If I started again what resources would I consider essential

If I started again what resources would I consider essential

I have been trading for six plus years now, and the learning process for me has seen its fair share of detours and dead ends. I have wondered recently, what advice on resources; I would give myself if I started again.

The following has probably had the biggest effect on my trading over the years, but there has been many smaller influences that have all contributed to my current style of trading.

Finding a potential edge in the market

Whilst this is an area of great importance, I found that it is not the key to success by itself, rather a foundation. Without an edge we cannot make money, but even with an edge there is no guarantee of making money.

I have no affiliation to the following so I am not going to put links up for these resources but I think that these are all good places to start looking for an edge.

You can just google them and each of these have excellent free resources as well as paid stuff.

Supply and Demand by Sam Seiden from Online Trading Academy

Supply and Demand in a Nutshell thread on Forex Factory

Tom Dante – Support and Resistance.

Lance Beggs – yourtradingcoach – Price Action Trading

Futures Trader 71 (FT71) – Volume profiling, context and much more

Adam Grimes – The Art and Science of Technical Analysis – Excellent blog and course

Peter Davis – Jigsaw Trading, excellent videos on reading order flow and volume

Investor RT – Homework – Plenty of ideas here to find a statistical edge in your market.

Back testing the potential edge

It is important to have a good understanding from your own back testing that there is a potential edge. Do not take any other traders word for it including mine.

We must learn how to do this properly. Many of my first back tests where flawed, and this means that we are starting from a dodgy foundation.

Resources I found invaluable in improving my back testing

Adam Grimes – The Art and Science of Technical Analysis – his free course and blog cover this topic in depth.

FT71 – His videos on standard deviation curves in excel are invalable tool to every starting trader.

Evidence Based Technical Analysis Book by Aronson . Whilst the actual testing of the systems was not particular of use to me, what was very helpful was how to test systems and how to make forecasts, all of which helped me in my back testing and in making better plans for the day and intraday.

Forward testing the potential edge

Test the edge on a demo account, personally I would not spend a lot of time in this area it has limited uses in the long run.

The primary use is to compare that over a minimum of 50 trades, it produces similar results to back testing.

A Realistic Expectancy

And I am not talking about our edge, I am talking about our expectancy of what is going to happen when we start trading live. There is a lot of crap out there but I would recommend the following 2 people

Tom Dante for the no bullshit truth about trading, and

FT71 from Stage 5 Trading. And his you’re not special approach.

Both have invaluable information to share about life as a trader.

Rules and Plans

You need rules on how you going to enter and exit the market, even if you are a discretionary trader.

I suggest that you look at Tom Dante flow chart for his setups and start from there.

You need a plan for the day, again I would suggest a good starting point would be Tom Dantes’ Futex trading plan and then FT71 videos on trader bites and hypos.

The important thing to remember that the key is simplicity, the more complex it is the harder it is to follow. We must work constantly to improve the processes we use.

For example I am on version 24 of my setup rules and version 17 of my trading plan.

I would suggest reading Daniel Kahneman and Thinking, Fast and Slow. I personally think that this contains essential knowledge about how a trader should be approaching the whole trading process.

Journals

This is the one of keys in my opinion for turning the corner. This is key to constituency, finding weak areas and finding stats to improve our trading.

Excellent resources on journaling are

FT71

Lance Beggs

Tom Dante

Adam Grimes

Edgewonk

I think that one of the most important but missed aspects of journaling are mistakes and error trades.

I have written about that before

My first attempt at reducing errors, which was successful from taking me from an error rate of around 40-48% to around 10%

How I made tracking and reviewing trades work for me

And my second attempt to get it from 20% to under 10%.

How I am using my trade journal to improve my trading 

In between these 2 attempts of reducing my error rate, I had tweaked my style of trading to be more aggressive, which resulted in more trades but an increase in errors especially in the “not in the plan” and revenge trading.

Are you mental enough

The psychological side is another key to turning the corner. There are a lot of excellent resources out there that focus on the trading side so I will not cover these again but would suggest that these books are essential reading for every starting trader

Chimp Paradox – Steve Peters

The Power of Habit – Charles Duhigg

Thinking Fast and Slow – Daniel Kahneman

The biggest thing that helped on me, was learning and accepting these 2 things

If I want a different outcome then I must change my approach / behaviour to achieve this.

I cannot control what has happen in the past but I can control how I react to it.

I am not sure who it was that explained these two ideas to me in such a way that I truly understand and implemented them to a degree that changed by mental state. I think it was FT71 but I am not 100% sure.

I would suggest that you take a leaf from Bruce Lee

Adapt what is useful, reject what is useless, and add what is specifically your own.

Good luck on your journey.

21st Oct – Bund Trade Journal

THERE IS ON AVERAGE ABOUT 5 OPPS PER DAY. IS THIS ONE OF THEM? 0730
Stats 70% vpoc at 93 will be tested
What has happened? close at 80 tried to test the onl, but fell short, buyers in and up to test micro bal at 82-71
Does PA fit 60min hypo,

if so where is my entry and 60min target

if not, then what is the my hypo 1 and hypo 2

possible range, looking for price to test the vpoc area and to find sellers- no sellers then possible bal or more upside, needs to bac the low at 68 for cont downside
CP / SH / Red flag? 87 sh n.short at 60 sd2 expect pullback on hourly
What do i expect to happen on the 15min test of vpoc at 93 and what the reaction there exp for sellers to come in
Where is my best short trade? 93-00

06-15

bac of 71/68 then shorts on pullback

Where is my best long trade? bof of 71
THERE IS ON AVERAGE ABOUT 5 OPPS PER DAY. IS THIS ONE OF THEM? 0900
Stats ibh/ibl to be tested 98%
What has happened? rot up with good volume to w.vpoc at 06 and p.vlow at 10, sellers in and rot back to mid and buyers back in and rot up to session hi
Does PA fit 60min hypo,

if so where is my entry and 60min target

if not, then what is the my hypo 1 and hypo 2

currently h2 range needs to hold the previous low and hold the low at 71 for this to continuer
CP / SH / Red flag? 03 sh neutral, bac of 11 or 86
What do i expect to happen on the 15min for price to test 08-10 bac then 29 bac of 29 test of 45 ish, c.va is 08-91 bac of this area then further upside or downside
Where is my best short trade? 42/45 restest of structure

29 the mid and sell zone

bof of 10

bac of 90-86 and ltf sd rot back

Where is my best long trade? trigger at 93

bof of 86

bof of 71

bac of 10 on pb for test of  29

THERE IS ON AVERAGE ABOUT 5 OPPS PER DAY. IS THIS ONE OF THEM? 1300
Stats
What has happened oir rot way from y.low and up to weekly vpoc and p.low sellers in and back to mid and osh, and buyers in with erc.v rot up to prev day 50% sellers in and rot back but unable to test 10, and buyers back in
Does PA fit 60min hypo,

if so where is my entry and 60min target

if not, then what is the my hypo 1 and hypo 2

pa for up, hypo 3, shorts at 45-54 break out origin and 60min sd rot and lvn
CP / SH / Red flag? cp = 27, n.long, bac of 18 warning and back of 05-10
What do i expect to happen on the 15min exp of test of 38 and then 42-47 and possible 54 and find sellers in this area
Where is my best short trade? bof of 38,

trigger 42-47

54-64

and if get top with strong move down then shorts on pbc at ltf sd or 15min com to minor levels

Where is my best long trade? 10-05 trigger

93-85 trigger

74 bof

THERE IS ON AVERAGE ABOUT 5 OPPS PER DAY. IS THIS ONE OF THEM? 1500
Stats
What has happened? oir rot way from y.low and up to weekly vpoc and p.low sellers in and back to mid and osh, and buyers in with erc.v rot up to prev day 50% sellers in and rot back but unable to test 10, and buyers back in, an up to session high into bal and attempting to test 38 for the 3tb
Does PA fit 60min hypo,

if so where is my entry and 60min target

if not, then what is the my hypo 1 and hypo 2

pa for up, hypo 3. ex of test of 45 shorts at 45-54 the break out origin and 60min sd rot and lvn
CP / SH / Red flag? cp = 37, sh. n.long, bac of 18
What do i expect to happen on the 15min exp of test of 38 and then 42-47 and possible 54 and find sellers in this area
Where is my best short trade? bof of 38,

trigger 42-47

58-64 for scalps

and if get top with strong move down then shorts on pbc at ltf sd or 15min com to minor levels

Where is my best long trade? 10-05 trigger

93-85 trigger

74 bof

21st October – Bund Market Review

21st October – Bund Market Review

As per hypo price rot up to test the sell zone, where if sellers where going to be aggressive I expected them to step in at the p.vpoc, my hypo 1.  Buyers stayed in control and my next exp was for a test of the 06-10 the weekly vpoc and previous support low at 06-10, there was good volume in this move up so was expecting a reaction off 86-83 the onl and mid and 60min marabuzo bar, buyers very aggressive here and good rot up that stalled before the session high.

Looking for a bof here and return to value for a balance / range day (hypo2). A bac with good volume indicated more upside (hypo 3), was looking for a ltf sd rot down to take long off 00-93. No pullback and further rot up to daily 50% at 29, only minor reaction here and into bal till us session and no pullback to previous previous session highs.

I did have a blind short at 45, but everyone seemed to be looking at the same area.  So changed that to trigger, which was a good decision, and moved the original order up to 58. A 15min minor sz and hvn and sd rot up, for a scalp, no fill and then waited for a trigger for a scalp short and looking for a scalp long at 46 the w.vpoc and wait to see the reaction there.

20th October – Bund Market Review

20th October – Bund Market Review

After the breakdown of the 45 level,  even though my bias was short, kept scalping long.

It was not that I was avoiding shorts, did not get a single pullback to my entries after the breakdown, which was a clue that longs was not good idea, if i cannot get a fill short then longs are probably not a good idea.

Also on the LTF price could not close above the 20ma, whilst this is not an entry for me but it is a clue that I should not be looking for longs until a daily or weekly level. The best longs were off these levels.

I stuck to my rules and all trades where off levels as per trade plan.

Biggest disappointment was not getting filled at entry no.3. First at 62, I then dropped it to 61 still no fill and then to 60, which was still within my risk parameters but no fill. 

20th Oct – Bund Daily Analysis

Main trade Bof of range low at 55, but unable to inside r.val at 75,  possible test of range hi at 57.12 due to bof. needs to hold y.low and bac y.hi for test of y.hi. warning sign unable to bac 75-82, or range/volume to downside and bac of 46

 
 

 
 

Key News 0700 Ger PPI

1100 UK Carney

1330 US Build Permits

1600 US Yellen

Stats DATR  0.72 –

WATR 2.32 –

WK.50%    56.47

M.50% 54.72

Weekly Summary – Inside week x 2 Hi 57.67 / Lo 55.42

Previous Day – Down day with weak bear close (bupin and bof of 2 x id) test of 57.12 if price holds 54-46 

Bias – N.Bias sc 3.2

What happened – OIR rot down thru r.low at 55 and test of weekly 50% at 46 and rej back to r.val and into bal

Hypo 1 – Up – if price holds / bof 60 (val) or 54-45(bz 2tb) then longs t 74 (vpoc) t2 85 (R.val), bac 85 then longs t 92 (y.hi) bac 92 t 00 t2 12 -23 bac 23 t 38 t2 47-67 (fresh sz/weekly hi)

Hypo 2 – Range – if price holds / bof 85-92 then shorts t 60 t3 55-45, if price holds / bof 46 then longs t 60 t2 74

Hypo 3 – Down – if price bac 46 then shorts t 32 t2 19-10 (f.sz/pivot low) t3 06-00 p. wvpoc

Red flag levels – For short trades bac 157.23 For long trades  bac 56.45

19th October – Bund market Review

19th October – Bund market Review

A look at the Bund market today, break down out of range of 55 with good range and volume, so was looking to join on first pullback as per my hypo 2, a breakout of range.

Stopped out on that trade, and price retested origin of move which made the breakout suspect. Was interested in seeing the reaction at 55, a fresh buy zone and the old range low, a small reaction or failure to hold would have indicated to me that more downside could be on the cards. But buyers stepped in with good volume but unable to make a HH and into choppy pullback to range low.

How I am using my trade journal to improve my trading. Part 1

How I am using my trade journal to improve my trading. Part 1

I use 2 journals to track my trading one is the excellent edgewonk journal and the other is an excel spreadsheet that I have developed over the past 2 years (on version 24).

I am constantly working on my own spreadsheet to give the information I need to improve my own trading.

The past 6 months I have worked on 2 main goals

The first is to decrease the number of errors I make in my trading. In my opinion, the easiest way to improve ones trading system or at least to the best way to see if a trader has an edge.   I was tracking the number of error trades as part of my weekly review but on pen and paper, so I decided to include as an individual setup in my journal.

For a trade to fall into the error category, it had to break one of my setup rules, be an impulse / revenge trade or not be in line with one of hypo or updated intra day hypo. For example, I want a short and not get filled then I find that I taking a long as that was the next set up I saw, instead of looking to get short on the failure of that long setup.

I was tracking these pretty well in my pen and paper weekly review but I was making much progress in reducing this number. My number of errors was average 23% of total trades, when I started with the  tracking weekly average was coming in at between 40-48%.  Yes that is right, 48% of my trading was fuck ups. I had got it down to 23% and occasionally I would get it down to under 20% but I was struggling to consistently to get it below that number.

As soon as I started tracking the number of trades via my journal, the first time I had a string of 3 error trades in a row the numbers hit me in in the face, and I found that I automatically started to reduce the number of error trades.

Below is the first 17 trades, just look at the error trades compared to the other setups. Somewhere some village is missing it idiot.

Below is the first 50 trades since I started tracking errors as a setup.

As we can see there was a total of 9 error trades (ERR.B + ERR.T) out of 50 trades. With a win rate of around 13%, also note the expectancy (exp%R) and how much these trades went in my favour (avg MFE) compared to my other setups. And these trades make up 18% of my total trades. Pretty much dragging my performance down and the knock on effects to my morale was also effecting my consequence performance.

These numbers motivated much more than the tracking via pen and paper spreadsheet.

Whilst I thought I was implementing the following in my life, these numbers helped me realised that I was not really fucking embracing this. I would not say that before, I was just paying lip service to this, but I was certainly only applying this way of living, in certain circumstances when it suited me.

I cannot change the fact that I fucked up, but the one thing I can change is how I react to fucking up.

After the fact that is the only thing left that I can control. 

This is the next 100 trades

Note that the error trades have dropped to 9% but still not great, but a big improvement.

To improve on this I set myself a target of not making an error for a whole week.

This is the latest 50 trades.

Errors down to 4%, a lot better and making less errors have given me a lift in confidence in my trading.

I hit my target of a whole week of not making an error, and then set myself a not making an error for 2 weeks.

I blew it in the second week by making 2 silly mistakes. Both revenge trade against my bias and plan.

And as I track my bias and my plan in terms of whether it was correct, neutral or plain wrong over every 2 hours of the session. I was trading in both of these trades against my exp and bias and this changed my win rate for each of these 2 trades from 80% and 77% to 41% to 33%. So even on papers there where not good trades to take.

I have run out of time. But next week I am will look at how I am using my journal and stats to improve my return on my existing profitable setups.

19th Oct – Bund Daily Analysis

Main trade In 60min range / bal – best trades outside in to mid / range until bac of this range then join on first pullback

 
 

 
 

Key News 1400 FR Auc

1500 US Brainard

  

  

 
 

Stats DATR  0.72 –

WATR 2.32 –

WK.50%    56.47

M.50% 54.72

Weekly Summary – Inside week x 2 Hi 57.67 / Lo 55.42

Previous Day – Inside day (2 x bepin) bac 56.65 hold 57.12 t 56.15-56.06 closest Comp HVN

Bias – N.Bias sc 3

What happened – OIR rot up to test sz 02-12 and rej back to ONH and into bal around 56.85-89 range mid and range vpoc

Hypo 1 – Range – if price holds / bof 00-12 (sz 00-12 2tb / 60m hi x2 / sz 12-23 3tb) then shorts 90-80 t.mid/r.vpoc, if price holds / bof 65-55 (r.low / 60m low) then longs t 80-90

Hypo 2 – Down – if price bac 55 then shorts t 47 (w.50%) t3 32 t3 19-10 (32 lvn / 19-10 fresh bz)

Hypo 3 – Up if price bac 23 then longs t 38 t2 47-67 (fresh sz/wkly hi)

Red flag levels – For short trades bac 157.23 For long trades  bac 56.55

My Tradeplan Shorthand

My updated shorthand below.

I have explained only one side. For example WRH weekly range high. I have not put the explanation in for WRL weekly range low.

Any questiuons drop me a line on twitter @adeyf69

 
 

BZ

Buy zone – area I am interested in buying in

BAC

Break and close – means that price has been accepted above / below this level.

BAL

Balance / Range Area

BOF

Breakout Failure of a level

BPB

Breakout of level and first PB

BEOB

Bearish Engulfing Candle Pattern

BUOB

Bullish Engulfing Candle

BEARPIN

Bearish Pinbar (and of course there is a Bullpin)

COMP

Composite, normally relating values for volume profiling

COM

Commom, meaning mode distribition normally in relation to the length of the rotation

C.WHL

Current Weekly High

DATR

Daily Average Range

D.

Prefix indicating Daily 

ERC.V

Extended Range Candle with Volume. Larger than normal candle with larger than normal volume

EXP.HIGH

Expected High for the day

FIB

Fibonacci Level

FTB

First time back to level, 2TB is second time back

HTF

Higher Time Frame meaning the 60min

HOLDS

Price not accepted past this level

LTF

Lower Time frame, 5 mins and below

L.BIAS

Long Bias

MRH

Monthly Range High

MM.U

Measure Move Upside

OTF

Other time frame, traders on the 60 min plus timeframe

OIR / OOR

Open In Yesterday Range / Open Outside Yesterday Range

OE

Over extended

PB

Pullback

REJ

Rejected

ROT

Rotation (swing length) comes in sizes, the rot (swing) is either shallow, mode/common, standard deviation and /over extended (SD2) ( I use 90% for SD2)

STRONG CLOSE

Close hear the high (>80%) on up candle or near the low (

SZ

Sell zone – area i am interested in selling

VPOC

Volume Point of Control

VAH

Volume Value High

VAL

Volume Value Low

WRH

Weekly Range High

WATR

Weekly Average Range

W.

Prefix indicating Weekly

Y.HIGH

Yesterday High