July Monthly Review
July 31
I look at my stats and it is a sea of red. Never seen this much before. Everything was down this month. Compliance, WR, p/l, avg MFE. I had a lot of things come up in my trading this month that I needed to write out in here because it was going to be a topic/goal going forward. Some I found solutions for, some I settled that it was just part of the game, some im clueless on.
NUMBERS
-$2973
64/328 19% WR
78% Compliance
-87R
46 breakeven, 86 full -1R, 48 more than -1R
Avg win +$71
Avg loss -$30
Avg risk $38
140k Shares traded.
In comparison, I traded less than most months. Compliance average. Breakeven way down. Full-1R average. More than -1R is above average. Avg win vs loss still good. Shares traded is most ever.
I been trying to get bigger and I am. My Avg win and RR still largely skewed in my favor. Its my WR that is way low.
I talk about it much more later on in the post. But first you can read what I wrote mid month if you want. If not, it picks up at the PROBLEMS section.
July 17
Trading is such a mental game. I seem to keep running into a few common major problems.
1. Not following Profit Taking rules
-Not leaving a runner
-Taking partial early, not giving it 1min lo/hi
2. Not risking trades according to ⭐ rating.
-Risking too much on trades that do not deserve the risk. I have to drop this mindset that every trade deserves the same risk. I am making a plan below
3. If I dont get my initial starter, I skip the whole trade idea.
Back when I was a financial advisor, there was a guy helping me out that said 'you dont ever get comfortable with making the phone call, it always stays.' He had been doing it 10+ years. And its relatable to trading. I cannot 'fix' these problems, I simply make them less and less. Its still uncomfortable watching profits be given up, but its part of the game. You have to try and squeeze the most out of your best wins.
RISK PLAN
Favorite setups
-Obviously deserve the most risk. These are trades I will start uncomfortably big, and only get bigger.
-Starter with 75$ risk on initial entry as it is the best RR start.
-Add 75$, essentially double size.
-Then add $50, cut add in half.
10/9 ⭐setups
-Still best deserve more.
-Start with 50$ risk
-Add $50
-Add $25
8 ⭐ or less
-Its still a setup in my edge, but missing a few points
-Start $30
-Add $30
-Add $15
I need to be risking more on my best, and not more on my lesser setups. Im taking too many big hits on trades that are lower star ratings/not my favorites/ not ideal. Best trades are around HTF levels with tape vol cues and markets help. If I dont have some of those, its not my best, it does not deserve more money on the line.
The other downside from this is that it takes me too long to recognize what kind of star rating it is. I need a better system for this.
I already have premarket points labeled on the stocks now. Usually its a 4 or 5. The other ones I have to recognize in real time usually withing moments.
Other possible points are.
1. Tape.
2. Volume
3. Relative strength/weakness
4. Market conditions aligned with trade
5. Clean clear PA at HTF levels.
6. Failure
7. RVOL
8. Significant HTF level, not just any
If It is a 5, and gets 5 more, its a 10 and I need to be getting bigger on it, stepping up size. If Its a 10 and a favorite, I need to get to max BP.
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July 22
I wrote all of that ^^^ about the 2nd week into the month as I was slacking and compliance was dropping way too low. And happy to say that those problems were fixed well. At the end of the month compliance was back much higher close to 100% not below 90%. But P/L was not following. I had 94% compliance yet lost the same amount p/l as the weeks before. WR also still low. No idea what is going on. Things just were not working the same way they used to.
I wrote about it a lot on Tuesday ill copy and paste
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Annoying day again. Nothing but 10/9 star favorite setups. No follow up. Nothing. Not a thing. Why? I have no idea. Every trade I took today was
1. Necessary
2. 10 or 9 star favorite setup
3. Correlated with SPY/same side
4. Clear tape cues
5. At great locations
6. Long
7. Most after a failed move the opposite way
I mean this is A+ stuff that usually is killing it for me and just nothing out there.
Im starting to think it means more to what kind of market were in. All those signs in one setup? But it fails? Several times across different stocks? Across the whole market? And were failing things on daily charts?
Maybe bulls are just tired. Things that were once able to rip higher easily are no longer able to. Doesnt mean I should avoid the long, but maybe reduce expectations? Take off more early?
My trades today were all positive at one point. Average was +.8R which really is nothing special. So dont think anything notable there.
I managed risk very well today though. Sized up in all of these and escaped relatively unharmed. I am down 300$ on the day but on all the trades I took, on average if they hit PT the trade was worth +$275 so just one of these 9 trades I took wouldve erased most of the losses.
In total on all PTON trades I risked $1040 on 8 separate trades and lost $181. And all were correct stop outs.
Frustrating to still see myself in this spot. I keep saying one of these times itll eventually work out for me but my god, its taking longer than it ever has before. Im not trading poorly, im doing whats been working for me. If we have to be adaptable as day traders, what do I need to adapt here.
I look around and good moves are still happening out there. The problem for me is that they are coming out of left field, from locations I got no business trading around. The usual rips and dumps I look to capture right at the turning point, do not come from the levels I am looking to take them at. Which really isnt anything new, its just happening a lot more often lately.
Which means my edge is still viable and things do happen from these points still, its just few and far between each one.
Im not convinced that I need to STOP what im doing. I am convinced that I need to be more selective, and that has been what I am doing. I wait for the market to come to me, and whatever happens happens. I stay on same side of SPY and overall trend. I expand my opportunities back to gap stocks with breaking news, still applying my same logic to those markets. Waiting to see what I need to see. And whatever happens, happens. I manage risk well, I stay selective, I enter when I see thesis confirmation, I exit when I see warning signs.
P/L is not reflecting how I am trading. And im not sure I should be upset as I am. The money will come, I know what I do can work in all markets. I trade the market. Not indicators or anything else. I read the flow. And apparently I must not be doing well at it now. Reading false signals, ignoring the other side. It really doesnt feel like it, but maybe I am missing things that are not so obvious.
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By my standards and way I judge myself, I am not doing anything wrong. Im actually trading pretty well. But the market isnt giving me a damn thing.
I remember back to my old chat with traders obsession listening to everything. Risk management is king. I am not blowing myself up here regardless of all these losses. My trades are averaging 1:5 RR and with a 25% WR, means that it can still be profitable, even though my WR on a good month is closer to 40%. WR also doesnt take into account where my PT is, or if it is hit. So on some of these good trades, 1 win will wipe out ~5 losses. Which is good. And necessary for long term survival.
I never in my career thought id be focused on WR before after hearing endlessly about how it is one of the least important metrics for your trading, but I know where my averages are at. And if WR is low, then something is wrong. And 9/10 it is because im settling for less, but not this time. Not in this market. Something else is going wrong.
I still miss some trades every now and then. And it especially hurts more now that I am down and having a tough time trying to find a good winner, that if that 1 winner goes without me, well that could have been my only shot at a winning trade for the next 5 trades, who knows? So its going to be imperative to my trading that I DO take every setup that meets all my criteria.
Another thing im thinking about is you are only as good as the stocks you trade. To put it in one simple term its RVOL for me. What makes a stock have higher RVOL than others. News, significant daily patterns. Some kind of catalyst. So thats what I aim for when I chart the night before/morning of. Trying to find what stocks I think are going to be making the best moves. Just keeping my options open. And on top of that I keep track of which ones are my favorite so I know I can size up on them. Managing risk as always but also putting pedal to the medal when all my points are lining up.
There has never been a time in my career when I havent wanted to get to the bottom of some problem ive been having in my trading. I dont roll over and accept it and dont try to improve upon it. But for the 1st time, after all these losses, I feel like there isnt anything major going on with me. Im just losing. Youre not meant to win every trade/day/week/month. Perhaps this is just one of those times when trading is working its best for me. The answer is always scale back, find out whats going wrong, fix it, and get back to work. And I did all of that, and its still met with losing trades.
Maybe im super unlucky. Maybe im not and im clearly missing something going on out there. Maybe its just meant to be this way for now during this period. Im staying on my game, making sure im compliant. Proper review, proper charting. Proper entries and exits and trade management, proper risk management. Its tough to just accept this one for what it is.
Ive still got 3 days left before the trading month is over. Lets see what can change in that amount of time. Maybe things will start going for me again and itll be back to normal, maybe ill find whats going on and be able to change it. Maybe ill just lose again 3 days straight. All I DO know, is that if I follow my process/rules/compliance, then I am trading correctly and the rest is up to mother market.
Next day after I wrote this was wednesday. And it was a solid day, with solid setups. The most notable thing here today was that there was a CLEAR theme across the board. Buying. Pot stocks popping, air/cruise/restaurant stocks popping. SPY uptrend and holding higher. Trending hard.
There was a clear theme that made my trades a lot 'easier' to work with.
I think the area that I need to be adaptable is if there isnt these clear signs of obvious strength, I need to reduce my expectations. Take the quick profit. Or take half and lock in a winner. Maybe that day isnt the day that that stock is meant to blow up in a clear trend and run forever. Take what I can get on the days that have no direction.
Making me think about how SPY also has days where we may get strong for a short period of time, and those are the times I want to get long, but SPY is not trending on a higher time frame long. Just this short burst of strength. And I keep expecting to catch these big blow up trends, and I keep not seeing them and it is clear why now. Because there isnt as much strength in the day as I seem to think there is.
Move 2 move on days where its not obviously strong. Make rules for these scenarios.
One thing im noticing lately is that these names seem to need the most confirmation before they make a move. They need the fail first, then reclaim of level, then all of the MAs to be under if want long.
PROBLEMS
As ugly as my stats are, I still feel I didnt have that many issues this month. The market refused to let me get good wins going.
The first 2 weeks compliance was shit. The usual suspect settling for less strikes again.
Also sizing up on poor trades. Which turned into me making my risk plan. Which I also talk more about below in next section.
So I need my lists again. What was worst this month?
-Settling for less
-Sizing up on trades that dont deserve it
-Not trading off of most significant levels. Ties in with settling for less
^These were more problems happening in the 1st couple weeks. I fixed these issues for the next couple weeks. Slowed my trading way down, half as many trades. But new problems came in
-Abandoning big picture idea because I did not get best entry.
-Missing excellent areas/opportunities to get in
-Fighting market conditions
-Clueless about why stats are so bad.
So one thing is for certain. Market conditions have changed. SPY is not ripping up anymore, we are sideways. A range bound market. And I DID notice, that on days where SPY is trending, is when I have better opportunities and things are actually moving well. Nothing new. But is a must look out for scenario for me when the action is not like that.
A thing I keep going back and forth on is whether or not I should be holding or exiting early and taking money off the table. When do I cut breakeven? When do I cut for win? That is the problem I need to find the answer and sweet spot too. And everything below will help me find it.
Jul 29
MANAGING EXPECTATIONS / THINKING IN TERMS OF PROBABILITIES
I need to do some more stat review here. Heres some pictures.
This shows my trades for the month in order, and how much of a drawdown I was in for each of them. The bottom line is my winners dont go more than -.5R against me. This has to be a rule for me. Heres the past 2 months included
The line stretches down to -.6R but the idea is still the same here.
So what does this rule need to be? When I enter trades, I already enter as close as I can to my risk price. On a great trade its no more than a penny or two. Bigger names can be up to a dollar. TSLA doesnt care about a dollar so trying to save .50cents is unrealistic. The rule cant be 'enter trade, if down -.5R get out.' It wouldnt be that easy.
HOWEVER. I am thinking about the second after I am in a trade. My risk is set so that if I am wrong, I am wrong right now. And then I get out. Down the road in the trade though, if it comes back to breakeven, that is when this rule comes into play.
Scenario:
If im in UAL, in a 39, risk at 38.95. It is usually that tight if not tighter
Right from entry goes to 38.97, I already am thinking im in trouble. Does that mean get out?
Well why is my risk at .95 in the first place? 9/10 its the most recent 1min hi/lo or significant level held on the tape.
If I get in on the tape, shouldnt I also get out?
No, not in this case. I am in off of .95, I need to stick with that .95
Scenario 2:
If im in UAL, in a 39, risk at 38.95
Right from entry we go nowhere, 39.05, 39, 39.03, 37.98, 39.08, 39, 39.05, 39, 37.97
Now time has passed, a noticeable amount, few minutes not seconds, now im down -.5R
Now I think it is ok to look for the exit if price does not immediately improve. The stock had a chance to do what I thought and it is not.
If I do get out, I can always get back in. After all my stats tell me my winners never go -.5R against me, why take the extra .5R risk that its going to turn around and become an outlier. In this case a winner. Just get out and get back in. Time is the factor here. Gotta give it a chance, but not too much of a chance.
Scenario 3:
If im in UAL, in a 39, risk at 38.95
We go boom to 39.30
I have no reason to believe 38.95 is going to be coming into play at all anymore. The problem now is not cutting losses faster, its making sure im following my data, and keeping my win. I dont need to let it go all the way back to entry. This is where I need a plan.
I am pretty damn good at getting a few ticks in my favor after my entries. More often than not lately I get a decent push out of my zone of entry, and then they come back on me and stop me out either full loss, reduced loss, or breakeven. I think there is a way for me to determine better if I should go for the full hold all the way to PT, or if I should be running for the exit sooner than later.
As always, have to go back to the stats and review. What questions do I need an answer to?
-What is an optimal way of me protecting profits? Bigger losses?
-How much do I allow the stock to pullback on me before I say enough is enough and get out all?
-Do I need to be taking size off before my PT, if there are warning signs?
-If yes all or half or some?
The real reason I feel I need to do this is because I am looking at my trades this month and on average, all my trades go +1.5R in my favor.
A chart I havent looked at yet is 'How far do my losers go in my favor on average?'
So where is the line? Looks like only 6 of my (INSERT LARGE NUMBER HERE) losses this month reached +1R
That tells me if a trade does reach +1R, its got a good shot at being a win rather than a loss.
But I need a 2nd opinion on this. Tradervue captures my trades as a whole in and out rather than a piece by piece trade. So MY spreadsheet tells me,
The average MaxR on my losers is +.6
The clear level here is +2R. Only 10 losers hit +2 MaxR and turned into losers.
The discrepancy between these is Tradervue stacks my risk with each trade I add on to the original, my spreadsheet looks at each add as a separate trade.
Here is my Winners by R chart too
Not 1 reached -1R, only 6 got further than -.5R against me, which aligns with the tradervue screenshot.
Average MinR is -.14R
54 of my 259 Losses were never positive.
48 of my 69 wins were never negative.
Again nothing new there, just double checking. Winners work right away.
This is a screenshot of my strats in my spreadsheet and the avg MFE/MAE on each. Max adverse barely negative.
There is a rule to be made from this though now with regards to adding. I dont need to waste my money adding to a trade that does not go immediately from 1st starter entry. Quite literally if the next few ticks are not positive, I dont need to add it.
So as always covering defense is object # 1. Cut the losses quick and make sure they are small. I need to focus on the other side now. What do I do when it is profitable but not getting anywhere. How do I make sure I follow process and at same time ensure I walk away with money in pocket, without choking the trade off.
So there are a lot of numbers here to play with.
WINNERS
-Never go more than -.7R against me
-Average MAE is -.15R (can look at this as 1 or 2 ticks against me)
-Average MFE is 3.5
-70% never negative
LOSERS
-Avg MFE is +.6R
-5% reached +2R
-21% reached +1R
-21% never positive
So what are some bottom lines and what does that mean for my trading? What new rules need to be made?
-Winners never never got more than half my risk against me.
-If trade is ever down to -.5R against me, look to get out. Preferably on any price close to breakeven. Do not wait for -1R unless was based on large bid/offer holding
-5% of losers reached +2R
-If trade reaches +2R, stop becomes breakeven.
-Avg MFE of winners is +3.5R
-If trade reaches +3R, it is a winner. Stop becomes +1R. Re enter if necessary.
-1/5th of all my losers came from being up +1R
-If trade reaches +1R, stop becomes if breakeven cant hold in favor.
Ok so if I implemented these rules this month, what would my screenshots look like? Save money? Lose bigger win?
Prevent bigger L - ////////////////////////////////////
Keep W from turning L - //////////////
Lose a win - /
Another thing I want to check is a 50% retrace on my wins. If I get all out on 50% retrace, after its up at least +3R, do I save money?
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Hard to judge yourself when you go over these screenshots of trades you shouldnt have been in in the first place.
Well a theme among my winners, is that I really dont need to worry about 50% pullbacks, or any significant pullbacks really. Best wins go from A to B in a straight line for the most part, with very little wiggle room in between. Catching a wave.
Rule I want to add
-If trade has spent any time at all positive, and a couple minutes have passed
-Change stop to -.5R
Hovering around my entry is ok, but not for long as long as im not losing money. I can stick with that trade and see what happens, but not so long I take a full loss on it.
A thing im realizing as im going through these charts, is how I worded my rules. I state if breakeven cant hold im out. That would be a small loser. Why not take a small winner instead? Always better to add money than to lose it. I think I need to change those.
If my trade is a winner, im going to know that its a good winner I need to hold within a minute or two. Those are the ones I need to capitalize on, the rest can be simple wallet padders if they are not acting right, but well enough to put me in a small winning trade.
Where have I heard these rules before? Rule #1, dont lose money. Rule #2, dont. lose. money.
OK finished up. This is good. Clearly can tell I will save money switching to these rules. And will lock in some wins as well.
With these tabs, a thing to remember is I may have 2/3 adds on a trade, but only marking it down as 1 trade I saved money on. So I have 36 tallies on saving a further loss by cutting it quicker. Ill make a lot of assumptions here.
Lets say each tally would count for 2 trades, so thats 72 trades I could at least cut losses on in half. Avg loss being $30, down to $15 x 72 thats $1080 to save, or about 1/3 of my p/l this month.
Other side of things, 14 trades, well say 28, I could have kept more money, rather than give it up at breakeven. Avg risk per trade is $38, of my 69 wins, 28 of them I couldve saved some extra cash. So $38 x 28 is another $1000 to save. This one is a big stretch though.
I do think that its safe to say that if I used these rules this month, I couldve cut my losses in half. Thats a big deal.
And one last thing I want to check is how far my winners pullback on me before I exit. Where is a good spot to look to get all out and reset the trade? Gonna look at all winners past couple months.
Have to remember best wins dont mess around, they go from point A to B with no warning signs inbetween. So when they do show warning signs, thats a problem. Just looking at my screenshots it seems a good rule of thumb is to get all out of the trade after it shows these warning signs, preferably sooner than later, but some names liked to retrace all the way back to entry, some not too much at all before resuming again. The main warning sign is volume. Best wins have huge vol cues, increases after the move has started which start the trend. Those vol cues run right through pivot points and continue on.
So the warning signs to look out for start with volume. A lack of it. If theres a lack of volume on the initial move that doesnt mean ill change mt stop right away, its only 1 indication. A failed break is the main one. If it does break a pivot and roll back over, or gets to it with weak volume and fails to break it. Thats when I need to tighten the stop.
Final rules
-Winners never never got more than half my risk against me.
-If trade is ever down to -.5R against me, look to get out. Preferably on any price close to breakeven. Do not wait for -1R unless was based on large bid/offer holding
-5% of losers reached +2R
-If trade reaches +2R, stop becomes BEFORE breakeven.
-Avg MFE of winners is +3.5R
-If trade reaches +3R, it is a winner. Stop becomes +1R. Re enter if necessary.
-1/5th of all my losers came from being up +1R
-If trade reaches +1R, stop becomes if breakeven cant hold in favor.
-Stock shows warning signs at point it should not be seeing them (failed break,lack of volume, slow tape)
-Stop raised to 50% of the move.
Im liking this way of thinking about my trading in terms of R. Now just being more descriptive about it. Making sure I leave with more money in the account than I started.
One thing im worried about is that I hear all the time that we are traders are supposed to be comfortable with the loss. Its part of the game. So Im concerned im trying too hard not to lose here.
I have to think about my trading in terms of the next 20 trades. Not the one im in, or the one im about to be in. I know that my best trades, the ones that make the day/week/month, I dont have to concern myself about them being a loser at all for a second. Those are the ones I dont need to worry about at all. Its all these other ones. About 80% of them, that flutter in the middle, the maybe zone. Those are the ones im freaking out about during this post, trying to make sure they can be winner instead of losers, while still respecting my process/data/strengths/trades and not getting out for the sake of getting out.
You can always get back in.
REVISED RISK PLAN
Need to change how I start the trade, I have been starting big and adding bigger. I need to be starting smaller again and adding bigger if its winning. A 10star favorite trade is a good trade, but doesnt mean its a win. And more often than not I am proven wrong after 1st entry, so it may as well be small.
As I was filling out stats I realized something about my avg risk per W/L. If I start the trade small, and its a loser, the loss and risk were both small. If I start small, and it wins, and I add, that risk is bigger, and add again, that risk is bigger. Now im in a situation where my average risk per win is larger because I am adding further away from my risk with the same size/ or perhaps more depending on what I see.
So when I see my avg risk per w/l are the same, it means that I am not actually adding bigger risk to my winners, but reducing it. The size is what matters lol. When I start 100, add 100, add 100. Im adding as price gets further from my risk, therefore increasing it. When I start 300, add 200, add 100. Im relatively keeping risk as a constant. BUT when I lose on that 300, I end up with months like these where my starter losses are much bigger, when there was not a lot of trade confirmation yet.
The goal here in this case should be to keep the loss small and add to wins. If I want to keep the loss small, that means I have to start small.
Favorite setups 10/9 ⭐
-Start $50 risk
-Double down
-Add same share size
Risk gets further away as trade moves more in my favor quickly. $ risked increases but share size remains same for each add.
By the time that last add is in, Risk should be close to $200
10/9 ⭐setups
-Start $50 risk
-Double down
-Add last size in half.
8 ⭐ or less
-Start $25 risk
-Double down
-Add same share size
SOLUTIONS
-On days where SPY is trending, are days with best opportunity.
-If trade has gone negative at all. It does not deserve a large add just because it came back to breakeven and a little in my favor. It needs more than that.
-Start smaller. Add bigger risk, not necessarily size.
-I have to get into the trade if it is at my level and moving in my favor. The problem comes from me not getting my start right where I want it with best RR. Cut size in half. Get in.
NEW RULES
-If trade is ever down to -.5R against me, look to get out. Preferably on any price close to breakeven. Do not wait for -1R unless was based on large bid/offer holding
-If trade reaches +2R, stop becomes BEFORE breakeven.
-If trade reaches +3R, it is a winner. Stop becomes +1R. Re enter if necessary.
-If trade reaches +1R, stop becomes if breakeven cant hold in favor.
-Stock shows warning signs at point it should not be seeing them (failed break,lack of volume, slow tape)
-Stop raised to 50% of the move.
CONDITIONALS/SCENARIOS
If after entry...
-We go right to -.5R
-Already looking to get out of trade if doesnt turn in favor right away. Get back in at where -1R would be if its there
-We go right to +1R
-Stop is change to if breakeven cant hold in favor. Get back in if its there at either breakeven or -1R
-We go right to +2R
-Stop is changed to before breakeven, a few ticks or maybe +.5R. Keep the win. Get back in it its there at original R.
-We go right to +3R
-Stop is changed to +1R. Period. Get back in at original R if its there.
-We go right to breaking point and 1. Fail to break it with low vol/tape, 2. Break but fail to move anymore and roll back under.
-Stop is changed to 50% of move that got us there. Re enter at original R if its there.
-We go right to PT
-Take profits as normal.
GOALS FROM LAST WEEK/MONTH
Correct Avg risk per star rating. Next week will be end of the month so will do a quick check on the week to make sure im where im supposed to be.
-Got this down very well. Just tweaking it a bit, making it more efficient
Only take 8 star trades that are favorites. All other 8 just avoid.
-Check
All trade locations at prev hod/lod, D bo levels, or significant past zones.
-Check
Didnt get 1st entry? Take trade with less size, look to add later on pullbacks.
-Fail. This is a fairly big problem of mine.
Lower volatile names require me to trade with SPY. Dont fight market conditions on those names
-Doing better. Have clear plans with what to do now going forward.
NEW GOALS
-Follow your new rules.
-Get into big picture ideas
-With intended size if best RR case is present
-With half size if missed best RR case
-Do not short stocks at ATH
-Follow SPY trend on all trades. To do otherwise is settling for lesser probability trades.
-Dont settle. Continue taking trades at the best HTF levels I know I trade well.
FINAL THOUGHTS
I say that I say this every time and ill keep saying it. I always feel better after a good review. Pretty excited to implement these new rules. Ive got my sticky notes good to go on the monitors as a reminder everyday. Head down. Get to trading.
How will I make my money back?
-One good trade at a time
-Cutting losses more efficiently
-Keeping money that the market makes available to me
-Resetting the trade
-Adding to winners
I look at my stats and it is a sea of red. Never seen this much before. Everything was down this month. Compliance, WR, p/l, avg MFE. I had a lot of things come up in my trading this month that I needed to write out in here because it was going to be a topic/goal going forward. Some I found solutions for, some I settled that it was just part of the game, some im clueless on.
NUMBERS
-$2973
64/328 19% WR
78% Compliance
-87R
46 breakeven, 86 full -1R, 48 more than -1R
Avg win +$71
Avg loss -$30
Avg risk $38
140k Shares traded.
In comparison, I traded less than most months. Compliance average. Breakeven way down. Full-1R average. More than -1R is above average. Avg win vs loss still good. Shares traded is most ever.
I been trying to get bigger and I am. My Avg win and RR still largely skewed in my favor. Its my WR that is way low.
I talk about it much more later on in the post. But first you can read what I wrote mid month if you want. If not, it picks up at the PROBLEMS section.
July 17
Trading is such a mental game. I seem to keep running into a few common major problems.
1. Not following Profit Taking rules
-Not leaving a runner
-Taking partial early, not giving it 1min lo/hi
2. Not risking trades according to ⭐ rating.
-Risking too much on trades that do not deserve the risk. I have to drop this mindset that every trade deserves the same risk. I am making a plan below
3. If I dont get my initial starter, I skip the whole trade idea.
Back when I was a financial advisor, there was a guy helping me out that said 'you dont ever get comfortable with making the phone call, it always stays.' He had been doing it 10+ years. And its relatable to trading. I cannot 'fix' these problems, I simply make them less and less. Its still uncomfortable watching profits be given up, but its part of the game. You have to try and squeeze the most out of your best wins.
RISK PLAN
Favorite setups
-Obviously deserve the most risk. These are trades I will start uncomfortably big, and only get bigger.
-Starter with 75$ risk on initial entry as it is the best RR start.
-Add 75$, essentially double size.
-Then add $50, cut add in half.
10/9 ⭐setups
-Still best deserve more.
-Start with 50$ risk
-Add $50
-Add $25
8 ⭐ or less
-Its still a setup in my edge, but missing a few points
-Start $30
-Add $30
-Add $15
I need to be risking more on my best, and not more on my lesser setups. Im taking too many big hits on trades that are lower star ratings/not my favorites/ not ideal. Best trades are around HTF levels with tape vol cues and markets help. If I dont have some of those, its not my best, it does not deserve more money on the line.
The other downside from this is that it takes me too long to recognize what kind of star rating it is. I need a better system for this.
I already have premarket points labeled on the stocks now. Usually its a 4 or 5. The other ones I have to recognize in real time usually withing moments.
Other possible points are.
1. Tape.
2. Volume
3. Relative strength/weakness
4. Market conditions aligned with trade
5. Clean clear PA at HTF levels.
6. Failure
7. RVOL
8. Significant HTF level, not just any
If It is a 5, and gets 5 more, its a 10 and I need to be getting bigger on it, stepping up size. If Its a 10 and a favorite, I need to get to max BP.
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July 22
I wrote all of that ^^^ about the 2nd week into the month as I was slacking and compliance was dropping way too low. And happy to say that those problems were fixed well. At the end of the month compliance was back much higher close to 100% not below 90%. But P/L was not following. I had 94% compliance yet lost the same amount p/l as the weeks before. WR also still low. No idea what is going on. Things just were not working the same way they used to.
I wrote about it a lot on Tuesday ill copy and paste
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Annoying day again. Nothing but 10/9 star favorite setups. No follow up. Nothing. Not a thing. Why? I have no idea. Every trade I took today was
1. Necessary
2. 10 or 9 star favorite setup
3. Correlated with SPY/same side
4. Clear tape cues
5. At great locations
6. Long
7. Most after a failed move the opposite way
I mean this is A+ stuff that usually is killing it for me and just nothing out there.
Im starting to think it means more to what kind of market were in. All those signs in one setup? But it fails? Several times across different stocks? Across the whole market? And were failing things on daily charts?
Maybe bulls are just tired. Things that were once able to rip higher easily are no longer able to. Doesnt mean I should avoid the long, but maybe reduce expectations? Take off more early?
My trades today were all positive at one point. Average was +.8R which really is nothing special. So dont think anything notable there.
I managed risk very well today though. Sized up in all of these and escaped relatively unharmed. I am down 300$ on the day but on all the trades I took, on average if they hit PT the trade was worth +$275 so just one of these 9 trades I took wouldve erased most of the losses.
In total on all PTON trades I risked $1040 on 8 separate trades and lost $181. And all were correct stop outs.
Frustrating to still see myself in this spot. I keep saying one of these times itll eventually work out for me but my god, its taking longer than it ever has before. Im not trading poorly, im doing whats been working for me. If we have to be adaptable as day traders, what do I need to adapt here.
I look around and good moves are still happening out there. The problem for me is that they are coming out of left field, from locations I got no business trading around. The usual rips and dumps I look to capture right at the turning point, do not come from the levels I am looking to take them at. Which really isnt anything new, its just happening a lot more often lately.
Which means my edge is still viable and things do happen from these points still, its just few and far between each one.
Im not convinced that I need to STOP what im doing. I am convinced that I need to be more selective, and that has been what I am doing. I wait for the market to come to me, and whatever happens happens. I stay on same side of SPY and overall trend. I expand my opportunities back to gap stocks with breaking news, still applying my same logic to those markets. Waiting to see what I need to see. And whatever happens, happens. I manage risk well, I stay selective, I enter when I see thesis confirmation, I exit when I see warning signs.
P/L is not reflecting how I am trading. And im not sure I should be upset as I am. The money will come, I know what I do can work in all markets. I trade the market. Not indicators or anything else. I read the flow. And apparently I must not be doing well at it now. Reading false signals, ignoring the other side. It really doesnt feel like it, but maybe I am missing things that are not so obvious.
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By my standards and way I judge myself, I am not doing anything wrong. Im actually trading pretty well. But the market isnt giving me a damn thing.
I remember back to my old chat with traders obsession listening to everything. Risk management is king. I am not blowing myself up here regardless of all these losses. My trades are averaging 1:5 RR and with a 25% WR, means that it can still be profitable, even though my WR on a good month is closer to 40%. WR also doesnt take into account where my PT is, or if it is hit. So on some of these good trades, 1 win will wipe out ~5 losses. Which is good. And necessary for long term survival.
I never in my career thought id be focused on WR before after hearing endlessly about how it is one of the least important metrics for your trading, but I know where my averages are at. And if WR is low, then something is wrong. And 9/10 it is because im settling for less, but not this time. Not in this market. Something else is going wrong.
I still miss some trades every now and then. And it especially hurts more now that I am down and having a tough time trying to find a good winner, that if that 1 winner goes without me, well that could have been my only shot at a winning trade for the next 5 trades, who knows? So its going to be imperative to my trading that I DO take every setup that meets all my criteria.
Another thing im thinking about is you are only as good as the stocks you trade. To put it in one simple term its RVOL for me. What makes a stock have higher RVOL than others. News, significant daily patterns. Some kind of catalyst. So thats what I aim for when I chart the night before/morning of. Trying to find what stocks I think are going to be making the best moves. Just keeping my options open. And on top of that I keep track of which ones are my favorite so I know I can size up on them. Managing risk as always but also putting pedal to the medal when all my points are lining up.
There has never been a time in my career when I havent wanted to get to the bottom of some problem ive been having in my trading. I dont roll over and accept it and dont try to improve upon it. But for the 1st time, after all these losses, I feel like there isnt anything major going on with me. Im just losing. Youre not meant to win every trade/day/week/month. Perhaps this is just one of those times when trading is working its best for me. The answer is always scale back, find out whats going wrong, fix it, and get back to work. And I did all of that, and its still met with losing trades.
Maybe im super unlucky. Maybe im not and im clearly missing something going on out there. Maybe its just meant to be this way for now during this period. Im staying on my game, making sure im compliant. Proper review, proper charting. Proper entries and exits and trade management, proper risk management. Its tough to just accept this one for what it is.
Ive still got 3 days left before the trading month is over. Lets see what can change in that amount of time. Maybe things will start going for me again and itll be back to normal, maybe ill find whats going on and be able to change it. Maybe ill just lose again 3 days straight. All I DO know, is that if I follow my process/rules/compliance, then I am trading correctly and the rest is up to mother market.
Next day after I wrote this was wednesday. And it was a solid day, with solid setups. The most notable thing here today was that there was a CLEAR theme across the board. Buying. Pot stocks popping, air/cruise/restaurant stocks popping. SPY uptrend and holding higher. Trending hard.
There was a clear theme that made my trades a lot 'easier' to work with.
I think the area that I need to be adaptable is if there isnt these clear signs of obvious strength, I need to reduce my expectations. Take the quick profit. Or take half and lock in a winner. Maybe that day isnt the day that that stock is meant to blow up in a clear trend and run forever. Take what I can get on the days that have no direction.
Making me think about how SPY also has days where we may get strong for a short period of time, and those are the times I want to get long, but SPY is not trending on a higher time frame long. Just this short burst of strength. And I keep expecting to catch these big blow up trends, and I keep not seeing them and it is clear why now. Because there isnt as much strength in the day as I seem to think there is.
Move 2 move on days where its not obviously strong. Make rules for these scenarios.
One thing im noticing lately is that these names seem to need the most confirmation before they make a move. They need the fail first, then reclaim of level, then all of the MAs to be under if want long.
PROBLEMS
As ugly as my stats are, I still feel I didnt have that many issues this month. The market refused to let me get good wins going.
The first 2 weeks compliance was shit. The usual suspect settling for less strikes again.
Also sizing up on poor trades. Which turned into me making my risk plan. Which I also talk more about below in next section.
So I need my lists again. What was worst this month?
-Settling for less
-Sizing up on trades that dont deserve it
-Not trading off of most significant levels. Ties in with settling for less
^These were more problems happening in the 1st couple weeks. I fixed these issues for the next couple weeks. Slowed my trading way down, half as many trades. But new problems came in
-Abandoning big picture idea because I did not get best entry.
-Missing excellent areas/opportunities to get in
-Fighting market conditions
-Clueless about why stats are so bad.
So one thing is for certain. Market conditions have changed. SPY is not ripping up anymore, we are sideways. A range bound market. And I DID notice, that on days where SPY is trending, is when I have better opportunities and things are actually moving well. Nothing new. But is a must look out for scenario for me when the action is not like that.
A thing I keep going back and forth on is whether or not I should be holding or exiting early and taking money off the table. When do I cut breakeven? When do I cut for win? That is the problem I need to find the answer and sweet spot too. And everything below will help me find it.
Jul 29
MANAGING EXPECTATIONS / THINKING IN TERMS OF PROBABILITIES
I need to do some more stat review here. Heres some pictures.
This shows my trades for the month in order, and how much of a drawdown I was in for each of them. The bottom line is my winners dont go more than -.5R against me. This has to be a rule for me. Heres the past 2 months included
The line stretches down to -.6R but the idea is still the same here.
So what does this rule need to be? When I enter trades, I already enter as close as I can to my risk price. On a great trade its no more than a penny or two. Bigger names can be up to a dollar. TSLA doesnt care about a dollar so trying to save .50cents is unrealistic. The rule cant be 'enter trade, if down -.5R get out.' It wouldnt be that easy.
HOWEVER. I am thinking about the second after I am in a trade. My risk is set so that if I am wrong, I am wrong right now. And then I get out. Down the road in the trade though, if it comes back to breakeven, that is when this rule comes into play.
Scenario:
If im in UAL, in a 39, risk at 38.95. It is usually that tight if not tighter
Right from entry goes to 38.97, I already am thinking im in trouble. Does that mean get out?
Well why is my risk at .95 in the first place? 9/10 its the most recent 1min hi/lo or significant level held on the tape.
If I get in on the tape, shouldnt I also get out?
No, not in this case. I am in off of .95, I need to stick with that .95
Scenario 2:
If im in UAL, in a 39, risk at 38.95
Right from entry we go nowhere, 39.05, 39, 39.03, 37.98, 39.08, 39, 39.05, 39, 37.97
Now time has passed, a noticeable amount, few minutes not seconds, now im down -.5R
Now I think it is ok to look for the exit if price does not immediately improve. The stock had a chance to do what I thought and it is not.
If I do get out, I can always get back in. After all my stats tell me my winners never go -.5R against me, why take the extra .5R risk that its going to turn around and become an outlier. In this case a winner. Just get out and get back in. Time is the factor here. Gotta give it a chance, but not too much of a chance.
Scenario 3:
If im in UAL, in a 39, risk at 38.95
We go boom to 39.30
I have no reason to believe 38.95 is going to be coming into play at all anymore. The problem now is not cutting losses faster, its making sure im following my data, and keeping my win. I dont need to let it go all the way back to entry. This is where I need a plan.
I am pretty damn good at getting a few ticks in my favor after my entries. More often than not lately I get a decent push out of my zone of entry, and then they come back on me and stop me out either full loss, reduced loss, or breakeven. I think there is a way for me to determine better if I should go for the full hold all the way to PT, or if I should be running for the exit sooner than later.
As always, have to go back to the stats and review. What questions do I need an answer to?
-What is an optimal way of me protecting profits? Bigger losses?
-How much do I allow the stock to pullback on me before I say enough is enough and get out all?
-Do I need to be taking size off before my PT, if there are warning signs?
-If yes all or half or some?
The real reason I feel I need to do this is because I am looking at my trades this month and on average, all my trades go +1.5R in my favor.
A chart I havent looked at yet is 'How far do my losers go in my favor on average?'
That tells me if a trade does reach +1R, its got a good shot at being a win rather than a loss.
But I need a 2nd opinion on this. Tradervue captures my trades as a whole in and out rather than a piece by piece trade. So MY spreadsheet tells me,
The average MaxR on my losers is +.6
The clear level here is +2R. Only 10 losers hit +2 MaxR and turned into losers.
The discrepancy between these is Tradervue stacks my risk with each trade I add on to the original, my spreadsheet looks at each add as a separate trade.
Here is my Winners by R chart too
Not 1 reached -1R, only 6 got further than -.5R against me, which aligns with the tradervue screenshot.
Average MinR is -.14R
54 of my 259 Losses were never positive.
48 of my 69 wins were never negative.
Again nothing new there, just double checking. Winners work right away.
There is a rule to be made from this though now with regards to adding. I dont need to waste my money adding to a trade that does not go immediately from 1st starter entry. Quite literally if the next few ticks are not positive, I dont need to add it.
So as always covering defense is object # 1. Cut the losses quick and make sure they are small. I need to focus on the other side now. What do I do when it is profitable but not getting anywhere. How do I make sure I follow process and at same time ensure I walk away with money in pocket, without choking the trade off.
So there are a lot of numbers here to play with.
WINNERS
-Never go more than -.7R against me
-Average MAE is -.15R (can look at this as 1 or 2 ticks against me)
-Average MFE is 3.5
-70% never negative
LOSERS
-Avg MFE is +.6R
-5% reached +2R
-21% reached +1R
-21% never positive
So what are some bottom lines and what does that mean for my trading? What new rules need to be made?
-Winners never never got more than half my risk against me.
-If trade is ever down to -.5R against me, look to get out. Preferably on any price close to breakeven. Do not wait for -1R unless was based on large bid/offer holding
-5% of losers reached +2R
-If trade reaches +2R, stop becomes breakeven.
-Avg MFE of winners is +3.5R
-If trade reaches +3R, it is a winner. Stop becomes +1R. Re enter if necessary.
-1/5th of all my losers came from being up +1R
-If trade reaches +1R, stop becomes if breakeven cant hold in favor.
Ok so if I implemented these rules this month, what would my screenshots look like? Save money? Lose bigger win?
Prevent bigger L - ////////////////////////////////////
Keep W from turning L - //////////////
Lose a win - /
Another thing I want to check is a 50% retrace on my wins. If I get all out on 50% retrace, after its up at least +3R, do I save money?
//////
Hard to judge yourself when you go over these screenshots of trades you shouldnt have been in in the first place.
Well a theme among my winners, is that I really dont need to worry about 50% pullbacks, or any significant pullbacks really. Best wins go from A to B in a straight line for the most part, with very little wiggle room in between. Catching a wave.
Rule I want to add
-If trade has spent any time at all positive, and a couple minutes have passed
-Change stop to -.5R
Hovering around my entry is ok, but not for long as long as im not losing money. I can stick with that trade and see what happens, but not so long I take a full loss on it.
A thing im realizing as im going through these charts, is how I worded my rules. I state if breakeven cant hold im out. That would be a small loser. Why not take a small winner instead? Always better to add money than to lose it. I think I need to change those.
If my trade is a winner, im going to know that its a good winner I need to hold within a minute or two. Those are the ones I need to capitalize on, the rest can be simple wallet padders if they are not acting right, but well enough to put me in a small winning trade.
Where have I heard these rules before? Rule #1, dont lose money. Rule #2, dont. lose. money.
OK finished up. This is good. Clearly can tell I will save money switching to these rules. And will lock in some wins as well.
With these tabs, a thing to remember is I may have 2/3 adds on a trade, but only marking it down as 1 trade I saved money on. So I have 36 tallies on saving a further loss by cutting it quicker. Ill make a lot of assumptions here.
Lets say each tally would count for 2 trades, so thats 72 trades I could at least cut losses on in half. Avg loss being $30, down to $15 x 72 thats $1080 to save, or about 1/3 of my p/l this month.
Other side of things, 14 trades, well say 28, I could have kept more money, rather than give it up at breakeven. Avg risk per trade is $38, of my 69 wins, 28 of them I couldve saved some extra cash. So $38 x 28 is another $1000 to save. This one is a big stretch though.
I do think that its safe to say that if I used these rules this month, I couldve cut my losses in half. Thats a big deal.
And one last thing I want to check is how far my winners pullback on me before I exit. Where is a good spot to look to get all out and reset the trade? Gonna look at all winners past couple months.
Have to remember best wins dont mess around, they go from point A to B with no warning signs inbetween. So when they do show warning signs, thats a problem. Just looking at my screenshots it seems a good rule of thumb is to get all out of the trade after it shows these warning signs, preferably sooner than later, but some names liked to retrace all the way back to entry, some not too much at all before resuming again. The main warning sign is volume. Best wins have huge vol cues, increases after the move has started which start the trend. Those vol cues run right through pivot points and continue on.
So the warning signs to look out for start with volume. A lack of it. If theres a lack of volume on the initial move that doesnt mean ill change mt stop right away, its only 1 indication. A failed break is the main one. If it does break a pivot and roll back over, or gets to it with weak volume and fails to break it. Thats when I need to tighten the stop.
Final rules
-Winners never never got more than half my risk against me.
-If trade is ever down to -.5R against me, look to get out. Preferably on any price close to breakeven. Do not wait for -1R unless was based on large bid/offer holding
-5% of losers reached +2R
-If trade reaches +2R, stop becomes BEFORE breakeven.
-Avg MFE of winners is +3.5R
-If trade reaches +3R, it is a winner. Stop becomes +1R. Re enter if necessary.
-1/5th of all my losers came from being up +1R
-If trade reaches +1R, stop becomes if breakeven cant hold in favor.
-Stock shows warning signs at point it should not be seeing them (failed break,lack of volume, slow tape)
-Stop raised to 50% of the move.
Im liking this way of thinking about my trading in terms of R. Now just being more descriptive about it. Making sure I leave with more money in the account than I started.
One thing im worried about is that I hear all the time that we are traders are supposed to be comfortable with the loss. Its part of the game. So Im concerned im trying too hard not to lose here.
I have to think about my trading in terms of the next 20 trades. Not the one im in, or the one im about to be in. I know that my best trades, the ones that make the day/week/month, I dont have to concern myself about them being a loser at all for a second. Those are the ones I dont need to worry about at all. Its all these other ones. About 80% of them, that flutter in the middle, the maybe zone. Those are the ones im freaking out about during this post, trying to make sure they can be winner instead of losers, while still respecting my process/data/strengths/trades and not getting out for the sake of getting out.
You can always get back in.
REVISED RISK PLAN
Need to change how I start the trade, I have been starting big and adding bigger. I need to be starting smaller again and adding bigger if its winning. A 10star favorite trade is a good trade, but doesnt mean its a win. And more often than not I am proven wrong after 1st entry, so it may as well be small.
As I was filling out stats I realized something about my avg risk per W/L. If I start the trade small, and its a loser, the loss and risk were both small. If I start small, and it wins, and I add, that risk is bigger, and add again, that risk is bigger. Now im in a situation where my average risk per win is larger because I am adding further away from my risk with the same size/ or perhaps more depending on what I see.
So when I see my avg risk per w/l are the same, it means that I am not actually adding bigger risk to my winners, but reducing it. The size is what matters lol. When I start 100, add 100, add 100. Im adding as price gets further from my risk, therefore increasing it. When I start 300, add 200, add 100. Im relatively keeping risk as a constant. BUT when I lose on that 300, I end up with months like these where my starter losses are much bigger, when there was not a lot of trade confirmation yet.
The goal here in this case should be to keep the loss small and add to wins. If I want to keep the loss small, that means I have to start small.
Favorite setups 10/9 ⭐
-Start $50 risk
-Double down
-Add same share size
Risk gets further away as trade moves more in my favor quickly. $ risked increases but share size remains same for each add.
By the time that last add is in, Risk should be close to $200
10/9 ⭐setups
-Start $50 risk
-Double down
-Add last size in half.
8 ⭐ or less
-Start $25 risk
-Double down
-Add same share size
SOLUTIONS
-On days where SPY is trending, are days with best opportunity.
-If trade has gone negative at all. It does not deserve a large add just because it came back to breakeven and a little in my favor. It needs more than that.
-Start smaller. Add bigger risk, not necessarily size.
-I have to get into the trade if it is at my level and moving in my favor. The problem comes from me not getting my start right where I want it with best RR. Cut size in half. Get in.
NEW RULES
-If trade is ever down to -.5R against me, look to get out. Preferably on any price close to breakeven. Do not wait for -1R unless was based on large bid/offer holding
-If trade reaches +2R, stop becomes BEFORE breakeven.
-If trade reaches +3R, it is a winner. Stop becomes +1R. Re enter if necessary.
-If trade reaches +1R, stop becomes if breakeven cant hold in favor.
-Stock shows warning signs at point it should not be seeing them (failed break,lack of volume, slow tape)
-Stop raised to 50% of the move.
CONDITIONALS/SCENARIOS
If after entry...
-We go right to -.5R
-Already looking to get out of trade if doesnt turn in favor right away. Get back in at where -1R would be if its there
-We go right to +1R
-Stop is change to if breakeven cant hold in favor. Get back in if its there at either breakeven or -1R
-We go right to +2R
-Stop is changed to before breakeven, a few ticks or maybe +.5R. Keep the win. Get back in it its there at original R.
-We go right to +3R
-Stop is changed to +1R. Period. Get back in at original R if its there.
-We go right to breaking point and 1. Fail to break it with low vol/tape, 2. Break but fail to move anymore and roll back under.
-Stop is changed to 50% of move that got us there. Re enter at original R if its there.
-We go right to PT
-Take profits as normal.
GOALS FROM LAST WEEK/MONTH
Correct Avg risk per star rating. Next week will be end of the month so will do a quick check on the week to make sure im where im supposed to be.
-Got this down very well. Just tweaking it a bit, making it more efficient
Only take 8 star trades that are favorites. All other 8 just avoid.
-Check
All trade locations at prev hod/lod, D bo levels, or significant past zones.
-Check
Didnt get 1st entry? Take trade with less size, look to add later on pullbacks.
-Fail. This is a fairly big problem of mine.
Lower volatile names require me to trade with SPY. Dont fight market conditions on those names
-Doing better. Have clear plans with what to do now going forward.
NEW GOALS
-Follow your new rules.
-Get into big picture ideas
-With intended size if best RR case is present
-With half size if missed best RR case
-Do not short stocks at ATH
-Follow SPY trend on all trades. To do otherwise is settling for lesser probability trades.
-Dont settle. Continue taking trades at the best HTF levels I know I trade well.
FINAL THOUGHTS
I say that I say this every time and ill keep saying it. I always feel better after a good review. Pretty excited to implement these new rules. Ive got my sticky notes good to go on the monitors as a reminder everyday. Head down. Get to trading.
How will I make my money back?
-One good trade at a time
-Cutting losses more efficiently
-Keeping money that the market makes available to me
-Resetting the trade
-Adding to winners
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