Oct24 – DAX & Nasdaq trades (stupid day)

I must have such a long way to go before I am a good successful trader.  I posted the charts first since a picture says more than 1000 words.  And only then will I digress into an outburst of verbal diarrhea….

dax oct24

nasdaq 15m

nasdaq oct24

And now for the verbal diarrhea….

Starting around lunch (didn’t trade during the morning), there were some reasonable setups.  Two on the DAX and a first-timer on the Nasdaq100 – the latter is a stock index for 100 technology-orientated US companies. The index is currently sitting at the very nice round number of 4,000, and has been trending upward nicely and consistently in recent sessions, more so than the Dow or the S&P.

1st DAX trade: Anyways I got stopped out on the first DAX position with 5 point slippage because of some unscheduled news around lunchtime regarding the stress testing for Eurozone banks.  Thus, this position was close to a full loser (around -0.85R).  I wasn’t upset about that.  Sh*t happens and sometimes this is going to occur – no big deal.  I felt that the setup was also good, and I had managed the position a little looser than previously – trying to implement the recent findings about me managing the positions too tightly.

DAX Trade #2 and Nasdaq: I went back into the DAX a few minutes after this news event, since it looked that the DAX was shrugging the news off and that it was going to do what it had “initially planned to do”.  Shortly after this time I also simultaneously bought the Nasdaq from the 15M timeframe, as the index sat just a few points above the very solid 4000 level.

What went wrong: Both positions then went into the anticipated direction (i.e. up) very nicely and quickly, and at the peak I was up close to 2R across these positions.  Then they started rolling over a little bit and I wasn’t sure what I should do.  Then US news came out at 3pm – normally I have seen the fx pairs being more responsive to Tier-1 news than the indices – thus I stayed in the positions, rather than exiting as I would have done in a FX position.  This triggered both instruments to fall further I got stopped out on the tightened DAX stop [there was an initial 20-point stop, at the peak the position was +28, and I came up with a -11 result – that doesn’t sound very cool!!].  At this point I kinda panicked and then did something stupid.  I shorted the DAX – even though this was against the bullish sentiment I had assessed at the start of the session – and then thought “well if I am short the DAX then there is no logical basis for keeping my long Nasdaq position!” so I closed that one too.   That was not very good trading.

Inevitably, the short DAX quickly fell to me being +19 in profit (again with 20 point stop) before it quickly spiked back up and eventually stopped me out at -10 for 1/2 the position and at -20 for the remainder.  Meanwhile the Nasdaq held very nicely above 4000 (as I had thought might happen when I had set the initial stop loss at 3990!!).  And then slowly rallied for the rest of the day to finish at around 4,030 – I had gone long at 4,013.

(My coach pointed out that on some days the market, for the instrument that i am trading, will just happen to take a breather and produce a small candle on the daily chart for that session – on days like that, it’s going to be much harder for me to make a profit with the EMA strategy, than on a day where the market moves a lot.  And of course, on a Friday afternoon, the market is generally less likely to be move than on a Wednesday!!)

The aftermath….cheeseburger & beer

Thus, around 4pm I felt pretty gutted and a bit frustrated – a bit at the results, more at how I behaved during this session.  This now means that I have managed to lose back most of the gains made from the “Post-Bayreuth phase” (see below) – this encompasses some 60 trades commenced on Monday 29th Sep.  Thus at that point I made my way to the Diner in Spitafields market and in the middle of the afternoon devoured a big cheeseburger and quickly gushed down a bottle of beer. Surely I am now becoming real trader?  Soon enough I will be consuming really kilograms of sweets and lollies on a weekly basis following in the footsteps of Nick Leeson in his journey of bankrupting Barings Bank in the 1990s with his huge trading positions in Nikkei futures, JGB futures (those are those Japanese government bonds) and options on both.

Then I returned to the office to start my detailed analysis and record-keeping of those 60 or so trades.  I will likely spend all of Monday on that analysis and will consequently not be trading.  I am hoping that this analysis will help to develop my position management approach as well as give me some unexpected useful insights.

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