Trading Log #000
The purpose of this series is to have a daily public log of my progress with my trades. Some people call this a trading journal or a trading report card (SMB Capital).
This is supposed to be less spreadsheet and more like ramblings or reflections. So if that isn’t what suits your fancy then go ahead and leave now.
My Trading Genesis
My first introduction to finances or financial markets is hard for me to put my finger on the exact year. My best guess would be either in high school or college in finance class. It was probably something involving amortization tables and the effects of compounding interest. There’s a quote, could be an internet legend that was started, “Compounding is the Eighth Wonder of the World.” — Warren Buffett. Whether he said that or not it’s certainly true. I saw how changing the inputs on the compounding interest formula would change the results of returns.
In my college accounting and finance courses we learned more about balance sheets, income statements, statement of cash flows, corporate structure, risk adjusted returns and so on. While some parts of these classes bored me I’ll admit, there were other parts that were fascinating and really peaked my interest. But, they don’t teach you about trading in college at least not the technical side.
Charting: Half Science, Half Art, Half Nonsense
Now you may be saying that’s three halves and that doesn’t make any sense. But, that’s why I said it because sometimes charting doesn’t make any sense. But, really the first place I started reading was Reddit. Now in today’s time, March 2021, mentioning Reddit and retail trading is taboo or makes people ask, “You trade Gamestop short squeeze?”
That isn’t where I started, I started at r/DayTrading and after reading the FAQs and finding out about Pattern Day Trading Rule, I was directed to r/Forex. From there I got redirected to BabyPips.com for my entry learning. Their free reading is over 200+ lessons and if you don’t have the fortitude or patience to complete it then trading isn’t for you.
I started to look for podcasts and YouTube channels on Reddit. I stumbled upon The Day Trading Plumber (DTP) and got sucked in. I’ve gotten to know Clayton and Matt who run the show and they’re genuine about wanting to provide entertainment and a good community. But, Clayton talking about how he went from working a full time job to running an automated robot and copy trade service was enticing to say the least.
So I learned about MT4 and EAs. I tried to write the code directly in MQL4 but, that was frustrating to say the least. I learned about Rob Booker’s Finch system from DTP and Booker’s YouTube videos. Kept stumbling through my code trying build a working EA. Then, a breakthrough occurred. Clayton guest starred on another great podcast, Trading Nut. Cam Hawkins who runs that podcast also sells a course to teach people how to use FxDreema. FxDreema is a flow chart-like tool to write EAs for you. This is what really sucked me in.
Now, What Do I Do?
Well right now, I’m trading a version of Booker’s Trifecta system. It works by looking for Knoxville Divergence and then trading a trendline break. I’ve got 3 examples below. This strategy is primarily a counter trend or mean reversion strategy.
So currently, I’ve just finished building an EA, affectionately called “Floating” referencing the Mac Miller song. Floating will wait for price to cross a manually drawn trendline. The EA will set the stop loss and profit target. The way I have the EA setup, it will close half of the trade when the price is half way to profit target. It will also move the stop loss to breakeven to create an essentially risk free trade.
In the Next Episode of DBZ, I mean Trading:
Will the Finch continue running my live account successfully? Will Floating work on my demo account successfully? Tune in next week to find out.
