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Hello fellow traders,
in this post I would like to share my progress in trading towards profitability. Every week, I'm going to post my results from trading the DAX (GER30).
Just a few words about myself: Currently, I'm studying chemistry at a university in Germany and I've been trading for almost exactly three years. I started with stocks, continued with CFD's and then futures and options. I was never profitable and in fact I lost a lot of my equity over the three years. A week ago, I signed up for the Brook's trading course. Of course 399$ might seem like a lot of money (and it is), I arrived at the conclusion that I'd rather spend it on some proper training from the ground up than loosing an equal sum in trading.
Even though I'm not proud of my losses, I know that they have been / are part of the path (at least for me). I had to make the mistakes myself and try out a lot of things. Now I'm finally in a state of mind where I actually listen to people instead of trying to outsmart the market. If I would have singed up for this course three years ago, I believe that it wouldn't have helped my a lot, since I wouldn't have listened.
So anyways, I've been through the losses - so if you want just feel free to openly comment onto my weekly results - I can handle it.
Why do I even trade? Well, firstly, I'm young so I don't really care if it takes me another three to five years to reach profitabilty. That still leaves enought time to archieve my financials goals (and if I happen to die young than I'll never have to worry about money ever again). -> I can only win by learning to trade.
I also like the mental challenge in trading and would like to be able to eventually be an independenten reseacher(funding myself). Chemistry and Astronomy really fascinate me.
My plan:
- In the first phase, I'll try to cut away my biggest losses and the obviously stupid trades. I hope that that will bring me closer to breakeven on a weekly or monthly basis. My verifyable goal is to have the 20d SMA of my P/L at or very close to 0. I'm estimating around six months for this phase.
- In the second phase, I'll try to reach into the region of profitability. My verifyable goal is to have the 20d SMA of my P/L turn positive. I'm estimating around twelve months for this phase
- In the third phase, I'll try to keep my 20d SMA of P/L in the positive as consistently as possible.
Week 3: Mo: All trades with chart
Daily P/L: +17.5 DAX Points
Detailed analysis: Because I had no time to trade in the morning, I noticed that instead of waiting for good trades, I FOMO'd into both trades today. For example, instead of waiting for a pullback to sell, I entered at the close of a bar, that could have easily been an exhaustive end of the bear trend and a false breakout from the trading range.
- Trade: Market was in old TR, so I bought at the bottom. As it started breaking below and accelerated, I eventually exited for a loss of -27.5 points.
- Trade: FOMO'd into an accelerating bear leg down away from the TR. I was lucky, as it didn't hit my SL, that was placed just above the bars that are market (in a red ellipse) on the chart. Eventually, the market broke lower and I exited as downward momentum stalled near the 200% MM. Profit: +45.0 points. After I exited the market bounced for a little amount and broke lower another 70 points. However, as we where nearing the session end, I decided to close the books anyway.
All in all, it was probably mostly luck, that I ended up in the green this day. Still, today together with Friday are my first two consecutively profitable days ever.
Here are the brokers statements for yesterday. I'll try to include them every now and then for credibility.
Verkauf = Short
Kauf = Long
Basically, you'll just have to look in the first column to see if I went long or short and then check the column "Preis", to see at what price the trade was executed. Then, go to the next row to see at what price I closed the trade.
So for example, the first trade: Kauf = Long at 12:52:40 for a price of 1291.86€ (note that in Europe, the decimal places are separated by "," and not by ".".)
Week 3: Tue: All trades with chart
Daily P/L: +44.6 DAX Points
Detailed analysis: Started trading a few minutes before market open. However, it soon proved that the market was very volatile, with violent up-and downswings. So I soon stopped trading, as I was very uncertain about the state of the market.
- Trade: See comment on the chart. P/L: +29.7 points
- Trade: Speculated on repopulation of an old TR. P/L: +14.4 points
- Was looking for a retest of the breakout area. However, as I was really unsure about the market, I exited for a profit of +0.5 points and quit trading for the day.
Generally, I can say that I was constantly switching between TR and Trend Mode in my mind. It was probably a good decision to quit trading when I realized my discomfort, even though afterwards, there where a lot of good trading opportunities.
Very interesting!
Here are the broker's statements for yesterday.
Week 3: Wed: All trades with chart
Daily P/L:+67.6 DAX points
Detailed analysis: Started my trading day again a few minutes before market open. At this time, the market was at top of a trading range. However, since the DAX tends to move violently on market open, I didn't take the short. At the open, the market quickly dropped about 250 points, so I was a bit angry for not taking the short. Although I still knew, that it could have been easily moved 250 points to the upside against my possible trade.
- Trade: It is quite usual for the DAX to make a violent move in the first half our, that is then completely reversed within the first hour. So as the bear move got exhausted, I went long for a possible move of at least ~100 points. However, we quickly lost upside momentum, so I reversed my trade for a possible revisit of the daily low at that time. P/L: +12.9 points
- Trade: Losing upside momentum, I sold to close and then sold to open. As I was just looking for a retest of the daily low, I exited way to early with a profit of +14.0 points.
- We broke below the low of the day so I shorted again. I assumed the formation of a LL MTR so I exited with a marginal profit of +0.5 points.
- Seeing an invalidated LL MTR, I sold again and closed at a support level from the 2nd October for a profit of +40.2 points.
All in all, I am not too happy with my trading today. This should have been a day, where I make at least 100 points if not more. I was too impatient and hesistant to enter.
This is what I'm talking about regarding the first trade:
As you can see, the DAX is in a TR, then, at the open, there is a violent move to either side, that is then completely reversed with equal force. This is a fairly regular occurence for the DAX and probably also other indices. So that's what I have been speculating on with my first trade. Usually, if the reversal does not happen with about equal force, it is better to exit and look for another trade.
Here are the broker's statements for yesterday.
Week 3: Thu: All trades with chart
Daily P/L: +58.0 DAX points.
Detailed analysis: Started trading at the open, where a big breakout to the downside manifested itself quickly. I was able to make two fast scalps and stop trading until the evening session, where I made another two scalps.
- Trade: Sold into the downside momentum that continued for a few minutes after my entry. Exited as we where nearing a support level from the end of September. Profit: +25.4 DAX points
- Trade: Sold the pullback from the day's low. However, price got very jumpy so I exited with a profit of +23.6 DAX points instead of waiting for a retest of the daily low.
- Trade: In the evening, I bought a possible continuation from a bull flag and was eyeing the HOD, where I exited with a profit of +5.0 DAX points.
- Trade: Shorted at the HOD for a possible retest of the bullflag breakout. Exited as momentum dried up near the top of the flag with a profit of +4.0 points.
All in all, I am happy with the trading day, considering the little time (~1.5 hours) I spent today.
Week 3: Fri: All trades with chart
Daily P/L: +26.9 DAX points
Detailed analysis: Didn't have much time to trade, so I was very hasty with my trades, often frontrunning the market. Luckily, the last trade just about hit the TP, that was placed at the top of the conventional gap on the chart.
- Trade: Short for second leg down, closed trade when reversed off support level. P/L: +6.6 DAX points
- Trade: Long with strong upside momentum off the support level. Closed way too early. P/L: +2.4 DAX points
- Trade: Reversed 2nd trade and was looking for retest of LOD. SL triggered. P/L: -28.3 DAX points
- Trade: Shorted for second leg down, TP placed at top of conventional gap, filled for a profit of +46.2 DAX points.
Week 3: Mo, October 19 - Fri, October 23
Gross P/L: +214.6 DAX points (+221.5 points week to week)
Average daily P/L: +42.9 DAX points (+44.3 points week to week)
Std.Dev.: 18.7 DAX points (-48.2 points week to week)
Total P/L since start: -36.6 DAX points
Analysis:
- + very consistent in return, low std. deviation
- + avoided a lot of stupid trades by thinking twice
- + personally, I feel like I'm making big improvements
- - impatience: took profits early before trade hit TP
- - fear of loss, closing trades with marginal profits
In summary, I'm incredibly happy. This is my first week ever to have made money each and every day. My results correspond to a return of 41% (based on margin). Also, I'm now very close to breakeven(globally speaking). Al, if you're reading this: I'm very happy to have signed up for your trading course. If have only completed 23% of the first part of the course, but I'm already seeing, how the puzzle pieces fall into place. I have avoided an incredibly amount of stupid trades by applying concepts from the course.
- don't try to catch the falling knive
- wait for confirmation
- trade with the trend
(I used to be a die-hard countertrend scalper, so trading with the trend is very different for me.)
Here are the missing broker's statements for Thursday and Friday:
Thursday:
Friday:
I won't have too much time to trade next week, so I'll take this as an opportunity to do more swingtrading instead of trying to scalp. Also, I just completed the videos 14 (Trends). So this is probably a good time to practice staying in trades longer. If you have followed my journal, you know that that is something I struggle with a lot. Exiting trades with 10 points of profit that could have easily made 100 points is not a good thing to do long-term.
Happy trading everyone!
Week 4: Mo: All trades with chart
Daily P/L: -1.3 DAX points
Detailed analysis: What a day! Up and down and up and down and at the end I managed to come to a screeching halt at the breakeven line. I have to say, that I'm very dissapointed with my trading today. Not because of the result, but because I fell back into old habits: Taking profits early, not riding winners and taking stupid trades. I can consider myself lucky that this has not been a day with -100 or -200 points. With my trading, that certainly could have happened. Days like these should probably make 200+ points. I mean, it went straight down and that's it.
- Trade: Went short after I laboriously convinced myself that it is indeed a downtrend and that it's fine to simply sell the market. P/L: +44.2 DAX points.
- Trade: Well, that's what you get for catching the falling knive. P/L: -83.3 DAX points.
- Trade: Went short after breakout below LOD. P/L: +61.6 DAX points.
- Trade: Short for possible retest of V-shaped bounce: P/L: -37.7 DAX points.
- Trade: Long after breakout above bull-flag: P/L: +13.9 DAX points.
Here are the broker's statements for Monday:
Week 4: Tue: All trades with chart
Daily P/L: -94.5 DAX points
Detailed analysis: What an utterly stupid trading behaviour again. Yesterday was a warning, today was a shot across the bows. Things have to change. How is it, that I'm still lured into taking longs in this kind of market? Also, today shows that although I know what I should do, I just rarely do it. For example, in the morning, I was down 100 points. Suddenly, I'm able to trail a trade all the way down and close it with 105 points profit to reach breakeven. Why am I not able to do this normally? Whenever I'm green on the day, I'm sooo afraid of taking a loss as it could "ruin" my good trading day.
- Trade: Long on breakout. P/L: +9.5 DAX points.
- Trade: Short on double top. I'm still angry that my stop was triggered just before the 200 point fall. P/L: -47.0 DAX points.
- Trade: Long on breakout: P/L: -64.2 DAX points
- Trade: Short after huge drop: P/L: +104.3 DAX points. Btw, this is my biggest winning trade on the DAX ever. I have to do these kinds of trades not only when I try to save myself from a drawdown. Also, after this trade, I was slightly in the green so I could have simply stopped. Instead, I decided to mess up again. This time, I was not able to save myself:
- Trade: Stupid: P/L: -108.9 DAX points.
- Trade: Guess I realized after two days, that there's a downtrend so so YOU COULD ACTUALLY JUST SELL! P/L: +44.6 DAX points.
- Trade: Yeah, let's try to pick the bottom again: P/L: -32.8 DAX points.
