My review for this week will take a slightly different twist. I am going to discuss where I am with my trading generally, and the current problems, and why I have them and what I am doing about it.
I have not traded as much as this week as normal due to a couple of reasons, one is the ECB announcement, which resulted in not that many setups on Thursday(for my system) and a particular high no fill rate on Friday. And the other reason will come clear further down in my weekly review.
Image courtesy from Tom Dante
Where I am
I have an edge and I am profitable. Filtering my trades for the best opportunity and only taking them in selected areas has reduced the number of trades but increased my winrate by 10% and by exp by 1.5 ticks.
I am working constantly not to make my current system more complex but to keep it simple and streamlined. I am still educating myself but in the view of not adding to the system but in improving the ease of use, so everything that I consider must improve but not add to the system complexity.
I have 2 current problems, both are linked to each other.
Micro managing the Intraday Swing Trades (IDS)
The problem is that on the trades I intend to hold for longer, I end up micro managing them so that I do not maximise the potential profits. I have been working on this for a while and I have seen an improvement but still have a way to go.
Why I do I have this problem
1. Generally lack of confidence in my own ability to do well.
2. That I find it hard to differential once I am in a trade, between a trade that I should be managing as an IDS or a scalp. I always easier for me, to manage everything as a scalp (no shit, Sherlock). Thus I am taking the easiest route mentally which ties in with my lack of confidence.
How I am solving it?
I had coaching call with Kam Dhadwar on the 29/2, about this problem and we discussed various areas to implement to improve my general lack of self-belief. I am implementing these ideas over a month and will do a full article on this process at the end of the month.
I am working on improving my trade plan and process to help me to get setup before entry on how I will be managing IDS and scalps. As I feel at the moment that some of the areas of interest can be IDS or scalps depending on the context of the day. I am not doing enough preparation beforehand to help me decide what the trade should be.
Am I expecting a reaction off a level or am I expecting this area to be a turning point and if I do expect it to be a potential turning point is this an aggressive level or a confirmation level.
I am going to spend some time on a matrix which tells me depending on the context how I should be treating each level. I have a rough version that has helped and I will work on improving it and simplifying it.
I am going to be looking at other people’s trade plan including FT71’s Traderbite to see if there is anything I can do to simplify my trade plan.
I have implemented a grading system, courtesy of Kam Dhadwar and this article on objectively grading trades and days
I am grading my mental side before I start trading, I grade each individual trade(with a higher weighting for whether I managed correctly in regard to my tradeplan and whether this should be and IDS or scalp) and then I grade the whole day.
As I have mentioned before, I track where price goes after I exit to see what happens, as part of my metrics I now track my exit vs the maximum favourable excursion after I exit. This will help in tracking whether I am improving.
No fills or as it know by some of my trading friends as an Adey.
I accept that I am not going to get filled on every trade. And in particular it is a Bund problem, I do not have that much of a problem in the Stoxx, I get the occasionally no fill but generally I get filled. Though I have a very much smaller sample size. My best IDS trades I rarely get filled on in the Bund.
I have tried various methods, trigger bars (this either got me in too early or too late), reading the Dom, not particular successful mainly got me too early, or I could not read it well enough to find an entry.
Why I do I have this problem
1. Partly this is my risk adverse nature, that I place the order so close to where I am wrong that I am likely not to get filled.
2. Partly a Bund problem, as it is not a problem in the Stoxx, and I place the place the orders using the same process.
3. Not skilled enough in Dom reading to use that as a trigger.
How I am solving it?
To solve part 1, I implemented a process that means I place an order the same way each time, and have added wiggle room for the Bund, this has been only partly successful. So this ties into my grading system for levels, I need to be able to tell beforehand which levels I am going to be aggressive on and willing to give up a few ticks, if I do not get filled on and which levels I can wait on.
To solve part 3, and one of the reason why my trading has been light this week, I have decide to do the Futex Price Ladder training course, I started this on the 7th March
I have decided to do this for the following;
1. Improve my Dom reading skills
2. Work on my self-confidence, some of the drills will take me out of my comfort zone, and that will be a good thing.
The downside is that it could reinforce my habit of micro managing trades. This is something I am aware of, and will be working on this during the course.
One perceived downside is that it takes me out of live trading for quite a few days, whilst studying and doing the drills.
This actually works for me, when I was professional sailor, any course I took I was always the hardest worker and performed very well, because if I was going to take time out and pay for the damned thing, then I was always going to the most value as possible out of the course materials and the chance to improve my skills.
As always, I gave consideration on the cost of the course against the likely hood of this improving my profit potential. Based on my stats, if this course get me in 10% of my missed trades, then it will pay for itself in one week. That is a potentially good return on investment.
At the end of the course I will do a full article on my experience and thoughts of the course. Though so far I enjoying it and have a couple of sweaty moments in the drills (FFS, it’s on sim, HTFU), and my Dom reading skills have improved already.
So over the next three weeks I will still do my trade plans every day and post them, but will not be posting my end of day market review. Just due to time constants. My dyslexia means it takes fecking ages to ensure that my posts actually make sense to anyone apart from me, and I want to save that time to focus on the course.