Tuesday, August 27, 2013

Journal Entry 20130827

*** position losing value along with *** position picked up yesterday.  Those two *** are currently showing correlation.  *** is on a bear trend, having never achieved a sell trigger before the pivot.  **** news blames the US situation in Syria coupled with weak US economic data hinting of continued Quantitative Easing; but mainly just a poor report for ***** and ***** in my opinion.  If what **** news says in correct for the reason.

Bottom line for the time being?

Realized P&L: 1.6bips

unRealized P&L: -114bips

Friday, August 23, 2013

The Post Reboot Drawdown

Pulley had a great question on the last post about if my 67+% drawdown was after or previous to the financial blog reboot.  The short answer to that is after, however, the longer answer is that I had a reboot followed by a method rework followed by a model overhaul.

The story goes I had taken on a couple of leveraged positions early on after the reboot, thinking I had a money making scheme figured out.  I actually did a vid on the subject titled "I had a margin call" watch it here if you have seen it yet:

The irony of that event has to do with how much I espouse the benefits of risk management.  Really, it doesn't make sense that I should talk so readily about a subject which in practice I know so little of.  In practice, if I am willing to learn, I was given a demonstration that I had much more to understand on the subject.  Hopefully I did learn this time around, but that will be something that time alone will tell.  Clearly though, if I hope to do this job professionally, I need to really lock down my risk management.

There was another trade after the margin close out, but it was outside of the rules of my trade plan again, and it got stopped out, mercifully at less than 10% this time, however, the loss as it was outside of the trade plan rules offered to education or explanation.  If I was within the trade model for the trade, I could figure out if it was an error in volatility management, or entry triggers, or number of units, but as it was from the hip, while the loss was within equity risk, there was nothing to learn from the experience, so a waste of time and a waste of money.  However, can we ever say there is "nothing to learn from this"?  If I were only able to take one thing away from that stop out after the margin call, it is the importance of me keeping within a rule structure so that adjustments can be efficient, accurate, and testable.

So as I sit and write this operating a new trade model confirming entry triggers with some favorable basis points, I know how I got there, and I can test if what I am trying has worked in the past.

Perhaps this can be the beginning of good things to come, but this is only the beginning, and I am only able to really share what is the veritable tip of an iceberg, and that iceberg is one that to this point, the processes that I am trying are still not my own.  But the more I study the origins of these methodologies, the more I can continue to form my own and be able to adapt to an ever changing market where even proven models when not updated or modified quickly become obsolete.

Wednesday, August 21, 2013

Performance Disclosure

-67.256% ytd

Why in the world would I share such a thing?  It could be that I am feeling froggy from making .8 bps yesterday, but it is more so that I can provide the context of what I share here as I reveal some personal psychology.

The performance also is the reason for my trading plan overhaul.  Several unprofitable practices have been identified and hopefully eliminated.  This loss has occurred completely within Q3, so hopefully Q4 will show how well my changes are progressing.  Meanwhile, For me August cannot end fast enough so that I can close those losses and maybe see some black in the ledger again (even if it is an itemized q4 report).

That being said, I am not giving up on Q3 and will continue to operate with as much success as possible, moving cautiously.

Monday, August 19, 2013

Worse or Better

Ok, so you may notice by now that for a short time I did have trading journal entries.  However, due to me getting so much outside help, it honestly isn't fair to the audience for me to attempt to share data that I myself do not fully understand.

I think that if you have had the patience to follow along and are reading this, you must have an understanding that markets are complex, and the interpretation of data is subjective, and an art form.  A technical indicator will work right up until the time that it doesn't.  So to even elude to such things would be a mistake to share in the long term.

What I will freely share is my psychology, and mood as it relates to my progress in the pursuit of professional trading.  Being completely honest, I was a little down in the dumps this morning as starting from scratch to discover some unexploited scheme is a daunting task for someone as eager as I am to make money.  I understand how silly that sounds, but hey, I am as human as anyone else.

There has never been a better time for me to buckle down and get to work.


Wednesday, August 14, 2013

Red Bull

I just have to ask, how did traders do it before RedBull?