FUNDED by TopstepTrader!!!

Took me awhile!

SO I get the best Christmas present I could have ever hoped for, given to me by myself!

It was a tough journey, through all kinds of personal and health trial & tribulations but, here I am, one Combine, two FTPs and NINE months later.

Check out this video on my YouTube channel for some details and stats. Unfortunately, my copy of Windows 8 got corrupted 3/4 of the way through the last FTP, so I don't have all the pretty graphs and statistics that I usually share in these posts. Nevertheless, I do provide screen shots of the last month of trading which gives a good idea of the overall performance.

Don't forget to SUBSCRIBE so you don't miss out on my updates as I build a draw-down cushion and, then, start drawing those checks! See you there :)

3rd Combine PASSED!

This one is significantly different as it was completed with my partner. To get the lowdown on why I've decided to go the route of working in a trading partnership, check out this video.

To get all the details of this successful Combine, watch this video.

So we are now in a position where we have two FTPs open simultaneously, both of them positive, with one nearing the finish line. The short-term plan is to take one of the funded accounts to a place where we are trading 3-5 contracts at a time and keep the other one at just the 1 contract for income.

Exciting times ahead!

Is Profitable Scalping Possible..?

They say that it's impossible for a human to compete with the HFT algos...

Forex Futures trades for the last 30 days.

...looks like "they" may be wrong. 

I'll be back when I've hit the next milestone...

Combine PASSED! (again...)

Just in case you don't follow me on YouTube ....

I'm particularly happy with the risk control on a daily basis (Only one negative day greater than ~-$100 out of the 17 that were taken!).

I go in to much more detail in the video so I invite you to SUBSCRIBE if you want to follow along and see how I make it back to, and stay in, the funded account at TST.

Here's the latest FTP update.

See you on the other side!

Back On The Horse - Journey Back To Funded.

Still here and diligently working my way back to TopstepTrader's funded department.

They have FINALLY done away with the 10-Day rule that was such a challenge for me, due to the historical expectancy of my approach to the markets and the fact that being positive with the method (in a way sufficient to weather any bad luck in the form of a DD...) after 10 days in an account isn't a given.

As mentioned in my last post, I'm very active on You Tube now because "blogging is so 90's" (lol @ L&W) and I'm enjoying giving back to the medium that has given me so much inspiration and so many ideas.

If you haven't done so already, smash that "SUBSCRIBE" button and watch me hit those goals over the next few months!

You Tube

Currently posting 5X a week.

Just a quick note for those who might be interested but haven't yet realized, I've recently got into the habit of regularly posting YouTube videos as a way of documenting my journey/progress and sharing any lessons I learn along the way. This means that I'm posting less here.

If you are interested in following along, you can click the YT icon to the right of the blog and subscribe to the channel so you don't miss any updates.

A lot has changed over the last few months, particularly in this past month (Jan).... most of it documented on the channel. See you on the other side!

Process - Oriented (January Game Plan).

After ruminating over the info in my last post, the main things that have changed are:-

a) Desire to "win" in the short-term. I've gradually slipped into the habit of taking trades off before 3R for no reason other than fear of giving back.

b) Lower trade frequency. This is most probably an attempt to "manage" risk when it's really just an avoidance of risk.

c) Not putting on two (or more) trades simultaneously. See "b)".

So here are the renewed rules of conduct. I'm writing them in this post to keep me accountable!

1) Never take a trade off for less than 3R unless:

* There is news, in which case take it off 5 mins beforehand and get back in according to the plan.
* Daily target has been met in open profits.
* It's 21:00 or later (see "3)").

2) Make a conscious effort to have at least two positions on as often as possible to diversify risk/smooth out the equity curve.

3) No trades entered after 20:00. Flatten all trades between 21:00 and 22:10 (all times in Central European Time).

That's it! If I do that for every trade in January, I'll be a happy trader, regardless of the result. Back to the process we go...

Personal Account + 100% Resistance = Sideways P&L.

Time to reassess and come up with a plan of attack.

The above is the rolling P&L since mid June '16. A few things that leap off the chart...

1) ~340 trades over the first 4+ months. ~70 trades in the following ~2 months. Last two months have a trade frequency of ~40% of the prior months.

2) Last two months- starting from the black arrow- have resulted in an 20+% range. The black arrow also indicates the start of live trading in my personal account.

3) The high of the above range is an 100% return based on $3K/contract over a few instruments with a per trade risk of ~1.6-2.2% (depending on the instrument).

4) Headline stats before last two months of trading: WR=34%, RR=2.319, E= 0.1489.

5) Headline stats for the last two months of trading: WR=36%, RR=1.824, E= 0.0196.

6) 8 target days (+10%) before last two months of trading.

7) 0 target days for the last two months of trading.

8) 46 trades >= 3R before last two months.

9) 7 trades >= 3R for the last two months...


Going to sleep on this post and return with an analysis of what has changed along with a plan of attack to get back on track!

The "Emotional Market Sphere" - Separating Yourself From The Crowd.

I think traders sometime forget that market movement is powered by other traders actions. The collective force of every trader's decision, including your own, moves the market. I call this the Emotional Market Sphere.

It's like a bubble of human consciousness that fails to see the error of it's ways. Everyone finds unique, apparently well-reasoned motives for falling into the trap of cognitive biases...some do it without ever learning that they even exist. The paradox is that, although everyone's way of expressing their cognitive short-comings is as unique as their fingerprint, the result is an entirely predictable constant. Repeatable patterns. The Emotional Market Sphere.

In order to profit from the market, we need to be able to 1) identify the EMS's emotions/actions and then 2) take advantage of them without succumbing to the same emotions (which leads to the same actions).

So the first step is to stop thinking of the market as a bunch of patterns with some rules that we can apply to profit from them, and start thinking about the emotions of the participants. The easiest way to do that is to take note of what you yourself are feeling. Look for the traps that you are about to fall in and position yourself to ride the panic/fear/greed/hope that you would have felt had you fallen for the trap. This requires you to be able to analyse yourself from a 3rd person perspective.

With practice, you'll widen the gap between what you felt like doing and when you took action...eventually, you'll hardly (hardly!) associate with the feelings that would have caused you to have knee-jerk reactions in the past. For the most part, you will have separated yourself from the crowd.

One Hundred Percent!

1) Make the strategy as simple as possible. Okay, now make it even simpler! If it can't fit on a post-it note, it's too complicated.

2) Get comfortable refusing setups. There will be a bunch of "almost a trade" trades. Worse still, a lot of them will work spectacularly! It's like an Aladdin's cave of possibility...and we all know how that ends.

Be disciplined and "touch nothing but the lamp" (i.e. your exact setup).

3) Think super long-term (for results). For various reasons, I broke even in August AND November. But I've still managed 100% in 5.75 months. If I thought about the outcome of those months in the wrong way, it might cause me to lose faith and sway from the plan. Let's not even mention being concerned about a losing day...!!!

4) Think super short-term (for the process). Yes, it DOES matter if you take that extra trade. Or chase that market...or trade at night when you know you shouldn't. Lot's of small, repeated processes add up over time.


PS  No longer with TST. Long story short, they don't really support the profitable trader looking for actual funding. The irony is I would never have become one if not for their program and the dream of getting funded that they promote.

Business As Usual

I only traded 12 of the 21 trading days available this month and still managed to make that achievable ballpark figure that I have in my head. This was accomplished while experiencing three (yes, three!) earthquakes here in Italy. We weren't close enough for it to be any risk to us as we are about 87 Km away but, with the quake measuring a hefty 7.1 on the Richter Scale, it was close enough to move the house from side-to-side, rattle windows and leave objects displaced in the house. Not fun with a family of four. On the plus side, I like that even experiences like this didn't dent my trading composure.

I love not having to rely on WR for results (I "lose" pretty much twice as often as I "win") and I know that if I manage my psychology and follow the plan, the money will eventually follow.

Still waiting on the Funded Account credentials from TST. Should be anytime soon as I've just paid for the data fees and that means the account has been set up on the brokerage side. I'm also adjusting my expectation of take-home profits as commissions are noticeably higher than the Combine (As much as $4.78 compared to $3.68 respectively). Add in the $170 professional data fees and that takes a good chunk out of the monthly figures I've been posting.

The good news is, these costs are fixed. So while commissions will increase as contract load does, the data costs remain the same. Fast forward to 20 contracts per turn and $170 doesn't make up much of cost in terms of percentages at all (1% compared to 1 contract's massive 24%).

FUNDED!

The 7 Deadly Sins & Breaking Resistance

Most people are at least vaguely familiar with the story of Adam and Eve. Legend has it that Adam was placed in the Garden of Eden by God and told he could eat the fruit from all but one tree. Eve, who came into existence from one of Adam's ribs, succumbed to the temptations of the snake. After eating the apple, she offered Adam some and the rest of mankind's problems was history!

Some 18 months ago, I felt compelled to write out each of the Seven Deadly Sins on my whiteboard in the office. I find that poor trading (and living) can always be traced back to one of them so, as long as I'm mindful, I can avoid unnecessary draw-down both in life and in trading.

One that keeps coming up for me is what I call, "reaching for the peach".

We have various fruit trees in our garden and, some time ago, I began to notice something which I'd eventually trace back to a trading problem that plagued me. I would be on the ladder, picking the fruit within a comfortable distance. When the fruit was finished, I'd move the ladder to a spot where I could repeat the process. After a while, I would move the ladder less frequently until I found myself picking (or trying to pick) fruit that was clearly out of my reach.

I knew I needed to move the ladder (think re-positioning yourself in the market..) but I continued to overextend myself, sometimes to the point of falling off of the ladder (lol) or dropping the fruit I had collected. This could be labelled "sloth" and/or perhaps "greed" as I wanted to "finish" the fruit nearby or "get ahead".

This, IMO, is the reason for whole number resistance...the distinct behaviour on lower time-frames when higher time-frames are rolling from one candle to the next. This is why people are sometimes too aggressive on Mondays and too reserved on Fridays. It's the idea that we have "nearly" finished/obtained something or "just" started something. The curse of beginnings, middles and endings. Our behaviour changes as we feel a push or a pull towards something rather than just remaining constant in our execution.

Push When Winning- Part II

Strategically adding to a winner to bag 6.7R, without increasing the original risk!

Don Miller- million dollar trader and educator- often spoke about one of the most misunderstood, and sorely neglected, ways of managing your risk. Push when you're winning and stop when you're not.

There are a few ways to do this:

1) Frequency of Stops.
2) Size.
3) Scaling In (not out!).
4) Daily Target/Daily Loss Ratio.
5) Reward/Risk Ratio.

Check out the short-lived, but very insightful, Trading After Dark series that Don created over 5 years ago for more on the above.

The only problem with all of the above methods is....they all won't work out in your favour some of the time. You need a thick skin, and a rock-solid, probabilistic mindset to allow a 3R win to come back and stop you out...or to stop trading for the day only to see that you could have made it all back if only you'd have continued ( etc. etc.).

4 Months In, MES Capital & Pushing When Winning.

Per contract of initial risk...some trades were scaled into.

It's been a long time since I've been on the back of such a consistent stretch of trading. What's more, the leverage involved has been smaller on average which makes the result even more significant. It's nice to see that the distribution is what was expected as far as the summer months are concerned. The graphs also tell the story of the resistance of the Combine target in August and the fearful trading of the FTP during the latter part of August into most of September. It'll be interesting to see what October will look like as volatility has arrived in full force and I'm free to put the pedal to the metal!

I've been doing a trial with MES Capital over the last week of trading. I'm doing well there so far but may have to sacrifice that for a bigger and better opportunity (which I'm keeping under my hat for now!). My initial experience with trying to learn more about the company was met with a less-than-warm welcome to say the least. This isn't encouraging as how you deal with people personally will often translate into how you deal with them in business, but I'm leaving my options open for now.

I've also thought about a comment that was made in my last post regarding pushing when winning. This is something that a lot of people struggle with in life in general, trading in particular. Our aversion to loss has us fighting the tape when we/the market isn't conducive to profitable trading and running away once we have some gains when the market suggests that there is much more to be had. I think a lot of this comes from our upbringing ("a bird in the hand is worth two in the bush"- Mum) and the way we were taught to think at school and in society in general. Winning is good, losing is bad....being right is honorable, being wrong is shameful...etc.