What did I do best this week and how I did I do it?
An okay to good week, a good read of the markets and I followed my process, trades were A and B, with an overall grade of B. Would have been an overall grade of A, but a few of the trades have been downgraded from A to B, since I added in the metric of playing to win to the grading system. It is only the first week or so that I have added this as a metric, and I will keep gathered data and see what I can do to improve this metric.
The more I focus in on just following my process, the clearer it becomes that the better trades come from the basic or core tenants of my system. The other stuff whilst helpful, can just cloud the picture. And what I mean is that it seems that some of the stuff I use, if I stripped it out of the trading system, would mean that I would take less trades but these trades that get dropped are the least profitable and most difficult to manage.
Of course this is just a feeling by looking at my trades over the past few weeks. I am not going to do anything drastic, but will analyse my trading journal for answers. As this feeling could be just Regency Bias.
So part of this weekend will be to do a back test of the past 50 opportunities, using only the core of my system, which is supply and demand coupled with volume profile and compare results against the past 50 opportunities using my full system rules for the supply and demand trades.
As always the goal is to make my rules and process as simple as possible without over simplifying them.
I will not include the breakout and retest trades and breakout failure trade in this, as these entries have simple rules and have had virtually no creep in the scope of the rules.
But overall the goal next week is to keep following my processes and working on my play to win attitude in trades.
The other good thing that happened this week, was I had a Grade A trade that went all of 1 tick MFE and stopped me out under 5mins. I then reassessed my bias, and looked for opportunities to go with my new bias till the larger timeframe level. The result I did not get filled on the trade with the new bias and price stopped 2 ticks from the larger timeframe level, and I did not take the fade at the good intraday level which would not hit my scale and would have stopped me out. So overall whilst not earning anything from this process, it stopped me from taking a scratch trade (best case scenario) or a stop out (worst case scenario)
What did I do badly this week and what lead me to do it?
I have noticed that some of my blind limit order trades, sometimes give me a signal for a secondary entry on a pullback to retest the level a second time, which is pretty close to the original entry point. I find, I do not regular take these trades and I tend to only take them if I do not get a fill on my original trade.
What is the problem
I am not re-entering trades after a win, when I get a secondary signal setup.
Why do I have this problem?
I rarely re-enter these trades as my FOL, makes me not want to give up a large portion of profits of the first trade, if the second trade then does not work out.
I have spent some time back testing and researching these “second chance” trades and whilst they have a slightly less win rate, the second chance entry has a better MFE profile.
But even armed with this knowledge, I still find myself extremely reluctant to take these trades.
This is certainly not a Play to Win mind-set but a Playing Not to Lose mind-set.
What I am going to do
I am going to take a baby steps approach to this. First I need to get into the habit of taking these secondary trades. To do this, I will be taking these at half of the risk of the original trade, thus if they do not work out then the loss will only be a smaller portion of the previous winning trade. Once I get into the habit of taking these trades and I can then focus on the correct sizing of these setups.