Midir's Stock Market Challenge: Day 7

Results For Today

Trades: 5
Total Contracts: 5
Winners:4
Runner: No Runner
Scratch: 1
Losers: 1/2 (scratch would have been stopped out)
Profit: $120.80 after commission
Gross: $150.00

Everyone Makes Mistakes

It was a strong down day, and I did my best to keep myself from wanting to counter trend trade.  I know that is my biggest weakness.  I did a great job at it too, until I didn't.  I took a second entry long against the trend, and it decided to trap and head against me.  I did see the trap and quickly scratched the trade at -4 ticks.

You have to be able to admit your wrong, otherwise the market will prove you wrong by blowing out your account.  One of your main goals should be to live to trade another day, but it is very easy to find yourself trapped and frozen with fear not knowing what to do.  I remember one trade I did early in my career as a futures trader where I wouldn't accept a $500 dollar loss.  It quickly turned into a $2,000 dollar loss before reversing with me selling at +1 tick.  You should NEVER take $2,000 dollars worth of heat for a 1 tick profit.  This is how you blow out accounts, after this trade finished I went back to Simulation Trading to practice.

Massive Down Day: ES

It's funny because in a massive down day, my first trade of the day was a second entry long. It worked out, and I would consider it a valid trade. The descending channel was not yet established.  I missed the second entry short because I did not have a channel drawn yet.  I missed the second entry short because I still didn't have the channel drawn.  I took the very next entry short for another 4 ticks of profit, followed by another.

I could see that the descending trend was getting weak because we did not test the bottom of the channel on two attempts.  We broke out of the channel, and then tested the low once more outside of the channel.  This is depicted by the three gray circles, and I was looking for a chance to go long.  There was not a second entry long, so I passed on the trade.  Instead, I did take the second entry short blind as soon as it triggered.  I got another 4 ticks.

We continued down, and eventually entered into a small range.  we broke lower which turned into another channel, but I decided to counter-trend trade.  It was a pretty decent set up to go higher, but it would have had to go through the EMA for me to scalp me 4 ticks.  It ended up turning into a trap, and thankfully I realized it was a trap and scratched the trade -4 ticks.  A full stop would have been -8 ticks.

Aggressiveness

A problem that I am seeing over the course of these last 7 days is the fact that I am not being aggressive enough. I will not take all the trades that are presented to me, even though there is nothing wrong with them.  Another problem is that the trades I do take do not have a runner because I do not buy with two contracts.

So there are two solutions to my problem, first I could take more trades.  Not a bad idea, more trades will give me more experience.  Another idea is that I could enter with two contracts, and let the other one ride. The final option is to do nothing at all and keep scalping 4 ticks at a time. 

I think I may try option two and try and get some runners.