First Day Live Lessons Learned: Consider Account Size For Instruments and System to Trade

S12 - Survey - Evaluate Trading Performance what did i do wrong that i should not repeat?
1

Today was the day that I went live and it I truly wish it would have started out better. I woke up today quite early and read a few books before the market opened. As I got ready to trade I thought to myself that I should watch CL on the 12 tick and the 6 tick, but after getting some advice from Darrell on a post I wrote a few weeks back about tick sizes I decided to stick with the larger time frames.

One thing that I have been noticing is that on days where the higher time frame is not presenting any complete APEX’s there are usually complete APEX’s on smaller tick sizes and today was a good example of that.

Take a look!

6 Tick CL

CL 6 Tick Today - TradeNumberz’s library http://www.screencast.com/t/Nn7nfkHC94

12 Tick CL

CL 12 Tick Today - TradeNumberz’s library http://www.screencast.com/t/Fy0MUfvJyKu

As one can see what appeared to be a traded less day on the 12 Tick at the time that I took the screen shot the 6 Tick chart showed a multiple APEX’s to the downside today. Not to say that there weren’t any Momentum Scalps. But as a person who does not trade Momentum Scalps there were no complete APEX’s to trade at the time I stopped trading.

[FONT=Century Gothic][SIZE=5]So What About The Trade I Took Today?![/size][/font]

Below is a screenshot of the trade that I took today…

TF Trade 14 Tick

Todays Trade TF - TradeNumberz’s library http://www.screencast.com/t/8UFGfVeq

There was a person in the Elite Room who recommended that we tighten up our stop losses since we were entering trades near the deviation levels. After today’s trade this is something that I realized I needed to learn more about so any posts or videos about this that Darrell has created please let me know.

The blue line that has the red arrow pointing to it was the original stop loss based off of following the rules. And due to slippage I got in one tick above my original price. The close of the E Bar 1125.4 so that I set my limit order to 1125.7 (3 Tciks above the close of the E bar) but I got filled at 1125.8 which is 1 tick of slippage.

[FONT=Century Gothic][SIZE=5]Here a few things that I learned today that were not as obvious when I was trading in simulation. [/size][/font]

  1. Even if you follow the rules to the T sometimes the trade may just go against you. I saw the set up and I took but I was stopped out.

  2. I need to learn more about deviations and their significance to expected moves. But what is really odd about trading near deviations is that when I was trading in simulation I never took trades near deviations. Dumb move on my part to disregard what I had been doing all along.

I believe what caused me to change is that at times I would see price pierce through deviation levels so I I’m kind of in a limbo when it comes to that.

3 The STOP LOSSES FOR THE APEX SYSTEM ARE HUGE. Had I stayed in the trade and let price move to the 5 ticks below the low of P stop loss I would have been down approximately $460.00 dollars. To some of you $460 is nothing but some of us who aren’t millionaires that’s a good chunk of change.

  1. Consider what your mind tells you. I had multiple opportunities to cut my losses short but I was in a battle of the mind. One part of my mind told me “cut your losses short on this trade, you are near a deviation level”. But the other side of my brain told me “let price reach ts stop loss and follow the rules.”

My mind also told me to consider OIL on a 6 tick today but I disregarded it as well. So now I’m trying to figure out how I deal with conflicting thoughts.

In conclusion I believe the best thing for me to do now is to continue to take the shot when the target appears tomorrow. If I freeze now probability will not play into my favor.

In spite of my loss I followed the rules but sometimes even when you do things right you can lose and that was just the case today. We’ll see what tomorrow holds. The reality of “Losing is a part of the game” just become a real life reality. If you can’t handle the losses psychologically find another profession.

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M, welcome to trading live… very very different than demo… continue your efforts to follow the rules…as you know you exited before your stop loss was hit, which would be a real heartache if market turned in your favor…as you’ll discover when trading real money, there are losing trades on any chart, picking the winners is the challenge and a skill that comes with experience… Typically the .5 dev is not a concern, but not recommended to trade into a 1.0 dev…I agree that APEX trades involve large risk and a couple of losing positions can shut down many traders for the day…May want to explore the profit poppers as they usually involve less stop loss amts…just a thought, good luck with your trading!

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If you take a look at the blue line price hit the original stop loss of 5 ticks below the low of the P bar. I tightened my stop to cut losses short which I am glad I did. Now I am definitely considering focusing only on profit poppers until my account can get large enough to trade the original system.

I exited before the original % ticks below low of P Bar because of a statement made about deviations so I adjusted accordingly and I’m glad I did. I would have been down $460 on the day had I not.

You bringing up Profit Poppersis def a serious consideration. I’ve been practicing them for a and they work and I think my account will be able to tolerate those losses a lot more than the APEX. Those stop losses are huge. I’ll elaborate on what you stated here more tomorrow I’m just a bit tired.

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Today was my first day live and my loss was $280 on TF. The entry was by the rules. I exited early. I took the second apex entry and closed with a $20 profit as I had to leave. My total loss was $260. This is part of trading. I will continue to trade the apex pattern and look at profit poppers.

The apex elite mvp trades remind me of the turtle traders. You will have some loss but the big runners make up for this. The apex entry is a trend following system. If you had started trading on July 7 you would have made 1k that day and the next day. The next 3 ( or 4 ) trades were losers and you would have given back about $1300. At the end of the month you would have made over 3K profit using just the apex pattern for entries.

You are correct about the stop loss being large. That is the reason you need 5k to start with.

5

Congrats on trading live and taking the time to analyse what happened, that practice will serve you well! Your observation about the deviation levels is a big one. I trade mostly Boomerangs but I have learned to respect every deviation level. Especially when you tie in the deviation level with the deviation indicator on the bottom of your chart. 0.5 dev can be very strong if your indice has already moved almost a full deviation high to low according to the deviation indicator. If you look at your 12 tick chart on the CL from 08/05 you were going to buy into a +0.5 dev while the deviation indicator had almost already moved a full 1 deviation from high to low expected move, indicating more pressure to the downside with the red bars. If I was going to take that long entry, I would have liked to see confluence with the deviation indicator with a full deviation move to the down side (Green bars) indication pressure to the upside. If you had noticed this after your entry you could have made the decision to exit much earlier, move on and wait for a better entry with more confluence.

Similar story on the TF entries, the expected move for that hour was already showing at least a 75% move up from high to low and the deviation indicator was showing more pressure to the down side having moved past a half deviation. the hourly move might not be so applicable to Apex Elite, but its lack of confluence again that would make me take a pause or double take on entering a long position.

Following the rules is the first part, adding the style and putting all these things together is the next part. you will get there, there is no teacher like doing it for real. You can train all day for a fight and spar, but nothing replaces the experience of someone really trying to take your head off! Trading is the same way, you will develop these skills under pressure and become a better trader.

-Christopher

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Great Stuff Christopher! Yes, on both of those charts it looks like you took trades that came up after the deviation levels were hit for the day. That is definitely something that you want to watch out for. Also, like you said, you have been doing well in demo, but never took trades close to deviation levels in your demo account. Always stick to what was working for you in demo. I know that after getting up early, ready to trade, then waiting ALL day on a trade and it finally came, even though it was not the perfect set up, I get the temptation to take it! But , as you can see from what happened here you want to stick to the rules, keep doing what you are doing, and realize that some days there are trades and some days here are not. As far as the 6 tick chart on CL. YES, on that day you would have gotten more trades, would have got in earlier and would have made soem good money! BUT, go back on a 6 tick chart on CL and look at how many days it would have chopped you out using such small bar sizes as well,. You have to look at the overall picture not just that one day that it would have worked. You mentioned you do not do Momentum Scalps? Is there any reason for that? Momentum scalps are there for the days where there are not Apex Entries or not a lot of action on normal Elite! They are designed to fill the time, fill the gaps. You ended up down $340 for the day, but take a look at the Momentum scalps…If you had traded Momentum scalps on those two instruments today you would actually be UP close to $1k for the day, just off that! So definitely take a look at those, they are happening on the chart right in front of you and can sometimes happen all day long. They have been really rocking it for us!

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[quote=skeltonmark]Great Stuff Christopher! Yes, on both of those charts it looks like you took trades that came up after the deviation levels were hit for the day. That is definitely something that you want to watch out for. Also, like you said, you have been doing well in demo, but never took trades close to deviation levels in your demo account. Always stick to what was working for you in demo. I know that after getting up early, ready to trade, then waiting ALL day on a trade and it finally came, even though it was not the perfect set up, I get the temptation to take it! But , as you can see from what happened here you want to stick to the rules, keep doing what you are doing, and realize that some days there are trades and some days here are not. As far as the 6 tick chart on CL. YES, on that day you would have gotten more trades, would have got in earlier and would have made soem good money! BUT, go back on a 6 tick chart on CL and look at how many days it would have chopped you out using such small bar sizes as well,. You have to look at the overall picture not just that one day that it would have worked. You mentioned you do not do Momentum Scalps? Is there any reason for that? Momentum scalps are there for the days where there are not Apex Entries or not a lot of action on normal Elite! They are designed to fill the time, fill the gaps. You ended up down $340 for the day, but take a look at the Momentum scalps…If you had traded Momentum scalps on those two instruments today you would actually be UP close to $1k for the day, just off that! So definitely take a look at those, they are happening on the chart right in front of you and can sometimes happen all day long. They have been really rocking it for us![/quote]

I have been doing some research with Profit Poppers in regards to how WIDE the stop losses are and for my account size that may be more suitable. And now that you bring up Momentum Scalps I realize that they also have pretty tight stops as well so that may be something I may take a look at over the weekend.

One thing is for certain is that people need to consider the strategy they are going to use in correlation with their account size. I realized that when I was trading demo I never took into consideration the risk size for each trade. All I focused on was weather the next trade was a win or loss and not taking into account my account size.

But the interesting thing is that I was able to build up multiple accounts with demo which was what I used to validate my preparedness. Even though I’m down in profits this week I have profited in knowledge of things that I may have once pushed to the size such as risk management.

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Yes! You most definitely want to keep your account size in mind. That is what should be determining your risk management. With Apex Elite DM teaches not to risk more than 5% of your account daily and to divide that 5% into 6 trades if possible. You do have a smaller $$ amount risk per trade with Profit Poppers and with Momentum scalps. Keep us up to date on our progress!! Yes, sounds like an educational week! Im glad to see you are analyzing what you are doing and using it to learn and grow!

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My first thing i would notice on CL is that you say “as a person who does not trade momentum scalps” and “not to say there werent’ any”

There where a lot of momentum scalps… volume was exceeding expectations…This is your first mistake is avoiding these trades. I have stated in a few post to you that you want the apex entries, the mvp reversals AND the momentum scalps. This chart is a perfect example as to why. A very profitable day and many trades missed do to not doing them.

You have the same issue on TF missing out on all the momentum scalps costing you a lot in profits that day.

  1. yes if you follow the rules the trade may go against you… rather in fact i will guarantee you it will go against you occasionally - hence the importance of risk management as its a balance in trading you ahve expenses (losses) and income (profits) you should ALWAYS expect to have expenses just keep them in check.

  2. if you change your rules from demo to live you should expect different results - if trading is demo is working and you change it you don’t know what to expect - i constantly stress deviation levels and how they filter trades out tighten stops etc…

  3. If the stop is to big the use a derivative like a nadex spread - if its huge to you then that means your account is not big enough to trade that instrument - huge is relative to account size - if you don’t have the account size for it pick something else - ie smallcap 2000 on nadex spreads - if international you can do CFD’s, or choose a different instrument with a smallrt tick value altogether - the stops work well we can’t choose a stop based on our account size - the markets don’t conform to your account size - so your instruments you trade have to do so…

  4. this was not a follow the rules - remember the rules include style - trading what you see - and the rules do include tightening a stop or literally not entering at all if near a deviation level - you see there is good reason for this leading to the loss… - we don’t expect it to move much if at all past a deviation on the majority of days so why enter a trade that you objectively can see most likely has no steam left…

Losses can not be handled when they are to high of a percentage of the account. Psychologically you wont handle them correctly long term. Losses are nothing more than trading expenses. its not about winning and loosing its about trading well trading what you see and following proper risk management. If you followed the risk model plan a loss would in no way impact you psychologically. If your risking more than that then it will definitely impact you. You did not follow the rules you are not using deviations correctly and you are leaving out an essential trade whcih is momentum scalps and this is costing you money (also note these have much lower risk). Don’t try to be a robot and just follow rules understand the rules and the why of an entry and if it makes sense based on what i teach you on volume and expected moves. And you are right on target take the risk of a trade into account to your account size to choose a more appropriate instrument.

You may consider 30 year treasuries, DX, as well as these are small tick value futures to help cut your risk in half on a trade and they usually move pretty nicely as well.

10

Thanks everyone for the feedback. I have learned that this is all a learning experience. Unfortunately there are certain things that can only be learned through experience. And that is the case for me at the moment. I encourage anyone who is preparing to trade APEX to really study up on risk management that is relative to your account size.

11

[quote=darrell]My first thing i would notice on CL is that you say “as a person who does not trade momentum scalps” and “not to say there werent’ any”

There where a lot of momentum scalps… volume was exceeding expectations…This is your first mistake is avoiding these trades. I have stated in a few post to you that you want the apex entries, the mvp reversals AND the momentum scalps. This chart is a perfect example as to why. A very profitable day and many trades missed do to not doing them.

You have the same issue on TF missing out on all the momentum scalps costing you a lot in profits that day.

  1. yes if you follow the rules the trade may go against you… rather in fact i will guarantee you it will go against you occasionally - hence the importance of risk management as its a balance in trading you ahve expenses (losses) and income (profits) you should ALWAYS expect to have expenses just keep them in check.

  2. if you change your rules from demo to live you should expect different results - if trading is demo is working and you change it you don’t know what to expect - i constantly stress deviation levels and how they filter trades out tighten stops etc…

  3. If the stop is to big the use a derivative like a nadex spread - if its huge to you then that means your account is not big enough to trade that instrument - huge is relative to account size - if you don’t have the account size for it pick something else - ie smallcap 2000 on nadex spreads - if international you can do CFD’s, or choose a different instrument with a smallrt tick value altogether - the stops work well we can’t choose a stop based on our account size - the markets don’t conform to your account size - so your instruments you trade have to do so…

  4. this was not a follow the rules - remember the rules include style - trading what you see - and the rules do include tightening a stop or literally not entering at all if near a deviation level - you see there is good reason for this leading to the loss… - we don’t expect it to move much if at all past a deviation on the majority of days so why enter a trade that you objectively can see most likely has no steam left…

Losses can not be handled when they are to high of a percentage of the account. Psychologically you wont handle them correctly long term. Losses are nothing more than trading expenses. its not about winning and loosing its about trading well trading what you see and following proper risk management. If you followed the risk model plan a loss would in no way impact you psychologically. If your risking more than that then it will definitely impact you. You did not follow the rules you are not using deviations correctly and you are leaving out an essential trade whcih is momentum scalps and this is costing you money (also note these have much lower risk). Don’t try to be a robot and just follow rules understand the rules and the why of an entry and if it makes sense based on what i teach you on volume and expected moves. And you are right on target take the risk of a trade into account to your account size to choose a more appropriate instrument.

You may consider 30 year treasuries, DX, as well as these are small tick value futures to help cut your risk in half on a trade and they usually move pretty nicely as well.[/quote]

Everything that you stated here is exactly what I needed to hear. Please note that I did not say there weren’t any momentum scalps at all. They are just not my personal preference at the moment.

In regards to me trading like a robot I do agree that I have a tendency to do that but I wouldn’t consider myself 100% robotic. I do take into considerations to a few things. But I will admit that when it comes to deviation levels I’m a bit rusty. I watched the video you have in the Deviations section.

I understand their purpose and what they represent but I am not clear on how to use them in certain situational circumstances. I understand the probability of each level but I don’t know how to combine all the info into a concise decision. Obviously there is a lot more for me to learn and I’m going to put the effort in to do that.

As I have been reading Trading In Zone. I am clearly realizing that Wins / Losses are the wrong thing to look at. Adopting a mind of probability is where I need my mind to be. Thanks for constructive criticism. I felt you were attacking me at first but I realized that you are here to help.

Thanks for everything!

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Keep rocking it!