A nice short nap and lunch out at Farmer's Market with the family has refreshed me. So where was I... oh yeah.


MY TRADING PLAN -- this is a rough work in progress, subject to vast changes as I go along on this journey and figure out where I am and what I'm doing.

I've been paper trading Woodie's setups for a couple months, plus a month with Bracket Trader simulation on Sierra Charts. I've been having a hard time. Other traders in chat talk of getting the mandatory chart time in and one day, the light will go on, the fog will lift and it'll all be crystal clear. That's fine and dandy, but for now my continued inconsistency has had me (for the first time) really start to doubt if I can ever be successful in this business. Scarier yet, the fantasy of being successful and consistently so year after year is getting to be such a far reaching outrageous thought that I am starting to view myself as perhaps everyone I know in the world views me: as a doomed dreamer. There, I just had to get that out of my head and written down.

My trading capital has shrunk over the years. My $5k IB account is the smallest I've traded. Actually, it's $4990 now because IB took out $10 for data fees since I didn't meet their minimum commission level for the month. It's not that difficult to blow out such a small account in a short time. My worst paper days have had me lose nearly $500. My worst sins have been: 1) inventing trades, 2) adding contracts to losers and 3) not honoring my initial stop losses. All are recipes for disasters. Taken together, it's a pitcher of Jonestown Kool-Aid.

PATIENCE, PATIENCE, PATIENCE

Can't beat myself over the head enough about this. The usual roadmap to hell starts with a series of invented trades aggravated by attempts to "dig out" of the hole I made. Whether I can cut that morning $300 hole into a breakeven or not, I find out at the end of the day, I've compounded my pain by the slew of commissions I've accumulated. It's frustrating to see at the end of a long day that it took me 20+ roundtrips to squeeze out a +$50 on the day. It's a nightmare to know that the $100+ in commissions wipes out the gain and puts me in the red.

My solution has been to put a daily 10 roundtrip cap on myself. I jotted down this 10 trade idea in my journal on August 24th as a goal to keep in mind. When I've actually stuck to it, I've done well. Regardless of the fact that I'm still apt to invent trades or misread setups or cut my winners short and let my losers run, capping my trade total is a very effective way to do damage control.

THE WOODIE SETUPS

I'm a master of none. Not even close. I started by keying in on the ghost. What's simpler than a head & shoulders? Or so I thought. Woodie and his moderators call the damnedest looking things a ghost, while disregarding perfectly fine looking H&S setups. It's had me all confounded and screwy that I've come to doubt my data, my chart settings and my eyes. The other setup I concentrate on is the ZLR (zero line reject), which is the bread & butter pattern for most of the successful Woodie traders. Supposedly, if you take the ZLR with the trend, you'll have an 80% success rate. Tough thing with ZLR's is the entry. Early entries face reversals or at least flip-the-coin stalling action. End of bar or near end of bar entries are late many times and you wind up like the dog that likes to chase cars. The combination "ZLR & TLB (trendline break) w/ trend" is probably a more promising setup with a more definitive entry point. I'm just not good at picking them up visually yet.

THE CHARTS

I traded the ES for two years with little success. I'm only watching the YM and ER now. I like their larger daily ranges. I've found much greater paper success with the ER rather than the YM. I don't know why, and I won't question it. That's just how it is. Woodie uses the 5 minute YM and 3 minute ER charts. He also has an esignal ER 250V chart for faster signals. I'm using a Sierra ER 125 tick chart to approximate that.