Yesterday was the day from hell!
Yesterday I put 2 trades on in the real $ account. I bought 1 ES @ 762 with a 10-pt stop (trying to catch a falling knife), and I got stopped out with a $500 loss. I went long again with 1 contract @ 752 with a stop at 742 (again, trying to catch a falling knife). I was expecting a small short-covering rally. Unfortunately, I accidentally exited out of my 752 long position after-hours due to an order entry mistake using IB's Trader Workstation platform, which is probably one of the worst trading platforms out there. It was pretty frustrating seeing ES trading at 780+ over night. To remedy that, I ordered Ninja Trader. Aside from the trading hickups, it was just a bad day over all. I even missed my stop on the train ride back home so got off and had to catch another train going the other way to get back to my stop which ended up costing me an extra 40 minutes. There were other issues too, but no need to go into detail. It was just a really bad day.
Changes going forward
I'll be using Ninja Trader in Live Trading mode connected to IB's TWS on my Sim account with IB. At some point, I plan on switching that to my real $ IB account but don't have a set time-frame on when that will happen. Could be a week or a month, I really don't know.
I will be cutting size to 1-3 contracts. Yesterday's $700 loss made me realize I'm not ready to trade anything over 3 contracts. Most of my trades will be 1-2 contracts.
Goal for next week
The goal for next week is to play around with different stop-loss levels and finalize a tighter stop. In the past, I've been using a 5-point stop but that's probably a bit too wide. I need to find the sweet spot where the stop-loss provides damage control for the trades where I'm just dead wrong, but at the same time, doesn't wiggle me out of the winners. From similar analysis in the past, I think that's around 3 pts but next week's focus will solely be on stops and the goal is to hae a conclusion by the end of the week. Trading is all about continuosly adapting to market conditions so nothing is set in stone, but I would like to tighten up the stops a bit. Yesterday's 10-point stop didn't really provide the damage control I'm looking for. Imagine if that was on bigger size!
Setting up for failure?
Given my current situation, I wonder if I'm setting myself up for failure. The S&P is a brutal market dominated by professional traders. I'm trading against professional traders with a lot exeperience, big accounts, multiple screens, cheaper commissions and full-time focus/dedication to trading. Meanwhile, my current situation is trading part-time off a single laptop connected via a broadband card from a train with less than 25 minutes to make any trades! Sounds like I'm bringing a knife to a gun fight! I'll continue trading on the sim for a while because it provides exposure to patterns and keeps me involved in the market so if/when I go full-time, I'll have a head start but I don't know if live trading (profitably) in my current situation is realistic. Post a comment if you have any thoughts on this topic.