Failure and Revaluation

I sat on this post for quite a while and restarted it a few times. I didn't want to publish another post that came off as a rant rather than reflection. My last few posts have been kept brief where I shared quick summaries of my trading. This post will be slightly different - it will be about admitting failure and readdressing my trading mentality.


After resetting my Topstep account again, I started trading today. It started off well. I scalped YM off key levels, trading just one contract at a time. Just 10 or 15 minutes into the session, I was up a bit over $200. I added a few more contracts and began trading some more. This is where I started revenge trading. The markets got choppy. Instead of trending, they fluctuated quite a bit around the key levels I had plotted. I took a few trades and quickly reversed. As I racked up losses, I just increased my contract size and kept reversing. As you can imagine, it did not work out well (when has it ever...). I don't know what possessed me to take trades in rapid succession. It felt as if I just wanted to gamble rather than treat this seriously. As I've invested so much on the psychology side for my own FX trading account, I'm surprised that I'm this undisciplined with the futures account.

After giving it some thought, I would have to say these are the possible reasons why this happened:
  1. My money isn't on the line. With my FX account, I take a 1% risk or even less than that per trade depending on the market setups or conditions. With the Topstep account, I'm only putting something like $230 on the line from the subscription fees. If $50K was on the line, I think this would've changed my psychology. In other words, I would've treated this account much more seriously.
  2. I don't have an edge. Unlike with FX where I have a clearly defined strategy, I don't really know what signals to look out for in the futures market. Sure, I plot key levels that price halted at before, but I haven't been able to fine tune the entry and exit signals. Without this edge, my success rate declines.
  3. Noise. I'm terrible at filtering out noise. This is why I decided to trade the daily timeframe for FX instead of on an intraday level. I failed trying to trade FX on the 5 minute, 15 minute, and hourly timeframes. I just couldn't make them work. By trading on the daily timeframe, I am able to set a wider stop so I don't worry about being stopped out by a sudden spike. I just haven't been able to filter out the noise for the futures market despite adopting the Heikin Ashi bars and various tick charts.
For the reasons listed, I currently lack of discipline trying to trade the futures market. In other words, I admit that I'm not psychologically mature enough to be handling intraday fluctuations.

Despite paying for two resets and two months worth of subscription fees, all is not lost. I do treat this as the cost of education because it provides me with a low cost way of seeing where I'm at with the futures market. I don't think I will be touching futures until I can properly capitalize my FX account to the point of generating a steady monthly cashflow.

Finally, I also want to say that I don't blame Topstep or speak negatively of the company for my failure. I have read about people complaining that Topstep's trading rules were too restrictive or designed to make you fail. While some firms do pray that you fail, I don't believe Topstep is one of them. The way they heavily invest in their performance tracking portal, podcasts, live market briefings, and more, I'd say they are one of the better companies out there. Their model is really straightforward. Prove you can trade and get funded. They don't sell a system or a trading course. They're not in the education business so I have to respect them for what they're doing. I was just not ready to tackle a new market.

With that said, I will continue to take trades and focus on my own trading psychology. My learning never stops. I experienced a small setback, but I have decades ahead of me to fine tune my craft.