Trading goals for 2009 are based around discipline and proper risk/money management. I need to be patient with my entries and exits, but at the same time cut the losers short if the setup isn't working as expected. I also need to keep in mind that with a full-time job, I don't need to trade every day and can be more selective on my setups. I'll also be focusing on trading in direction of trend. I love to take counter-trend setups, which work well on range bound days like yesterday, but fail miserably on strong trending days such as last Friday.
Regarding risk management, my plan is to keep risk per trade to 1% max ($225); preferably 0.5% ($112.50), and max draw down per day to $500. I don't have any set profit objective and the goal is to learn from my mistakes. Although I've done relatively well on the sim, trading with real money brings out a whole new set of psychological barriers that I will have to deal with. I may switch between real and sim accounts depending on how in sync I am with the market, and will make it clear whether the trades were taken in the real $ account or on sim, but I expect majority of the trades to be in the real $ account.
Showing posts with label goals. Show all posts
Showing posts with label goals. Show all posts
Monday, January 5, 2009
Friday, November 21, 2008
Friday 11/21/2008 - Reset
Yesterday was the day from hell!
Yesterday I put 2 trades on in the real $ account. I bought 1 ES @ 762 with a 10-pt stop (trying to catch a falling knife), and I got stopped out with a $500 loss. I went long again with 1 contract @ 752 with a stop at 742 (again, trying to catch a falling knife). I was expecting a small short-covering rally. Unfortunately, I accidentally exited out of my 752 long position after-hours due to an order entry mistake using IB's Trader Workstation platform, which is probably one of the worst trading platforms out there. It was pretty frustrating seeing ES trading at 780+ over night. To remedy that, I ordered Ninja Trader. Aside from the trading hickups, it was just a bad day over all. I even missed my stop on the train ride back home so got off and had to catch another train going the other way to get back to my stop which ended up costing me an extra 40 minutes. There were other issues too, but no need to go into detail. It was just a really bad day.
Changes going forward
I'll be using Ninja Trader in Live Trading mode connected to IB's TWS on my Sim account with IB. At some point, I plan on switching that to my real $ IB account but don't have a set time-frame on when that will happen. Could be a week or a month, I really don't know.
I will be cutting size to 1-3 contracts. Yesterday's $700 loss made me realize I'm not ready to trade anything over 3 contracts. Most of my trades will be 1-2 contracts.
Goal for next week
The goal for next week is to play around with different stop-loss levels and finalize a tighter stop. In the past, I've been using a 5-point stop but that's probably a bit too wide. I need to find the sweet spot where the stop-loss provides damage control for the trades where I'm just dead wrong, but at the same time, doesn't wiggle me out of the winners. From similar analysis in the past, I think that's around 3 pts but next week's focus will solely be on stops and the goal is to hae a conclusion by the end of the week. Trading is all about continuosly adapting to market conditions so nothing is set in stone, but I would like to tighten up the stops a bit. Yesterday's 10-point stop didn't really provide the damage control I'm looking for. Imagine if that was on bigger size!
Setting up for failure?
Given my current situation, I wonder if I'm setting myself up for failure. The S&P is a brutal market dominated by professional traders. I'm trading against professional traders with a lot exeperience, big accounts, multiple screens, cheaper commissions and full-time focus/dedication to trading. Meanwhile, my current situation is trading part-time off a single laptop connected via a broadband card from a train with less than 25 minutes to make any trades! Sounds like I'm bringing a knife to a gun fight! I'll continue trading on the sim for a while because it provides exposure to patterns and keeps me involved in the market so if/when I go full-time, I'll have a head start but I don't know if live trading (profitably) in my current situation is realistic. Post a comment if you have any thoughts on this topic.
Yesterday I put 2 trades on in the real $ account. I bought 1 ES @ 762 with a 10-pt stop (trying to catch a falling knife), and I got stopped out with a $500 loss. I went long again with 1 contract @ 752 with a stop at 742 (again, trying to catch a falling knife). I was expecting a small short-covering rally. Unfortunately, I accidentally exited out of my 752 long position after-hours due to an order entry mistake using IB's Trader Workstation platform, which is probably one of the worst trading platforms out there. It was pretty frustrating seeing ES trading at 780+ over night. To remedy that, I ordered Ninja Trader. Aside from the trading hickups, it was just a bad day over all. I even missed my stop on the train ride back home so got off and had to catch another train going the other way to get back to my stop which ended up costing me an extra 40 minutes. There were other issues too, but no need to go into detail. It was just a really bad day.
Changes going forward
I'll be using Ninja Trader in Live Trading mode connected to IB's TWS on my Sim account with IB. At some point, I plan on switching that to my real $ IB account but don't have a set time-frame on when that will happen. Could be a week or a month, I really don't know.
I will be cutting size to 1-3 contracts. Yesterday's $700 loss made me realize I'm not ready to trade anything over 3 contracts. Most of my trades will be 1-2 contracts.
Goal for next week
The goal for next week is to play around with different stop-loss levels and finalize a tighter stop. In the past, I've been using a 5-point stop but that's probably a bit too wide. I need to find the sweet spot where the stop-loss provides damage control for the trades where I'm just dead wrong, but at the same time, doesn't wiggle me out of the winners. From similar analysis in the past, I think that's around 3 pts but next week's focus will solely be on stops and the goal is to hae a conclusion by the end of the week. Trading is all about continuosly adapting to market conditions so nothing is set in stone, but I would like to tighten up the stops a bit. Yesterday's 10-point stop didn't really provide the damage control I'm looking for. Imagine if that was on bigger size!
Setting up for failure?
Given my current situation, I wonder if I'm setting myself up for failure. The S&P is a brutal market dominated by professional traders. I'm trading against professional traders with a lot exeperience, big accounts, multiple screens, cheaper commissions and full-time focus/dedication to trading. Meanwhile, my current situation is trading part-time off a single laptop connected via a broadband card from a train with less than 25 minutes to make any trades! Sounds like I'm bringing a knife to a gun fight! I'll continue trading on the sim for a while because it provides exposure to patterns and keeps me involved in the market so if/when I go full-time, I'll have a head start but I don't know if live trading (profitably) in my current situation is realistic. Post a comment if you have any thoughts on this topic.
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