My name is Eduardo, I'm originally from Brazil but I've been in the US studying and working for almost half a decade now. I've worked at a very large mutual fund and a big hedge fund. My work consisted of global macro investing, risk-arbitrage and currency trading.
I've recently moved to Texas from NYC because of my wife, and thus cannot be in the investment management business anymore.
This is going to be my journal. I'm creating it so that I can keep myself accountable for the trades I take and so I can write down my analysis without the benefit of hindsight bias. My goal is to become a profitable price action trader. I also have created a couple of trading systems which I'll use from time to time as trading aids.
I'm also creating this journal because I'd like to share my ideas and hopefully get some ideas from other futures.io (formerly BMT)ers.
I have a 9-5 starting in two weeks but my goal is to quit as soon as I pass my own trading combine. I'll be looking at rolling 20 consecutive days of trading with the following characteristics:
- PNL greater than $15,000 trading up to three contracts at a time.
- Maximum daily loss of $1,500
- Maximum drawdown of $4,000
- Winning days percentage of 60% or better
- Profit Factor of at least 1.5
I know that these goals are not going to be easy. However, my job pays really well and this means that it must be economically worthwhile to quit it in order to become a full-time trader.
My Charting Setup
I'll trade with two charts, one in each monitor:
- 6 Range Chart to time entries
- 793 Tick Chart
Indicators:
- Market Profile so that I'm aware of Balance Areas, the IB, etc.
- Cumulative Delta for one of my setups
- EMA(20)
Trading Setups
I have practiced in both historical data (by hand) and in real time trading with a simulation account some setups. I plan to keep track of the profitability of each setup and eventually prune these from my plan. I'm not the best at catching early setups and turning points, so I'll enter most on second entries.
1) Cumulative Delta Divergence
2) Trendfollowing after a break from the IB on a pullback
3) Pullbacks on second entries after touching EMA or VWAP
4) Buying (Selling) at Bottom (Top) of Trading Ranges on second entries
5) Trading strong spikes when participation picks up in the opening range (5-15 minutes after pit session open)
6) Opening reversals when the setup is extremely strong and the CD has a clear divergence
7) Strong Major Trend Reversals at around 9-9:30am
Money Management
I'll be following VinceVirgil in that my initial stop loss is going to be 15 ticks and my first take profit at 15 ticks. If/when my take profit is hit, I'll move the stop to break-even and exit when I think it is proper to exit, while trailing a stop loss.
If I'm already inside a strong trend and I see a pullback, I may pyramid the trade at a new swing high/low.
I'll explain my trades every day starting tomorrow. After I start my new job, I'll trade in market replay when I come home and post my trades here. My goal is not to lie to myself or you guys, my goal is to figure out when my skills are sufficiently good to start to trade live.