The Vortex Trader

Ah the confines of a quiet morning and my journal, no one to answer to, no naysayers to confront, a few people actually reading this from time to time.

The one truth is that in the end being a trader is about results.

So the question I have on my mind this morning is how do I ramp up my results. I feel like I am in a rut picking up a few pips here and there but definately not enough to live off of. So how do I maintain my risk parmeters and get my account to grow exponentially instead of a little bit at a time. Good news is that I have taken money out of my account the last couple of weeks and still have a positive gain in the account for the week. The bad news - it is not enough. This battle between making enough to live on and plodding along is one that needs to be resolved and the sooner the better.

I am at a loss on how to do that so any help would be greatly appreciated.

I hear ya Brother Man...

I'm at a similar cross roads, and I have this idea, that has yet to materialize, but as I focus more and more on charts of H4 and up, I see more consistent setups and follow throughs... although I realize thats a completely diferent way to trade.... to have the patience to check the charts, every 4 hours, and the patience to let those profits run, and the balls to hang in there when a trade goes against me but stays within my initial Stop Loss perimeters. I have several live accounts, and I'm now going to trade each one with different time frames and see which one has the most consistent profits.

I enjoy reading your journal.

Thanks Dan for your kind words. I have been bouncing around so much I have lost my way. One of the habits I have developed is whenever someone comes to me with a different trading methodology, I have to test it out. Then what happens is I keep seeing the new methodology set ups which effect my normal trading methodology.

I have tried everything under the sun and what works the best for me is scalping the later part of the New York market.

Like today, I found that the usdjpy was what I traded in a scalping methodology I am refining as I follow the shakesfx journal. I also trade the EuroGBP with a modified robinhood methodology. Increased my account and am 17 pips away from my goal for the day.

Now its 11 (18:00) and if I try for those 17 pips I am sure to be in the chair for the next 4 or five hours. Wouldn't it be grand if I could just scan through the charts see the perfect set up, take the trade and hit my goal. What happens though when I do that is that the perfect setup is not so perfect and then I give pips back to the market and instead of needing 17, I quickly need 50 to 75.

With that I am taking the better road and quitting for the day.

The start of new day - so what am I working on today - that is not a good question, better yet "what am I going to do today to grow my trading business?" This morning I have been reading about the Kelly criteria which deals with the question I had yesterday on how to grow ones account. I have always wondered where this suggestion about only putting 2% of your account at risk on any one position came from. I always had it in my mind it was based on some hocus pocus when in actuality it is based on the Kelly Criteria. The 2% assumes that one has a little better than 50% chance of hitting ones profit target on any trade. I know I am not giving its full due but after reading pages of mathematical formulas with little squiggly lines and exponential numbers I boiled it down to the 2% rule. Just knowing that some genius at IBM, years ago figures this out and has used it successfully through the years, gives me a warm fuzzy inside.

So what I am working on today is looking for good set ups and figuring out how to make the 2% rule work in my trading style.

So I post in any of my trades - I had 3 - shorted the jpy at 9428 got out at 9405, shorted the euro yen at 12024 got out at 11980, and shorted the eruogbp at 8878 out at 8866. So here I sit once again short of my goal for the day by a few pips and now do I trade or go away, I know that if I stay around I will see all the money I left on the table and If i stay around I will start to over trade. Sometimes its best to take a break and come back and continue working. I am going to take that break - the market will be here when I get back.

The end of a week - I have done 2 trades so far this morning - euroyen scalping short at 11924 and out at 11905, and a short on the EuroGBP for a couple of pips, waiting until the top of the hour to see if I can get one more trade for the day. Getting Greedy today is the day I could give back much of what I have worked so hard to gain for the week.

This journal is about me growing as a trader.

I just had to get in one more trade today - and went long the chf for a quick scalp which I made a few pips on, met my goal for the week by one pip and got out. In hindsight I was lucky. Trading does have an element of luck and learning to be a successful trader is taking the concept of luck out of the trading mentality. Luck is why so much time is spent with trading rules and why finding the holy grail doesn't exist.

When I look at the charts at the close of the market, I realize I am starting to rely on scalping instead of my 30 min set ups. With that realization and the sense that I was lucky today, I am having to be honest with myself. My confidence is shaken right now because I am looking at my scalping chart and trying to reconstruct how I would have traded it. I have this feeling that I would have gotten killed. I see now that I had no business doing a scalp even though it worked out.

I am a mentor to a group of 16 - 17 year old boys and this week we were dealing with doing something wrong and not getting caught. The first response is to say wow was I lucky. The problem with that response is there is no behaviour change. A behaviour change comes from owning what happened and really looking at the consequences that exist even though one was "lucky".

So what are the consequences - I am questioning my skills as a trader; I lost respect for the real risk involved; I have a desire to tell the story from the point of view that I am a hero so I feel good; I am hiding from the emotional pain so my focus is on my story instead of being present in the here and now; with my mind so busy with the story, I am short tempered and not able to engage with other people. Interesting how the consequences spiral out and effect more and more people.

With that I am going to spend some quiet time meditating and getting back into the present. Have a great weekend.

Usually I am not up this late so I know I have something bothering me. All weekend I was angsting over an event that did not happen. I was feeling the pain of a huge loss even though I didn't have a loss on friday. Ultimately, I was creating my suffering. To relieve my suffering I went back to the chalk board and spent a couple of hours trying to gain enough market knowledge to avoid the pain of losing. All this effort over an imagined event that didn't even happen. Intellectually I know that I am responsible for all my decisions and results in the market. I am now getting it at a deeper level of awareness than before.

So what am I learning from this awareness. I create the pain of loss in my mind before the market even goes against my position. Because I am creating the pain of loss, I take actions to limit my losses based on my self created fears and not what the market is telling me. The result, I limit my gains and extend my losses. And as any experienced trader will tell me, that doesn't work.

Because I am afraid of loosing, most of my my trading decisions are based on avoiding feeling the pain of loss. That is why I hate stop loss orders, it confirms the loss and that I was wrong. So this week I get to work on my attitude and reframe my mindset into one of being a winner in the market. I will not ignore my fears, I will trade my trades and let the market tell me what is happening instead of listening to my fears tell me what might happen.

THE WORK

I am upset because I think it is hard to hear and not react to my fears.
Is that true - yes
Am I absolutely sure its true - no
How do I react when I believe the thought that it is hard to hear and not react to my fears? small, less than whole, afraid of failure, not enough, ashamed, hurt, diminished, defeated.

Who would I be if I didn't have the thought that it is hard to hear and not react to my fears? big, confident, active, engaged in what I am doing, a winner, happy, joyful, alive.

So lets turn the thought around,

I am not upset because I think it is hard to hear and not react to my fears. Is that true or truer - yes - in this moment I am not upset and I am hearing and not reacting to my fears. an example is I have a fear about putting this in my journal and I am doing it because it is the right thing to do.

another turn around,

I am upset because I think it is easy to hear and not react to my fears? Is that true yes - example I am upset with myself for believing that it is hard to hear and not react to my fears.

another turn around

I am upset because I think it is hard to hear and react to my fears? is this true or truer - I don't see that it is truer

I look forward to hearing and reacting to my fears.

I was laying in bed thinking about what has been working the last couple of weeks, such that I have grown my account and taken money out. I don't know. It's not that I have great entries, I surely didn't let winning positions run, I didn't cut my losses short. I am clueless at the moment.

Interesting place to be.

Well I am done for the day. Still working on my mental framework. I missed taking a couple of inside bar trades and a slingshot trade. I was busy messing around with the 1 min trades and working the Euro Jpy and EurGBP a couple of times and threw in a Eurusd for good measure. I am happy for the day even though I have yet to really let a profit run to my target area. I am working on money management as well. I also made the mistake of entering a buy order when I meant to enter a sell. That was an upset for me. I want to blame my wife for coming into the office at the time of my first trade and asking me to do something for her today. It seems the market always goes against me when that happens. Someday I would love to turn back to my charts and see I am up instead of down on the wife interference/wrong entry trade. Dreaming to say the least.

I am not in a great frame of mind this morning, feel tired and groggy and yet I just went short the USDJPY at 96.48. I wasn't going to trade until well after Bernake's talk but when I went through my set-ups for the day - top down the USDJPY was outside the starc bands on the 4 hour which is a great entry. So I looked at the smaller time frame and saw that price had stalled and couldn't resist doing what I pay myself to do.

I realized that I am not being totally up front with how I trade. Like this morning - On the JPY trade - I saw that price was over extended, so I entered with 1/3 of my commitment to a postion. For two reasons - it was at 48 which is a place the yen likes to bonce off of and because I hadn't been watching price action so I was entering blind. Now when the yen broke 50 I did not panic I just added 1/3 more position at 65 and then the last 1/3 at 83. I also will trade the last 1/3 using shakes method and just take it off the table and put it back on which I got to do twice this morning, then price went in my direct and I closed out all my posistions when price hit 56. This gave a me a profit for the day. I do have a mental stop of how much money I risk on any trade - this morning it got close but with the extra entries and exits when price was bouncing between 70 and 85 I was able to lower my total risk. This is why I have spent so much time learning shakes method - I also got 4 trades in on the EuroJPY, I use the same methodology as with the yen but cut my lots in half to begin because of the volitility of the Euroyen. I am getting better.

Well this morning I was late to the party by a few minutes and missed the inside bar trade on the GBP and the 21 cross on the JPY so I am now in a foul mood and have to get my head back into the game. This is one of those times when its easy to beat onself up with shoulda's, coulda's, woulda's. Take a break and come back prepared to play the game well.

My platform is down so I am done for the day. Fortunately I didn't have any trades on. This hapens every once in a while and it drives me crazy especially when I have a postion. So it looks like I am going to have to go through the pain of opening a new account on another platform and spending time learning how to trade on it. I did have a pretty good day - Scalping trades for the most part - Eurjpy, usdjpy, usdgbp and eurgbp. Today they seemed to have the setups that I am looking for on the 1 minute timeframe. Didn't do any 30 minute trades so it looks like I am moving away from the 30 minute charts into the 1 min scalping. Am working on how to get my profits to run longer. My platform came back on. Now to work on using pivot points more effectively.

Interesting day, I was up late last night watching shakesfx's demo of his trading style. Don't know what to say about it at the moment. Other than I can see how he can do it.

Today I had another profitable day just $7 short of my goal. I missed one trade which would have put me over the top and I am happy with the day. I am getting more confident with my reverse robinhood setup's and results. Been getting several good trades in during my trading hours. Today I managed to be more patient with my entries waiting a couple of minutes longer after my mind told me to get in. I also actually let the price hit my limits 3 times today. So I am feeling that I have grown just a tad this week with my trading.

End of the month - time to evaluate what worked, what didn't work and what improvements I can work on.

What worked - really being consistent in my trading times. Picking a 4 hour window that works for me and only trading during that window. Working the full 4 hours instead of part of it. Most of my daily targets where reached on my last trades of the day. Using one methodology and sticking to it. Not being afraid of the market. Being patient and then being more patient.

What didn't work - closing out my positions instead of letting at least one lot run or hit a stop loss. Being impatient. Listening to my mind and then believing what it was telling me. Getting upset about missed opportunities, playing the woulda shoulda coulda game prior to entering a trade - smells of being a revenge trade.

Improvements. Still work on the mind and allow it to be and not to be at the same time. Letting a position run to a natural area of support or resistance.
Find a daily set up. Do a consistent job of top down analysis before my trading start time so I am ready to make a trade the first minute of my 4 hour window. Increase my lot size by 1 lot. Continue my diligence on not risking more than 2% of my account on any trade. Keep a better record of my trades and use arrows on my charts to show me where my entries and exits took place. Do an end of day analysis so I get a better idea of what I see and what I need to not see.

Thats a lot to work on.

I have been thinking about this for a good part of the weekend.

First, I followed shakes thread and though not a devotee of his style of trading, his thread opened my eyes to not being afraid of a 1 minute time frame. I was under the belief that that was too small a time frame to work with. After I watched one of his demo trading sessions then read the comments on what he was doing, both good and bad, I ended up with this uneasy feeling about what I thought I had learned.

What was interesting was at the same time I was reading his thread a trading partner of mine sent me another 1 min trading strategy. I watched that method for a couple of days while I was watching shakes method seeing as how they where on the same time frame. As will happen some times when you are looking at a couple of things at the same time, something new pops up. That is what I had happen. I didn't like my friends trading method even though it works, I just felt uncomfortable with it and I didn't like shakes trading method either because it was way to busy for me. Yet studying both methods and being open to finding some value in either one of them, I found a pattern that is working in my live trades.

With anything new in the forex, it is easy to become so focused on one method that other methods are pushed away. I think that shakes had something of value to add to my trading. Even though, after watching his demo for a couple of hours, I went to bed and told my wife that I had learned what I could from shakes and that what he was doing was not something I was interested in pursuing further.

What is on my mind is the uneasy feeling. Because of all the comments about whether shakes is real or memorex, where is the flaw that I don't know exists yet in the pattern I am seeing.

I have some work to do. First I need to quantify what I am seeing and to test it until I find the achilles heal so I can protect myself from a major hit to my account and Second I need to keep doing all my trading plays and not become obsessed with the new exciting play. With that awareness, I am off to a good nights rest so I can wake up confident and ready to trade.

I am short at 1.4036 on the GBPUSD based on an inside bar break which was followed by an Outside bar. So now I see I need to have a play for the outside bar. Any one with a suggenstion on what to look for on outside bars would be greatly appreciated.

I am chuckling at myself at the moment. I am trying to determine the value of this post - I hit my financial goal today so is it bragging; I increased my lot size so is it to show progress; I didn't stay in my trades long enough to hit my targets so is this post about beating myself up - naw its just a post. I am finding the joy in saying "any day I increase my account size is a good day."

I still have my charts up and realize I am done for the day. I also know that I said I was going to trade the full 4 hours of my trading window. So this post is really about me being true to my word and actually working to get one more trade in so I can be complete with my day. Have no idea what the trade is going to be yet and I will stay within my trading plays and see if one sets up.

I feel like a fisherman sitting on the edge of a lake going through my tackle box. What lure shall I use today to catch a fish? What I notice is that I have to many choices. I am thinking about how many of them have actually worked to my satisfaction. Very few. I think I have spent a lot of time learning different trading methodologies and not enough time actually catching fish. I will stay with what I am doing - it is working.

By the way I did get in one more trade yesterday and ended the day having surpassed my goal. Had to wait until the Asian market though to get in the trade.