11 May 2009

 Direction:                   Long

Outcome:                   -$162.40 (USD)

Balance:                     $11,152   (AUD)   (correction to original posting)

Drawdown:                13 trading days

Comment:

Today’s trade never even looked like getting over the line, so the bad run continues.

If you’ve read my articles or my books, you will know that I regard perfect implementation of the trading plan as one of the most important elements of success. The last two weeks have illustrated that quite well.

My daughter-in-law trades every night using the techniques I taught her. She has done quite well over the past two weeks! The differences are interesting:

On 1 May, she caught the up spike at the end of the second minute – my old fingers were a bit too slow on the mouse. It was a great result for her, because the market moved up so fast that within a couple of seconds it was way over her target. In fact, she had no time to enter her target order, so simply exited after about 15 seconds with a win twice the normal size! In contrast I got a small win that session, but totally missed out on the windfall gain which I would have had if my execution had been perfect.

On 4 May, my daughter-in-law showed much better discipline than me, holding on for a full win, where I settled for grabbing a small profit (because I made the mistake of watching the trade and was convinced the market was turning…).

On 6 May, my slow fingers missed a trade on the short side, which my daughter-in-law caught. It turned out to be a loser, so that was a bonus for me.

On 7 May, we both took a short trade. However, I have my profit target set slightly more aggressively than she does. The trade moved within a pip of my target, before reversing sharply and stopping me out for a loss. She scored a good win.

(In my defence, I did have a better April result than she did, although she still recorded a nice profit.)

I can live with the 7 May result, because I have a slightly different policy, but the other three days were implementation errors and they cost me. 

The 4 May result was a pure lapse of discipline. I normally fix this problem by setting OCO groups with my exit strategy, and then not watching the screen. I’ve started doing that again now.

The remaining two issues were to do with me being too slow to submit orders in fast moving early trading. By the time I calculate the number of contracts to take, the moment has passed – just by a couple of seconds in both cases.  I’ve changed my approach here, so hopefully I’ll have a bit more time and won’t miss these trades again.

The ultimate solution would be to have the computer trade for me. IB have a facility which enables me to implement this if I want to, but it is a lot of work. So much so, that every few months when I have a look at it, I shunt it off into the too hard basket. Still, it really would be a benefit with the 1 minute bars.

So, I’ve downloaded IB’s API (application program interface), got their sample java program working, and am dusting off my old programming skills to see what can be done. Don’t expect anything any time soon – there’s a lot of learning for me here.

 

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