STOP! Wait Wait…Somethin’ is goin wrong here

STOP! Somethin’ is wrong here..

stopsign.jpgThough I thought of writing this in my monthly review later, I just can’t help thinking of the cause/reason of my mediocre March performance. OK, I am not losing any penny, instead, I am just having a FLAT month with a whopping 0.9 R profit to date. The months-long flu and cough and chopfest of stock index futures after the big sell off might be part of the reasons, but I am not using these as execuse.

Here are what I did this month.

I started a new strategy which is more like a scalping strategy. After flipping through charts after charts after charts, I decided to jump in with some real money. Well, things were not as rosy as I had thought. I hit problems like spread, confidence, order execution speed etc. I stopped this after I started feeling uncomfortable.

Secondly, instead of focusing on NQ only, I started expanding my trading basket to ER2 and ZG. This move was fine, but it was just too fast. I jumped into two instruments that I had never/rarely traded. So, the movement, speed, spread and risk level scared me a little. I lost confidence for a while. I have stopped this monkey act immediately and taken out ER2 and ZG immediately. Now I again focus on NQ.

Third, I am timid. When I am facing the situation that the risk required for a trade is far below my R, I hesitate to increase my positiong size. So, even though the trade painted out a nice picture in the end, my equity growth is still mediocre.

Solution? I don’t have it all now. The only ’emergency action’ I am taking now is focusing on One product One stup again. And I need to push myself to increase position size when opportunity comes.

OK. Now go back to trade.

Red packet day

When I wake up in the morning in Singapore, I see Straits Time Index dropped -157.74, the biggest one day loss I have ever seen since I started trading (It shows I am still young huh). and I see overnight NQ lost -87, YM lost -482.

World stock markets plunged on Tuesday as fears about an economic slowdown in the United States and the end of the Chinese economic bubble sparked a global wave of selling.
Asia was dragged down by a plummeting Shanghai stock market, Wall Street slumped, and the main European indices showed falls of between 2.0-3.0 percent on average at the close.

World stocks tumble after China meltdown

The sell down of NQ started around lunch hours, and I had already left my desk. The feeling sucks. I was unable to profit from this kinda day. Ok, I was thinking market had gone down “enough”, what a fool.

Stay safe.

Postmortem 29-Jan-2007: Lack of patience

Nothing much to write about today’s trade. It was the result of being impatient to wait for a good setup. I took an very poor setup. I am not going to think too much over this trade. In the business of trading, you pay for your mistake. 

I start testing my strategy in E-mini Russell 2000 futures. The tick size is bigger though. I am still reluctant to trade YM (mini-sized Dow futures) as I don’t when will the exchange down again. I am really afraid of that.

Failure patterns…of a trader

I was reading some trading articles, at the same time, review my past performance. What I am trying to do is identifying some fatal patterns that caused my losses. Why?

I am not referring to chart patterns, but the patterns of traders’ behaviors. When I first started trading, I was told to observe behavior of winning traders, and learn from them. I can’t agree more with this idea. That’s why, I would encourage new traders start reading books like Market Wizards: Interviews with Top Traders and The New Market Wizards: Conversations with America’s Top Traders (A Marketplace Book). It is important that you want to learn what winning traders do. However, I think it is important to observe the behaviors that cause the majority fail. Here are some patterns that I have observed from myself and some traders that I know. Of course there are still a lot of them, I am listing 4 failure patterns that I have experienced.

[Read more…]

Still no trade: Testing Patience

I continued staying away from NQ today. I did not find any good setup before lunch hour. There was no clear strength shown from bulls and bears. NQ indeed made a reversed in the mid day.

[photopress:NQ5minfulldaynotrade23Jan2007.jpg,thumb,alignleft]

Now, I am kinda sitting for another test. Patience. This is another thing I have learnt from my experience. I am still very keen in learning Options trading. [Read more…]

Postmortem 17-Jan-2007

[photopress:NQ5minfull.jpg,thumb,alignleft]I have only made one trade today, after watching market till lunch hour, I decided to call it a day. No fun. It was a choppy morning. Yep, I got stopped out. In fact, that was a low probability entry. Setup was formed within a trading range. A better entry would be waiting for NQ breaking out from the range. But well, I was struggling between “higher lows” vs “trading range”…..It, in fact, looks stupid. Maybe I was just finding excuse to trade.
I will be extra cautious and patience, since it is options expiration week.

I did not have a valid entry for the afternoon sell off, so nothing was missed.