The Chart Strategist

Trade Nbr. 81 - 2007

2007-08-23T13:01:00.000+02:00

Short Sep 07 E-mini S&P: Entered on Aug 13th - Closed on Aug13th.Short: 1463.25 -- Initial Stop: 1469.00 -- Stopped: 1469.00 -- Result: -1,00R

Bearish in Screen I - At value in Screen II - Entry Set-up 1 in Screen III (uncompleted) - Stopped out.

Comments : Bad trade. I entered as the signal was not yet completed in Screen III... Somehow unlucky as well since the market reversed during the last minute of this bar, ie: the reversal was once again amazingly brutal... tough markets..

Trade Nbr. 80 - 2007

2007-08-23T12:45:00.000+02:00

Long Sep 07 E-Mini S&P : Entered on Aug 13th - Closed on Aug 13th.Long: 1468.50 -- Initial Stop: 1466.25 -- Stopped: 1466.25 -- Result: -1,0R

Bullish in Screen I - Pullback at value in Screen II - Entry Set-up 1 in Screen III - Stopped out.

Comments: Reversal was brutal, no way to exit in order to reduce the risk....

Trade Nbr. 79 - 2007

2007-08-10T19:10:00.000+02:00

Short Sep 07 Crude Oil: Entered on August 10th - Closed on August 10th.

Short: 70.64 -- Initial Stop: 70.89 -- Stopped: 70.89 -- Result: -1,00R

Bearish in Screen I - Pullback to value in Screen II - Entry Set-up 1 in Screen III - Stopped out..

Comments : Difficult trade, the reversal was too quick to allow a better exit.....

Trade Nbr. 78 - 2007

2007-08-06T16:48:00.000+02:00

Short Sep 07 E-mini S&P: Entered on August 6th - Closed on August 6th.Short: 1446.50 -- Initial Stop: 1451.50 -- Covered: 1437.00 -- Result: 1,90R

Bearish in Screen I - Pullback to value in Screen II - Entry Set-up 1 in Screen III - Covered as the market did its move too quickly and was not followed by a rally in Bonds and Yen.....

Comments : Good trade. Exit was good, I noticed that something was different than previous days' sell-offs..

On Holiday this week !!

2007-07-31T23:27:00.000+02:00

I am taking the week off and will be back next week.

Wishing all a good trading week !!

Trade Nbr. 77 - 2007

2007-07-28T11:50:00.000+02:00

Short Nov 07 Soybeans: Entered on July 27th - Closed on July 27th.
Short: 839 4/8 -- Initial Stop: 844 6/8 -- Covered: 843 2/8-- Result: -0,72R

Bearish in Screen I - Pullback to value in Screen II - (Late) Entry Set-up 1 in Screen III - Stopped by my trailing stop.

Comments : Bad trade. Entry was "forced" : I entered too late and then I was unlucky with the trailing stop. The market reversed in a few seconds just as I was adjusting my trailing stop from the 843 2/8 level down to 840 2/8 once the previous candle was completed....This would have reduced the loss to almost nothing....

Grading for Trades nbr. 51 to 75

2007-07-26T14:49:00.001+02:00

As mentioned in previous posts, one of the key element in improving as a trader is to continually monitor the performance over a meaningful number of trades. Grading every 25 trades should help me identify if there are some particular systematic weaknesses that are apparent in my trading. The idea is to measure if I reach a target that gives me a sustainable edge over the long run. The key statistics that define such an edge are the following:

1. Percentage of winning trades: The objective is to achieve a minimum of 60% winning trades.

2. Average win/loss: The objective is to achieve a minimum ratio of 1,5 to 1.

3. 3 biggest wins/3 biggest losses: The objective is to achieve an average of minimum 2 to 1.

4. Biggest win/biggest loss: The objective is to achieve a minimum of 3 to 1.

Nbr. 1 and 2 are given equal weighting (36 out of 100 for each), followed by nbr.3 (16 out of 100) and the lowest weighting for nbr.4 (12 out 100). Anytime I reach the 100 mark over 25 trades, I have achieved my minimum trading objective, anything above indicates that I am on top of my game !!

Once this quantitative evaluation has been completed, I am reviewing each and every one of the 25 trades from my diary with the objective of identifying recurrent patterns, both in my strategy and the execution of the plan. This qualitative analysis should help me to continually look for improvements in my strategy and identify early enough if I need to adapt to changing my game plan. It is, as well, the way to adress recurrent problems regarding the execution of the trading plan and psychological issues that may have occured during the period. With this diagnosis, my aim is to objectively look at the quality of my work and to identify what has to be improved to continue growing as a trader.

Herebelow are the 3 gradings I did sofar since the beginning of the year.

Trades 51 to 75 have been slightly better than the previous 25 but again have not been above the 100 mark, confirming that my trading is still slightly erratic. I have experienced again a serious drawdown during this period (trades 63 to 70). This series of losses has basically been due to the fact that I tried to take signals from a "quicker" timeframe than the usual (using volume-based candles) in order to generate a higher frequency of signals. As soon as I came back to my usual intra-day timeframes, thinks went back to "normal".

Accumulated equity curve since Jan 1st in Rs:

Trade Nbr. 76 - 2007

2007-07-26T08:53:00.000+02:00

Short Sep 07 E-mini S&P: Entered on July 25th - Closed on July 25th.
Short: 1521.50 -- Initial Stop: 1526.50 -- Covered: 1515.75-- Result: 1,15R

Bearish in Screen I - Pullback to value in Screen II - Entry Set-up 1 in Screen III - Covered as the market was printing multiple tails close to the oversold area (lower enveloppe in Screen II).

Comments : Good trade. Exit was good, the market rallied hard later in the day. I took what the market had to give...

Trade Nbr. 75 - 2007

2007-07-26T08:39:00.000+02:00

Long Sep 07 T-Notes: Entered on July 25th - Closed on July 25th.Long: 106'15 -- Initial Stop: 106'11 -- Sold: 106'19 -- Result: 1,0R

Bullish in Screen I - Pullback at value in Screen II - Entry Set-up 2 in Screen III - Sold as the market began to reverse due to the bearish divergence in Screen I.

Comments: Solid trade. Good exit. The key was to be extra cautious due to the bearish divergence in Screen I that was indicating a potential loss of momentum...

Trade Nbr. 74 - 2007

2007-07-25T13:34:00.001+02:00

Long Sep 07 T-Notes: Entered on July 24th - Closed on July 24th.
Long: 106'09.5 -- Initial Stop: 106'06 -- Sold: 106'16.5 -- Result: 2,0R

Bullish in Screen I - Pullback at value in Screen II - Entry Set-up 2 in Screen III - Sold few minutes before the close...

Comments: Solid trade. Good entry and good position management...

Trade Nbr. 73 - 2007

2007-07-25T13:26:00.000+02:00

Long Sep 07 T-Notes: Entered on July 24th - Closed on July 24th.Long: 106'09.5 -- Initial Stop: 106'06.5 -- Sold: 106'08.5 -- Result: -0,33R

Bullish in Screen I - Pullback at value in Screen II - Entry Set-up 1 in Screen III - Sold as the market was reversing fast right after my entry...

Comments: Solid trade. The reversal was very agressive but I had time to bail out before my initial stop was hit reducing my loss..

Trade Nbr. 72 - 2007

2007-07-25T13:14:00.001+02:00

Short Dec 07 Corn: Entered on July 23th - Closed on July 23th.Short: 326.75 -- Initial Stop: 339.75 -- Stopped: 325.75-- Result: 0,33R

Bearish in Screen I - Pullback to value in Screen II - Entry Set-up 2 in Screen III - Covered few minutes before the close as the market was not going lower...

Comments : Good trade. Exit was ok. I was slightly slow for the entry, could have improved this trade's result with a sharper entry....

Trade Nbr. 71 - 2007

2007-07-20T13:18:00.000+02:00

Short Dec 07 Corn: Entered on July 19th - Closed on July 19th.Short: 336.25 -- Initial Stop: 339.25 -- Stopped: 333.75-- Result: 0,83R

Bearish in Screen I - Pullback to value in Screen II - Entry Set-up 1 in Screen III - Stopped out by my trailing stop...

Comments : Good trade. Exit was sharp !! I went back to my "slower" timeframe which generates less signals but the "hit rate" is obviously way better...

Trade Nbr. 70 - 2007

2007-07-19T15:49:00.000+02:00

Long Sep 07 E-mini S&P: Entered on July 16th - Closed on July 16th.Long: 1564.25 -- Initial Stop: 1561.50 -- Stopped: 1561.50 -- Result: -1,0R

Bullish in Screen I - Pullback at value in Screen II - Entry Set-up 1 in Screen III - Stopped out..

Comments: Markets have been showing no trendiness... The reversal was very agressive and did not allow me to bail out before my initial stop was hit...

Trade Nbr. 69 - 2007

2007-07-12T17:07:00.000+02:00

Short Sep 07 E-mini S&P: Entered on July 11th - Closed on July 11th.Short: 1524.25 -- Initial Stop: 1528.25 -- Stopped: 1526.0-- Result: -0,44R

Bearish in Screen I - At value in Screen II - Entry Set-up 1 in Screen III - Stopped out by my trailing stop...

Comments : Tough trade again. This was clearly not my day !! I lost a total of 3,15R during the day... this is almost a personal record !! (and the maximum I allow myself to lose in any given day..). I will drop trades that show bearish/bullish divergences in Screen I in order to improve the odds of my entries...

Trade Nbr. 68 - 2007

2007-07-12T16:38:00.000+02:00

Long Aug 07 Crude Oil : Entered on July 11th- Closed on July 11th.

Long: 72.84 -- Initial Stop: 72.59 -- Sold : 72.64 -- Result: -0,80R

Bullish in Screen I - Pullback at value in Screen II - Entry Set-up 2 in Screen III - Sold as the market reversed hard...

Comments: Entry was taken as Screen I was showing an even bigger bearish divergence, I should really skip those signals..... Exit was good, I did a good job at reducing the loss

Trade Nbr. 67 - 2007

2007-07-12T16:03:00.000+02:00

Short Sep 07 E-mini S&P: Entered on July 11th - Closed on July 11th.Short: 1525.25 -- Initial Stop: 1529.25 -- Stopped: 1528.50-- Result: -0,81R

Bearish in Screen I - Attractive value in Screen II -Entry Set-up in Screen III - Covered as the market reversed very hard.....

Comments : Another tough trade.... More of the same than previous SP trade of the day. This time set up 1 was confirmed in Screen III, but some heavy short-covering cancelled the signal...

Trade Nbr. 66 - 2007

2007-07-12T12:57:00.000+02:00

Long Aug 07 Crude Oil : Entered on July 11th- Closed on July 11th.Long: 72.66 -- Initial Stop: 72.36 -- Sold : 72.78 -- Result: 0,40R

Bullish in Screen I - Pullback to value in Screen II - Entry Set-up 2 in Screen III - Stopped by my trailing stop.

Comments: Good trade in tough markets !! Exit was good as the market reversed heavily afterwards...

Trade Nbr. 65 - 2007

2007-07-12T12:46:00.000+02:00

Long Aug 07 Crude Oil : Entered on July 11th- Closed on July 11th.Long: 72.67 -- Initial Stop: 72.39 -- Sold : 72.53 -- Result: -0,50R

Bullish in Screen I - At value in Screen II - Entry Set-up 1 in Screen III - Stopped by my trailing stop.

Comments: Tough markets !! Exit was good, I did a good job at reducing the loss..

Trade Nbr. 64 - 2007

2007-07-12T12:26:00.000+02:00

Short Sep 07 E-mini S&P: Entered on July 11th - Closed on July 11th.

Short: 1521.25 -- Initial Stop: 1525.00 -- Stopped: 1525.0-- Result: -1,00R

Bearish in Screen I - Pullback to value in Screen II - (uncompleted) Entry Set-up 2 in Screen III - Stopped out.

Comments : Tough trade. I entered as the bar was almost completed with a a set-up 2 but big buying kicked in right after my entry and reversed the market very fast, leaving no pullback to improve the exit.....

Trade Nbr. 63 - 2007

2007-07-12T12:11:00.001+02:00

Long Aug 07 Crude Oil : Entered on July 10th- Closed on July 10th.

Long: 72.91 -- Initial Stop: 72.65 -- Sold : 72.75 -- Result: -0,62R

Bullish in Screen I - Pullback to value in Screen II - Entry Set-up 1 in Screen III - Stopped by my trailing stop.

Comments: The bearish divergence in Screen I was indicating that odds were slightly lower for the trend to continue. Exit was not very good, could have done a better job of reducing the loss..

Trade Nbr. 62 - 2007

2007-07-12T12:07:00.000+02:00

Long Sep 07 Copper : Entered on June 29th - Closed on July 6th.Long: 3,4340 -- Initial Stop: 3,2890 -- Sold: 3,5760 -- Result: 0.98R

Bullish in Screen I - Pullback to value in Screen II - Entry Set-up 1 in Screen III - Sold on july 6th because of an acute food intoxication which did not allow me to follow the markets...

Comments: Good entry. Exit was (unfortunately) "forced" by my health condition....

Trade Nbr. 61 - 2007

2007-07-12T11:57:00.000+02:00

Long Sep 07 Euro: Entered on June 29th - Closed on July 6th.Long: 1,3553 -- Initial Stop: 1,3415 -- Sold: 1.3653 -- Result: 0.72R

Bullish in Screen I - Pullback to value in Screen II - Entry Set-up 1 in Screen III - Sold on july 6th because of an acute food intoxication which did not allow me to follow the markets...

Comments: Good entry. Exit was (unfortunately) "forced" by my health condition....

Long Term Trading - Entries

2007-06-30T15:29:00.000+02:00

I entered in 2 new Long-Term positions on Friday. They are both reported in this post.

Long Sep 07 Copper : Entered on June 29thLong: 3,4340 -- Initial Stop: 3,2890 -- Objective: 3.9870

Bullish in Screen I - Pullback to value in Screen II - Entry Set-up 1 in Screen III

Long Sep 07 Euro: Entered on June 29thLong: 1,3553 -- Initial Stop: 1,3415 -- Objective: 1.3910

Bullish in Screen I - Pullback to value in Screen II - Entry Set-up 1 in Screen III.

Trade Nbr. 60 - 2007

2007-06-27T22:41:00.000+02:00

Long Aug 07 Crude Oil : Entered on June 27th - Closed on June 27th.

Long: 68.84 -- Initial Stop: 68.56 -- Sold : 69.08 -- Result: 0,86R

Bullish in Screen I - Pullback to value in Screen II - Entry Set-up 1 in Screen III - Stopped by my trailing stop.

Comments: The market was not willing to give more...... The initial stop was slightly too loose I could have increased my position size accordingly...

Trade Nbr. 59 - 2007

2007-06-27T22:29:00.000+02:00

Long Sep 07 Wheat : Entered on June 27th - Closed on June 27th.

Long: 631 4/8 -- Initial Stop: 625 6/8 -- Sold : 630 4/8 -- Result: -0,18R

Bullish in Screen I - Pullback to value in Screen II - Entry Set-up 1 in Screen III - Stopped by my trailing stop.

Comments: Good exit !! Difficult market....

Trade Nbr. 58 - 2007

2007-06-26T23:22:00.000+02:00

Short Sep 07 E-mini S&P: Entered on June 26th - Closed on June 26th.

Short: 1513.50 -- Initial Stop: 1518.50 -- Covered: 1507.50-- Result: 1,20R

Bearish in Screen I - Pullback to value in Screen II - Entry Set-up 1 in Screen III - Covered as my trailing stop was hit.....

Comments : Frustrating trade... Still struggling with my exits !! My current trailing technique was not effective in this case but I will continue to apply it before drawing any conclusions as far as its efficiency is concerned....

Trade Nbr. 57 - 2007

2007-06-26T20:59:00.000+02:00

Long July 07 Copper : Entered on June 20th - Closed on June 26th.

Long: 3,4270 -- Initial Stop: 3,2500 -- Sold : 3,3210 -- Result: -0,60R

Bullish in Screen I - Pullback to value in Screen II - Entry Set-up 1 in Screen III - Stopped by my trailing stop.

Comments: Good entry but Exit could have been improved somewhat....

Trade Nbr. 56 - 2007

2007-06-22T21:11:00.000+02:00

Short Sep 07 E-mini S&P: Entered on June 22th - Closed on June 22th.

Short: 1527.00 -- Initial Stop: 1530.00 -- Covered: 1521.0-- Result: 2,0R

Bearish in Screen I - Pullback to value in Screen II - Entry Set-up 1 in Screen III - Covered as the market reached my objective in Screen II (lower enveloppe).

Comments : Decent trade... After suffering the choppy market earlier in the session I got another signal to short it. Entry was good, stop-loss was much more favorable than the first trade of the day and exit was at my objective.... I should have trailed part of the position but the initial choppiness did not convince me that such a move would occur today....

Trade Nbr. 55 - 2007

2007-06-22T20:44:00.000+02:00

Short Sep 07 E-mini S&P: Entered on June 22th - Closed on June 22th.

Short: 1527.25 -- Initial Stop: 1533.25 -- Covered: 1528.25-- Result: -0,16 R

Bearish in Screen I - Pullback to value in Screen II - Entry Set-up 1 in Screen III - Covered as the market was reversing hard after printing a threatening tail in the previous candle.

Comments : Difficult trade... Very choppy market......

Very good post about the 3 keys to success in the markets

2007-06-21T11:52:00.000+02:00

Richard, at http://www.movethemarkets.com/ wrote a very good article about the 3 keys to success in the markets. I highly recommend to read it since it can help anyone realizing what is the path to finding success in the markets.

Here goes the link to the article :

http://www.movethemarkets.com/blog/2007/06/20/3-keys-for-success-trade-naturally/

Enjoy !!

Long Term Trading

2007-06-21T10:50:00.000+02:00

From now on I will add some diversification to my short-term trading. I will take Long Term positions and will report them under Trades2.x in my diary. These positions will last anywhere between 1 week and 6/8 weeks. I will post the entry and initial stop as I enter the position and report them once they are closed out. Let's begin with the first such entry realized this am....

Long July 07 Copper : Entered on June 20th.

Long: 3,4270 -- Initial Stop: 3,2500 -- Profit-Objective: 3,9725 -- R/R: 3,08R

Bullish in Screen I - Pullback to value in Screen II - Entry Set-up 1 in Screen III

Trade Nbr. 54 - 2007

2007-06-19T21:58:00.000+02:00

Long Aug 07 Crude Oil: Entered on June 19th - Closed on June 19th.

Long: 69,55 -- Initial Stop: 69,19 -- Sold: 69,55 -- Result: 0,00R

Bullish in Screen I - At value in Screen II - Entry Set-up 1 in Screen III - Sold as the market reversed the initial push higher.

Comments: Solid trade, did not let a winner turn into a loser....

Trade Nbr. 53 - 2007

2007-06-06T22:58:00.000+02:00

Long July 07 Crude Oil: Entered on June 6th- Closed on June 6th.

Long: 65,92 -- Initial Stop: 65,62 -- Sold: 65,98 -- Result: 0,20R

Bullish in Screen I - At value in Screen II - Entry Set-up 1 in Screen III - Sold after the previous candle printed a threatening tail and the market failed to follow-through indicating a lack of momentum.

Comments: Solid trade, the market was not willing to move today !!

Trade Nbr. 52 - 2007

2007-06-04T18:17:00.000+02:00

Long July 07 Crude Oil: Entered on June 4th- Closed on June 4th. Long: 65,07 -- Initial Stop: 64,70 -- Sold: 65,66 -- Result: 1,60R

Bullish in Screen I - Pullback to value in Screen II - Entry Set-up 1 in Screen III - Sold after the previous candle printed a threatening tail and the market reached its objective at the enveloppe in Screen II.

Comments: Good entry...... Exit was according to the plan BUT I need to force myself to trail part of the position to fish some of those huge opportunities when they arise ......

Trade Nbr. 51 - 2007

2007-05-24T20:38:00.000+02:00

Short June 07 Crude Oil: Entered on May 24th - Closed on May 24th.Short: 65,38 -- Initial Stop: 65,78 -- Covered: 65,16 -- Result: 0,55 R

Bearish in Screen I - Pullback to value in Screen II - Entry Set-up 1 in Screen III - Covered as the market was reversing hard after testing the lower enveloppe in Screen II.

Comments : Poor exit again. The rebound was normal after the previous candle's break. Did not follow my new trailing methodology... Will make sure to apply it in future trades...

Grading Trades nbr. 26 to nbr. 50 - 2007

2007-05-24T15:16:00.000+02:00

Let's look at the grading and accumulated Rs for trades nbr. 26 to nbr. 50

Followed by the accumulated Rs curve sofar this year:

Comments :

The trading performance for trades nbr. 26 to nbr. 50 has not been as good as the first 25 trades of the year. I achieved a grade of 1,04 which is o,11 below my trading objective of 1,15. Remember that this mark takes into account the key statistics of a trading system (% Wins, Average Win/Average Loss, Maximum Win/Maximum Loss and 3 Biggest Wins/3 Biggest Losses).

My hit rate decreased to 52% during this period and the average win/loss was as well worse at 1/1,39, reducing the expectancy. Looking back in details I find an overall difficult trading environment for my style during this period and some sub-par position management as the main suspects. I forced some trades and was too quick to take profits in some good trades.

On a positive note I stayed calm and focused after taking 5 losses in a row and knew to make them back and then some fairly quickly without doing any "revenge trading" which is a sign of trading maturity. Another positive point is that I improved my trailing stop methodology and this should allow me to stay into fast moving markets longer....

Trade Nbr. 50 - 2007

2007-05-21T20:55:00.000+02:00

Long June 07 Crude Oil: Entered on May 21st- Closed on May 21st.

Long: 66,11 -- Initial Stop: 65,71 -- Sold: 66,99 -- Result: 2,20R

Bullish in Screen I - At value in Screen II - Entry Set-up 2 in Screen III - Sold after the previous candle printed a threatening tail and the market reached its objective at the enveloppe in Screen II.

Comments: Good trade...... Exit was good.

Trade Nbr. 47 / 48 and 49 - 2007

2007-05-18T11:11:00.000+02:00

I will report the 3 trades I did yesterday in one single post. The reason for this is that I want to remember the mistakes I did yesterday. Eventhough I ended up making some money, this was a very frustrating day where some serious mistakes were made. It is important to fix problems as they are identified and this is the objective of this special post !!

Trade Nbr. 47

Long June 07 Crude Oil: Entered on May 17th- Closed on May 17th. Long: 63,06 -- Initial Stop: 62,68 -- Sold: 63,35 -- Result: 0,76R

Bullish in Screen I - Pullback to value in Screen II - Entry Set-up 1 in Screen III - Sold after the previous candle printed a threatening tail ...

Comments: Very frustrating trade...... Exit was not very sharp this time !! I was afraid of the price action at this stage in the day, but my trailing stop methodology was not indicating a reversal yet .... I closed the position beacause I was afraid to give back my profit and not because my methodology was indicating to do so..... As a professional trader, we live from few good trades and I cannot screw up opportunities like the one that occured yesterday in crude oil !!!

Trade Nbr. 48 - 2007

Long July 07 Corn: Entered on May 17th- Closed on May 17th.

Long: 376,25 -- Initial Stop: 373,75 -- Sold: 374,25 -- Result: -0,80R

Bullish in Screen I - (Uncompleted) Pullback to value in Screen II - (uncompleted) Entry Set-up 1 in Screen III - Sold during the same candle as the market was reversing hard.

Comments: Bad trade. Went long as my entry set-up was not fully completed, kind of a wishful thinking...... Happened shortly after closing too early the Crude Oil trade, was annoyed and wanted to fight back which is not the way to make money in the markets !!!

Trade Nbr. 49

Long June 07 E-Mini S&P: Entered on May 17th- Closed on May 17th.

Long: 1518,0 -- Initial Stop: 1515,0 -- Sold: 1520,0 -- Result: 0,75R

Bullish in Screen I - Pullback to value in Screen II - (Late) Entry Set-up 1 in Screen III - Sold after the previous candle printed a VERY threatening tail AND my trailing stop got hit ...

Comments: Unimpressive trade...... Exit was good and according to my trailing methodology BUT entry was too late, I left 1R on the table due to the smaller position implied by the wider stop than usual......

Trade Nbr. 46 - 2007

2007-05-17T08:31:00.000+02:00

Short June 07 E-Mini Nasdaq: Entered on May 16th - Closed on May 16th.

Short: 1883,00 -- Initial Stop: 1887,75 -- Covered: 1885,00 -- Result: -0,42R

Bearish in Screen I - At value in Screen II - Entry Set-up 1 in Screen III - Covered as the candle was reversing and breaking the entry candle's high...

Comments : Good exit but should have paid more attention to the Stochs that are ticking up in Screen II..

Trade Nbr. 45 - 2007

2007-05-15T21:44:00.000+02:00

Short June 07 E-Mini S&P: Entered on May 15th - Closed on May 15th.

Short: 1504,75 -- Initial Stop: 1506,75 -- Covered: 1503,75 -- Result: 0,50R

Bearish in Screen I - Pullback to value in Screen II - Entry Set-up 1 in Screen III - Covered as the candle was forming another tail and because the CPI numbers were expected 1 hour later...

Comments : Good execution. My rule of not having any open position into important numbers proved to be the right decision....

Trade Nbr. 44 - 2007

2007-05-14T22:09:00.000+02:00

Long June 07 Crude Oil: Entered on May 14th- Closed on May 14th.

Long: 62,76 -- Initial Stop: 62,56 -- Sold: 62,86 -- Result: 0,50R

Bullish in Screen I - Pullback to value in Screen II - Entry Set-up 2 in Screen III - Sold after the previous candle printed a VERY threatening tail ...

Comments: Good trade...... Exit was sharp !!

Trade Nbr. 43 - 2007

2007-05-08T17:54:00.000+02:00

Short June 07 Crude Oil: Entered on May 8th - Closed on May 8th.

Short: 61,40 -- Initial Stop: 61,58 -- Covered: 61,26 -- Result: 0,77 R

Bearish in Screen I - Attractive value in Screen II - Entry Set-up in Screen III - Covered around the support of the trading range, as the market was choppy since the entry....

Comments : Good execution. Screen I is indicating a serious loss of momentum which was indicating that the odds were not very good to get a continuation of the trend.... Good exit !!

Trade Nbr. 42 - 2007

2007-04-30T20:45:00.000+02:00

Long June 07 Crude Oil: Entered on April 30th- Closed on April 30th.

Long: 66,26 -- Initial Stop: 65,94 -- Sold: 66,38 -- Result: 0,37R

Bullish in Screen I - At value in Screen II - Entry Set-up in Screen III - Sold after the previous candle printed a threatening tail and the market failed to break the resistance area around 66,66...

Comments: Good position management, eventhough the bearish divergence in Screen I was indicating that odds were low to intiate a strong move today...... Exit was sharp !!

Trade Nbr. 41 - 2007

2007-04-30T20:33:00.000+02:00

Long June 07 Crude Oil: Entered on April 30th- Closed on April 30th.

Long: 66,40 -- Initial Stop: 66,20 -- Sold: 66,35 -- Result: -0,25R

Bullish in Screen I - Pullback to value in Screen II - Entry Set-up in Screen III - Stopped by my trailing stop...

Comments: Good position management.

Trade Nbr. 40 - 2007

2007-04-26T20:08:00.000+02:00

Long June 07 Crude Oil: Entered on April 26th- Closed on April 26th.

Long: 65,73 -- Initial Stop: 65,46 -- Sold: 66,24 -- Result: 1,90R

Bullish in Screen I - At value in Screen II - Entry Set-up in Screen III - Sold after the previous candle printed a threatening tail as the market was close to its objective in Screen II.

Comments: Good trade. Exit was sharp !!

Trade Nbr. 39 - 2007

2007-04-25T21:42:00.000+02:00

Long June 07 Crude Oil: Entered on April 25th- Closed on April 25th.

Long: 65,09 -- Initial Stop: 64.84 -- Sold: 65.74 -- Result: 2,60R

Bullish in Screen I - At value in Screen II - Entry Set-up in Screen III - Sold almost at the close.

Comments: Finally a good win !! Good position management.

Trade Nbr. 38- 2007

2007-04-25T21:26:00.000+02:00

Long June 07 Crude Oil: Entered on April 25th- Closed on April 25th.

Long: 65,12 -- Initial Stop: 64.80 -- Stopped: 64.80 Result: -1,00R

Bullish in Screen I - At value in Screen II - Entry Set-up in Screen III - Stopped out.

Comments: One more loss .... Amazing !! Five losses in a row.... Statistically I am due for some wins soon !! It is during such times that it is important to make sure one stays focused !!

Trade Nbr. 37 - 2007

2007-04-25T12:34:00.000+02:00

Short June 07 E-Mini S&P 500: Entered on April 24th - Closed on April 24th.

Short: 1485,75-- Initial Stop: 1488,00 -- Stopped @ 1488,00 -- Result: -1,00R

Bearish in Screen I - Attractive value in Screen II - Entry Set-up in Screen III - Stopped by the Initial Stop.

Comments : Another loss with solid position management. Four 1,0R losses in a row..... markets are testing my trading methodology !! The most important thing to remember is that we are in for the long term when we trade and for this reason one only risk a small part of the equity he manages on any given trade. Series of consecutive losses (and wins) are part of any quantifiable edge and this current serie of losses is the price to pay to take advantage of better times to come !!!

Trade Nbr. 36 - 2007

2007-04-24T20:25:00.000+02:00

Long June 07 E-Mini S&P 500: Entered on April 24th- Closed on April 24th.

Long: 1490.25 -- Initial Stop: 1488.50 -- Stopped: 1488.50 -- Result: -1,00R

Bullish in Screen I - At value in Screen II - Entry Set-up in Screen III - Stopped out.

Comments: Position management was good but should pay attention to the strong bearish divergence in Screen I which is reducing the odds that the trend is ready to resume........ Markets continue generally choppy which is extremely unfavorable for my type of trading....

Trade Nbr. 35 - 2007

2007-04-19T11:29:00.000+02:00

Short June 07 Crude Oil: Entered on April 19th - Closed on April 19th.

Short: 64,08 -- Initial Stop: 64,29 -- Covered: 64,29 -- Result: -1,00 R

Bearish in Screen I - Attractive value in Screen II - Entry Set-up in Screen III - Stopped out.

Comments : Well, well difficult month sofar. The execution of this trade was good but the market is simply too undecided to allow my methodology to be successful.... The key during such rough time is too keep a very tight money-management and to continue to monitor the markets with total objectivity....

Trade Nbr. 34 - 2007

2007-04-18T18:58:00.000+02:00

Long June 07 Crude Oil: Entered on April 17th- Closed on April 17th.

Long: 66,15 -- Initial Stop: 65,71 -- Sold: 65,71 -- Result: -1,00R

Bullish in Screen I (Strength Index was strong as I entered) - At value in Screen II - Entry Set-up in Screen III was not ideal but still valid - Stopped out.

Comments: Bad Exit, should have initiated the trailing stop process once the market printed the threatening engulfing candle right after the entry candle, this would have limited the loss to 1/2 R......

Trade Nbr. 33 - 2007

2007-04-14T11:40:00.000+02:00

Long June 07 Crude Oil: Entered on April 13th- Closed on April 13th.

Long: 66,46 -- Initial Stop: 66,19 -- Sold: 66,56 -- Result: 0,37R

Bullish in Screen I - At value in Screen II - Entry Set-up in Screen III - Sold as trailing stop got hit..

Comments : Good trade. The week has been very hard, but my trading has been solid... Looking forward for better oportunities next week !!!

Trade Nbr. 32 - 2007

2007-04-12T22:29:00.000+02:00

Short June 07 E-Mini S&P 500: Entered on April 12th - Closed on April 12th.

Short: 1451,00-- Initial Stop: 1453,25 -- Covered: 1452,50 -- Result: -0,60 R

Bearish in Screen I - Attractive value in Screen II - Incomplete Entry Set-up in Screen III !! - Covered too late as the bearish set-up was cancelled in Screen II !!.

Comments : Bad trade.... I kept stuck with my initial plan for the day and was not flexible enough to recognize that the odds were not very much in favor of this trade !! I should have paid more attention to Brett Steenbarger's post about the importance of staying flexible in front of the price action: http://traderfeed.blogspot.com/2007/04/strong-opinions-flexibly-held-lesson.html

Trade Nbr. 31 - 2007

2007-04-12T20:28:00.000+02:00

Short June 07 E-Mini S&P 500: Entered on April 12th - Closed on April 12th.

Short: 1448,50-- Initial Stop: 1451,75 -- Covered: 1449,75 -- Result: -0,40 R

Bearish in Screen I - At value in Screen II - Entry Set-up in Screen III - Covered as the bearish set-up was cancelled in Screen II.

Comments : Good exit management.... But frustrating how my market "reading" is far from optimal lately !!!

Trade Nbr. 30 - 2007

2007-04-11T20:49:00.000+02:00

Short May 07 Crude: Entered on April 11th - Closed on April 11th.

Short: 61,90-- Initial Stop: 62,22 -- Covered: 61,77 -- Result: 0,40 R

Bearish in Screen I - At value in Screen II (at the extreme limit of my conditions though..) - Entry Set-up in Screen III - Covered as the market was reversing after printing a very threatening tail in the previous candle.

Comments : Good exit management. Entry was slightly agressive since Screen II was not indicating a very attractive value... Solid trading in choppy markets....

Trade Nbr. 29 - 2007

2007-04-10T22:44:00.000+02:00

Long June 07 E-Mini S&P 500: Entered on April 10th- Closed on April 10th.

Long: 1456,25 -- Initial Stop: 1453,75 -- Sold: 1456,00 -- Result: -0,10R

Bullish in Screen I - At value in Screen II - Entry Set-up in Screen III - Sold after the market printed 2 threatening tails and was reversing fast...

Comments : Unimpressive trade !!! Frustrating day....

Trade Nbr. 28 - 2007

2007-04-10T22:15:00.000+02:00

Short May 07 Corn: Entered on April 10th - Closed on April 10th.

Short: 363 2/8 -- Initial Stop: 367 -- Covered: 364 6/8 -- Result: -0,40 R

Bearish in Screen I - At value in Screen II - Entry Set-up in Screen III - Covered as the market was reversing immediately the initial weakness...

Comments : Good exit management. Entry signal was weak with Strength Index ticking up agressively....

Grading Trades nbr.1 to 25 - 2007

2007-04-05T12:28:00.000+02:00

Performance assesment

The biggest challenge that I am facing as a trader is is to structure a daily routine that aims at creating order in an unstable environment. The only way to do this is to create and follow a detailed trading plan and to keep a diary of every trades in order to learn from them. There are no shortcuts on the way to trading expertise and only a structured, deliberate learning/monitoring process can allow me to avoid chaos !!

One of the key element is to continually monitor my performance over a meaningful number of trades. Grading every 25 trades should help me identify if there are some particular systematic weaknesses that are apparent in my trading. In order to do this, I am computing a number of statistics that should hopefully help me identifying recurrent themes:

Percentage of winning trades
Average win/loss
Biggest win/biggest loss
3 biggest wins/3 biggest losses

Once this quantitative evaluation has been completed, I am reviewing each and every 25 trades from my diary with the objective of identifying recurrent patterns both in my strategy and the execution of the plan. This qualitative analysis should help me to continually look for improvements in my strategy and identify early enough if I need to adapt to changing market conditions. It is, as well, the way to adress recurrent problems regarding the execution of the trading plan and psychological issues that may have occured during the period.

With this diagnosis in hand, my aim is to objectively look at the quality of my work and to identify what has to be improved to continue growing as a trader!!

I'll post my trading performance for every 25 trades in the blog and comment them.

Find herebelow both the grading and accumulated Rs for the first 25 trades of the year...

Comments : The trading performance of the first 25 trades of the year has been good. I achieved a grade of 1,27 which is o,12 above my trading objective of 1,15. This mark takes into account the key statistics of a trading system (% Wins, Average Win/Average Loss, Maximum Win/Maximum Loss and 3 Biggest Wins/3 Biggest Losses).

Looking back in detail, I realize that my initial stops were generally slightly too conservative. I will work on having my stops closer to my entry without affecting my hit rate (hopefully...). The other issue has been too little occurences. This was due to a very busy schedule with the creation of the ATS program and related business issues... I should be able to trade more from mid may 2007 onwards and improve this aspect... Let's see !!!

Trade Nbr. 27 - 2007

2007-04-02T21:53:00.000+02:00

Short June 07 E-Mini Nasdaq 100: Entered on April 2nd - Closed on April 2nd.

Short: 1784,00 -- Initial Stop: 1788,50-- Covered 1/2 at 1784,0 and 1783,75 -- Result: 0,10R

Bearish in Screen I - Pullback to value in Screen II - Entry Set-up in Screen III - Covered Half at 1784,00 and then stopped by my trailing stop on the other Half.

Comments: Decent trade - once again the market was not willing to move today....

Trade Nbr. 26 - 2007

2007-03-30T20:08:00.000+02:00

Short June 07 E-Mini Nasdaq 100: Entered on March 30th - Closed on March 30th.

Short: 1787,00 -- Initial Stop: 1796,50-- Covered at 1779,75 and 1788,0 -- Result: 0,35R

Bearish in Screen I - Pullback to value in Screen II - Entry Set-up in Screen III - Covered Half at 1779,75 because of the threatening tail of the previous candle and then stopped by my trailing stop on the other Half.

Comments: Decent trade - the market was not willing to give more in this one...

Trade Nbr. 25 - 2007

2007-03-29T20:45:00.000+02:00

Short June 07 E-Mini Nasdaq 100: Entered on March 29th - Closed on March 29th.

Short: 1794,00 -- Initial Stop: 1799,75-- Covered at 17 89,0 and 1779,75 -- Result: 1,67R

Bearish in Screen I - At value in Screen II - Entry Set-up in Screen III - Covered Half at 1789,0 because of the threatening tail of the previous candle and Half at the objective (envelope in Screen II).

Comments: Decent trade. First half exit was not totally valid but I guess that my last 2 trades made me a little more nervous than normal...

Trade Nbr. 24 - 2007

2007-03-29T20:08:00.000+02:00

Short June 07 E-Mini Nasdaq 100: Entered on March 29th - Closed on March 29th.

Short: 1794,25 -- Initial Stop: 1799,0 -- Stopped: 1799,0 -- Result: -1,0R

Bearish in Screen I - At value in Screen II - Entry Set-up in Screen III - Stopped by Initial-Stop.

Comments : Bad trade (again) - This time around I mismanaged Screen III (Only 1 screen :big improvement compared to the last trade... :-)). Entry signal was valid but as the entry candle reversed and printed an engulfing candle, I should have closed the position.....

Trade Nbr. 23 - 2007

2007-03-27T20:56:00.000+02:00

Short May 07 Soybeans: Entered on March 27th - Closed on March 27th.

Short: 758 2/8 -- Initial Stop: 761 4/8 -- Covered: 759 6/8 -- Result: -0,46 R

Barely Bearish in Screen I - Uncompleted pullback in Screen II - Entry Set-up in Screen III - Stopped by my trailing stop.

Comments : Bad trade, made many mistakes in this one:
1. Screen I is basically neutral and not bearish !!
2. Pullback in Screen II did not reach value...
3. Initiated the trailing-stop too early !!

Difficult to mismanage a trade in all 3 screens.... but today I achieve it !!

Trade Nbr. 22 - 2007

2007-03-26T22:15:00.000+02:00

Long June 07 E-Mini S&P 500: Entered on March 26th- Closed on Mar 26th.

Long: 1444,0 -- Initial Stop: 1440,75 -- Sold: 1448,25 -- Result: 1,30R

Bullish in Screen I - Pullback to value in Screen II - Entry Set-up in Screen III - Sold 5 minutes before the Closing Bell.

Comments : Good trade - Got lucky on the exit as market could not maintain the momentum into the close...

Trade Nbr. 21 - 2007

2007-03-23T22:11:00.000+01:00

Short May 07 Corn: Entered on March 23rd - Closed on March 23rd.

Short: 407 6/8 -- Initial Stop: 410 4/8 -- Covered: 403 6/8 -- Result: 1,45 R

Bearish in Screen I - Overbought in Screen II - Entry Set-up in Screen III - Covered as the market was printing a second threatening tail...

Comments : Good trade.

Holidays !!!

2007-03-10T10:12:00.000+01:00

I will be skying in the Alps next week with my family, so no trading and no posts !!

Have a great week !!

Trade Nbr. 20 - 2007

2007-03-10T10:01:00.000+01:00

Short May 07 Soybeans: Entered on March 9th - Closed on March 9th.

Short: 755 6/8 -- Initial Stop: 758 6/8 -- Covered: 757 2/8 -- Result: -0,50 R

Bearish in Screen I - Pullback to value in Screen II - Entry Set-up in Screen III - Covered as the market was reversing the entry candle very quickly.....

Comments : Good exit. All markets have been very difficult to trade this week !!!

Trade Nbr. 19 - 2007

2007-03-09T22:36:00.000+01:00

Short April 07 Gold: Entered on March 9th - Closed on March 9th.

Short: 653,80 -- Initial Stop: 655,30 -- Covered: 652,70 -- Result: 0,70 R

Bearish in Screen I - Pullback to value in Screen II - Entry Set-up in Screen III - Covered as the market was reversing all its losses very quickly...

Comments : Good execution. Markets continue to show a total lack of trendiness......

Trade Nbr. 18 - 2007

2007-03-09T09:36:00.000+01:00

Long April 07 Crude Oil: Entered on March 8th- Closed on Mar 8th.

Long: 61,77 -- Initial Stop: 61,56 -- Stopped: 61,56 -- Result: -1,0R

Bullish in Screen I - Pullback to value in Screen II - Entry Set-up in Screen III - Stopped at initial stop.

Comments : Another choppy day !! Tough to find decent set-ups in futures this week.....

Trade Nbr. 17 - 2007

2007-03-06T23:06:00.000+01:00

Long April 07 Crude Oil: Entered on March 5th- Closed on Mar 5th.

Long: 60,60 -- Initial Stop: 60,34 -- Stopped: 60,34 -- Result: -1,0R

Bullish in Screen I - Oversold in Screen II - Entry Set-up in Screen III - Stopped at initial stop.

Comments : Chopfest day !! Good example of how some days are more difficult than others !!

Research Project

2007-03-06T21:30:00.000+01:00

During the next few weeks I will undertake a "real-time" testing of my new trading rules, risking 1/20 of my normal "R value" (ie: risking only 0,05 % of my trading equity per trade).

The purpose of these "Research Trades" is to forward-test those trading rules and to rehearse them in "battlefield-conditions" in order to increase my confidence in them. I will monitor them and validate them (and my execution) after at least 30 trades before increasing my trading size and incorporating them into my trading arsenal.

The first set-up is a "Mean-Reverting" trade that takes as a filter "Bullish" or "Bearish" divergences of the Strength Index in the "Strategic Window".

The second set-up is a "Strong Momentum" trade that targets "High momentum" moves.

Research Trade 1.3 - "High Momentum" Trade

2007-03-05T20:58:00.000+01:00

Short March 07 E-mini S&P: Entered on March 5th - Closed on March 5th.

Short: 1389,75 -- Initial Stop: 1391,50 -- Covered: 1384,75 -- Result: 2,83 R

Bearish in Screen I - Trading below envelope in Screen II - Entry Set-up in Screen III - Covered as the previous candle printed a threatening tail.

Comments : The key to this "High Momentum" play is to take the signal as the price stays at or below the 3 standards deviation band in Screen II. The other condition is to have a valid "Swing" set-up in shorter timeframes (I am using 21/5/1 min screens to trigger the entry and decide the Initial Stop level to do this). Will look to add on those Research trades during the next few weeks...

Trade Nbr. 16 - 2007

2007-03-01T19:07:00.000+01:00

Long April 07 Crude Oil: Entered on March 1st- Closed on Mar 1st.

Long: 61,59 -- Initial Stop: 61,38 -- Sold: 62,08 -- Result: 2,34R

Bullish in Screen I - At value in Screen II - Entry Set-up in Screen III - Exit after the previous 2 bars printed threatening tails.

Comments : Good trade. Compared to yesterday, was patient enough to wait for the price action to indicate that the loss of momentum was too strong to stay in the position.....

Trade Nbr. 15 - 2007

2007-03-01T13:52:00.000+01:00

Short March 07 E-mini S&P: Entered on Feb 28th - Closed on Feb 28th.

Short: 1413,50 -- Initial Stop: 1415,75 -- Covered: 1415,00 -- Result: -0,66 R

Bearish in Screen I - Overbought and pulling back to value in Screen II - Entry Set-up in Screen III - Stopped out by my trailing stop.

Comments : Poor trade. Good entry but once again lowered my initial stop too early !! Very frustrating since would have been a multiple Rs win again.... It is recurrent problem, as Brett Steenbarger mentioned in one of his numerous brilliant articles : it is important to Trade to Win and Not Trade Not To Lose......

Trade Nbr. 14 - 2007

2007-02-27T20:30:00.000+01:00

Long April 07 Crude Oil: Entered on Feb 27th- Closed on Feb 27th.

Entry: 61,17 -- Initial Stop: 60,95 -- Sold: 61,66 -- Result: 2,23 R

Bullish in Screen I - At value in Screen II - Entry Set-up in Screen III - Exit as the trailing stop was triggered.

Comments : Good execution, traded according to the plan.

Trade Nbr. 13 - 2007

2007-02-23T10:46:00.000+01:00

Long March 07 E-Mini S&P: Entered on Feb 22nd- Closed on Feb 22nd.

Entry: 1462,00 -- Initial Stop: 1459,75 -- Stopped: 1459,75 -- Result: -1,0 R

Bullish in Screen I - At value in Screen II - Entry Set-up in Screen III - Stopped out.

Comments : Another loss when the EMA was not ticking up in Screen II - This looks to be a recurrent pattern... A solution would be to add the 5/21 EMA crossover as a filter in Screen II.

Trade Nbr. 12 - 2007

2007-02-22T12:39:00.000+01:00

Long April 07 Crude Oil: Entered on Feb 21st- Closed on Feb 21st.

Entry: 59,49 -- Initial Stop: 59,19 -- Sold (average): 60,30 -- Result: 2,60 R

Bullish in Screen I - At value in Screen II - Entry Set-up in Screen III - Exit of half the position as the market printed a reversal candle with a threatening tail in Screen III. The other half was triggered by the trailing stop.

Comments : Good execution, traded according to the plan.

Trade Nbr. 11 - 2007

2007-02-21T21:25:00.000+01:00

Long April 07 Gold: Entered on Feb 21st- Closed on Feb 21st.

Entry: 665,0 -- Initial Stop: 661,30 -- Sold: 663,30 -- Result: -0,40 R

Bullish in Screen I - At value in Screen II - Entry Set-up in Screen III - Stopped-out with trailing stop.

Comments : Poor execution - Started the trailing stop too soon as the market did not take-off yet - Lost a huge opportunity - Very frustrating.....

Trade Nbr. 10 - 2007

2007-02-14T15:53:00.000+01:00

Short March 07 Bonds: Entered on Jan 13th - Closed on Jan 13th.

Entry: 110 11/32 -- Initial Stop: 110 17/32 -- Covered: 110 6/32 -- Result: 0,83 R

Bearish in Screen I - Pullback to value in Screen II - Entry Set-up in Screen III - Covered as my trailing stop got hit towards the end of the session.

Comments : Average trade. Should have entered one bar earlier, at a better level, and instead of waiting for the trailing stop to get hit, should have taken partial profits on the second test of the day's lows as the market reversed, printing another tail.....

Trade Nbr. 9 - 2007

2007-02-13T08:25:00.000+01:00

Short March 07 Bonds: Entered on Jan 12th - Closed on Jan 12th.

Entry: 110 15/32 -- Initial Stop: 110 19/32 -- Covered: 110 10/32 -- Result: 1,25 R

Bearish in Screen I - Pullback to value in Screen II - Entry Set-up in Screen III - Covered as my trailing stop got hit towards the end of the session.

Comments : Good trade, traded according to plan. Took what the market had to give.....

Trade Nbr. 8 - 2007

2007-02-12T18:31:00.000+01:00

Long March 07 Euro: Entered on Feb 12th - Closed on Feb 12th.

Entry: 1,3046 -- Initial Stop: 1,3027 -- Sold: 1,3027 -- Result: -1,00 R

Bullish in Screen I (not strongly but SI>0) - At value in Screen II - Entry Set-up in Screen III - Stopped-out at initial stop.

Comments : Good execution, traded according to the plan - Most of my losses seem to occur when the slope of the EMA is not clearly up in Screen I and II - will monitor this.....

Trade Nbr. 7 - 2007

2007-02-10T12:07:00.000+01:00

Long March 07 Soyabeans: Entered on Feb 9th - Closed on Feb 9th.

Entry: 746,00 -- Initial Stop: 743,50 -- Sold: 752,75 -- Result: 2,70 R

Bullish in Screen I - At value in Screen II - Entry Set-up in Screen III - Exit as the market printed a reversal candle with a threatening tail in Screen III. Exit was executed at the open of the last candle.

Comments : Good execution, traded according to the plan.

Trade Nbr. 6 - 2007

2007-01-25T11:25:00.000+01:00

Long March 07 E-Mini S&P 500: Entered on Jan 24th - Closed on Jan 24th.

Entry: 1438,00 -- Initial Stop: 1434,50 -- Sold: 1445,25 -- Result: 2,01 R

Bullish in Screen I - At value in Screen II - Entry Set-up in Screen III - Exit at Envelope in Screen II.

Comments : Good execution, traded according to the plan.

Trade Nbr. 5 - 2007

2007-01-21T11:12:00.000+01:00

Long March 07 Corn: Entered on Jan 19th - Closed on Jan 19th.

Entry: 412,0 -- Initial Stop: 410,0 -- Sold: 409,50 -- Result: -1,31 R (incl. Com)

Bullish in Screen I - At value in Screen II - Entry Set-up in Screen III - Stopped-out by my Initial stop.

Comments : Poor execution - as the market reversed I had 1 bar to work out a manual exit which would have allowed me to limit the loss to less than 1 R but ended up with a slippage as my initial stop-loss got hit, taking a bigger loss - lacked flexibility in my tape reading.....

Trade Nbr. 4 - 2007

2007-01-19T10:59:00.000+01:00

Long March 07 Corn: Entered on Jan 18th - Closed on Jan 18th.

Entry: 410,50 -- Initial Stop: 407,75 -- Sold: 411,0 -- Result: 0,14 R

Bullish in Screen I - Pullback to value in Screen II - Entry Set-up in Screen III - Have been stopped-out by my trailing stop as market reversed towards the end of the pit session.

Comments : Good execution, traded according to the plan. The market is selling off in the overnight session, trailing stop protected the position......

Research Trade 1.2 - "Mean-Reversing" Trade

2007-01-12T20:16:00.000+01:00

Long Feb 07 Crude Oil: Entered on Jan 12th - Closed on Jan 12th.

Entry: 52,52 -- Initial Stop: 52,27 -- Sold: 52,55 -- Result: 0,12 R

Bullish divergence in Screen I - At value in Screen II - Entry Set-up in Screen III -
Trailing stop at 52,57 filled at 52,55 .

Comments : "Mean Reversing" set-up. The market rallied later on, I followed my new trailing-stop methodology. Good discipline for a tough trade !!

Research Trade 1.1 - "Mean-Reversing" Trade

2007-01-11T19:07:00.000+01:00

Long Feb 07 Crude Oil: Entered on Jan 11th - Closed on Jan 11th.

Entry: 54,20 -- Initial Stop: 53,99 -- Sold: 54,44 -- Result: 1,14 R

Bullish divergence in Screen I - Attractive value in Screen II - Entry Set-up in Screen III -Stopped-out with a trailing stop at 60.44.

Comments : Good trade, traded according to the "Mean Reversing" set-up. The market totally collapsed later on, the trailing-stop methodology protected the gain...

Trade Nbr. 3 - 2007

2007-01-09T18:07:00.000+01:00

Short March 07 Corn: Entered on Jan 8th - Closed on Jan 9th.

Entry: 364,25 -- Initial Stop: 366,25 -- Covered: 357,50 -- Result: 3,32 R

Bearish in Screen I - Pullback to value in Screen II - Entry Set-up in Screen III - Covered half within 2nd bar on Jan 9th and other half within bar 13 as market was unable to break below the day's lows and Screen II was indicating oversold conditions.....

Comments : Good trade, traded according to plan. High Risk/Reward (3,32) thanks to a very low-risk entry set-up.....

Trade Nbr. 2 - 2007

2007-01-05T08:56:00.000+01:00

Long Mar 07 Corn: Entered on Jan 4th - Closed on Jan 4th.

Entry: 370,50 -- Initial Stop: 364,75 -- Sold: 364,50 -- Result: -1,06 R

Mistake in Screen I (SI was positive as I entered BUT price was below MA !!!) - Correcting from Oversold in Screen II - Entry Set-up in Screen III - Stopped out.

Comments : A critical conditions was not met in Screen I - oversaw it !! Amazing mistake due to a lack of Focus ... Good lesson !!

Trade Nbr. 1 - 2007

2007-01-04T09:50:00.000+01:00

Short Feb 07 Crude Oil: Entered on Jan 2nd - Closed on Jan 3rd.

Entry: 60,80 -- Initial Stop: 61,25 -- Covered: 59,78 -- Result: 2,25 R

Bearish in Screen I - Pullback to value in Screen II - Entry Set-up in Screen III - Objective reached within 2nd bar on Jan 3rd (reached lower enveloppe in Screen II).

Comments : Good trade, traded according to plan. The market totally collapsed later on, have to work on a trailing methodology...

The Three Pillars of a Trader's Mindset

2007-01-03T17:49:00.001+01:00

Most traders come to the market with expectations of high returns, in the belief that their chosen method or approach, combined with their general abilities gives them the foundation to perform and succeed in the seemingly easy playground known as “The Market”.

However, only a few number of traders are able to generate consistent returns on their equity, and most are on a roller-coaster experiment!! Why is this? The (good) trading literature explains why this game has more to do with a self-discovery process than other professional endeavours. Are the top traders superior because of some special tool/methodology/trading system? The answer is no. The reason why they are able to consistently take money out of the markets is because they follow a common path of being focused, being disciplined, and being confident.

Let’s detail these 3 pillars of a trader’s mindset:

Being Focused:

Most people begin their trading journey attracted to trading because of its potential of making easy money. The trading industry often supports this view by selling the idea of “Trading out of your home”, “Living the dream”, “Trading from the beach” etc... The idea that trading is an enjoyable and easy way of making money is probably one of the main culprits of why people don’t succeed in the markets!!! The reality is completely different. Trading is one of the most demanding endeavours that someone can undertake. As K. Van Tharp, Mark Douglas, Brett Steenbarger and other brilliant market experts demonstrate in their (excellent) books, trading faces everyone with beliefs that are strong obstacles to trading mastery. What you can learn from these great authors is that a persons beliefs must be re-programmed into more adapted views of what trading is about. For this to happen, a person must go through a very deep introspection and a permanent assessment of how they react to the “heat of the battle”. What the authors show us, through different means, is that first you have to be extremely focused on the task.

A trader that does not have a strongly developed plan to trade the markets will be assailed by never-ending waves of conflicting inputs that will make him lose his focus and his mind in fighting the markets. As Mark Douglas and K. Van Tharp explain very well in their books, the markets have no beginning and no end. Any moment is unique and the only way to find order in the markets is to develop a methodology adapted to your personality that will allow you to gain an edge, and to be able to implement it consistently in order to exploit this (usually) slight statistical advantage. In order to develop such a trading plan, a trader needs to intensively work out his methodology, back-test it in order to validate his concepts and last, but not least, “practice it “. This latest part is probably the most overlooked aspect in the trading literature. Brett Steenbarger’s books and blog highlight this fundamental part of a trader’s development. As for a Fighter Jet Pilot, or a Professional Golfer, a trader needs to practice, and practice, and practice until he considers himself fit enough to enter into this challenging playground called The Market. Once those steps have been completed, a trader’s success will depend on how focused he is in any given moment. The danger, as for other routine-based endeavours, is to get bored or unduly relaxed and this will inevitably lead to disasters. Here again the confirmed trader faces the challenge of being consistently focused on his skills, and on the markets, in order to avoid falling prey to his own weaknesses. This leads us directly to the next pillar of a Trader’s mindset: being disciplined.

Being disciplined:

This is probably the most recurrent concept mentioned in trading literature, but what does it mean exactly? “Discipline is any training intended to produce a specific character or pattern of behaviour, especially training that produces moral, physical, or mental development in a particular direction”*, i.e.: to be disciplined you need a specific set of rules to follow. Without rules, discipline is an empty concept!! In order to be disciplined, a trader first needs to set the rules that he will need to follow. Here we come back to the necessity of first working out a methodology, and then applying the rules to make the most out of it. This is usually called the “Trading Plan” and it is the foundation of any successful trader. Many would-be traders find it hard to write down a specific trading plan since it is very far from the typical “easy money” illusion that many people have about trading. Being able to articulate a precise, step-by-step plan is the result of intensive study and research of the markets behaviour. Once this intensive observation period has produced some trading ideas, it is time to test the concept through back-testing, and even more importantly in real-time. Any trading approach can and must be tested, be it a fundamental, supply/demand model, a quantitative system or a technical analysis methodology. Once the tests have confirmed that the strategy has a demonstrable edge, the real difficult part begins, and this is the systematic application of this edge to the markets. One of the major issues facing the trader once he has formulated a strategy is to make sure that his personality and organisational availability will be in accordance with the execution of this plan. It will only be through the continuous practice of the trading plan that the trader will gain confidence in his ability to execute it flawlessly. Markets have a way to spot any of our psychological weaknesses and only the focused and intense practice of the trading plan will produce the consistent pattern of behaviour that characterizes successful trading. This is the necessary discipline that can lead to confidence!!

Being confident:

Being confident is the ultimate prize for any trader; some call it being in the “zone”, some others talk about finding the “Holy Grail”. What it really means is that, as for any performance based endeavours, trading will satisfy you only once you reached the state where “you know what you do”. Trading is not different from any other demanding undertaking, it requires mastering the different stages of the learning curve and the quality of this learning process depends on how focused and disciplined the trader is in honing his acquired skills. Once the trader has identified, through practice, what markets, methodology and timeframe he is comfortable with, he will slowly gain confidence in himself by systematically repeating all of the steps that constitute his trading plan until it becomes part of his personality. Just as for a tennis or a golf player, being confident makes the difference between winning and losing, so it is for the trader. And, just like the tennis or golf player, the trader can only gain this confidence through a well worked out set of skills, a battle plan and the continuous practice at a performance level. Losing focus or relaxing the discipline will very rapidly threaten the trader’s confidence. Hence, it is of the utmost importance to understand that this virtuous circle has to be maintained during every trade. And here we touch the challenge for any trader: only the repetitive and focused practice of his plan will ensure that he will stay confident in his trading. This can only be achieved through a balanced and healthy way of living and a sound detachment of the day to day results.

Only the traders that live and work and hone their skills in accordance with the principles that we detailed in this article will be able to stay consistently focused, disciplined and confident....

Trading Methodology

2007-01-03T17:49:00.000+01:00

My trading methodology is systematic, as opposed to subjective.

I do not “read” Charts based on traditional indicators, which are, by definition, lagging and open to some of the biases identified by cognitive psychology. My analysis is based on defined, quantitative and repetitive patterns that are integrated within a “context” based on systematic technical conditions. Before going through the tools/parameters I use, let’s first cover what I see as my analitical edge.

Technical analysts argue that since the most knowledgeable and sophisticated participants are actively trading in the markets, the current price trend is the most accurate assesment of future supply and demand. In addition to this, the technical analyst recognizes that the psychology of the participants often leads to a “self-feeding” process that may push prices to an extreme in value. This “mass psychology” factor is a common trait in all markets, countries or moments in history. It is my belief that on top of trying to identify what the main trend is within a given timeframe (typical trend-following approach), my methodology helps me to make an accurate diagnosis of the balance of power between Bulls and Bears at any given time. This diagnosis helps me to assess what the probability is that the current trend will continue or stabilize or even reverse.

The essence of the methodology is based on identifying the inertia of a market (its trend or lack of thereof) and the strength of this trend (its momentum) within a given timeframe.

To achieve this, I have developed my own indicator, the “Strength Index” which, together with a traditional Exponential Moving Average, indicates me both what the trend is and its strength in the “Strategic Window” (Daily bar charts for swing trading).

In the “Tactical Window”, which is always 1 timeframe shorter (about one fifth of the number of hours a market is open during a normal trading day), my objective is to decide whether the price is trading at an attractive value or not.

Finally, in the “Now Moment Window” (about 1 fifth of the Tactical Window), I look for systematic price patterns that will give me an entry signal.

The trading process is always the same :

If the Strategic Window indicates that the trend is up/down and that the momentum is strong/weak, I look at the Tactical Window to find out where the current price trades in relation to its "fair" value. With the help of a 3 standard deviations around an Exponential Moving Average, and oscillators, I look for price zones that present good value to go long/short this market.

The Now Moment Window is then used as the Entry Screen. A set of systematic conditions has to be fulfilled to trigger an entry.

Stop-loss is set below/above the last significant low/high area.

Price objectives are defined by the 3 standard deviations bands in the Tactical Window.

Positions are taken only if the Risk/Reward is superior to 1/1,5.

First Post......

2006-12-13T22:59:00.000+01:00

I will begin posting my thoughts on trading soon on this blog, for a starter you can find herebelow a link to one of my published article on trading.

http://archives.tradersavvy.com/latest/1207.shtml

I plan to feed this blog on a regular basis from January 2007 onwards....

Happy Trading !!!