Following on from my last post, I've decided to reset my paper account and start fresh with the learnings I've picked up from John Carter's book Mastering the Trade. I've studied and will be applying 3 strategies thus far: Opening Gap, The Fade, and The Squeeze. While I previously stated I'd only be trading US Based Equities, this book has opening me to exploring futures as well. I'm using the Think or Swim platform, and the minimum balance they permit on a paper account is $25,000 so that is my starting balance.
Day Summary
| Label | Value |
|---|---|
| Starting Account Balance | $25,000.00 |
| Ending Account Balance | $27,431.78 |
| Profit | $2,431.78 (after commissions) |
| Trading Time (Wall Clock) | 09:30 - 09:48 |
Opening Thoughts
Recently the market has been very choppy, causing a fair amount of instability although recent trend of the overall market has been down. I was anticipating a continuation of this trend as the news in the market has not provided any strong bullish sentiment.
Trade Review
When the opening bell rang, the $TICK was reading strong below -800. Given this strength I knew I would be looking only at short positions for the day. 
Given a strong downward opening sentiment in the market, I then looked to my 1m/5m/1D chart layout for /ES. 1D showed a downtrend, 5m showed a weakening uptrend in the premarket, and the 1 min chart indicated we were entering a squeeze setup to the downside. Under normal conditions, I'd wait for squeeze indicator to develop a bit longer, but given the strength of $TICK I entered a short position - 3 contracts at 2633.25 (Clock 09:30:34). I closed this position very soon after (Clock 09:31:18) at 2632.00 because the 1 minute chart showed a small retracement. I instantly regretted this move as I then noted the squeeze setup was continuing to develop and the $TICK reading was still strong. I re-entered the position 3 contracts at 2631.25 (Clock 09:31:38). This closing and reentering recurred a few times as I was excited to realize profits, but reminding myself to stick to the plan. I ultimately re-enter the short position at 2622.00 and closed at 2615.00 - with one last position of 3 contracts shorted at 2615.25 and closed at 2615.75 upon second momentum confirmation the squeeze was over.
Final Thoughts
I am pleased with my execution, although it is sloppy discipline. I am at least happy that I was quick enough to correct my poor discipline and trust the plan. Doing so allowed me to turn significantly greater profit than if I took profits off the table along the way. I also am please when I closed my position for the day - $TICK was retreating strength, and the chart since my exit has become very choppy with an upward trend
Overall Rating: B+
Wow dude, that's nearly a 10% capital gain on one trade ? You must have a hell of a risk management strategy :-)
How much were you prepared to lose on that trade if it had went the wrong way ?
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One morning of training. It involved about 6 or 7 round trips.
In terms of risk management, I’ve mentally planned for a 2% loss on any given trade and I watch every position like a hawk. I’ve tended to be more trigger happy and bail out sooner. From some playing around this has resulted in leaving profits on the table so working on my discipline is my biggest challenge right now.
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Well it's good that you know what you've been doing wrong, most people don't, or won't admit it !
What you've been describing is the reason that people lose at trading, not waiting for a trade to finish and taking smaller profits earlier. Most also take too big a loss as well when it goes the wrong way which is the other side of the coin.
"I'm at my stop level, but I'll just let it go a little further... ok, a little bit more now... am sure it's going to turn around any second... just a few more points.. Oh crap, I'm down 10%" he he.
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Hah! The thought has definitely entered my mind on the losses but a few weeks ago messing with low float stocks I experienced how that could very rapidly backfire. It’s very clear to me that this is a game of having a plan and the discipline to stick to it.
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Absolutely, it's the thing I struggle with the most, every time I mess with the plan it backfires, always :-) That's why I've forced myself now to put on a trade with a profit and loss target and walk away.
You can drive yourself insane second guessing every trade, thinking you've made a mistake halfway through, justify to yourself that you should take early profits or take a smaller loss.
My trading is very mathematical based now, on probabilities. So I know if I don't stick to 'the plan' then it throws the maths out the window and it's just gambling instead.
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