In this post:
- Review of the day’s trading performance
- Areas for improvement
- Lessons Learned
- Action Plan
Trading Day – April 21st, 2020
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Another profitable day. I woke up really late today so I wasn’t able to get in more than one trade today.
The beauty of trading three markets is that I have options. If you recall, last week I limited myself exclusively to ES (S&P 500 Futures) so that I could focus on developing a trading strategy. That worked great because it forced me to simplify my process. However, it also showed how limiting myself to one market could also severely limit my profitablility. ES was mostly sideways all of last week. Since I use a trending strategy, I need price to move and not range. Even though last week was profitable, it was not as profitable as it could have been.
What I’m trying to show is how different price action can be between markets and why trading more than one market is very important.
Let’s take yesterday and today as an example. I was able to trade 3 markets yesterday. Two markets, ES and CL, were profitable but GC was a loss. The quality and strength of the trends played a major role in my profitability. GC’s trend was choppier and more difficult to ride to profitability; it lended itself to a scalping strategy. In contrast, the other two markets had very smooth and easy to join trends.
Time of day also has an impact on the quality of the trade. I could substitute "news" for "time of day" because that may be what’s driving the quality of the price action or trend. Yesterday, I traded CL at 22.80, which was before the market open. During the work day, CL traded at -40.19! That’s right, a negative number. I have never seen than and didn’t know it was even possible.
CL dropped 60 points during the day, that is a $60,000 move! I still can’t believe that. In contrast, both ES and GC had modest moves (ES dropped over 1%). What I’m trying to show is how different price action can be between markets and why trading more than one market is very important.
Trades for today:
|Symbol||Number of Trades||Risk Size||P&L|
I found ES in a good downtrend and was able to join it following my rules.
CL was completely sideways and provided no trading opportunities.
GC had very strong price movement at the London open (3 hours before I started trading). It made a $4000 move in minutes. For the remainder of the morning the risk to join the trend was too large for me to trade. I was patient and by the end of my trading session, price was sideways. Following my rules, GC provided no trading opportunities. The beauty in this is that had I chased price action then I would have been chopped up because the trend came to an end.
- Followed my trading rules
- Was patient and carefully analyzed all three markets
- Earned 78% of my daily salary in less than one hour of trading
Areas for Improvement
- None noted for today
- No significant lessons learned today
- Continue to execute trading plan
- Be prepared to re-join the trading combine next week – April 27th