Is it Love All?

I took the day off and went to Wimbledon to watch the tennis so nothing to post. Sad to see Federer got wiped out. Czech Mate. Looks like I didn't miss anything on the trading front. Posting this from Wimbledon wirelessly.

Census jobs boost economy

The PG's Elwin Green brings us the story of Mike Jones, a South Fayette resident who's also a microcosm of a Census labor force unsure of what's next. The decennial US Census also gives a boost to unemployment figures -- and the gain was especially needed this past year. But what happens after everyone's counted?


By Elwin Green
Pittsburgh Post-Gazette
June 29, 2010

For Mike Jones of South Fayette the 2010 Census has been more than a decennial ritual conducted by the federal government. It has been a much-needed break from a spell of unemployment.

Mr. Jones, 27, was let go from his job as municipal and state government reporter for the Washington Observer-Reporter a year ago. He began working in March, and still works, with the Beaver Falls office of the Census Bureau as a group quarters enumerator, tallying residents of hospitals, group homes and the like.

In so doing, he joined an army of temporary workers that signed on with the bureau in a hiring blitz that added 48,000 jobs to the nation's economy in March, 66,000 in April and 411,000 in May -- more than 95 percent of all jobs added that month, according to the Bureau of Labor Statistics.

Now those jobs have begun to disappear.

Read more about my census job...

Another Day, Another Dollar and Another Euro

The ES was sold off in Asia overnight. There was not much to do except a bit of scalping in the morning London session.

The ES RTH session began with a gap trade that failed.

I found support at 1054.00 and bought 2 ticks above it hoping for a decent move towards yesterdays close. The action was terrible and looking inside the bar with MarketDelta got me out with 1 point profit.

Trade 2 was a sell of the broken support.

Trade 3 was a sell back towards the 33EMA with only half size with the other half for sale right at the 33EMA. I was helped out with the Consumer Confidence number which blew through my 2 targets giving me a nice profit although only on half size.

All the prep for the training has made me sharper I think. Although I'm trading fewer hours I've been consistently green and well focused while I'm trading.

I spent time cross-examining Kiki to ask what worked for her in her training and what was a waste of time. I used the feedback to plan the training and am feeling very good about what I will be teaching and how I'm going to teach it.

I've also decided to do the post webinar support by Skype with the attendee being able to explain their questions using the desktop sharing facility in Skype. More labour intensive for me but a lot better for the pupil. I'm fitting the one on ones around my trading in 3 different time brackets each day so that I can accommodate each time zone as much as I can. There will be people from all sides of the globe from Australia, Asia, Europe and the U.S. They look like a great bunch and I'm really relishing meeting them all online.

Remembering a proud Mountaineer

The news about Sen. Robert C. Byrd's death early Monday morning quickly spread out of West Virginia and into the main stream media. But it was another proud West Virginian who died Monday that meant more to me personally than losing the longest serving senator in United States history.

Bob Kelly, the managing editor of the Charleston (W.Va.) Daily Mail, died yesterday while rehabilitating from a brief illness in his hometown of Parkersburg, W.Va.

BK -- as most of us in the Daily Mail newsroom called him -- was more than just a boss with an ornery personality; he was a mentor who made me a better reporter and writer. That doesn't mean it was ever easy with Bob. He would poke and prod and force you to ask the next tough question and/or rewrite your copy to adequately immerse readers in the story. I used to hate when my phone rang on deadline because I always knew it was him sitting in his office and spying on my story moments after I tapped it onto the computer screen.

"Heeeeeey, Miiiiiike," he would say in his slow West Virginia drawl. "Did you ask (insert random name here) about (insert random question here)?"

"Well, no, Bob," I usually stuttered in response. "I was gonna..."

"Well, why don't you do that, OK?" he demanded.

"But, Bob..." I started again.

CLICK!

And that was that. If I still didn't do the job right, he would scold me that I could do better. "Details, Mike," he would often say. "Details." But damn if he wasn't right every time. In the end, the story would be better because of the followup calls he would push me to make and the revisions I would begrudgingly insert. Those journalistic virtues have stuck with me ever since.

That was the way it went with the entire Daily Mail crew. From the editor-in-chief who hired me (Nanya Friend) to my immediate editor who offered both a carrot and a stick with his supervision (Brad McElhinny) I would gladly have run through a brick wall for every one of them.

But BK just pestered us to do better. Although his ornery personality drove us nuts, he also made us laugh with his sometimes bizarre rituals. After suffering from leg problems in 2005, he walked around the newsroom with a fish slipper on one foot to soothe the pain. Other times, he offered me encouragement when I faced difficult problems.

Less than a year on the job, I wrote a story about a local motorcycle builder who killed his wife and himself in front of their two children. I felt sick after receiving several nasty e-mails and phone calls about my story. But there was Bob Kelly to crack a lighthearted joke to pick up me and my coworkers from a sad situation. He added perspective to the ordeal that helped me return to work the next day.

He was a great newsman.

In the end, the media will pay more attention to Sen. Byrd's death than to the passing of BK. But the most influential West Virginian I have ever known is Bob Kelly. My thoughts are with Bob's family and the Daily Mail staff.

"It's Amazing......."

Training: Attendees, you should have received an email from me regarding video and sound check.

The dogma is that 90% of traders lose. I'm not sure what that exactly means. Whether at any one time 90% of traders are losing or whether 90% of people that attempt to become CP get blown away and that the other 10% are added to an ever growing pool of CP traders.

But whatever the exact definition is, a huge percentage of new people trying to become CP fail. I've seen it, I've heard it and it's a sad fact. There is an ever increasing pool of people who take the other side of my and other CP traders. It has to be that way because it's a zero sum game. It needs people to bring in new money otherwise there would be none to earn.

I remember brokers in the U.S. who I knew well using the old soya bean expression about clients: old crop and new crop. The old crop were the clients who had been around for almost 6 months and who were just about out of money and the new crop who were the newest bunch of clients that the brokers had found who were still cash rich, but sadly would be "harvested" in the coming months.

One of the readers, Dave, in a comment to Friday's post thought "it was amazing" that I was trading well. It is amazing to the people who can't trade CP because it seems an unattainable goal.

Let me say it clearly AGAIN.

Trading can be learned. But it has to be learned in the right way. This blog has the information on how to do it. I have by now probably over 50 emails from people who I do not know but who have told me they achieved CP by reading the blog and following the road map they have found here. About 50 people who did all the hard work and reached their first goal: Consistent Profitability.

This stuff works if you follow it with the right mental attitude. No short cuts. No over trading.

The people who have taken the training have bought a shortening of their learning curve as it will reduce the time the need to get to CP. We are just a couple of weeks away from starting. I'll be blogging about how it's going and I'll also try and get some of the attendees to be guest bloggers and tell you all how the training is going.

Today's trades started with a gap type trade which extended right through the VA. Nice stuff and easy to see. Didn't need much thinking as there was plenty to lean on.

Trading Boundaries

As the time for the beginning of our training effort gets closer, I'm finalizing my notes and lists of what we are going to cover.

One of the topics will be talking about is knowing where you are in the market.

In sports, there is a football pitch or field with lines that sets the limits of play. In tennis we have a court with a net and lines setting out the field of play. Everyone participating knows where they are. They can see what they are and where they have to go to win.

I look at my charts in a similar way.

I define my field with the keltners. When price is outside the keltners I am looking for a trade to go in the opposite direction because that is the field of my play. I divide the field into upper and lower with the 33EMA. I use the Profile in a similar way. There is the VAH and VAL, both previous day and developing. They too are boundaries and exceeding them leads me, all things being equal, to looking for a trade going back to value.

This simplistic look at the charts is the first basis for learning to trade. We then start building on this and look at order flow when we get to those important areas. Not complicated but important to define where you want to do your biz.

Today's trades started from the short side until the Profile balance needed a rally up to the VAH. Strategy from now will be to sell VAH.

Getting it on

I have written about how I qualify the market at the close of every range bar. I have also spoken about how I anticipate where the bar will close so I can get my order in on a stop.

This is process has a dual benefit.

Firstly, it keeps you on top of exactly where you are in the auction process as you have to go through your mental check list every bar. This keeps me focused and my mind in the game.

Secondly, it makes it harder to miss a trade. If I see the start of a new range bar, I can calculate where that range bar will end. If I take the best case scenario and it closes in a position that triggers a trade, I'll put my order into the DOM on a Stop Limit basis so that the trade gets triggered. Once every so often, The range bar might reverse and the new bar starts at the wrong end of the my anticipated close. But, as I am using the best trade location, I can mostly scratch the trade or exit for a small loss. The benefits of not missing the trade or being ahead of the queue far outway,for me, the risk of being triggered in a trade wrongly.

If the idea appeals, back test it against trades you entered and see if you would have gotten a better price and have at look at the trades you missed because you were too slow.

This is all part of context and envisioning. It makes a huge difference to my trading and it will to yours.

Today's trades were a lot of work, not difficult but a lot of trades. VAL of yesterday held the market after a weak session during the London morning.

Trade 5 was an averaging of trade 4 and I exited trade 4 at break even plus a tick.

The wasted year

Well, this has been a massive waste of time.

It was a year ago this morning that I strolled into the O-R newsroom and took a seat at my desk to begin my last real workday. I spent an hour working the phones trying to get some info on a local bull riding arena that would be opening in the coming weeks. Then I received an instant message that fellow reporter Amanda Gillooly had been let go. About a half-hour later, the "editor" asked to see me.

"What the (bleep)!?" I shouted in my head.

I explained the rest of the story on this blog a year ago, but I still chuckle when thinking about the "editor" and owner asking me if I wanted to finish my workday. Hell no! Instead, I asked for a box to pack my stuff. Then I greeted several of my coworkers in the newsroom and said my goodbyes. I found it ironic that a couple of them were crying and I was not. They had a job, and I did not.

I thought it would be easy to find a new job. I have the education, experience and work ethic that a new employer would cherish. Damn, if I wasn't mistaken. From blogging to freelancing to campaigning to enumerating, it's been the most bizarre 365 days of my life.

And now we begin Year 2 in the unemployment line with little hope of finding sustainable work. Some might say things will turn around. We shall see. But there's really nothing else to do except keep blogging and plugging away.

So I present to you Vol. 2 of The Bread Line Blog

Risk Tolerance, Position Sizing and Scaling

I get a lot of emails about stop losses. My standard reply is that I do not exit on stops although I ALWAYS have a drop dead stop in the market far away from my position. I tell you all, that I let the market tell me when to get out.

What we have not discussed in depth is the concepts of risk management, position sizing and scaling in. These concepts are harder to discuss in writing as I am anxious to be clearly understood.

There are some basic concepts I adhere to. I will not risk more than a fixed percentage of my account on any one trade. Traders find it hard to adjust size to their stops in the heat of battle. Using range bars makes it easier because my drop dead stop is a certain number of range bars. This way, I can calculate my risk very easily and quickly.

Traders typically risk a fixed percentage that changes with their account size, adjusting daily, weekly, monthly or a different number in accordance with their trading plan. This process keeps risk constant and lets position size grow with success.

I also introduced my concept of Doubling Down in a recent post here where I spoke about averaging a trade that has gone against me without significantly increasing my risk.

This tool can be an important arsenal in your toolbox and increase profitability significantly by reducing losses. It should be used very intelligently and ONLY when the original concept for the trade is still in place OR when it is CLEAR that the market will move back in your direction albeit not to the original target.

That post mentioned above has the criteria for Doubling Down entry placement.

Today's trades were fun. The first trade was an early entry towards the gap. The area below was low value and the momentum carried price down until it found support just above the POC of 11 June. The context is everything. I have been beating the context drum since I started the blog last year and I'm glad to see that lots of people have noticed and are now spreading its importance in their own blogs.

The squeaky wheel...

If only I knew a year ago. If only I knew that all I needed was for my mommy to call Tom Northrop at the Observer-Reporter and demand that I keep my reporting job. If only I knew that whining and moaning gets you exactly what you want in America.

That's what happened with the breadlining Pittsburgh piergoi just days after the Pirates fired him for insubordination. Rather than taking his punishment like a man, his "helicopter mother" swooped in and saved the day. She whined to the Post-Gazette, prompting a dismal media buzz that forced the Pirates to rehire the 24-year-old. The baseball club now claims the disparaging comments about the team on his Facebook site were not grounds to be fired, but I suspect that the bad publicity caused the quick turnaround.

If only I knew a year ago.

Although I still doubt the initial termination is news, I most certainly think the rehiring is newsworthy. It shows that hard work means very little nowadays as long as you stomp your feet until you get your way. It shows that you can trash your employer (the people who sign your paychecks) and get away with it as long as you're a cute and lovable pierogi.

So maybe that's the answer. Maybe I've been looking at the wrong career all along. I performed as The Wild Thing several years ago while interning with Washington County's minor league baseball team. Maybe next year I can find a teflon job as Sauerkraut Saul.

My Trading Plan

I love the question: "How do you eat an elephant?"  and the answer: "One bite at a time."

There are lots of people out there promoting trading systems that rely on one winning trade making up for lots of losing trades. It just doesn't work for me and for anyone I know. High win rate and lots of smaller profits is what makes me money. A ten point buck trade (see earlier posts) doesn't come along two or three times a day or even every day. Lots of 2 point profits (ES) come along 5, 6 and more times a day.

I take my position size and divide into bites that I scale out of as I hit logical exit points. These can be all sorts of things including hi and lo volume, POC VAH, VAL and so on. I am also always ready to bail the whole position if momentum has run out of gas with the idea of re-entry if its appropriate.

This form of money management fits me, and many people I have traded with, both financially and psychologically. Taking profits feels good. Letting profits run while the move is in place feels good. Doing both is ideal.

When we got past the trading "setups" with Kiki, she spent time going over charts to satisfy herself what money management made sense. Its something she had to do for herself to KNOW and BELIEVE. Once you have done all the back testing and SIM and have confidence in what you are doing, you can get to CP. If you don't do that work, I believe that CP will remain elusive.

Today's trades in ES RTH started with a sale against the VAL of the split Profile. I was tempted to do another split as there was a double print half way up but it would not have made much of a difference in this trade. Context rules. Trading without it is like Luke Skywalker trying to use his light saber with out the Force being with him. After that it was a matter of selling pullbacks.

Not even fake news

By now, you've probably read about the heartbreaking tale of a Pittsburgh pierogi runner who lost his $25 per race job during this savage recession. The poor 24-year-old kid (who still lives at home) just wanted to run the pierogi races at Pirates games. What yinzer wouldn't love that gig? Unfortunately, this kid ripped the team on his Facebook page after it announced contract extensions for the GM and field manager. Then he was surprised when management canned him the next day for insubordination.

Somehow this turned into a front page story in the Post-Gazette when his mommy called the media to complain. What the heck compelled the P-G to run this "story" above the fold? This isn't news. It's not even fake news.

First of all, the kid made $25 per game. That's barely a part-time job. I'm sure he can make more money flipping burgers at a fast food joint. Second, not many companies take kindly to employees posting nasty comments on social networking sites. Anyone who thinks otherwise is sadly mistaken. Plus, this guy was suspended by the Pirates earlier due to a scheduling gaffe.

But my main complaint is with the P-G. When a helicopter mom calls you complaining that her son lost his barely part-time job for ripping the Pirates, that doesn't make it news. The fact that the P-G made this a story -- let alone a front page story -- is insulting for those of us who have lost real jobs for doing absolutely nothing wrong.

Inside out versus Outside in Trades

Training Update: I have sent an email to all confirmed attendees. Please check your spam folder if you can't see it and if not received, please email me.

There are some traders who only trade Outside In and others who only trade Inside Out.

Firstly, for those not familiar with my terms, let me give a high level definition.

Outside in trades are those where the trader is trying to catch the turning points in the market, the troughs and the peaks.These trades are lower win rate trades as you are anticipating a change. However, the profit per winning trade is relatively high.

Inside out trades are trades where the trader is joining a move that is under way. They are inside out because by the time the trader realises the move is under way, you are already inside the move. These trades are higher win rate trades but less profitable per trade as you have missed part of the move.

Specialising in one or the other can be both good and bad. Good because you get really good at something when you do it over and over again, and bad because you miss a lot of great trades.

Many years ago, I went through a phase when I used to have a hard time with long positions. I was always looking for a short, even in an an uptrend. I guess it was my Pavlovian response to the instant gratification of a short win against the slower gains from a long. I overcame this disability by forcing myself to only trade from the long side for a while.

As a professional trader, I realised I needed a full tool box to deal with whatever the market threw at me. I saw that unless I could trade every which way and loose, I would not recognise what was going on and be able to deal with it.

In teaching Kiki to trade, I took a holistic approach. We found, firstly, one setup that she could trade both from the long and the short side and she became CP with that. We then added a second setup and did the same. The first one was an inside out, the second an Outside in. We then added to this basis.

I'm confident that she is now a trader.

Without taking anything away from Kiki and the enormous amount of time and work she put into it, I am convinced that the way that we went about the process of learning had a lot to do with her emergence as a trader. This is what we will replicate in the training.

Today's trades in RTH were around the gap trade. Trade #1 was inside out, trade #2 outside in. I have increased size and am trading less. That's all for today, I'm watching the Wimbledon tennis. Federer currently down 2 sets and losing the 3rd, but the fat lady hasn't sung yet.

Quad Day

Quadruple witching day. Wow, I thought it couldn't get better than triple witching. Lot's of stuff expiring today. Everyone has an agenda of where the market should close. My vision was a new high which happened. The day's range, at least while I was trading, wasn't brilliant. I'm happy I banked my ten point buck (was it yesterday?). The days flow one into another.

I both love and hate the week-ends. Love them because I have time to do other things - both private and research. And hate it because the markets are closed.

Trading is an occupation that can provide you with a nice life but it's an occupation that, I think, requires you to have a passion about it. We love the money, we love not having a boss, and we love the high of seeing green at the end of the day. But most of us also love the actual trading. The working out of what is going on. The Sherlock Holmes or Poirot of it. The Columbo or Perry Mason of it. That's the high and they pay us for it.

In line with my vision today, I used the EMAs as support and just jobbed the market from the long side. It was not very interesting as it was slow but hey, there are quite a few days like that. Volume was not a lot of help today. I think we are heading for the Fib target of 1120.00 or so.

A shameful hiring policy

I already knew that every time I submitted a resume to a company, it would be competing against numerous other worthy candidates. What I didn't know (although suspected) was that I also was competing against myself.

A new CNN report shows that some companies are immediately discarding resumes from unemployed applicants. If it's true, that is a shameful hiring policy. How dare these companies turn away from willing applicants who have the audacity to seek a job. How dare they force us to trudge through the unemployment line, accepting welfare checks when all we want is a decent-paying job with a side of health care benefits.

"Making that kind of automatic cut is senseless; you could be missing out on the best person of all," said Judy Conti, a lobbyist for the National Employment Law Project. "There are millions of people who are unemployed through no fault of their own. If an employer feels that the best qualified are the ones already working, they have no appreciation of the crisis we're in right now."

I couldn't agree more. It makes you wonder how many applications were immediately chucked in the trash because the resumes don't include a current job. I seemed to have solved that problem by freelancing for the Tribune-Review and working as a census enumerator. However, I'm beginning to wonder if that U.S. Census Bureau position is a red flag that I'm without a full-time job.

Some think we should boycott the companies that use this practice, but who knows which employers are doing it? Most of us send our resumes into the tubes of internet, never to be heard from again. It's becoming increasingly clear that the cards are stacked against the unemployed. Unfortunately, it's worse than I previously thought.

Another Day at the Office

Today's ES trades were very straight forward.

It started with the Gap Trade and then just kept going. The 10 Point Buck was hit in the first hour with the Initial Balance (IB) almost mirroring yesterday's RTH Profile. There was ample opportunity to re-sell the scale outs. Trade #1 was the initial Gap Trade entry and Trades #2 and #3 allowed me to re-sell what I had scaled out of and return my position to its original size.

After we got to the low of yesterday's Profile, there was the single print to get through and then the POC below. The single print held the downward spiral.

Market Profile Support and Resistance

I'm still long ES as I write this post even though there was a lone single print at the bottom of the Profile (at least with my data stream).

My vision today was a take out yesterday's high and probably a further distribution up. Part of the clue was the several distributions of yesterday separated conveniently by single prints as can be seen in the chart below.

It was much easier that price was below yesterday's close and that the Gap Trade was on. I got myself long around the 1103.50 area and I was out of 2/3rds of my position by the time we got to 1 tick below yesterday's close at 1109.00. What I had scaled out before the single F print at the bottom of the Profile, I bought back at 1103.25 on the way down as I was confident in what I was seeing with order flow. I scaled out a second time on the way up to 1109.00. My next scale points were at 2 handle intervals and I am long a small piece which I will sell at MOC or at break even plus a tick. I had and still have a small risk that the Profile is a neutral day and price will pull back into the middle but I have a free trade now (all of them were break even stop protected by the second rally over 1107.25) so I've stopped work and let the computer manage the rest of the trade.

Help wanted

Constituents loves to complain about their elected leaders and government. In fact, it's probably the thing we do best. So a couple local state representatives decided to launch an online "suggestion box" to channel the frustrations of Pennsylvania citizens.

Jesse White and Matt Smith, both Democratic representatives from Western Pennsylvania, uploaded the website, YourPaBudget.com, that asks for budgetary suggestions and posts them on the homepage for viewers to rate. Who knows if any of our ideas will be enacted in this year's budget, but I applaud White and Smith for giving us a platform to express our opinions. Hopefully they are reading them and taking notes on what their constituents want.

The site is easy to use and the suggestions appear online in just a few minutes. It's very interesting to read what others are thinking.

As for the most popular opinion? Reduce the size of the General Assembly.

To Trade or Not to Trade. That is the Question!

Paraphrasing Shakespeare may be trite but it's a very important part of my trading plan.

There are different types of day-traders. Some who only trade very selective setups, and others who trade all day and grind it out, adapting themselves to the volatility and trend of the market throughout their session.

This is a problem if you don't know which one you are.

Defining your business is a critical part of your trading plan as so many things flow from that. Part of the decision making process I go though as I evolve - and I am still evolving - is to look at myself and what I am good at and what I am not.

The first step is to decide your own business hours. This choice may make a lot of the decisions for you. Part of the process is to recognise the different phases the market goes through during the trading day, looking at your performance, likes and dislikes, stress level and so on.

I have had to change my trading plan as I started preparing for the training I am giving in July as well as preparing for the post training support I have undertaken to provide. The consequence of all of this is that I cannot trade the hours I was doing and something had to change.

The change I settled on was to mainly trade the opening of Eurex and then the opening of RTH of the ES. I looked at my highest win rate trades and increased my size so my earnings for the 3 or 4 hours of work would be as much as a previous normal 10 hour day.

Strange thing is that I really like it and will probably continue with these hours after the training and support period is over.

Gather your armies!

Democracy is a wonderful mechanism to run our government. It allows "We The People" to choose our elected leaders, and challenge them at the ballot box if we disagree. But some of those People are just plain stupid.

Case in point: Rick Barber, a tea party candidate running for Congress in Alabama. His internet ad entitled "Gather Your Armies" is becoming a viral sensation. It is set in a dark tavern as he explains modern-day tax policies to George Washington, Sam Adams and a fellow who appears to be Ben Franklin. It opens with Barber calling for Congress to impeach President Obama (too bad for Republicans that the president has never been caught with an intern in the Oval Office). By the end, Barber is whipped into a frenzy and asks the three ghosts if they are with him in opposing this "tyrannical" government.

"Gather your armies," George Washington responds.

Unfortunately, Barber is skewing his history by railing against what he perceives as unfair taxes. It was during George Washington's presidency that the Congress enacted the Whiskey Act excise tax in 1791 as a way to pay for the Revolutionary War debt. Rural western Pennsylvania farmers, who distilled and sold their own whiskey, felt this tax was unfair and rebelled against the Act three years later. A few months after the Whiskey Rebellion in July 1794, President George Washington led 13,000 federal soldiers into Allegheny County and quickly quashed the revolt.

Barber's commercial shows a fictitious Washington hanging out in some dank basement bar and calling for Americans to turn against the federal government. But history tells us that the real George Washington likely would have encouraged the federal government to gather its armies and put down the revolt Barber is suggesting.

Doubling Down

One of the sayings you learn as a new trader is to"never average a loser". This is true for inside out trades but often not true for outside in trades.

I know that this statement will be very controversial but if it's done to particular rules that are part of my trading plan then it's an effective tool.

Outside in trades are trades that are triggered at potential tops and bottoms of swings. That in itself is a "riskier" (read lower win rate) trade. However, these outside in trades, if you get them right, give the greatest trade locations. And sometimes, I enter them too early. When I take these trades, I am buying an oversold and selling an overbought market in my time frame. I am also, in most cases but not always, leaning on some support or resistance area. Sometimes these support and resistance areas are not knife sharp and hence the too early entry.  When that happens and ALL the reasons for having entered the trade is still in place, I double down (average the position) with a view to taking the original position off at its original entry price leaving only a single position in the trade.

The doubling down is taken right in front of the spot where I would stop myself out as wrong. This rule is important as it means that the risk on the additional contracts is very small. It allows me to take advantage of a better trade location, getting my risk back to normal quite quickly. This is not appropriate for most inside out trades as these trades should go in my favour straight away.

This is quite an advanced technique and should not be used until a trader is more experienced and can carry out this operation without requiring extra deodorant.

Today's trades were interesting as usual. Wonderful how no two days are the same, although you can always find something similar you have seen. The gap didn't close in the first couple of hours. It didn't look like it would. I had two small sells then turned it around and bought it for the run up to the POCs of 3rd of June. I then sold it short too early and had to double down and took a small profit out of the trade. It was a coincidence as I had written the topic of the post above before this trade. You can see the trades number 4 and 5 which were sold near the highs of each of those bars.

Setting Initial Daily Profit Targets

I had a guy here a couple of days ago to move one of my internet lines. He saw my wall of screens and of course we started talking about trading.

It turned out that he had started trading currencies and proudly told me that he had made £1,000 on his first trade. Naturally, my next question was (in a kind way), how long had it taken him to lose it. The response was that it happened on the next trade because he had upped his size and had a tighter stop and had gotten stopped out after which, of course, the price went in his direction.

One of the useful things to think about in writing your first trading plan is whether it is a good idea or not for you to have a daily target for profits and limits on losses. Every time you put on a trade, you take on risk. After becoming CP in SIM so you can trade in your sleep gives you an idea of your trading profile. many of us went through the stage of making money in the first part of the day only to give it back in the last part of the day. By making a modest profit target you satisfy your soul that you are CP and after time, the target can be increased and then eliminated.

I have spoken to a number of traders whose dream is to make 4 ES points a day.  Once you get to CP it doesn't look difficult. Do it with a 5 lot and you have earned £1,000 a day.

How do you achieve this. One way is to find a setup that has a high win rate and only trade that one setup. Isolate the trade including context, back test it up the kazoo, learn it in SIM until you can do it blindfolded for at least every day for a month or two, go live with 1 contract. Done!

Gap trade was on again. This could be the trade to make your initial 4+ ES points on. Today it was good for 6+ points. The market was pushed down on the numbers so it was set up very well, far enough from yesterday's close to make it worthwhile and inside yesterday's profile. Then we had more numbers just before 10am in NY and it gave the last pop to close the gap. Jackie Gleeson time - "How sweet it is".

If you are a follower of the blog and have done the necessary work you will find another great high win rate trade that I earn my living from. I can make it anything from 57% to 82% win rate depending on how much I filter it. Of course the surer the trade, the less often it appears and the bigger size I need to trade to earn the same amount per month. Seemingly less risk with the 82% version, but is it?

The Golden Mouse

Congratulations to Scott Beveridge in earning The Golden Mouse award for achieving 100,000 unique page views on his blog. Mr. Beveridge, a local newspaper reporter, just recently passed the 100k mark on Travel with a Beveridge after launching it three years ago. His former newspaper colleagues, Michael Jones and Amanda Gillooly, presented Mr. Beveridge with The Golden Mouse over beers and pizza Tuesday night.

Mr. Beveridge, who earlier in the day doubted the existence of the prestigious Golden Mouse, was too shocked by the appearance of the award to offer any semblance of a speech.

"Oh my God," Mr. Beveridge said, slapping his hand against his forehead as the presenters pulled the award from a brown paper bag.

The plaque, the first in a series by Mr. Jones, a local blogger and novice woodsmith, cost less than $8 and prominently features a gold spray painted computer mouse that hadn't been used in a decade. Mr. Beveridge said he plans to display the award on a wall in his home, although it can also be used as an over-sized beer coaster.

Flo is a machine

We are live with Flo, running her on ES and Euro FX futures (6E). I'll show her in operation during the training and after that, if there is interest and I can find a practical technological solution, I'll give a view to all blog readers who want to see her live.

Lot's of challenges to get to the stage we are at. Broadly speaking, testing over a year of tick data using continuous contracts gave a draw down of less than about $2,200 per contract. The last year or so of the 6E had a theoretical nett profit of around $100k and the emini $30k, both per contract.

Flo is not curve fitted in the normal sense. The parameters that may be considered curve fitting are the targets and the stops but these are pretty generic. We are still working on improving exits and will have a later version on test after the week-end.

We test live with real money on one contract with the exit at a logical first scale area. Nothing fancy. The later versions will have more exit logic as well as scaling out.

The biggest challenge is data and connection speed. We use eSignal data for testing and analysis but the orders go to the brokers. There is a disconnect between the prices on the eSignal feed and the broker. We could run the analysis using the brokers' feed but the feeds are not raw enough - snapshots, amalgamations and such like. At this stage, if it makes money we won't worry a lot but further down the line we may look at hosting our server at the exchange to get purer data and faster connectivity. Looks like I may be in Chicago at the end of October and I'll look into it then.

Our current testing is also doing an analysis between the theoretical results on the eSignal feed and the actual trading results generated with real money. We are running this in parallel. I want to see what percentage of the theoretical profit we actually capture.

That's the story so far. We'll expand the number of markets we trade as soon as we get the next version of Flo tested.

Lot's of you are designing automated trading systems. It's not easy but I am now convinced that Kiki's enthusiasm was warranted. Although I still beat Flo by trading more markets at the same time, she wins in the end.

I started posting about Flo because I have found that many new traders look for hard and fast rules for their trading. They are not really discretionary traders in the true sense and perhaps many of them would be more comfortable, and profitable, with a completely rule based methodology that is executed by a computer so that consistency is met, unless, of course, they switch off the PC.

Today is rollover day in the ES and we have had the usual distortions as the spread traders do their thing rollin', rollin', rollin'. The first trade as ES RTH opened was a sell against the upper tail of yesterday. It overshot a bit into a higher volume congestion of 4 June. I traded it down to the POC of the split distribution of yesterday. I then sold it after a rally that tested the highs. The shape of the Profile clued me in.

Exit, Stage Left, Again

As traders, we control our entries and exits. We go to a lot of trouble to work out how to enter. However, profits and losses are made by exiting in trading. Its not like buying an undervalued piece of property and then selling it for its fair value.

Yet in looking at lots of trading plans, all I see is a stop loss and some generalised profit rules. In writing entry rules, I see detailed minutiae description to the nth degree. Why are exit rules not described in such detail?

It would be easy if our exit was the opposite of our entry. But we have learned by now that nothing in trading is quite so straight forward.

Our exits depend partly upon what type of trader we are and what time frame we trade. A scalper will exit differently than a swing trader although their entries may be quite similar.

Markets do not move in straight lines but are a series of moves and pullbacks until the pullback becomes a reversal. We can get rid of a lot of the noise if we want by using range bars. What needs to be done is deciding how you want to trade these advances in trend and pullbacks. Are after an exit at every peak and an entry at every trough? Or will you let a series of advances and pullbacks continue until a target? These are just two of the choices. Exits can be more complex than entries. Thought and back testing will reveal what is both profitable and fits your emotional profile as a trader.

I will be spending a lot of time on this in the training, helping the attendees finding their exits.

BTW, I just noticed that I had passed the 200 post mark almost 2 weeks ago. It really surprised me. I've enjoyed watching Kiki and lot's of the readers to this blog achieve CP and greater profitability. I'm anything but a humble person much to my Mother's consternation but it really feels good to have made a difference. Thanks for all the feedback, please keep it coming as it motivates me to write the blog.

The Times They Are a-Changin'

Training Update:  The training is full. Anyone who has not signed up or told me their transfer was under way and to whom I was talking to about a place, please email me. I have to limit the number of attendees as otherwise I will not be able to cope with the support I want to give for the 90 days.

We have tested the recording method and it worked very well. Both picture and sound quality was excellent.

Now down to biz.
I get my hair cut on a Saturday morning. It's not only because that's a time when the markets are closed but because on Radio 2 here in London there is a guy that plays music from the '60's. As the first of the Baby Boomers, the 60's was my time and is still my music.

On Saturday as I got into the car to drive to Wimbledon where one of the places that I get my hair cut is, he started playing that iconic song by Dylan. I couldn't help noticing that his description of life related so much to trading and to what is happening now in the world.

If your time to you is worth savin’
Then you better start swimmin’ or you’ll sink like a stone
For the times they are a-changin’

And keep your eyes wide
The chance won’t come again 

For the loser now will be later to win

For he that gets hurt
Will be he who has stalled
There’s a battle outside and it is ragin’
It’ll soon shake your windows and rattle your walls
For the times they are a-changin’

 And don’t criticize
What you can’t understand
Your sons and your daughters
Are beyond your command
Your old road is rapidly agin’

The slow one now
Will later be fast
As the present now
Will later be past
The order is rapidly fadin’
And the first one now will later be last
For the times they are a-changin’

History will look back at these times as a milestone in our modern world. I don't know where we are heading but I do know that there is something major happening. A major shift.

There are many people out there who are dreaming of making 4 ES points per day per contract. In these markets it has been easily doable. Becoming CP in these times is a great opportunity to be setup as a trader for life. Squandering the opportunity would be a shame. Planning how you will achieve CP is as important as your trading plan. Going about it the right way can mean success while just not planning your training is, frankly, a waste of effort.

I get emails every day from people who have found the blog useful and have said it has taken them to CP. I suspect that the way they planned their training had a lot to do with their success.

As a trader, there are only two things you have any control over: when you enter a trade and when you exit. The outcome of these two decisions determines whether you make a profit or a loss.

Interesting trading day. Lower low but the plunge protection ( aka short covering) was in place.

Trolls have their say

It took only a few minutes after The Wall Street Journal published an online story about unemployed census workers when the trolls started coming out to play. They immediately began bashing the three of us featured in the story because we were unfortunate enough to get canned from our professions and have to find alternative jobs. But rather than rage against these anonymous idiots, I chuckled. I mean, they're hilarious!

Bill Trask said: "Oh drat... now these out of work ACORN enthusiasts may have to go out and get a REAL JOB... but wait... they don't have too, Obama will give them more money - (they just have to wait until their census counts are tabulated.)"

Now I'm an ACORN enthusiast? Well, that sounds about right considering my mom's maiden name is ALCORN. And what would you consider to be a "real" job?

Shrini Kulkarni said: "The salaries for the Census workers are paid by the Federal Government which goes on the national deficit. How can this be a good thing for the economy? It seems that this census is just another white elephant Obama wants to showcase in his radically left winged vision of the nanny state."

The Census is Obama's white elephant? Haven't they been counting Americans since our founders wrote the Constitution? And I guess the Bush Administration had nothing to do with the planning during the first eight years of the decade.

David Shellenberger said: The headline has it wrong: ending employment of government workers cannot come fast enough. The funds spent on government employment deprive taxpayers of better use of their own money.

Well, thanks for your vote of confidence, Dave. Nothing like kicking an unemployed man when he's down!

Andy Dulina said: I find it ironic that the people chosen to be interviewed for this article all came from "blue" states. Hey folks, how's that change y'all voted for workin' out for ya??

What would you say if I told you that I live in a "red" congressional district. And if he read the story, he would have noticed that the first interviewee lost his job in January 2008.

Parts Came in...

The sheet of paper the parts are laying on is 8.5x11"
My Welder Sent me this Picture . He still needs to weld the bottom manifold on,
When I ordered this version I did not order the bottom manifold because I had one. alas I was showing the previous version to people and either I left it at FAR, or someone walked off with it.
I've ordered another bottom manifold ring it will be two weeks or so.

The Yips

I was watching a show on TV yesterday called HUMAN TARGET  starring one of the Guys that used to be in Boston Legal and another guy that was in a few episodes of House. He had to fight but for some reason he had some sort of issue and couldn't unleash his inner self and do what had to be done. They looked at the problem from a few different ways and finally decided his problem was that he "had the yips".

I immediately saw the parallels in trading. Something that interferes with us keeping our discipline and sticking to our trading plan. My wife was researching the issue and found this quote on the web, but relating the issue to golf:

In trying to get to the root cause of yipping, we typically find that some past event triggered in a player's mind a sort of mental self-destruct button. For example, you identify a putt that really meant something, a putt you really wanted to make, and missed. And the whole thing gets blown out of all proportion. As the (self-inflicted) mental anguish escalates, the significance attached to that one event affects the way you approach the next putt.

The whole piece can be found at http://www.golftoday.co.uk/proshop/features/getting_over_the_yips.html

It was interesting to note that in both the TV show and in the web article, it was referred to as "the yips".

I have often written about the importance of developing that "muscle memory" in SIM. To me, that has always been the solution to "the yips". I believe that if you take away the financial consequences while you develop the automatic responses to market situations you can put yourself in the right frame of mind to deal with live trading. That is not to say that if you are CP in SIM that you will automatically be CP live, because that is not true. But what is true is that by the time you go live from SIM, if you have become CP in SIM then you have resolved ALL the issues of trading EXCEPT the one relating to risking real money. This leaves you only one issue to work on.

I want to say here that often the issue is that traders move from SIM to live too early. If that is the case then moving back to SIM is the first thing to do. The other issue is that "I have to make money". Putting yourself in this position is almost a guarantee of failure. With electronic trading, it's possible to keep your day job and trading live going in parallel. This is a good thing to do as it takes away that "must make money" mentality.

We are going to address all these issues in the training under the heading of "How to Learn this Stuff". Again, trading is much more than reading about a couple of good setups and opening a brokerage account.

Some Data

I've now flown the simple instrumented HPR 5 times with data recording.
I've learned some things

Flight 1 at FAR Spark fun IMU, GPS and 6DOF Analog devices ADIS16360
GPS did not work at all, Spark fun was noisy, ADIS16360 worked reasonable well

Flight 2 At FAR, shorted battery cable, only goy Spark Fun IMU data.

Flight 3 at Plaster City (Yesterday) OpenPilot 10Hz GPS and ADIS16400 Analog deivces IMU.
GPS lost lock moments abter ignition (10 G or So) ADIS data all looks good.
On board recorder did not work, only have down link telemetry.


Flight 4 at Plaster City (Yesterday) OpenPilot GPS and ADIS16400 Analog deivces IMU.
GPS kept lock till parachute deployment (where the GPS is now pointing at ground).
Take off was only about 6-7G, while the GPS says it kept lock, the altitude data was wrong and did not follow the flight path, onboard data recording worked correctly. (A few minor drop outs, I think the data recording connector is intermittent)
Flight 5 At plaster City Same setup 10-12G launch, GPS lost lock, ADIS16400 data looks good.
Telemetry log only, on-board recorder did not work.


Things I've learned:

• The $125 Spark Fun 9DOF IMU does not like rocket vibration, and the accelerometer saturates on the rocket.
• The $500 ADIS16400 is really pretty good, the data is clean and seems to make sense.
• The low cost 10Hz GPS's are not happy with high acceleration. (To be expected)
• The Max stream 900Mhz Xbee seems to be reliable even with grossly sub optimal antennas.
  

My goal is to develop a low cost system, buying a 5K GPS and 10K IMU are not part of the program. I'm really happy with the analog devices IMU, now to solve the GPS. I have one more
gps to try the new Novatel OemStar, I suspect that it may do better, but it is not available in a form that does not have the COCOM limits. I really do want to develop a vehicle in the next 12 months that will exceed 1K knots and 60K ft at the same time. There is an open GPS project based on the old Novatel SuperStar, alas the super star hardware is not available anymore and the base band chip set used on that receiver is not available. I can buy a Novatel receiver that is unlocked but it would be about 2K. As I've said several times this year, I currently have more rocket time than rocket $, I can continue to do interesting things with my leftover LLC hardware, but it does not match the far end goal. The far end goal is a 100Km 5Kg payload rocket that is reusable and can be reproduced for less than 10K.

In the past few years there have been a number of interesting papers, and even some 100% open projects on building software GPS receivers with just a simple front end. There are also a number of GPS front end chips and module assemblies that will directly feed such a receiver.
In looking at these projects its clear to me that a high dynamic GPS receiver with real time 10Hz updates is still beyond state of the art for realtime software only receivers. I want to do some experiments in this area, so I'm bread boarding a MAX2769 GPS front end chip a small FPGA and a high data rate SD card to record about 60 seconds of GPS front end data. So some time in the next month or so I hope to fly a payload that records GPS front end data and can be post processed with the open source software GPS receivers. If this works I might think about developing a 100% open Tightly integrated GPS/IMU using these peices, with the high rate code and carrier loops in an FPGA. Having the IMU data available at the code and carrier phase tracking level can really help the GPS keep lock. The short version is I'm crazy enough to contemplate building my own GPS receiver as I can't find one that meets both my cost and performance targets.

For anyone that cares the raw data file for flight #2 at plaster city is here: http://www.rasdoc.com/data/

The GPS data is at 10Hz and unmodified, the ADIS16400 is shown in the $AIMU lines.
The data is raw from the ADIS16400,(look at that data sheet) the order is Ratex, Ratey, Ratez, Acel X, Acel Y, Acel Z, Magx, Magy, Magz, extra. (I recorded one too many fields)

This flight was a lower acceleration flight on a rocket with big fins so it made a fairly sharp turn into the wind and the flight path was more parabola than straight up. The parachute deployment was also fairly late and abrupt. Looking at the Magnetic data it looks like the rocket rolled about 5 revolutions during the boost phase.

Monday Could be Opportunity Day

I don't usually do this but I thought a "heads up" might be useful. This is not a recommendation to trade - all the disclaimers apply. Take out your SIMs and see what you can achieve. This post is for educational purposes only.

Monday may be a great opportunity for making better trades more easily in both the ES and the 6E (Euro FX future). The two markets have a number of things in common after Friday's action:

• both are at "new" lows
• both had a trend day down
• both have great support and resistance levels all over the place. I'm not going to be specific because that's not worth anything to you. Finding your own S and R will give you the necessary belief in them. Whether you use the Profile (my first choice) or the range bar chart, if you highlight all the areas where you want to do business and areas where you would not want to open a position, Monday may teach you how well this stuff can be applied in these changing times with the right prep and visioning. 

Whatever timezone you are trading in, by the time you sit down in front of your computer, you will have looked at the news and commentary from Fri/Sat/Sun and have a bullish or bearish bias. Then, sitting down in front of your PC, marking the areas I have spoken about ad nauseum in the blog, you can think of the possibilities. Not only those that fit your bias but those that may happen if you have it all upside down or if the plunge protection society comes in or if the hedge funds decide to push the market to new depths. Have three scenarios: Up, Down and sideways. This way you can deal with whatever comes up.

I wish Great Trading to you all, in SIM of course.

Quoted in The Wall Street Journal

So after 50 weeks of unemployment, here's my 15 minutes of fame. The Wall Street Journal quoted me for a story today in its online edition about the unemployed working for the Census Bureau. My prose was buried in the bottom of the story, but it certainly seemed like the least worrisome out of the three tales. Click on the headline to read the entire story, or check out my section below.

Census jobs end all too soon

By Joe Light and Justin Lahart
The Wall Street Journal
June 4, 2010

Since losing his job as a newspaper reporter last June, South Fayette, Pa., resident Michael Jones, 26, has landed interviews with only three companies and hasn't yet received an offer. Last November, Mr. Jones read an ad for census jobs and took the qualifying test on the Monday after Thanksgiving, earning a perfect score. In early March of this year, he got the call letting him know that he had been hired as an enumerator, at $15.25 an hour.

"If I hadn't gotten that job and my unemployment benefits ran out, I'd have to take drastic measures," Mr. Jones said. "The first day of work, I couldn't wait to drive to training. It had been so long since I had a 9-to-5 workday."

Mr. Jones's census job is scheduled to end in mid-July, depending on how quickly his team finishes its work. If Congress doesn't extend unemployment benefits again, his benefits will run out in mid-August. If that happens, and Mr. Jones still hasn't found a full-time job, he plans to start looking at jobs driving train crews around for a railroad company or working in retail.

Way to go Spacex!!!!!

From the video feed I saw that launch looked perfect.
Way to go spacex!!!!

Very Interesting.....

Training Update - Free Place: The person who is getting the free training has been chosen and has been informed. If you have not heard from me then it was not you.  It was a very hard choice as the criteria was based on the chances of the person succeeding with limited capital. I have an undertaking that they won't start trading live until they have been consistently profitable in SIM for 3 months.

As the choice was so hard and there were others that were a very close second, I'm going to provide 5 other people, who had asked to be considered for free training, with a set of the videos we record and email support if the videos are up to the quality I want. These people will be informed over the weekend.

Back to Biz:

Years ago there was a TV show that gave birth to Goldie Hawn and was a lot of fun. It was called LAUGH IN. There was another character with a German accent, I think, who always said: "very interesting". Just like this market.

"They", or should I say "we" started selling this morning in London when we figured out that whatever the job report said, it would be sold as everyone was long on the anticipation.

The number came out with a whimper and the market tanked. What a coincidence that it was stopped by the VAH of June 1st.  This stuff is not hard if you create a vision of the possibilities so you are ready when a plan comes together, as Hannibal used to say.

RTH opened and I bought 1080.25, scaled out at the low of the tail of the split of 2 June at 1082.25. Then came the ride up the zipper. 1084.25 was a volume congestion which was a logical scale point. Looking for 1089.00 on the balance. I now had a free riskless trade with a stop at break even + 1 tick. Jackie Gleeson said it: "How sweet it is."  Order flow turned around 1085.00 so I bailed but with a view to buy back if the 33EMA held and order flow confirmed.

Well, it worked, a couple of times and then I was finished for the day. My father used to say, "It's not how long you work, but how smart". This stuff can be learned as Kiki has shown. I have another daughter who has had no wish to trade, now taking a little more interest. We'll see, I'm not as sure with her as I was with Kiki as my other daughter's disposition is a bit more high strung.

Another journey to Oz

Another Journey to OZ from Dana Kerkentzes on Vimeo.

By Michael Jones
For the Tribune-Review
June 3, 2010

Dana Kerkentzes of Elizabeth Borough wasn't quite sure what would happen when she focused her video camera on a local children's production troupe for her college senior project.

What Kerkentzes found was an inspiring story that landed her 15-minute documentary, "Another Journey to Oz," in a British film festival.

The recent Westminster College graduate spent last summer following the Petite Players as they prepared an offbeat play of "The Wizard of Oz" at the Grand Theater in Elizabeth. The fact that she grew up just a few minutes away from where the group performed made the film a bit more personal.

"I wondered what these kids did and what it was like," said Kerkentzes, a 2006 graduate of East Allegheny High School. "I thought this would be a great opportunity to tell the story about kids doing something they love."

Kerkentzes, 22, immersed herself into the production and slowly introduced the video camera to the 46 school-aged performers and their parents. She spent months with the group that led to goofy moments during rehearsals.

Read more...

Good luck to spacex.

I'm eagerly awaiting the spacex web-cast to watch the first F9 flight.
I sincerely hope they have a perfect flight.
It is a new rocket on a first flight so a perfect flight is unlikely.
If they have a problem it will most likely be something they could not test on the ground.
If I were to guess my biggest worries would be:

• First stage pogo oscillation, the Saturn V had significant issues with this.
• 2nd Stage ignition in vacuum, the first stage Merlin's have a fair bit of ground side support equipment, so the air start is a differnt beast. (The first hotfire scrub was do to an incorrect valve in GSE) A turbo pumped motor is a complex piece and getting the whole choior singing in tune on the first attempt in vacuum is tricky.

We're All Watching the Same Movie

Earlier today I replied to a comment to yesterday's post.

This stuff is not hard but it does require you train yourself to look at the market -  not indicators, but what the information is that the indicators are telling you.

I wrote:

Guys, all these questions are looking for mechanical answers. We all sit in front of our screens and watch the same movie. We see different things because of the way we have trained ourselves and the things we watch for. I keep saying that I look at a "picture" and make my decisions based on that. The charts I post are the same charts I use so there is no magic in that. It's the WAY I look at what is happening. I'm not looking at indicators, but at what traders are doing. This can be learned but requires a change in attitude to what you have now. When I taught Kiki to trade, it was this concept that we spent time over, not indicators.

You can see from the trades marked on the chart, I traded the gap down - short at 1103.00 against the top of 27 May. I scaled twice and did not wait for the gap to close as there was too much buying. I covered the last piece at 1099.75. I then went long at 1101.50 and exited at 1104.50. My mechanical signal markers also found this exit.

So what do you do now? There was a a nice trade short at 1102.00 still going for a gap close. It broke support nicely so there was a possibility of more than just the gap.

All this was like Tarzan swinging from vine to vine, following what the traders were doing through order flow. This is basic electroniclocal stuff. It's what we did on the floor. Each of the trades gave a nice profit and an hour after the RTH open we could all head for the beach. I know that I stopped trading and went to the park with the dog. You don't need to work long hours if you make a plan and trade the size that meets your requirements for earning. Of course you need the capital to do that but it's a matter of the maths.

There are probably lots more good trades still available today. If that is your plan to trade more often with smaller or even the same size, that's fine too. But there should be a plan that you have made and tested that the numbers stack up. Test driving it all in SIM is important until you achieve CP. Once you know all the numbers, most of the uncertainty is gone.