2023W21 Review

+$29.50

-91.1pips

81.3% win rate

A strange combination of numbers...

As late as Friday afternoon 3:30pm, the drawdown was more than 15% of the week opening capital. It was deflating and shitty feeling.

There were emotional trades, price chasing, but the biggest failure was still the inability to identify an opposite one-way train.

Managed to save the week into positive with the subsequent 9 positive trades, some with double lot size. In a way, it's a plus in trade/lot management

Grade: C+

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2023W20 Review

It's a week that I lost just over $500 (on demo account), that's about -10%. But still I don't think it's a terrible week... except the last handful of trades

All was quite well, with some small gains and rather big losses, perhaps the expected return with this high hit rate and low return strategy.

Emotion... is still biggest thing, even on a demo account. 

When I was on winning streak of 2, 3, or 4, I was able to stay rational, be patient, stick to the plan, wait for opportunities to show themselves instead of keep looking for one, no FOMO even when price ran away.

But when winning streak got longer, like 4, 5, 6, then complacence and arrogance started to creep in. 轻浮，浮夸，不严谨。

The worst thing, however, was after one or two losses... then I tend to become aggressive, go on offensive and try to regain lost capital,  start to tweak my game plan, which may not be a good thing for an inexperienced trader.

In terms of market movement, biggest killer was still one-way train movement.

I trade on "reactions" and "rebounds", 10p can be obtained, even on a one-way train. But one-way train has another voodoo... which is speed. 10p may be hit in a few seconds, or 1 min, and that is very exciting, tempting me to catch more small profits.... then inevitably, will get trapped before too long.

Grade: B

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Emotions!

"Whether you believe it or not, it is a fact. Many traders psychologically sabotage their trading and they do not even know it. They are not prepared for the flood of emotions that sweep over them when they are trading and, therefore, they are unable to deal with them. 

When the bank account balance is on the line, you will experience greed, fear, and denial. You will react in ways that you did not anticipate and, at least part of the time, you will take irrational and self-destructive action. In order to succeed as a trader you must prepare for the worst, just as a jet pilot must prepare for an engine failure. You must recognize the emotions that you will experience when you are in both winning trades and losing trades and you must be prepared to deal effectively with them. Design specific strategies for the market’s movements and be ready to execute those strategies when your emotions get fired up. If you do not recognize the power of emotions in trading and if you do not prepare yourself to effectively deal with them, you will fail. 

Do not destroy your next trade by worrying about and reliving your last one. If you plan to be a long-term player, there will be hundreds and maybe thousands of other trades."

-- Winning the Day Trading Game, Thomas L Busby,
Chapter 5 "There's No Crying in Trading"

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Be a Good Loser

"As weird as it sounds, learning how to lose is really learning how to win because we will all be losers at one time or another. You must know how to deal with losses so that they do not defeat you. Winning  traders put their bad days in perspective and keep on plugging away. They do not ignore their mistakes; they learn from them and get better and stronger."

"To be a winner you must learn from your losses and eliminate mistakes you have control over."

-- Winning the Day Trading Game, Thomas L Busby,
Chapter 5 "There's No Crying in Trading"

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2023W19 Review

The first week in a long while that I'm fully on a demo account

My strategy is to trade for bounces at key levels, and aim for small tp, typically 10p, or occasionally 20p or a bit more if it's in active US sessions.

After one week, it seems quite workable. While it's not a blanket statement (e.g., if it's a a big move that will easily cover a range of 150p or 200p in 15 minutes), prices tend to react at key levels.

So, provided if there's no FOMO, and wait patiently for entries close to key levels, aiming for 10p of reaction bounces while risking 30 to 60p is usually viable.

Anyway, it's still a negative week, owing in large to the two trades that resulted in -90p. By the way, that's a 200p move in 20 minutes... exactly the kind of move to beware of.

Don't overtrade

Don't chase the action

Be patient

Grade: B

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The sinking feeling when averaging downs go south

Some familiar feelings when the market goes firmly in the opposite direction.

This method of trading is known as averaging down and, believe it or not, it is a method used by thousands of traders. In fact, it is a strategy that I used for years. 

I remember the last day that I used it. I was trading the S&P Futures. At that time I always placed my orders in thirds. I bought the first third of my contracts. The market immediately moved against me and I was losing money. Fear reared its ugly head but I refused to acknowledge it. I responded by buying another third of my position. The market continued to fall and I continued to lose. It was getting harder and harder to stay calm and keep panic from sabotaging my strategy. My palms were wet with sweat, but I stuck to my plan and I arrogantly bought my final third. My losses kept getting greater and greater. I was getting sick.

On this particular day, the bears were clearly in charge and the market continued to fall relentlessly. My losses were increasing every second, but I just held on and waited for the reversal that I was sure was coming. I would not give in to fear and I would stick to my original plan, no matter what. After all, I was a professional and I knew how to analyze the market, right? I just needed to give the market time and it would validate me. Just hold the position and wait. This was no longer a trade, this was a war. 

I waited for the market to shift and turn my way. I stared at the profit and loss box on the trading dome for what seemed like an eternity and I watched my losses increase as I sweated and my stomach flipped. My original arrogance gave way to fear and panic. I had not considered being wrong and I had no plan for dealing with the fear I was experiencing. I was immobilized. I felt like a pedestrian standing on a street corner watching an automobile headed straight for me, but I could not move to get out of the way. I was a sitting duck.

On that day, the market did not reverse and eventually my losses were so huge that the truth hit me and hit me hard. I could not deny it any longer. I was wrong! I had been a bull in a bear market and I could not buy my way out of my error. By adding to a losing position, I had only increased my losses and dug myself into a deeper hole. Those are the days you want to forget.

-- Winning the Day Trading Game, Thomas L Busby, pg 66 

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2023W18 Review

Desperation

Petulance

Vengeance

Demotivation

These were among the emotions that drove me this week

No surprise, it's a devastating week, where I lost over 200p, $100, or about 30%

The only surprise was I still have my account

But with just over $100 remaining, it's as good as busted

The 20p challenge didn't work for me, at least not in this state of mind

Was too desperate to prove something

After taking a few days of break, I've reverted to trading demo again

Turned out to be rather positive performance, with less emotional stress and fear

So... how do I know I'm ready for live trading again?

1. When I'm profitable with at least +80p weekly gain for 4 out of 6 profitable weeks
2. When I'm getting Grade B for 4 out of 6 weeks of at least Grade C
3. When I can declare that I'm on top of my emotions while trading a demo account

The last one isn't scientifically measurable, but let's start like this...

Grade: E

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Three Most Destructive Emotional Forces in Trading

1. Greed
2. Fear
3. Arrogance

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