The Vortex Trader

Yikes - I spent a couple of minutes listening to this tellemarketer then put in a bad trade immediately after I hung up because i was watching price move from where I was thinking of entering. So I am feeling angry with the world and myself for losing concentration for just a moment. Damn those tellemarketers and Dish or Debt reduction or Mortgage reductions or what ever the latest scam that is allowed to use the telephone to prey on people.

I closed the trade with a 0 loss so I am fine. Refused to hold on to a trade I entered when I was not clear why I got in and know that living in hope is not a good way to spend the rest of the afternoon. With this I am done for the day. I am slightly above my goal for the day so I am happy. I am getting much better at what I am doing.

Well I have my first trade done for the morning - now I am looking at the JPY to see if it will push up a little higher. Where it sits right now 96.10 is sort of nomans land - going short would be for a few pips and going long would be for a few pips - So I sit tight and wait and actually hope it goes higher so I can short the retrace -

Cool - the jpy gave me what I was looking for Neg divergence with a spike candle - then price was so kind as to fall to my tp within 10 mins - I like that. So I am done for the week - any more trading today is not in my best interest.

Ok, now I am being silly. I had this thought to put my days account page in the journal because I wanted readers to see that I am actually taking trades. Kind of a way to validate who I am as a person. Interesting thoughts my mind comes up with. So why is it so important for people to know that I am real? Basic human need to be connected with people.

Trading can be a lonely business - just me and my computer screen. For me the challenge of putting on good trades and watching them work is very fullfilling and when I trade my system during my trading time of day, I have plenty of time to socialize with people all over town. So what is this need I have to post my results - because readers of this thread understand what I am going through as a trader better than the people I connect with in town.

Essentially, I am wanting validation from those who are part of the larger trading community. In truth, the only validation I need is self validation. When I look for validation outside of myself then I am saying "what you think of me is more important than what I think of me." It is nice to have others validate me as a person and I don't need that for my self esteem. I am a good trader working on becoming a better trader. This journal is one of the tools I use to monitor my growth and success as a trader.

This week I brought home the bacon and increased my account equity. That is really all I need for self validation. Again I find my mind wanting to put up % change in my equity or winning trades vrs losing trades. I guess that is better than putting up all the trades that left money on the table or that I got into to early, or that I just blew.

So next week, I work on being more patient and letting the trade complete itself. I am also not waiting long enough to get into a trade - itchy trigger finger. I have solved that problem by entering a 1 lot trade. When I do that I then become much more patient for the rest of the day. This itchy trigger finger is troublesome for me.

I find it very interesting that price can sit 1 pip away from my limit for a couple of minutes and yet take out a stop in a millisecond. Just one of the problems on faces - brokers who actually have a different focus than assisting their retail customers.

I am out of the market at the moment - not getting my set ups this morning. Actually not acting on them because of the New financial plan of geitner. Something is not right with the plan and I don't know what it is at the moment. I have no faith that the very institutions and people who created the fiancial problems we are facing today can fix them. Given that my broker will do anything to hit a stop and do their best to not hit a limit, I can only surmise that the very people solving this problem are thinking that John Q public will be happy with words insted of actual caring about their financial needs.

Well looks like I might have a play on the Euro. Let's see if it will bust through 2600 giving me a retrace back. About all I have to work with at the moment. Not much and yet I would be happy with a trade this morning.

This morning I am most interested in my mental framework. I am not seeing a trade set up at the moment. During these times where patience is the order for the day, my mind likes to get busy. This is the time to not force a trade. In fact when the market is not givng me a trade set up or the potential for one the best thing I can do is wait for a solid A+++ trade. My habit is to take a mediocre trade because I finally have a trade to monitor. Time to leave the charts have my alarms set so I am not going to miss anything.

I had to turn off my charts because the alarms where going crazy. I am not a news trader and even though I have these "if only I had done this or that look how much money I would have made thoughts", I know better. Actually this thought is very addictive and one that keeps me from being realistic in my trading.

This is the thought if given any credence that creates problems down the road as my mind remembers the large quick moves and then tries to use the large quick moves as a means of keeping my positions small and my greed high on my regular trade set ups. I used to be fascinated with watching the market move after a news announcement but no more. Now I go about my business and come back to the market when it has a had a chance to settle down and allow my setups to happen within the natural course of the market instead of during extreme market conditions.

I see this as a sign of trading maturity on my part.

Anatomy of a bad day. These are the choices I make that turn a day into a bad trading day. Today I fought the EurGBP for 5 hours before finally giving up with a loss. So let me talk about it so I get it out in the open.

I went Short the EuroGBP at .9292 with a 2/3 position for 2 reasons, my indicators showed me there was an entry and I was expecting a bounce off the 9300 back to 9270 for a reasonable 20 pips or so with a 10 pip stop loss except I didn't do the stop loss because sometimes price will go 10 pips or so on the other side of a 00 number and I didn't want to get stopped out and then have price reach my goal. I did put on a 40 pip stop loss so I gave the trade plenty of room to breathe. Of course price went to 9310 and I added the other 1/3 of my position. That was the mistake - now I am committed to the trade being right and as such I remove my 40 pip stop loss. Of course 5 minutes after I do that price runs an additional 60 pips against me. Because I was committed to the trade I added to my positon at each entry based on my indicators. But price kept running through my setups until I got in over my head. When that happened I had to start taking lots off the table which of course defeats the purpose of the average down. I tell myself I will add the lots taken off when price retests a higher level thereby assuring myself a profit. This kind of trading is stressfull and hard on the brain.

This strategy looks good with hindsight but executing it is not easy what so ever. The mind of course gets hung up on the worst case scenario - price going forever in one direction which of course stops one from just taking the setups as they happen. So as I take short term profits to lesson my exposure to a market that was running against me, I loose the benefit of my added positions and end up with a loss after all.

The worst though is watching price go 1 pip short of break even or profit and turn around - which is exactly what happened. This is when it seems the market is out to get me because price will never take me out. Instead price will hang around my average entry price just close enough to keep me in hope and never close enough to close out. Finally I got tired and closed out taking my lumps promising myself I will never do that again, knowing that I will.

So that is an ugly recap of a day of trading that happens to me just often enough to keep me from being a good trader. I will fight the market instead of just live with the market. Now the trades that I take for the next couple of days will be with smaller lots. This doesn't work very well because the trades for the next couple of days will be picture perfect trades. I will finally get the gumption to go to a larger positon and this will happen again. Amazing how the market works. I am a victim of the market when in truth I am not making the hard decision to stop what I am doing.

This is the core place I go - I will not cry uncle because I can endure the pain. I find great pride in my ability to handle the emotional pain. Truth is it doesn't work very well in my life. I really don't handle the pain very well. I just numb myself so I don't have to deal with it. Now I am mentally drained and tired with a few more grey hairs.

What can I take away from today that is positive. I finally said enough and got out. I did take a couple of other trades while this was going on. I finished the day down $35. I created a chance to expose a habit of mine trading and another opportunity to grow from my experience.

Two bad days in a row is enough - yesterday and the day before I was a basket case - lost confidence in what I was doing - The good news for me is that I went back to the basics this morning and am doing much better - using smaller positions until I get my confidence back. I have made a small change to my trading plan.

Yikes just realized I put in the wrong order. I have done this a couple of times in the last month. Happens when I am doing to many things at the same time. I am supposed to be out of 1/2 of my positon instead of adding a half to it. My long term target is in place so that is good, what is bad is the lack of focus on my part. This is the kind of mistake that can take the starch out ones day. Now instead of being in a free trade I am in a bad position. So now I get to beat myself up for a while - back to my mantra

I am a professional trader, my job is to take risk, I will forgive myself easily for making mistakes and move on to new opportunities.

It is important forme to have this on my desk to help me stand back and see the big picture instead of the mistake I just made.

Ok end of the Month and time to reflect on what I learned and how I am a better trader today than when the month started.

First Results: For the month I grew my account by 5% after taking out 9% for my efforts. I had 2 loosing days and 1 Break even day.

Lessons learned. What I look for in the market with my indicators is working. I am adding Pivot points next week to see if they might help me with my daily setups and my scalping technique. I am hesitant to add another factor to think about and am hoping that using them improves my timing entering and exiting trades.

Today I found myself less emotional with my trading. I was able to close a couple positions easily and overcame a mistake with good discipline and a willingness to stop being in hope that things would work out. I also figured out a way to create targets based on current market action which I am excited about putting into use next week. My mantra works when I remember to use it.

What to improve on.

Being able to wait for better entries. The use of Pivot Points and targets is an effort to keep me focused on the big picture.

Trust what I am doing my instincts are getting better so time to listen and act with confidence when I hear my little voice. It is right more often than not which means I am moving into a new stage of trading development.

Be patient. My account is growing even though it is slower than I need it to. That pressure is weighing heavily on my mind which stops me from surrendering to the market. I find I still feel the need to try to control the market which intillectually is absurd and emotionally a poor habit.

Before I make a trade ask myself if I am acting out of fear or greed. This will be tough and just the excercise should help with my discipline. If I can wait longer to get into trade and longer to get out, my trading will improve significantly.

I am happy with myself and what I have accomplished. I feel good and look forward to next week.

I am making the choice this week to post my trades. This is a learning tool for me to force me to create my trading plan and to share it - quite honestly, many of the trades I am waiting for won't happen - we shall see what the results are at the end of the week.

First trade set up I am waiting for is EurGbp - long in the 8230-9240 range with a target of 9260. That trade is less likely to happen because price just went from 9260 back to 9274 which is a trade I am testing and have not validated yet.

Next trade on my list is USD CAD - short at 1.2600 area with a target of 1.2560 shall see if this one works out for me. Another aspect of this trade I am analyzing is negative divergence at the pivot level or double tops etc... Since I haven't used pivot levels before I am still watching for these set ups.

Hmm - I took a short on the USDCAD at 1.2571 with a target of 1.2547 - entry was a negative divergence on my trading chart at a pivot point - target was based on my trading chart set up price area which gives me an indication of support and resistance. I had a couple of things working for me. It worked out and I have to remember this time it worked out. Next time will be totally different though the probabilities should be in my favor - I now get to see if I get a double top at the pivot or if price punches through to 2600

I am short the USD CAD again at 1.2698 - got in a little late on this trade - again negative divergence on my trading chart at a pivot level - because I am testing - I am using very small lot positions. I will do this until I really get a better feel for this trade set up. This was the reason I put on pivot ponits. My target is 1.2575.

Oh well was stopped out on this trade. I am not seeing something in the moment with this trade set up. Neg divergence on a lower time frame when price is hitting a pivot point sounds good. I will do demo's for the rest of the week on this set up when I see it until I see what I am not seeing at this point in time.

I am short the Audjpy at 6828 because of an itchy finger more than anything - I am reporting this because I did not do any of my morning work nor did I write out my trading plan before hand. In fact I am in because my bad trader voice told me I better get in here or else. My good little voice never puts on a qualifier. That is good to realize.

The bad thing about listening to the wrong voice in my head is that now I am in doubt about what to do. I am trying to justify my actions by giving myself a pep talk. I can say all the cliches - bottom line I know I listened to the wrong voice. I now am living in pain - the pain caused by confusion as the loss builds. This is when I listened to my bad voice again because I didn't get out when I had a very small loss and am now living in hope and running through all the scenarios that could happen. Now I will do another bad trade and then another until I die inside. Not today. Today I take the monster out and shoot it. I just wish I new what monster.

I am not sure if I shot the right monster or not - tough trading today when the markets have been trending all night and I was sleeping. So now I get to work on creating a retracement trade - for this tye of trading I put in places where I am interested in the market and hope the market gets there. If the market chooses not to then I spend a lot of time sitting and hoping it does.

I have lots of areas of interest for me - eurjpy short above 134, Eurusd short above 134.90, UsdChf long below 1.1320, Cad 1.2350,

Well a pretty good day after all and I am now short for the second time today the Eurjpy entry 133.97. Because it is so late in the day I have a pretty tight stop and a large target. My expectation is when I come back for the open of the Asian market I will have a choice to make. Of course underneath this post is my feeling that I have a pretty good entry which means it will go against me big time - the market does humble one quickly.

Its late for me and I am not sleeping because I burnt my thumb and it is throbbing and the pain is keeping me awake. Which of course led me to a insight hence the entry in my journal.

For me to be a really good trader, I need to learn to live with the pain. This is why I am a struggling trader. It's the constant emotional pain I live with day in and day out that becomes so difficult to endure. I need to learn to not feel the pain my actions create. Sure on the surface Fear and Greed appear to drive the decisions I make but my realization is that its the pain that I feel that really makes the decisions. What do I mean by pain. The pain of loss. Now loss comes in two forms. The pain can be of an actual loss or a percieved loss. Both can be equally painfull.

To trade without pain would be to trade effortlessly. Why do I spend so much time on developing perfect entries and exits - to eliminate the pain. What if I eliminated the pain - would I then be a better trader? I think so.

I am seeing that when I live with my pain and do not react to it, I do a much better job of managing my entries - exits.

Great, now I am learning to be a masochist. This is an addition to my morning mantra work. "I look forward to feeling the pain in my very next trade."

I am done. My thumb has quit throbbing and my mind is complete with this topic.

I am up early this morning, this is not my normal time to trade. Because I am not trading during my normal hours - my mind is creating the worst case scearios, possible. kind a funny how that works. When in doubt the mind will add more doubt. Then this doubt becomes so painful, I become hesitant to do an entry even when I feel the love of the market. Then of course the market does exactly what I expected it to do. Then I feel the pain of the missed opportunity and resolve to take the next trade regardless. Of course I become myoptic about the next trade and take one only to find out that I missed an important peice of information and presto a loss which then adds to my pain. This is the core dynamic of trading. This morning I am short the UsdCad at 1.2376 I waited patiently for this entry while I watched other pairs I had an interest in create entries. So now I have a sense of being invested in being right on this trade. Again all based on the doubts I have because I am not in my normal routine.

Why am I up early? I completed a weekend workshop taking a group of broken teenagers through an initiation into manhood and promised to take a couple of the assistants on a hike through beautiful west fork. I am wanting to get a positive trade in before I leave for the day because I am committed to being a trader. This is part of the game as well. Life must be lived and I choose to live it fully.

Why does it seem that my entire trading career is about seeing negative numbers in my floating profit/loss box. Sure by the end of the day most often I have made a profit but during every trade I can count on a negative number in that box. Getting used to that is part of trading. I look forward to having a negative number in that box. That is something I have not gotten my head wrapped around yet - Time to relax and let the market do its thing.

There comes a time when one has to take the next step.

I have been trading profitably now for 3 months doing the same thing every day. I am having a hard time though gearing up to the next lot level. As long as I am playing with my current lot size, I believe I will find it difficult to live off my earnings. The resolve to increase my lot size has my head spinning because that is the only way I am going to grow my account fast enough to keep me interested in the endeavor. I am starting to think in terms of being richly rewarded for the time I spend in front of the charts.

Today I am going to spend 6 hours in a class I took a couple of years ago in expectation of gaining a piece of information I have forgotten or not given much credence to. This is part of my porfessional development - continual learning.