FIRST DAY OF LIVE TRADING!

Today was officially my first day of live trading. I decided, after much deliboration, to stick with the Infinity Platform and trade the S&P Minis. Im the 2 months that I've been practicing on that platform, I have had good success, so I stuck with it.

Today was actually a horrible day for trading. They announced 3rd quarter GDP so the market went nuts. Luckily I stayed out of it as I recognized the volatility in the market and didn't like what I was seeing. I traded one time, one contract, at one tick. I was out of the trade quickly and made my first $12.50! Not too exciting, but I tell you what, I was super nervous to make that trade. I was very surprised at how nervous I became as soon as I was trading with real money.

So today I'll go away happy and with an increased level of confidence.

Initial Investment Fee- $525

Acc Monthly Investment - $500

Acc Profit / Loss - $12.50 (gross)

Initial Investment - $5000

So why would this work for me, and not everybody?

One of the things I've struggled with during this entire trading experience is why would it work for me, and not every other investor in the market? After all, if every investor has the same information, and there is a process in which consistently brings in profits, why wouldn't everyone utilize the same process?

So I've come up with a couple of possible reasons:

1) Looking for small profits. One of the aspects of my trading when compared with institutional traders is that I'm looking to make a small profit off of very small movements in the market (the smallest the market allows) So this may seem insignificant, but actually, the math proves this to be important.

Let me explain...If I'm looking to buy long or sell short at the smallest possible movement, there is a 100% chance that it will move, either up or down, by that smallest possible movement (called a tick or pip). So with that, we can also calculate that regardless if we buy long, or sell short, we have a 50% chance of picking the right movement, assuming (which we can safely do) that the market won't shut down forever and will move.

So with that logic, any software or knowledge that I possess which helps me predict future movements of the market increases my chances from a 50% base. So in essence, as long as the software or knowledge that I'm using give me ANY indication of future movements, I ALWAYS have a better than 50% chance of making the right trade.

So why doesn't this work for other investors? Most other investors trade at higher market movements. They are looking for higher profits, and don't trade little trades all day. Rather, they make big investments and invest in big movements. So taking that knowledge, if an investor is betting on a 15 tick movement, the probability of the market moving up or down 15 ticks is not 100% (the market may not every get to that point...especially in a short time frame)...maybe it's only 70%. That would mean that your probability, if you flipped a coin and chose a market movement of 15 ticks, would be 35%. So that would mean that, even with great predictive software, you may never get above 50% probability of making the right trade.

Ending thought...small movements, small profits pay big in the end.

Patience, Patience, Patience

So I have created a checklist of processes that I go through before I make a trade, and I added an important one yesterday.

Before I make any trade I tell myself "Patience, Patience, Patience". Until I say that, I will not make a trade.

This small process definitely impact my decisions. It is really easy to place a trade based on what you've seen the market do in the past, rather than what it is doing right now. In other words, the market today is more important than the market yesterday, so waiting until I see all of the indicators on the current market should determine my trade.

Patience is one of those emotional skills that really needs to be learned to be effective at this I believe.

Morning Trading/End of Day Trading

So in the reading, it suggests to trade when trading is at its highest. I've found the very opposite to be true. When trading at high volumes, it increases the volatility, and although volatility increases potential return, it doesn't justify the risk in my opinion.

The largest volumes of trading seem to happen right when the market opens and right before it closes. So I'm going to avoid those times. I'll start my trading around 8:00am and end trading no later than 2:00pm. During these times I generally see a much more stable market..which still moves..but is much more stable.

I am attempting to fund my account this week...I am probably still not comfortable enough to trade live, but want to get everything worked out so that when I am ready to trade live, I can do it without any hiccups.

More risky stop loss?

So in our study material, it talks about the importance of taking your losses early, which is what I've stuck to thus far. but I've noticed that in my loosing trades, almost everytime if I would have stayed in the trade a little longer, I would have ended up winning within 10 minutes or so. So this week I'm going to set up stop loss to 10 ticks (up from 4 ticks), which means when i have a loosing trade, I will loose $250 instead of $100...but the idea is that I will loose much less frequently (not that I am having a ton of loosing trades in a day...1-2 generally).

I don't think that I've mentioned before that I learned that in order to trade the S&P, Infinity Brokerage requires a $5000 deposit. Although there is only a $1200 minimum (if I remember right), I am going to have to fork out $5000 up front. But, if I just wanted to trade in the FOREX for a while, there is no minumum, I could trade $100 if I wanted. So I'm not sure what I'll do to start. I've had good luck trading the S&P minis so far, I'm somewhat inclined to stick with that.

Initial Investment - $525
Monthly Acc Cost - $250

Acc Revenue - $175

How I will start...I think

My trading is going good. Today I had 8 wins and 2 losses, for a total of $125 profit. I learned that when I loose on a trade, I am quick to pull the trigger on my very next trade in hopes of making up for that loss fast. I've decided that after taking a loss, I will walk away from trading for 5 minutes before I make the next trade...that will help me take the emotion out of it.

To start (which should be in 2 weeks), I am going to trade 1 contract at 1 tick and have a goal of making $50 a day. This should be pretty easy seeings that I have hit that goal everyday of trading save 1.

Initial Investment : $525

Monthly Cost: $250
Total Net Revenue: $175 (from signing up Lou, this showed up in my bank account two days ago)

Catch Up

I wasn't able to do my postings last week, so I'll catch you up. After talking to Josh (who is one of the two people mentoring me through this), he told me I should start two things. One is to start trading on the Infinity AT Sim trader, which is just antoher interface to execute trades. The other was to look at trading a different market, just to see the differences. So I begun doing both of those things. I'm trading in the Future Currency market (Euro/USD) at the recommendation of Josh.

So far it's been ok, although it does seem that the trading platform that I'll be using when I go life is more difficult, more lag. I am also finding that it is not good to trade when there are large discrepencies in the 1 minute and 5 minuted charts.

Today was actually my first loosing day, which not fun, taught me to take my losses early and trade another day. I lost $67.50. I was up $150 at one point, and followed the same system, but it just went against me today.

Initial Payment: $525

Acc Monthly Payment: $250
Total Income: $0