Predictions

This won't be a legitimate update. Not really. Just thought it would interest some of you to know that I have a stock (and weather) prediction project in my numerical analysis class. We're using Lagrange Polynomials, Hermite Interpolation, and Cubic Spline Interpolation, among other methods, to predict an already known price of AAPL stock. We'll then compare the approximation with the actual price and thus calculate the error.

BTW: I definitely wouldn't recommend using Lagrange Polynomials for calculating future stock prices. I probably wouldn't use any of these methods for serious stock analysis (especially when depending only on closing prices), but I'll leave that until all has been calculated.

Predictions

This won't be a legitimate update. Not really. Just thought it would interest some of you to know that I have a stock (and weather) prediction project in my numerical analysis class. We're using Lagrange Polynomials, Hermite Interpolation, and Cubic Spline Interpolation, among other methods, to predict an already known price of AAPL stock. We'll then compare the approximation with the actual price and thus calculate the error.

BTW: I definitely wouldn't recommend using Lagrange Polynomials for calculating future stock prices. I probably wouldn't use any of these methods for serious stock analysis (especially when depending only on closing prices), but I'll leave that until all has been calculated.

Been a while

Just wanted to say that discipline is 75%* of the game.

*or so

Clock In

I've been playing the .25/.50 tables for the last week or two and have raked in winnings of $200 (400 BBs or four buyins). At the moment I am sticking to a single table in order to maximally exploit all opponents and maintain focus. There are extended moments where I instinctively know exactly how much to bet in order to make an opponent fold or call and sometimes even raise (slightly more difficult, for me at least). I get in the zone.

In order to maintain the zone for longer periods of time, I'm doing all I can to think and rethink various plays when I'm not at the tables. If I can continue to train my actions, I hope to be able to instinctively act upon the myriads of scenarios that emerge while at the felt.

Anyway, the goal is $300. Then I am taking all profits out. I'm then planning on aiming for $1,000 after which I'll withdraw $500 and move to the .50/1 tables. I'd like to have enough to open an S&P e-mini account by the end of the year.

We'll see; I have a lot of school work and miscellaneous obligations at the moment. I'd really love to post some hand histories with commentary. I'm trying to get out a little bit more too. More, hopefully, very soon.

No Excuses.

Position Sizing

One thing I find helpful about no limit poker in relation to trading is position sizing. Every hand you play requires you to decide how much you're willing to risk. Sure, you can bet the same amount each time, but, as many new players will soon find out, that does little to nothing to limit your losses, throw off opponents or maximize your gains. If you do not know how much to bet and when, you're going to be at a severe disadvantage.

The more thought and attention I give to trading, I'm finding the same to be true. If you are able to control the amount you put into play depending on the context and conditions surrounding a trade, you can minimize risk and maximize potential profit. Say you are uncertain about a specific trade. Why not cut down the amount you're willing to risk on it? There's no real need to risk the same amount on every trade. If you're confident about a trade, put on some more money. As your confidence increases, add to your position. As it decreases, subtract some off.

Being able to successfully manage risk in this manner increases your strengths and decreases your weaknesses. Put your money where it's going to win.

1/3

I read somewhere that true poker sharks play about 30% of their hands. Of course, such stats vary depending on a number of things. At first, I was skeptical. But, the more I play the more I realize the necessity of playing more than the prime hands. For one, people will begin to pick up on your hand range fairly soon if all you play are the top ~10% of hands. Because of this, they won't pay you off for those hands. They'll wait until they have the advantage with some underdog and try to get you to pay them off.

If you play a wider range of hands, however, your opponents will have a tougher time guessing your current hand among all your other hands. Such play not only allows you to benefit when the flop contains nothing for either player, but also allows you to reap the benefits of stronger hands that others may at times hesitate to play against.

Playing this way is much harder, which is probably why most will not play like this. It is hard to remain tight, as tightness requires a good ability to read hands. You need to know hold an edge over your opponent by being able to pick out what he is likely to have and how much you should risk against him or her this round. That's the only way you can remain tight while playing a wider range of hands. And to increase your effectiveness, you need to be aggressive more frequently. Say you think both you and your opponent missed the flop, but you at least have an ace high or find that your opponent folds more frequently than he should. Then bet. You have an edge; don't let it go to waste.

PS: Gotten back into poker over the last couple of days. I see so much improvement in my game, both intellectually and emotionally. I really hope to achieve this level on the trading field some day.

The Reason

I posted yesterday's post for a good reason: My main desire while trading or playing poker (or doing much else) has not been to win. I need to admit that. Perhaps it seems trivial; but, to me, it defines a major turning point in my thought.

PS: Lots going on. Moved. Hanging out with friends. School starting soon. More later.

Why do you do it?

I skimmed through several books this weekend. A part of one of those books stuck in my mind: "Why do you do it?" In the book, the author is referring to the reader's reasons for playing poker. He asks if you do it because you want to make friends. Or if you play to relax, or to get out of the house. Or, perhaps, because you want to win and make money. The author had a PhD in psychology and rightfully pointed out that many people will tell you they play poker to make money, but truly play for other reasons, likely subconscious reasons.

The reasons do not mesh well. Playing to relax and to make money will not allow you to maximize either relaxation or profit. Saying that you're playing to make money while actually thriving on the thrill of the "gamble" will hinder your growth. You have to be honest with yourself about your feelings in order to progress.

Same goes for trading. Are you really trading to "win" and make a profit? Or is that just what you say?

Interesting Fact

If since 50days after GOOG went public you traded it using a simple 50-day MA strategy you would be up 243%. All it requires is you to cover any open shorts and buy GOOG at the open, following a day when GOOG closes above its 50-day. When it closes below its 50-day, you do the opposite: sell any longs and then short. While to many traders who want to make returns like that every day (haha), it may not sound like much. But a decent gain considering the plan is simple and easy to execute. Also, that is with ~65 trades, so commission shouldn't take too big a chunk out of the person's account.

I've been using Excel (well, openoffice's version called calc) to back test various strategies. The one above was me trying to figure out how the hell to use the program. At first I had to enter all the data manually. Then I figured out you could import data from a website (such as finance.yahoo.com), which made things so much easier and more complete. The same thing happened with formulas. At the beginning I would enter formulas by hand, but then figured out you could merely drag the same formula over multiple rows and that it would incrementally change the values for you. Such is the beauty of technology.

Short Update

Haven't been doing any trading these last couple of days. I spent some time moving and some more time hanging out with friends. Any other free time I had available went into making stock/currency price spreadsheets. I'd love to get back into trading the S&P eminis, but would like to have a much, much better grasp of the overall market before I buy/sell a contract. I'm going to be back in school soon, so I'm not entirely sure when I will get to trade some ES; albeit, there will be a ton of prep work beforehand.

On a side note, I played some poker over the weekend with a couple of friends. $10 buyin and I ended up with $13.75. I had a slight advantage even though one guy plays poker at his office amongst various options traders. Fun stuff. Live games are so much more engaging than online poker games. You just can't beat it.

Carrying a Cat by the Tail

"Any plan you develop should emerge from experience—and the opportunities that you observe during that experience." - Enhancing Trader Performance by Brett Steenbarger

"A man who carries a cat by the tail learns something he can learn in no other way." - Mark Twain

"You can't step twice into the same river. " - Heraclitus

"One must learn by doing the thing, for though you think you know it, you have no certainty until you try." - Aristotle

For the beginning trader, or even those further along yet still stuck in various forms of trading dogma, developing a plan often involves something pernicious: using someone else's ideas without personal experience. Many of the methods described in books and online tutorials can work ^[1], however, need modification depending on the situation. This requires experience. How do you know if a market has gone from bearish to bullish or vice versa? Experience. There isn't a well-defined method for making that determination (at least not right off the bat). If there was, no one would tell you. Trust me, you don't have enough money.

How do you know what effect something like the FOMC could have on markets without actually experiencing it first hand? When I started trading I didn't know what could happen on FOMC Days. At first, I experience large windfalls. Lady luck chose my side. But, this did not allow me to experience the importance of such events. Later, when the events (which I hadn't investigated much) started producing different results, I lost lots of money. You need experience in order to understand such things and their evolution of meaning. Some books out there may go into such detail ^[2], but most will not. Most may mention news offhand but focus entirely on reading candlesticks without explaining context. Some may show you Fibonacci lines ^[3] but not explain why they place the beginnings or ends here or there. Many books may only show you successful implementation of such signals--failing to alert you to the instance where a doji may fail, or a gap does not act like resistance/support.

How do you know what your mind will do with $100 on the line? $1000? $5000? $20k? Your home? Without experience, you may assume that money's psychological effect will be minimal. Unlikely. Perhaps you think you will be disciplined. Really, you do not know what disciplined even means yet! How do you learn the perfect baseball pitch when you have never thrown a ball before? Or the perfect tennis swing without ever having played? YOU DON'T! You need to play first. Experience the weight of the objects in your hands. Begin developing a feel for the various nuances. Perfecting your skill comes later.


Basically, without experience you cannot create a good plan. Even if you do, you will have trouble executing it. Furthermore, and I think most importantly for beginning traders, without experience you cannot trade someone else's plan well! I don't have enough football ^[4] experience to play much less formulate a winning plan on Superbowl Sunday! I could take one of John Madden's plays step for step, but I doubt I could invigorate the team like he can; I don't have the skill. Why are you trying to do that with trading?

-----------------

Notes:

[1] This excludes most of the sites, endorsed by someone you have never heard of (and no one else has either), with stories of overnight success, rags to riches (in a week), and with a paypal link at the bottom. Also excluded are: numerology sites, astrology sites, or basically anything without some solid logical reason for working. They may work once or twice, but prepare for the illogical to eventually leave you homeless, and the guy selling you the package rich. Back.

[2] An interesting book that explains some of the Federal Reserve actions over the years (especially the Volker years) is Secrets of the Temple: How the Federal Reserve Runs the Country. It is rather thick and probably won't benefit your trading enough to warrant such an endeavor. But, it is information for the interested and/or hardcore. Back.

[3] I'm not a fan, do not use them. I would only (and hesitantly) suggest using them like others use pivot lines. Remember: there's nothing magical about them. Life isn't that beautiful/simple. If it were, we'd all be rich. Back.

[4] Not soccer for our international friends, although it would probably serve just as well :)Back.

Good Losers Usually Lose

"Competence precedes confidence: Winning mind-sets result from mastery, not the reverse." - from Enhancing Trader Performance by Brett Steenbarger.

Deals quite a blow to traditional trading literature, but is something Dr. Steenbarger finds among all peak performers. Solid mindsets come from solid action. You need to develop successful habits before you can become successful. Unfortunately, The Secret isn't going to make you a trader (hint: lots of practice, failure, contemplation, more failure, testing, improvement, research, experience, etc will). More on this later...

Anyway, I haven't done any trading. I watched the FOMC and am glad I avoided it. Otherwise, I've been reading, watching various markets, testing out ideas and working on new ones.

Back at it

Traded the AUD/USD and EUR/USD today for a 4.7 pip gain in AUDUSD and a 13.3 pip gain in EURUSD. That brings me up to $43.94, a daily gain of ~4.3 %, or an overall gain of ~57%.

I haven't been trading much these last few open days. Most of my time has been focused on reading and researching. In addition to Golf is Not a Game of Perfect, I would recommend Super Trader as referenced on Kirk's site here. I've gotten started a couple other books, but I'll hold off talking about them until I'm done.

Also, I added some poker blogs to the far right column (below that long "sources" list). Those listed here play a wide range of limits and types. Definitely check out a few if that's your thing (probably just Black Bottle, haha).

Edit: I put 1.33 pips instead of 13.3. Was thinking in terms of dollars. Corrected.

Dreaming Big

Several times this week I listened to the audio book of Golf is Not a Game of Perfect by Dr. Bob Rotella. Just about every piece of advice he gives pertains to trading. As Sandy stated in the comment section a couple days ago, many comparisons arise between trading and any solo performance-based activity, even life itself.

Dr. Rotella starts the book off strong with what he considers the most important aspect among those who excel to their heights: dreams. He states, "A person with great dreams can achieve great things. A person with small dreams, or a person without the confidence to pursue his or her dreams, has consigned himself or herself to a life of frustration and mediocrity."

At the heart of everything Dr. Rotella works on with patients resides dreams. Dreams that excite people from when they wake up until they go to sleep (and perhaps in their dreams as well) give people life. A want to do great things and to improve can propel even the lesser talented person further than anyone would expect. Without this drive, Dr. Rotella argues, people will not reach their heights.

Of course, to merely have a dream will get you nowhere. You have to act on those dreams and build those dreams. However, the dream will make the work not only bearable but enjoyable--it'll give you a point of meaning and a joy. While others may put in a weekend of golf practice, you're also putting or chipping after work. While they take breaks, golf itself is a break. It has become a joy and a challenge.

As you practice you begin to develop habits. In order to succeed you need to develop habits that encourage trust. Trust is at the heart of success. You need to make that putt enough that you have no emotions blocking your ability to perform. Trust means you allow yourself to do what you need to do. Fear will cause you to second guess, or change your swing (tactic) multiple times mid-game, thus reducing your potency.

Trust leads to focus. And an ability to focus allows one to perform at the heights of his or her abilities. He speaks of players who have similar talents, but who consistently place higher or lower in tournament play. Those who seem to lose their talent tend to constantly question their abilities. Internally they lose trust and when that occurs, they falter.

Furthermore, when the pressure heightens many people begin to focus on what could go wrong to the detriment of all that could go right. Dr. Rotella speaks of players whose fear of hitting a ball into the water or forest leads them to do exactly that. Conversely, those who focus on a healthy target do much better. As he states, "Negative thoughts are almost 100% effective."

One of my favorite stories he presents has to do with a young golfer rooming with another golfer. Each day they come back and the first golfer says how much he loves the grass they played on today. The other hates it, cannot stand how coarse it is. The next day the first golfer states that he loves the grass again. This drives the second player, who again dislikes the grass, to address the contradiction; today's grass being smooth. The first golfer says something like, "I always love whatever grass I play on."

The same attitude will be a great boon to any trader looking to reach for his or her heights in the markets. Love the challenges that the current market presents you.

And most of all, have a dream that will propel you to achieve greater and greater competency each day.

Market Hour Range

I noticed something the other day when I lost a handful of pips before regaining it. If I had put in a little more time studying it prior to trading I may have escaped the loss or at least would have had a better understanding of the action. It has something to do with market activity.

As you may know, the forex market is open at all hours between Sunday at 5 pm EST (10 pm GMT) until its close on Friday at 5pm EST (10 pm GMT). But that does not mean that each moment of trading is equal during that time. Some times are quiet and some times are much more active.

According to Baby Pips the London trading session has the largest pip range, nearly 20% greater than either the Tokyo or US sessions. The London session opens from 3 am EST to 12 pm EST. The reason it sees the largest range is because of the session overlaps that occur during this time period. Tokyo closes at 4 am EST, after London opens, and the US opens at 8 am EST far ahead of the London close. The overlap means a greater amount of traders in the market pushing it one way or the other.

There is, of course, a lot to be gained from being in the market at the correct hours. Knowing when new players are likely to enter the market can be a great boon, especially if those players may have a slightly different world view and thus a different disposition towards your favorite pair.

Just send him to his home

After yesterday's post I've been feeling a little like Happy Gilmore:



(me: "Don't you want to go to your home, trade? COME ON TRADE! ANSWER ME!")

Anyway, started the session off with a significant loss I took right when the market turned. Luckily, after quickly opening and closing another losing trade, I managed to get my wits together and place another short. I held and sold it for a nice gain and then placed another when I saw more weakness develop. Once my original loss of about 20 pips was covered I jumped out. I had been sitting waiting for that breakdown. I could just feel it coming. I thought it would go to 1.319 but I just couldn't hold on. It's okay, I did slightly better than breaking even, 0.9 pips, which is always nice after being down a significant amount. Better trades tomorrow.

Dr. Rotella and a sport I've only played twice

Gotta love Don Miller's top three favorite books. The first two don't contain the word trading within their pages. The last one is one of Dr. Brett Steenbarger's (of Trader Feed). I've mentioned one of Don Miller's favorite books, The Tao of Poker, which I heard of by reading Miller's blog circa 2008. And, I find Dr. Steenbarger's writings extremely helpful.

Anyway, I had never read the other book that he recommends. Quite frankly, I didn't think it would help me much because it is about golf. However, before I started playing poker in early '09, I didn't think The Tao of Poker would have anything to teach me about trading. I am surprised at how much I have learned about trading and myself by playing poker.

Well, this morning I listened to the audio book of Golf is Not a Game of Perfect by Dr. Bob Rotella. I haven't played more than two rounds of golf in my life. They weren't even the full 18 holes (I was fairly young). Despite that, I can see why Don Miller recommends this classic. Nearly everything in here is applicable to trading and any endeavor in life.

I'll post a little more about Dr. Rotella and Dr. Steenbarger when I've formulated my reactions to this title. I just thought I'd encourage others to pick it up, especially if they you ignoring it due to "golf" being in the title. This isn't a "golf" book, per se; it is far more than that. A true gem.

Two days in one

Made this 22.7 pip trade today (well, yesterday and today). It had a little more drawdown than I would like (~3:2). My entry could have been better. Perhaps much better. Anyway, took profit at the 1.320 mark, although I don't see why the EURUSD couldn't trade even higher sometime in the future.

22.7 pips puts my account at $42.05 or an overall 50% gain (141 pips). I doubt I'll be able to keep this up, but at least this gives me a little more of a cushion.

PS: Looks like the bull-flag breakout will still continue higher. And, no, my computer is not at risk. I'm actually running WinXP and FXCM in VirtualBox on my Linux laptop. =)

First Trade of the Month

I know I said I was going to take a hiatus from pulling the trigger, but I just couldn't help myself. I did a little correlation research and read thirty (plus) of Dr. Brett's TraderFeed articles over the weekend. I'm trying to stay in the groove. Anyway, made a 10.8 pip trade. I got in a little early (should've waited for more red candle confirmation). I'll take the money, though. Account at $39.78 with this ~2.8% trade (based on previous balance).

Free money from FXCM

Saw this link on a banner ad earlier today: click here to get a free $25 FXCM micro account. I don't get commission, but I figured some of you could benefit. Good luck!

Some Numbers for the End of the Month

- total trades: 30
- winning trades: 21
- losing trades: 9
- break even trades: 0
- percent win: 70
- percent loss: 30

- starting balance: $27.95
- ending balance: $38.70
- total profit: $10.75 (107.5 pips)
- percentage gain: 38.5

Next month, I'd like to work on collecting more pips per trade and on minimizing draw down. Hopefully I can hold onto current profits while increasing my overall account size, all in my quest to become a hundredaire. Or something like that...

Brain (Age) Fart

What's wrong with this image from Brain Age 2 (for the GameboyDS)?

Hiatus?

Well, not entirely. I'm just taking a hiatus from putting in orders (driving the bat mobile). I'll be doing some quantitative explorations in the meantime. Up my edge a little, hopefully. And I'll be sharing it with you lucky folks (or unlucky if it dulls your edge). More in a day or two.

Hmm...

Just left it on. One of these will end up hurting me for more than my account can take. Need to rework my entry methodology, because I know that taking small stop loss losses will eat up my gains too...bleh. ($37.70; ~34.5%)

Stress

I should've taken profit when it hit 1.2960, but I'll take it today instead. That's 36.9 pips in what could've turned out to be a mess. But, I kept myself calm by reminding myself of the US bank stress tests. They wouldn't let the Euro down. I'm not sure traders will respect the tests, though. And there's a strong downtrend...we'll see. (Act: $36.77; 31.5% gain)

Loss

Bigger than it had to be too. I just couldn't help myself and put on two more trades. Oh well. Basically, maxloss day for me (no more than 3 losing trades in a row).

And Another

I saw that large bearish flag forming on the hourly and put in a short on the five minute. I've been sick, so I went to sleep (again) and woke up in the middle of the night, which is when I took the screen shot. Anyway, I thought it was a fairly safe 15 pip gain. This puts me at $35.69 or 27.7%. Getting a little better, but still have quite a bit of summer work. We'll see how it goes from here.

Slept on it

Figured it would head back up to 1.3, but didn't want to be too greedy. I set my limit at ~1.298 with an entry at ~1.296, and went to sleep. When I woke up I had made out with a 20.2 pip gain. Biggest gain yet, as I am becoming somewhat more comfortable. We'll see how long I can keep it up. At $34.19 or 22.3% ($6.24) gain from the beginning.

Bleh

I should've taken my 3pips. Oh well. Bought before the breakout and didn't want to hold because I figured it could go lower. No more trading today. I'm still kinda sick and need to do some homework.

Closing this Week Out

I'm feeling a little sick, so I'm going to close the week with this trade. Got 4.2 pips, and also worked on my bad habit of entering too soon/late (basically: wait for the pullback, thus limiting risk). More next next week (and probably this weekend).

Update (well, forgot to put account totals): Currently at $32.68 or a ~17% ($4.73) increase from the start. Now, I think I can just about go into StarBucks and buy a latte.

Gotta Have Faith

Bad night. I came home tired and made those two stupid trades. Then I sobered up and decided to nap. I came back, and while not much better. I did manage to make the money back and a fraction of a pip more. No more trading (five trade per day rule). I'll do some more tomorrow.

Gotta have faith in yourself:



Well...something like that.

Back in Five

I have some studying I have to do, so no trading today. I'll be back at it tomorrow.

Two Misses, A Hit

Not sure I'm feeling up to talking much about this. The first two trades were losses caused largely by indecision. I held onto the third trade through a bit of a rough patch (probably more than I should've). But it worked.

The math comes to (-4.4) + (-3.4) + 9.4 = 1.6 pips. And I'm pooped...

Update: Last one for the night. 3.4 pips (cut a little too soon, probably).

Short

6.5 pip profit shorting the Euro. They way it has been acting, it could probably fall further. But, I'm not ready to start taking longer duration positions yet.

Account now at $31.68 or a gain of 13.3%.

PS: Reading Trading in the Zone by Mark Douglas. Read it a while back, but enjoying it again.

Too Late, Terrible Wait, Some Profit

The drop as the market opened today (Sunday) felt like a solid drop. There were no bottoms put in--just bars of consolidation previously formed. Anyway, I made a terrible trade. I waited too long to take a risk and when I took it I was unwilling to take a small loss. Perhaps that's me intellectualizing it; I probably would've taken a small loss if the drops were less steep or if some sort of bottom formed after I shorted. What I really needed to do was wait for a slight pull back and then short. But I missed one, and didn't feel like missing another.

I took a risk, and if I didn't have the entire market pushing lower behind me, I would've been screwed. This is why you should never go in without knowing the larger context. The more time frames you have working in your favor the better off you are.

The top screen is of my (way too long in duration) short trade. I finally took a profit of 5.6 pips on that.

The bottom screen is of the EURUSD in the daily time frame. It is either taking a pull back, or forming a top. Who the hell knows which it is? I'd say that there's a greater likelihood of a pullback, given the precipitous drop that has taken place over the last few months and what looks like a bottom forming (basically, I'm going to wait for some sort of bottom formation on the smaller time frames and then start taking more long positions).

But, then there's evidence that the Euro may be heading towards parity with the dollar. I'm not really qualified to speak much about this idea in depth. Maybe I'll delve into it some other time (for intellectual stimulation); but, what really matters to traders is being able to read and interpret a chart.

We're not economists.

Inspiration from Jordan

Why not take some advice from a great? Some quotes from Michael Jordan on success:

- "I've missed more than 9000 shots in my career. I've lost almost 300 games. 26 times, I've been trusted to take the game winning shot and missed. I've failed over and over and over again in my life. And that is why I succeed."

- "If you accept the expectations of others, especially negative ones, then you will never change the outcome."

- "I've always believed that if you put in the work, the results will come. I don't do things half-heartedly. Because I know if I do, then I can expect half-hearted results."

- "Some people want it to happen, some wish it would happen, others make it happen."

- "I know fear is an obstacle for some people, but it is an illusion to me. Failure always made me try harder next time."

- "My attitude is that if you push me towards something that you think is a weakness, then I will turn that perceived weakness into a strength."

- "If you're trying to achieve, there will be roadblocks. I've had them; everybody has had them. But obstacles don't have to stop you. If you run into a wall, don't turn around and give up. Figure out how to climb it, go through it, or work around it."

- "I never looked at the consequences of missing a big shot... when you think about the consequences you always think of a negative result."

- "Always turn a negative situation into a positive situation."

And two quintessential MJ videos:

Last Trade of the Week

I like this trade a lot, and I had it set for 5pips, which it would've hit. But my taking 4 pips is a lot better than taking 1-2, so there is improvement. This trade brings the account to $30.47 for a weekly gain of $2.52 (~9%). Not bad for the first week. Still lots of improvement is underway.

PS: I updated the "Sources" to the side and added a few people who link in to me. If you want your site added, let me know (of course, it's always nice that you have me added on yours). As long as you keep some regularity to your updates and have more than a week on board, I'll add you.

Also, I'm also going to try to write some trading material this weekend. We'll see how that goes.

Last trade for the evening (morning?)

Made a 4.4pip trade that I should've held for just a little longer. It was really a good trade overall, but I screwed up in several parts. I got a good entry (I told myself the market would go to 1.2715 and I shorted at 1.2713ish). Good entry. I then stayed in a little too long when I should've taken a quick 6pips. I couldn't tell if the market would fall fast or continue up. Oh well, I stayed in. Luckily I had a comfy position, otherwise I may have been scared out.

I need to realize these moves take a little more time than I am mentally allowing. Anyway, I had a limit order in for 10pips and got out early because I just couldn't handle the stress. Oh well, the market fell to where I thought it would. And! the worst part is the chart looked like it would do that. But I needed to relieve my stress. I think I'm going to study some (not market related) and get some rest.

Account up to $30.07 or +$2.13 (21.3 pips) and about 7.6% overall.

Hmm...

Didn't get in quite as high as I hoped. Tried to eek out a 10pip gain, but came up with a 3.1 pip gain instead. Not great.

Too Slow

Made this trade after hesitating. Bad move. I should've been in 2-3 pips lower. Took a 5.7 pip loss because I wasn't willing to risk any more. Account at $29.32.

No more trading for tonight. I have a few things to do. Will leave FXCM open though.

Poor But Profitable (slightly)

I think we'll be over 1.27 sometime soon, but this trade here was made a little too late for my tastes. I focused on the five minute and didn't pull out to the 15 min until after the entry (although I did check the daily, which motivated my decision to enter yet another long).

You may be saying to yourself (and I know I am), that these scalps are terribly unprofitable. Well, they obviously aren't, albeit a negative trade could definitely hurt (I'm keeping my losses on these trades from 5-10 pips, with a bias towards the 5pip side). But the thing that has me saying that these trades are unprofitable is the amount of money that goes towards the spread. I get a decent spread that can sometimes be below 1pip, but even so, it averages ~2-2.5 which is a large portion of my trade. The only reason I trade them is because I figure I have a decent edge on my side and I want to get my feet wet.

Eventually, I hope to increase the amount my trades take in (a good idea, no doubt). Just giving myself a little time to get back in the game.

Anyway, the trade netted 2.5 pips bringing the account to $29.89 or a total gain of ~6.94%. Hoping for a trade that I can gracefully exit. Then again, the .8pip trade from the other day could fall into that category. I just want to know that I won't hold on long after things have fallen through...we'll see.

PS: Decided to add something on to my rules; I hadn't mentioned how many lots I would trade. Right now I will trade a single lot. Once I am at two times my original account size (27.95*2 = $55.90) I will increase my lot size to two. Should be careful enough.

Another One

Went long on the EURUSD for a 6.9 pip gain, bringing the account to $29.64. I decided to go long for several reasons. First, this market is bullish. Second, the EURUSD had made new highs. Third, this market is strong. I won't make any predictions about tomorrow, but when I saw things this evening a long didn't look too bad.

Anyway, I'm tired and have some studying to do.

PS: If I held on any longer (at least in the short term), looks like I would've given back my gains. Who knows what it will look like in ten minutes, later tomorrow, next thursday or ten years from now. But, luckily, that's not my game.

Take a Read

If you haven't already: Ziad's comment on how to become a successful trader.

A couple others of interest: Why Intelligent People Fail and 52 Prove Stress Reducers.

Update: Spending time watching the market while doing some other miscellaneous activities. Keep it running and make mental comments/guesses as it progresses. Absorb and learn.

Second Trade

All of these are from the same trade, which netted 4.3 pips, boosting my account to $28.87. I'm not letting two (fairly small) trades get to my head. There was nothing all that great about either.

If you look at the first screen, you'll notice what charters like to call an inverted head and shoulders (whether it holds or fails won't be known until later, of course). I don't know a ton about the context surrounding this market at the moment. It appears that the Eur is on a fairly strong momentary upswing, which is one reason my trades (scalps) are so short and hesitant. I keep coming in during "after hours" when the action has calmed downed. I'd rather not get caught in anything too substantial (keep my risks small), because while I could land a nice 100pip run (haha) I am just as likely to see a 100pip run against me. For now, I'll stick with short ~5pip gains until I'm a little more comfortable. For instance, I could've let this one run more. In time.

Right now, I'll let the market soak in.

Update: made another trade. I decided it was a little too impulsive and got myself out with a 0.8 pip profit. I'm going to leave FXCM open but stay out of trading for the rest of the night. Account at $28.95

New Goal

I posted a week back that I had reopened a micro forex account with FXCM. It has a little over $25 in it at the moment ($27.95 to be exact). Because of my rigorous Summer class schedule and the amount of work I've spent on programming a poker bot, I haven't played much poker in the last two months. I'm going to shy away from poker until the bot is fully functional.

At the moment, I'm very interested in financial markets. I posted in a comment to Black Bottle that while poker can help a person develop many useful skills to trade in the market, poker will rarely provide as much of a reward. I'll leave the poker game mostly to the bot until I get a large enough bankroll that playing a couple tables pays better than $5/hr.

Right now, I'd like to develop my forex skills. As they are still underdeveloped and rusty (although I would say somewhat profitable), starting to get back into the game with a $25 account will obviously not be for the money. It will be for the experience and eventual profits.

Now, for my goal: I aim to trade at least once a day for the next six months (excluding some days that will be mentioned beforehand and, of course, any days the markets are closed). That's six days a week, with approximately four weeks to a month: or, 144 trades minimum. I will begin with a limit of five trades a day with no more than three losing trades to prevent steaming.

All of the trades will be kept track of right here. Hopefully, I can keep my head on straight and make it through the great times, the terrible times, and everything in between.

EDIT: (first trade)

This was a quick trade. Definitely nothing I would want to stay in long term (looking at the 2 hr charts). But I played this one because it seemed that the pair had a quick dip and an equally quick recovery on the 15. It had pulled away from the MVA and may make a return. I wish I got in just a few pips higher in order to reduce risk. But it turned out okay. Account now at $28.44 with this 4.9 pip trade.

Further: unsure whether it would continue its push higher or a push lower. Just playing momentum and getting my feet wet.

Self-Knowledge

"Many bad players will not improve because they cannot bear self-knowledge." - David Mamet.

Yesterday, while browsing the local half-priced bookstore, I came across a copy of The Tao of Poker. My eyes widened. I reached out and picked up the copy. For $3.97, I would make a purchase. Something about the book makes me all warm and fuzzy inside. It brings out my desire to make myself a better person (not just a better player). In fact, I've also heard many traders refer to this book; I've heard many people refer to this book.

The Tao of Poker has more than its fair share of treasure contained within.

For example, the quote above. I had not planned on posting until I skimmed across that line. One of the easiest things to do is to block your real self from coming into view. Some people may even know their flaws (intellectually), but they prefer to push those realizations off to the side. It makes for a more comfortable life.

Unfortunately, the true winner, the true master, is willing to look at himself in the mirror in entirety. It is a difficult thing to do, viewing your own humanity. But, self improvement is difficult if you do not allow yourself to see what needs improvement.

It takes strong people.

Goal

"When the opponent expands, I contract; and when he contracts, I expand. And when there is an opportunity, I do not hit, it hits all by itself." - Bruce Lee

PS: I miss me v wallstreet.

Love

You really gotta love it (you have to reach for it, thirst for it, strive to be one with it...) in order to become good at it. Otherwise, it's just a passing glance; how will you ever know it?

I've said it before: you must be willing to emerge yourself. A cursory glance may get you through, but it definitely won't put you on top.

Today

Today is my birthday. I've gotten really lazy when it comes to blogging. Most of it has to do with my realization that quite a bit of my desire to blog came from making money (believe it or not I have been paid $400 for a single text link, two words/one year, in the past) and further, that the good money is definitely not in blogging (at least, not for me). I wanted to use it to help develop my skills too; but, I don't know if blogging is the best way to develop potential in whatever you're trying to improve.

So much of the time one puts into blogging goes into constructing a skeleton of an article that will hopefully make sense to someone else. You really aren't writing for yourself. Sometimes you get good ideas and suggestions, but, besides a great venue for making friends, most of my ideas were gathered through rigorous trial and error. Try, fail/succeed, then modify. Repeat. Not so much writing about them, as by getting my hands dirty (and my wallet).

Anyway, today is my birthday. I would love to be making a million dollars a year right now. But really, I didn't have any such thing in the works to occur by this day.

My thoughts are terribly scattered. Obviously (I feel).

And I wanted to put the fact that my friend's and my poker bot is functional at the 90 table play money tables (made it to some final tables) and will be functional at the real money tables shortly. I obviously can't give you too many details, what with various big named poker sites trying their best to prevent such things from happening (I would prefer not to have my account frozen and closed).

But in the future, I'll definitely give more details. Making a bot, while time consuming, isn't as hard as it would seem. I don't want to say it's _easy_ as you probably want to be at least a marginally profitable poker player, and most people would say that's difficult (I would have to agree). But it really isn't as hard as some people would like you to think.

This time next year, I hope to have a degree (I missed several years of school in there), a side income from botting, and have taken a step back into the trading ring (I've been doing some micro forex trading recently*)

(*FXCM has some nice software to help making your own automated trading program. And it's free (albeit, you have to sign up to use it)). MULTIPLE PARENTHESIS!

But, things aren't too bad. Another year, another 365 days, another, what is that in moments? We'll have to see how my brain determines that process this year. Let's stay mentally active, fit, and healthy.

Cheers!!!

Poker Botting

Started making a poker bot with a friend early last week (maybe even ealier) using AutoHotkey as the main scripting language. Love it.

Here are a few sites you might want to check out:

Coding the Wheel - an excellent coding site with a famous poker bot series (check the left hand side).

Poker AI - has an active forum dedicated to poker bots and those who make efforts to create them.

AutoHotkey - a simple (yet powerful) scripting language that can be used to make mouse movements/clicks or keyboard clicks. Simple automation.

More notes as things progress (although, I will keep most of the code under wraps).

Planting the Seeds

I really want to see "Exit Through The Gift Shop" with the street artist Bansky.

Don't know much about him, but if he points the finger at himself and his culture every once in a while, I love the guy.

Auto Hot Key

How many people use this program? I have no idea. But it should definitely be in any serious poker player's arsenal. The program allows its user to assign mouse clicks and movements to keyboard keys. Say you want to make a bet, click "B" and AHK will do the mouse actions you have "B" scripted to do. Go from sliding the mouse up and down and left clicking to just pressing "B" and you've streamlined your movements. The more you streamline such repetitive movements, the easier it is for you to play and add more tables.

I love it. It helps me play quite a few tables (a max of 12 on my current laptop setup). Anyway, I wanted to post my script, hopefully helping some other beginners jumpstart their AHK usage.

Anything with a ";" in front of it is ignored by AHK (";" signifies a comment). It's not all that complicated: put the key you want to use as a macro and follow it by "::" and some other code to tell it what to do. I have a modified version of this script that allows me to use a USB game controller =) I may post that later. Anyway, enjoy:

; Fold
u::
MouseClick, left, 367, 448
Sleep, 100
MouseClick, left, 368, 465
Sleep, 100
return

; Check/Call
i::
MouseClick, left, 480, 446
Sleep, 100
MouseClick, left, 516, 477
Sleep, 100
return

; Inc Bet Amount
o::
MouseClick, left, 670, 423
Sleep, 100
return

; Bet/Raise
p::
Random, randxcord, 630, 640
Random, randycord, 475, 485
MouseClick, left, randxcord, randycord
Sleep, 100
return

; Bet/Raise x 2
y::
MouseClick, left, 617, 423
Sleep, 100
MouseClick, left, 617, 423
Sleep, 100
MouseClick, left, 617, 423
Sleep, 100
MouseClick, left, 635, 480
Sleep, 100
return

; AutoPost
NumpadAdd::
MouseClick, left, 16, 425
Sleep, 100
return

; SitOut
NumpadSub::
MouseClick, left, 16, 405
Sleep, 100
return

;close
esc::
MouseClick, left, 682, 17
Sleep, 100
MouseClick, left, 67, 107
return

;no wait for bb
w::
MouseClick, left, 464, 439
Sleep, 100
return

;allin
del::
MouseClickDrag, L, 605, 420, 679, 420
return

;sit out next hand
a::
MouseClick, left, 15, 353
Return

;fold to any bet
d::
MouseClick, left, 15, 338
Return

;sit out next blind
s::
MouseClick, left, 15, 368
Return

;Add chips
t::
MouseClick, left, 350, 75
Sleep, 100
MouseClick, left, 300, 60
Sleep, 1000
MouseClick, left, 130, 350
Return

; WindowNW
6::
CoordMode, Mouse, Screen
MouseMove,400,300
MouseGetPos, curPosX, curPosY, curWin
WinGetTitle, title, ahk_id %curWin%
WinActivate, %title%
return

; WindowNE
7::
CoordMode, Mouse, Screen
MouseMove,880,200
MouseGetPos, curPosX, curPosY, curWin
WinGetTitle, title, ahk_id %curWin%
WinActivate, %title%
return

; WindowSW
8::
CoordMode, Mouse, Screen
MouseMove,200,700
MouseGetPos, curPosX, curPosY, curWin
WinGetTitle, title, ahk_id %curWin%
WinActivate, %title%
return

; WindowSE
9::
CoordMode, Mouse, Screen
MouseMove,900,700
MouseGetPos, curPosX, curPosY, curWin
WinGetTitle, title, ahk_id %curWin%
WinActivate, %title%
return

; Desktop1
1::
CoordMode, Mouse, Screen
Click 1157, 1032
return

; Desktop2
2::
CoordMode, Mouse, Screen
Click 1180, 1032
return

; Desktop3
3::
CoordMode, Mouse, Screen
Click 1205, 1032
return

; Desktop4
4::
CoordMode, Mouse, Screen
Click 1225, 1032
return

Useful "Poker" Sites

Here's a list of some sites that I find help with my poker game:

Poker Table Ratings - PTR helps determine how profitable your opponents are.

AutoHotKey - Use to make your mouse movements automated by the stroke of a key (keyboard macros). Makes multitabling much, much easier.

Those are the only two I'm posting right now. I have used PTR extensively over the last two months and it has helped me keep track of my opponents and myself. I just found out about AHK a week or so ago, and I have fallen in love with it since.

More on the way.

Small Update

Made $400 in the last month playing NL Texas Hold'em; I have played the $.02/.05, .1/.05, .1/.25, and .25/.5 limits with a few hands in the .01/.02 (ugh) and the .5/1 (too big for my bankroll). I haven't played anything but a few online tournaments (two offline, but no winnings).

Still a ways to go and more info soon (finals week is nearly here).

Not Dead

Still kicking, just directing my kicks at topics like discrete mathematics for my degree. In my free time (and sometimes in the background while I work) I have been building a poker bankroll and diverting bits to my bank account. Along with other funds, I hope to have a small starting amount for a futures account come post-finals. Until then, I don't really have enough cash on hand to do much in the markets (much less morning time--PST here). I'll try to keep the updates coming.

Three Simple Rules

I'm back in the poker game (wishing I could also trade--not happening with 8am classes) and several of my friends have asked me for tips on how to make money.

I wanted to keep it simple (they are relatively new to the game) so I told them to remember these three things:

1) Play pocket pairs, but, without top pair or trips, fold after seeing the flop. I make a ton of money playing pocket pairs, hitting trips (11.75% of the time) and playing the, unexpected, best hand.

2) Safest bet: face cards.. You can play ace ten (cautiously) or even king ten. But I try to stay away from queen ten and jack ten unless I have good position and a good read on the other players. It just sucks to hit a pair of jacks and to be beaten by a better kicker.

3) Poker is a slow game. It is not supposed to be exciting. You will want to do a lot of folding. As you get better, you will learn that good folding is what makes you money and keeps you money.

Worst Thought Ever

Things look bad, but this* could happen..if I just stay a little longer.


*Something unlikely

Risk Free?

One of the first things you should learn is that nothing is risk free and that taking risk (real and perceived) is what gets you paid.

Systems that advertise risk free strategies are disingenuous.

Deception

"All warfare is based on deception." - Sun Tzu, The Art of War

Pace

Another key to success--think: the tortoise and the hare, albeit perhaps you can find a reasonable speed in between those two extremes. Slow down (note: that is most likely needed) to a speed that you can consistently maintain. With caution, ever so slightly increase the speed and watch as you build endurance.

Before you know it, you'll be stronger than you were. Because you developed the strength over time, it will remain with you that much longer--similar to a habit.

Subjective

Playing the man/market means ignoring the underlying reality of the situation and going for the underlying psychology of the situation. Who cares if supply and demand do not reflect the current market value? Who cares if you only hold 23o? Get them to fold at the wrong time. Sell to them at excessive prices. Let fear and greed rule the day. And embrace the subjective experience.

One of Many

One of the many keys to success: don't be too hard on yourself. You want to be able to survive (your self-inflicted kicks and punches can prevent this).

PS: Doing shit loads of math homework. But, easing my way back into the poker world and working on keeping up with the market as best as I can. Hope the New Year is treating you all well. If not, there's always the Chinese New Year.

Force

Don't force it.

New Year's Resolutions

Some say it is kinda silly to make resolutions at the beginning of the new year. Well, maybe. Let's just call these a reassessment of values--or something.

This year is going to be largely devoted to finishing school. I have a few more semesters and I want to get as much done this year as possible, making next year the cleaner up year. So, I probably won't be posting as much. But that can change. I'm rather impulsive when it comes to blog posting (sometimes you get one a month, sometimes ten a day; an exaggeration, but it illuminates the truth).

Also, I have been running and working out recently. Being in physical shape helps me maintain concentration in other aspects of my life. I want to increase my endurance.

When it comes to poker, I need to work on my patience. Over the holiday I moved up the limits too fast and ended up hurting my account on a bad beat (an inevitable aspect of the game) and blew it up completely shortly thereafter. Tilt is a killer; but even worse is pushing your account for impossible returns.

I need to sit back and fish. It's not an exciting game when played right. I get in trouble when I play it that way.

The same goes for trading. I need to sit back and spot the plays rather than pushing for them. Choose your markets, choose your tables, choose situations that give you an edge. Sometimes you'll be sitting there for hours doing nothing. Sometimes you'll do everything very well and still lose money. But, in the long run, maintaining discipline leads to profits. Find other outlets for frustration/entertainment.

Bad post. More soon. Hopefully.