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Levels I'm looking at next week on the daily chart.
Last week I posted that per my prior week anticipation, ES was in the chop zone where it got stuck 3x over the last year, I also questioned whether CPI (& FOMC minutes) might take it out of there, to the upside. It sort of did take it up, but not out of here yet, and did so indirectly, as so often happens with FOMC -- one direction first only to reverse the next day. It was interesting because having the insight this might happen didn't help me at all in my moment-to-moment trading. But that is to be expected. It's impossible to tell what path it will take to make these HTF moves and I'm trading on a much lower time frame. That said, I should have done better on the move back up, as I had thought it might resolve upward and it had gone down on FOMC, and then started back up overnight. The pieces of the puzzle should have fallen into place for me. I remember making a note to myself it was going back up the night before, but for some reason didn't act on it then, or the next day. I may stop trading big news days altogether because my strategy hinges on certain market dynamics that are essentially negated with HTF price discovery.
The one thing that stands out this coming week is that the options market is pricing in more than double the expected move it priced in last week. This is intriguing because I thought last week was the big news week. I don't see anything huge on the horizon this week except maybe Opex on Friday. I am guessing continuation up until proven otherwise.
Nothing to write home about, but I am working through a whole new paradigm here, with a -($250) daily loss limit and a forced 30-minute break if I get to -($150). I am still figuring out how to make it work (position sizing, strategy, etc.). The sim trades from the account I use to copy from are more like what would like to see (ES vs MES). It will make sense in the end and it's still early in this process. At least I am not blowing up
One small tweak I did was to add a midpoint to my daily VIX expected move bounds, then a midpoint for the upper and lower halves. Before I just had the upper and lower and would just look for 3%+ on the upside (not trade long against this) or 3%- and lower on the down side. I realized yesterday that I needed something a bit more nuanced for days when it stays within the expected move. Thus, if it trades down as it did yesterday, but the VIX is trading in the lower portion, then I don't short it below. I use some ACD boundaries to help me with this. For those who know, I would not short it below the A or C down with the VIX on the lower half of the area under the midpoint on an inside day (which is the opposite of the normal rule to short at A down, but clearly not when it is highly likely to reverse. This just brings it out more visually for me). I used it today and it was very helpful. The only time I broke the rule was a losing trade, which just goes to show!
I'm struggling a bit right now. I downsized to the point where I am trading the "I don't care" daily loss limit and trade stop all day ($250 DLL / $37 stop per lot), but the problem is if I get one wrong with anything bigger than a 1 lot MES I quickly run out of attempts to make my day work. Today I took a loss with 3 MES lots on my first trade and then I was battling to make up a $127 loss. I feel like my whole world has shrunk and I am wearing pants that no longer fit and I am parking a tiny car that should be easy to park in tiny little spaces that I can't seem to fit in. Going smaller is a challenge in and of itself. I feel like the John Cusack character in the five-foot tall 7 1/2 floor of a Manhattan office building in Being John Malkovich.
I have to find a middle ground. I'm not sure what it is. Otherwise, I can have "I don't care losses" but I am dying by attrition / thousand paper cuts ... you get the idea. I seem to go from one extreme to the other, from over trading way too big with ES to one micro. Today I took another DLL in RTH I took a few trades in the early Globex session to get that small loss back (I'm in Los Angeles, so it's just mid-afternoon here). My levels and strategy work well in Globex, the trades I took were a bit impatient and so I went a lot bigger than I would need to if I were doing this as an end in itself. If I were to work as patiently and diligently in Globex, I might be able to do better. It's definitely something to think about. There is much less volatility and I find it to be a lot more predictable. Because it's a lot slower and the ranges much smaller, I can work with larger size. Of course, I don't need to go to 6 lots, I can do what I'm doing in RTH with micros with 1lot ES. On the other hand, I might just need to stick it out very small until I figure it out. I get impatient sometimes and do stuff I shouldn't and that's a part of it, and I have a lot more room for error. I'm not sure. I have to think it all over.
This morning I had a similar read of the open as @snax did, but I didn't get out of my trade quite as nimbly. FWIW, one of the last guys I still follow and subscribe to had a good read on the "textbook" price action this morning. He highlighted the failed breakdown setup this AM in his PM newsletter(too late for me! ). I am posting his images. Hope he doesn't mind. If anything it's good advertising for him. These failed breakouts come up often and I have to do better keeping an eye out for them. They are a staple in the ES.
Done for the day. 15.7pts. Good. But problematic for reasons discussed last night. I need to find a middle ground. I'm thinking about how to achieve this.
Hit my minuscule DLL again this morning ($250). It's definitely frustrating in this small world. My first trade would have been my entire day with 1 ES lot. It was a +10pt trade. But with 1 micro it equals $50, so I carry on and my trading worsens as we get these huge seesawing Opex moves in the ES. Eventually, I get impatient, do all the typical stuff, and hit my DLL. I am actually mostly right, but can't hold my trades larger than 1 micro due to my small DLL. I mean, on some level it's working, because if I just stuck to 1 micro I could keep going for a while, but not really get anywhere. I guess maybe that also says something about today's PA (and how it can trigger me), so it's just as well I got taken out small and early.
The way I am set up, I really cannot do anything about it. I can't change my mind and make an exception and switch to a larger DLL or give myself room or anything. It is what it is. I have a one-hour window after RTH is over to get into my Cold Turkey app and give myself the option to trade after hours if I want to (turn the night-time lockout off -- other week days, not today, clearly). By then I've cooled off and we get into a slow, deliberate Globex environment. In Globex I can put on one trade that takes care of my RTH DLL and see about another one.
Maybe this is where my solution lies. I get some small chances in RTH and suffer small cuts when it doesn't work (when I lose patience). In Globex, I get the opportunity to correct it in more of a chess-playing environment than RTH pinball wizardry. My thinking is to keep it smaller than I have done so far in Globex too. So instead of 4 contracts, for example, I can do one or two. The slow speed and more deliberate context allow me to play full-size there. The main thing is to stick to my A+ setups. I usually have a couple of levels mapped out that are extremely high probability. Where I go wrong is when it's so slow that my level won't be reached for hours and I start trying out stuff I see that's likely but not as likely (that everyone is watching -- fibs, trendlines, etc.). The highly trafficked setups have a tendency to do unexpected stuff in Globex. i.e., likely most of the time, but exploited by some players who milk the low liquidity to send it flying in the opposite direction sometimes.
Anyway, that's my thinking right now. So far this month this impossibly tight regime in RTH combined with very select "depth charge" trades (that are inherently high risk due to the trailing drawdowns, but I have traded them very selectively vs one after the other) has kept my equity curve rising and no resets in my Apex combines so far in April. That in and of itself is huge progress. Just not as straightforward as I had hoped. The main thing is to downsize my depth charge trades too, so they are not so huge as to have the capability of blowing me out. The extremely small size I trade in RTH helps in this regard, as I am only trying to make up -5 ES points if I hit my DLL vs -20 or something.
That's my thinking as of right now. Maybe better ideas will manifest as this goes. My mental machinery is churning in the background.
Later on in the day (same day as the previous entry), I queried ChatGPT 4 to see what it thinks. Very interesting response. I will have to try with different metrics on trade configurations, but this is sort of ballpark for profit targets I can hope to hit consistently, with a stop size as small as my system will bear (when my levels are good, 2.5pts if fine, if they go past this, the level wasn't perfect to start with, but they tend to be, it's more about my level and direction selection on any given trade). The 1 lot trade I found frustrating this morning is not one of the recommended options (and it also led to me oversizing on the flip side afterward).
My query based on the last couple of weeks of trading:
With the following trading statistics:
77 Trades total Win rate 52.3%
Profit factor 1.25
Average winning trade: $75.55
Average losing trade: $-70.96
Trade P&L standard deviation: $162.93
As you can see, the expected outcome is the highest with 3 contracts. However, we also need to consider the daily loss limit of $250 and the trade P&L standard deviation.
For each trade size, let's calculate the maximum number of consecutive losses before hitting the daily loss limit:
1 contract:
Loss limit / loss per trade = $250 / $12.5 = 20 consecutive losses
2 contracts:
Loss limit / loss per trade = $250 / $25 = 10 consecutive losses
3 contracts:
Loss limit / loss per trade = $250 / $37.5 ≈ 6.67 ≈ 6 consecutive losses
Now, let's calculate the P&L standard deviation for each trade size, assuming the trade P&L standard deviation scales linearly with the number of contracts:
With 3 contracts, you have a higher expected outcome but a lower number of consecutive losses allowed before hitting the daily loss limit and a higher P&L standard deviation. Depending on your risk tolerance and willingness to accept higher risk for higher returns, you may choose between the 2 contracts and 3 contracts options.
Considering the higher expected outcome, the relatively low probability of hitting 6 consecutive losses with a 52.3% win rate, and the increased P&L standard deviation, the 3 contracts option may still be the better choice for maximizing the probability of a rising equity curve over the long term. However, you should be aware of the higher risk and potential drawdowns associated with this trade size.
More fun testing and ChatGPT 4 stuff, just to show how incredible it is to bounce ideas really fast.
This is something I started doing just for fun, more in the spirit of gaming the "$50K" / $2.5K trailing drawdown / $3K profit target evaluation, than what I am really interested in: Long term mindful trading. But I'm sure these experiments feed into the big picture, even if only flights of fancy and totally insane on the face of it. Also, these are just what they are: *back tests*, even if calculated on even tick in market replay.
This trade is one that rests on an order flow algo tool I built for myself, which I often use more as a reference, but also to trigger orders. I decided to try something that centers around the 15 min open range. It's an extremely high-probability trade (92%) but with almost certain death if it goes off the rails twice in a row. The April P&L and stats are below and this is with a simple 5-point stop that moves to -1 tick under entry when profit reaches 1 tick. The profit target is 2 ticks and it consists of 8 ES contracts. Once I got through this stage, the next part involves looking at the stats, MAE, etc., and trying to see if it can be made into something with a slightly lower chance of certain death. In any case, tt's not a long-run trade, as this is just to get to the eval profit goal. It's really in the spirit of the incentive structure created by evals.
These are the rules:
From 6:31 AM to 6:44 AM PST / OR stop when $400 net is reached.
No trading on big news release days or FOMC / No HHLL gap days >5pts / No Opex / No rollover
Trade both directions, UNLESS there is a strong ON trend established with continuation at the open (i.e., Open Drive) or continuation of big Globex liquidation. In that case, just trade in direction of the trend.
If there is one “misbehaving” trade, stop (i.e., unexpected big trades / excess MAE / full stop).
If it persistently fails to get clean trades, stop (i.e., small back-stops & failing to make net realized on the 8 lots -- constantly growing goss but not net realized profit)
Here is my follow up conversation with ChatGPT 4 to see how to optimize it. The whole process involved about 4 - 5hrs on market replay and 3 - 4 hrs including uploading everything to Tradervue. The stuff I ask ChatGPT is what I would be doing myself, which it does in a few seconds after each question. This accelerates our process so much, it's kind of mind-blowing. We (all of us, traders) can tinker and refine so much. It's a real game-changer. I probably have not even begun to imagine what this will eventually do for us, and how much it can help us educate ourselves. Sunday thoughts
ME:
Thank you. On a different note, I have the following challenge:
This is a very high probability trade in the ES futures contract. The trade parameters and rules are as follows:
Contract sizing: 8 contracts with a 2 tick profit / 5 point stop loss (every tick is worth $12.50, 4 ticks to a point). When price goes 1 tick into profit, the stop loss moves to 1 tick before the entry price. If it ticks back it stops out.
1. From 6:31 AM to 6:44 AM PST / OR stop when $400 net realized profit is reached.
2. No trading on big news release days (i.e., CPI / JOLTS or FOMC
3. No trading on true gap days with gaps >5pts (from prior day high or low)
4. No Opex Fridays or contract rollover days
5. Trade both directions, UNLESS there is a big news trend one way, or continuation of big Globex liquidation, then just trade in direction of the trend.
6. If there is one “misbehaving” trade, stop (i.e., unexpected big trades / excess MAE / full stop).
7. If it persistently fails to get clean trades, stop (i.e., small back tick stops & failing to make net realized on the 8 lots, with constantly growing goss profit but not net realized profit)
Here are stats for the first 3 weeks in April and these do not include the cost of commissions, which is $3.98 per individual contract round trip (i.e., buy / sell one contract or sell / buy one contrace).
Days traded: 14
Total trades: 36
Round turns: 230
Winning trades: 33 or 91.7%
Losing trades: 3 or 8.3%
Profit factor: 4
Maximum consecutive wins 15
Maximum consecutive losses 2
Largest gain: $200
Largest loss: $1050
Average winning trade: $137.88
Average losing trade: $379.17
Average winning contract gain: $12.19
Average per contract loss: $94.79
Trade P&L standard deviation: $212.83
Average position MFE (Maximum Favorable Excursion): $126.39
Average position MAE (Maximum Adverse Excursion): $207.99
Now, my current challenge is to work with a $2,500 bankroll and achieve a total profit of $3,000 to meet the challenge goal. So the trade setup, while it has a very high win ratio and probability, is nevertheless extremely risky. One full stop of 5 points on all 8 contracts equals a $2,000 loss and could easily lead to ruin.
My question to you is the following: Based on all this information, do you see an optimal position scale out scenario that would really enhance the chances of getting to the $3,000 goal. For example: Scale out half the position at -3 ES points. Or scale 2 contracts out at a certain loss amount, then another 2 and so on. Either leaving a portion of the position to come back to profit.
Note: at this time of day, during the first 15 minutes of the trading day, price tends to go back and forth from one side of the opening range to the other, although not always, but most frequently, hence the notion of leaving a portion in case it comes back towards the entry price. Thus, such a strategy can also incorporate adding some points to the target to make up losses with the reduced number of contracts. But this is secondary to potentially mitigating losses on the original position with scale outs, such that the resulting loss can be overcome during successive trading sessions based on the given trade statistics above. What would be the optimal solution for this challenge?
ChatGPT:
Given the high risk associated with this trade setup, it's crucial to manage your position size and exit strategy effectively to increase your chances of meeting the $3,000 profit goal while working with a $2,500 bankroll. While I can't guarantee any specific strategy will work, I can suggest an approach that might help manage risk and achieve your target.
Scale-out strategy: Instead of exiting the entire position at once, consider scaling out at different points. This could help you manage risk by limiting the impact of a single adverse move. For example, you could exit 2 contracts after a 1-point loss, another 2 contracts after a 2-point loss, and so on. This way, you spread the risk across multiple exit points and leave a portion of the position in case the price comes back towards the entry price.
Adjust the profit target: As you scale out and reduce the number of contracts in the position, you could consider increasing the profit target for the remaining contracts to make up for the reduced position size. However, keep in mind that increasing the profit target might also increase the likelihood of not reaching the target, so it's essential to find a balance.
Limit the number of contracts: Given the limited bankroll of $2,500, you might consider reducing the number of contracts to lower the risk. For example, instead of trading 8 contracts, you could trade 4 contracts, which would result in a $1,000 loss in case of a full 5-point stop. This would allow you more room for recovery in case of a losing trade.
Stop trading after reaching a daily loss limit: To protect your bankroll and avoid significant drawdowns, consider setting a daily loss limit. If you reach this limit, stop trading for the day to prevent further losses.
Regularly evaluate your strategy: Keep track of your trading performance and continuously assess the effectiveness of your scale-out strategy. Adjust it as needed based on your results and the changing market conditions.
Keep in mind that even with an optimal exit strategy, there's no guarantee of success. Trading involves inherent risks, and you should be prepared for the possibility of losses. It's essential to manage your risk and continuously learn and adapt your trading approach to increase your chances of meeting your profit goal.
ME
Thank you for all of these great ideas and tips. My question to you is whether you can run some statistical probability calculations based on the parameters I outlined, all of the trading statistics above, to give me the optimal scale out strategy you suggest in #1 above.
ChatGPT
Due to the complexity of the trading scenario and the various factors involved, it's challenging to provide a precise optimal scale-out strategy without running extensive simulations. However, I can provide a general guideline for designing a scale-out strategy based on the trading statistics you provided. Please note that these are suggestions and not guarantees of success.
The primary goal is to manage risk while preserving the ability to achieve the $3,000 profit target. You can start with a scale-out strategy that exits 2 contracts at each predefined level:
Exit 2 contracts at a 1-point loss: -2 * 1 * $50 = -$100
Exit 2 contracts at a 2-point loss: -2 * 2 * $50 = -$200
Exit 2 contracts at a 3-point loss: -2 * 3 * $50 = -$300
Exit 2 contracts at a 4-point loss: -2 * 4 * $50 = -$400
In this scenario, the maximum loss is $1,000, which is 40% of your $2,500 bankroll. The scale-out approach allows for partial losses, giving the remaining contracts a chance to come back to the entry price or reach the profit target.
To assess the effectiveness of this scale-out strategy, you can calculate the expected outcome:
Expected outcome = (win rate * average winning trade) - (loss rate * average losing trade)
For each scale-out level, the average losing trade will change. For example, with a 1-point loss, the average losing trade will be -$100. Calculate the expected outcome for each scale-out level and compare the results.
It's important to note that this approach doesn't take into account the impact of scaling out on the win rate and profit factor. The actual performance of the strategy may differ from the expected outcome due to these factors.
As mentioned earlier, it would be best to conduct a simulation or backtest the strategy using historical data to determine the effectiveness of the scale-out approach. Additionally, keep track of your trading performance, and adjust the strategy as needed based on the results and changing market conditions.
ME
Thank you for this suggestion. One thing to consider in the scale-out stages is the average MAE (Maximum Adverse Excursion). This is the average amount that a position of 8 contracts will typically travel back from the trade entry before going into profit. In this case it is -$207.99 or just over 2 ticks per contract. You did suggest exiting the first 2 contracts at 1 point loss. It does seem like you took this into consideration. Did you? Also, did you run multiple scenarios to come up with your suggestion? Is it the best of several alternatives? Does it take into consideration the recovery time based on the given trading statistics?
You're correct that I considered the average MAE (Maximum Adverse Excursion) in suggesting the scale-out strategy. However, the suggestion was meant as a starting point rather than an optimized solution. The scale-out strategy provided is a general guideline, and it is crucial to run multiple scenarios, backtests, or simulations to evaluate different scale-out strategies and find the one that best fits your trading objectives and risk tolerance.
ChatGPT
The suggestion I provided earlier does not take into account the recovery time based on the given trading statistics. To find the optimal scale-out strategy, you would need to conduct a thorough analysis of historical data, testing various scenarios while considering factors such as win rate, profit factor, average MAE, and recovery time.
A more advanced analysis could involve running a Monte Carlo simulation or using machine learning techniques to optimize the scale-out strategy based on the trading statistics and historical data. However, these methods are beyond the scope of what can be provided as text-based guidance.
In summary, the scale-out strategy provided is a general guideline based on the given trading statistics, and it is not an optimized solution. You should consider running multiple scenarios and conducting a thorough analysis of historical data to find the best scale-out strategy for your specific trading scenario.
ME
Understood, thank you. Based on your suggestion, if I wanted to extend the profit targets on the remaining contracts profit targets, how much would I have to extend the profit target by for each scale-out? How many ticks?
ChatGPT
To determine how much you should extend the profit target for each scale-out, you need to consider the number of contracts remaining and the amount of profit you want to achieve. Keep in mind that extending the profit target might also increase the likelihood of not reaching the target, so it's essential to find a balance.
Let's take the same scale-out strategy as before, with 8 contracts and a 2-tick profit target ($25 per contract):
Exit 2 contracts at a 1-point loss: 6 contracts remaining
Exit 2 contracts at a 2-point loss: 4 contracts remaining
Exit 2 contracts at a 3-point loss: 2 contracts remaining
Now, let's calculate the required profit target for each scale-out level to achieve a net gain of $3,000:
For 6 contracts remaining: $3,000 / 6 contracts = $500 per contract. To achieve $500 per contract with a 2-tick profit target ($25 per contract), you would need to extend the profit target by (500 / 25) - 2 = 18 ticks.
For 4 contracts remaining: $3,000 / 4 contracts = $750 per contract. To achieve $750 per contract with a 2-tick profit target ($25 per contract), you would need to extend the profit target by (750 / 25) - 2 = 28 ticks.
For 2 contracts remaining: $3,000 / 2 contracts = $1,500 per contract. To achieve $1,500 per contract with a 2-tick profit target ($25 per contract), you would need to extend the profit target by (1500 / 25) - 2 = 58 ticks.
Please note that these extended profit targets are based on the goal of achieving a net gain of $3,000. However, it is essential to consider the impact of extending the profit targets on your win rate and the likelihood of reaching the targets. It might be more practical to set more conservative profit targets and rely on multiple winning trades to achieve your goal. As always, backtesting or running simulations can help you evaluate the effectiveness of different profit target adjustments.
ME
I'm sorry, let me explain better so we can get to the results I was after. I am not trying to get to $3,000 on the losing trade. Once the trade goes that far against me so that it's scaling-out, I am just trying to get back to break-even on the given trade. So, if we are scaling out due to a trade going against me, how much does the trade profit target need to be extended to get to break-even on the trade after each scale out stage?
ChatGPT
I apologize for the confusion, and I appreciate your clarification. Let's calculate the extended profit target required to reach break-even after each scale-out level in the given scenario.
Exit 2 contracts at a 1-point loss: -2 * 1 * $50 = -$100 loss
6 contracts remaining
To break even, the 6 remaining contracts need to generate $100 in profit: $100 / 6 contracts = $16.67 per contract
Since the original profit target was $25 per contract (2 ticks), you'll need to extend the profit target to $16.67 + $25 = $41.67 per contract, which is 3.33 ticks. In practice, you would round to the nearest tick, i.e., 3 or 4 ticks.
Exit 2 contracts at a 2-point loss: -2 * 2 * $50 = -$200 loss
4 contracts remaining
To break even, the 4 remaining contracts need to generate $200 in profit: $200 / 4 contracts = $50 per contract
Since the original profit target was $25 per contract (2 ticks), you'll need to extend the profit target to $50 + $25 = $75 per contract, which is 6 ticks.
Exit 2 contracts at a 3-point loss: -2 * 3 * $50 = -$300 loss
2 contracts remaining
To break even, the 2 remaining contracts need to generate $300 in profit: $300 / 2 contracts = $150 per contract
Since the original profit target was $25 per contract (2 ticks), you'll need to extend the profit target to $150 + $25 = $175 per contract, which is 14 ticks.
Please note that these extended profit targets are based on the goal of reaching break-even after scaling out at each level. As before, consider the impact of extending the profit targets on your win rate and the likelihood of reaching the targets. It's important to test these profit target adjustments with historical data, simulations, or backtesting to evaluate their effectiveness.
ME
Thank you. One more question. I should have mentioned it before: did you consider the commissions in your calculations for extending profit targets to get to break-even above? If not, can you run the calculations with that in mind?
ChatGPT
I apologize for not considering the commissions in my previous response. Let's recalculate the extended profit targets required to reach break-even after each scale-out level, taking into account the commissions.
The commission is $3.98 per individual contract round trip. We'll need to account for both the entry and exit commissions.
Exit 2 contracts at a 1-point loss: -2 * 1 * $50 = -$100 loss
ME
Sorry, I am cutting you off because the commission is actually $3.98 per round trip, meaning to buy and sell each contract. It is not doubled for each transaction.
ChatGPT
I apologize for the misunderstanding. Let's recalculate the extended profit targets required to reach break-even after each scale-out level, considering the commissions as $3.98 per individual contract round trip (buy and sell).
Exit 2 contracts at a 1-point loss: -2 * 1 * $50 = -$100 loss
Commissions: 2 contracts * $3.98 = $7.96
Total loss including commissions: -$100 - $7.96 = -$107.96
6 contracts remaining
To break even, the 6 remaining contracts need to generate $107.96 in profit: $107.96 / 6 contracts = $17.99 per contract
Since the original profit target was $25 per contract (2 ticks), you'll need to extend the profit target to $17.99 + $25 = $42.99 per contract, which is about 3.44 ticks. In practice, you would round to the nearest tick, i.e., 3 or 4 ticks.
Exit 2 contracts at a 2-point loss: -2 * 2 * $50 = -$200 loss
Commissions: 2 contracts * $3.98 = $7.96
Total loss including commissions: -$200 - $7.96 = -$207.96
4 contracts remaining
To break even, the 4 remaining contracts need to generate $207.96 in profit: $207.96 / 4 contracts = $51.99 per contract
Since the original profit target was $25 per contract (2 ticks), you'll need to extend the profit target to $51.99 + $25 = $76.99 per contract, which is about 6.16 ticks. In practice, you would round to the nearest tick, i.e., 6 or 7 ticks.
Exit 2 contracts at a 3-point loss: -2 * 3 * $50 = -$300 loss
Commissions: 2 contracts * $3.98 = $7.96
Total loss including commissions: -$300 - $7.96 = -$307.96
2 contracts remaining
To break even, the 2 remaining contracts need to generate $307.96 in profit: $307.96 / 2 contracts = $153.98 per contract
Since the original profit target was $25 per contract (2 ticks), you'll need to extend the profit target to $153.98 + $25 = $178.98 per contract, which is about 14.32 ticks. In practice, you would round to the nearest tick, i.e., 14 or 15 ticks.
Please note that these extended profit targets are based on the goal of reaching break-even after scaling out at each level and considering the commissions. As before, consider the impact of extending the profit targets on your win rate and the likelihood of reaching the targets. It's important to test these profit target adjustments with historical data, simulations, or backtesting to evaluate their effectiveness.
On balance, I guess today was a good day. But it was totally bipolar in every sense of the term.
From a purely resulting perspective (Annie Duke) it turned out to be a winning day ($50K eval profit done). From a mindfulness standpoint, it did veer off the emotional sobriety cliff for a bit. I initially justified it to myself by telling myself this happened on my experimental Leeloo 5 account combo package purchased for around 30 bucks on discount and my regular Apex account were nicely stowed away with a profit so it "didn't count." But upon reflection, that's kind of like telling myself it's okay to get totally wasted because I went to Ensenada to do it (or make it Tijuana if that sounds more familiar). It was, to be sure, a day in which my entire Team of Rivals showed up.
The Wise Man
Last week we got a blow-off top on Tuesday, followed by a minor one on Wednesday. Leelloo had a 5 "$50K" ($2.5K trailing drawdown) package on sale for around $30 (only one of 5 can get funded). I got that to try a few things out on the side. So I went short at 4170 for a swing down on Thursday, after assessing those two blow-off tops, the inability to make it higher on Wednesday, and the fact that after a series of dojis on the daily chart, we got the first lower low in days. I also thought I saw a H&S with a 4148 neckline. So my plan was to take it down 60 pts with 1 lot, which gives me 50pts of room on the trailing drawdown.
Over the weekend, after a weak down move, I debated holding just to 4120 (instead of 4109), which is the key downside boundary on the core up-channel for the recent move up. But over the last couple of days, they kept buying it back up around 4135-37, over and over and my trade would gain and lose 20pts or so. Looking at the daily chart I didn't see a whole lot more downside if this up move is viable. It's possible they will push it to 4120, but I couldn't get the account to the needed $3K profit unless it went to 4109 or so and I am just doing it for the ego of trying to do it in one trade at that point. So I went ahead and put a buy order in at 4137 before going to bed last night, and sure enough it went to 4133 and bounced.
The Geek
I left the swing account alone and did my first 15 min open algo trade on another of the 5 accounts and that worked and so I left that one alone (the one outlined in the previous post).
The Perfectionist
Then we came down at 10:30 and I thought I should put on the one that I started a swing long with last week and taken off after 10pts profit (3rd account). Unfortunately, I still had the 8 lot order set loaded from the open 15 trade whereas I meant to do 1 lot and it started going against me and here my chimp decided to let it go, or maybe it was the all-or-nothing, perfectionist in, and I blew that one.
The Chimp
Action begets equal opposing reaction (or something like that ) and I doubled down with 8 lots AGAIN! And long, AGAIN! No rhyme or reason to that one. Definitely the chimp this time. Some of you will get it (probably many ). Blew that one too.
The Stunt Driver
The last two negated each other (psychologically if not P&Lwise) and I was ready to become normal again. Price headed to the proverbial 35-37 zone (where I exited my swing short, as outlined above), plus I had a key level mapped out today at 4139.50 (my own, not a TA or subscription level), so I took it there with the 5th account (one of 3 remaining). That one I took to the $3K profit needed to pass the eval with 4 lots, as 8 lots with only 6.25 pts for rotations is clearly deranged. The combo package only allows one account to pass the eval and get funded, so from this perspective it's a "success". I'll do the open 15 trade with 1 micro for the next few days, should be fine.
Regular me
I didn't trade my "main" Apex accounts today. I had taken one trade in Globex for 16 ticks and that was it for those accounts for me on a Monday.
Saner trading today. I'm not going to post P&Ls like this every day, but right now it's pertinent.
On the Apex accounts -- these are my "staple accounts" -- where I am working on running a tight ship and observing all the risk management protocols, no experimentation -- on these I just did a bit of Globex trading. With the addition of the Leeloo accounts my system has been upended somewhat. I can't lock everything down as I normally would, I have to weigh MES vs ES, and so on. I have to spend a bit of time figuring out Cold Turkey lockout schedules, GAT schedules and entries, and so on. Therefore, I didn't want to trade the Apex accounts in RTH, where things are more tricky. In Globex it's more like playing chess, where I go with ES at any rate, so I got those done and left it alone.
On the Leeloo accounts, they did another sale and the bundles were selling for $11 last night, so just over two bucks per. These are sets of 5 evals of which only one can go to PA. (FYI, no affiliation with any of these things. If I mention price and such it's totally in keeping with what I am journaling. So, for instance, the fact they sell them so cheap is great, but remember that this fosters the very type of mindless trading they're after. They TRAIN traders to be sloppy. So be careful). The good thing is that these accounts allow for a lot of latitude in experimenting and as I outlined yesterday, different aspects of my inner Team of Rivals can be catered to without jeopardizing the whole enterprise.
So on the Leeloo accounts, I got 4 more and I had 1 so now a total of 25 accounts, of which 5 could potentially go to funded PAs. I have 3 trade setups going on right now, and two of the 5 accounts on each are currently virgin accounts. On one of them, I got the required $3K profit yesterday, the first day trading it. So that one is on a ratioed micro diet for the 4 more days of required trading to go to PA. Thus, I am doing the Open 15 Algo setup I outlined over the weekend on one set of 5 accounts across the 25 total with 4 of the new ones plus the one I got to profit on yesterday as a 5th account for that strategy even though this was not originally an Open 5 trade. I added it to this setup is the "safest" in some ways and therefore the best one to keep it ticking over to get the required remaining days, even though this strategy is the one with the most inherent risk in other ways. But safest on a ratioed micro diet as it is a 92% win rate strategy and the minuscule size makes it essentially bulletproof. Since the trade is with 8 ES for 2 ticks on the other 4, what I do is set the one that got to profit to 0.25 ratio and convert it to MES. So today's profit on that one, for example, was $2.50, whereas the ones with the full size were $400 gross each and $336 net. That was after 2 trades. Normally the rules allow for trading from 6:31 AM to 6:44 AM PST, but I just did two trades and was done by about 6:35 AM. Since they are such high risk if they go off the rails the sooner I am done the better as price only ticks back and forth so long, and can potentially pick up momentum to either side even in the first 15 minutes (and usually move more decisively after 15 minutes, hence the rule).
On the second set of 5 Leeloo I traded today, these were just trading my levels as usual (+/- $437 gross profit on each showing).
On the third set I started a swing trade: Long 1 lot each at round 4121 (I shut down already and I didn't write it down, but it was right around there). Here the thought is that we are at the bottom of the core rising channel for the up move recently. If this breaks we go to 4099 or so and there is 50 points of room on the trade. My thought is this could be an interim bottom. Today we have MSFT and Google earnings, it could go either way. If I'm right it moves back up and I was a genius, if I'm wrong it shoots down, and ... well, there we have it. But even so I can take some heat. Let's see. (the -$2.49 showing is the commission on the trade).
I'm probably not going to detail everything every day like this. Normally I just post results for 1 Apex account as that's all that matters. All of this is new and raises a lot of organizational and mindset issues and so it's good to put it all down as I am dealing with it. The main thing to be careful about with all these things is that no matter how good we are at creating a secure environment to cope with our deficient brains, we will find ways to punch holes in the system and then blow it all up. So the Leeloo discounts are phenomenal, but they are also a huge distraction. This is precisely what all of these providers do. Everything that is market-related, from the videogame like consoles, all the bells and whistles, the colors and sounds, the discounts and packaging to make it look like you are buying "$50K" account sizes, etc., etc., etc. All of it is to take your money! This must stay FRONT AND CENTER.
). Blew that one too.