October Trading Summary

Net breakdown (contracts traded):
CL $80(18), NQ -$777(60), ZS $8410(250)

RESULTS FOR OCTOBER
Contracts:	328
Net $P/L:	7713
Wins:	55
Losses:	58
Win%:	49
$Commissions:	1527
Avg$Win:	531
Avg$Loss:	-371

Wed. 10/31

12:45pm CDT - Shutting down early today on the small moral victory back to green on the year.  Net YTD +$112, after a peak drawdown on year of -18% ($10.2k).  This also concludes the best month in over 2 years, +$7713.  May it continue...

RESULTS FOR DAY
ZS Contracts:	12
Net $P/L:	838
Wins:	1
Losses:	1
Win%:	50
Avg$Win:	1359
Avg$Loss:	-521

Tues. 10/30

2:10pm CDT - Today could have gone either way with a final reversal trade that was going to make or break the day.  I was able to exit inside the final minute in the money. 

RESULTS FOR DAY
ZS Contracts:	14
Net $P/L:	328
Wins:	2
Losses:	1
Win%:	67
Avg$Win:	524
Avg$Loss:	-721

Mon. 10/29

1:25pm CDT - I wasn't sure how the closing of equity and bond markets due to Hurricane Sandy would affect ZS today but it basically had no impact.  Good day to start the week.

RESULTS FOR DAY
ZS Contracts:	12
Net $P/L:	738
Wins:	1
Losses:	1
Win%:	50
Avg$Win:	1259
Avg$Loss:	-521

Fri. 10/26

2:10pm CDT - No errors today and traded per plan.  For the week, net +$1958.

RESULTS FOR DAY
ZS Contracts:	6
Net $P/L:	819
Wins:	1
Losses:	1
Win%:	50
Avg$Win:	879
Avg$Loss:	-60

Thurs. 10/25

5:55pm CDT - An error reading a signal got me to enter too soon.  I knew an entry would be coming so I left trade on.  It went and stopped me out.  Slap me.

RESULTS FOR DAY
ZS Contracts:	20
Net $P/L:	347
Wins:	2
Losses:	2
Win%:	50
Avg$Win:	869
Avg$Loss:	-696

Wed. 10/24 + CFTC Regs

2:10pm CDT - Mixed in a new system today on a trial basis. Haven't done enough backtesting yet. What else is new?!  Last trade came within 2 ticks of target with 25 min. left in session so I tightened stop and got stopped out locking in profit.  Of course it hits target 20 min. later...

Fellow blogger Chris posted about this latest news from the CFTC on new regs. Please let the CFTC know your opinion.  I agree with Chris, this is not enough!  Some kind of insurance needs to be established or it needs to be physically impossible for segregated funds to be stolen by an FCM.

RESULTS FOR DAY
ZS Contracts:	10
Net $P/L:	548
Wins:	3
Losses:	1
Win%:	75
Avg$Win:	286
Avg$Loss:	-310

Tues. 10/23

2:10pm CDT - Tough going today with many early false breakouts.  Wish I would have held the last trade until the end of the day but got out as per plan.

RESULTS FOR DAY
ZS Contracts:	28
Net $P/L:	-1044
Wins:	1
Losses:	4
Win%:	20
Avg$Win:	2159
Avg$Loss:	-801

Mon. 10/22

1:50pm CDT - Decided to focus more on ZS and less on the other markets (NQ and CL) that I have not been trading as well.  ZS is slowly rolling over this week and the Jan. contract should be higher volume by the open next week. Until then, Nov. it is!

RESULTS FOR DAY
ZS Contracts:	12
Net $P/L:	1288
Wins:	2
Losses:	1
Win%:	67
Avg$Win:	904
Avg$Loss:	-521

Tractates of Trade

The Tractates of Trade (new and improved) or Aphorisms from a Trading Life

Copyright 2012 Charles Kespert

• In order to accumulate you must speculate.

• Trading isn’t about winning or losing, it’s about self-discovery.

• You only learn from losing trades.

• Stay away from big losses. Stay away from big losses. At all costs, stay away from big losses.

• Along with the probability that your trade will be profitable, there's probably a greater probability that it won't be. Think about the trade you'll make if things don't work out.

• Don’t be afraid to go where the market wants to take you.

• It doesn’t matter where you get in. The only thing that matters is where you get out.

• Moving averages seem to be important. The steeper the slope, the better the trade.

• Markets tend to overshoot. The high will be higher than “your high.” The low will be lower than…

• Never meet a margin call. Liquidate. The margin clerk is your best friend.

• Welcome to the learning curve. A trader is always, somewhere, within the learning curve. As long as the curve isn’t circular, you’re making progress.

• Your belief system will determine if you make or lose money so just as you should be careful what you wish for, you should be just as careful when selecting what you believe in.

• When someone says “Believe me, it’s different this time” make the choice not to believe it. Markets are the cyclic expression of hope, fear and greed, in other words, human nature. Human nature doesn’t change. The fact that human nature doesn’t change is why Shakespeare is relevant, we read Plato, study Dante and are in awe of Sophocles. Technology changes, human nature doesn’t.

• In trading, he who has the best rules wins. Your innate, intuitive brilliance only talks to you occasionally.

• Never double down. Consider adding, pressing an advantage but never double down.

• Don’t be impatient but be on time.

• Execute your initiating trade at the opening of the bar, not at the end.

• Markets roughly spend 85% of the time range trading and 15% of the time running to a new level to restart range trading again. Just figure out where you are in the scheme of things to implement the correct style of trading to mimic the current market action.

• To panic is human.

• Zen saying:

   -To hear is to doubt

   -To see is to be deceived

   -To feel is to believe

• As a trader, your job is to separate the signal from the noise.

• Markets don’t suffer fools. They just take their money.

• Don’t let your desire to “do something, do anything” prevent you from doing the right thing. Patience means watching your keys, waiting for your setup and executing. More than one train leaves the station. The trains leave continuously; the station stays in place.

• Hubris is built on a foundation of success.

• It can be very profitable to trade with blood in the water as long as it’s not yours.

• How to know when you are wrong is an essential to successful trading. Have a metric in place that objectively tells you that you should be out.

• The road to ruin never needs repair.

• Risk small but often.

• Be intolerant of loss and learn to relax more with profits.

• If you fail enough the only thing left is success.

• The market will all too soon locate, expose and exploit your weaknesses. All strategies have a weakness. Know yours.

• Life is at least a study in perspective.

• The wonderful opportunities awaiting you in the future are dependent on your ability to intelligently delimit your opportunities in the present.

• Trade from side of trend. Trade from side of trend. Trade from side of trend. Even if your entry level is abysmal, the trend may reassert itself and bail you out.

• Your current beliefs may be obscuring the truth.

• When you put a trade on, it should work almost immediately. If it doesn’t, seriously consider bagging the idea and look for a new setup.

• The trend is your friend till the bend at the end.

• Use stops, use trailing stops but don’t use break even stops.

• A long term investor in the futures market is often a day trader with a bad position held overnight, after night, after night and tomorrow creeps into this petty pace of day to day.

• There’s no such thing as “trading with house money.” It’s either your money and you’re ahead, or it’s your money and you’re behind. Just don’t let your money become their money.

• At the same time, take trades. The only way you are going to make money is by taking trades.

• Don’t worry about winning or losing on a particular trade. There’s only one concern: does the trade help to grow your bottom line. Taking losses is a strategic necessity.

• Hope is not an action.

• The first step to success is failure.

• If you have a bad position, all too often no amount of elegant day trading is incapable of offsetting the loss.

• The futures market is the greatest wealth transfer mechanism ever invented.

• No matter how many times you shuffle the deck the cards remain the same.

• The more efficient a market is, the more random it is. If a market is inefficient, the more that market will trend. The efficiency of a market is inversely correlated to its liquidity.

• Do you look at your positions as assets or liabilities? Liquidate the liabilities with extreme prejudice.

• Life is full of breaks that don’t break evenly.

• If you are in a position and you are losing more in that position than you can reasonably expect to make, get out.

• It is far easier to lose money trading than to make it. It is far easier to make money trading than to keep it.

• A margin call argues for your continuing status as an amateur.

• If the market prints your price and doesn’t fill you, go to the market. If you don’t have an exit strategy, the market will figure out one for you.

• If your trading begins to resemble an exercise in madness, at least take a break for a day.

• A market trades to try and fill all orders: limits, buy stops, sell stops, everything. If there aren’t any orders, there’s no reason for the market to move.

• If your indicators are lagging but your data is high frequency, you should be okay. If your data is low frequency, your indicators are useless.

• Your ability to discriminate, to successfully think critically, is inversely proportionate to the profitability of your positions.

• You can go broke taking profits, very small profits. This type of trading behavior will also convince you that you're performing better at the buy/sell game than you really are.

• When the pundits start talking about a barrel of crude oil and a bushel of wheat as not really a barrel of oil or a bushel of wheat but an asset class and you are long, get nervous.

• Just give it time; the market will trade at previously incomprehensible levels, regularly.

• There are more black swans waiting in the weeds than you think there are.

• Most indicators are worthless; the “price” of something motivates buyers and sellers. Learn to read “price action.”

• Your next trade could be your last trade for a very long time. Be aware of this and don’t let it happen. Use stops.

• Markets are challenging: when illiquidity meets volatility parallel lines converge, divergences converge, convergences diverge and mathematical certainty is forced to embrace new theorems.

• If you are down a certain, predetermined percentage of your equity (for some this could be as little as 2% and for others this could be as much as 15%) and you have open positions, liquidate and go to cash. You and the market aren’t on the same schedule. (Few ever do this). Hitting the reset button is a psychological palliative. In other words, not to change the subject, when your positions have little relevance to the current market, liquidate and reset.

• When all your trades are going incredibly well, when you’re seeing the market as if you’ve already read tomorrow’s papers and you’re just about ready to thicken the callous that resides just below your left shoulder with your right hand, get out Webster’s and reread the definition of coincidence.

• Markets are thematic. In fact, those flashing numbers are always trying to tell or sell a story. Become a better reader.

• Don’t think of the market as an opponent to be bulled, bloodied, battered and beaten. Its resources are far greater than yours. It’s better to concede the conceit of market as ocean in all its obvious metaphoric diversity.

• The Myth of Sisyphus resonates in the experience of trading.

• Remember that irony is alive, well and constantly at work in the universe; irony, the cornerstone to the construct of the Divine Comedy.

• Trading isn’t about winning or losing, it’s about building equity. Taking strategic losses is a key to building equity. Winning or losing on any one particular trade is meaningless.

• A market is a market. It can do anything it wants. It doesn’t have to make sense. A market is only obliged to itself. In fact, exploiting this fact will lead to your best profits.

• One aspect of a period of successful trading is to convince you into believing that you actually know what you’re doing.

• Just as persistence allows mediocrity to soar, a persistent, rule driven trading approach seasoned with just the right touch of intuition can turn your sow’s ear into a silk purse.

• What you want to have happen in a market often prevents you from doing what you should be doing in a market.

• That which is true, never changes. A market, a dynamic reevaluating, discounting mechanism, always changes. There’s very little that’s true about a market.

• Beware of the new paradigm; it may not be wearing any clothes.

• Beware the talking heads; they are only talking their positions and aren’t seeking the truth; they are far more interested in acquiring your money.

• If you don’t crave profit, profit may be attracted to you. If you don’t fear loss, loss may not be attracted to you.

• If you want to be condemned, keep doing what you’ve always done.

• Worst positions leave last.

• To capitulate isn’t easy.

• Trading is like procreation; if you’re nervous it just isn’t going to work that well.

• The market is an imperfect game. Chess is a perfect game. All information is transparent. Either you are a smart player and can see the board or you are a challenged player. There is no luck. Poker is an imperfect game. You don’t know all variables and bluff by itself can win the day.

• You only learn from losing trades. A winning trade is simply a confirmation of your current infallibility.

• Do everything you can to keep a losing trade an annoyance rather than a memorable event.

• If you are in a winning position, remain aware that just as the sea reclaims land, the market wants its money back.

• Never disrespect the possible (especially option expirations).

• A trade is a trade. It is a financial event. It is not a justification or repudiation of your current geopolitical or eco-political model.

• Don’t convince yourself that you’ve figured out the puzzle. The puzzle keeps changing. Eventually the puzzle just disappears.

• You have to be willing to give back, to fold, to square your position to cash. If you don’t give something back the market will end up taking it back on its terms, not yours.

• Markets spend as much time going up as they do going down, the only difference is amplitude.

• As the futures market is a zero sum game and the instruments of trade expire continually, regression to the mean should be a frequent event. The stock market is totally different; for every buyer there doesn’t have to be a seller and the life of a stock is theoretically, potentially, infinite. Regression to the mean should be a “less frequent” event at Wall and Broad.

• Good trades are often counter intuitive.

• There’s far greater skill in trading well when you’re behind than in trading well when you’re ahead.

• Ascertaining the correct value for 6 variables before making a trading decision is not better than ascertaining the correct value for 3 variables.

• When it comes to heuristics, kiss.

• All your answers have questions.

• Markets are mechanisms that foster irrational behavior. Don’t let your trading be held hostage to the need for discernment.

• As soon as market action can be explained and generally understood, expect the market to change.

• Before entering a trade, mentally understand and accept all potential losses.

• If you have to win you’ll lose. If you have to lose, you will. The seeds of doubt are self sown.

• The market doesn’t care about your positions. No one but you cares about your positions.

• On initial order placement, never be impetuous. Wait for your price.

• Look for ways to take action. Idle brilliance addles.

• Good trades usually set up with a sense of inevitability and unfold in slow motion.

• Remembrance may be the inability to let go.

• In trading, feeling comfortable should be an uncomfortable feeling.

• Great windfall profits tend to remain paper profits.

• You can’t continue to court disaster without eventually landing a date.

• You’re only as young as your last winning trade.

• People feel more comfortable with losing positions and more nervous with winning positions.

• When do you place a stop? When you put the trade on in the first place. It’s at that exact moment when you are most capable of managing risk.

• If you have a position in a market and the average true range of that market is 128 points and the market has only had a range of 28 points so far, start figuring out which side of the market is going to deliver the next 100 points.

• When asked to play a game, then stopped mid game and asked how they are doing, people invariably state that they are performing at better levels than they actually are.

• Work on four things: fear, anger, frustration and judgment; it’s all derived from fear.

• Anger is the clash of desires.

• Whatever you believe is undoubtedly correct until the passage of time offers another suggestion.

• Simplify. If you are using 4 indicators to trade, use three. If you are trading 5 markets, trade 4, then reexamine the number of indicators you’re using.

• Never trade out of boredom.

• Markets generally lack conviction, especially post 9/11. That’s why trend traders have a low incidence of winning. Take advantage of that. 9/11 taught traders that anything is possible.

• What funds buy, they sell. Few funds are ever going to take delivery of a barrel of oil or a bag of coffee. Take advantage of that.

• You manifest the world through interpretation.

• Life is, at least, the non-annihilating coexistence of opposites.

• Ultimate sorrow is to love as gravity is to mass.

• Don’t be so eager to burn today in the hopes of a better tomorrow. Death hides in the folds of the future.

• There is no failure, only feedback.

• Trying is being in a state of failure.

• The fool only seems unenlightened to the unenlightened.

• Only when you really look at something does it begin to disappear.

Fri. 10/19

2:40pm CDT - Got up to breakeven on the week then a few CL trades got caught in the midday chop. For the week, net loss -$442. 

Net breakdown (contracts traded):
CL -$608(4), NQ $77(1), ZS $1079(4)

RESULTS FOR DAY
Contracts:	9
Net $P/L:	549
Wins:	2
Losses:	4
Win%:	33
Avg$Win:	578
Avg$Loss:	-152

Thurs. 10/18

2:25pm CDT - Another frustrating day.  No signals again in ZS which had a huge upside move.  That's the problem with systems that trade infrequently, you miss some good action often!

RESULTS FOR DAY
NQ Contracts:	7
Net $P/L:	2
Wins:	3
Losses:	3
Win%:	50
Avg$Win:	77
Avg$Loss:	-76

Wed. 10/17

3:05pm CDT - Nothing worked today.  Nearly had a ZS signal to buy which would have worked nicely but it wasn't meant to be.

Net breakdown (contracts traded):
CL -$99(2), NQ -$326(6)

RESULTS FOR DAY
Contracts:	8
Net $P/L:	-425
Wins:	2
Losses:	4
Win%:	33
Avg$Win:	75
Avg$Loss:	-144

Tues. 10/16

2:00pm CDT - Rollercoaster of a day - was up $1200 unrealized at one point but got stopped and further ZS trading sucked the rest away.

Net breakdown (contracts traded):
CL -$59(2), ZS -$915(32)

RESULTS FOR DAY
Contracts:	34
Net $P/L:	-974
Wins:	3
Losses:	4
Win%:	43
Avg$Win:	628
Avg$Loss:	-714

Mon. 10/15

2:35pm CDT - Only 1 trade today in CL.  Had more signals in a new CLsystem I'm testing but didn't take as I've only backtested 30 days of data.  And wouldn't ya know it?  Today would have been the best day in the previous 30 if I had traded all signals.  LOL

RESULTS FOR DAY
CL Contracts:	1
Net $P/L:	406
Wins:	1
Losses:	0
Win%:	100
Avg$Win:	406
Avg$Loss:	0

Fri. 10/12

2:25pm CDT - No real damage to end the week.  Net for week +$2586.  What I made in CL, I lost in NQ, and ZS made the rest.  Still testing things out with CL and NQ systems and may tweak these next week depending on weekend progress backtesting.

Net breakdown (contracts traded):
CL $151(2), NQ -$343(5)

RESULTS FOR DAY
Contracts:	7
Net $P/L:	-192
Wins:	2
Losses:	4
Win%:	33
Avg$Win:	186
Avg$Loss:	-141

Thurs. 10/11

2:20pm CDT - 2 winners had me up a grand but then 3 losers dinged the results.  The grains were crazy early on with the crop reports, ZS below...

Net breakdown (contracts traded):
ZS $259(8), NQ -$208(3), CL $246(1)

RESULTS FOR DAY
Contracts:	12
Net $P/L:	296
Wins:	2
Losses:	3
Win%:	40
Avg$Win:	513
Avg$Loss:	-243

Wed. 10/10

2:40pm CDT -
Net breakdown (contracts traded):
NQ $197(7), CL $305(1)

RESULTS FOR DAY
Contracts:	8
Net $P/L:	502
Wins:	4
Losses:	2
Win%:	67
Avg$Win:	154
Avg$Loss:	-58

Tues. 10/09

1:35pm CDT - More patient today.  One ZS trade came within 3 ticks of target.  I stayed in for another 1.5 hrs. before it finally worked lower to fill my order.

Net breakdown (contracts traded):
ZS $1038(12), NQ -$68(7), CL $6(1)

RESULTS FOR DAY
Contracts:	20
Net $P/L:	975
Wins:	4
Losses:	4
Win%:	50
Avg$Win:	484
Avg$Loss:	-240

Mon. 10/08

2:35pm CDT - Didn't fully execute properly today and my target on ZS of 15.52 eventually hit but it was inside the final minute of trading so who can fault me for getting out earlier??   Had a long NQ trade that I bailed on late in day when P/L went over a grand.  Missed $280 in profits on that one and $300 on ZS.  It's hard to follow your rules sometimes but I like to think I'm making progress.

Net breakdown (contracts traded):
ZS $1367(16), NQ -$363(7)

RESULTS FOR DAY
Contracts:	23
Net $P/L:	1004
Wins:	3
Losses:	5
Win%:	38
Avg$Win:	810
Avg$Loss:	-285

Fri. 10/05

12:25pm CDT - Good end to the week. Missed an $80 trade in NQ.  CL reminded me how fast you can lose in that symbol.  Results for a volatile week, net gain $1707.

Net breakdown (contracts traded):
ZS $1459(8), NQ -$3(1), CL -$423(3)

RESULTS FOR DAY
Contracts:	12
Net $P/L:	1033
Wins:	2
Losses:	3
Win%:	40
Avg$Win:	729
Avg$Loss:	-142

Thurs. 10/04

12:15pm CDT - Short day.  Got to get out and enjoy this nice weather before it ends!

Net breakdown (contracts traded):
ZS $829(4), NQ $170(4), CL $156(1)

RESULTS FOR DAY
Contracts:	9
Net $P/L:	1154
Wins:	4
Losses:	1
Win%:	80
Avg$Win:	309
Avg$Loss:	-83

Wed. 10/03

1:35pm CDT - Technically, today I should have been down $3400 before ending the day down $2000. But instead, I moved my target and got out for a gain on one big loser (trade 5). My plan does not call for moving stops or targets but after the past 2 days of live trading, I’m going to revisit this. This may introduce a degree of “optimization” to my system but that's okay, as long as I don’t overly optimize as I have done in my past.

Net breakdown (contracts traded):
ZS $1076(24), NQ $170(4)

RESULTS FOR DAY
Contracts:	28
Net $P/L:	1246
Wins:	5
Losses:	3
Win%:	63
Avg$Win:	503
Avg$Loss:	-423

Tues. 10/02

2:00pm CDT - Easy come, easy go.  The good news is that I did follow my plan.  The bad news is that today's result slightly exceeded the worst day in my backtest period.  That's never a good sign.

Net breakdown (contracts traded):
ZS -$3612(12), NQ -$173(5)

RESULTS FOR DAY
Contracts:	17
Net $P/L:	-3785
Wins:	2
Losses:	4
Win%:	33
Avg$Win:	77
Avg$Loss:	-985

Mon. 10/01

2:05pm CDT - Best day of the last year.  Expect to have more like this but since I increased size on ZS, my losers will be larger too.

Net breakdown (contracts traded):
ZS $1968(16), NQ $92(3)

RESULTS FOR DAY
Contracts:	19
Net $P/L:	2060
Wins:	3
Losses:	2
Win%:	60
Avg$Win:	848
Avg$Loss:	-242