27th April 2017 – Bund Daily Trade Plan

27th April 2017 – Bund Daily Trade Plan

News

0700 GE CONS CLIM 0800 SP CPI 1030 IT AUC 1245 EZ IR
1300 GE CPI 1330 US CORE DUR 1330 ECB PRESSER 1500 US HOMES

Previous week – Range week with strong down close, at channel top and bal va extreme, bac of 62.50 t 61.54 t2 60.94 t3 60.18

Previous Day – Range up day with strong close hi 64.47/63

Big Picture

60m – Neutral, bac 61.63/60.64 for direction

10m – Up, hold 61.18-61.10 bac 61.36 for dir

Context Play

1. Balance

Shorts: hold /bof 47-63 t 61.20 t2 61.06 t2 60.84

Longs: hold 60.84-64 t 61.06 t2 62.20

2. Break Up

Longs: bac 61.63 t 72-78 bac 78 t 90 t2 62.02

3. Break down

Shorts: bac 60.64 t 43-37 t2 23-14


26th April 2017 – Bund Daily Trade Plan

26th April 2017 – Bund Daily Trade Plan

News

1035 US CRUDE

Previous week – Range week with strong down close, at channel top and bal va extreme, bac of 62.50 t 61.54 t2 60.94 t3 60.18

Previous Day – Down day with strong down close, m50% at 61.00 tbc

Big Picture

60m – Down, hold 60.93-61.10 and bac 60.71 for cont

10m – Down, hold 60.93-00 and bac 60.66 for cont

Context Play

1. Down

Shorts: hold 60.93-61.10 bac 60.71 t 59 bac 59 t 44 t2 23-14 (watch for bof)

2. Balance

Longs: hold 60.58 t 60.71 bac t 81 t2 90-00

Shorts holds 61.90-00-10 t 60.80 t2 60.70

3. Up

Longs: bac 61.10 t 61.19 bac 21 t 61.31-37


25th April 2017 – Bund Daily Trade Plan

25th April 2017 – Bund Daily Trade Plan

News

1035 GE AUCT 1400 US SP HPI 1500 US CONS CONF

Previous week – Range week with strong down close, at channel top and bal va extreme, bac of 62.50 t 61.54 t2 60.94 t3 60.18

Previous Day – Gap down to weekly targets 61.54 and 60.94, neutral close(bupin hi @61.63)

Big Picture

60m – Down, balance day, bac of 60.93 for cont and bac of 61.61 for pb

10m – Up, hold 61.40-33 bac 61.63 for cont

Context Play

1. Balance

Shorts: hold/bof 57-70 t 40 t2 33 t2 25

Longs: hold/bof 16-07 t 25 t2 33 t 40

2. Up

Longs: bac 63 t 78 t2 62.02 bac 62.02 t 62.18-30

3. Down

Shorts: bav 08 t 93 (watch for bof) t 60.78 t2 69-59 t3 45


24th April 2017 – Bund Daily Trade Plan

24th April 2017 – Bund Daily Trade Plan

News

FR ELECTION 0900 GE IFO

Previous week – Range week with strong down close, at channel top and bal va extreme, bac of 62.50 t 61.54 t2 60.94 t3 60.18

Previous Day – Range day with strong down close, tst first time back to d.bz 62.68-02, mode rot down on daily.

Big Picture

60m – Down, for cont, hold 84-96 bac 62.49

10m – Neutral, for direction bac 96 or 49

Context Play

1. Balance

Shorts: hold 84-96 t 71 t2 60-49

Longs: hold/bof 49 t 71 t2 84-96

2. Breakdown

Shorts: hold 60-71 bac 49 t 38 (poc) bac 38

Longs: hold 38 T 50 t2 60

Shorts: bac 38 t 19-00 (watch for bof) bac 00 t 61.77-64

3. Breakup

Longs: bac 94 hold 90-80 on retest T 08 t2 16-26 bac 26 t 34-44


Financial Targets – Show me the money

Financial Targets – Show me the money

On the 19th April 2017, Tom Dante, tweeted a poll on whether traders had monthly, quarter or annual financial targets.

The responses were interesting, and seemed to be along the lines that setting these sorts of goals could do the following

Limit Potential Growth or returns from trading.

Add pressure to the trader.

Give the wrong mindset.

Pressure the trader into taking trades not in the plan just to meet target.

Cannot manage returns only risk.

All of these are valid responses and to certain extent I agree with them.

I feel that financial targets do have a place as a tool to improve a trader’s performance.

And I mean using financial targets as a tool to improve a trader’s performance rather than target or end game to hit.

Therefore, I think they should be used as goals to help drive the behaviours and focus needed to be improve.

As with all tools, they need to be used appropriately.

Here is a list of when I think financial goals are a waste of time.

Trader has no edge.

The target / goal here should be to find an edge. At this stage, the trade does not even know what they are potentially capable of, and it is bit like saying that I want to win the Formula 1 Championship when I have never even seen a car.

Whilst that might be a dream it is not a relevant goal at this stage and would do nothing to improve the traders lot.

The primary goal here should be to find an edge.

Trader has an edge but not applying it consistently over time.

Primary goal in this situation is to be applying the edge. Financial goals will do nothing but add more pressure to the already hard task of applying the edge consistently.

Trader has an edge, applying it consistently but still makes mistakes in applying the edge.

Primary goal, should be working on reducing the mistakes down to acceptable level, as close to 0-10% as possible.

Financial goals in this situation will do nothing to improve a trader’s lot. It will just add pressure to the situation and increase the error rate.

Where a financial goal could help, would be to track the financial cost of these mistakes, to help drive behaviours that will reduce the error rate.

When financial goals can be beneficial.

Trader has an edge, applying it consistently, mistakes are rare. They are at stage 4 and above of the competency curve.

Stage I – Unconscious incompetence – the person is blissfully unaware of their ignorance

Stage II – Conscious incompetence – the person aware of their skills shortage

Stage III – Conscious competence – the person is able to demonstrate their competence with a high level of concentration or focus

Stage IV – Unconscious competence – the person is able to demonstrate their competence with a low level of concentration or focus

Stage V – Shared competence – the person is able to teach others by explaining not only how but also the the why’s to achieve a level of competency

What does a trader do then to help drive behaviours that will improve the performance over time, when they are at stage 4 and better.

All the low hanging fruit in terms of goals have been done.

I feel that having a long term financial goal can help drive the trader to view their trading and what they should be doing on a day to day basis in a different light or at least give them a structure.

A trader at this level, will have an understanding of their risk profile and the typical returns of the system including the variance based on market and seasonal cycles.

One question, traders / everyone should ask is where do I want to be in the next five years?

By using a financial goal, this then can be broken down into performance goals and what needs to be done.

I always use the following process to help me decide what I need to do to meet my goals. This process can be used for any type of goal.

Outcome goal

What is my goal?

What results I need to do to achieve this goal?

Process goal

What process do I need in place to do achieve the outcome goal?

What skills do I need to achieve these processes?

What do I need to practice / learn to have these skills?

Performance Goals

What benchmarks and standards that I need to hit to ensure that I am following my process goals?

As we can only control entries and risk, by setting a long term financial goal, this can then be reverse engineered backwards to see what sort of risk we should be taking and whether realistically, our trading system is potentially capable of giving us this sort of return, bearing in mind variance.

Example

Trader A is at Stage 4

He has built his account up to 15000 USD.

His previous performance shows that the system has 50% win rate and the win to loss ratio is 2 to 1, and averages 3 trades a day.

His goal is to turn his 15,000 into 1,000,000 over a five year period.

Using quarters as the primary measuring device to avoid the focus being on the short term performance.

Trader A needs to return of 23.5% every quarter compounding, to turn this 15,000 into 1 million in 5 years.

Trades taken per quarter.

4 days a week, to allow for days off and unforeseen circumstances,

11 weeks to a quarter, again to allow for holidays and unforeseen circumstances.

4 x 11 = 44 days. Which is under the typical 65 working days per quarter.

Average of 3 trades a day x 44 days = average of 132 trades per quarter.

A return of 23.5% of 15000 is 3525.

Therefore, a performance bench mark for the first quarter is 18525.

Running 100 simulations shows that the variance of this sort of system and gives us a minimum variance of 18,924.

In theory, we can see that it Trader A risks 1.5% of the initial account balance on every trade over the quarter.

This is gives Trader A the best opportunity of hitting his bench march without forcing anything different on to the trader, but just adjusting one of the things that we can control.

The risk.

This is a rough example of how to use financial goals to guide performance over the long term, but I believe they should not be used as targets and should only be used as a tool when appropriate.

Weekly Trading Review – Stress Free Trading

Weekly Trading Review – Stress Free Trading

Weekly Trading Review – 17-21 April 2017

weekly trading review

Summary of Performance

An okay week, good quality trades whilst overall an under performance, this was effected by a shorter week with the bank holiday and a dull Friday with lack of triggers.

I am going to be moving away from my posting of the weekly review to monthly review.

I am going to be still doing a weekly review but my trading has got to a level where there is not much to say regarding each week, and some of the initiatives I am taking need more time to play out before deciding that they work or not.

But I am will be replacing the weekly review with article on aspects of my trading and current thinking, along with various context / trade reviews.

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

My focus and playing the context, and not letting my emotions or profit and loss control my trading decisions.

I still make mistakes, I took one revenge trade, which was a good setup with positive expectancy, but was against my context play and not in my plan.

I am still learning when to apply scaling in and when not to use it.

As I am good at picking levels, and had problems getting filled in the past.

It makes no sense to scale in to these levels, as it just ends up with me in the trade in a part of a position. The only exception to this is when I end up getting in with a signal when I have a no fill on the blind order, as there is still potential for the original order to get filled.

In summary, my scaling rules, say I should apply scaling in only at levels with a couple of potential entry points that are not automatic blind levels.

Last week, I was mulling over how to do my journaling. As I moved to a system where I was not tracking my profit and loss on a daily bias, but this lead to an increased workload when journaling the trades at the end of the week, rather on a daily bias.

Of course, the answer came to me, as soon as I posted the review. I will carry on journaling intraday as this is the most efficient way to keep the journal up to date, except that I leave the exit price and result blank and then I fill this in at the end of the week.

This way the journal is kept up to date efficiently but I am unable to see how my profit and loss is doing.

Though one has to be a fool not to know where one roughly is, just from the pattern of winning and losing, but I have found that not knowing the exact P/L for the day helps reduce the pressure to trade ones P/L.

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

We had a trend day in the Bund this week.

My plan for trend days, is to keep taking my signals until it becomes clear that a trend day is in progress, then move to taking signals at only the bigger picture levels.

How I spot Trend days.

1) Does not respect good levels.

2) Small pullbacks, as price does not get back to entries to go with the current flow or any fades have very small MFE.

3) A lot of double traps. Trapping traders only to trap the traders playing against the original traders, fuelling the next leg lower. Especially when the original trapped traders are front running a good level which then gets completely violated.

4) One time framing on my 10min chart.

It is important that I keep taking my signals as per my process, I do not want to get in the habit of picking and choosing which signals to take.

Moving to the bigger picture levels, means that when I do take the signals I am trading in the right area, but my stats show that overall this still mean that I can suffer a string of losers on these days.

I have tweaked my process, to the following

That when I have a trend day that fits my criteria and I move to the bigger picture levels then all fades will be smaller size allowing for slightly bigger stop (to give the trades a chance to work) and reduced risk until the following criteria is met

1) The LTF has a change of character. This can be a standard deviation pullback rotation, break of opposing structure on the LTF, which has held or not even been tested on the previous with trend rotations.

2)The one time framing stops.

I then move back to normal size for fades.

The above criteria does not mean that there will not be an extension of the trend day, just that the market is now more 2 way with buyer and sellers involved.

I am also studying on these days if I can identify how to use the double traps to get in with the trend.

As the biggest problem with the double traps is working out where the stop should go as the nearest structure is not particular close and what sort of target I should have, as these happen on trend days at decent levels.

In summary, the double traps mean going with the momentum, into areas where I would normally would be fading, if it was not a trend day.

As trend days are the occasionally days, it is important to not nerf my current system for the rest of the time with trying to optimise it to include these double traps.

My current process is to reduce risk or exit when I see a double trap developing which works well and could well be the best way to continue to handle these without nerfing my system.

It is worth investigating to see where this take me.

21st April 2017 – Bund Daily Trade Plan

21st April 2017 – Bund Daily Trade Plan

News

0800 FR PMI 0830 EZ PMI 0900 EZ PMI
0930 UK RETAIL SALES 1500 US HOME SALES

Previous Day – Down day with down close, tst first time back to d.bz 62.68-02, mode rot down.

Big Picture

60m – Down, for cont, hold 84-96 bac 62.50

10m – Neutral, for direction bac 96 or 52

Context Play

1. Balance

Shorts; hold 84-96 t 74 t2 69 t3 60-52

Longs: hold/bof 60-52 t 70 t2 84-96

2.Up

Longs: bac 96 t 16-20 bac 20 t 34-44

Shorts 34-44 t 96-88

3. Cont Down

Shorts: bac 50 t 38-25 bac 25 t 18-00

Longs: hold 38-23 t 52 -80

20th April 2017 – Bund Daily Trade Plan

20th April 2017 – Bund Daily Trade Plan

News

0700 GE CPI 1330 US PHILLY FED

Previous Day – DOWN DAY WITH STRONG DOWN CLOSE, Pbip? Next d.bz and mode rot is at 62.68-02 (38 pent)

Big Picture

60m – Neutral, for t/c to short, LH (49-65?) and bac of 63.17

10m – down trend, holds 63.41-48 and bac of 63.16 for cont

Context Play

1. Cont of down trend

Shorts: bac of 63.16 t 08 t2 00-87 bac 85 t 78 t2 68 t3 59-50 t4 38

Longs: 38-25 t 59-68

2.Balance

Shorts: hold/bof 41-48 t 27 t2 20-16

Longs: hold /bof 16-20 t 41-48

3. PB and LH

Longs: bac 49 t 54 t2 64-75

Shorts: 64-75 t 48

19th April 2017 – Bund Daily Trade Plan

19th April 2017 – Bund Daily Trade Plan

News

1000 EZ CPI 1035 GE AUC 1530 US CRUDE

Previous Day – UP DAY WITH UP CLOSE @ D.SZ .02 -64.40 D.ROT 2SD+

Big Picture

60m – Up TR, hold 63.49-63.34 and bac 64.02 t 64.20-40

10m – Up TR, bac of bal 63.83-63.34 for cont hold 75-67 (va) and bac 64.02 t 64.20

Context Play

1. 60min Up TR cont

Longs hold/bof 83 t 64.02 bac 64.20 t2 64.30-40 (watch for bof)

Shorts 64.20-40 t 64.02

2. Pb to Balance and cont up

Longs: hold 75-65 on retest (rrt), t 64.02 t 2 64.21-40

3. Back into Prev Bal VA

Shorts: bac 67 t 63.49-44 t2 40-34

18th April 2017 – Bund Daily Trade Plan

18th April 2017 – Bund Daily Trade Plan

News

0700 GE WPI 1330 US BUILD PERMITS

Previous Day – UP DAY WITH NEUTRAL BULL CLOSE

Big Picture

60m – Up TR, hold 63.16-63.32 bac 63.82/89 for cont

10m – Neutral, Bac of 63.82/63.42

Context Play

1. 60min Up TR cont

Longs: bac 63.82, hold 75-65 on retest (rrt), t 64.02 t 2 64.21-40

2. Balance

Shorts: hold 75-82 or bof of 82/89 t 58 t2 50-41

Longs: hold / bof 50-41 t 58 t2 75-82

3. 60min PB

Short: bac 41 t 30-16

Longs; hold 30-16 t 40 bac t 58