I'm Stupid

Quick update over on the futures trading side. After a killer day on Monday, which I talked about in my previous post, I performed like absolute shit on Tuesday. I was able to make a recovery earlier today. Let's go over the past two days.

Let's start with Monday again:

TSTrader Performance Center

I dare say I made next to no mistakes today. Losses will occur, but I was able to successfully control them. A pair of stats that might be concerning are the Average Winning Trade (AWT) and Average Losing Trade (ALT). My AWT is slightly smaller than the ALT. I know the reason why and it's because of NQ. I target a reward-to-risk ratio of under 1 for this index. Given how volatile the move is, I often enter counter to pullbacks. If price doesn't exhaust, it will end up hitting my stop loss.

After careful thought, I don't think this is a concern since AWT and ALT numbers can't be analyzed in isolation. You need to analyze them with respect to the win rate in order to determine if you can sustain. Since my Win Rate (WR) was 74.36%, this actually produced a positive expectancy, meaning that I would make money in the long run. Of course, this is assuming that my AWT, ALT, and WR stats don't change. Since they will constantly change, I need to make sure that my WR goes up if the gap between my ALT and AWT widens.

My takeaway from Monday is that it's possible to clear over $1K in a fucking day when my decision quality is optimal. The decision quality can be seen in my non-cumulative P&L. From a visual standpoint, I was able to capitalize on several large movers. When I wasn't able to do so, I took smaller and more frequent profits. There was quite a bit of adaptability here. This is a huge motivator since I've only been trading one contract per trade. When I scale up, that's when this can get really powerful in my opinion.

Tuesday is when everything turned to shit. Here's how:

TSTrader Performance Center

As you can see, my ALT was significantly larger than my AWT. What this means is that I would need an 83% WR in order to achieve positive expectancy. My actual WR was only 33.33% so I'm definitely losing money.

Back at the start of the session, I took an immediate loss of $215. I believe this was an NQ trade that didn't work out. At this point, it didn't affect my mentality as much as I was able to claw back slightly with a $75 profit. However, the next trade was another large loser, which led me to running scared. I took two quick profits and then experienced another larger loss. I'm not going to lie, but this is roughly when I made a revenge trade by sizing up to triple my usual 1-contract size. Was I on tilt? Absolutely. From the top of my head, this was when I went from a $300 loss to $800 within half a minute.

Unlike on Monday, I made a lot of mistakes. In fact, I can quickly list them out:
  • Overconfidence - after bagging a $1K day on Monday, I subtly thought it would be a piece of cake to continue with another $1K day.

  • Impulsiveness - indicated by the revenge trade that I took simply for the sake of trying to recoup my losses quickly.

  • Poor decision quality - I obviously didn't have a good read on NQ so I should've sat out or at least watched the movement for the day.

  • Not being in tune with the fundamentals - not saying I needed to go full out with news and economic analysis, but I should've been in tune with what was happening for the day. Specifically, the decision for the infrastructure bill occurred on Tuesday. If I had been patient and waited, I would've been able to ride a massive trend.
Today (Wednesday) was redemption:

TSTrader Performance Center

Captured a small win of $610 after paying trading fees and commissions. My ALT was still larger than my AWT because of how I set my take profit and stop loss levels. Since my WR was lower at only 63.41%, my expectancy was lower as well at $18.60.

I am proud of what I was able to accomplish that day. From the P&L history, it looked almost as if I was flip flopping. I had a couple of losers and then a couple of winners. Looking at my cumulative P&L history, I was down around $300 for the first half of the session. I didn't revenge trade and focused on taking opportunities as I saw fit. This led me to not only recover my losses but also end the day green. I did take one trade near the end of the market close. That resulted as a loser so I only secured $610 in profits instead of $700+. This was probably the only trade that may be classified as a mistake. The signal was there, but I felt like I did try to "force" the trade a little bit.

I expect myself to perform well for the rest of the week. I do hope to complete this $50K Combine without having to reset my account. If I do need to reset my account, the only reason is if I encountered extremely bad luck that resulted in sequential losing days.