Wednesday, March 16, 2016

Nothing to be happy about - Day Trading: Mar 16, Intraday

Trade 1: Breakout Failure of Yesterday's Low. Failed.

Trade 2: SAR'ed when Trade 1 Breakout Failure did not succeed. Should have locked some profit on this trade, but it seems that I have not learned any lessons from the past 2 days.

Trade 3: Range Compression Short. Though it was just above 7450, I took it anyways. I have succeeded with these kind of entries earlier this month.

Trade 4: Fed up of my losses over the past few days, I shifted to a 100% mechanical trading system. This time it succeeded. I hate to switch Trading Systems in the middle of the trading day. Usually, I avoid the switch unless the system is giving me a huge drawdown. That wasn't the case with this discretionary trading system though. So, for tomorrow, I am undecided on whether to go mechanical or discretionary.

Nifty M3 Candlestick Chart

Tuesday, March 15, 2016

☹ - Day Trading: Mar 15, Intraday

Obviously, I am clueless. Need to think about changes to my current methodology. And should I go back to Mechanical Trading?

If there is one thing about today that I would want to change, it is the SAR trades at the start. I got off to 3 consecutive losses in minutes.

Nifty M3 Candlestick Chart

Monday, March 14, 2016

Got chopped in the chop - Day Trading: Mar 14, Intraday

Bad day started off well.

The first trade was a short below the consolidation after spike. Was unfortunate that that trade hit Stop Loss. Then, 2 losers followed, and after that I could not recover.

Nifty M3 Candlestick Chart

Friday, March 11, 2016

Did I do it right, or did I do it wrong? - Day Trading: Mar 11, Intraday

The same clueless trading. 9 trades in total. The first 5 were losers, and the next 5 were winners. To my credit, I applied the exact same logic to my entries and stops throughout the day - irrespective of whether I was in the losing or winning phase. So the question is pretty much rhetorical... What I should really be asking is - Is it right to win, and wrong to lose?

Did I do it wrong?

Trade 1: Short on Breakout Failure of 7500. I was hoping that it would touch yesterday's afternoon range low - which it did - but there were not sufficient points to lock in profit at that point. After exiting for a loss, I was hoping that it would come back and cover the range again.

Trades 2, 3 and 4: Trade 2 entry was below the pin bar after a nice wide range bar. I took the trade even though the momentum was clearly up. So, when the Stop Loss hit, I reversed to Trade 3 long. It broke the Day High with volume, but then started falling. Seeing the fall, I wanted to reverse early, and tightened my Stop Loss to reverse to Trade 4 short. That was another loss.

Trade 5: A breakdown after couple of attempts to break the day high. I was not very confident about the location of this entry, and so I tightened the Stop Loss. Result: It ate my Stop Loss, and then continued its fall. Bad luck?

Did I do it right (but maybe not very right because the exits were wrong)?

Trade 6: Reentered the short. Took this trade even after 5 consecutive losses, because I thought that the previous exit was bad luck.... and if I could take 5 losses, couldn't I take 6? ☚ Reason why I keep losing so often. About the exit, I was conflicted. On one hand, I wanted to book when momentum stalled. On the other hand, I did not want to miss out on a big fall just because I tightened the Stop Loss, like I often do. I finally voted for a wide trailing Stop Loss.

Trade 7: Pullback long. It moved, and I tightened Stop Loss to lock in some points, and it got hit.

Trade 8: Price was swinging for a few bars before it broke out. Then, it immediately fell, and I took that entry. for this trade also, booking on loss of momentum would have been a good idea, but I trailed the Stop Loss to a random point.

Trade 9: Price was going up, and I was cursing myself for not reversing Trade 8 at loss of momentum (though I had only thought of exiting on loss of momentum in Trade 8, and not of reversing the position). Anyways, when the upward momentum stalled, I shorted. There were a few points in this trade also, but I did not get much.

Nifty M3 Candlestick Chart

Thursday, March 10, 2016

Trading by Statistics

Especially while trading discretionary, I am pretty clueless about what I should be doing. What are the patterns on that chart? Are they telling me to go long or short, or am I just fooling myself that they are telling me anything at all? Since I am trading discretionary, it is my discretion to decide when to do what. Isn't it? Or if I already knew what is to be done, then where is the discretion?

(While trading mechanically, at least I have pre-decided rules and hence know what exactly is to be done in each scenario, though the rules themselves may be pretty clueless.)

Now, given that I am clueless about how to use my discretion, and half believe that the markets are somewhat random, how can I still trade? My (current) genius tells me to trade by Statistics. The core idea remains what is described in this post about System Hopping. I need to be profitable, have small drawdowns, and a high rate of capital growth. (Peace of mind is not statistically measurable though, I think)

Add to that the guidelines/core values/motto of whatever system.... and I know that I have to take trades with small Stop Losses, and the high Win Rate. How many losses I log before I net a big win counts more than where I enter trades. It's all about the Payoff Ratio and the System Drawdown. I need to keep my wins much bigger than my losses and reduce the frequency of losses. Let the graphs and probabilities on the Statistics page tell me what to do, rather than the Price chart. Let the numbers scare me into booking a profit, or calm me into relaxing my Stop Loss. The objective is to get the Statistics to look better.... and increase the probability of ending the day positive.

Trading by Statistics

Clueless trading - Day Trading: Mar 10, Intraday

Trade 1: Breakout Pullback of Yesterday's Close.... Hahaha. When it went down to 7450.10, but did not touch 7450, it confused me. I could not decided whether to book, or keep a wide Stop Loss... so finally I compromised and trailed the Stop Loss to somewhere in the middle.

Trade 2 & 3: Range Compression after Failure to Continue to 7450. I could have avoided both these trades if I had kept a wider Stop for Trade 1.

Trade 4: Breakout Pullback of 7450.

Trade 5: Breakout Failure of 7450. When it breached 7500, it was a good opportunity to reverse, but I kept the Trailing Stop Loss wide. Reason 1: I already had too many losses in the previous trades. Reason 2: I thought the Momentum would continue after a Pullback.

Nifty M3 Candlestick Chart

Wednesday, March 9, 2016

Yesterday's plan worked today - Day Trading: Mar 9, Intraday

Observe the similarities with yesterday:
  1. I read the direction wrong. Yesterday was a down day, and I started off with 2 losing longs. Today was an up day, and I started off with 2 losing shorts.
  2. The third trade on both days was in the direction of the trend and got me into money.
  3. In both the Trade #3, there were clear opportunities to lock in 20 points profit, that I did not book.
  4. In both the Trade #3, the price started sliding in the opposite direction after the lost opportunity.

Thankfully, the similarities end there. Unlike yesterday, today's Trade #3 got me money.

Today would have been a great day if I had taken the early morning Breakout Failure of Yesterday's Low, but I decided to to wait for 7400. Also, in Trade 2, there was a clear pivot to lock in some profit, but small profits were not in today's plan. I was also not very happy about my exit in Trade 3, because the price bounced back immediately. Luckily, the price did not bounce up much like in the last trade of March 1, so I am not too pissed.

Nifty M3 Candlestick Chart

Tuesday, March 8, 2016

Another Bad Day - Day Trading: Mar 8, Intraday

Trades 1 & 2: Breakout Pullback of 7500 Spot. Booked an early loss because I tightened the Initial SL by 2 points. The early exit also caused me to take the second long trade. If I was not in these trades, there were so many chances to go short before 10:30. After the losses, I was cautious and did not look for a short until a breakdown. Breakout failure of 7500 Spot with volumes was another opportunity to short that I did not take.

Trade 3: Breakout Pullback of 7450 with higher volume. Moved well. Should have booked better, since I was already got 2 losses in the first 2 trades.

Nifty M3 Candlestick Chart

Better trades - Day Trading: Mar 4, Intraday

Shifted to discretionary trading on M3 charts.

Trade 1: Breakout Pullback of 7450. Fell down, then ranged a bit. Booked on FTC of 7400

Trade 2: Failure to Continue at 7400. Good entry. Range a long time above entry. Booked below High Volume Pin Bar.

Trade 3: Range Compression Entry. Loss.

Trade 4: Breakout Failure of 7500 Spot. Took a quick entry, and had to wait out a lot of volatility. Exit was not too good.

Nifty M3 Candlestick Chart

Worse Trading - Day Trading: Mar 3, Intraday

Was engaged in other activities, unable to focus on trading, but placed trades anyway.

Result: Disaster

Nifty M3 Candlestick Chart

Wednesday, March 2, 2016

Bad Trading - Day Trading: Mar 2, Intraday

It was semi-mechanical trading today, with a lot of discretion. I had planned to continue with the Discretionary method that I traded yesterday, but then fell back on some mechanical rules - mechanical rules are so convenient. I system hopped twice today - around 1:45 PM after many losses I shifted to a different method that should give fewer trades.

The plan was to try and capture movements of around 20 points, with small losses in the losing trades. The small losses part did kind of work out until Trade 4, but after that I hit a series of bigger losses. And capturing profits from small movements - that I could not, though there were many opportunities. The only trade in which I captured a small movement - Trade 2 - was the one in which I should have stayed longer and SAR'ed.

I do not know what I will be trading tomorrow.

Nifty M3 Candlestick Chart

Tuesday, March 1, 2016

Short bias did me in - Day Trading: Mar 1, Intraday

Today, was a nearly 200 point uptrend day, but I could not read the day early on. The best part of the day was the spike in the morning, when I was actively looking to short...

I had 7 trades today - 3 longs and 4 shorts. All the longs were winners and all the shorts were losers.

Early on, in the morning, I was looking to short below the spiking bars. Missed the opportunity to go long at the Pullback marked on the chart. After that, the day was difficult for me.

Trade 1: Short on BOF of yesterday's high.

Trade 2: Reversed to long when it broke the Day High. Also, can be considered a Range Compression trade. Exited when the move lost momentum.

Trade 3: Range Compression Short. Exited at Initial Stop Loss after 1 hour. If I was not already short, I could have looked at a BOF long at 7150.

Trade 4: Another Range Compression Short, almost a repeat of Trade 3. If I was not already short, I could have looked at a BOF long at 7150 again.

Trade 5: Range Compression Long. Reversed to Short at Range Compression below 7200.

Trade 6: Reversed to Short at Range Compression below 7200. Day High at that point was 7199. Ideally, I would have preferred a BOF of 7200.

Trade 7: Range Compression Long above 7200. Held on for a long time, and then exited just before it spiked up. Was patient with this trade until the end. Held on to the trade even when it dipped below 7200 with a intra-Trade Drawdown of -26 points.

Number of daily trades is increasing with this new discretionary method. One reason for that is that I am trying to reduce intra-Trade Drawdowns, and capture points in the Trade when I have some.

Nifty M3 Candlestick Chart