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 :)

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!

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!

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.

10-Year Trading Anniversary: What Has A Decade In The Markets Taught Me?

Today marks 10 years to the day that I set off on my journey into trading the markets by attending Day 1 of a 3-Day seminar.

It's also my birthday! I don't remember whether or not I had intentionally chosen that date to attend the course, but it's a cool bit of trivia that my trading anniversary coincides with my birthday....but I digress...

The course I attended introduced me to the basics (for a hefty price!) and touched on the psychological aspects of trading. The real learning began years later as I found myself trading a $50K account, of money I had borrowed from a bank, whilst trying to regain my composure after my first (8 trade) losing streak...

So, what has a decade of playing this crazy game taught me? 


I've Found The Holy Grail!! 

There is no technical holy grail... every system, approach and method will draw down. Oftentimes more than you'd expect. If ever there was a "holy grail", it'd be the ability to weather the storm until the method eventually picks up again- even after a 17-trade losing streak ;).

Embrace Losers

Let's pretend walking represented a positive trading edge. If the left leg represents losers and the right one represents winners, how far would you expect to get trying to walk on just the one (right) leg?? This is where being truthful with yourself comes in...the goal is to execute a process, with it's inherent losers, not reach for a certain positive outcome/run away from a negative outcome.

A good exercise for checking your resistance toward following a process rather than seeking an outcome is to take note of the thoughts running through your mind when you review some of your trades. If you start blaming yourself for the inevitable times where you are stopped to the tick, or you start looking for a way you could have exited sooner before giving back that 2R paper profit even though the method said that's what you should do...there is still mental progress to be made.

Let Go Of Control

We control nothing but our thoughts and our actions. I've lost count of the amount of times I've sat watching a trade, sometimes for hours, before falling into bed or going out for some much needed air and/or exercise. As if watching it made the difference. The "illusion of control" is one of the more costly cognitive biases as it expends our energy, completely in vain.

Mind The Gap!

I've written about this several times on the blog. Essentially, if we are able to take action at any moment during a trade, then we have no live edge. Every living thing/system relies on gaps to exist. This means we have to let go of control and have faith and trust in our plan over the long-term, almost ignoring what happens in the short-term.


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In a nutshell, I've learnt that we have to be comfortably uncomfortable in order to make progress. Growth hurts, no pain no gain etc.

 I've focused on the trading aspects in this post but, truth be told, learning how to trade has influenced my life- the way I think and live- far more than it has my actual trading. Almost as if trading were a metaphor for life...

Combine Completed!

.....No, I haven't passed yet. But I do have more information/feedback that will guide me towards doing so.

Here are the facts (in no particular order):-

1) The percentage of the target obtained in each of the eight Combines I've taken since last June has increased over time. They are noticeably larger after moving to the $30K Combine.

Here they are in chronological order. The ones in bold are $30K Combines-

3%, 9%, 3%, 37%, 0%, 0%, 49%, 80% (< The one I've just finished...stats in the above screen captures).

2) My plan when moving in to this last Combine was to take advantage of the information gleaned from previous Combines- especially the 5th and the 6th- here is a snapshot of my TST journal which summarises this information...

I basically found that I was able to very consistently net +$200 within 1-3 hours of liquid market action. I needed to allow for a $400 intraday draw for that to happen. The one day out of seven when I wasn't able to achieve this typically resulted in less than a $400 loss.

3) After having a "discussion" with the missus, we decided that I'd no longer talk about the story- the reason why this nearly happened/didn't happen and if I had just done this that or the other...just bare bones results in business-like fashion. Even then, it was to be limited to a weekly conversation if not a fortnightly one.

The period of adhering to this way of operating coincided with the initial run up towards the target.

4) The high coincides with the blog post documenting my results (along with the story of how I got there) along with more frequent conversations with Mrs MM.

What does this all mean to me?

*"1)" Suggests I'm making progress.

*Trading the $30K is the where I need to be.

*Daily structure and an unwillingness to indulge in stories or even results in the short-term is essential.

*I need to use the daily stop and not get drawn in to the idea of taking just one trade per day.

Will establish what I'm going to do in terms of a daily structure then get back on the horse.

Combine Update - Pushing, Pulling & The Present.

The last post documented the second Continuous Combine as well as most of the 10-Day one (the 10-Day marks the switch from the $100K to the $30K). I've since done another 10-Day and Continuous...I'm currently doing another Continuous- my 6th Combine for the year (7th in total)...

 

 

I'm currently two-thirds of the way to the target having traded 5 days. There are a few notable changes I've made to push me in this new direction:-

 

1) One Time frame (less is more)- I've removed the anchor chart. My theory is, take away as much as you can without ruining the integrity of something and you have the most efficient system. Everything I need to know to make profitable decisions can be found in the one chart/TF (15 sec).

 

2) Process Over Outcome- This might seem like an obvious one as we are playing a game of probabilities but it's crucial to ignore what happens (in the short-term- after X number of short-term=long-term then we can look at results) and focus on what needs to be done in the moment according to a given method. We cannot control the outcome, so there is no point in getting upset (or happy) about it. We can, and must, control our actions...i.e. adhere to the process.

 

Therefore, it's very beneficial to get upset (or happy) about not implementing (or implementing) the process.

 

3) Let The Market And Time Do The Heavy Lifting(less is more!)- There have been 14 trading days since the beginning of this Combine. I've sat through 10 and only taken trades in 5 of them. Rushing in to a trade that isn't exactly what you're looking for suggests some kind of fear....fear of a future that lacks opportunity, fear of missing out etc.

 

I once wrote a post about pushing and pulling...this type of back-and-forth, emotional variance leaves us bouncing from trying to reconcile regret (pulling/clinging) to fear of the future (pushing/resistance). All while we ignore what's right there in front of us. The present. The gift of what you need to do, right now, without fear.

 

Here's an excerpt from my TST private journal which shows where my focus now lies...

 

 

Ok! Enough observing of results...time to move on to the next present moment! The next time we look at a result, the Combine will be over (in one way or another) and I'll upload the spreadsheet with all the stats as I did with the last two posts.

Combine- Day 12.

Good job with patience and avoiding TWOT...I recognised that thoughts of frustration, failure and regret were running through my mind yesterday when I missed purposefully passed on what would have been a nice payment because it didn't flush the way I needed it to. No trade.

Fast forward to today and I was faced with the same situation. Recency bias- together with negative self-talk-reared their ugly heads ("take it now or you'll miss it like yesterday"). But I just simply chose not to take part in it.

Work needs to be done on trusting my targets, but acclimatising myself to 10 contract trading is my first concern.

Combine- Day 8.

Last Thursday was Day 7 and that was a profitable day with full contract size (10 contracts). Friday was a repeat of this scenario, except I did one better and just didn't watch the markets.

Since Monday, I've returned to my 19:00-20:00 CET hour (which is where I intend to stay for the rest of the Combine). I've taken just the one trade, today's, out of seven setups identified in those two hours. I managed to catch the only one that resulted in a loser an expense.

Easing in to 10 contract trading. Under water in the account but know the power of the edge so still feeling confident.

Combine- Day 6.

Confused. Will take a day to decide on a direction that can be sustained without risk of ruin as an exercise in building confidence. Will at least scale back on the frequency of updates as that is starting to become a chore too.

Combine- Day 5

Followed through with the plan...but the trades I got in didn't follow through. Not as frustrating a day as yesterday, where there was one runner and a few scalps that I sat on my hands for, but close.

Wasn't aggressive enough on the 4445.25 short...missed the 4452.25 short in to the close (not annotated on the chart) as I was doing the write-up. Too many coincidences suggest fear was in my trading today.

Good control though and live to fight another day. No regrets and will see this week through hunting for two or three "runners" and controlling losses on the rest. This will mean giving back a few scalps. Will review at the weekend and change course if necessary.

Combine- Day 2.

I know these days well.

It goes something like this. Happy with my actions on the prior day leads to euphoria. I can't get to sleep until late as I feverishly imagine what it'd be like to be completely location and time independent. I'm talking calculating how much it costs to live in Medellin, who I'd pay tax to if I was a digital nomad...the works. When I do eventually get to sleep, I don't rest well and my eyes are wide open by the crack of dawn.

One of two things then happens:

1) God complex in tow, I bend rules that served me well even if, in the moment, I'd swear that I didn't. It doesn't work out or, worse still, it does.

2) I become overly careful. This then leads to frustration which ultimately leads to 1). The amount of frustration is directly correlated with the amount of damage I end up doing.

In short, euphoria leads to emotional and physical exhaustion which then leads to decisions based on "then" ("it worked back then"= past or "If I get out now and it goes in favour, then I'll miss out on X"= future) rather than "now". "There" rather than "here". Gone unchecked, this can cause traders to doubt their edge, or abandon it entirely. All they needed to do was trust and stop trading so as to limit the damage. This is what I've done today.

A whole host of emotions arise when you take this kind of action; "I could have made it back and then some" or "If I have true edge, I should just plug away and take more trades" but that's just our inherent faulty wiring that causes us to fight when we are losing and run with some gains when winning.

Continuing with 5 lots for now and back to waiting diligently, taking what the market has to offer and asking for no more.

"StoryBook" Trading Meets TopstepTrader's Continuous Combine!

At the request of this frequent blogger, and this not-so-frequent one (!), I've decided to document my journey in the TopstepTrader Combine.

I'm trading the $100K account. Here are the account parameters and Combine rules:

The profit target is $6K. Past performance would suggest an ETA of 20-40 trading days. This is the result of Day 1:





A bit of background info: blue rectangles = MR, Blue triangles = PF, Arcs = C2N and Yellow ellipses = App....all colours refer to the background of the shape.

 

EDIT: I've been made aware that the charts are a bit small. This 5-min chart and this 15-sec chart should be clearer.

I opened the Combine on the 12th of February 2015, but due to US holidays and just generally getting myself set up (I subscribe to Continuum data but the program only works with Rithmic etc) I was only able to get started today.

The green triangle on the 5-min chart depicts the trade I decided to let go. My plan was to trade half-size (I intend to start trading 10 lots shortly) with a one-and-done approach, win, lose or draw. I bailed 3-4 ticks before the target because:

1) Moves tend to be quicker and more volatile during the late EST morning/early EST afternoon in the NQ as compared to pre-market (when I sometimes attempt to catch bigger moves).

2) It put in wicks a hair above the 1st target of the pattern.

My aim is to document everything here, but, should it start to take my focus away from the task at hand, I will scale back/stop the blogging and just continue with my usual record-keeping.

Back...

.....but only long enough to promote talk about my latest challenge.

As I hinted at before disappearing, it was time for a more holistic approach to life/trading success.

In the last 12 months I've radically changed my lifestyle: Diet, Meditation and regular exercise (Coming from an athletic background, I hadn't noticed that I was slowly...very
slowly...becoming rather sedentary) along with making sleep a priority again.

 So now that I am no longer addicted to trading (I regularly trade just an hour a day and actually have dinner with my family again. Everyday. Without fail! Something I hadn't done for years before..) and have smoothed out the Emotional Variance to a large extent , I feel as if I have what it takes to accomplish the much touted sign of true competence in trading:

I'm going to make 100% on my account risking 1.7% per trade.

Expectancy suggests that should take until late Nov/early Dec, but I'm targeting the end of the year. If it takes longer, so be it. Less time would be icing on the cake...

My progress can be followed on Twitter and also on YouTube....I'll share as much as I can without distracting myself from the task at hand. I've already noticed a difference the other day when I flipped Camtasia on to capture the live trading, so I'm not making any promises where videos are concerned!!!

Links at the top right hand side of the blog- See you there!

The End.

Just moved from a rather modest flat to a not-so-modest house. Now I have the office in the loft/attic (or "mansarda" as they say here in Italy) that I've always dreamed of AND space (3 floors down!) to practice my hobby of the last 15 years and counting, as well as just workout in general. 

It's a beautiful house- it has 4 balconies (of varying size), 3 bedrooms, the loft, 4 bathrooms (!!), a tavern with a fireplace and a pizza oven, kitchen and living room as well as a garage.

I got this by learning to trade....but not from trading profits ;). The secret is hidden within the 218 posts of this blog.

That being said, there's not much more to add. I'd only be delivering the same content in a different way which is a poor use of my time.

So, in the spirit of reduction:

- Cheap clients rejected...? Check!

- Time-wasting satellite television subscription cancelled...? Check!

- Reduced time on the Net...? Check!

- Blog concluded, only to be reignited as a teaching tool should there be demand...? CHECK!

Good Luck for your life and trading. :)

Day's Anatomy- 12th November 2012

I tried, but can't find an unforced error in my trading today. Yippee!

The eagle-eyed may notice a bunch of other trade markers on the chart other than the ones I've marked up. Those aren't my trades ;) More about that in a future post!

As Scalpy says,  

"There are four types of trades. Good winners, bad winners, good losers and bad losers."

Today, I only have the good variety of winners and losers on my chart so, as such, can't really add much in terms of commentary here.

What I can say is that the three days since switching back to SIM have, magically, been net positive overall. I guess I should be happy...*sigh*

As I've said before, the passing grade is now higher than before. I hope this will be enough to bolster my confidence to the extent that there is little/no difference between my SIM discretion and Live account discretion.

It's funny, as a youngster, I always used to wonder why sports people sometimes had such difficulty bridging the gap between practice performance and match performance. Confidence and Faith...

Expectations About Expectancy.

Anybody who is serious about becoming a profitable trader will probably know what Expectancy is, if they've been around long enough. But, just in case, here's a quick overview.

Expectancy can be calculated using the following formula:

Expectancy= (Average Win * Win Rate)-(Average Loss * Loss Rate)

This needs to be calculated using a "statistically significant data set"- for a swing trader that might mean testing over years or even decades of data. Intra-day traders will probably need a month or two of data. The time over which your data is collected matters because you are inevitably going to test over various market conditions but the number (N) of trades is crucial. The larger the number, the more reliable the expectancy.

So, let's say you forward/back test a trade idea, taking 100 trades. Your WR is 40% (0.4) and your Avg Win is twice your Avg Loss then...

E= (2 * 0.4)-(1*0.6)=0.2... This means, on average, you make 20% (0.2) of whatever your risk (R) is per trade for every trade you make. Positive Expectancy! Yay!

But that's only half the story.

Here are the six charts from the "Readers' Poll" post. The last results I saw (before they magically disappeared from the poll! EDIT: They are back..for now. 5/11/12) had the winner as 3,4 & 6, which is the right answer.

What do they have in common? They each contain 10 random equity curve outcomes by trading a system/method with a Avg Win 3X larger than the Avg Loss with a WR of 30%. This equates to E=0.199.

The other three charts show 10 random equity curve outcomes with the same Expectancy except the combination of R:R (Reward to Risk ratio) and WR is different- Avg Win 1X Avg Loss with WR 60%.

The few people who voted were able to agree with a majority vote that the charts which belonged to a given group looked different to the charts that didn't. The difference is Variance.

A trading system with a lower WR and higher R:R (such as charts 3,4 & 6) will have a higher variance from the mean, an imaginary straight line that transects the wobbly move upwards (assuming positive expectancy). Likewise, a trading system with a higher WR and lower R:R will have a smoother, straighter equity curve that is closer to being like the mean of the data set.

The comparatively very different outcomes possible between the curves, as well as within the curves themselves, within a high variance approach makes sticking it out with a method as difficult as holding on to a trade that whips it's way to a target.

It's not just where the strategy ends up (Expectancy) but how it gets there (a function of WR and RR) that counts.

Day's Anatomy- 23rd October 2012

The market tested my patience....and won.

A couple of decent paper profits, then the break even result before the subsequent drop pissed me off quite badly. Trade 3 and 4 ruined the day when I treated 3 how I'd have liked to have treated trade 1. Again, TWoT...I should be using that kind of stop on both of these setups but I tried to run it  (3) based on the outcome of 1. 

Less said about trade 4 the better :)

What should have been a tgt/almost tgt day became a loser.

Day's Anatomy- 22nd October 2012

Could have waited a little longer before committing to the first trade but missed the fact that the resistance had just been pierced with seconds left for the change of bar. Had the opportunity to reverse/get out at a pip loss but not in my plan (I've found that giving myself the liberty of doing that causes more harm than good). Got trapped there.

Otherwise, followed along and did what PA suggested was the right thing to do at the time.

UPDATE!:One more trade taken...