Order Flow

Self-Awareness

noreply@blogger.com (Matt Fahmie) — Sun, 31 Jan 2010 17:56:00 +0000

This is something I have been working on extensively during my absence from my blog. This is just the tip of the posts that will come on this subject. I traded both live and simulated this week tracked my results and emotions and found some revealing conclusions, mainly my performance anxiety in live trading due to a fear of failure. I never really would have thought I was afraid of failure, but my actions clearly show I am. I believe, I have so many opportunities and so much on the line if I can just do well with this live account, and I believe this is part of the reason for my performance anxiety. Fear that I will fail all those who have put their confidence in me. This realization is relatively new and has to have been either consciously denied or I was never consciously aware of it till now. This though, is just the tip of the iceberg and I still have much to learn and improve upon. One thing I am absolutely aware of is my ability to overcome this challenge and any challenge I face in the future, it's just a matter of perseverance and hard work. Here I include two documents that have helped increase awareness in myself, though neither of them seem to indicate a fear of failure as a major problem. It seems I had to learn about this through experience. Yet another step forward. During my absence I have been working extensively on myself and also a more systematic approach to my trading and understanding of my system though testing and objective variables. I would like to be more of a "gray box" type trader where my proven and tested strategy can be contextually applied. The only thing my performance statistics currently indicate in my live account is a emotionally defunct trader. So self-work and system work will continue...more posts to come.

Myers-Briggs Matthew Fahmie -

Deliberate Practice: D.O.M Stacked Bid/Offer Working Orders/Entering Positions Execution

noreply@blogger.com (Matt Fahmie) — Wed, 20 Jan 2010 04:28:00 +0000

If any of you have wondering where I have been, over the last week I took off trading to focus on re-balancing various aspects of my life to better align myself for peak performance and honestly, start getting healthy and in shape again. About two weeks prior to this post, a trader I greatly admire (I will withhold his name unless he wants me to release it) suggested I read: The Power of Full Engagement: Managing Energy, Not Time, Is the Key to High Performance and Personal Renewal. After finishing it, I was blown away. It felt like almost every example used in the book was about me, or at least a situation I have been in. I felt like the poster boy for poor energy management after reading this. To make a long story short I needed major reform in my sleep patterns, nutrition, and exercise. I needed also, to give myself a break from the amount of energy I dedicate towards trading and use it to balance other aspects of my life. Just one example, as cognitive dissonance states, I knew sleep was good for me, but I never let myself get enough of it and I would consistently trade on sub-optimal sleep on a regular basis. My nutrition nor exercise was any better and the majority of my energy was sustained though diet pills and coffee. This book hammered home some hard truths for me and really left me with a clear vision of the type of stale reality I was consistently painting for myself on a daily basis. But, it was a paradigm shift in my thought process of how I approach my everyday life and how I could continually work on improving it to reach a state of full engagement with my trading and in life. I suggest everyone read it.

Anyway, I have transitioned back to simulation because I know I need work on my execution, working orders/entering positions, trade management, working orders/exiting positions. These are the skills modules I will be drilling and each have separate components that will be addressed each day. I am actively forming a deliberate practice program for these execution skills that will initially involve identified levels and the depth of market. The complexity of these deliberate practice sessions will increase as my skill level and real time understanding increases. Once I regain the confidence in my execution I will move back to live trading. The journey continues.

Here is the first deliberate practice session:
Video:
Deliberate Practice Order Book Execution Day 1

Comments/feedback welcome
I will not be trading tomorrow as I will be in New York for the entire day.

Something to think about...

noreply@blogger.com (Matt Fahmie) — Fri, 08 Jan 2010 00:50:00 +0000

I just started reading a new book on trading tonight named The Intuitive Trader : Developing Your Inner Trader Wisdom, by Robert Koppel, and I found a great quote in the introduction that really made me think. It is something I will be doing increasing work on developing in my progression as a trader: trading with a more intuitive sense and flow of the market.

From: The Intuitive Trader : Developing Your Inner Trader Wisdom, by Robert Koppel
Koppel Quotes:

In Zen and Japanese Culture, D.T. Suzuki describes the essence of the successful warrior. "I believe it well describes the essence of being a successful and consistent trader."

"However well a man may be trained in the art, the swordsman can never be the master of his technical knowledge unless all his psychic hindrances are removed and he can keep his mind in the state of emptiness, ever purged of whatever technique he has obtained. The entire body together with the four limbs will then be capable of displaying for the first time and to its full extent all the art acquired by the training of several years. They will move as if automatically, with no conscious effort on the part of the swordsman himself. His activities will be a perfect model of swordplay. All the training is there but the mind is utterly unconscious of it."

just something to think about... more on this later, I just purchased this book on my Kindle (Which I highly recommend; I, in my hand, hold a significant wealth of market, philosophical, and psychological knowledge in a package the size of a DVD case. And I get the Wall Street Journal delivered electronically every morning at 4:00am EST directly to it.) take care. Be flat at 8:30am EST tomorrow.

...1-7-10 Trade: Constructive Criticism Welcome on Every Aspect of My Trading.

noreply@blogger.com (Matt Fahmie) — Thu, 07 Jan 2010 18:17:00 +0000

Video:1-7-10 trade
If I do not follow these parameters, please everyone criticize me on it. It has been a struggle to be my own coach/student/trader all at the same time. I have absolutely no one to hold me accountable. Generally, I feel I am very disciplined, but maintaining that discipline 100% of the time has been a struggle. So I have attempted to simplify my rules down to core principles I must follow. Before I was all over the place with way to many inputs and parameters to follow and monitor. I will still use contextual analysis, but positions must fall within these parameters. I take responsibility for my actions and will continue to push forward until I am successful at this. I will not allow myself to fail, that is absolutely not an option. I will reach my goals, no matter what I have to do. I know its possible, now I just need to find a way. I understand that this is a marathon, not a sprint. I am lucky enough to be in a position where I have been given the opportunity to succeed at this without much overhead.

As you will see, a violation of these parameters was the cause of my risk limit hit today. This has been a recurrent theme. I am absolutely my own worst critic and my own best supporter. I have spent two months with this account and took it from 40k down to 38k. I can blame low volatility, I can blame this or I can blame that, but at the end of the day none of that matters. What matters is the bottom line, and I am clearly not producing. With zero production, advancements in this career are unlikely to materialize.
I welcome critiques and comments. I have opened the comment moderation for now so I do not have to approve anyone. It will stay this way as long as your keep it to constructive criticism. "Flaming" is extremely immature and does nothing to improve anyone.
So, bring it on, If I do not follow these rules please lay on it on as thick as you want, just make it constructive and relevant. Any guidance from people who has been through a rough patch in their trading, or any established professionals is welcome.

Also, feel free to comment on these parameters. The logic behind them, I believe, is very sound. It looks simple, but if you understand the principles behind them, they sum up the tenets of market logic fairly well.

Happy Holidays

noreply@blogger.com (Matt Fahmie) — Wed, 23 Dec 2009 15:22:00 +0000

It actually feels great to step away from trading every day and just get some reading done, learn some new concepts, and relax my mind. Here is one book I found very very good. I am doing work on how to integrate the opening range and where it opens in relation to prior day's range/value. I believe the majority of opening range(1min) breakouts fail could be a function of where they open relative to prior value and range. It is tremendously helpful in gauging day type, market confidence or lack thereof. I believe it would also be possible to quantify Dalton's Open Types: Open Drive, Open Test Drive, Open Rejection Reverse, and Open Auction, with the use of the one minute opening range. Contextual application of the opening range relative to prior day's range, value and other key reference areas such as minus development looks like it could be a fruitful project. Anyway, this book is great, while your reading it, look at how similar the concepts are to market profile. Both Market Profile and the ACD Method were created by great floor traders, so I guess it shouldn't come as much of a surprise. Focus on the similarities in logical application and understanding of market activity. Some great ideas in this book, some of which have really helped in my understanding of the profile, most notable, how the book describes the concept of time in the market. The method itself does not need to be used in its entirety, but can be integrated into existing strategies as a way to bias dominance in the market. 100% worth reading, I believe everyone will take something positive away from this book.

Among other things I will be doing with my time off is standardizing my trading process, firming up exactly how I will be executing and creating procedural outlines for my mechanics. Hope everyone has a great holiday.

If one is unable to rotate the ebook to make it readable, here is where I found it and many others: www.4shared.com
Just do a search and problem solved.

FISHER_ Mark - The Logical Trader Applying a Method to the Madness 137p -

ACvalue -

A Week of Challenges

noreply@blogger.com (Matt Fahmie) — Fri, 18 Dec 2009 18:11:00 +0000

I am to say the least, very disappointed with myself this week. I would say what has been the main theme of this week one of mechanical and execution errors. I was just off. The account sits at 38,700 down from the initial 40,000 of two months ago. Conditions have been flat,sideways, with no range whatsoever. Conditions very different from conditions from June to the end of September. My strategy going into this new account was one of trading imbalances and it seems almost as soon as I opened the account, we went into a completely new market condition. Given the current range trade, being down 1,300 dollars over a two month period, while adjusting to a more sideways environment, is not horrible. It is a draw down that can be corrected in a single day, if and when volatility returns to this market. Assuming it does not for an extended period of time, fading for smaller targets(2-3 points) will have to become the game plan. I have noticed it extremely hard to capture 5 points in a single trade, compared to my trading in prior months. Clearly this is a function of the decreased range. My strategy was never adapted towards trading a sub-10 point range on a consistent basis, so if it persists, I was have to adjust. To think, this time last year, I would have had the type of volatility I love to trade. Bad timing, HA! I will be taking off until the new year from trading. I will continue to work on improving myself and my trading during this time, reviewing what I do best, and where I can improve. Overall, -42 ticks this week. Very disappointing for me because I know for a fucking fact that I am better than this, regardless of the current market condition. Okay, enough for the ramblings. Video: Challenge 9
Right now, I really want to put my head through a wall, or find some way to release the type of aggression I feel right now. In the past, I have competed in power lifting competitions, Olympic lifting competitions, and trained in Brazilian jujitsu, all of which I stopped doing when I sequestered myself from the world, started smoking cigarettes, and worked on my trading 24/7 for the past two years. This might be a great New Years resolution to start one of these again and quit smoking. I have always been driven by competition all my life, I think finding that competitive outlet outside of trading again would be tremendously rewarding and helpful to every facet of my life.

Seasons Best,

-Matthew Fahmie

Oh Volatility, Where Have You Gone?

noreply@blogger.com (Matt Fahmie) — Tue, 15 Dec 2009 00:20:00 +0000

One trade one scale in: +20 ticks. From contraction comes expansion. Hopefully, a new year will bring renewed volatility.

Video: Capturing 5 points on a 5.5 range day

Using What Didn't Happen to Visualize Potential Day Structure.

noreply@blogger.com (Matt Fahmie) — Thu, 10 Dec 2009 21:16:00 +0000

Today was probably one of the most rewarding trading days I have had in a while. While I only took two trades and ended up scratching for the day, the ability to pull myself out of a jam in a low volatility and low range market pumped me up beyond belief.

At the open, we opened out of balance and had a open test drive; a high conviction open in an imbalanced market should lead to further upside. I took a long at 1105.50 with the expectation to see rapid follow through due to the high conviction open out of balance. If I was correct there was absolutely no reason for the market to return to the opening range. Well, it did and I got stopped out for a 16 tick loss. Only having 4 more ticks to currently work with I knew I had to either pick my point correctly or just stand aside and accept the loss.

Well, I went back to an old Dalton adage and asked myself "What didn't happen?". The expected activity of a high conviction open didn't happen, and that information in itself contained all one needed to know about the day today. Clearly higher prices were shutting off demand and there seemed to be a complete lack of trade facilitation at higher prices. I knew if the market could not facilitate trade at higher prices as evidence by what didn't occur at the open and the complete lack of volatility and range on the day, I could potentially secure a good short if I could get a good value. I ultimately secured a 1104.25 short told myself, if the market cannot facilitate trade at higher prices, then clearly it would need to move lower than 1104.25 to generate some type of interest among market participants. Seeing the range and the lack of volatility, I set my alarm to make sure I was up for the close, and took a mid afternoon nap, expecting lunch trade to be no better than the morning trade. Came back, watched the market cover off the (C) period buying tail with absolutely no follow through, and got ready for the breakdown to secure profits on my short. Took profits at 1100.25, did a Tiger Woods pump and called it a day.

Video: Using What Didn't Happen to Understand What is Happening.

The Tale of a Single "Tick"

noreply@blogger.com (Matt Fahmie) — Thu, 10 Dec 2009 05:08:00 +0000

That was the story today. Basically a scratch day trade over trade, but I was able to pull myself out of the hole that developed in the morning and end in the black. Its funny, how the market will take you out by a single tick and then spare you the next time around by a single tick. Days like this make you laugh, but still much to be learned from it.

Video: Coming Back from Being Ticked Out

Comments appreciated.

For whatever reason, I guess I overlapped the video twice in production. It is not actually 71 minutes, but half that.

Morning Imbalance

noreply@blogger.com (Matt Fahmie) — Tue, 08 Dec 2009 22:30:00 +0000

Morning imbalance
Hitting my stride.

Some Trades You Scratch, Some Days You Scratch

noreply@blogger.com (Matt Fahmie) — Tue, 08 Dec 2009 13:54:00 +0000

Tight Range Day and After Action Review

Profile of Chaos

noreply@blogger.com (Matt Fahmie) — Fri, 04 Dec 2009 02:02:00 +0000

Profile of Chaos Steidlmayer -

ISO: Taking The Data Forward

This is one of those harder to find pieces of market profile literature. If anyone has any out of print, hard to find literature of markets, trading or market profile, please contact me. I collect rare literature on markets.

The Spike Game Plan for Tomorrow and Today's Trade Video

noreply@blogger.com (Matt Fahmie) — Thu, 03 Dec 2009 23:45:00 +0000

Up until (M) period my trading was going fairly smooth. I was not anticipating the end of day spike and attempted to catch a falling knife at 05.25 04.25 and 02.25. Obviously none of these long entries worked, but after successive attempts at the long side, I decided to abandon all bias and join the crowd. That last minute decision saved nearly half my ticks. In hindsight, there were many structural and logical clues that could have lead to the conclusion that the end of day break was a possibility. Hindsight means nothing really, unless one reviews how these structural clues could have been anticipated and traded. Minus development in (C) period from 1111 to 1112.75 which created a volume profile with absolutely zero volume in this region was the overriding structural clue. Successively lower highs in (E) (F) (G) (H) (I) and the inability of both (J) and (K) to breach above the VWAP created a strong negative skew in rotation factor were also clues.

Overall, my trading went fairly smooth today netting 32 ticks total. Standard production is becoming consistent, and soon my campaigning execution scales will be allowed once more on dynamic breaks.
Much for me to learn from this video upon review. Business as usual.

What I love about the afternoon structure is the simplicity in trade setups tomorrow.

Open within spike = bearish showing acceptance of afternoon breakdown.
Open above spike = extremely bullish
Open below spike = very bearish

Spike high = 1105
Spike low = 1097.50

Open within spike fade spike high and low with preference towards the short side.
Open below spike fade spike low with obvious preference towards the short side. Targets 85 and 77.75
Open above spike fade a test of spike high.

Video: Strong Morning Buffers Afternoon Misread

Spike Examples:

Anticipating a Failed Breakout Before it Occurs

noreply@blogger.com (Matt Fahmie) — Thu, 03 Dec 2009 14:07:00 +0000

Video: Anticipation of A Failed Breakout Before It Occurs
This is my prior day's trading. Commentary will come later if possible. Video pretty much explains it all.

Anticipating A Range Bound Day 30 Minutes After the Market Opens

noreply@blogger.com (Matt Fahmie) — Mon, 30 Nov 2009 23:31:00 +0000

If there was one word to describe how I traded today it would have to be methodical. I am still operating in a manner to assure production is in line every day, before I decide to ramp it up (increase contract size). Everything went great today. One thing I did today was I did not go into to the day with any expectations. I feel as though, when I have done this in the past, saying, "Today is going to be a great day and I know I'm going to trade well because I have to trade well", I tended to try to force the trade; rather than let it come to me. Today I went in, had all my preparation finished, knew my points I wanted to strike, and knew the structure I wanted to see to initiate a trade that I had not planned prior. If they occurred, great I would execute the trade, if they didn't, whatever, I can wait. My business is finding a good value to collect inventory and turning it for a profit. Value on your purchase is key, and this is something I focused on heavily in my work over the weekend. This is just like any other business. Buying something for less than it is worth and selling it for more than it is worth. This can all be read on the profile. A good business doesn't purchase inventory at a greater value than it is worth, and neither does a good trader. A review of my trading from last week drove this point home. One more point: Location, Location, Location. It's vital in business and vital in trading. Pick your location, understand the probabilities, let the trade come to you, execute, actively manage in accordance with the markets ever changing conditions.

In regards to anticipating a range bound day with only the first 30 minutes of data from the RTH open, well, the video can provide you some insight as to how. Business as usual.

To anyone who has not received an email back, be patient I will respond. My focus is on my performance, and my performance alone. 24/7 until production is in line and ready to be augmented.

Comments appreciated.

Video:
11-30-09 trade

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

noreply@blogger.com (Matt Fahmie) — Wed, 25 Nov 2009 02:44:00 +0000

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

noreply@blogger.com (Matt Fahmie) — Tue, 24 Nov 2009 03:37:00 +0000

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

noreply@blogger.com (Matt Fahmie) — Thu, 19 Nov 2009 15:18:00 +0000

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

noreply@blogger.com (Matt Fahmie) — Mon, 16 Nov 2009 17:38:00 +0000

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

noreply@blogger.com (Matt Fahmie) — Sat, 14 Nov 2009 12:25:00 +0000

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.

noreply@blogger.com (Matt Fahmie) — Fri, 13 Nov 2009 16:59:00 +0000

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

noreply@blogger.com (Matt Fahmie) — Tue, 10 Nov 2009 17:12:00 +0000

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

Framing Monday's Trade in Accordance with the Market's Background

noreply@blogger.com (Matt Fahmie) — Mon, 09 Nov 2009 23:45:00 +0000

Over the weekend, I spent an extensive amount of time working on improving my psychology. From brief therapies to internalizing the importance of a process focused mindset, I covered as much as possible for as long as possible. My girlfriend thinks I'm crazy, I think I'm just dedicated. It felt as though, when I had finished my work, I had actually become what I had read. It is now my job to continually sustain and improve on my psychological re-framing until it becomes habit. My goals: process oriented, my mindset: receptive. The trades in the beginning of last week, before I recouped the initial risk limit losses on Thursday, disgusted me so much, I worked harder than ever to ensure I not only learned from them but progressed past them and became a better trader.

Today's video is, in my opinion, is one of my better ones. It is also, what I believe was one of my better trading performances. Not because of the outcome, but because of the focus I sustained on the process of my trading. After posting this, I will sit down, watch and review it to see what I can improve on to set process focused goals for tomorrow's trade.

Quoted from Steidlmayer from 141 West Jackson:

"In the early days of Market Profile, the background of the trade always handled the lull period, by reassuring us that longer-term direction, and hence the collective dominance, was in our favor. Lulls always induced activity of an opposite nature and needed to be looked upon with perspective. The perspective or background we had at that time came from the type of day classification system, Which had its strength in having evolved from the floor liquidity. For example, a normal variation day had more dominance than a normal day, and the fact it could evolve meant that the background would not just disappear but would at least hold on. Trades were not made in isolation but as a part of this background. Background was, and remains, an essential part of market discipline".

Video:
Application of the Background to a Trade

A Brief Structural Briefing for Monday

noreply@blogger.com (Matt Fahmie) — Sun, 08 Nov 2009 18:06:00 +0000

A break above Friday's high on increasing volume buy the break; fade the break on weakening volume.
A break below Friday's low on increasing volume sell the break; fade the break on weakening volume.
Targets can be used as potential points to execute trades off of as well.
Upside Target 3 = 1098.50.

Failure for the buyer or seller to extend the range beyond the initial balance on Friday shows a lack of conviction on both sides. Friday's attempted direction was up but on weakening volume. Since the 11/2 lows, we have seen decreased volume, decreased value, decreased range, and wide profiles. The trading over the past three days looks very mechanical and shorter term trader oriented. Though value is building higher, it is doing so with decreased range, which is a sign of poor trade facilitation. If I were to bias this, I would say we should see a breakdown to test the 1026 lows (which show no longer term demand conviction and leads me to believe that the three prior days have just been short covering), but we have seen this market express great strength to the upside over the past couple of months on structure that would have previously indicated weakness. I have a hypothesis that if this rally continues above 70.25, the reasoning for the profiles lack of structural strength yet continued upside movement could be an indication of longer term traders covering shorts (Mutual funds etc... who do not go short, but instead must try to match relative returns can be considered covering shorts by bringing their portfolios up to speed with the market on pullbacks).

I will let the market guide my actions as to where it wants to go and leave my bias to the wayside. As far as the daily VWAP bias goes, the 5day sits below the 20day and the 2 day sits above the 5 day, an indication of shorter term strength but longer term weakness. This VWAP bias would most likely shift to bias long on any strong move and acceptance above the 70.25s.

Comments and alternate scenarios welcome.

Grinding Out a Win in Low Volume Short Covering.

noreply@blogger.com (Matt Fahmie) — Thu, 05 Nov 2009 22:47:00 +0000

Finally, I was able to get a win under my belt with my new account. The past couple of days, I haven't even had the ability to trade the full day because I hit my risk limits right at the open. It was a mix of performance anxiety and trying to press the trade. I did a lot of reading and reflecting last night on what the problem would be. Scouring through the 101 lessons Dr. Bret writes in his newest book The Daily Trading Coach, I came across what I believed I was doing. I was attempting to force the trade and when that clearly was not working, I believe, I experienced performance anxiety. I spent a significant amount of time doing my preparation and visualization pre-market today. A little bit of meditation to balance myself and entered the market with orders where I wanted to do business. I waited a bit longer today to let the market find its way and then I settled in, business as usual. Stepping back and letting the market find its way definitely helped to trade with a more calm and balanced focused. The past three days where I hit my risk limit of 300 dollars have been great learning experiences. Each day, after wanting to put my head through a wall, I stepped back, exported my trades into TraderDNA, and reflected on what I could improve on tomorrow. I just really needed to get a win under my belt after experiencing three straight losing days with a brand new account. I knew it wasn't my strategy or tactics, many times after hitting my risk limits, I would watch the market play out one of the scenarios I had prepared for. I knew it wasn't my tight risk management and how I "campaign" position size, there was no need to increase my risk limits yet. I distilled the problem down to, can you guess... psychology. Dr. Bret's books came in handy here, and I would recommend them to anyone with a conscious. Funny thing was, I didn't spend a very long time reading it, I just flipped to the Chapter Index and found what I believed was the problem (Lesson 15: Pressing: When You Try to Hard to Make Money). Yea, I was definitely pressing in the previous days. That lesson hit home immediately.

Video:

Grinding Out a Win in a Crap Market