I am starting my first electronic Trading Journal. I will be utilizing MS OneNote for the journal on my home PC. In addition, I will post a copy on BigMike'sTrading forum online. The purpose of this journal is three fold:
1) Improve my trading through open discussion and constructive criticism. I encourage all to participate. Not to be harsh, but if you are here to just be unconstructive and negative, I hope that does not happen, I will just ban you from my thread.
2) Contribute back to the trading community at Big Mikes. I have been lurking for almost a year. I figured it was time to give back some. I thank Big Mike for providing such a great forum.
3) Creating a permanent place to track my progress and force me to be more thoughtful in my trading. I am working on overcoming bad habits. What better place than an open forum to force your hand.
About my self
I have been trading for a little over 1.5 years. I started out with a new baby and a three year old on my lap while I traded. Not the best way to trade, but I had no other choice as I took off from work to stay home with my kids. My wife is a teacher, so this summer has been a good time to concentrate on trading while she was off from work.
When I first started, after trading sim for a month or so, I lost a lot of money in the first two weeks of live trading on the ES. This was a wake up call to the difficulties of trading and a good learning lesson on what not to do. My trading has improved in a direct relationship to the amount of time and effort I have put into trading. Experience has proven to be the best teacher.
WARNING: Do not follow my advise or take heed my opinion. Do not copy my trading. I am a loosing trader. I am not profitable yet! You will most likely loose money if you do and form bad habits. Learn from those that have made it and become consistently profitable. If you take anything from this journal, learn from my mistakes of what not to do..
That said, I have come a long way in a short time. I am very close to becoming a consistent break even trader. I realize that most of my trading failures are from bad habits that I need to overcome. I am hoping that in another year I will become profitable.
The biggest improvements to my trading
1) Strict Money Management. I got that Money Management Religion! But I am no expert in money management and far from it.
To me it is the single most important thing in my trading now. Without it , you will most likely loose ALL of your money and loose it fast. I know others believe psychology and undercapitalization is the ticket, but all that is encompassed under money management in my humble opinion. You have to maintain proper money management through psychology and with out the proper capital you cannot implement your plan with proper money management. Like others, I have learned this to be true through the school of hard knocks.
2) Leaving futures and moving to spot forex.
I had no place starting out in futures. It is too risky for new traders. I learned a lot, but I paid a lot for that education. It would have come a lot cheaper trading smaller positions with spot forex. Once I got the money management religion, I realized how futile trading futures was for the account size I was willing to risk . It was not possible to implement my new plan via futures. I was forced to move to micro-contracts with spot forex or increase my capital at risk. I am maintaining proper risk management with the ability to scale in and out of a trade given my plan allows it. Well at least I am trying-this is a work in progress for me, hopefully I will learn more as I go.
3) Increasing my time frame.
I started out trading 3 and 5 minute time frames. Bad choice. I lost a lot of money trying to trade noise. I did learn a lot, but yet again, it was an expensive education. I am now trading off the 1 and 4 hour charts. I have more time to think and recover from mistakes, the charts are more accurate, and I can rest more. …