Call me Vidvad - I day trade futures

Thank you, turnip. I appreciate not only that you and other long time FF members are following my journey, but also that you and other FF veterans who I know are following along here are among that small group of those forum members who have had such a positive impact on my journey through your own contributions to FF.

This week's daily profit factors:

Monday:



Tuesday:


Profit Factor = total profits/total losses. As a rule, I want my profit factor over the long haul to be 2.00 or higher (the higher the better).

Another great post and summation Vid... Thanks for sharing your insights.

I just saw this and thought it relates to what you are saying.

Peeling back the Onion !


Cheers !
Blue

Thanks blue! You too I count among that small group of FF'ers who have made a positive impact on my journey. Very happy to have you here!

Yvan Banerjee's content is a favorite of mine.

Here is a link to his own youtube playlist. I sometimes put this on my iPad and fall asleep to his trading meditations.


Trading Psychology Lessons - YouTube

Your welcome Vid.. it's a community and we are always learning in this game...every one of us.

Lord knows..lol... my biggest hurdle is and always has been me. As Stacey says 1% better every day !

Yvan is great.. I know he has a new book out..I need to order that up..

Meanwhile I will listen in on the playset.. funny I opened the link and I see that little red bar on all the videos.. But it's been awhile since I've watched...so getting at it again

Cheers !

I'll not be trading this morning until the ADP data is released and at least the initial reaction subsides. I may wait until the NYSE open to trade. I do have my charts open, but I am not at all focused on trading and I do not have my trading platform open, so I cannot place a trade without making a conscious decision to start trading. I say that so no one thinks I am already breaking my #1 Rule: When trading, 110% of my available consciousness must be directed on the process of trading and nothing else may have even a small portion of my attention.

What I am focusing on in my thoughts this morning is a sentence that came to me last night and it has stuck with me since it first crossed my mind: Trading is almost entirely a behavioral issue.

Strange sentence, right?

What I think my mind is trying to get me to see is that though I have been profitable for a long time, I have been until very, very recently, a failed trader. And my failure is almost entirely a result of "bad behavior."

I am a failed trader because though I have been at this for a long time, and for much of that time I have been profitable overall, I have never succeeded in doing what true success as a day trader will do: I have never, in the words of Mark Douglas, turned the market into the "never ending stream of opportunities by which I may enrich" myself. If that is not the goal of day trading, that has certainly been my goal. To be able to sit down at my computer each day and execute a trading plan that allows me to be consistently profitable, day after day, so that I may draw a consistent and predictable income from my profits.

So, given that this has been my goal, I am a failed trader.

I am a failed trader almost entirely because of behaviors that are not merely foreign to trading success, but these behaviors actively create trading failure.

I will have more to say about this later. For now, I have 5 minutes before ADP, and I am going to focus on trading my plan. If the reaction to the ADP number is such that it creates the conditions under which I halt my trading until the NYSE open, I will return to these thoughts.

Your honesty is inspiring

No sooner did I post that message this morning and my phone rang, and I was told my father had fallen and took a real crack to his head and he was on hiway to the hospital in an ambulance. He's about an hour from me, so I packed my laptop and a bag of clothes, and I was gone. I didn't trade at all this morning, but I was able to trade for about an hour and half this afternoon using my laptop while my dad was sleeping after surgery. The nice thing about the TopstepX platform is that it is web based so it is always ready to go if you have a web browser and internet service.

I don't work as well on this laptop as I do from a desktop with big screens and large keyboard, so I'm not going to the math and the write up I usually do. But it was a solid day where my only loss was when I accidentally exited a trade for a few ticks loss, which I immediately reentered. I blame the laptop for the error and it really was the laptop's fault!

Final profit was $1275 gross average across the accounts. Since I took that accidental loss, I had a calculable profit factor for the day of 100.61 lol





I'm gong to be staying at my parent's home at least through the end of this week, and since I have my laptop I will be trading depending upon how my dad is coming along. However, I don't know if I'll be updating much here between now and when I get home.

I would like to continue my thoughts that I started this morning, and I hope to be able to add to them over the coming days. To be honest, it is these insights into myself that I think are most valuable to shar, both for me to put them in writing and for anyone following along who might be looking to fix his head as well. I'd like to focus on the roulette epiphany and its continued impact on my development.

The text below is copied from Paul Rotter Career, Life, and Net Worth - All You Need To Know - Earn2Trade Blog ... I added emphasis by means of italics myself.

The Key to Paul Rotter’s Scalping Success

Rotter says his strength is the ability to get more aggressive when winning and scaling back when losing. However, humans naturally act in the opposite way. We become more cautious when we are profitable and start taking more risks when losing money in a bid to compensate, only to end up losing even more.

To Paul Rotter, human nature (cautious when winning and taking more risks when losing) is the exact opposite of good trading. He maintains that, with discipline and good money management skills, anybody can be a successful trader. For example, when winning and you get more aggressive, proper money management requires having a stop limit (the maximum loss you can take), while discipline requires having the strength to pull the plugs if you reach your stop limit.

However, when in a losing position and going under a certain predefined threshold, Rotter advises starting to reduce your position size. If you end up losing even more, he advises you to call it quits and get back to trading another day. Because it can be very hard to scale back and close trades when losing, Rotter advises having somebody around who is neutral to trading. Such a person can help enforce discipline by requesting that you stop trading when you reach a certain loss level.

Another piece of advice by Rotter is: “As a trader, you should have no opinion. The more opinion you have, the harder it gets to get out of a losing position.”

Since my roulette epiphany I've developed an interest in the study of professional gambling, especially the study of successful professional gamblers. As a result, I purchased a number of books on the subject, but I've not done much reading. Now that I find myself with some down time due to the situation with my dad, I'm reading one of my recent book purchases that I threw into my bag as I packed for my stay. I'm mentioning this here because some of you might find the title as funny as I do. The book I am reading is called "The Man with the $100,000 Breasts, and other Gambling Stories," by Michael Konik

I'll report here on anything I find that I feel might relate to trading in general, and my roulette epiphany in particular.

PS. My interest in gambling is in the Venn diagram area of overlap with trading. I have no desire nor inclination to head to Atlantic City and put $250 on red!

Sorry to hear about your dad Vid... Wishing him a speedy full recovery !

The Rotter ! Reminds me of Trader Tom and pressing your winners....If their is one thing that I learned from Tom was just that.

And speaking of professional gamblers....Not sure who "Rips" is but he seems to have many 6 figure days at the poker table.
Not sure of his trading record but he seems to do alright ?


All the best
Blue

I decided not to trade today but I have been watching for the last hour and half or so. I pulled up a rockypoint style template that I had had on my laptop Ninjatrader from way back.

Vertical lines indicate trades, color indicates direction. Right now, a long would have been entered at 65.25, stop would be 10 points ... scratch that as I see it would have been stopped out. Of the five entries I traded that would have been the second full loss, one breakeven, and two for +30 points, for an imaginary net of +40 points.


The next most obvious set up would be a short if a renko HA candle closed below 49.


One aspect of my trading I haad forgotten about, however, was that when the NQ one minute ATR is less than 6, it is usually best for the rocky method that you don't take signals. Had I been paying attention to that, I would not have allowed that last imaginary long. I have so many old chart templates saved on this laptop its like a walk down memory lane lol.

The short 49 has triggered.


That version of the rocky method using renko HA is a good one, imo.

I have 13 renko's loaded today. Even without looking at a 1 minute ATR, once you get experience trading a market with renko HA, you sort of know which brick size to you given the current market conditions. For NQ, I use 13, 21, and 34. The more volatile and larger range the day, the larger the brick size.

I hope everyone is having a good trading day. My dad is awake and alert, though he has a severe headache that the doctor says should dissipate in the coming hours or at worse, days.

That short would also have paid off with a 30 point target hit.



I didn't menton the Williams%R in the lower pane. Anyone who is familar with rocky's thread will recognize the 16 period %R from rocky's very first method. At the time I made this template, I was using the 16 %R along with what was then "the new" renko HA method.

I used it just like rocky. The trigger was price, but the %R had to be below the -50 for me to take a short, or above the -50 to take a long. In aaddition. I was only taking trades back then where price broke a level identified by the swing indicator (the dashed blue and dashed red lines). I traded it the same way today in my imagination. Don't let anyone tell you there isn't value in just watching your system without actually trying to trade it. It is agreat exercise to train your eyes and your reaction time.

Someone like rocky who trails his stop would be up almost $2000 on one NQ as I type this. A scaredy cat like me who uses fixed take profits would have only made $600 on the last short.

This continues the thoughts I started the other day. As a reminder, those thoughts concluded with the following admission to myself, where I acknowledged that though I am net profitable as a trader over the years, I am nonetheless a failed trader.

"I am a failed trader because though I have been at this for a long time, and for much of that time I have been profitable overall, I have never succeeded in doing what true success as a day trader will do: I have never, in the words of Mark Douglas, turned the market into the "never ending stream of opportunities by which I may enrich" myself. If that is not the goal of day trading, that has certainly been my goal. To be able to sit down at my computer each day and execute a trading plan that allows me to be consistently profitable, day after day, so that I may draw a consistent and predictable income from my profits."

The notes in the picture above are a further reflection on how to move past failure, and to achieve my goal of being able to sit down at my computer each day and execute a trading plan that allows me to draw a consistent and predictable income from the market. That, for me, is my definition of what success as a trader looks like.

The other day on Topstep TV, they interviewed their Top #3 trader Jake Ricci. I have the interviews cued up in this link below:



He made a number of interesting insights, but he made two comments in particular that got my attention. The first was that he relies heavily on the 15 minute chart. He stated that in his opinion, the fifteen-minute chart can fix a lot of problems that traders have. Since my roulette epiphany, the 15-minute chart has become my main chart. Even when I drill down to an M1 to laser focus my entry, I am looking for the entry because of what I see on the M15.

The other comment he made was something along the lines of "the main thing is to avoid tilt. If you avoid tilt you will succeed at this." This is exactly the thought I had the other night that led me to the insight that I have failed at achieving my trading goal, and the reason is largely that I have a propensity over trade/revenge trade at times, and even if it is only one day a month, it is that one day that sets me back and makes and continues my inability to make a consistent and predictable income from the markets.

Furthermore, I never really took responsibility for those bouts of revenge trading. Instead, I'd allow myself the delusion that the problem was my system just wasn't tweaked enough, or maybe it should be trashed completely. The problem all along has been me, and not my methods and systems and indicators and reading of price action. Let's face it, during all those periods of revenge trading the reason the losses stacked up is because that is when you are 100% NOT FOLLOWING YOUR SYSTEM!

My roulette epiphany came from watching the video linked below. Copy and paste this link and the video is cued up to the section that had such an impact on me.



My epiphany came about because of my reaction to the following components of the roulette players who actually beat Vegas:

1) They would only play roulette and ONLY on biased wheels. In trading terms, they would only play their chosen instrument(s) and only using their method with a calculated and known edge, i.e. your system, assuming it has an edge, is your version of "a biased roulette wheel."

2) They played a system that would lose almost every time, but when it paid off, it paid off with a reward to risk of 35 to 1. In terms of trading this doesn't mean you need a system with 35 to 1 reward to risk. What it does mean is that you accept that your system is going to lose with a certain consistency and regularity, but that your edge is such that the reward to risk when you win will more than cover the losses that inevitably occur.

And then the lynchpin that really pulled the above principles together for me for the first time since I decided to give this trading thing a go is

3) They started with a very small bankroll and their start did not go well as they lost and lost and lost, and the bankroll was rapidly depleting. He was stressed out, but he knew he needed to be patient and trust his edge. TRUST HIS EDGE! After this period of losing, "probability bites back." They experienced several high stakes wins in a row, and despite having started with an extended losing streak, their first night ended profitably, and after just one month, they quadrupled their equity n the first month, and by the end of the second month, their equity was over $100,000 which was more than 20 times their initial stake of only $4700.

How easy would it have been for Gonzalo to over bet to try to make back all of his losses on "the next spin?" Isn't that what revenge trading is? Isn't really just throwing a bet down immediately with the thought that you will get back the money you just lost?

How easy would it have been for Gonzolo to take what was left of his depleted bankroll and tried the blackjack table for a bit, and if that didn't get his money back, maybe the slot machines? The craps table? Isn't that what we do when we go on Tilt and instead f sticking to out trading plan and sticking with the instrument in which we know we have an edge we switch from NQ to CL to ES to GC to LE to RTY to 6E and we flip from our M15 to the M5 or the M1 to 1000 tick or the 21 renko "looking for a trade," ... which is really forcing trades where no high probability trade exists at that moment.

This all leads me to the idea that success or failure in trading is the result not of method or market, it is not the result of superior market knowledge and much less the result of luck: Success or failure in trading is a result of the behavior of the individual trader. Change your behavior and you will transform yourself from a failed trader who struggles to grow profits and equity to a trader who will consistently and predictably secure a regular income from the markets.

That, at least, is my current "hypothesis," I presume one could call it. I am the experiment. I am the problem. I am the solution.

The change that must take effect is that I must avoid all variants of the trading behavior known as "Tilt," revenge trading," and/or "over-trading." That is the first goal. If I accomplish that goal, then it will be simply a matter of focusing on those things that allow me to benefit fully from the consistent and flawless application of my edge.

1) The most important thing in trading is to AVOID TILT, also known as REVENGE TRADING or "OVER TRADING."

This is the key to it all. I must become "mindful" of this behavior. I must avoid it completely if possible, however, if I start to rapidly fire of trade after trade in response to a loss in an effort to "get back to even" I simply must train myself to recognize this behavior and to STOP it dead once it is recognized and acknowledged. One way I will do this in my prop accounts is I will set a hard daily loss limit that will LOCK me out of my accounts for the rest of the trading day once my losses exceed that limit. This will effectively force me to stop destructive behaviors before such behavior destroys my accounts.

2) IF you AVOID TILT, THEN you will succeed.

I sincerely believe that the facts will show that avoiding tilt will result not merely in not failing but will necessarily lead to success in trading. Again, my definition of success is to be able to sit at my computer on a daily basis and earn a consistent and predictable income from my trading results. Those results come about due to following my process. Going on tilt is the complete abandonment and breakdown of process.

3) Losers average losers. If you add to losers, you will lose, and you will TILT.

My worst trades and worst days were those where I would add to a losing trade, trying to get "back to breakeven." I would bet that 90% of the time, not only did I not get back to breakeven, I ended up being forced to take a monster loss rather than simply taking my initial stop.

4) Maintain constant awareness of NORTH-SOUTH vs. EAST-WEST market character and trade accordingly. If you trade contrary to market trend, you will lose, and you will TILT.

I adopted this "North-South and East-West" framing from Robert Anderson's Futures Trading Journey youtube channel. I prefer methods/systems that are with-trend pullback entries. These systems NEED the market to be running North to South or South to North, the market must have up swings and down swings. If you are using a moving average system, then the conditions under which your edge exists is when the moving averages are sloped up at an approximate 45* angle or steeper, or down at an approximate 45* angle (or steeper). A market in which the moving averages are moving more east to west, i.e. left to right, i.e. FLAT is not a market where you are going to enjoy a positive edge buying or shorting pullbacks.

North-South markets = moving average pullback type methods will excel, whereas overbought/oversold reversal methods will get run over.

East-West markets = Overbought/oversold oscillator type methods will excel, but moving average pullback-continuation methods will get chopped to death.

Trade the method that matches the current market character. And note that if you are trading the wrong method for the market, there is no case in which adding to losers will have high probability of getting you out at breakeven. Rather, you will have a 90% chance of losing a LOT of money.

5) The market is a movie that repeats itself over and over again, which is why edge exists; Therefore, you must have a plan to exploit it. If you do not stick to your plan, you will lose, and you will TILT.

The same patterns of market behavior occur over and over and repeat day after day, week after week, month after month ... decade after decade. Those patterns and their repeatability is the existential basis for the existence of trading edges, i.e. the cause of the existence of a "biased wheel market." Identify an edge and the market conditions under which your edge exists and then create a money management scheme to go along with that edge and stick to it. Choose instruments with lots of liquidity so that over time you can grow your profits NOT by trying to force more trades, but rather by sticking to the same method with which you started, but by increasing position size from 1 contract to 2 contracts to as many as your emotional control, capital, and the market will allow without incurring so much slippage as to destroy your edge.

I agree with this premise as a whole. But for most traders,,the cycle starts by searching for the holy grail indicator or EA
until one day/one year you wake up(if your lucky) and realize your True edge lies within you. Then you realize that perhaps
alot of what you have tossed out as not working...Actually did work...Actually had a edge to exploit but you simply could
not see it.

I see so many trying to duplicate what others are doing method/system wise... it really doesnt work that great.
As Crudele is saying you need to make your trading align with yourself. Is it easy? No.. but imperative for any
type of longer term consistency.

The True edge as I say, in my opinion, lies in you... The Behaviour of the trader. Its exactly what the "Turtle Traders"
showed. All traded the exact same rules with different results..

And I say all of this only as my opinion(thru experience)... And we know what they say about opinions !

Just some Sunday morning ramblings while i drink my coffee

Some really great thoughts and ideas etc that Vidvad has posted in here...

Cheers and have a great week !
Blue

Good stuff, blue!

Here at FF I fear most of us in the end aren't very good explainers of our current method/system (and I include myself among the "most of us"). That leads to a lot of misunderstanding and miscommunication.

Also, even those presenting a method in a systems thread here at FF are themselves following the same behaviors I've been documenting here:

1) Here is my system - Isn't it great! Easy peasy!

2) Here is a new indicator I've added to help filter out some losers.

3) Instead using the heiken ashi I found switching to a 2 minute 3 line break will keep us from entering too soon and getting stopped out.

4) more changes

5) more changes

6) more changes

And before you know it the charts being posted to the 627th page of the thread don't look anything like the charts posted on page 1, share none of the same indicators, have a different bar type and interval, and aren't even trading the same markets that the OP was trading when he or she began the thread.

In short, even when we think we have the grail, we still don't have it. What I refer to as my "roulette epiphany" which is still less than a month ago is precisely this insight that I am the problem. I mentioned in one of my posts from the past few weeks that I now see that I could now trade ANY method or system so long as its rules have an edge and I use a money management plan that avoids or at least minimizes the risk of ruin that might be associated with that edge and I could be profitable long term.

In keeping with your post, while I do feel I could trade ANY method/system that has an actual edge, not all methods or systems are to my liking. But not all the methods out there are such that I feel comfortable with them, even knowing that all I have to do is follow the rules, use appropriate stop losses and take profits, and, well, easy peasy. Someone posted an article here at FF a long time ago that I thought really spoke to me. I wish I had bookmarked it as I don't know how to search on it and find it. But one sentence that struck me was something along the lines of "there are many things in trading that would benefit me greatly and that others can do with ease that I myself am unable to do at all." For example, I know that the YM has particular behaviors when it approaches the overnight open during NYSE hours AND that it will typically spend very little time AT the level of the overnight open. I could easily put together a trading plan to exploit this fact that would allow me to ride to profits of 100+ ticks or more. Can I do it? Nope. At least not yet.

I am much more comfortable taking the quick NQ scalp. Even the M15 method I am trading stretches my comfort zone, even though I am trading with a much more carefree state of mind than I have ever experienced in the past. I do know the reason why. In the past I'd use logic and rationality to expalin myself and why I prefer to trade NQ with a $200 stop loss and a $200 take profit. Now, I understand that it still the vestiges of fear - the fear of giving back open profits and the fear of letting a profitable trade become a loser.

A thought I am just now having is that, ironically, this probably indicates that the NQ is NOT the right instrument for me and that I'd probably be better turning my focus to the tamer and more manageable YM.

I have always "journaled" my trades. I have many years' worth of screenshots of charts, chart templates, daily P&L's, etc. But I never really journaled my trading and how trading affected me (and in turn, how I affected my trading).

I suggest everyone start a journal where he or she makes the Self the focus of the writing and makes the method and system and charts secondary. I likely would have had my roulette epiphany many years ago rather than just a few weeks.

Good post, blue, I appreciate you sharing your thoughts here. Very valuable!

Your analogy to casino makes perfect sense.

Below quote is what always guides my principles in trading.

Once an aspiring trader fully understands the meaning of these words(it took me years to get it), it will be the first step toward being a successful trader.

Statistics are totally correct, 95% of traders will never understand that all trades and outcomes of these trades are random. Flip a coin, black or red, buy or sell ...well, you know the rest of my story.