Monday update

Shitty trading today. Not because I am down, I am actually up 32.9% in the last two trading days, but because I was more emotional today than I have been in awhile. I am pissed because I did not trade $BLNK very well, and it was the play of the day. It had all the signs of a great long trade and I was not patient enough: Low float, Chart that draws in early shorts, great catalyst with Whole foods collab. You really don't need much else, you just wait for a good dip to enter.

Damn... I have not been this angry in awhile, but the catalyst for my anger this morning was initiated by looking into my insurance claims to find out that once again my broker did not input a claim that he said his office did... I've been waiting for this reimbursement check for awhile and it hasn't come. That's why. I have since called the broker and come to understand that everything is looking alright as of now, it's all just surprising.

OJ is just running without me too. I should have just bought it. Also, Sugar is definitely coming back down, so I just bought a small rebound off the longer term trend of sinking prices. This could be a long hold, but that is what I have to be prepared for. This is long term value investing, not trading.

On the psychological and emotional side of things, I am doing much better. It's rare that I go through what I went through yesterday, but damn, when it does I find myself just completely lost. I need to get things in place to help me deal with that, such as just moving my body and getting things out and trying to get distracted instead of meandering in the negativity.

Upo-dato

 

Chart glitch today had me down $500 twice on WTW... bummer because I would have bough a nice bounce. I exploited the glitch to make $3000 after the losses haha, but it doesn't mean anything.



Today was the rate decision in the Canadian Dollar. here is a chart of my trading. I've lost a few % in the last week trading non-news and had I not done that, I'd be up over 5% right now, but lessons lessons...

Looking at the longer term chart which is not pictured here, I had a gut feeling of a breakout north. North was the initial direction, and price action was signaling a continuation. Higher lows, Higher Highs. Then as the market consolidated a little, the most recent highs become targets for profit, but not necessarily reversal. I wouldn't want to get caught shorting an established up move on such an event. It can always go farther than you think. I would have kept a tight stop, but I'd rather not risk the loss regardless.

HLX fell today after I tried to dip buy, so I put in a limit to add at support, but it didn't dip low enough to give me my average price. Missed out on that, but looking to hold this earnings winner for a few days to see what happens.

And finally a chart of OJ

Fallout Xbox Complete and Trading Update

Finished the Xbox today and I love it!

Also, Friday I bought some HGSH just for the hell of it. I just looked at it again and It soared, so I put in a market sell order for Monday. Just pure luck, but funny.

Not much to post really. In terms of my real world trading, it's hit and miss. Mainly because I am not trading a tested theory. I have made money waiting every month for the Banking Rate trades, but this week I decided to just trade discretionary and I've lost a little each day. Still up about 2% but every time I come to the charts for non-news trading, I seem to walk away will less money in my account. The results show, and my emotions show, that I should just be patient and wait for my bread and butter days that happen a few days per month.

In reality, I really dislike watching the charts move so damn slowly. My analysis is generally right in direction, but my timing is off. And when I put some size on, in order to preserve capital I have to limit risk and take small losses quickly. That's what suits me best when trading a fast moving market during a rate decision, but any other time and I'm just watching paint dry, while losing money haha.

I am moving more and more into the feeling that I just want to be a guy who has robots trade for him completely. I am at the moment waiting for Scott Welsh to make some information available about his trading robots. It's going to cost me well over $2,000 but I don't know anyone else who has a portfolio of robots for sale. I'll keep you posted.

Until then, I'm just a house cleaning, youtube watching, dish washing, gym going loop.

P.S. Today I filmed a drug deal going on right in front of my apartment. Called the cops too... This makes the Third time in a week these guys have done the same shit.
Creepy Drug dealer

OJ Action

Got a price alert today. OJ has finally hit and closed slightly above the average entry. I am not break even on the entire trade, with the last two contracts now in profit of about $5,000.

UPDATE

Even higher today!

Commodities Update

Hello all,

I'm in Ohio tonight. It's late and before I go to bed I wanted to update you on the commodities trades. Last December I bought one Crude Oil contract in the $66 range. As you can see by this chart, we've hit a profit as of recent, but it really isn't much. Had I purchased another contract months back when it was in the $45 range we would not doubt have exited at least on contract for a hefty profit, but for whatever reason I was lazy and didn't do it. I'm not going to make up some bullshit and act like I did, even though I thought about doing it. If I haven't posted it, it didn't happen. It looks like we are in a nice uptrend as of now, but I don't know if we're going to see a third measured moved higher. That would be a great place to sell if we do.

On the Orange Juice front, prices had a steep decline and then a recovery the other day. Looking back on previous events, moves like that have been met with continuation, so there is a probability we will see further decline. However, that decline could have been profit taking, and then dip buying. I am curious to see what happens either way.

On a final note, I had my socks blown off by some of the best news possible in the video game world tonight... Final Fantasy VII is actually being remade!!! After well over 10 years of fans screaming and pleading for it, and being teased and disappointed... we are finally getting a remake. With that said, that means I have to make due on a silent promise I made to Sony. I promised if they ever remade it, I would buy it full price and I would also buy whatever system it came out for. Well, it is coming to Playstation 4, but it is also hinted that it is not exclusively for that console. So, I have to decide how I feel about that. Anyways, here is the trailer for it. Fucking so excited!!!

OJ takes off

Great timing on the buy @110.95 because today OJ is screaming higher and we are almost back at break even.

On a side note, I'm having some serious frustration right now because of my Motorcycle alarm and a new set of frame protection rails (race rails) I bought over 2 months ago... They just arrived and they gave me two of the same freaking side... so, totally useless until they send me the correct side... It is very annoying. And my alarm shipped back with the new, hopefully working components, and they forgot to send me all of it back so there goes another few weeks with no frame protection or alarm on the bike... All really expensive shit that should have much higher quality service attached to it.

I just got into town today. I spent a lot of time listening to the Joe Rogan Experience podcast and watching some trading instruction. I have been getting ever eager to get this over with and start backtesting a methodology and also start my bodybuilding.

Adding to OJ position

Back on December 4th of 2014 I went long 2 OJ contracts @146.15.

Today Orange Juice is trading in the 110's so I decided to go long (buy) 2 more Futures Contracts.

With the two initial contracts purchased at 146.15, the position is sitting with a current drawdown of $10,560. Because this is an investment, I am prepared to hold this position until it is profitable. For those of you who don't recall or haven't been following that long, the beauty of the commodities market is that unlike stocks there will always be a value to them because they are real assets.

As long as you have a full cash position on a hard asset, you can withstand price fluctuations. If a stock you own goes to zero or is delisted, it's over and your money has vaporized. Orange Juice will always have a value. The only real danger here is if there is somehow such a catastrophic collapse that even the Futures exchanges go under or your broker goes under. It is in the best interest of us all that these exchanges exist because farmers and businessmen will always have a need to offset production risk through these markets.

Anyways, since I am purchasing two more contracts today @ 110.95 each, that puts our average price at 128.55. Even if Orange Juice prices take another year to go back to our original entry of 146.15, that will be a $10,560 profit we are sitting on. Not enormous, but a profit nonetheless. Just a 10 cent move beyond that point to 156.15 would be an extra $6,000 for a total profit of $16,560 because we would have 4 contracts making $150 each for every cent in our favor.

As you can see on the chart, prices are relatively low at this point, but the market has been griding lower. We'll have to see if the fight taking place right now is won by the buyers or if we break through again and head towards the 70's and 60's.  '

Keep in mind this is simulated trading and no real money is at risk here. This is to demonstrate how I could likely trade futures contracts long term to increase wealth.

Losing to Win, or just plain losing?

There are cycles to every aspect of existence that I know of.

I started taking notice those cycles in middle and high school, but specifically my personal cycles of emotional highs and lows.

Our schools would hand out these planner books each year and I actually loved them. They were a nice size with rounded edges and that spiral plastic spline holding everything together. I would doodle in the little calendar days, but I also started making some notes about how I would feel or what I would do that day. I wanted to go back and look years down the road and recall those moments. I began to notice that if I felt great at school I would tend to feel shitty and depressed at home. Likewise if I felt depressed at school I tended to feel better at home.

It's not anything I took serious study with, but it was just enough of a pattern to become noticeable to me. I think those were the formative times of me starting to analyze myself and life in a serious way.

Well, fast forward 16 years and here I am noticing different things about myself that I have never noticed before. Much of which I won't be writing about in this post or even perhaps this blog, but what I did want to mention is that I have been in a pretty shit place for awhile now.

One thing I can say, is that being in a shit place makes it an emotional challenge to even look at the trading progress right now. Losing basically 25 times in a row is pretty stressing in a way I haven't felt since 2008-2009; the last time I was actually in the market. I was trading real money back then and like I mentioned in a previous post, my risk per trade was 10 times the percentage it has been on this blog.

Here, with a $10,000 account a $10 loss is only 1/10th of a percent. 25 losses basically puts me down 2.5% but back in the day that would have been a 25% draw down.It's bugging me and it's still only a demo!

I know I keep saying that I have to remind myself that I am letting this robot just do whatever its going to do because I am gathering data, but damn is it difficult to watch 7% gains get eaten away by a market I know I shouldn't even be trading in.

What kind of data am I gathering you ask? Sometimes I am unsure. At first is was really just to see how the robot responds to live data instead of a historical backtest. It seems to do alright honestly as long as there isn't any crazy volatility from news releases coming into the market.

I suppose part of this data, is actually about me and how I psychologically handle a string of losses. It's also a curiosity of the unknown. As simple "What if I just let the fucker go?".

For those of you who have been keeping up with my posts and paying attention, you'll recall that the market has been doing pretty much what I have estimated it would do. I am thankful for that because it means I am not totally inept at reading the market, yet my actions and losses seem to reflect otherwise haha.

I have said a few times now that I expect the market to be choppy and for me to wake up to losses. That has happened.

An issue rising up in my consciousness is a question that says "If you suspect all of that rubbish why do you even have the robot running?"

Again I think curiosity is the best answer I can thoughtfully give. I think when I set out to test this concept, I wanted to just really put it through its paces. I want to discover just how bad it can get... I guess I want to see the worst it can get now with fake money rather than real money.

So far, even in my 25 sequential losses I have had several opportunities to take profits that would have the account well above the $700 in gains that were there before it started losing so much. When I get home, I plan to take a good look at the performance and document charts showing all the obvious profit that there was to take that I simply didn't.

There is a part of me that has evolved as a trader that makes this process pretty stressing to go through. You see, when I first started out trading I thought to myself "Well, everyone seems to lose money because they can't cut losses and they can't hold winners, so I'll just learn to do both."

Well, the key to doing that successfully as I have learned and am still learning, is to do it in a balanced way. And more specifically in a way that your approach requires based on expectancy and market conditions.

Back in the day I had much less of a problem taking 10 losers in a row because in 2008 when the US markets were crashing there was enough movement in a day that my 10 losses could be made back pretty easily. In the years since, directional volatility and daily ranges have died down considerably. This recent downtrend in the Euro (strengthening of the Dollar) is bringing back some of that large daily range again, but I don't think anyone can or should expect it to last. It feels to me like it is simply a result of the market struggling over whether or not this is the bottom of that drop or not. Very wide swings show a big fight between buyers and sellers. I think once the battle is over those daily ranges will decrease substantially back down to how they were on the downtrend to begin with.

When I had learned to hold winners, my problem became that I learned to hold them so long they became losers.

(I have a whole post about "Making it all back" coming up that will make a lot of sense to you so stay tuned for it. Very relevant to this situation.)

In short though, because I was down 10 losses already for the day, when I was  finally under a winner I would want to hold onto it until it caught me up from all those losses and then some. In a market that's moving, that is possible depending on how many losses you've actually taken, but on a slow, choppy, unsure market day... The market will likely only have so much to give you and it won't be all you are asking or hoping for.

So when I say this has been hard for me to go through, it's because I feel like I am watching the same shit happen to me that happened back in the day; where I have a decent profit and I am just not taking it. But this time I actually want to take it.

I'm looking at these charts and where reversal points are likely to be and I am like "I should totally take this profit, but I'm not because of this stupid curiosity to see what the hell happens."

I'ts kinda making me feel like a fool, which is why I have to constantly remind myself that I am choosing to stay disciplined to that curiosity because it's what I set out to do.

Let me explain something though, because it's crucial to this situation: I can't physically be in front of the charts to monitor them.

I feel like if I had the control and the time to trade this robot the way I actually saw fit, I wouldn't even have it trading as much as I do. I would wait until the market where likely to be alive with movement and I would carefully choose to place the robot at key reversal areas.

If price got to that area and didn't immediately reverse I would like to be present enough to gauge whether or not it would be wise to implement my martingale risk profile into the mix. (Martingale by the way is usually a deadly stupid way to trade, but I have no data as to how it pertains to what I am currently doing with this robot.)

Not only that, I would really love to see how I can implement this robot during news trades with the martingale side of it. If price is just really directional and going to pop but I will take a few losses before it decides where to go I think that might really be useful.

But because I am driving all day and don't have the remote control I'd like to have... my only options are to watch it do whatever it's going to do, or take all the profit on any particular position, with no ability to relocate the robot yet.

The following sentence is something I think is a good question for all people to ask themselves:

If the flow of opportunity is never ending, what good does it do anyone to become obsessed with picking exact tops, exact bottoms or capturing the entire move?

I honestly think that as long as trading exists and volatility is tradeable, we should keep that question in our minds because it can help us cut losers quickly and take profits when the market makes them available.

But besides that, at the end of the day... there is still the serious risk that my broker's live execution will kill this strategy altogether and I'll need to keep looking. I have had problems with them before while trading live money and if those issues still exist, putting tens of thousands of dollars at the risk of a shady brokerage is not worth it. I'll have to be extra careful just to try and not get taken advantage of.

Thank you for taking the time to read this if you indeed did.
-Francisco

P.S. By the way, if Orange Juice hits $1.55 again I am selling. I wasn't watching and it totally hit it... I'm just calling it out now so no one can say it's hindsight trading ;P

Trading Commodities

In the meantime, since the Ninja Trader program I downloaded shows Commodity prices I decided to put two simulated trades on.

The first trade is in Crude oil, which is seeing nice lows. Contracts of crude oil trade in 1,000 barrels each and the minimum increment of movement is one cent. That means that each cent crude raises or lowers in price equals a $10.00 gain or loss per contract traded. Now, I don't have the capital to trade even one futures contract, but I love the idea of trading futures because they are real goods and will never go to zero. They will always have real lasting value.

 Here are some charts of Crude oil. I decided to buy a contract at $66.81 simply because prices have not been this low since about January of 2009. The value of just one contract at this price is a staggering $66,810 dollars, but even if prices go back to $80 a barrel that would be a profit of $13,190. As you can see be the monthly chart, it would not have to go very far to reach that price point and I am fully confident that it will...

The other trade that I can't resist is Orange juice.

 OJ has a minimum movement of 5/100 of a cent and a contract size of 15,000 lbs of "orange juice solids". So for every tick up or down, the position will gain or lose $7.50 per contract traded. Every one cent movement in the price of Orange Juice equals $150.  So at the time of this post, with OJ at a cost of $1.46/lb the value of an entire contract would be $21,900. Far cheaper than the Crude oil.

Now if you look at this monthly chart OJ is basically in the middle of the highs and lows. As a trader of anything else I would not want to buy at these levels, but since I am trading something that will always be worth something, I am far less afraid of price drops. You see, in the stock market when the price of a stock falls some people look to add to their losing position and "Average in". But that stock can always go to zero. In commodities, the lower the price goes, the less likely it is to continue going down because it is a real physical and valuable asset.

Back in May 25th of 2012, I took a simulated trade of one contract @ 109.25. I took that trade because I knew that was relatively cheap and even if it moved against me it would only present better buying opportunities. I literally waited until he price hit 158.00 to get out. I felt it was high enough and I had waited long enough. It was about two years to make $7,312.50. That was a 44.6% return on the initial value of the position. THAT, was an investment. If that is not something that makes you start wondering about doing this, your head is not on straight. I have wanted to do that for a long time now, but I do not have the capital.

Here is one point to think about though. Even if the value of one contract right now is worth $21,900 Orange Juice is not going to go to zero. The lowest its been in almost 10 years is just above 60 cents. If OJ went to .60 from todays price, that would be a drawdown of only $12,900. You could open an account with $15k and still be alright. Not only that, but by the time OJ actually reached that price odds are you would have had plenty of time to add more capital to your account. I just love that we have the opportunity to grow wealth from a real asset.