Weekly Trading Review – Law of the Instrument

Weekly Trading Review – 5th to 9th December

Summary of Performance

I finished this week, down overall. This was due to one mistake which I will cover later.

Other than that, I am reasonable happy with the way this week went. I am back into my routine and following my process (with one exception) and this is paying dividends.

Tiredness is a still a problem but not as much. I am handling this better and the main problem is accumulative, rather than lack of sleep over individual nights. But the Christmas break is just around the corner and I will be able to relax and rest for the New Year.

My goal of getting back into my fitness routine was set back a bit by a head cold. But I got three sessions in and will continue working at this.

What did I do best this week and how I did I do it?

I have started to incorporate a new tool into my trading, the footprint chart provided by AMS Trading for RT Investor.

weekly trading review

This is not an addition but a tool to replace the Jigsaw Vista / Bookmap chart setup. Whilst I found those tools very helpful, I was noticing order flow setups, which I was using but was frustrated with the inability to look inside past examples of these setups and see what was going on. I wanted to analyse why some worked and other failed.

I was persuaded by a friend Trading for Singles to try out the footprint chart.

What was good, is that I now having a clearer understand of why some of my triggers work and others don’t. Or what is actually happening inside my trigger setups.

I also now know of the warning signs that when these could be failing after entry and have given me a clearer idea of what I should be looking for in my pre-breakout trades.

Overall very beneficial week from that point of view and I will be updating my trigger process to incorporate these learnings.

The downside of focusing on this tool, was to neglect my core strategy during the week. If my focus is purely on an order flow tool, then everything looks like it can be solved with the order flow tool.

It just demonstrated that whilst order flow is an important especially for my triggers, applying it in the right areas and with respect to the context and using it conjunction with my core strategy is always going to be more important.

What did I do badly this week and what lead me to do it?

I traded the ECB presser, had a basic plan and everything was going well.

During my normal trading, I use the Jigsaw Dom, which does not have the ability (at the moment) to auto place stop and target orders.

So, during news events, I use the Stage 5 Dom, as this does allow me to place auto exits orders. Not that these are always where I am always looking to exit but more of a precaution in case I get caught on the wrong side of a move.

For the ECB presser, I was using the Jigsaw Dom, and what happen on the last question, I got caught on the wrong side of the move with no stop. A day limit loss on one single trade.

Why did I not have a stop in?

I had only just entered the market when the move happened and had not placed the stop order. It was not the case I was trading without a stop, I just had not placed the stop yet.

This is the whole reason why I use the S5 Dom, to avoid this situation.

Why was I not using the Stage 5 Dom?

I was complacent and lazy. I could not be arsed to swap the screen layout around and do not like the S5 dom.

Why was I complacent and lazy?

Having used the other Dom for six months of NFP trading, I have not been caught out on any move, as I always had a stop in and this had lead me to a place of over confidence in my abilities over my procedure.

What did I learn? That my good trading is driven by the maximising my edge using routines and process.

And each of these are in place for good reason.

And ignoring or deviating from these best practises will only set me back in self-confidence and hard earnt profits.

An expensive lesson learnt. Or I should say re learnt.

6 thoughts on “Weekly Trading Review – Law of the Instrument

  • 10/12/2016 at 22:20
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    Hi Adey,
    Thanks for sharing your review. What exactly do you mean by ‘look inside past examples of these setups and see what was going on’?
    I have found IRT’s Trade Dots together with Trail of Intentions to be a good replacement/approximation of Vista/Bookmap. But of course, that doesn’t show you the individual trading size.

    Reply
    • 11/12/2016 at 16:08
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      Hi Alex

      Thanks for commenting. I was using IRT Trade dots and volume candles, but the AMS footprint has allowed me to look closer at what is happening with actual volume on the buy side and sell side. So using this tool, I have been going back thru various trigger setups that worked and ones that failed. To see if their was any similarities between them. Using the footprint allows me to see both sides of the volume. It is has been beneficial. Whilst it will help with trigger entries, it has not changed the core way I trade.

      Have a good week.

      Adey

      Reply
  • 11/12/2016 at 09:28
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    Nice review Adey. Similar tool to AMS can be now easily created in IRT using new Volume Candles 2.4 indicator with no additional cost. I’ve been trying to find the right settings and replay market action to test all day yday. I know AMS is using point and figure chart for this. What kind of chart periodicity setting did you end up with? I’m leaning towards a range chart. For now, I’m testing 22range (mode rotation on 15min Bund) and 10range (mode rotation on 3min). Let me know if you want to have a look at print screens. I see big potential in these tools.

    Reply
    • 11/12/2016 at 16:20
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      Hi Maro,

      I was using the same setup you was describing. Volume candles with trade dots.

      I was pretty convinced that I did not need to spend money on AMS tool. I was persuaded by Mobs to give it a trial. And actually it just adds a more nuanced approach to the volume. It has allowed me to see what I was visualising on the volume candles before. The funny thing is that once I have finished with the looking at the inside, I could probably set up the volume candles and trade dots to show what I have learnt from looking at the footprint.

      Though I don’t want to give the wrong impression, that it gives a edge in itself, but the AMS tool and the Volume Candles does allow to express what we are looking for in a form that I can make easy decisions off.

      I am using AMS point and figure suggestion. I am not 100% convinced that is the right periodicity for me as of yet, but I will trial it for a few more weeks and maybe try the range candles.

      I agree that these tools are extremely helpful.

      Hope you are having a good weekend.

      Adey

      Reply
      • 11/12/2016 at 18:00
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        Quick correction on my initial comment. 22 and 10 are not mode rotations in the Bund for 15 and 3min respectively. According to my rotation chart, which likes to play tricks on me, these are in fact 10 and 7 ticks. Not very useful for the purpose of the Volume Candles setup. Mean rotation for 15min Bund is 24 and for 3min is 13ticks looks a bit better. Apologies for the confusion.

        Reply
        • 11/12/2016 at 18:30
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          No worries mate. I found a 13 tick zigzag periodicity very helpful when I first started use volume candles to map the rotations.

          Reply

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