Hi Traders,
I will cut right to the chase with this trading journal. I will post updates to my journal and my retrospective of the day after the AM and PM sessions are over and I have completed my post day analysis. I will upload the updated trade log (excel attachment with my stats).
Overview:
- I trade ES mini or micro depending on my initial cash balance. I don't really like micro due to the commish. However the impact of your psychology is critical when trading live. Live is different and the experience CANNOT be replicated on demo.
- My goal is to make my minimum daily nut. Currently my daily goal is 15 handles a day.
- My routine is fixed. "try" to get a good night sleep. Up early to have breakfast and go through daily prep.
System:
- I run MultiCharts 64 bit (easy language version) with AMP as my broker. Single hard-wired internet connection (1 GB) on a decent workstation. When I ever get to consistent profits I would consider a mkt co-located server for better redundancy, but that is a dream.
Daily Preparation
- check economic calendar, note any red star events and the times.
- Assess the market and determine levels, targets, and possible responsive areas. Look at auction/volume profile (Dalton/Steidlmayer auction theory). Floor pivots for possible S/Rs and determine wide targets based on the current Vix levels.
- Based on my starting bank I determine my trading size and risk. This is calculated using a Risk of Ruin calculation accounting for margin, and other variables driven from my daily statistics so I am not guessing. This is a critical step as it helps ensure that I can survive to trade another day (i.e. tomorrow). This is a marathon not a sprint (I tried running fast, it doesn't work).
- Refer to the word document "Template mmddyyyy_DailyPrep.doc" for a sample of what I fill out.
Session Execution
- I trade ES on a 987 tick chart with 3 indicators for execution.
- I look at volume profile/auction TPO charts periodically to identify best higher timeframe trade locations.
- My fundamental approach for entries is based on reversion. I "try" to enter only when price has reached an extreme. Determination of extreme is identified by using Keltner channels set at 2, 3, 4, and 5 standard deviations (SD).
- Additionally I look for alignment and confirmation by 3 other indicators (bottom of chart). Pardon the names of the indicators but I will describe their function.
- Open Close Oscillator - Simply, this smooths out the price action over my lookback period (250 bars). In short, it helps me to identify where price is in relation to that "channel". Short the highs, buy the lows.
- MktAccell - This tells me if the market is fast vs slow. Very little happens when the mkt is quiet. I want to enter when the machines are on and the market is moving.
- MktSpeed - Price doesn't move without energy, that energy is driven by volume. This indicator tells me if volume is increasing or decreasing.
- I don't trade naked and always enter with a bracket with hard stop and trailing triggers set. 5h stop / 5h trail trigger
- On every trade I try to get the max profit for that particular trade entry. Of course I do not know what the profit will be at the time of entry so my actual exit varies depending on what happens after I enter.
- I break up the sessions into AM and PM (no brainer there). I try to always trade AM and sometimes continue during PM. PM has different behavior than the AM session, so I track the stats between the two. I just made this change recently and I suspect AM will be better than PM (except for today as I totally botched my AM session).
- During a session I track the market internals and my positive/negative behaviors on a "Market Behavior Session Log". Copy of a session attached.
- If I get rattled, find myself getting mad/angry/frustrated (because the mkt isn't following my plan ;^), then I go Sit on Hands (SOH) or even switch to demo to stay engaged.
Post Session Analysis
- After the session I export the trade log …