Futures is a Completely Different Monster
I'm making this post shortly after coming close to hitting my daily loss limit set by TopstepTrader. Coming close to the DLL, I'm calling it a day. I'm actually more disappointed in myself today than yesterday.
It's approaching 9:30 AM so I'm getting ready. I've prepared my charts and done what I always do. I did a quick scan of my daily chart and plotted out key highs and lows. I then dropped my timeframe down to the hourly (H1) chart and plotted my intraday levels. As the markets opened, I transitioned to my 1,000 tick chart to be able monitor the price action on a volume basis, rather than time.
The first few trades worked out well. I followed my system, which is to take trades off the levels I plotted, and this led to my overconfidence. At this point, you probably already know what follows after overconfidence. That is, overtrading.
Crime #1: Feeling that today was a good day, this led me to take more trades. It goes without saying that these trades were suboptimal - they were not near any of the major levels I had plotted.
Crime #2: Seeing that my trades were no longer going in my favor, I did what any gambler would do. I doubled-down and hoped for the best. When you pile sub-optimal entries with bigger lot sizes, you're setting yourself up to be majorly screwed.
There's something about the futures market that really encourages me to overtrade. Maybe that's how fast this market moves. Maybe it's the tick values. There's something about it that my approach to the FX market just doesn't work for the futures market.
Using my takeaways from poker of seeing less flops, but also capitalizing on the hands I do play, I'm able to successfully be very selective with the trades I make in the FX market. I also focus on the daily timeframe in the FX market because I'm terrible at scalping and I'm terrible at digesting the noise. I'm confident that I've successfully adapted my trading in the FX market to filter out this noise. I have the patience to sit on the sidelines and miss trading opportunities for FX, but not for futures.
How I refine my trading in the futures market will be difficult. I'd like to highlight my personality traits in order to understand myself a bit better:
Details about me:
It's approaching 9:30 AM so I'm getting ready. I've prepared my charts and done what I always do. I did a quick scan of my daily chart and plotted out key highs and lows. I then dropped my timeframe down to the hourly (H1) chart and plotted my intraday levels. As the markets opened, I transitioned to my 1,000 tick chart to be able monitor the price action on a volume basis, rather than time.
The first few trades worked out well. I followed my system, which is to take trades off the levels I plotted, and this led to my overconfidence. At this point, you probably already know what follows after overconfidence. That is, overtrading.
Crime #1: Feeling that today was a good day, this led me to take more trades. It goes without saying that these trades were suboptimal - they were not near any of the major levels I had plotted.
Crime #2: Seeing that my trades were no longer going in my favor, I did what any gambler would do. I doubled-down and hoped for the best. When you pile sub-optimal entries with bigger lot sizes, you're setting yourself up to be majorly screwed.
There's something about the futures market that really encourages me to overtrade. Maybe that's how fast this market moves. Maybe it's the tick values. There's something about it that my approach to the FX market just doesn't work for the futures market.
Using my takeaways from poker of seeing less flops, but also capitalizing on the hands I do play, I'm able to successfully be very selective with the trades I make in the FX market. I also focus on the daily timeframe in the FX market because I'm terrible at scalping and I'm terrible at digesting the noise. I'm confident that I've successfully adapted my trading in the FX market to filter out this noise. I have the patience to sit on the sidelines and miss trading opportunities for FX, but not for futures.
How I refine my trading in the futures market will be difficult. I'd like to highlight my personality traits in order to understand myself a bit better:
Details about me:
- I'm terrible at trading through the noise --> I need to learn to filter them out somehow.
- I'm terrible at scalping --> Avoid entering too many trades at one time and don't try to go for very small profit targets.
- I do better when I selectively enter a trade and let it ride. If a trade doesn't work out, I need to know immediately and close it out --> Adding a rule to myself to only take one trade at a time. With this one trade, it has to be at a major level because, just like poker, I need to formulate my exit strategy. When this trade doesn't work out such as breaching a support or resistance level, it becomes very clear that I need to get out.
- I make my best trades when they are based off of the major levels --> Adapt my mindset in the futures market that I don't need to trade every day or every session. If price isn't near a major level, then don't trade it!
Finally, I'd like to touch upon the state of my demo account with TST. I pretty much wiped out the $2K in profits that I have previously accumulated. I'm essentially starting back at ground zero with a near $50K balance. For the weeks onwards, I'd like to commit to my reflection and prove that I have reformed.