Thursday, 24 March 2016

Jan vs Feb/March

(1) The market was in a volatile place in Jan, quite volatile in Feb, and then all volatility tapered off in March. The market direction doesn't seem to have played a role, but the volatility definitely did.

(2) I did have stubborn trades that I held onto for dear life in Jan, but they came back - probably contributed to current stubbornness. That being said, those stubborn trades were more parabolic moves, rather than grinding "trend holding" type action, like the current action I tend to get stubborn on.
They were also more likely to be on the open (a lot safer to trade counter-trend) than post 10:30am.

(3) Food for thought: Jan - 8/9 profitable days (two stubborn big losses that came back).
                                   Feb - 9/17 profitable days (magnitude of losing days bigger than winning days).
                                   March - 7/12 profitable days (only up on net because of undisciplined big win).

(4) What worked in Jan - taking profits extremely early, and adding to winners.

(5) What is currently punishing me in March/Feb (aside from not taking losses) - adding to winners on slight movement in my favour. For example if I'm short, I have been hastily adding on a small crack below a level, rather than waiting for the over/under; then when the level reclaims I baghold the add and the starter.
This has contributed to (1) stubbornness because in a bigger hole than intended, (2) Can't trail the stop-loss cause the breakdown never confirmed, so official stop is in a worse place - which in turn contributes to the stubbornness as the stop-loss is harder to hit.

(6) I have been trading starter positions potentially even better over Feb/March. No longer am I throwing a starter on for a laugh. Have been focusing on good entries on starter, while I have still been holding them with a really wide stop-loss, they usually end up profitable because of the better initial entry.
Focusing on entry makes a huge difference!
Food for thought: It is probably more important to take this attitude with adds rather than starters.

(7) In Jan and somewhat Feb I adopted the rule to only go 2/5s size counter-trend. I broke this rules a few times because of a poor initial entry on starter. Would also add that I got punished when I broke the rule.
Compare that to now, and I have relaxed that rule just a tiny bit, but focusing more on getting the better starter entry, and taking profit immediately, recycling the position quite aggressively counter-trend. I'm still not really getting over 2/5s counter trend (sometimes do), but am ending up with an exceptional average. I believe that this is actually an improvement compared to Jan. But is being ruined by the impatient adds to a winner, and not taking things off when they proved me wrong.

(8) Another big part of the stubbornness is failure in methodology in adding to a winner when I try and anticipate a lower higher/higher low.
The add needs to be after the higher low/lower high is confirmed (and hence stop-loss can be trailed to that spot).
Again, this leads to bigger losses when actually stopped out, AND contributes to stubbornness.

(9) Another comment, not any specific month related. I have noticed that when I have less than my max drawdown available in my trading account I trade sub-optimal in that gap. E.G. Don't hit a stop so that when it comes back I can place another trade.
In the past I have kept an amount close to PDT to ensure that I don't continue trading past max drawdown. I believe this is now detrimental to my trading, and I should have faith and rely on my discipline - which will build as a habit.

So to sum up:
(1) - Hit out when wrong. Will start a stickk goal for always having a hard stop-loss in.
(2) - Poor methodology and patience when adding to a winner.
(3) - Good counter-trend trading with starters.
(4) - Watch really closely for stubbornness after 10-10:30am. Having a hard stop-loss is a nice fail-safe in this case, but ultimately not being stubborn and manually covering will result in better exit, if recognising the error.

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