Small Profit

Posted by Deb | Day Trading Journey | Friday 20 August 2010 4:06 pm

I tried the demo again today. The market was slow, so it took too long. Finally I got out of the position with a profit of $75 on 2 contracts. Of course, now the market is still going up, so I could have gotten already $125, but never mind.

What does bother me is that today I used again my method of adding a contract when the position was losing. I was sure the market was going up again, so I was just “helping” myself to make the position profitable quicker, but isn’t that the method that has made me also loose?

I think I can’t ban this method. That is the way I use in order to profit. Without it, my losing positions will just go on losing, and I will be quitting my positions too early, since it will often not be likely the market will go up enough in the next few minutes to get the position profitable again. Adding this extra contract makes me not despair immediately when the position is losing, since I know this added contract can change it back to a profitable position.

What I need is a method to decide in what cases adding this contract to the losing position is good, and when it is bad. Maybe in a case like today, when all indicators are showing the market will be going back again, adding the contract is ok. In other cases, when the added contract is just gambling, it is not ok.

I will have to continue experimenting on this a bit longer.

———————-

Now I added one more position one contract and exited if after a profit of $25. My total for today is $100 on 3 contracts.

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Is Using the Demo Really Helpful?

Posted by Deb | Day Trading Journey | Thursday 19 August 2010 11:05 pm

Today I lost again on the demo, and I am starting to have doubts about how much helpful the demo is to me.

Prior to my first “going on live”, I took the demo much more seriously, though already then I would do things I would never had done on a live trading. When trading on a demo you know there isn’t any real money on stake. You can put a limit order and forget about it, or try things which you aren’t really supposed to.

Today I put a limit order, but then my daughter and her friend asked to eat something. I left the Transact running and went to prepare something, forgetting about my position. When I came back the position had been over, without me even seeing it entered. That is something I wouldn’t allow myself on live. I did 2 more positions, and without that losing position this would have been a successful day, so I really don’t know how I should be seeing this day of trade – as a success or a failure.

On the other hand, if I cannot force myself to trade seriously on the demo, how will I be cautious enough on live? And what other options do I have now? I don’t feel yet prepared to go back to live trading.

I suppose I will have to play it by ear. I’ll go on practicing on the demo for a while till I feel reassured enough to trade on the live trader, whether or not I had been successful enough on the demo.

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I need a recovery-from-vacation period

Posted by Deb | Uncategorized | Wednesday 18 August 2010 11:25 pm

It takes so much time to get back from a vacation! So many things to put back in place (and I am such an untidied person), and I need time to rest and readjust! Just going over my email takes over an hour.

Between everything I had to do I didn’t have much time to trade today. I did $50 over one 2 contracts. Not very good, but at least it is a profit. The internet connection also wasn’t very good, which is frustrating as I have just now upgrade my internet connection.

The book I mentioned here, about the psychology of trading, has arrived. Now I have to find time to read it. Of course, I will write about it as I read.

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Coming Back from Vacation

Posted by Deb | Uncategorized | Wednesday 18 August 2010 8:37 am

Hi Everyone,

You are probably wondering where I disappeared to. Sorry I forgot to post here that I am going on a few days vacation. I went camping with the kids. The heat and humidity was unbearable, but otherwise we enjoyed ourselves.

Anyway, we came back late yesterday night. We actually had a flat tire coming back, so this made our journey back longer, and we came in very late. I will post here again later today or tomorrow when things are back to normal.

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Money Management in Day Trading

Posted by Deb | Futures Trading Tips | Thursday 12 August 2010 9:54 pm

I read yesterday a great article by Ilan Levy-Mayer, VP of Canon Trading, the company through which I do my  trading.  In this article he gives some rules to managing your risk when day trading.  He sees the managing of the risk as the most important factor in determining whether a trader will be successful or fall.  Any trader will have bad days, in which he loses.  Only a good risk management will help him not to lose all his money, and to be mentally capable of continuing the trading successful.  As I said here before, a trader’s mentality and psychology is the most important part of trading, more than any market indicator.

His rules are similar to the rules I wrote down here in my trading rules and tips pages, though he added a few interesting ideas.  I will give here an outline of his system:

  1. Daily stop loss:  Every trader must set for herself a daily loss limit.  Your limit depends on the capital you have and your personality:  How big a loss are you able to deal with.  When the loss exceeds your daily stop loss, close your positions and stop trading for the day.
  2. Daily maximum number of trades:  Going on with more and more positions will set you for losing.  It will make your fees too high for any substantial profit.
  3. Set your breakeven level:  This is an interesting idea I haven’t heard about before.  You should set yourself a certain profit limit, which if you get to during a day trading, and then lose again your profit, you should stop trading for that day.  The psychology of this, as I understand it, is that there is usually a certain limit that if you pass and than start losing you feel as if you have to fight to get it back, and that sets you to lose.
  4. In a similar way, set your profit target:  This will be a limit greater than your breakeven level.  For this target you will set a trailing tail.  The logic of this pair is similar to that of the breakeven level:  If you get to the profit target or pass it and then start to lose, don’t let yourself lose more than the trailing level.  If your profit goes down from your maximum profit of that day by a sum equal to the trailing tail, it is time to stop for the day.  The logic here is similar to that of the breakeven level:  When you make a nice profit and than lose it, after some critical point you can’t take it and lose your logic.
  5. Profit limit:  similar to your daily loss limit, set yourself your profit limit.  Don’t let your profits make you too greedy.  Enough is enough, and if you try to make more and more positions you will start losing.  Your trading fees will accumulate, making your profit smaller.
  6. Stick to your rules!  This, from my experience, is the most difficult rule of all.  But if you do manage to follow these rules, with the limits you set for yourself, you will create for yourself  a positive trading psychology, and make your chances to survive and make profit much higher.

 

Good luck in your trading!

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I Changed My Theme!

Posted by Deb | Uncategorized | Wednesday 11 August 2010 10:53 am

How do you like the new look of this blog?

I decided the old one gave a dim impression, and was a bit depressing.  This theme has more happy colors.  I don’t like the business men on top:  It sends the wrong message, as if the work of trading belongs to men only, with no women around.  But overall, this theme is happier, so I am having this one for now.

I have to do a few more changes, as giving the ads a more appropiate color, and also the registering to my newsletter doesn’t fit.  I’ll do it over the next few days.  Anyway, I am excited about his change.  Congratulations to me!

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Playing with the Transact Simulator

Posted by Deb | Day Trading Journey | Tuesday 10 August 2010 9:49 pm

Yesterday and today I was playing with the smiulator.  Trying things I wouldn’t dare do on live.

Yesterday I went into a position and immediately started losing.  I decided to wait and see.  2 months ago I would probably add contracts on a higher price.  Yesterday I waited to see what happens.  Well…  I did lose at the end, big time.  At least I learnt a little how to identify chances to get out of the losing positions in a minimal loss.

Today I started with a good position but went out of it too quickly, so the profit wasn’t much.  Then I entered again, and the position was losing.  I thought of getting out of it to cut the loss, but forgot about a financial report that was due just then.  Suddenly the market changd direction, climbing up so quickly – and I was winning!  That was nice.  I went in again to a position while the market was still going very fast after the report; not something I would recommend on live, when the market jumps so fast you can never now where it will get to.

In any case, I feel still far from going back to trade on live.  I don’t know how much time it will take.  It feels so scary now.

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