A good day of discipline

Gross of $35 day trading, but very good discipline. I didn't fight the market on the SPY's, and I was patient enough to let things work. I did several other trades beside the spys and only had one loser, although only for pennies, 7 cents and 12 cents.

I was very disappointed in myself at the loss from the week before last and even last week when I was showing wrong discipline by going against the market. I felt like a fraud, like everything I've said or worked towards was a lie because I had failed to put any air in the tires.

I did good, though, I spotted a cup and handle formation and a pennant that both indicated a higher market.

Its interesting, I'm exploring how easy or hard it is to just run with the SPY's vs. doing the other kinds of trades. I'm not a fast momentum trader, almost for sure, I just have no confidence and usually the stops are very wide. The trades I picked were slow movers and felt ok.

It may be, though, that aside from a few very specific opportunities, like when the 30 minute and 10 minute are turning together, it may not be possible, meaning that I get chewed up on trading losses that more than make up for the gains.

I feel like I need to try it, though. It could be one of those things that resists being pinned down in the moment. Its so obvious in hindsight. I did make a couple of good SPY calls, I've noticed how there is a pattern of 3's in waves in the 2 minute and that a typical run is an hour so, and I caught the end of one of those.

about even on the day, but 8 for 11 day trading

I had a pretty good morning day trading. A gross of $91, but 8 for 11 winners in the SPY, FAZ and in BAC.

I got chopped up in the futures when there was not much range and an unclear direction, so I'm probably about even on the day.

8 for 11. That is very good.

A choppy day

I started out the day up on the futures but lost enough on a couple of trades that I ended up down more than $100. On day trading I was down a little.

My head wasn't in the game, I kept saying I was going to work on other stuff today but kept it open and kept making trades without giving it my best.

I didn't make the transition from 'up day' to 'down day', the day turned around, and the 30 minute futures clearly showed this but I kept fighting it.

Head not in the game.

down 3.5 pounds in the last month

I went in for my weigh in/med refill this morning, I'm down 3.5 pounds in the last month. That is very solid weight loss, not too fast and steady progress.

230.75 is the new official weight. If I can keep losing weight at even 3 pounds a month I'll be at 200 by my next birthday in September. I want to keep the goals reasonable. 4 pounds a month would be awesome, 3 pounds a month is solid.

The number 200 is important because it would represent a transition in my Body Mass Index (BMI) from medically obese to just overweight. Obese is a sucky word. There are no good connotations to being obese. Its just a label, its just a word, of course, but what it stands for is real. I can't change the word but I can change the underlying reality, which is what I'm working on. At my highest weight, around 280, I was morbidly obese because I was 100 pounds overweight. Talk about a fun pair of words!

Its important to just take every pound as it comes, of course, I've noticed this three pounds, clothes have felt different, my face looks different and my body seems different.

changes in forex trades

As part of the work on forex I've gotten away from trying to day trade forex and instead just take small stakes and swing trade them. One of the key advantages of trading a currency pair is that there is not a natural up or down. All other securities will eventually trend higher because everything becomes more expensive, and going short in anything is, well, against the long term natural way of things. Currencies only have relative value, and they move within that, so going short is something that is natural.

After I had placed all the forex trades the other day I looked at them on their dailys, and all but one were directionally placed in opposition to the daily MACD. The other day all of the ones that I had out of sync with their MACD (4 out of 5) went hard against me. The one that was with the MACD went up.

The absolute dollars in loss were small ($40) but percentage wise it was a massive move. This is a good reminder that leverage cuts both ways, and a reminder to me to keep the positions small relative to the amount I want to use for forex.

I sold the losers and today went through the currency pairs available to me and picked things that were all macd black (just to pick a direction) and I have 4 new positions. I also picked things that were other than dollar positions, like AUD/JPY. This can get me away from positions which are purely based on how the dollar does and are also not correlated so much with each other.

I'm not sure what the right number of positions is. 5? 10? I'll hold onto these and see how it goes. My strategy will be to swap in and out based on the MACD change and just swing them. I'll keep the risk as a proportion of the amount to invest so I'm not wiped out. By having a number of positions that are disparate across different currencies I hope to balance out the risk of everything going wrong at once and see what sort of aggregate return I can get and smooth out the return.

I'm up 50% on the one winner, AUD/USD, over a week or so. A position of $3000 at a risk of $60 and its up $38. This is the sort of movement that can provide a chunk of return. If I can maintain any sort of consistent aggregate return it could be very powerful. My plan is to use the house's money if I win and allow that to grow.

I lost $9 today

believe it or not I actually feel good about that, there was some serious choppiness that cost me $100 in the futures, a problem with the platform that cost me $60, and I had a fat finger mistake that cost me $40. And, I was in the market all day.

The futures issue is correctable, I didn't use use all the data I had when I entered and got chopped up on a couple of trades. However, I still ended up upon the day on the futures.

I've also learned that I can cut commissions cost by over 2/3 by switching brokers. It doesn't sound like a lot, $1 for a trade as opposed to $3.50, but I had 18 futures trades today, and that's $45 right off the top and can make the difference between an up day and a down day. To put it in perspective if I can make $200 a day I can make a living, that would have been 25% of earnings. It would have meant that today would have been an up day.

I made many, many good decisions, and the ones that didn't go well I got out of. My discipline was very good. A fat finger mistake (buying more when I meant to sell) is a form of discipline and I need to have zero of those mistakes. I had a problem with the platform in a pre-market trade and that cost me, but now I know how to execute properly.

Believe it or not this is a good day. I was in the market all day and came out at about even. I'm very happy with that.

Check your intuition at the door

One of the things I'm coming to realize about day trading is just how little intuitions matter. In all of our other ventures we get a 'feel' for things. Trading and the markets moving defy this, especially when it comes to 'is this move done', etc.

Experience teaches, of course, and to the degree that we've internalized lessons those count as intuition, the ability to quickly know how to react and how to take steps.

However, The Big What is what happens next, and intuition will not, I believe, ever help here. Sometimes we guess correctly and sometimes we don't. I see and hear people in the room all the time talking about their gut telling them what's going to happen next, and they are frequently wrong, and I doubt that they are right more than chance. Its a big lie that we tell ourselves. I've done it a lot, and I was really, really hoping that it would be the key that unlocked the door in the same way that it unlocks so many other things in life. We eventually just lean on our intuition in so many situations in life, and in the case of the markets its worse than a mistake, its a fool's errand.

What tricks us is that the times when we are right make us feel like we are harmony with market motion, when we're really not, we just guessed right. I think this is also why we think we are being punished when we are wrong, its like we have been jilted by something that we know and are strong with and now its turned our back on us.

I have really studied the curious emotions around the way that I fear the market's reprisal, being humble, not boasting, etc. because I think deep down I don't want it to get mad at me and punish me by not whispering into my ear what the future holds. The only reason I would think such a ridiculous thing (and it is ridiculous) is because I've convinced myself that there is a relationship there when, in fact, there is not. The market is not a being, its the cumulative results of the actions of people and software. Its an outcome. Every tick is an outcome.

Again and again they say that the best traders are not emotional, and I believe that I have a glimpse into what this means: that decisions are made based on some criteria (even if its 'this looks strong' or 'this looks weak') based on experience, and then you execute and see the results.

This is an 'aha' thing for me because I wanted to be able to feel it, and I think I see that that's the wrong goal. The goal is to detach not emotion but any sense that our intuitions will be a good guide to the action.

Now, if things are going down and the technical analysis says there is further to go then its reasonable to conjecture that more will come -- that's basic trading. However, that's based on something objective -- the MACD or the stochastic or a pennant being created or whatever.

This will help, I think, I can work on the discipline of 'not feeling it'.

4 for 5 in the futures, 9 for 12 in day trading

All for a whopping $20, which is better than a sharp stick in the eye. The killer today was a short that I got in and didn't get out of at the stop. I just kept thinking that it would turn around, and it didn't. That cost me $85. I feel pretty good about having climbed out of the hole on that to a loss of $2 for the day (gross profit of $20). One of the day trades was a loss of $5, basically a break-even. Only that one large loss and two smaller ones.

I did an after hours futures trade that nicked me because I set a stop and it tested it. Stops are part of the trade but the after hours action didn't require a hard stop so close to the action, an emergency parachute a point down from that would have been fine. That cost me 3/4 of a point and a round trip of commissions.

So basically, a good day except for two mistakes, and I came out ahead after commissions. I made a lot of good trades today.

I've started to increase the share amount on selective trades to more than 100 shares, up to 200 or 300, that is going to be crucial for making actual money on this instead of paying tuition and 'building confidence'. I was taken to task today by the head of the trading room for not getting more on a trade, and he was right. I got a point on a futures trade that had several, and I knew it was possible at the time. At least I didn't take a half point when it was there, that is progress for me.

I guess it was all those days of losing $200-$400 and having every trade seemingly fall apart that made me so gun shy, but I've got to enter the trades with confidence and I have to get wins to build up confidence. I am getting there, its real and I'm doing it, I'm making futures trades that work because I wait for the setup. Even setting aside the one slip-up with the stop I would only be doing a 1/4 point as I write this and the trade still would not have failed. It would not have been moving the way I would have wanted, things are kind of languishing, but I would not have made a bad trade.

a little Sunday night trading

I did 2 trades and got a point and a half in the futures this evening for $75, one long and one short, a nice way to start the week. I took a good risk at the right time and it worked out. The setup is now based on 2,10 and 30 minute setups. I also look at the 2 hour setup but not as often.

The main lesson on Friday was how important it is to note how much movement there is. While volatility itself is measured its not intraday. Friday there just wasn't much movement, which mean that 2 minute trading didn't work well.

I'm also really starting to notice the interplay between the different time frames and how the action of the higher time frame can guide action in the lower time frame, especially when the slope of the stochastic in the higher frame is steep. The lower time frame will look like it is making a transition and trigger a buy or sell signal and then suddenly reverse. Looking at the higher time frame reveals that it is on a steep slope, as if it were 'pushing' down on the lower time frame. Gaming this is key, because there are many times that a transition on the MACD fails. This can be very mysterious, but makes more sense when you watch the higher time frame.

One mental thing I'm working really hard on is the discipline of not getting ahead of where I am. I've realized that the key is simple: gratitude. I am grateful for the progress that I've made. I'm grateful that I'm getting real insight as to the (very short term) behavior of the market in action and I am grateful that I can take advantage of this in a way that lets me make money.

I'm making real progress. If this is like everything else I've ever done then its something that I'll get better at by just doing it more and more. What an amazing concept!

almost $200 gross day trading stocks

I had a good day day trading stocks. There was not a lot of range in the S&P today, maybe 4 points, so on a day like that trying to do futures through 2 minute MACD fails, there are too many chops back and forth. On days like that, though, individual stocks have a chance to do well if they are stronger or weaker, they stand out more and there isn't so much 'tidal force' of the market pulling you around.

I also made a decision to pick stocks that I would be willing to hold and swing intentionally if they went against me. That protected me from dealing with something going wrong. I looked at the daily chart and only bought things that I thought I would want to hold onto.

I lost $25 on 2 futures trades, first one went against me and I held the second one for a couple of hours before it finally came around. The thing about a choppy day with a small range is that you can actually afford to be patient and not try to game tops or bottoms or play the 2 minute as I've described. If I had held onto the second one I would have had a profit for the day but when I've been down a while I feel a lot of relief to just get out. Still, I did well because I did hang on, saw that the market wasn't moving and I could be patient, and watched the interplay between the 10 minute and the 30 minute technicals produced a positive move from a negative start. I had said early on I was leaning long but long was wrong the first hour of the day.

A gross of 168, before commissions. I'm very happy with that number, getting 3 figures is very, very solid.

I'm also encouraged that there is a place for day trading stocks, I don't want to day trade when the market is moving, too much risk of being whipsawed by the market, but on a small range day its a different story.

this is how it develops, see the condition and respond to it. different techniques and instruments for different conditions.

feels good!

Thinking of day trading via the 10 minute

I've struggled with trying to trade the SPYs based on the 2 minute MACD, its just easy to be have a winner that's a nickel, then a loser that's 12 cents.

I think what I'm going to start trying is to trade daily using the 10 minute MACD on the SPY's. This is easier to leave alone. I did one trade today with it and did well. I've got to try to find a way to put that day trading money to work, else I need to move it. I like the idea of the components of day trading to the overall picture, and I think it can complement trading futures, perhaps be less intense in terms of focus.

A perfect pennant

There are some powerful chart patterns that happen fairly often. One of the classics is the pennant formation, where prices compress to a point and then bounce. Today in the SP there was beautiful pennant. I've attached a graphic here which shows the pennant at the time it formed and then shows what happened. Usually a pennant results in a move up.


What I know now, based on the kind of technical analysis that I do, is that this pattern is the above ground representation of a change in momentum on several scales at once.

Stock prices are fractal, I believe. This is the reason that technical analysis works at different time scales. There are rhythms at every level of detail you want to look at. Something can be a 'buy' based on a daily scale and a 'sell' based on an hourly scale and a 'buy' based on a 10 minute scale. The central theme to my technique is to monitor the multiple levels of detail and focus on trades where things are aligned.

futures trading: 8 trades, 6 winners

I decided to robo trade the futures today using the 2 minute MACD. My first trade was 7:50, the last was 10:05 so 2 hours. I had 8 trades, 6 winners, gross of $125, net was probably $70 -- its a $7 round trip on the futures for commission.

I have accurately predicted that this would be a down day based on the stochastic of the 2 hour futures, so that felt good. At least so far.

My rule is that I'll take a 1 point loss in hopes of a 1 point gain. Although this is a 1:1 risk the fact that its a high probability strategy makes that worth while.

I actually got scared out of my first trade, which wasn't a loser by my rule, so that would have been 7 out of 8 had I stuck to it.

Its funny, I'm done trading for the day. I want to take the win and move forward.

It really helped to have the rule and execute based on the technical analysis and be patient and let it work. Emotions will sometime be spot on and confirm the action, which provides a false sense of whether intuition helps trade or not. Sometimes it just nails it. Sometimes it is wrong, especially in the very short term.

I left a lot of money on the table. It looks like the high/low swings for the 2 minute are about 3 points, and by the time the MACD turns about half the move is done.

Looking at the 30 minute, 10 minute and 2 minute I had a lot of confidence that the moves were good, although not always, the first trade happened when it looked like things were going up and I was short, probably one of the reasons I got shaken out.

All in all, very satisfying and tiring. Its tiring to let go and let it work, but that's the way forward, detachment and letting it run.

$50 in the futures

I did two futures trades after hours, one long (winner), one short (loser), and made $50 gross.

I decided to take a look at the entire day for the futures at 2 minute intervals for today and counted the opportunities when the MACD was red and was black.

Starting at 7 am there were 17 transitions, red to black and black to red. Of those 13 offered at least a 1 point gain. That would be 13 winners and 4 losers, a 3:1 ratio, or a 75% success probability. The losers varied in terms of what happened, but its safe to call them 1 point losses. Some might have been break-even.

If I overlay the 10 minute chart and count trades that were in the same direction at the time that the 2 minute line made the transition as the 10 minute MACD line there were 7 trades, all long in this case, and it looks like they were all good except 1, and that went up but didn't go up a point.

So, 9 winners vs 5 winners, the question would be how bad the cuts would be on the losers.

Even during times when there is clear uptrend or downtrend on the 10 minute there are opportunities in the 2 minute. Going along with the 10 minute trend would provide more movement, it would seem.

Of course, there was good range today. If this was a relatively narrow range day it would have been a chopfest.

up $30 swing trading forex after a couple of days.

I think I've figured out that swing trading forex is the way to go for me, using daily charts just like they were stocks.

intraday trading takes too large a movement to make a difference, and this way I can have multiple positions. Right now I'm long the Canadian Dollar, Swiss franc and the Yen and short the Euro and the Australian Dollar. You also have to give currency very wide stops, it can swing 50 pips on you just to move in a short term trading range.

Fortunately, I learned that you can trade very tiny amounts of currency -- $1000 worth at a time at a trade cost of $20 (50 to 1 leverage). I'm trading $2,000 chunks at this point, which make for $20 per 100 pip move at a trade cost of $40 per trade. I have 5 positions, so that's $200 in capital. Compare that to thousands on a stock for the same kind of movement! A currency might move several hundred pips in a week, so this is enough to call it a real trade without having to allocate too much to it. If 4 of the 5 trades moved 100 pips in a week that could be $60 profit, or 30% return on capital. If 3 out of 5 are winners that's $20, or 10% of capital.

As with day trading this is something that is easy to scale. I've got $3,000 set aside for this because I thought I would be buying $100,000 at a time (for a cost of $2,000) but I have $200 at risk right now. If this is a winner I'll play with the houses money, scaling up and down based on the amount that I profit or lose.

This feels settled, I like that. I'm attracted to currencies because you can get in with a small dollar amount and still get a profit and they don't correlate to the S&P, although right now the Euro is driving a lot, but generally speaking they move on their own. That means I'm not 100% correlated in one direction and can have a mixture of longs and shorts.

$35 gross day trading today

I'm still having these enormous doubts and confidence issues day trading but still managed a $35 gross today after being down $35. I was down $35 because I was trading against the 10 minute trend trying to pick the bottom. The 2 minute was giving a buy signal on the stochastic, which is a shorter term and more volatile signal, but the 2 minute MACD had yet to turn. I need to respect the rule that if I'm trading against the 10 minute trend I wait for the MACD to turn to confirm, or at least wait for a higher high, or just sit on the sidelines.

I don't have to trade with the trend but I can't fight it without additional arguments. This means that I will lose opportunities, the more rules the fewer conditions that will be correct, but also fewer losses.

I'm going to have to do some work on this block. I don't feel it for swing trading but there is an intraday block that keeps me fearful even amidst clear successes.

230 on the scale and 122 sugars

I got a 230 reading on the scale this morning and my sugars were 122 this morning. The former is a milestone and the latter is a very solid reading, the upper range of normal. Both are a reason to feel great about progress.

The next weight milestone is 225, which was my 'golf weight', I weighed 225 for the longest time when I played golf regularly, I can remember that number. I've lost 12 pounds since starting the new meds and the change has been noticeable. The next 10 pounds should really be noticeable as well, as a whole new set of shirts will fit. I will probably be ready to donate the existing large shirts I have to Goodwill, and that's an important step in letting go and setting a stake in the ground.

I have clown pants now

I've got a couple of XXL pants from Territory Ahead (my favorite clothier) which were the only ones that would fit me when I was much larger, 40 pounds north of here. My XL version was in the wash when I wanted to take a walk today so I put some on, and they are wonderfully huge. My friend that I walk with called them "clown pants", and they are now.

I would never wear them now out to something other than to the park for a walk. Its important that I wear clothes that fit. If I wear things that are too large I get a false sense of progress. Its easy to tell you've lost weight if fat clothes are hanging off you. While I do have a new test shirt that won't fit until I lose more, I don't want to wear clothes that are too tight either. Just clothes that fit. They will naturally display a slimmer me.

I'm not getting the big head here. I have to lose 30 pounds before I'm not medically obese. Still, progress is progress.

3 for 3 in the futures today

Its odd, but I've had this confidence problem this week. I think it was from having so much confidence on Friday that I spent the weekend feeling good about where I was.

Everyone who has traded for any length of time knows the feeling of getting slapped down by the markets. It feels personal, even though its not. It feels like the markets are making sure you understand who your daddy is, and you must never, ever assume that you can do better than it.

After all, if that were possible then you could make vast amounts of money for simply clicking 'buy' or 'sell' and there is a part of all of us that thinks that that can't possibly be too true -- its too good to be true.

This is real deep stuff, and its probably why there are psychologists who specialize in talking to traders.

I find myself saying to myself "the market doesn't know where you bought or sold and isn't keeping a P&L for you".

I found a setup that's working well. I've added the 30 minute to have another layer of direction. So, I'm using 2,10 and 30 minute charts with stochastics and MACD. I'm 3 for 3 today. 3 times I entered the market and 3 times I came out with profit. Today I was a good boy and didn't stray from my setups. My gross is $87 for the day. I lost about $25 day trading the SPYs. I think that has potential but I have to be persistent.

I guess I'm trying to find the mental handle that will let me say 'I can spot a setup which has a high probability of working' without becoming arrogant about it. Part of me wants to scream at the market "HA! FUCK YOU! I CAN BEAT YOU!! I CAN FUCKING WIN!!!" but I'm scared that it will hear me and it will stop working. Isn't that strange?

5 for 7 in the futures

Although its really something of a trendless chopfest today I got 5 for 7 on the futures with a gross of $25. Flat on day trading, with two trades, one loser and one winner. I was actually up $112 and had quit for the day when I got smart and lost 1.25 on a trade that was not based on my setup. Because I'm so effing smart. Then I did a revenge trade and lost another .5 point on that. I ended the day up .25 on a trade, so at least the day ended on a positive note. After commissions I'm down for the day $25 or so. Idiot. Idiot. Idiot.

$25 in futures, a few bucks in forex

I've been doing some Sunday night trading. I had 3 for 4 wins in the futures for a $25 profit and two forex trades for about $4. I think I'll end up with a small loss on the futures since there is a $7 round trip charge. I was up $65 before my final trade, which was a loser and I didn't feel totally confident of. However, good decisions and effective patience for good setups.

I wore The Shirt today

My test shirt fits. I had just tried it a few days ago and it wasn't fitting yet, but this morning it met my criteria, when I sat down it fit around my midsection. Its nice because its smaller than my other shirts even though its an "XXL" -- it wasn't sized well.

Today was literally the first time I've ever worn it, from the day I purchased it it didn't fit. Its very satisfying that I can add that to my wardrobe. I have a couple of other shirts from that time that I'll check on as well.

Its a big milestone.

I think I'm down another pound

Its hard to say because of the crankiness of my scale, but it showed around 132 or so. I've seen my reflection and noticed that it seems more linear and less pear like, but there aren't any hard signs of progress. Slow is good, though. No complaints.

I have a shirt that is the next size down that I put on every few days to see when it fits properly. Its very close but its not there. That will be a visible milestone.

Yesterday I went on a long walk and didn't have to cinch up my pants, which I had to do a couple of weeks ago, so that was almost a counter indicator. I'm certainly not gaining weight. I'm eating a little more but my appetite hasn't returned as before. I'm sleeping much better, fewer nights where I lay awake, although I had a spell last night. I'm also not as feeling as much of the stimulant quality from it.

This is how it should be really, just taking it a day at a time and slowly but surely making progress.

I did a check of my BMI today and it looks like I'll be in the 'obese' range until I get to around 200 pounds, which would then qualify me as simply 'overweight'. 200 pounds looks awfully good from this perch. It was the lowest I got to when I was doing Fen/Phen, I remember seeing the reading, and I stopped shortly after that and promptly put it all back on.

Morning sugar readings are 130/140 etc. Blood sugar is well controlled.

I think I've turned the corner

This morning I woke up and was confident that I'd do well in the markets today. I believed that I would make money today, but more importantly I knew that I would be able to spot the opportunities and execute them, and I was sure that I had the discipline to get out.

Day trading: 8 trades, 6 winners, $30 gross
Forex: 2 trades, 2 winners, $26 or so
Futures: 1 trade, 1 winner, $25

Gross for the day:$80 or so.

I even traded a regular stock today in addition to the SPY: BBY, which I got 6 cents in. I watched it for a while before getting in, and had confidence in the trade.

The 2 minute/10 minute setup is my strategy, at least for now. I don't need to stray from it but instead grow deeper into it and gradually increase my size within that.

Something has clicked. I've strayed from the straight and narrow and paid, time and again. There is this tiny little circle where things work well for me, and if I venture outside that circle I get hacked by spinning blades. My discipline is getting better, I get tempted to try variations but am getting better at doing those as a paper trade, just to see.

It would be great to have a basket of setups and have a sense of the percentage of winners. I would love to know what sort of setups to use on hourly or daily forex or futures, there are such huge numbers there. However, scalping for pennies and a few pips and a point or less is working, and that is a foundation on which to build something.

I think I can do this. I have done it. I am doing it. This is really, really great.

up $200 today after a disasterous day yesterday

My 22 point loss in the futures yesterday was a huge blow, and it wasn't the first time I've been blown out like that. I have this mental picture that I can trade the futures like I swing trade, where the intraday moves aren't important, but the raw numbers are just too large. Being down $1200 in a day is too much, especially when it looks like a correction may have ended. I had two other trades yesterday that were losers, another futures trade (which fortunately I stopped out on) and a currency trade that I got stopped on.

Today I've had 1 day trade, 1 futures trade and 2 currency trades that were winners, for a total of about $200 in profit.

Its so intoxicating to have a few winners and then start thinking bigger. And this isn't unwarranted, I just need to think bigger within the box by letting the existing trades run longer. The future trade I made this morning was good for a point, and its run 12 points since then, or half of my loss from yesterday. And yet, once I'm up a little I grab it. Confidence needs to turn into letting a winner run, not trying a different strategy, which was to go short a future and think I'll just check in on it in a few days.

I seem to have a winner with the 2 minute/10 minute setup, I need to stick with that and let them run, or at least see how well I can do over a longer term.

back in the saddle

This game is about persistence. I just shorted a mini near 1204 close to the top of the range, with a hard stop at 1207.25, which was the high. This is a strategy. Simply buying or selling and waiting for it to work out isn't a strategy. I say that over and over to myself and hopefully its sinking in.

I also got back into the EUR at a higher place to short, and I got ahead enough to put a stop on entry, so I can't lose on the trade.

out for a 24 point loss

I couldn't take the pain, the Euro started shooting up and the futures started making new highs. This could be the end of the correction.

My euro short also stopped out, for no loss fortunately

The only consolation is that realization that the moves are there. I was just on the wrong side of it this time.

taking a beating on the futures today

I went short a mini at 1177 overnight believing that it would take out the most recent low. Now I'm down 23 points in it as it has roared on the 1st of the month.

I had several opportunities to get out but I've consistently seen that every position I've had in the futures ended up being a winner if I was patient. It might take several days but so far its been consistent, and this is sort of the test for that.

Scalping for a half point and all is great, but I see the bigger moves and want to be able to take advantage of them, and they require that I get comfortable with something that moves against me for a while. There is a lot of pain right now ($1000 down) but the futures have had a huge move in a short time and it will have to correct -- it always has.

What I'm going through internally is when do I thrown in the towel and say I missed it. I went short at the wrong time and the charts showed me that but I didn't use that as an entry rule. I have also gone short at the top of a move only to see it go another 20 points higher, after the elections, but at least in that case I was in the right position.

The bad part about holding this position is that I'm locked out of futures trading until this position clears. I transferred more money into the account so I can go short another contract when that clears but I can't go long because it would cancel out my short -- you can't be short and long a position in the same account.

This is really trying to learn swing trading for futures (or forex), where the dollars are quite large.

I took advantage of the peak to go short some EURO and am in the money on it and will just hold it. I set a stop at my entry so I can't lose money on the trade, and I want to just watch it play out over time.

3 for 4 today in the futures

I made 4 trades this morning, one was a 1/4 point loss (that would have turned positive if I had waited) and 3 winners. Gross of $87. I'm done for the day because I need to get back to my day work. Why not double, triple, quadruple the size and do this full time? That's the goal, but it takes time to build confidence. I could easily multiply these results by 20 but that's too much too fast. I have to build confidence with days, weeks, months of success and slow, incremental increase in trading size.

One of the charts I'm using is the 2 minute chart of the SPY, and it contains a very useful 'tell', in that there seems to be a correlation between short term highs and lows and volume spikes. They aren't large spikes but there is more volume around the ends of small moves. This is a good confirmation signal, as the chart here shows.



I was also more relaxed today when things were moving against me in the shorter term, although it still produces some alertness. The truth is that I'm not setting hard stops here because its so easy for the trade to meander for a while.

Overall I think the market is headed down in the near term, I'm mostly in cash in my swing account, so short is a direction I can rest in, even though 3 out of the 4 trades were long today. Short term there can be strong movement in any direction.

Solid night last night and solid day today in the futures

It may seem like I'm skipping around some with different securities, and I am. I'm trying to find the right fit. I'm about to give up on forex because the pricing on this platform is so 'loose', the currency will range around quite a bit but the bid/offer doesn't move quickly. What this means is that I need a larger move to profit, which makes scalping harder. Add to that the fact that the wide range of an individual move makes it easy to get spooked out, and I think I'll hold on that for a while.

I like the futures because they are the purest form of the market. The market follows the futures. When you trade a stock you are trading something within a group or industry, and within that you are trading based on how the market is doing, so you are attenuated twice. Trading the market is trading the market. That doesn't mean that there aren't opportunities day trading, there are, especially around round level arguments.

Trading the SPY ETF is also trading the market, and has the added benefit of being able to take advantage of smaller moves.

Last night, Sunday night, I did 3 trades and netted about $30. Today I made 5 trades and grossed $125. I had one trade last night and today where I got out where I got in so it was a loss of commissions, but I had no losing trades. Today I was 4 for 5 profit and 1 even. The 10 minute/2 minute setup worked again and again, and I was very disciplined about not getting in unless the conditions were right. One trade was in the middle of a choppy range and went against me for 2 points, but I held on and it came back in for a small profit. Other than that one trade I executed very well.

I left money on the table several times, and that is something for more confidence to help with. I was getting out with 1/2 point on average. It worked, and I need that foundation, but I also need to learn to loosen up. The goal is not all of a move, but I'm leaving money on the table. This isn't greed, its needing to make sure I get wins to counteract the inevitable losses.

I could feel myself have the urge to go for it several times and I would look at the setup and just say 'stay out, the setup isn't right'. When you get wins it gets easy to get fancy and believe that you can predict what's going to happen or that you've 'got it'. The setup says 'stay out' or 'you may pass'. Before lunch things settled into a choppy range and I stayed out. I also correctly identified that the futures were forming a pennant and would likely go higher later, and that turned out to be correct. I was watching very basic stuff, higher highs and higher lows or lower highs and lower lows, moving averages and the setups of the stochastics and the MACD. I've also noticed that, on the 2 minute chart of the SPY, that there are frequently volume spikes around times when a short term move is close to an end. So, like the airplane pilot I cycle through the instruments.

I feel very good about my discipline today, and I had an up day of $125. I was right 4 times and I was lucky once. My day trading account is $40 away from needing another deposit, and I don't want to have it go under 25K again just now. I think I'll stick with the futures for a bit. I can make real profit and there are real moves, and its pure -- I'm trading the absolute market.

A choppy week in the markets

For the week I'm down $150 day trading, down $100 or so in the futures, and down a little on forex.

For the month of November I'm down $400, or 1.6%. Still paying tuition, but its starting to feel tighter, and I am making good decisions. I think the turning point will happen soon. My sins are getting spooked out and occasionally fighting the trend.

The swing account is down as well, the markets are trying to figure out what the next move is and I got into some commodity trades too soon -- a peak and burst in the markets that I did successfully avoid but then got in too soon afterwords.

In terms of day trading I'm really focusing on good execution and I'm pretty much only trading the SPY using 10 minute/2 minute setup. This setup provides good opportunities and forces me to be disciplined about not getting in if the setup isn't right. When I ignore it bad things happen. When I follow it I sometimes get spooked out but am rarely ever just plain wrong. Its about discipline, more discipline, and not experimenting. Its getting better.

Forex is a tough place to trade, there really needs to be a 20 pip move before I can profit because of the way that the bid/offer moves, or doesn't move. The platform adjusts it every few seconds but is slow to do that and doesn't offer me trading opportunities that appear to happen on the charts.

I've noticed that the USD/AUS (Australian dollar) is quite active in the evenings when the Euro slows down, which is consistent with it being morning in Australia. I got chopped up some on a few trades the other day, they were briefly profitable but I was fighting the trend. The thing about forex is that it can move a long way before it corrects, so seeing something that looks like an attractive 'reversion to the mean' type setup can trip you up.

The mystery part of trading is that I don't know what opportunities I'll have, or whether I'll have many. What I have to hold close is the discipline and willingness to sit it out if its not right as well as a trading plan that will let me ride the winners. On Friday I had more winning trades than losing trades but the losers cost more.

I'm starting to trade 200 share blocks of the SPY, and my trading plan must include selling a partial as soon as I get a nickel or so. At that point I can feel safe that I can't lose money on the trade because I can set a stop behind the purchase price and feel better about letting it ride. And ride it must, I can't take a nickel profit on these trades and be happy because the losers all cost more than that. I have to be in a position to have something on the trade at the time that there is movement.

I had a very sloppy day with futures the other day, I was getting in too late or at the end of a move. It was very sloppy.

I'm also paying more attention to the first few bars of a trade. Winners tend to win fairly quickly, and especially in the case of the 10 minute bars if it doesn't start to move the chances are good that its not going to, and I need to get out. I did get out in time on my final trade of the day shortly before there was a 5 point plunge in the futures. I managed to get 2 points of that plunge so that the day overall was a break-even.

I can see my thin body

I think I'm down 8 pounds from the start of the meds but down 16 from the start of the year. At the beginning of the year I was about 250 and lost 8 pounds up to about September, then started on the new meds for another 8. I'm 234 at last weigh in and I think I've dropped another pound since then (a week and a half). I'm not feeling as speedy and there are fewer nights when I'm awake for an hour in the middle of the night. The appetite suppressant quality of this is still as effective. I crave proteins.

I'm a full 50+ pounds overweight, if I were 180 (50 pounds south) an argument could be made that I was carrying extra weight, but I don't think I'll see college weight of 160, nor do I think that's a good goal. When you're that thin at this age you look gaunt.

This weight is still firmly in 'fat guy' territory for my height (5'10") but I can really start to see my body differently, especially in profile.

For the first time I can look down and see the thin guy inside, and I can feel him in there. Someone meeting me for the first time would still think 'fat guy' because of the bulk in my gut. That won't change until I get to around 210 or so. At that point I'll be out of 'fat' territory because my belly won't be so prominent. I'll still bulge a little but no more than almost every other guy I know, most of whom are in 'paunch' territory.

When I get to that point I will become essentially invisible. From a perspective of how I want to perceive myself that's a big milestone -- just one of the crowd in terms of size, nothing remarkable. There is a good chance I'll end up weighing less than the peers that I am heavier than now, and I would have to admit to a certain ego pride if that happened.

That attitude is probably not very enlightened, and I've never, ever been made to feel unaccepted by my peers, but I've noticed, and I don't like it. Having this weight is a result of the bad choices that I made and the lifestyle that I lived for many years, which was about gratification.

I'm embarrassed about that now, but its the past and we learn as quickly as we can learn. I've done the best I can and I'm making progress, which is the best any of us can ever do. The arrow is pointing in the right direction and there is forward movement.

I'm very satisfied with how walking is going, I'm up to 2.5 miles on a walk and doing that multiple times per week.

18 pips in EUR/USD on a Sunday evening

Currencies and the futures start trading Sunday night, so its fun to check in and do some trading. I made two trades tonight for 18 pips. I was using my 2 minute/10 minute setup, trading on the 2 minute but in the direction of the 10 minute.

It looks like the Euro is going higher and both of my trades were long since that seems to be the natural direction.

In this case I made a whopping $37 because I was only trading $20,000 worth of currency, but that's almost a 10% return; $400 to purchase $20,000 worth. Not bad for an evening's work! I had the TV on watching Iron Chef and would just check in on it. However, the main point is that I've advanced from 10,000 to 20,000. This is how it works, tiny little steps to incrementally be comfortable with a tiny bit more risk.

Its tough trading small swings when there isn't a lot of volatility. Although the spread on the platform I trade on (TDAmeritrade) is pretty tight, 2 pips or so, if movements are only in the 10 pip range it can be difficult to get much, because you never get in at the bottom or the top. In this case I traded on the 10 minute ranges, which were larger, using 2 minute entry points, and did ok.

I wonder, though, if I shouldn't be focusing on longer term time frames with currency and go with trading over spans of days and get comfortable with those. The mechanics of the technical analysis work the same, and if I can get comfortable with longer time frames the potential money is much larger, 500 pip swings over the course of a week. The key is being able to comfortably deal with the losses from the stops. Right now it looks like the Euro is in an uptrend over the last few days. A buy signal on the stochastic was generated 2 days ago and its up 100 pips from then, although the stop was 120 pips down. Am I ready to lose 120 to gain, well, 100 at this point. The last sell cycle gave 350 pips during its run with a stop at 250 pips above.

It looks like the current run has longer to go. The thing is if I start swinging currencies I can't trade the one I'm swinging because I'll have a position, although I could trade one and swing another -- you can have multiple positions on in different currencies.

I think maybe I'll just gradually increase the time frames, that would be a good incremental approach. Trade on 10 minute time frames, then 30 minute, etc.

Official weigh in down 5 pounds this last month

I go in monthly to see the nurse managing me in the clinical trial. She takes blood pressure, pulse, gets my weight and they take blood samples. This morning I weighed in at 234, which is down 5 pounds in the month since I was there last. Its 8 pounds total over the two months on the new med, or about a pound a week -- solid weight loss that's not too fast. I just want this to keep working. I can tell that I've taken some weight off but I also am really seeing how big I am, and that's not a happy place.

I'm also adjusting to the meds, I'm sleeping better and my irritability has diminished. I don't feel 'speedy' anymore, but the appetite suppressant quality is still working. Yesterday I was more hungry than usual, which bothered me some, but then I remembered that I had a few drinks on Monday. Alcohol will definitely increase my appetite the next day so I'm really trying to keep it down to once or twice a month.

down $40 on Forex today

I had some good solid trades and broke the rules a couple of times and got shaken out prematurely once. The thing about forex is that there is a lot of up and down, the same price gets revisited again and again over a short time frame so its better for staying in.

I got a little more comfortable today with it. More discipline!

Scalping for pips (Forex)

In forex the unit of change is a pip. Last night I got 4 or so pips (there are fractional pips) and this morning I just did a 5 pip scalp.

This is a whopping $5 for the trade size that I made, $10,000 size at a cost of $200. In terms of percentage, its a 2.5% profit. For a full size contract, $100,000 at a cost of $2,000, that would have been a $50 profit. I could have held on for more (its up 13 now) but the point of scalping is to just try to get the first move based on the technical analysis. The point of learning to do this with this size of trade is to gain confidence in the technicals, to confirm that this is a consistent winner. Once that is established I can crank up the dollars, incrementally. This increase in size of trade can't be rushed. Consistent winning begats confidence, which begats comfort with increased risk.

I'm using Stochastics and the MACD. In this trade the MACD for the 10 minute was positive and trending up, meaning the easy direction was up, and the 2 minute Stochastic triggered a buy signal. The MACD on the 2 minute was red but declining. A slower strategy is to wait for the MACD to go positive on the two minute, but there isn't a lot of movement right now so the short term trends aren't long.

A day in the futures pit..

Today I was shut out of day trading because my account balance fell below $25K pending a deposit of more money. If you are a 'pattern day trader' you have to maintain a minimum balance of $25,000 in your account.

This regulation was established after the dot-com bust when enough people lost their shirts day trading that they decided that you had to have more skin in the game. In an important way this prevents people from completely wiping out, unless you do it all intra-day. Once your balance falls below 25K you can only close positions until you deposit more money.

Anyway, because of this I decided to do intraday futures trading today, something that doesn't require a 25K balance. I'm trying to work on very short term scalps. In forex this means a few pips, 5 or 10. In terms of futures this means a half point or a point, with the possibility of making more.

The setups for this are based on 2 minute and 10 minute charts. The 2 minute chart is used to trigger entries and the 10 minute charts are used to describe the short term trading environment.

I had mentioned that my futures trading has, until now, been based on finding entry points when previous highs or lows were taken out, so this was a new thing. My first trade of the day was actually one at 3 in the morning when I happened to be up and was based on the perception that the futures had bottomed out for the night. This turned out to be correct, which worked for my first trade of the day. Had I set a limit sell I could have done much better, but se la vie, a win is a win.

Let me repeat that. A win is a win. The markets are in constant motion, and if you can successfully dip your cup into that stream and get 1/4 cup instead of a full cup you must be happy about that. There is nothing wrong with learning what the opportunities are in order to not leave obvious money on the table, as I am doing now, but if I walk away from a trade with a profit then I win, pure and simple.

My hesitation about trading futures intraday has been that each point is $50, with each increment being worth $12.50 and a bid/offer spread of $12.50, which means you are down $12.50 as soon as you buy. However, I decided it was time to take the plunge.

So, I made 11 trades today. On the day I grossed $100, about $300 in profits in 7 trades and a little over $200 in losses in 3 trades and after commissions netted about $15. Commissions on futures are $7 per round trip.

I started out the day trying to follow the big swings, but ended the day duplicating what I had done with forex, have a 2 minute and a 10 minute chart. When I looked at the trades for the day the losers were clear violations of the 2/10 setups and looked stupid on the 2 minute chart. This was encouraging because in all but two instances I had terrible entry positions and still didn't get killed. I had one perfect trade in terms of execution, got in at the right time and out for a point.

The technicals I'm using are the stochastic and the MACD, two of the most popular technical analysis tools. Both measure changes in moving averages, so its valid to criticize using them together because they both measure the same thing. However, they operate on different time frames. Stochastic is good for signaling entry point and the MACD, which moves more slowly, is good for indicating the general up or down trend.

So, I'm encouraged. This sort of trading, based on technicals, is easier than day trading because the technicals are the objective viewpoint and your role is to execute at the right time.

This sort of trading can complement a day trading strategy based on the SPY, which is the ETF that tracks the S&P. Since these are S&P futures I should theoretically be able to go long and short in the SPY at the same time.

To review, 1 point in the futures is equivalent to 10 cents in the SPY. For 100 shares of the SPY's you get $10 for a movement of 10 cents vs. a movement of $50 for a movement of 1 point. That's 5 to 1 leverage at work for the futures!

Why trade two securities that are based on the same thing? Well, each is different. The futures trade after hours, for instance, and have more leverage. I have 4 to 1 leverage in the day trading account and can mirror moves I make in the futures market with more room for error since the SPY's trade on pennies, not $12.50 for each tick. There are also day trading opportunities that I can't take advantage of with the futures, so having a day trading account that I mostly trade the SPY's with is useful.

I suck at day trading stocks. However, ...

Day trading stocks is extraordinarily difficult. The overlapping levels of knowledge is staggering to me. I had always respected it, of course, but I'm beginning to glimpse just what it takes, and it takes a lot of time doing research and years of experience to know what to look for and what patterns trigger what actions.

Its not that every decision I make is bad, its not. Its just that the losers are outweighing the winners, and as long as there is a negative delta I can't state that I can do it, and it affects my confidence level.

However, I'm not doing badly at all trading e-mini futures and I'm starting to get a clue at forex, and it may well be that's where I spend my time.

In the case of the e-minis my entry points are when the futures 'take out' recent highs or lows. As I sit its 9:42 on Thursday, November 11 and the e-minis have just matched the previous low for the day of 1202 precisely. It didn't take out the low, but it did 'wick' it, and a bounce resulted.

I passed on that trade because its the end of the day and I'm done, and I have a profit for the day (1 winner and 1 small loser).

This behavior, this taking out of highs and lows, isn't something I've ever seen before in any other setting and its quite strange. Its also very tradeable. And, unlike trading stocks, it doesn't require knowing about news, or secondary offerings, or where pivot and 50 day moving averages are or any of the other things you have to juggle when day trading stocks.

It costs $5,000 or so for one mini contract and each point of movement is worth $50, with increments of 1/4 point at $12.50. These numbers make it something I don't want to trade a lot of because you can be down a lot quickly. It also means you can do quite well, and there have been quite a few days where I stared at a 10 point range during the day, which would have been $500, and I settled for $50 or $100.

This behavior -- not letting a winner run -- is something that will hopefully change with more confidence, but I'm at the point in trading where I tend to take the first profit that's offered up. I'm not actually convinced that taking the first bite and walking away isn't the right move, because there are plenty of times that you can be up small, then down big. The 'right' move, though, from an academic perspective, is to set stops once you have a winner and be ready to take a smaller win in hopes of a bigger one.

This is a learned skill, and I'm not very good at it. When I saw $250 this morning sitting right in front of me I took it, and I'm not sorry, even though had I managed the trade better I would never have gone negative and there was $600 there to be had max.

However, the main thing about the minis is that I'm not getting bled by the death of a thousand cuts the way I am with day trading. Although I feel like I've learned a huge amount there is still this huge invisible gap that I haven't crossed -- 'turning the corner', they call it -- and I don't know what that crossing looks like. I have to say that I enjoy the challenge, though.

In terms of forex I've been trading with the smallest increment you can, which is $10,000 worth of currency, and you need $200 to place a $10,000 trade. The standard size is $100,000, and it costs $2,000 to place this trade. This small size, the 10K size, is a very nice way to trade because the absolute dollars are small and the increments of win and loss are $1 increments -- each 'pip', or unit of change in the price of a currency pair, is worth $1 when you trade $10,000 worth.

A typical day's range in the Euro (EUR/USD) is 100 to 200 pips, so you can see that you can double or lose all your money in one typical day. 200 pips = $200, which is what the trade costs. The power of leverage! However, the absolute dollars are relatively small, losing $20 on a trade means I lost 10% of the cost of the trade, but its still just 20 bucks, and that is cheap tuition to learn.

Trading currencies is also completely bereft of the complexities of the stock market, there are no CEO scandals or drugs that don't get approved or earnings misses. There are events which influence the currency markets, of course, but they are more of the geo political kind and policy type things like 'printing more money to make your currency less valuable' aka 'quantitative easing'.

Mostly its just you and one currency pair, moving up, down, sideways, rinse and repeat. Currency action can be very fast, and you can be up and down 10 pips quickly. You can also suddenly be down 50 pips if you're not being careful, and that can end the party if you aren't on top of that.

I'm still trying to learn what works for me and my style in terms of time frame, and I think what I like is the very short term scalp of 5 or 10 pips. This limits the time that I'm in a trade and it doesn't close the door to larger wins if I manage the trade well. The short term motions are in the scale of 20 or so pips during the course of an hour, and within an hour there can be 2 to 3 signals to trade using the setups that I'm working on, sometimes less if there is no clear trend, aka a 'chopfest'.

It won't be hard to scale up the forex if I become proficient, and I can turn $10 wins into $50 and $100 wins by just changing the size of the order. This all requires confidence, of course, but the learning curve is manageable. The learning curve for the minis is steeper because of the amount at risk, so I'm content to stick with a strategy for the minis of focusing on highs and lows.

Another 2 pounds or so in the last few weeks

I got on the scale this morning for the first time in a while. I think there are probably two ways to do weighing, either you are maniacal about it and do it every day and chart it so you are used to minor up and down days or you don't do it or only do it every few weeks.

I haven't noticed a lot of changes with clothing in the last week or two, everything I wear now is fitting well but the 'next level down' of clothing that I have isn't fitting yet, so I'm kind of in a dead zone of noticing changes of late.

I have a perception that my face is a little more vertical than horizontal and I'm not as bulgy in a particular shirt but I know the ways of the mind and how it can trick you into seeing what you want to see. Fit doesn't lie, though, if you couldn't button something before but now you can that's real.

So, its a risk when you finally step on the scale, and I was rewarded with a clear loss of a couple of pounds over a couple of weeks, and I'm being intentionally imprecise with myself with amounts and time frames to avoid the trap of trying to dictate how fast it will happen. It will happen as fast as it happens, and the big results will play out over months, not weeks.

Its an analog scale with a needle so there isn't precision, but there was a clear distance between the last and current reading, which puts me at somewhere around 232, based on the delta between my scale and the office scale.

In terms of number milestones those divisible by 10 are the big ones, of course, so 230 looms large, but I'm trying not to focus on the number. I'm going to be an obvious big guy for another 20 pounds or so, not until I get to around 210 or so will it be really different, and at my current pace that will happen in another 5 or 6 months, late next spring or so.

This is working, so the plan is to work it and not change anything. Work The Program. I have the experience of successful weight loss once before, on Phen-Fen, although I didn't keep it off because I didn't change anything about how I ate or drink. Or, as a friend put it, I continued to 'party hardy'. In the last couple of years I had lost 30 pounds by changing my relationship with food and drink, so I've got real progress and results on the ground before I started this next phase.

Its a rare thing to find a combination of things that produce results and is something is livable. Its easy to not eat much, but then you have to battle hunger and weakness, a battle I have lost every time.

There is a product called Sensa which are sprinkles that you put on food that cause you to feel full sooner because they affect smell. They really work. They really do. But, not eating as much made me weak, and the solution for weakness was not 'more exercise' or 'drink more water'. The unfortunate math is that you have to compensate for fewer calories with some sort of stimulant. At least I do.

In terms of a stimulant this medication is a very high quality stimulant because there is no euphoria, and therefore no emotional component or addiction risk, its just a 'get out of the chair' kind of stimulant. Its not advertised as a stimulant, of course, its for blood sugar control, and its crushing it on that front, my sugar levels are now in the normal range. The appetite suppression and the stimulant quality are (wink,wink) 'side effects'.

I'm still awake for an hour or so every night, but my irritability has gone down. You have to give your body a chance to get used to it.

Onward. The way is forward and the path is long.

Post walk reading of 92

I haven't had a lot to eat today (some grapefruit, yogurt, strawberries and granola bars) and went on a very long walk in the park. My morning fasting reading was 112, which in of itself is a victory. However, after not a lot of food and a lot of exercise -- over 2 miles easily -- the post reading isn't too low. 92 is a very solid normal number, just a touch on the low side. I've never had problems with sugars that are too low -- so far -- so I'm encouraged that my body is not going too low after not a lot of food and a lot of exercise.

These are numbers that I haven't seen in many years.

I may have to change the name of the blog..

My sugar readings have been continuously dropping from a start of 225 average to this morning's new low of 112. I didn't even walk yesterday. Since 80 to 120 is considered normal that means I pulled a N for a morning reading. Nothing to see here, folks, move along. Just a dude with a normal blood sugar level.

No question that losing weight helps, although I thinks is about 6 pounds, and the high level of exercise helps as well. I think I weigh around 235 now, which is still high enough to be a problem without meds. Its well known that losing weight changes the sugar levels, but 6 pounds didn't get me from 225 readings in the morning (with metformin) to a 112reading. This jnj drug is extremely effective and, if its approved, could be the game changer for type II diabetics, especially those with weight problems.

So, the blood sugar level battle is over, what, 2 weeks after I started the blog? I'll call that a win and move forward and not post about it unless it creeps back up or I have low sugar episodes.

The weight struggle remains. but clearly there is progress there too, and that's the overarching theme related to diabetes. I hear again and again people who lost weight and don't have to take anything, and I want to be in that club.

using stops and OCO for measured risk and return

I'm heading off to bed. Its election night, and its not at all obvious to me what tomorrow will bring w.r.t. the futures and currency markets. I probably should have taken a pass but I liked the setups and placed a trade in each, I'm short EUR/USD and an e-mini.

I'm using an order called "One Cancels Other" (OCO) to place a bracket around each trade. Its actually two orders, a stop loss order and a limit order to take profits. If one executes the other is automatically canceled. That lets you walk away from a trade or, in this case, sleep on it.

It isn't that trading while you sleep is the best way to trade, an automated setup doesn't allow a human override for changing conditions such as a huge pulse that you ride out, but these times are a real opportunity and its a way to capture that, even if I don't get all of it.

32% return in about 6 hours trading currency

Because of leverage, the size of the returns that you can get trading currency is just amazing. I bought the EUR/USD at 1.3902 at around 10 pm. I happen to get up several times a night due to the new meds, so I left my computer on and would check the trade through the night.

At around 3:30 am it was trading at 1.3966, and even though I believed it had more to go I decided to close the trade because I was overwhelmed at the run and just wanted to capture it. It was a 64 pip run. The trade ran to over 1.4 the next day, a potential 100+ pip run.

The math is that a $10,000 trade costs $200 to place because of the 50 to 1 leverage. For that size trade each pip is $1, so for a 64 pip profit I got a $64 profit, or 64/200 = 32% return.

Leverage cuts both ways, but the basic principles of risk/return apply. I had a stop on this trade of about 40 pips below where I bought it, so it was a risk/reward of 1:1.5, which isn't super-duper. Had I held the trade to its conclusion it would have been 1:2+, which is very respectable.

Its natural to do this math, though, and imagine what sort of return you could make by doing this regularly. The charts indicate that a trade like this occurs once a day or more on the long side and short side -- once on the long side, once on the short side. That means that if I nailed it perfectly I could double my money in a couple of days. Of course, that's not realistic. Not all trades will be winners, and you never catch the top and the bottom. I'll keep track of this, though, and if I am successful at it I will keep increasing the size of the trades.

Prudent trading says 'risk 1% to make 2%'. Because the absolute dollar sizes are relatively small I'll probably go with 'risk 2-3% to make 4-6%'. I have $3,000 available for this, so I can put $400 into a trade and risk $60 to $90 to make $120 to $180. I should be able to find out if this will work or not based on that. I think good discipline is to let the profits pay for the next trade instead of adding funding to make larger trades; allow it to grow organically. If this works it could be very profitable, and if I trade on the profits I'm playing with the house's money.

sugar reading of 112 after walking today

It was 130 this morning and after two meals and a 2.5 mile walk it was 112. That is the lowest reading I've seen in years, and folks: its normal. That is a normal blood sugar reading. The commercials for the testing supplies show 98 and 101, but the normal range is considered to be 80 to 120.

That's pretty amazing for being on the new meds for 5 weeks, considering that I was having morning readings of 225 before going on it.

This stuff works.

Too Tired To Trade, trading as learning to fly.

Its not at all obvious that active trading can wear you out, but it does. It requires vigilance, at least when you're in the early learning stages. This vigilance takes mental effort, you are building new muscles in your mind, and that's hard work. A lot of it is getting more automatic, but as I am in these early learning stages its all news and I'm having to make myself remember all of it.

At a previous job I had my boss was learning to fly an airplane and owned a plane with a group of people. One day he invited me to go on a flying lesson with him. He was in the main chair and the instructor was in the chair next to him.

During the lesson the instructor kept barking at him to watch different instruments because their values would fall out of range. There was a dashboard of something like 6 or more different instruments that displayed all the different values you need. Each instrument had a range of values that were appropriate for what you were doing right then, and if the plane got out of the correct range you had to make an adjustment of some sort to the plane, tilt or speed up or slow down or whatever.

What I learned, and this has always stayed with me, was that the discipline of flying involved cycling through each instrument, noting its values, and making the appropriate adjustment. You had to learn to do this so it was automatic. The natural tendancy isn't to cycle like that, its to flit, but you had to just go through each one in turn and methodically record where it was.

Trading is like that. There are a few things that you have to observe when a trade is active, such as where you are with respect to the stop and where the market is and what the action is telling you. Experience and education prepare you, but the act of trading involves asking yourself over and over where things are with respect to some guideline and whether or not that requires a decision. This act of cycling through reminds me of my boss and his experience learning to fly. Its hard work at first, the mind doesn't like to shift around like that, it wants to find a place and rest. It isn't like you can't get up from the chair and get a drink, but you really don't want to wander when you've got trades on.

As a result, I get tired from paying so much attention. I'm exercising and developing mental muscles that I've never used, and they get sore. There was a nice trade opportunity at the end of the day today that I would love to have put on, the setup was very nice and, in fact, it would have worked. I was just done, though. I had a small loss today and didn't want to take any more risk and didn't want to have trades on that I was paying attention to. I was tired. Too tired to trade. If you aren't able to give the trade your attention you are asking to lose money because you will have no tolerance for a loss. That tolerance for a temporary loss (without being stopped out) comes from patience, and no patience means an early exit just to get out and be done with it.

Oddly, or not, this phenomenon doesn't happen for swing trading, where I almost always have some positions on. I'm checking them, to be sure, but I'm not right on top of each tick. Those trades last for days and can last for weeks, so checking them once a day to see if they've gone south is fine.

115

That was my sugar reading after a long walk in the park. Exercise is essential in treating diabetes. I haven't had a reading that low in a long, long time. Its a long road and its nice to celebrate the minor victories.

sugars and weighing

138 this morning! I'm also certain that I've lost some weight since my last visit with the clinical trial people last week.

My last official weigh in was 239 after a month on the new meds. I don't weigh every day, and my scale is wildly and variably inaccurate anyway. Weighing every day can create false hope on the one hand and unnecessary despair on the other there are just too many variables.

The real goal is to have a plan in place that is working and just live and have it be something that happens in the background, not so fast that its worrisome. I was about to say 'and not so slow that ...' but I'm not sure there is a 'not so slow'. I've lost weight several times and put it all back on and more because my habits didn't change. There were times I'd lose a bunch over a few weeks and feel weird about it, like it was wrong, like I was in danger.

I think my pace is about a half pound a week or so, 2-3 pounds a month. That is plenty good enough. I'm getting the rewards of feeling clothes be a little looser and things fitting better. The numbers on the scale matter, of course, I would like to get back to 190 pounds or so, which is about 50 from where I am now. I'll be on these meds for two years, that's how long the trial is, so if I can lose a half a pound a week I'll get there in two years. Of course, I don't expect that to be continuous, I'll probably lose more up here then when I'm down there, and if I end up at 200 I won't be crying about it. From the perspective of the disease that will be a huge advantage, and although it won't be skinny -- 165 would be rail thin for me -- I will have dropped out of the 'obese' scale and into 'normal, but a few extra pounds'.

To day trade you need DESK: Discipline, Experience, a Strategy and Knowledge

I was down $330 today because I got overconfident from 2 days in a row of very good discipline. I completely lost my discipline today and I paid for it.

I'm still very early in my own learning, less than two months of really serious effort. I've lost several thousand dollars, part of tuition, but I've also gotten steadily better. I know exactly why I lost money today. I was only wrong a couple of times, mostly I got sloppy. You can expect to be wrong a percentage of the time, its built into life, and you can never expect not to be wrong. That isn't the goal. You can, however, learn to make the right decisions and respond correctly to the situation. The correct response in a particular situation may be to take a loss. I'm actually feeling more confident about trading futures -- the e-minis -- these days.

There are four things you need to day trade.

1. Discipline
2. Experience
3. Strategy
4. Knowledge

in no particular order.


Knowledge

You acquire a lot of knowledge early on, and its about basic things like what the mechanics of trading are -- the role of ECN's, how to work your software, what a P&L is. In terms of the stock market itself you need to have heard of a lot of different companies and understand sectors and the companies in them. You don't need to know who the CEO of XYZ is or anything, but knowing that Akamai (AKAM) is an Internet company and that Proctor and Gamble (PG) is a food company or that Goldman Sachs (GS) is an investment bank is important so that you understand who the real solid companies are. There are a lot of ticker symbols out there that you can trade, but only a tiny percent are really suitable. Fortunately this universe is fixed in size, and although companies come and go you will find yourself in a world of familiar names after a period of time. You won't learn this unless you read real business papers like the Wall Street Journal and watch CNBC for many hours on end. This has to be interesting to you on its own or you'll never learn it. I like reading about business, to me its like sports. Its the human condition in a certain wrapper.

Experience

The experience of day trading is, like most of life, unlike anything else. Its its own world, ultimately part of our world, but its little corner. There is only one way to get experience, and that is by doing it. You can paper trade some, and should so that you can get a sense of the scope of how things move, but when there is real money on the line that's when you find out how emotional you will be. Hopefully you will have learned how to avoid risking too much -- part of knowledge -- and you will have enough time in the trenches to turn the corner. I'm in a trading room with an expert who is a teacher and mentor, and he says that it can take from 3 months to 18 months to develop the necessary skills and knowledge. I've logged hundreds of hours watching stocks intraday now and its becoming less intimidating, and I'm starting to see some patterns recur; certain kinds of action and movement and what a good decision is for those. I'm still a newbie, in diapers really, even though I've traded stocks for over 20 years. Day trading is its own world and very little of the knowledge I learned from other parts of the stock market applies.

Strategy

It would seem that its ultimately about strategy, and yet this part turns out not to be the most mysterious. Here is a simple strategy based on momentum. Find stocks that are making new highs or new lows and jump on board with them. Of course that's a broad stroke. How do you find these stocks? The software should have a screen that displays them. How do you pick good ones? Select names that have good volume and that may be part of a theme for the day. How do you know if the action is good for this strategy? Watch it to see if its in motion -- if the price is changing quickly on heavy volume. When do you get out? Watch for how it behaves at a round number, a pivot line, a fib line or if its approaching a round number of dollars like $5 or $10 in price change.

Now of course that's a lot of information and it would be impossible to start new and understand that -- what's a 'fib line'? Nonetheless, its a strategy, and its a pretty basic one. Day trading uses a playbook, certain kinds of responses to certain setups. There are not an infinite number of them, there may not be more than, what, a dozen or so? After all, a price can only go up or down. How many variations on that can there be?

Discipline

This is where the rubber meets the road. You can have everything else lined up and not show good discipline and get wiped out. Discipline gets you in and makes you stay in or get out. There is some board game out there with a simple set of rules and it states that 'takes a few minutes to learn and a lifetime to master'. That's the role of discipline in day trading, and its all about you and your mind. In that respect its like golf, its just you and the club and the ball.

When you are enter a trade you have to have rules, the first and foremost of is, when do I get out. Its said that "you have to look down before you look up" in trading, and that means that every trade you get into you need to know when you will bail if it goes against you.

If you don't decide that ahead of time when you will get out you will have no discipline about staying in the trade if the winds turn, which they do most of the time. Most of the time after I enter a trade it ticks down for a bit, because things move. You have to decide before you get in when you are going to pull the ripcord. This is much harder than it sounds, because things happen fast. Discipline also gets you out when you have a profit instead of staying when the party is over. Some trades only last a few minutes and then they are done and you don't want to stay too long or you will give back all you got. Trades move at different speeds, of course. Some boil and move $1 in 30 seconds, others take an hour to move 25 cents. The former are like a set of spinning blades and can result in large wins and losses and the latter are less scary but require more patience.

Learning discipline is to train the mind. To train the mind is to mold the self.

Blood Sugar was 147 today

For me that's not bad. One of the things that I was told about diabetes is that its a progressive disease, my sugar readings have slowly gone up over time. The new med that I'm on (JNJxxx or Glimiperide) is very effective. Before I could qualify for the trial I had to go on Metformin only, and my morning sugars were 220 or so. One doc told me that normal progression is to add one new treatment every decade, and I'm in my 50's so hopefully it won't get too bad as I age.

Getting diagnosed was a pretty hard slap in the face with respect to my lifestyle around food, which pretty much was to not pay attention and eat as much as I wanted to. Its been a tough road to learn discipline, but I've made solid progress. Before I went on this one and started losing weight I had already lost 35 pounds over a couple of years by making changes. Those changes are the reason that I am confident that I can keep it off after losing it.

Buying some Euros

Bought the EUR/USD at 1.3947 for an overnight trade.

Currency trading is very cool. It goes on worldwide, 24 hours a day for 5 days a week. Most of the volume happens in the morning in the U.S. when the U.S. and European traders are active. Its the largest market in the world, dwarfing all the stock markets. Trillions of dollars flow in the currency markets. Its a market that is too large to be manipulated in the way that the stock market can be.

When you trade currency you always buy one thing and sell another. You buy Swiss Francs and sell Canadian dollars, or whatever, so you are always long one thing and short another. These are called the "pairs". The largest pairs are the ones between the Dollar, Euro, Yen, British Pound and Swiss Franc. The ticker is always ONE/OTHER, in this case EUR/USD for Euro and US Dollar. When you buy EUR/USD you are going long the Euro, when you sell EUR/USD you are going short the Euro.

Trading occurs in units called "pips", where each pip represents one tick of change. The prices for most pairs are expressed as 4 decimal points of value, e.g. 1.3947 for my EUR/USD pair. 1 pip is the 4th decimal place of value. This means that one Euro is worth $1.3947 cents, so you trade in hundredths of a penny in this case.

You can buy or sell as little as $10,000 worth at a time, and you get 50 to 1 leverage, which means a $10,000 trade only costs $200. The standard size trade is $100,000 at a time, which costs $2,000 to place, using the magic of leverage.

Leverage lets you get extraordinary returns -- and losses. In an IRA or 401k there is no leverage and you think in terms of making, say, 8% a year or better. If you are an active swing or trend trader you probably have 2 to 1 leverage and you'd like to make 20% or more a year. If you day trade you have 4 to 1 leverage and you think about making an income, with returns that work out to a a couple of hundred percent a year on your capital. If you trade futures you have 10 to 1 leverage, and currency (or 'Forex') trading involves 50 to 1 leverage. Currency and futures are how fortunes are made -- and lost -- trading.

I'm just dipping my toes into this so I'm starting with the $10,000 sized lots. With that size of trade each pip is $1. In the time since I've placed this trade the price has moved to 1.3957. That is 10 pips of movement, 1.3957 - 1.3947 = 10 pips = $10 of price movement.

Now remember, that trade cost me $200 and its already moved $10. That's a 5% move in about 10 minutes! For comparison's sake if I had a CD that paid 2% I could earn $4 on $200 in a year.

At 1 am early this morning the EUR/USD was 1.408, or 133 pips higher than my position entry. If it returns to that value tomorrow I would make a 66% return on my $200, or $133. Of course, if it dropped that much I would lose 66% in a day.

That sort of movement (100 pips) is very small. Its a very small move amplified by leverage.That sort of return is part of the allure of currency trading.

WTF?

I used to write a lot about Life with a capital L, but then stopped. For a while I thought this was because I didn't have any more things to say -- it had all been internalized. However, I realized it was because I had already written all the words I had about Life with a capital L. I still think about Life with a capital L but I don't have any more written words for it.

This blog is about my journey with two things.

Diabetes:

Some years ago I was diagnosed with type 2 diabetes and have been on a journey of food control and weight control. Its currently pretty well under control, with an A1c of less than 7, but I learned about a new compound that is in phase 3 trials, code name JNJ28431754, which had as a 'side effect' weight loss and used a different mechanism for blood sugar control.

Now, of course, with a phase 3 double blind trial you don't actually know whether or not you're getting the test compound or not. In this case there isn't a placebo, they either give you the compound or Glimiperide, a drug already on the market for diabetes. This trial is not to determine effectiveness, its to determine relative effectiveness. While I don't know if I'm getting the active compound what I can state with certainty is that whatever I'm taking has the qualities of a stimulant, including appetite control and lots of energy. I've already lost 3.5 pounds in a month. I'll talk about exercise, food, weight loss, blood sugar, meds, etc.

Day Trading:

After the Great Financial Adventure of 2007 I began to more actively trade stocks, because if I didn't do it no one else would; no one will ever care as much as you about your money. Most of the trading that I did was 'swing' trading, wherein I would hold something for anywhere from a few days to a few weeks, but rarely more than that. Its about capturing short term movements. However, day trading has always been alluring to me as a mountain to climb, so I've starting doing that. I'll talk about that learning process and share it as I go along, with whatever results there are. I'm trading equities, futures and forex. Sometimes I'll hold things overnight but mostly its intraday.

I'm writing about these because I have words for this, its a story that is current and living. I'd like to think that this story will end when I'm thin, have an A1c of 6 and make 6 figures day trading. We'll see how that turns out ;-)