Trading Short Term Inventory Imbalance, Cognitive Dissonance, and After Action Performance Review

This is the type of videos I will be creating from now on. This one is an hour. Forty minutes of it is the trade day, the other 20ish is a self review of the video and assessment of where I did well, strayed off course etc... Ended the day +10 ticks which really pisses me off. I was trading great in the morning, and then completely fell apart in a spurt of revenge trading after taking a loss. It's amazing watching the video and assessing my performance. There is much I could have done better today in regards to sticking to my rules and maintaining a process focused mindset. I was completely process focused and strategically sound until I took one loser that cut my profits in half. Boom! State shift, after review, it seemed like I was trading as two completely different people. The morning I maintained correct process, the afternoon, I started thinking about my p/l after a loss, and downhill the profits went.

This video is a great example of how I view short term inventory imbalances and how I see and trade them with the profile. This is one type of tactic, you hear nothing of, from anyone... Understanding and anticipating these types of imbalances I described in this video has something I have been working on for a very long time and continue to improve on. If you were ever wondering how to read TPO count, in real time, this is a great video. I really wanted to finish off the day great pulling a significant amount of ticks from the market, and I believe as soon as I started thinking this way in the afternoon as the close drew near, I completely removed myself from the flow and into an outcome focused mindset. Almost every tick I had worked for went out the window at that moment. Regardless, it is yet another learning experience and a chance to continue to improve as a trader. I am adapting to current market conditions after doing an extensive review of my statistics over the weekend. The past two days have not been extremely profitable, as I cut back my size and am looking to collect some wins under my belt. They have been an improvement though, and continual improvement and progression is what I am always looking for.

I'm holding my position long overnight, as I feel, this morning was one large sweep of any weak longs in the market...I guess we'll see. The dollar is currently confirming this view, but nothing is ever certain. As long as we hold above 98.50 I remain bullish going into tomorrow, looking for a test of the 12.25s and possibly put an end to this upside auction with some excess.

Video:
112409Trade

Comments appreciated

After 15 Days: A Look at My Performance in Relation to Daily Market Conditions

Phew! What a fun three weeks with this new account it has been. I have learned a lot from them I'll tell you that. Out of 15 days: 10 losers and 5 winners.
Out of those 10 losing days: 7 of them have been range bound and opened within the prior day's value area. Out of all seven of these days, I have traded and hit my risk limit within the first hour of trade. The other 3 days have been from taking a long position during the overnight market.
Out of my 5 winning days: 3 of them have been when the market has opened out of the prior days range and trended immediately off the open. The other 2 have been during range bound days where I DID NOT, trade the first hour of trade.

Well, clearly I range bound markets have been a challenge. If one reviews many of my previous videos, it is clear that the majority of the time I was trading an imbalanced market at the open, and just imbalanced markets to one side or the other in general. Lately, the markets have become more range bound, in my humble estimation, and I my strategy for the past 4 months has been one of targeting imbalanced markets. Clearly, conditions have changed, and I will have to change with them to survive.

First off, I will not be trading the first hour of the day (the initial balance) when the market opens within the prior day's value area. This signifies a market that is in balance and prior day's sentiment has not changed. If I wait for the initial balance to complete on these types of opens, I can assess where value placement will most likely be, understand the confidence level of the current day through assessment of the open type, determine if the market is dominated by shorter term or longer term traders by judging relative volume at the open and assessing how the market reacts at shorter term reference points, visualize what the likely day structures that could occur by assessing value placement, size of initial balance, and excess developed during the initial balance, etc...

I have much more control over my trading and understanding of the market when it is range bound if I wait for the market to establish the initial balance. After each day I have hit my risk limit, I sat directly at my computer and watched the remainder of the day to see how it played out and what I would have possibly done. Each time, after the initial balance was over, I had a fairly good idea of what was occurring, especially going into the close. Each of these 10 days I have lost, I have not been able to trade the close and their dynamic inventory corrections, which are fairly easy to read and trade. These end of day inventory corrections have been some of my best trades along with opening imbalances and failed auctions. So, no more trading the initial balance when the market opens inside value until I get a better feel for how to handle these types of days. My targets will also have to be reduced on these days as well, because I have been structuring my targets every day in the same way I would for an imbalanced market. I am very analytical in my market assessment with the profile, if I do not allow myself the opportunity to even trade the entire day, all my synthesized analysis goes to waste as I sit and watch the market trade without me. It's funny, because I was never discouraged, thought I needed to learn any new methods, or incorporate a new indicator from technical analysis (BS). The method is not the problem, the problem was getting the trader to realize shifting conditions in the market and learning to adjust with them.

The past 15 days have been a great learning experience. Many traders would have been discouraged by taking these types of losses (-300 risk limit daily) practically every day, but I knew it was not my overall market understanding or strategy. It was my inability to adjust to current market reality. After sitting down and going through each account statement and each day of the profile that statement was correlated to, I was able to take a step back and see where I was going wrong and in what conditions I was doing it in. Now, I will adjust my strategy to more range bound conditions. I will continue to trade the live account but be much more selective in the trades I take, and when I take them in range bound markets. I will also now incorporate Market Delta's new simulator (fantastic) to test out other profile strategies for a more range bound environment.

More videos to come soon, none today, just a modest gain of 11 ticks because I had other commitments that needed to be taken care of. And thanks to everyone for the feedback, anyone who I have not emailed back, I will get back to it as soon as I can. I have been completely focused on my performance in trading and what was occurring, so any excess that would not help me start winning had to be temporarily put to the way side. The amount of time I have put into my performance analysis in TraderDNA and through comparing statements to profiles has been enlightening. Better days are on the horizon. There is no other option, because I won't stop until I reach my goal.
"The Rage to Master" Damn, I love that phrase.
Comments/feedback appreciated.

Relating What Didn't Occur to Understand What Occurred At Today's Open

Video:
Holding

I was actually long this market overnight. Obviously I got stopped out of the position. But what I find more interesting is how I did my analysis and why it did not work out as expected. What is interesting is what it told me about market conditions. The analysis I did in this video is the same analysis I did in all the videos of my best performances (I have been going back watching my prior videos in search of what I do best when I am at my best). My strategy is currently adjusting to not only the psychological effects of moving to a live account (which I do believe are largely resolved), but also to what I believe is a shifting market condition. The analysis and logic that I have applied to my trades in the past have not been as effective when applied in the present. Please understand that while I am a discretionary trader, my profile analysis is fairly objective and standardized in relation to how I view its structural aspects.

So, what is going on here? I believe these markets are transitioning into what seems to be a far more uncertain environment than it has been in the past couple of months. This uncertainty is reflected in the fact that the ES is largely not trading on its own, but in response to what the dollar is doing. Whereas prior times unsecure high/lows and tails would indicate an auction not completed in the former and a completed auction in the latter, it now seems as though the ES is disregarding this information and instead taking its cue from the dollar.

As one can see by simply looking at the past two weeks of daily bar data on the dollar, it is clearly balancing. It is my hypothesis that if and until the dollar finds its dominant direction through vertical imbalance, the ES, and subsequently many other markets will continue to be largely directionless as well. If the ES is taking its cue from what the dollar to determine what it would like to do, then the ES will find certainty and directional conviction, once again, as soon as the dollar makes up its mind by shifting from horizontal balance to vertical imbalance.

Comments/Feedback appreciated.

Man! Am I in One Hell of a Funk

I don't even have any words to describe what happened today. Today was my day, the type of imbalance I am great at trading, and yet, I somehow fell apart. I am numb to losing at this point. Comical. The wins will come. I will post the performance metrics as soon as I can update my local database in traderDNA. Tomorrows another day... Comments/Suggestions welcome as usual.
Video:
Man am I in a funk!

UPDATE:
Current Account Equity Curve: Flat/Slightly Lower

The Power of a Single Premise

As one reader commented, this is one of my favorite posts on Traderfeed. I used to read this every morning about three months ago. It motivated me tremendously. Prior to BillH's comment, I almost forgot about it. So thank you for remembering that it is one of my favorite posts, and bringing to the forefront of my mind once again.

The Power of a Single Premise

Consider what your trading development would be like if you accepted the simple premise that, in some measure and on some occasions, you are already the trader you wish to become.

What if, at times, you already recognize market patterns, generate solid trading ideas, and manage risk well? What if you don't need to work on your trading problems at all and, instead, simply need to harness the influences that enable you to trade well?

What if everything you need to succeed is already part of who you are and what you do? What if the only change you require is to become more consistent with your strengths and competencies?

Would you still seek out advice from gurus? Would you still look for answers in the latest indicators and systems? Or would you devote yourself to becoming the best you can be--enacting the best within you--confident that the answers you seek have been part of you all along?

Comical at Best.

That is what I think about how I traded today. It is a great example of a stimulus-response reaction. I literally walked into my office, looked at the chart, reacted, and it immediately went against me. Attempted to cover and reverse and without enough risk left to correctly manage my position, I immediately got taken out and shut down. Today just makes me laugh honestly, because I know I am absolutely 100% better than that. The past three days have been very shaky at best. My analysis has been correct as to the odds of value being placed higher or lower and the points I have outlined to execute off have been correct... what has been off has been my psychology and cold detachment from the market. This is something I will continue to work on and improve upon. Is it disheartening? Well, at first it was. Now its becoming comical, because I know for a fact that I know how to trade and I know my method works. Get out of your fucking head Matt!! Focus on the process. I will continue to work on this challenge for as long as it takes till it is resolved. To me, this is a small road block at best. A period of flat performance I must push through. And push through it I will. The process of trading every day is a micro process of the process of becoming a better trader. So, I consider this period of flat performance just a small part of the process of becoming the best trader I know I will be.

Video of the past three days:
Three days of disgusting trading.

If you see any recurring patterns or anything at all you would like to point out in regards to my psychology, method, or markets please feel free to comment on it. Give it to me, I am all about the criticism, just make it relevant. As always I accept responsibility for my actions and use this blog and the statements which are automatically forwarded to friends and family every night as a means to continually take accountability for my actions. Win or lose another step forward.

Have a great weekend guys.

Seeing a Pattern Among Days I Hit My Risk Limit

Among all days that I have hit my risk limits, I have been indecisive and impulsive immediately off the open. Among my winning days I have remained calm and patient off the open, waiting for the opportune time to strike. Although today did not turn out as planned, patterns are starting to emerge from these losses. Patterns that I can learn from. My risk management and capitalization are set up to allow me to continually survive these types of days so I can track, log, and learn from them. It is obvious upon review of my trading was unplanned and reckless. My punishment is now I do not get to trade when I trade my best... the entire rest of the day. All losing days have come from being impulsive off the open. All winning days have occurred when I remained patient and had the ability to trade the entire day. There is not a large enough sample size among my trading days with my new Infinity account to come to concrete conclusions just yet, but patterns are emerging. Patterns I can work with and improve on. I can sit here and type you a sob story as to why the events prior to the open pissed me off and threw me off my game, not allowing me to correctly prepare, but I'll save all of you the trouble. I am not the victim here, and trading the open poorly prepared and pissed off is my responsibility. I could have walked away, but I didn't. I'll take this experience, reflect, learn, and improve.
My process goals for tomorrow: 1. Do the preparation I do when I am at my best (which did not happen today). 2. Let the market tell me what it wants to do off the open by sitting back and seeing how the initial 15 minutes play themselves out.

Win or lose, another step forward. Stay process focused.

Video:
scratched to death