Thursday, July 19, 2007

Need to Try Something Different

Today was meant to be a big trading day with lots of news releases, the FOMC minutes, and Google earnings. But I didn't sleep last night and just closed out another trade at a loss. What I'm doing is not working both in practice and psychologically. There is also the stress caused by my whole visa and moving situation and undoubtedly the fact that I am no longer earning a salary is a major influence even though I have plenty of funds. The model is performing very badly this month. But I am doing even worse. At this point my Interactive Brokers account is down another 5% this week so far. Several of my investments have also been falling. The inexorable rise in the Australian Dollar makes my USD net worth look like it's growing, it doesn't look as good in AUD. I think I should take a break for the rest of this week from trading. Rest and get most of the rest of my packing completed. Then when I come back to trading just do day trades, using the model and intraday charts for guidance until I can rebuild my confidence. I can't handle holding these overnight trades at the moment. And do quite small trades to start with. The main thing is to rebuild my confidence in this next period, not lose money, rather than really try to make money. Well that's the plan.

The area circled on this chart is the track record so far in July:

After the initial loss I thought I was getting to grips with things. Until the last couple of days. At least the recent loss was trading according to the model, which turned out to be wrong, which is better than the cause of the initial loss when I was trading against the model. There are also plenty of losses in my Ameritrade account. So this isn't the complete picture.


pfstock said...

Hmm, I think that we have seen this chart before... I had a couple of questions. How do you define a "trade" in this context? Does that represent both a buy and a sell together, or do you have a way of counting your open positions? I assume that your profit already accounts for trading commissions, right? Lastly, based on the numbers, it seems that you average less than $25 profit per "trade". Am I missing anything here?

mOOm said...

Yes it is just an update of the chart - each "trade" is closing the futures position. The average profit per contract traded is $14 currently. This is all after commissions. So that is roughly a one NQ point of profit on average which is equal to $20 minus $4.80 in commissions for the round trip.