PL-GC Update

I got caught with a global market meltdown. It's horrible idea to exit on this time of trade, but I decided to take a loss and move on.

Sold 2 PL at 989.1
Bought 1 GC at 1166.3
at a spread of -177.2

I got in at the spread of -122.8, so that's the loss of 54.4 or (-$5440 less commissions).

PL-GC trade

Just got filled on another Platinum - Gold spread trade

Sold 1 GC at 1122.6
Bought 2 PL at 999.8
The spread of 122.8

PL-GC spread update

Today I exited my PL-GC spread. The chart confirmed the spread usually had a rotation of 20, which means from a swing low to a swing high even in a trend, it bounced about 15-20 pts. While the spread of -120 was very appealing, it could still go to -200 and beyond.

This trade went against me as low as -$230 (or 2.3) or so. This morning, it went to as high as +13.9 for the day. I decided to exit because the rotation was very reasonable.

In summary:

Sold 2 PLV5 at 1071.1
Bought 1 GCV5 at 1180.8
The spread of 109.1

P/L 11.8 pts or ($1180 less commissions)

Platinum-Gold Spread

Historically platinum is way more expensive than gold because it's rarer and harder to collect. There were a few times where the price of platinum became cheaper than gold. If you recall everybody was buying gold when people feared paper currency will be worthless or simply buying because the price of gold was going up. This inverted price relationship brought many opportunities in the world of spread trading.

Right now platinum is about -$120 cheaper than gold. Even to be equal, that's $12,000 per contract. However I've seen -$200 at one point (which is about $8000 drawdown from -$120) and of course it could get worse too.

To me, this is a good level to take advantage of. Note that gold is being traded in 100 troy oz where platinum is in 50 oz, so the ratio should be 2:1 (platinum : gold).

Consequently, I executed the following trade today:

Bought 2 PLV5 at 1064.5
Sold 1 GCV5 at 1185.4
The spread of -120.9 (less commissions)

This kind of trade can take a long time to work out, so you need to be able to hold on, but it WILL work out, which is why I traded the contracts with 90 days out rather than active contracts.

QM Update

With the surge of Crude Oil today, I exited my first contract at 61.15 and moved the stop of the 2nd contract to 60.275. With about $1 room, I thought it was pretty good. But then the inventory news came out and stopped me out. At the end, it worked out well as CL went as low as 58.9.

My T1 was $62, but with the inventory coming out, I decided to take a profit. The worst drawdown was about -$1300 and I was up as high as +$1200. My final P/Ls are:

$537.5 +$100 = $637.5 less commissions on this trade.

dunning-kruger effect / QM trading psychology

Today I came across an interesting article and thought that's exactly what I wrote about the last Friday.

In short, my trading confidence was as high as I could be when I first started trading with no fear whatsoever (A in the graph). Still pretty high when I was following trading signals taking webinars (the downhill from A to B). But then I couldn't pull the triggers with no confidence and stopped trading (definitely at B).

Where am I now? I can't say I'm at C, but I, at least was able to pull the trigger and I'd like to believe I'm heading to C.

As for QM, it's going against me by -$1000. With $2 stop, I'm looking at -$2000. Normally, I'd stare at my chart all day, but this time I'm not. Instead, I'm just watching my thought process closely.

-Will I be exiting if it comes break-even?
-The pain is so great that I'll not be trading for a while?

The above two is what I've done and I want to change. No need to stare at the monitor. OCO stops and targets are set, so really nothing I need to do, which suits my trading style over the years.

Another thing I'm watching is the fact that the other contract I was looking at was going in my favor, but I didn't take the trade. The trade I took (QM) is going against me. In order to be a better trader, I know what needs to be done.

QM

It's been a long time since my last post. Likewise, I didn't trade much, maybe one trade here and one trade there. A small down last year and a small up this year.

Trader's lifecycle:

When I first started trading, I wasn't afraid of anything. I thought I was a risk taker and I had no problem pulling the trigger. Big wins and of course big losses.

After a series of big losses, I realized I needed help, so I took courses and went to seminars. Using signal services and making new friends, I gained my confidence back. More importantly, I thought 'These gurus should know what they are doing.', so all I needed to do was to follow their signals only to realize some gurus got in before I got in and out before me. I tried to change the signals, not taking some trades for some odd reasons etc. You know the result. Fail.

I, then, started looking for a new mentor and a signal service. A few supposedly good salesmen traders seemed promising, so I spent my fortune only to find another blowup in my account. The cycle continues until I lost my confidence. Completely.

At the same time, I found myself in favor of certain trading styles. I started seeing something happen over and over and over again, but the biggest problem was I simply couldn't pull the trigger. Sure, some worked right off the bat, but mostly it went to drawdowns and even though it worked out, the stress was so big that I was mentally worn out regardless the amount of the risk on the table. To recover from mental exhaustion, I decided to take a break. When I lost, of course, even if it's the part of trading, I had to take a break. In other words, I wasn't really going anywhere while I kept seeing patterns in the markets.

Fast forward to today. I suddenly realized I've been living too safely. Considering my age, sure it feeds me and my family, but my life will not be going anywhere. I'm know I am not as creative as others. I don't have any special skills. I'm ok at my job, but not the best as some of my colleagues are. I feel as if I might have a shot in trading from all the time I spent over the years. I have a few good setups. I know my stops and targets.

Long 2 QM: 60.075
Stops: 58.075
Target 1: 62.075
Target 2: Open

Rule: I get to open my trading platform only once a day.