting my time stuck in a hamster wheel, running in tune with the swings of the market. I find myself skipping the winning ones and jumping into ones that are missing an indicator or two, chasing the win. It’s a trap, they really mean it!
I switch to sticking strictly to my power play rules. I check my list to verify set up, place my trade and sit back to watch the outcome, my mind no longer actively still questioning whether I should be in this trade as the third bar forms. The feeling that my life is on the line each time OP turns red or green starts to dissipate and something magical happens! Because I’m no longer focusing on that, I notice bigger patterns that are happening. What looked like a terrifying massive reversal against my trade, turns into one of those boring elevators we so often see in charts and have no strong fear associated with them.
I realize that those times when a cluster is optional isn’t based on my feelings. It’s actually based on the fact that I’m in a chop zone while everyone waits for devastating news at 10am and when it breaks out of chop I might want to take that trade and ride the 160 tick dive. My focus suddenly becomes situational awareness which is where it really starts to make sense. But I can’t do that while I’m focused on and emotionally battling with the basic mechanics of entering the trade.
I realize that taking 10 or 20 tick scalps and how fast I lock in profit isn’t based on how confident I feel because I’m profitable for the day, It’s because the market has been smoothly ranging between levels and 20 tick scalps are appropriate or it’s been choppy and I could have been taking a smaller scalp and seeing the small profits pile up.
Most importantly I realize that the more mistakes I make and the more my precious practice ticks go negative the more I learn. It almost feels like an exponential relationship between how badly you’re doing in practice and how fast you’re learning. APEX is supplying us with the keys to success. Being creative, focusing on the next step before learning the previous one, not assuming every single rule or piece of advice makes a monumental difference is a deadly trap. And, at least for me personally, I didn’t really believe it until I experienced it.
I wish you all the best.

#6

This is excellent! Keep it up! :slight_smile:

#7

Thank you, Ronin! Happy trading, sir :+1:

#8

Progress is coming along nicely. I’m still having “ah ha!” moments followed by bouts of misusing the new insights. I notice I am spotting set ups that I missed and what I did wrong a couple moments after I make an error. Last week I didn’t spot them until I was writing my notes later on, and the week before it was just a terrifying chaotic wave of ups and downs. It feels good to realize how far I’ve come.
The uncertainty and panic is definitely subsiding at a swift pace. Now the challenge is in using the tools and focusing on what’s actually happening with the patterns. Here are a couple of the biggest lessons I’ve learned this week:

  1. The chop box appears to be based on how many bars are closed in the first reversal after a cluster. I get the sense that you can enlarge it for wicks but if it started out as one, two or three bars, it stays that wide until the dreaded fake break or a welcome exit cluster. For the longest time I was widening it and then after the fake break, thinking I was out of the chop box, and I missed all those Power Plays and scalps. An important detail I keep forgetting is it’s not chop until another bar closes in the opposite direction
  2. When I am told to lock in 10, 20 and 30 ticks… it must be gospel. I can’t count the number of times I’ve slid back into thinking I was going to miss out on a large trend if I didn’t protect against elevators. Those medium sized trends add up when you’re not trying to catch that one big trend all in one bite.
  3. It took me the longest time to accept that the term scalp does not mean 20 ticks when it’s not an ideal Power Play set up. All day long I would be losing my scalps by 2-5 ticks and wondering if I was going crazy, all the while knowing that 10 ticks was the guideline but unable to fight the urge for a higher tick count.
    Please let me know if you have the answer for any of my questions in the charts below. The movement on NQ today seemed a little slower than the last few days, but it was still an enjoyable day with many lessons learned. I hope everyone is having an excellent week. Cheers!

#9

This is a really great idea with the forum journal you have going! Just something I was wondering, do you have any sort of ‘trade limit’? I see many people have a max amount of trades they will take per day. Was wondering if you do as well. Thanks!

#10

Hi Wesley.Bridgette, Sorry for the delayed response. I haven’t been back to the forums this week because I opened a live account on Monday with Nadex, purchased an Apex membership and started trading on Tuesday. It’s definitely a completely different level of stress when one accidental click or mental error can cost a hundred dollars or miss out on a hundred dollars. For this first week using my live account, I decided not to set myself a limit on the number of trades I made in a day.
For instance, on Tuesday I made 39 trades, which was way too many trades for being profitable, but I was letting myself make them while I was learning. After I profited on a few trades in a row I would slip up with a silly mental error and that would affect my decisions for a short while. Through reflection and taking notes I progressed to only about a dozen trades each day on Thursday and Friday.
I would say a limit on the number of trades you make is essential, and the number is different for each of us. If we go past our personal limit, at least in my experience, the errors start creeping in and will affect us on the next couple of trades. Even when you’re profiting on your trades the stress is overwhelming at first. I wouldn’t recommend to anyone that they jump into live trading as quickly as I did. The mistakes I made the first few days could have been made in a practice account, but I’m a glutton for learning the hard way.
For your amusement, here are three of the most ridiculous types of errors I made that I never imagined would ever happen in my wildest dreams:

  1. I’m using the scanner to place a spread trade for the first time in my live account. After I place the trade nothing shows up so I try to place the trade again. Finally the open trade pops up and I realize with horror that I had the number of contracts set to 10 for my demo account and I have now placed a total of 20 contracts on this setup on my live account! I quickly get out of the trade before the price has even moved and lose $140 only to see the setup develop to where if I had stayed in I would have made about $1,000.
  2. Watching order prints while a cluster bar forms when real money is on the line will crush your soul if you haven’t put in sufficient time to completely trust your system and indicators. The final moments before the cluster bar closes in your direction, passes through the terrifying third bar sling and you cash out for a nice profit… are intimidating. If you have a buy, order prints shows that there’s 560 more sellers and it’s one tick from closing down, only to switch a minute later to 680 more buyers and closing up in your direction. I must have exited my winning trade at least 15 times before I hid the developing bar off the edge of the computer screen and just watched my diagnostic bar chart. My biggest advice for your first week with a live money account is, if you are as nervous as I was, don’t watch order prints on a developing cluster bar until you have confidence in the system. You may not have the courage to watch how quickly it changes at first, with real money on the line.
  3. I intend to open an entry trigger above a developing cluster bar and accidentally click the lightning bolt, instantly entering the trade in the direction of my indicators. Seeing the cluster change locations in the developing bar several times, I become concerned and exit the trade only to see the cluster bar close in my selected direction… and I miss out on a couple hundred dollars in profit. I make similar mistakes concerning the developing cluster bar a handful of times before I learn from this.
    Thanks for the question, Wesley.Bridgette! Please let me know if you have any others. I wish you good luck and a lovely week :smiley:
#11

All good with the delayed response. All of the mistakes you have mentioned I have already gone through myself! hahaha Learning to trust the system even when you ‘think’ a trade is going against you is the hardest part. I have been in those exact trades you had described where I see a power play, I go long or short, the first 1-2 bars goes 5-10 ticks in my favor, only for the next bar to go against me. I would immediately close my position, only to see the PP setup go another 30 ticks in my favor hahaha (I am trading on Nadex as well) I have been getting better at trusting where my stop loss should be placed depending on the power play set up I see and only getting out of my position when that is actually hit. So it seems what is happening with both of us may be normal when testing/getting use to a new system. Keep the journal entries coming and good luck!

#12

LOL yeah, you might say we’d be better off placing our stop loss/take profit after our entry was triggered and not watching it. I can’t remember who said it in a webinar but they said something like, it’s not the systems and indicators that fails us, it’s our own fears and inexperience trusting them. It’s hard to believe it until you’ve gone through it, right! That third bar sling and the retrace before every huge trend sometimes feels like the start of the biggest move in the opposite direction that anyone has ever seen and all my confidence disappears. I spent most of last week mumbling to myself, “I will not exit the trade until my take profit is hit” …and only being able to stick with it half the time because the anxiety became too much. Sounds like you might be breaking through one of the last barriers to success. Awesome, keep it up and enjoy!

#13

cal810

        Wow. Very inspirational. I just started a few days ago. Eight months ago  i was here for around 2 weeks but left due to health issues. Technically i'm a Newbie. looking forward to reading the rest of your journal and the progresses you have made. 
                                       Good Luck Jesse.