Jonbig04's Log

[jonbig04]

First off I want to disclose that I have yet to formulate a sound strategy, this thread will hopefully be the evolution of that strategy. Today was my first day trading (with fake money). I'm trying not to think about the fake money aspect. After all, when I go live with real money nothing will have changed unless I myself let the fact that I'm trading real money change me...and I'm determined not to. I will be trading the NQ E-mini exclusively for various reasons. My first and most important goal is to try to understand price action. As of right now I could care less about indicators. I think it is far more important to learn whats behind the indicators, rather than just relying on 2 lines crossing. In time I'm sure I will use various indicators just for simplicities sake, but not until I can see and understand them myself by understanding price action. I do/will be watching volume, but only in the context of price...e.g. what price was doing during high or low volume. Simply stated, I want to buy when demand overwhelms supply and sell when supply overcomes demand. I will try to find supply zones (resistance) and demand zones (support) and trade accordingly.



A little bio- My name is Jon. I live in Denver and have been on ET for around 8 months I would say. I am still very much into real estate (development) and am trying to balance it with trading...oh and I turn 21 on thursday .

Books ordered:
The nature of risk
How to buy
When to sell
all by Justin Mamis

The disciplined trader
trading in the zone
both by mark douglas


Thanks to dbphoenix and all the others who took the time to educate and explain the different elements of trading.

[jonbig04]

My replies may be a couple days behind. This is from 7/22


07-22-08 03:00 PM

Today was interesting. It was mostly devoted to figuring out the the hell to work Ninja Trader...I really need to figure out how to do a trailing stop (working on that now). In the midst of trading today I couldnt help but feel a familiar feeling creeping down my spine. The same feeling I get while I'm playing poker. I know that sounds weird, but its crazy to me how similar trading and poker feel. I knew trading was emotional, but damn keep your emotions in check is half the battle! Thankfully I'm no stranger to that battle (many many poker games) and it's nice to jump into something a scary and new as trading only to find myself on a battlefield I am very familiar with.

Today I over-traded. About 19 trades in all, and I would like to keep it to around 10-12. I did well in the beginning of the day. Started out with a 1.25 point loss on my first trade and then the next 7 trades were all winners (9.25 points). I should have just walked away then, but I guess I thought it would be cool to lose some money. 11 trades later I finished the day up 2 or 3 points I think. I had one trade go against me by 3.5 points, besides that the worst trade took out 1.75 points. The trailing stops I feel will really help me. I tried to have a mental stop of 1.25 points, but things just move to quickly and emotionally. Tonight I will figure out how to to all that. Tomorrow I will keep a journal of all actual trades. This will help show my reasoning (or lack thereof) and help me trade less. The chart is attached.

[jonbig04]

from 7/24

2nd day trading. good day over-all. still getting my stop strategy worked out, but im a lot closer.

anyways I made 9.5 points over all, decided to stop while i was ahead haha. charts attached.

[jonbig04]

Forgot the chart:

[jonbig04]

today is 7/29. My internet connection is fixed finally. I realize this journal is full of grammatical errors and everything else, but to me thats ok. I do write down my reasoning behind each trade...but its a bit crazy for an online journal. Here is a sample i was able to decipher and make somewhat public as per the chart on 7/24:

the move at 12:40 for example, it looked to me like the smart money didn't want anything to do with it at this price. To me those 3 short range bars in a row are all no demand bars, authenticated by the lack of any kind of volume. people holding it would have to sell at a lower price, and they did. eventually it reaches a point where smart money steps in a buys a boat load of it on its way down 12:54-13:00. The people who missed the up move come in late (13:03ish) and the smart money begins to unload it (13:04-13:06) on them sending prices lower yet again. My reasoning could be way off, but it did work on this day. If its flawed I will soon find out though.

As far as I'm concerned trading is merely a game in which I try to rack up as many points as possible. This helps keep money out of my mind along with all the profit damaging emotions that come with it. I'm in the game for 6-10 points and then I'm out. If I can manage that many. If not, I will lower and adjust my goals and expectations.

[jonbig04]

To the surprise of no one, i have dropped my points goal to 7-10 points. This is based on some calculating I did (assuming im only trading 1 contract at first) and works well with my financial goals.

Anyways, today was damn hard. I felt i had to scratch and claw for every little tick. Then that stupid earth quake came and volume shot up ten-fold in less than a minute, costing me 2 points. I hated that.

today's results +7.75 points.

Im pretty damn pleased with that considering how hard it was to make, coupled with today being only my 3rd day. here are the charts of my entries and exits. Appreciate any and all input. Thanks.

[jonbig04]

Still need to figure out how I can have a set strategy too eliminate emotional and rash decisions. Since I'm not using any indicators (other than VOL) its hard to me to have a set of concrete rules to go by.

I can't be the only price action trader that has had this dilemma though. There is really now way for me to back test is there?

[brownsfan019]

Originally Posted by jonbig04 Still need to figure out how I can have a set strategy too eliminate emotional and rash decisions. Since I'm not using any indicators (other than VOL) its hard to me to have a set of concrete rules to go by. I can't be the only price action trader that has had this dilemma though. There is really now way for me to back test is there?

If you are 100% 'fly by the seat of your pants' it would be rather difficult to backtest.

[jonbig04]

Originally Posted by brownsfan019 If you are 100% 'fly by the seat of your pants' it would be rather difficult to backtest.

Right. I wouldnt say I act impulsively ( I try not to), my trades are thought out in advance. Usually its something like "I will buy here if x happens along with y" etc, so its not "fly by the seat of my pants", but it is dependent on the price action of that particular chart, so I think back testing is out.

[cantana]

Originally Posted by jonbig04 Still need to figure out how I can have a set strategy too eliminate emotional and rash decisions. Since I'm not using any indicators (other than VOL) its hard to me to have a set of concrete rules to go by. I can't be the only price action trader that has had this dilemma though. There is really now way for me to back test is there?

You might take the extra step and inquire about db's e-book, since you're collecting books anyway. I'm sure you'll find your own answers to your questions there.

Just a thought.