As I mentioned a few times over the past month, I have been focusing on 2 areas to improve my trading.
1) Participating in the Futex Price Ladder Training Course, to improve my Dom reading skills and to work on my no fills on the Bund.
2) Working on my confidence and self-belief with visualisation.
Price Ladder Training – Week 4 Progress Report
This week consisted of 3 days of Modules and 3 days of all days’ drills. So a busy week with the Bank Holiday on Monday.
Been very interesting and I have found this week has emphasised some weak areas of mine and definitely showed to me how far my order flow reading skills have come.
What I learnt about myself as a trader this week.
Read the Instructions
One of the drills the week was trading a thinner market. I completely misread the instructions and assumed that I had to be in the market constantly and only cut and reverse, which was the previous 2 drills. This was not the case and the results were pretty disastrous in the DAX. Only myself to blame.
For the PM session I changed markets and had a better session.
Volume, Volatility and Correlation.
One of the drills was to trade 2 correlated markets, Bund and the Stoxx. What I learnt that in theory whilst these markets are correlated, on the shorter time frame on a low volume (-50% on the average) and low volatility (-40% on the average) day, the correlation can rotate between and -0.7 to 0.7 and spend a lot of time around 0.
On these days, they tend to be only correlated when moving on an impulse move, if either market goes into balance then the correlation will come to pieces.
I went into the correlation day, with the assumption to trade correlated markets was to trade the mean reversion. This was the wrong assumption (surprise, surprise) that some of the best trades where to take breakout and impulse rots.
Whilst I always known that I work better with a plan. But at various points this week, this was very clearly demonstrated the differences in my performance when working with a plan compared to without a plan.
I went in to the correlations drill without a plan apart from the assumption and struggled with the drill.
I did my NFP plan, following the Futex process for data points, and felt more in control with my trading then all the previous NFP attempts.
On the Central Bank drills, I did not receive the prep sheet (no fault of Futex) so I could not make a plan for the replay. I decided to do the replay anyway and just go with the flow. But found that after the initial move that I struggled with what my plan of attack was and ended up taking random trades. This of course did not work out.
This also pointed out that I am not the great at coming up with a plan on the spot, I am not sure how many people are. So for me if there is no plan then the best action is to make a plan even that means I miss out on trades in the meantime.
Reading Order flow
In my previous NFP attempts at reading order flow, I have struggled to understand the ebb and flow of order flow compared to normal market conditions. But this was the first time, that I could see what was happening even if some of it was too fast for me to action at the moment.
Also I have found my overall reading of order flow in the general market has improved immensely.
As I mentioned in this post, that I have found limited value in trading replays in the past.
But trading the Futex replays, has reinforced what value they can have.
It is not the fact that we know the trade is a winner that spoils the value, it is that we know how it plays out. Thus we know where entry is, how far it goes, etc.
When doing the Futex replays, we knew what setup we were trading, we knew they were winners. What we did not know was where they would turn, how long it would take to play out, how they would play out and how far they would go.
So even knowing the result beforehand, I still got immense value from these replays.
For me, to get the most out of trading a replay of the market, then the following criteria has to be met
1) Be practising a certain set up or skill. i.e. deliberate practise.
2) Cannot know the how it plays out before the starting the replay.
To make this work, as to meet criteria 1 often means that we know how it plays out and so fails criteria 2.
What I have done is set up a google sheet, that I will share with a few likeminded traders, who are interested in deliberate practise.
Each trader will have their own tab, and by the end of the week each trader will aim to input 3-5 setups with the market, the date, the start time, the type of setup and any relevant support / resistance points for the setup.
We then can browse each other tabs and choose a type of setup without knowing the how it plays out.
Of course this is reliant on traders having software which can be traded on whilst in replay mode.
Ninjatrader, Stage 5 Trader and Bookmap all have this capability.
Next week I will do a Review of the whole Price Ladder Training Course.
I am continuing my visualisation before the markets open, and feel it helps ground me and focus me before the market opens. A bit along the lines of FT71 recommendation of 3mins of silence and focus before the market opens.
In fact, that the only day, I did not visualise, was the day I overslept slightly rushed my prep for the drill, and had a poor plan which all result in an unsatisfactory session.