Ok,
Need to follow up on yesterdays trading.
I did not do any simulation trading yesterday, I only traded on the real money account.
Yesterday and today were a bit freaky for me.
I did my open trade as usual made a good trade and took some profit.
This was a long trade.
However, I only took out one of the two contracts I had taken on the open trade at the 1 point target.
I set the second target a bit higher and it never hit.
Then the market reversed and gave me a short signal.
So I reversed my trade and went short.
Based on my money management techniques I need 4 contracts to cover my previous loss and recover some profit, so now I am short 4 contracts.
Almost as soon as I entered the short trade the market did a head spin and headed back up.
The next thing that happened was a long signal.
To take this signal would mean I have 35 open contracts.
If the market moves a point everything is great I recover all my losses and make a profit.
If the market turns again I am in big trouble because I do not have enough capital in the account to hold past 16:00 should that happen.
During the regular hours margin requirement is 25% of the full margin.
So, I basically froze and did not reverse into the long trade as per my trading plan.
This was stupid since the odds of having two signals in a row going against me during this time of the day are nearly zero.
Anyways the market went up, and if I had taken the trade all would have been good.
But, since I did not I was stuck in a losing position with nothing to do but watch the market climb higher.
Now what do I do.
Due to my capital limitation I needed another plan.
The markets are always going up and down, so I decided I would wait for the market to top out and turn back down then take a few more positions short to dollar average my entry and get my break even into a better position.
Near the end of the day the market started to fade and gave me a short signal,
I took another 6 contracts short which brought my break even up to the 50% retracement level of this runs range.
Then I waited.
Nothing happened overnight, the market was pretty flat. But, there where subtle signs of a retracement.
On the open the market started to decline and over the next 2 hours it pulled back to the 50% level and took out my 10 contracts with a decent profit, which was a relief since at one point I was down over $4,000.
So what did we learn from this?
The strategy only works when you work it properly.
The human is the weak link.
When you screw up don't freak out, make a new plan that makes sense and has a high probability of working.
Be grateful when the market gods throw you a bone.
Check out the chart below for my entry and exit points.
Need to follow up on yesterdays trading.
I did not do any simulation trading yesterday, I only traded on the real money account.
Yesterday and today were a bit freaky for me.
I did my open trade as usual made a good trade and took some profit.
This was a long trade.
However, I only took out one of the two contracts I had taken on the open trade at the 1 point target.
I set the second target a bit higher and it never hit.
Then the market reversed and gave me a short signal.
So I reversed my trade and went short.
Based on my money management techniques I need 4 contracts to cover my previous loss and recover some profit, so now I am short 4 contracts.
Almost as soon as I entered the short trade the market did a head spin and headed back up.
The next thing that happened was a long signal.
To take this signal would mean I have 35 open contracts.
If the market moves a point everything is great I recover all my losses and make a profit.
If the market turns again I am in big trouble because I do not have enough capital in the account to hold past 16:00 should that happen.
During the regular hours margin requirement is 25% of the full margin.
So, I basically froze and did not reverse into the long trade as per my trading plan.
This was stupid since the odds of having two signals in a row going against me during this time of the day are nearly zero.
Anyways the market went up, and if I had taken the trade all would have been good.
But, since I did not I was stuck in a losing position with nothing to do but watch the market climb higher.
Now what do I do.
Due to my capital limitation I needed another plan.
The markets are always going up and down, so I decided I would wait for the market to top out and turn back down then take a few more positions short to dollar average my entry and get my break even into a better position.
Near the end of the day the market started to fade and gave me a short signal,
I took another 6 contracts short which brought my break even up to the 50% retracement level of this runs range.
Then I waited.
Nothing happened overnight, the market was pretty flat. But, there where subtle signs of a retracement.
On the open the market started to decline and over the next 2 hours it pulled back to the 50% level and took out my 10 contracts with a decent profit, which was a relief since at one point I was down over $4,000.
So what did we learn from this?
The strategy only works when you work it properly.
The human is the weak link.
When you screw up don't freak out, make a new plan that makes sense and has a high probability of working.
Be grateful when the market gods throw you a bone.
Check out the chart below for my entry and exit points.
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