Phantom's CDS Journal

#1
Trading Plan

Starting Capital: Rs.50,000

Instruments to be traded: USDINR and EURINR

Max. Risk per Trade: 1% of Starting Capital i.e. Rs.500

Max. Drawdown: 35%

Expected outcome after 600 trades:
Excluding commissions and other costs.



Broker: Zerodha

Rules​

Standard Trade Setups:

1. TS3:
Take only if in direction of 15min trend.
All you need to focus on is that for a simple ABC correction you need all three elements:
• The ABC correction pattern
• Wave C WPT (support / resistance zones) and
• The correctly coloured Reversal Bar
2. TS1:
Take only if in direction of 15min trend.
A TS1 trade set-up is where the ABC correction forms as part of the first correction to the first move off an important high or low. In Elliott wave terms, this is off the end of a larger-degree Wave (2) or (B) correction.
• The ABC correction pattern(minor wave)
• Typical wave C WPT and
• The correctly coloured Reversal Bar​

3. TS2:
Take only if in direction of 15min trend.
A TS2 trade set-up is where the ABC correction forms as part of a correction once the main trend is already well established. In Elliott wave terms, this is off the end of a Wave (4) correction.
• The ABC correction pattern(minor wave)
• Typical wave C WPT and
• The correctly coloured Reversal Bar​

4. TS4:
Take only if in direction of 15min trend.
The TS4 trade set-up is again based on a 3-swing (ABC) correction. In fact, it is very similar to a TS3 trade set-up as it uses the same degree of swing, however the TS4 trade set-up does not look back to see the prior swing. So it cannot judge whether it is corrective in relation to the prior swing.
• You must look at the Wave C swing low (TS4 label) and check that it falls above (for a long trade) the prior main low. Reverse for a short trade.
• The ABC correction pattern
• Wave C WPT (support / resistance zones) and
• The correctly coloured Reversal Bar​
5. DP:
The DP automatic trade set-up is designed to catch the end of an impulsive move as the impulsive trend runs out of steam.
• the reversal is at the DP (Decision Point) support/resistance zone
• there is clear divergence on the STF oscillator
• the R/R is strong (above 2:1) at the first profit target (the opposing DP level)​

Trade Management:
1. As soon as the trade is entered, place an initial protective stop 1 tick beyond the recent high or low.
2. Follow time stop.
3. Use the projected profit targets when the STF is weak.
4. Swap to the ATRStop when the STF is strong i.e. has exceeded its Strength Band. As ATRstop give more room for price.
5. If you get a volume spike at any important levels (DPs or other wpt targets) move stop close to bar low/high.

Advance Trade Setups:

HOLY GRAIL Setup:
Market creates a Holy Grail Wave 2, off a Wave 1. Go long on a BLUE Candle. Go Short on a RED Candle. Trade may have already been entered prior to Holy Grail since it will have occurred after market enters a Support/Resistance zone and reverses.​
PROFIT TARGET:
All Holy Grail entries should use “Typical wave 3 Zone” as the profit target.​
Trade Management:
1. As soon as the trade is entered, place an initial protective stop 1 tick beyond the recent high or low.
2. Follow time stop.
3. Use the projected profit targets when the STF is weak.
4. Swap to the ATRStop when the STF is strong i.e. has exceeded its Strength Band. As ATRstop give more room for price.
5. If you get a volume spike at any important levels (DPs or other wpt targets) move stop close to bar low/high.​

Wave 5 Setup:
Market creates a clear Wave 5 anywhere during the trading day. Prefer seeing TWO VSA spikes prior to entering a Wave 5. Second spike should be the reversal candle. Go short on a RED bar. GO Long on a BLUE bar.​
PROFIT TARGET:
All Wave 5 trades should use the Decision Point zone created by the previous Wave 4 Swing High/Low.​
Trade Management:
1. As soon as the trade is entered, place an initial protective stop 1 tick beyond the recent high or low.
2. Follow time stop.
3. Use the projected profit targets when the STF is weak.
4. Swap to the ATRStop when the STF is strong i.e. has exceeded its Strength Band. As ATRstop give more room for price.
5. If you get a volume spike at any important levels (DPs or other wpt targets) move stop close to bar low/high.​

PS: All trades taken are Intraday.
 
#4
Wednesday, June 10, 2015

The First Day

Well today was the First day of trading after a prolonged gap of a year and a half due to other priorities(graduation).
Health is not in good shape and was not able to focus as expected. Due to this there was a delay in placing the EURINR buy order(due to prolonged gap, I have lost the touch. But will get back to normal with passing days.) as shown in the chart and hence did not get the fill. As this was the only Trade Setup today, no more orders were placed. This itself tells how important order execution is when it comes to day trading, especially when trading small TF.

After the buy signal which came at around 10:50, other hour and a half was spent in correcting the issue with my datafeed. There were no trade setups for the day. The rest of the time was spent watching Mark Douglas's series on Trading Psychology.


PS: Did not worked out early in the morning due to health issues and skipped mental prep exercise as I was late to setup my workstation and pre market analysis.


Trade Setups today:




The trend on larger TF was clearly Up. So was looking for long setups in EURINR




As the trend was up, this was the perfect trade setup to take but missed it due to confusion arised due to faulty datafeed and hence missed the entry point. Was also slow in placing the order and was not focused.
 
#5
Execution as per the Plan

Now this is what I call a good start of day! Woke up on time and was feeling much better then yesterday. Did not work out though as not fully recovered from illness. Mental prep-checked, pre analysis-checked.

It's 9:20am as I am writing this, waiting for trade setups. Trend on USDINR seems to be down but yet to receive confirmation. Trend on EURINR is clearly down. Received confirmation on USDINR trend. It's clearly down now.
So will be looking for short setups and filter any long once. Time to wait for opportunity. In mean will bidding on some projects and reading some articles etc while waiting for trade signals.

Larger TF trend on USDINR has been changed to long. So will look for long setups in USDINR. EURINR trend is still down.

Later in the day 2 appropriated trade setups were triggered and took both of them. They are explained below. The main point to note that I was executing them as per plan without second guessing and with no emotions, mechanically.




The Trend on 15 TF EURINR was clearly down. Thus was looking for short trades.



As per trading plan entered with 2R risk and was scaling out with passing time. Was eventually stopped out.
Shorted 16 lots. Covered 4 lots at 1st green arrow @72.3625.
Next 4 lot were covered at 2nd green arrow @72.3894.
Stopped out on remaining 8 lots.




Trend was up initially and price had reached the opposing DP level. So was looking for short trade as the probability of reversal was high.



As per the plan took this DP sell signal right at 15min DP level.
Entered with 2R risk and shorted 44 lots as per the plan. Strategy was to scale out with time if price does not move in expected direction but was stopped out quickly as SL triggered.

The funny thing is in an attempt to scale out, placed and market buy order for 11 lot. Everything happened so quickly and it was beyond my control. Cannot log this as trading error as it was mere coincidence. Though covered those extra 11 lots at same price but it added to commissions.


Overall, executed the trades as per trading plan.
 
#6
Friday, June 12, 2015

Mentally Challenging Day

It was a blissful start to a day as it was raining this morning. First rains of this season. Woke up a little bit late as I was working on a client's project last night. Also have almost recovered from illness and will start with my workouts from tomorrow.

Mental-prep-checked, pre market analysis-checked.

Mood check- Calm, Assertive and Confident.

Trades: Total trades=5, 3 in EURINR and 2 in USDINR.

Trade 1: EURINR 3 min.


Market took the support at the DP level and hence it was possible trend reversal to up trend. So was looking for buy setups in EURINR.


There was this HolyGrail TS1 buy setup. Executed as per the plan, though I should be more aggressive in scaling out to decrease the risk to 1R ie Rs.500.
Bought 36 lots @72.0775.
Scaled out 9 lots @72.0700.
Did not get the chance to scale out remaining 9 lot as I was stopped out and remaining 27 lots were sold @72.0475

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Trade 2: EURINR 3 min.


Still the trend was up.


Bought 25 @72.0625.
SL hit. Sold 25 @72.0225.
Note: Does not match chart because the OLHC values were changed on refreshing data and hence position sizing.

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Trade 3: EURINR 3 min.


Trend on 15TF reversed and so took this short trade as per the plan.
Sold 14 lots @ 71.7975.
Scaled out 3 lots initially @71.8300 and remaining 4 lots were scaled out @71.8400.
Was stopped out eventually and hence 7 lots were bought @71.8625.

I was experiencing a little bit of fear of losing because both the trades initially were stopped out, but caught myself on that and executed without any emotions then on.
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Trade 4: USDINR 5 min.


Trend on 15TF was clearly up. So was looking for buy setups.


Bought 50 lots @ 64.2575.
Scaled out 12 lot @64.2425. Did not get chance to scale out another 13 lots as SL was hit and so 38 lots were sold @64.2375

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Trade 5: USDINR 3 min.



Bought 50 lots @ 64.2475
Scaled out 12 lots @64.2450 and 13 lots @64.2400 respectively.
Was eventually stopped out and 25 lots were sold @ 64.2300
 
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#7
Week 1: June 10-12 2105

Total Trades: 8
Missed Trades: 1
Winning Trades: 0
Losing Trades: 7

Week started with a trade which was missed due to delay in placing order.

The next day i.e. Thursday was good with regards to order execution. Was focused and executing the orders according to the plan. There were two trades on that day. In first trade was able to scale out according to the plan. In second trade was stopped out and did not get the time to scale out. I need to be more aggressive with scaling out and minimizing my risk.

Friday was a mentally challenging day. There were total of 5 trades taken, 3 in EURINR and 2 in USDINR (such days are rare but they do show up.). All trades were executed as per the plan. There was an error in placing SL trigger price( due to miscalculation) in first trade.

Common trail to notice is that I am not as aggressive as I should be in scaling out, thus increasing my risk. This I think is because of the greed involved. The good thing is I have caught myself on this issue and time to work on it.
 
#8
Sunday, June 21, 2015

The Fix

On digging deep into my thoughts when I place trades and with the help of notes in my journal, I have reached to the conclusion that I was not fully comfortable with the amount I was risking per trade which somehow prevented me from scaling out quickly, as deep within I was hoping that the trade will work.

It's like handing a 10 year old a responsibility far more then what he can handle. I was not mentally able to handle the amount I was risking per trade. The solution to this is to scale down my position sizing by reducing my risk per trade. Start by risking very small amount until I am very much comfortable with the amount I am risking and executing trades without any conviction about the outcome. When I will achieve this, it means I am fully accepting the risk per trade.

To achieve this, the plan is to start by risking only 0.5% of capital i.e Rs.250 max per trade over the next 25 trades that I take. No matter what, I have to take the next 25 trades that my system triggers. I don't care how many of them are going to be winners, I know that If none of them is a winner I will just lose around 7K (giving the room for errors) which I am completely comfortable losing.

The next step is to analyze those 25 trades and see if I was completely comfortable with the amount I was risking per trade and was executing without any conviction. If so, I may increase my % risk and repeat the above procedure i.e taking the next 25 trades with higher risk level. And if I find any conflicting beliefs or I am not totally able to accept the risk amount and trade comfortable, I have to reduce my % risk even further and repeat the procedure. This way I will be able to find the exact amount I am comfortable risking per trade.
 
#9
Morning workout - checked.
Mental prep - checked.
Pre market analysis - checked.
Mood check - Refreshing, calm and confident.

New plan statistics:
Capital: Rs. 50,000
Max Risk per trade - 0.5% i.e. Rs.250
Sample set -25 trades.
Total capital at Risk: Rs.7,000(considering the room for errors.)


Trade 1: DP of wave 5.
The trade was executed perfectly as per the plan. No errors in scaling out.
Bought 7 lots @63.5675
1st scale out 2 lots @63.5575.
2nd scale out 2 lots @63.5550
Remaining 3 lots were hold until stopped out @63.5400



R= -0.61
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Trade 2: DP of wave 5.
Same setup as in the 1st trade which was stopped out. Executed as per the plan. Scaled out without any hesitation.
Bought 11 lots @63.5375
1st scale out 3 lots @63.5300
2nd scale out 3 lots @63.5350
Rest 5 lots were hold and sold at target @ 63.5925



R= 0.99
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Trade 3: DP of wave 5.
Executed perfectly and scaled out as per the plan.
There was an error in placing the short order. Sold at market price instead of selling at limit price so got a fill @72.4025.
Shorted 6 lot @ 72.4025
1st scale out 2 lots @72.4300.
2nd scale out 1 lots @72.4300
Remaining 3 lots were hold until stopped out @72.4450



R= -0.82
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Trade 4: TS1 buy setup.
The trend was up in 15TF as we can see in 15 min chart.
The trade was executed perfectly as per the plan. No errors in scaling out.
Bought 14 lots @63.5875(got a good fill)
1st scale out 3 lots @63.5900.
2nd scale out 4 lots @63.5900
Remaining 7 lots were hold until stopped out @63.5775





R= -0.38
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Trade 5:TS2 on 5TF.
The trend was up on 15TF.
Bought 14 lots @63.5725
1st scale out 3 lots @63.5675
2nd scale out 4 lots @63.5675
Rest 7 lots were hold and sold at target @ 63.6250



R = 2.35
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Conclusion:
Total Trades:5
Winning Trades:2
Losing Trades: 3
 
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#10
Tuesday, June 23, 2015

Morning workout - checked.
Mental prep - checked.
Pre market analysis - checked.
Mood check - Refreshing, calm and confident.


Trade 1: EURINR 3min TS2 sell. This was the trade setup which was supposed to be avoided as per the rules as there were no consecutive closes below 15TF DP. So the trend was still up.



Shorted 10 lots @71.7225
1st scale out 2 lots @71.7300
2nd scale out lots @71.7400
Remaining 5 lots were hold until stopped out @71.7475



R= -0.54
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Trade 2: USDINR 5min TS3 buy
The trend as per 15TF was clearly up and hence was looking for opportunity to get long.



Executed as per the plan. No errors in execution.

Bought 20 lots @63.6475
1st scale out 5 lots @63.6450
2nd scale out 5 lots @63.6475
Remaining 10 lots were hold until stopped out @63.6350



R= -0.69
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Trade 3: EURINR 3min TS3 sell.

The trend was clearly down on 15TF as it had breached the DP level. So was just looking for shorting opportunity.



Executed as per the plan.
Shorted 9 lot @ 71.5800
Did not get a chance to scale out my position as the price never retraced back beyond my entry level.
Bought 9 lots at the target @71.4800



R= 3.64
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Trade 4: EURINR 5min DP of wave 5 buy.
Though the trend was down, got a DP buy setup of the wave 5 which is considered as trend termination. So took this Buy setup.

Executed as per the plan but did not get the chance to scale out as my SL was taken quickly. Now this is something beyond my control.

Bought 6 lots @71.4725
Stopped out and 6 lots were covered @71.4350



R= -0.94
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Total Trades: 4
Winning Trades: 1
Losing Trades: 3