[jasont]

Ok first off I have decided to move my journal here because I am tired of seeing my journal in every entry of the blog section. I don’t think it’s fair for people wanting to check out others blogs and just seeing my journal there. This way I can post my journal here and the most spaces I take up will be one as opposed to just about every spot I am taking now in the “recent blog entries” section. I also was getting a bit stale and wanted to change things up a bit.

Right now I want to start off with an assessment of my trading and how it has been going. Things were doing ok until this week I made a number of bad decisions and earned myself a lesson in humility. In this game I really need to avoid thinking I have conquered it. It allowed complacency to enter my trading.

So to begin with I want to outline my statistics. All of them are made on a per contract basis. I don’t want increased size and/or decreased size to alter the purity of my statistics. So here is the overall picture below for my live account.

Total Trades: 155

No. of Wins: 69

No. of Losses: 73

Breakeven Trades: 13

Win %: 44.5%

Av Win Amount on winning contract: $68.48

Av Loss Amount on Losing contract: $-49.66

Risk/Reward Ratio: $1 Risked to make $1.37 (1:1.37)

The above picture isn’t too bad but it isn’t great. The average win amount in comparison to the average loss amount is ok, ideally I would prefer it to be in the 1.5-2.0 range but where it is I can live with. What is really irritating me at this point is the Win %. During my simulation trading and also whenever I do switch to simulation, my Win% is closer to 60%+. Now if that was the case here, the 1:1.37 Risk/Reward would be fine.

Overall I am ahead about 6.2% on my starting capital. I have made 21.1% profit with my trading but commissions have cut me back to 6.2%. Prior to this week I was ahead by 15.9% but took a rather irritating setback with only 4 of 16 trades being winners. Unfortunately the winners were not great so couldn’t salvage the situation. So this is where I stand on an overall basis.

If I break down the results a bit more I get a more interesting look on my trading. I don’t count the breakeven trades in my further looks as I only count winners and losers. Again the results are on a per contract basis so not to distort the bare facts. The results are as follows:

Short Trades

Short Wins: 29

Short Losses: 55

Win% on Short Trades: 35%

Average Win Amount on winning Short Trade: $72.41

Average Loss Amount on losing Short Trade: $45.91

Risk/Reward Ratio On Short Trades: 1:1.58 ($1 Risked to Make $1.58)

Long Trades

Long Wins: 40

Long Losses: 18

Win% on Long Trades: 69%

Average Win Amount on winning Long Trade: $65.31

Average Loss Amount on losing Short Trade: $61.11

Risk/Reward Ratio On Long Trades: 1:1.07 ($1 Risked to Make $1.07)

So I am faced with a rather strange dilemma at this point. I take way too many losses on my short trades for my liking. In fact I don’t have the same problem when I trade short in my simulation account. I also seem to be preventing my long trades from running their full course however it could be more a result of being in a downward market up to this stage.

I am trying to find a solution to this problem. I am in fact losing money with my short trades and making money with my long trades. Prior to this week I was close to break even with my short trades though which was a big improvement. I am unsure how I can fix it at this point but will work towards a solution.

Part of finding the solution is that I may revert back to recording my trading via camera. I believe my analysis most likely changes when I trade my live account. I can’t catch that when writing in my journal as I believe I probably filter my typing. On camera I can’t change my thoughts; I will just need to push myself to talk through my trades. I have done this in the past but it sort of faded off as I switched to writing. I couldn’t do so many things at once whilst trying to monitor the market. I also need to make sure it doesn’t slow down my trading platform.

I will look at ways to get it up on the net either through YouTube or something else. I will look further into it over the next couple of days and see how viable it is to do. I think I will be able to capture more through video with my trading. I want to take things a bit easier next week and refrain from over trading. Hopefully this can help.

[smwinc]

Nice Jason.

Working on the win % is easier than working on the av. winner vs av. loser, and you are doing well in that department.

Commission really is a bitch. Long term though you can do things about that, depending on the size you trade & your own situation - become a member at the exchange, volume-based commission pricing, etc. The S&P is really one of the most versatile markets out there as far as commission.

I would really recommend recording your trading. I heard from a friend a long time ago who used to do it, and started doing it. I would also talk out-loud to myself (yes, weird) why I was taking the trade.

It made it MUCH easier to see after a losing day what I was missing. Having the verbal reasoning at the time really helped.

Few questions:

What period is the above analysis done over? I.e. A month?

How many total round-turns do you average per month? I.e. If you traded 100 lots per trade, that's 100 round-turns per trade. If you traded 1 lot per trade, that's 1 round-turn per trade.

Your figures for Av Winner / Av Loser - is that including or not including Commission?

[jasont]

Thanks for the reply SMW. I agree that working on the Win% is a bit easier than the av win or av loss.

The commission side of it is irritating but if I think for the long term, it can be reduced and with increased size the actual gains get better though % wise they stay the same.

I have recorded my trading on camera in the past but found writing helped me enter trades according to plan a bit more. Now I have a different problem so I will go back to the recording to see if it sorts out my current issue. I think it will help me see things I cannot see when written down. It is good to hear from someone who has also done it and it has worked for them.

The above period is from late January this year. So I don't take too many trades, per month. In my first few days of trading I was 10% down on my account when I made a few platform errors. I would rather not mention how many contracts I trade as I personally don't want too much financial information on here. I will say that I'm not a huge volume trader, I currently am still using only a small portion of my capital to gain consistency at this point.

Thankyou for bringing up something I had overlooked SMW. The av win and av loss does not include commissions. The adjusted values below are av win and av loss including commission costs.

Av Win Amount on winning contract: $63.58

Av Loss Amount on Losing contract: $-54.56

Short Trades

Average Win Amount on winning Short Trade: $67.51

Average Loss Amount on losing Short Trade: $-50.87

Long Trades

Average Win Amount on winning Long Trade: $60.41

Average Loss Amount on losing Short Trade: $-66.01

[jasont]

Here are my zones for the 4th August:

Resistance

1263.25-1264.25
1271.25-1272.25
1278-1279
1284.50-1285.50

Support

1256-1255
1250.50-1249.50
1242-1241
1233.50-1232.25

My Outlook

Things are pretty mixed at this point. We seem to have found a choppy area in the NDX, the SP and DJIA seem to be doing similar but over a wider range. I'm not willing to take sides at this point as I am cautious that this could last for a while.

The VIX has settled its recent decline which could be a signal of further weakness entering the market. Again I am not willing to speculate on where it is heading at this point but will keep an eye out for some direction.

Oil has been finding an extended base recently which appears as though it is gearing up for another move higher. Gold has done similar but to a bit of a lesser degree. Last week I noted that we could see an attempt by Oil to run higher which may encourage another wave of selling. I will keep this in mind.

The USD is still looking like building strength more than finding further weakness. Things have been looking slightly better for the US economy but not as much as one would like for a kick start out of the recent problems. It still is in a very dangerous area and does risk further weakness at this point.

My Focus

Tonight I want to try to get some video of my trading. Hopefully of actual trades if it doesn't slow my platform down by too much. I was hoping to get a video up today of how I calculate my s/r levels but I am having trouble getting the right mix for compression. I'll work on it some more and go from there.

Currently we are trading at the 1260 area in the overnight market. 1250 is the area I would like to see hold up if the buyers are going to push the market higher. If we get down there I will be paying attention to the Tick and Volume for any buying signals. If we hit 1263.50 without showing some buying follow through we could see a move back down to the 1250 area.

I wouldn't like to be caught in the choppy range area from Friday so any trades around there will need to have some solid sentiment readings. I will pay attention to the 1255.50 area but placing any trades down there won't be my first option.

For me I want this week to err on the side of caution. After getting caught on the wrong side of the market last week, I would like to put more effort into my market analysis. I think Monday might set the tone for the rest of the week if we see a direction chosen. I am sticking to trades at s/r levels using both the moving s/r (EMA's if being respected) and areas I have identified already. I just want to let things flow a bit on camera so I can recognize anything that can be improved upon.

[firewalker]

Hi jason, have you thought of only trading the long side for a period of time?
What would your results be if you only took long trades? Probably a whole lot less trades and less losses. It would help get you more profits in, while you try to determine the cause of the problem with the short trades. There's no rule that says you must do both.

If, for some reason, almost 2 out of 3 of your shorts are losses (like in your stats), I'd say why continue taking those trades? Unless the numbers you gave were only from a short batch and not representative for the overall performance of a short trade. Also, you have 84 short trades but only 58 long ones (this is without the breakeven trades as you didn't make the distinction there whether is was a long or short position). So basically, I'd say you're shooting yourself in the foot,...

Also, given the fact that only 35% of your short trades are winners, you could try to determine a closer stop. Because the majority are losers anyhow, why risk more if you can set a tighter stop? That requires some testing and analyzing from the profitable short trades obviously.

Good luck!

[jasont]

Thanks FW. I am currently switching back to trading the short side in simulation and the long side in my live account. I did the same thing a few weeks back and it was a big improvement. My short trades were better and my live account didn't suffer from poor short trades. I thought after a week and a half I had identified the problem as entering too early but there seems to be more to it than that.

I think I have more short trades than long at this point because we have seen an extensive downward period recently. The opportunities for long trades had been less than for short trades. You are right about shooting myself in the foot with short trades though.

I am going to take your advice and analyze my simulation short trades whilst trading the long side live. I don't want to remove short trades all together as I think it would put an emphasis on looking for bullish biases. I have seen that I can trade the short side very well in simulation, I just need to figure out what changes when I switch to Live. I do get the feeling I look for trades more when I trade live than when I trade simulation.

[firewalker]

Originally Posted by jasont »

I think I have more short trades than long at this point because we have seen an extensive downward period recently. The opportunities for long trades had been less than for short trades. You are right about shooting myself in the foot with short trades though. .

Yes that's probably one reason. But I'd say be careful when looking at the big picture and trading intraday. I was so focused on the short side in the beginning of this year, that I let a lot of long trades slip through my fingers. I remember somewhere somebody saying that there are more up days then down days in a bear...

Originally Posted by jasont »

I am going to take your advice and analyze my simulation short trades whilst trading the long side live. I don't want to remove short trades all together as I think it would put an emphasis on looking for bullish biases. I have seen that I can trade the short side very well in simulation, I just need to figure out what changes when I switch to Live. I do get the feeling I look for trades more when I trade live than when I trade simulation.

Most of the time there are opportunities for shorts & longs, even in bear market mode You're right, beware of having too much bullish bias...

[jasont]

For those who have been following my journal since I began this year I wanted to say thanks for the support and feedback you have offered. The likes of FireWwalker and LiggerPig in particular.

At this point I am going to take an indefinite break from posting my journal in a forum. I currently am feeling a bit of burn out from writing the journal with the intention of posting it here. Last night I found in my video journal that I was holding back personal opinions and thoughts on the market due to knowing I would post it up. This is not the way I would like to be approaching my journal and feel it has lacked the substance necessary to provide further growth.

I am still going to continue my journal but I will be keeping it private at this point. I feel it is the best way to get the most natural thought process out of my trading and to stop thinking in the back of my mind as to how something sounds. Somewhere along the lines I believe I stopped making the journal for myself and made it for the sake of the journal.

Originally the journals purpose was to make sure I remained consistent with my plan. Now the journal needs another purpose which is better met when I keep it for myself, that way I won't refrain from comments.

It may be a week, a month, six months, before I return to making the journal public if at all. I may decide after a week I need to get back to it. I'm not sure and I'm not going to make any plans at this stage. I may post updates here but at this point I just feel its best to work on it solo for a while. Again thanks to all the guys who offered some great advice and support as it made a lot of difference.