Saturday, March 17, 2007

March 15 Weekly recap


Trade summary:
There is more money to be made and I'm planning on doing more homework in order to make it.
Bad things this week:
1.I could have made probably 2x as much money if I was more active scalping. Instead I would cash out as soon as I had my profit targets hit. If I'm covering, then I need to also buy and play the bounce, and after the bounce I need to short again and try to ride the wave for as long as possible, because once you get into the rhythm that the market is trading in, then the money will start flowing to you and not away from you.
2.I didn't take any losing trades. I did this last week and this is difenitily a problem. This means I'm either the best trader in the world, or that I'm averaging in to loser trades and then exiting when the trade turns positive. I had YM go 50pts against me on Wedensday, and 14pts on Friday. I held through this negative heat and still came out ahead, sounds good right. Well it isn't. I lost 50pts of potential profit on Wedensday and 14 pts of potential profit on Friday. Although my current trading method is allowing drawdowns of this sort based on the market volatility, I'm thinking I may need to change up my trading strategy and start scalping more based on a few indicators that I've been watching. This will prevent me from having trades with a negative drift as some of mine do.
3.I exited to soon. This goes back to the negative drift study that I've been finding happening to me. I take 50pts of heat, and only take 30pts of profit. You need to have a positive drift of lets say 2:1, not 3:5, or else your going to lose over time.(risk/size management does play an important part in this and that's why I've been able to still come out ahead; moreover, I scale into trades which helps the drift factor)

Good things this week:
1.I got rid of my intraday unrealized P/L. I noticed in the past that I would just be watching this number to turn positive during the times I was in a bad trade. This has got to be the worst thing you could watch. It just adds so much stress and euphoric states that it can screw up your emotions and trading and turn you into a big loser that is revenge trading out of anger from losing so much, or to a greedy trader that is going to lose it all from focusing on getting the P/L back to the high number you had for a split second of the day. I'm thinking about getting rid of my account balance and only looking at it at the end of the week. It sounds easy, but if I have a big drawdown day I'm going to want to know how much I lost. But, knowing this isn't going to help me is it?
2.I watched my recordings. My only observations and things learned is the inverse relationship between ZN and ES. You can see this on the charts. However, there is still more to be learned from my recordings. Today I was thinking about a new trading strategy, in which case these recording well be of more use.
3.I wasn't afraid to take trades and add to loser trades. This is kinda a tricky one. Basically I held true to my reading of the market and my scaling into some trades worked out. However, I'm thinking of becoming a more active scalper due to the negative drift that some of my trades incur.

Homework for next week:
1.Study new trade strategy by recording the stock market as you've been doing, but pay more attention to how your strategy would have worked out by making notes.

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