Wednesday 20 January 2016

First 30 Trades

Image result for loss
the numbers

£% (R)
Start Bal£3,000.00Start bal %100.00%
Current Bal£2,771.47
Current Bal %91.75%
Gross Profit ££153.93
Gross Profit %5.55%
Gross Loss ££382.46
Gross Loss %13.80%
Net PL (Diff)-£228.53
Net PL (Diff)%-8.25%
Average Win ££30.79
Average Win%1.11%
Average Loss ££15.30
Average Loss %0.55%
Av net PL££15.49
AV net PL %0.56%
Total Wins5
Hit Rate16.7%
Total Losses25
Hit Rate Diff83.3%
Total Trades30
Expectancy-0.27%
Total Longs5
Total Longs %16.67%
Total Shorts25
Total Shorts %83.33%

Gross Win MFE 18.00%
Gross Loss MFE38.10%
Gross Win MAE1.75%
Gross Loss MAE21.00%
Average Win MFE3.60%
Average Loss MFE1.52%
Average Win MAE0.35%
Average Loss MAE0.84%


quick summary

So from this new method we can see I'm down -8.25% / -£228.53,  My hit rate is 16.7% and my expected payout is -0.27%. Certainly nowhere near a business!

However there are some promising numbers. In my MFE (Maximum Favourable Excursion) we can see my trades have been hitting healthy numbers. So what went wrong?


problems

1. I cut my winners short (92% of the time): Collectively these trades had an MFE of +44%, see "Gross Loss MFE" where many of these trades ended up. Many winners simply didn't get out of the gate due to my fear based trading and my desire to trail my stop too quickly to reduce risk! This occurred in three ways 1. trailing to BE too quickly. 2. Trailing a little too tight, not respecting the spread. 3. Taking profit too early.

I appreciate of course that I won't be getting anywhere near the full +44% MFE in reality. However even if I average out all my winners and "potential winners, ruined by George" (+44% / 12 trades = +3.66%), take away the the trades that didn't achieve the average (6) and multiply the remainder by the average (6 trades x 3.66% = +22%) I would easily have got into profit.

2. Taking weak setups (50% of the time): These occurred in three forms too. 1. Candle setups that were sub par, particularly weak IB, MRC and Engulfing patterns not showing reasonable reversal strength. 2. Setups that weren't actually at S/R 3. "Experimenting" with setups that weren't in the plan!

Collectively these trades accounted for -8.5%. Just avoiding these alone would have got me back in the black.

3. Taking STAM 3 or counter trend trades (13% of the time): All failed but the numbers have been accounted for in "weak setups".


observations

Not conclusive but I would say that on the whole, and particularly if these all occurred at the same time, my trades had the biggest runs in my favour when...
  • setups experienced deep pull-backs prior to their occurrence
  • setups were on what I call polarity change levels, where S becomes R or R becomes S
  • setups were on or near the 50SMA
  • setup triggers were Pins, MRCs or IBs. 


going forward

Letting Winners Run: 90% of my winners I am closing too early! It's also worth noting that had I not cut the legs off my winners I would be looking at a hit rate in the region of 30%. Ironically it seems this fear based trader needs to expose capital to preserve capital!

Reducing Mistakes: What has flagged up and that has greatly surprised me, is that 50% of the time I'm taking sub-par setups! Be they simply a weak candle pattern, a setup not at S/R or worse not a setup at all, mistakes are happening as often as I am making good decisions! Before I start again I need to make a concerted effort to reduce these if I am going to see an improvement in my numbers.

Going Forward: It is of course blindingly obvious that I need to avoid points 1-3. So firstly I am going to revisit and rework my Tactical Trade Plan with the aim of preventing them and their subcategories. I will then make note of my observations. Finally I need to take time to include what I have learnt from VTP Stage 2 so far. I am going to be vague here as it's not mine to share but I will say it involves building positions.

Once my TTP is updated the plan is to start the next 30 trade sample in a micro real account, which doubtless will create its own issues ;-)

Monday 4 January 2016

R+2: GU Intraday Short

Happy New Year all here's an intraday trade I took on the GU this morning.

I had noted few things
1. that there was some medium strength UK data out at 0930GMT
2. My STAM work told me I wanted to short the GBP
3. There was a resistance area above GU price action that was chock full of R levels

It was my hope that the reaction to the data might push price up into the zone of supply/level where I thought lots of sell orders were sitting and I would be able to short it. Price did as I hoped, I drilled down to the M15 chart where a nice pin had formed with a large upper wick so I set my sell stop at it's low and a TP at 1:2. Turns out I could have held much longer...

Friday 1 January 2016

December Trading Issues

So my usual trading issues flared up in December...
  • trade avoidance
  • a disinterest in trading
  • and a little bit of self loathing, for not taking trades that I spotted

 However they all came from one cause, that being...
  • not keeping  my current goal in mind.

Image result for missing goal


recently

I recently completed my "strategic business plan", this is a 40 page long-term business plan aimed at creating trading success for myself. Essentially it defines shorter-term goals I need to achieve to get there. My coach Paul emphasises that it's important to ensure these shorter term goals are "relative" rather than "absolute", meaning goals should be relative to where you are currently rather than verging on a pipe dream. So the first relative goal on my journey has simply been to build my numbers up regardless of P/L. I wanted around 30 trades in the bank before I made any major decisions regarding my trade plan.

I got my trades to 26, froze and the trading issues mentioned above flared up. I thought I had fixed this but obviously had not. In the month of November I did well by simply waking each day thinking "all I've got to do is build my numbers up". December came and I got a bit lax/overconfident and just didn't wake with the same clear headedness or mental discipline and my numbers suffered. I doubt there is a cure for a fear based trader but I have proven, albeit for a short time that I can prevent my FBT tendencies sabotaging me if I keep my mind in the present.

going forward

The above is a simple yet important lesson, I've got to have a relative goal fixed in my mind at the beginning every working day to discourage fear based trading. As a fear based trader the thing I most need to battle is trade avoidance. Even after my first 30 trades are completed and I amend my trade plan a little the goal again will be to "build my numbers up".  

I created an anachronism: PPTMRR(R) - Prep. Plan. Trade. Manage. Record. Repeat. (Review) despite this probably being more accurate I don't know if it's as straight forward/ no-nonsense as saying "just build build your numbers up" every morning. Maybe a mix is better?

Just build your numbers up -  Prep, Plan, Trade / Manage , Record , Repeat