What do you trade? How about Options and Stocks?
I’ve done stocks, ETFs, and options in the past. But, now, I only trade futures. They suit my personality, and the leverage is advantageous. At present, I trade the SP500 e-mini (the “ES,”) Russell e-mini (“TF,”) and less frequently the Nasdaq e-mini (“NQ.”) I’ve traded oil (“CL”) and gold (“GC”) futures before, and plan to again soon.
Do you trade long and short both?
Yes. I don’t have a preference, for the markets I currently trade. For the ES, TF, and NQ systems I trade, the entry triggers, targets, and stops are derived in the same way, whether it’s a long trade or a short trade. The targets and stops are calculated differently for longs vs short for the commodity based futures systems (CL and GC) that are based on range breakouts.
What time frame do you trade?
I did a little swing trading back in the late 90s, but other than that, I’ve always been an intra-day trader. I don’t have the intestinal fortitude to keep leveraged positions overnight, so intra-day trading is a good fit for me. I’d guess the average trade duration, over the last few years of trading, is about an hour.
What’s the what/when/where/why on the live trades?
It took me a long time to get comfortable with trading, when I first started out. Looking back (and having watched friends go through the process,) I think there is some wisdom in trying to learn the first stages of trading discipline, by experiencing many many small live trades. You’ll read all sorts of opinions, about how to get into trading. Trading on a simulator has a lot of advantages, but doesn’t expose one to the full force of the emotional highs and lows of being in an actual trade. Jumping in quickly, trading live full size trades, will teach you a lot of lessons very quickly, but will be expensive, if you make newbie mistakes.
Myself, I was very methodical, and took many “baby steps.” And I, to my thinking, spent way too long “trading” on a simulator. I would have been best served to start trading live, albeit with small size, much earlier than I did. Of course, everyone has their own unique background, experience base, and psychological make-up. What was right for me, might not be best for you.
What I really needed, was to somehow experience the highs and lows of being in trades, whether by trading them myself, or by vicariously being in the trade vis a via watching someone else do the trade live time. I blog live trade walk throughs on this site, simply because I think it was what would have benefited me the most, when I was learning to trade.
When I get a trade trigger on a system, a post is made (format shown below) with a specific entry, target & stop. As the trade plays out, for better or worse, I’ll add comments to the post (time permitting – I’m often quite busy watching multiple simultaneous trades.) Anyone can then follow along, and, hopefully, will be able to “experience” the trade, psychologically, as they watch the market action on their own screens, in real time.
Will you answer questions about the specific under-the-hood workings of your systems?
Nope, sorry. The description of the systems, in the “The Systems” tab <here,> is all I’m willing to share.
What is the format of the live trade posts?
An example: *** Buy ES NOW Targ=2205.75 Stop=2109.50 TS=15:50 (DISC) . This is a discretionary trade, to buy the SP500 emini, right now, with a profit target of 2205.75, a stop (market) order at 2109.50, and if neither the profit target or stop are hit at 15:50 US Eastern time, exit the trade at the market. “DISC” means it’s a discretionary trade.
The full format is:
*** Buy(/Short) AAA BBB EP=CCC EE=DDD tg=EEE st=FFF ts=GGG (HHH)
*** The asterisks call attention, indicating that this post is a Real Time Trade.
Buy/Short means just that. Buy to initiate a long position; Short to initiate a short position.
AAA is the symbol, for example TF for the Rusell emini, or ES for the SP500 emini
BBB is the the entry method, either NOW, or APMUT (As Price Moves Up Through), or APMDT (As Price Moves Down Through”
EP= stands for “entry price is.” This element would only be present for entry methods APMUT and APMDT
CCC is the entry trigger price
EE= stands for “entry expiry is.” This element is not present for the “NOW” entry type.
DDD is the time of day (US East Coast time) in 24 hour format, at which, if the trade hasn’t yet been entered, the entry order is cancelled.
Targ= stands for “target price is.”
EEE is the target price
Stop= stands for “stop price is”
FFF is the stop price
TS= stands for “time stop is,” the time at which, if a trade hasn’t yet hit its target or stop, it’s exited.
GGG is the time of day (US East Coast time) of the time stop, in 24 hour format, or “EOD” for end of day
HHH is the name of the system, for examples: “DISC” for discretionary trades, or “TFMomo07” for my TF Momentum version 7 system. The “The Systems” part of this website for descriptions of all the systems which you might see referenced on this website.
Another example: Buy ES APMDT EP=2020.00 EE=11:00 Targ=2025.50 Stop=2010.25 TS=15:55 (DISC). This is an example of a discretionary fade trade, buying the (“ES”) SP500 emini, when in gets down to 2020.00, if it gets there before 11:00 US East Coast time. Once in the trade, the profit target will be 2025.50, and the stop 2010.25. In any case, if the trade hasn’t hit the profit target, or been stopped, at 15:55, exit the trade at market.
Another example: Buy ES APMUT EP=2050.50 EE=10:30 Targ=2056.25 Stop=2045.75 TS=15:55 (DISC). This is an example of a discretionary break-out trade, buying the (“ES”) SP500 emini, when it gets up to 2050.50, if it gets there before 10:30 US East coast time. Once in the trade, the profit target will be 2056.25, and the stop 2045.75. If the trade hasn’t hit the profit target, or been stopped, at 15:55, exit the trade at market.
Do you recommend any particular broker?
Nope. Over the years, I’ve had accounts with several brokers. None have stood out as being clearly better, or clearly worse, than the others. They’ve all done a pretty good job for me, and I’ve never had any significant issue with any.
Are you selling training or coaching?
Why are you blogging?
I guess there are several reasons, mostly personal. There are a lot of reasons NOT to blog, to be honest, and, until the last year or so, I would not have ever considered it. But peoples’ lives and circumstances change; mine did.
I’ve always had some traders who are true friends. And I’ve always really valued those friendships. It’s odd if you think about, really. It is, by and large, a net-sum-zero-gain environment we play in. It’s been heartwarming to realize there is room for genuine friendship.
I also just simply enjoy being connected to others, which is something that’s missing from a lot of independent traders’ work days.
I think your blog is great, and I’d like to do something to help out. What can I do?
Send me happy, upbeat email.
My goal in life is to do the greatest amount of good, for the greatest number of people. So when I work on this site, I’m constantly asking myself if what I’m doing is really leveraged – that is, does it help a lot of people, or just a few. I need to focus on what I believe has the greatest amount of value, to the greatest number of people. So if you have an idea of something that can be made part of the website, that would be truly significantly valuable to a LOT of people, tell me.
And, of course, please feel free to tell your friends about this blog. Please share the content and posts on your social media accounts, and anywhere else you’d like. There are a number of buttons at the end of each post – these can be used to share the content, or forward the content with some popular messaging clients.
And tell your friends about the site.
Is there any one place I can go to, to get a summary of your trading philosophy?
Are you using other systems, beyond what you mention here on the blog?
Is your trading completely automated? How automated is it?
No, it’s not completely automated.
Automation is a great topic to bring up, in a group of seasoned traders. You can get a wild debate going, with folks arguing their points with almost religious fervor. I personally can’t get comfortable enough with the way certain scenarios are handled, and with where the automation is hosted. I can point out five or so scenarios that scare the heebie jeebies out of me, most of which are pretty techy & depend upon how your broker’s software is written.
The easiest to understand has to do with partial fills on your entry – there’s a very real chance that your exit limit order will not be placed and that your exit stop order will not be active until the entry order is filled completely. Partial fills are not uncommon. By my understanding of things, it’s possible that you’d get a partial fill, then price move waaaaay against you without your having a protective stop in place.
For me, I’m only comfortable if my eyeballs actually SEE the entry order placed & executed in its entirety, and then SEE my target & stop orders on my screen. Once that’s done, I’m comfortable walking away from my PC for as much as an hour or so.
So, no, my trading isn’t automated completely, because I’m just not comfortable with complete automation. Having said that, I have tried to make things goof-proof and streamlined.
The “flow” for me is: Throughout the day, my systems constantly pull down market data & check for triggers. When a trigger happens, I get a trading signal on screen, visually eyeball the chart very quickly it for any obvious issues, and then immediately place the entry order.
Attached to the entry order are the target and stop orders, which the broker makes active if the entry is completely successful. I watch the entry order’s execution happen on my screen, and then verify that the target and stop are correct. On systems where the entry is done with a market order, I sometimes need to manually adjust the target and stop a tick or two.
Do you ever use discretion in your trading?
I really want to say no. The reality is, that from time to time, I do. My goal is to never second guess my systems, and to never be tempted to use discretion. I studied my trading logs from 2016, and found that I’d used discretion in three ways.
First way: I had one instance of not taking a trade signal. My system calculated stop size based on a 5 period (5 day) ATR. Ranges in the last 5 bars were small, except for the most recent bar, which was huge. I second guessed my system, thinking that the system’s calculated stop size wasn’t appropriate. The trade, that I didn’t take, turned out to be a winner. This is clearly “second guessing” the system, and I’d like to stop doing it.
Second way: From time to time, when I’m 90% sure a system will trigger within the next couple minutes, I try to get an advantageous early entry. I did this perhaps 30 or 40 times in 2016. I don’t know whether this has made me, or cost me, money since I haven’t kept track of things, and because it’s hard to predict how many times you’ll get filled at the bid for longs, or get short at the ask for shorts. My gut feeling is that if I did this consistently for a long time, it’d slightly improve the net profitability of trades I take, but that I’d miss some winning trades, so that overall, it’d be a wash. I’d like to stop doing it.
Third way: A few times a year, I’ll just simply “feel” really good about a trade, because it goes in my way very quickly after entry. (Or I’ll “feel” very negative about a trade if it quickly goes against me.) When this happens to a degree that I’m either clearly euphoric, or clearly despondent, I recognize it & consider myself to be too emotional to carry out the remainder of the trade rationally. In my earlier days of trading, being powerfully emotionally charged (either positively or negatively) caused me to make silly decisions mid-trade. So, now, I’ll sometimes exit a trade when I feel powerfully euphoric or despondent. I’d like to mature to a point that I no longer do this.