Trade Like The Casino Episode 1

Trade(s) should be monitored. I remember seeing a 12-hour seminar of—Late. Mark Douglas: I was given a task. He said, “Take all trades no matter what. At least the next 20 trades calculate the risk, accept it”. Well, I told myself—“This is a task; an obligation”. It had to be done. “I will go through lengths to make sure I succeed at trading, no matter what it took”, I muttered. Albeit, there’re steps to doing it. I’ll list them just in case anyone’s interested in the exercise. The aim of the exercise is to enable the trader to: trade like the casino (trading without expectations or fear).

It’s called—“the consistency exercise”: Steps: Pick a market—Nasdaq100, Confluence—Divergence, doubles and trends, Trade entry—retest, Stop-loss—below or above retest zone, Time-frame—4hr and daily, Taking profits—next structural level,  Test it, Accept the risk—you have to be ready to lose all 20 trades. That is, 0.1 by 20 trades—I’m risking $200, and finally, do the exercise.

Rules

Trade your system exactly as you have designed it. This means you have to commit yourself to trading at least the next 20 occurrences of your edge—not just the next trade or the next couple of trades, but all 20, no matter what. In addition, you cannot deviate, use or be influenced by any other extraneous factors, or change the variables that define your edge until you have completed a full sample size.

Therefore, by setting up the exercise with rigid variables that define your edge, relatively fixed odds, and a commitment to take every trade in your sample size, you have created a trading regime that duplicates how a casino operates. Ergo, monitor yourself and use the technique of self-discipline to refocus on your objective. Write down the five fundamental truths and the seven principles of consistency, and keep them in front of you at all times when you are trading.

The 5 fundamental truths

Mark, in his seminar, talked about the 5 fundamental truths to trading which are: Anything can happen, You don’t need to know what is going to happen next in order to make money, There is a random distribution between wins and losses for any given set of variables that define an edge, An edge is nothing more than an indication of a higher probability of one thing happening over another, and Every moment in the market is unique.

7 principle of consistency

You need to read these affirmations everyday so it becomes your mantra. It would guide you to consistency in trading.. I (insert your name) objectively identify my edges, predefine the risk of every trade, completely accept risk or I am willing to let go of the trade, act on my edges without reservation or hesitation, pay myself as the market makes money available to me, continually monitor my susceptibility for making errors, and lastly, understand the absolute necessity of these principles of consistent success and, therefore, I never violate them.

Trade 1/20

On Tuesday January 25th, 2022. I took a the first trade, twice. Because I actually got scared (fear of failure). Then I realized, I didn’t have a SL or TP set—which was rather odd. Because that’s unlike me. I remembered, “it’s about the process not outcome”.. Got in again with a 2:1 target which I achieved. I also realized that my exits aren’t as strong which actually caused the fear of leaving money on the table and failure. For the first time in my trading, I am fearless—still worried, which is human but—fearless.

At first, I got out after seeing a bullish pull-back pattern on the 30… but I reminded myself that I know nothing of my outcome since “it’s all about probabilities” what worked before might not and vice-versa. “Don’t get married to the past”.

I haven’t level down yet, so, I took a ($200) win. However, my SLs are a bit better but my TPs still needs work. Me as a swing trader (for this exercise, I won’t be giving myself a tag. I want to see what I become, the kind of trader I am), hasn’t fully been accepted yet because I get worried about losing the capital I’ve already made. I need to work more on my TPs.

Having a TP I’m okay with (2:1 or 3:1) should work. It helps to avoid greed and allows me to take whatever the market gives…

Trade 2/20

Today is, Wednesday, 2nd February, 2022 haha—so many “2’s”.. Anyway by 8:49pm—I took the second trade. Took the trade, went over the fundamental truth and consistency principles.

There wasn’t any hesitation of some sort. I guess it’s because I’ve already accepted the risk—which is a total of $200-300 for 20 trades… that’s something I’ve accepted.

Although, I still feel a little conflict in my head—I wont lie. My entry is okay, still struggling with these TPs and fear of failure.

That silent conflict, although not as loud as before, but, it’s still there I can feel it. Hopefully (surely), after this whole exercise I will completely get rid of it. Although, I’m glad that I can monitor my emotions and feelings. I’m aware; I’m present.

The stop-loss is more than 1.5% though. It’s like 1.9%—Some carelessness right there. My entry wasn’t exactly perfect for the risk to be like that. Then again the market has been leaving wicks around which is—kind of tough, having a 1-1.5% stop.

Not the best entry that still needs a little work as well. Three things now I need to work on: my entries, TPs and fear of failure.

Argh, that conflict, the need for perfection. Damn! it’s okay remember: you don’t need to know what’s going to happen next to make money.

Currently, 22:14 (closing bell) and I lost that one (-$19.25). A risk I wasn’t okay with. I lost because the bulls weren’t as strong and I noticed a pattern from Nasdaq100. The market doesn’t exactly go straight—It goes creates some sort of supply, goes down creates a double, then—back to initial point. If that is the pattern that has been created, I’ll be waiting.

In all honesty, I actually feel good. No emotions whatsoever. Just that I really don’t know if these conflicts in my head are good or bad. Are they some kind if warning or what? I mean this is just the second trade so we’ll see.

Trade 3/20

After yesterday’s loss. That didn’t stop me. The bears are feeling threatened, like they have some unfinished business.

Today, Thursday, 3rd of February, 2022. Around 12:36pm I took a sell trade. The risk is okay because it’s 1.1% which is good for my edge. My risk is 1-1.5%. Unlike yesterday where I risked more. In addition, I have to make sure I don’t risk more than 1.5% of my account. After this exercise, I’ll be going to “0.30” because, I need to be in this game for a while to get this right. I can’t give up!

Anyway, The market had a breakout and I finally got a first correction. This trade will only go well if the sellers are more than the buyers. From the look of things, I can’t exactly tell because: anything can happen.

The trend however is kind of mid. This week might just be mixed, not exactly sure. Then again, you don’t have to know what will happen next to be successful.

I followed my edge and played along. Then I have nothing to worry about.

Albeit, me not worried about the outcome makes me think I’m a little bit careless. This exercise is really challenging my way of thinking. It’s currently 21:33 and I got a winner. The trade hit my TP ($20.53) actually. It’s funny because I almost closed this one. I think I won this one because the sellers where more than the buyers and the odds were obviously in my favor.

Well, I almost closed it because It threatened to hit my stop. But something in me kind of decided to trust my get out point.

So I wasn’t going to close until it obviously hit my SL. Followed all rules, it actually took me 9 hours. That’s growth right there. I learnt trust from this one. An important skill.

What to work on: my entries, Trust, TPs and fear of failure.

Trade 4/20

It’s Friday NFP. 4th of February, 2022 at exactly 10:29am I took another trade. I got into this one due to the pullbacks on the daily. Risking 1.4% to gain 4.9%.

I’m becoming more trusting of my edge’s signals. No hesitations whatsoever and I take all trades that the market provides. The NFP started and swerved a past my TP. From $30 to $2. It was crazy. Hasn’t hit my SL yet though but that just added to my belief that: “Anything can happen”. I was tempted to close as usual because I didn’t want to lose the remaining money. But I left it because I feel it’s all part of the process. I’m after the process and not it’s outcome.

It’s Saturday and The market’s closed didn’t so, till Monday.

Yup, it’s Monday—7th of Feb. 2022. The market’s open and the buyers are threatening. Don’t know what it means yet for this trade but it ain’t looking good. Anyway, I have an entry incase this goes wrong. I’m currently working on Targets while still overcoming fear and trading like the casinos. Targets because, I don’t want to trade based on assumptions. I’d like to build my skills on SLs and TPs. That way, I let the market decide.

It’s Tuesday, the 8th and the trades still on. The market’s not moving up or down. As much I want to leave my TPs to hit and SLs smashed—I’m actually tired if holding. What could this mean?

Does this mean I might do well with swings? I mean—the market’s not moving. That im-patience though. Trust me, I want to wait for its outcome but situations like this just get me tired. Probably some kind of range. It ain’t over till it is. I’ll have to learn to wait for the outcome no matter how tired I am. Learning to have patience and trust in my trades. That way, I’ll have nothing to worry about. P.S: I’ve been sleeping well without thinking about my trades. That’s a great growth right there. I want to be really great at this.

After Thoughts

I’m having a great conflict in my head. I actually cut the trade at 70 pips. Anyway, the conflict is about: Analysis and intuition. Trust me, I want to allow my TPs hit and SLs smashed but I’m conflicted between intuition and analysis. I closed it because the trade has already been compromised wasn’t feeling great about it anymore. Not because I’m trying to be right it’s just that: I don’t know what this conflict means.

Is it coming from fear of failure or just an innocent curiosity? I really don’t want to mess up this exercise though.

The market’s (well it’s my mind not the market) keeps pulling my legs. I know for a fact that if this trade goes well I’ll be sad. Although it won’t affect me as much but I’ll be really down mentally. I’m trying so hard to overcome my fear of failure. I guess I just have to work more on my targets—as at last week, I could have been off this trade a long time ago. My target wasn’t right—now I’m conflicted. This is still just trade 4—I know this too, shall pass. Lol! I feel my self praying for the trade to be wrong to justify my intuition.

Yeah, it definitely comes from fear of failure. That answers my question: I really won’t consider my intuitions in trades no more. Maybe before the trades but, once I’m in, I should be able to accept the terms and conditions that comes with it.

The goal is to trade like the casino whilst overcoming fear..

Trade 5/20

Hello, it’s Wednesday, 00:25 9th of Feb. 2022. Took a buy trade, risking 1.6% (Arghh, need to stop risking more than 1.5%, Stop!) to get 3.1%—after previous lessons, I’m more faster in my decisions and taking all trades provided by my edge. Looking to focus more on the process than: it’s outcome.

I’m still a little bit concerned of the outcome though. I won’t lie. It’s like I can’t help it. Albeit, I’m not bothered about the outcome. I can sleep, go out without having to constantly check the charts.

Anyway, the Nasdaq has been pretty indecisive but the trend says otherwise the bulls are leaving trails all over and I can’t help but think that’s the direction to be. I can’t wait to see what I learn from this one, actually—I can wait.

I had to adjust my Target. The zone on trading view differs from my broker. I’ll be working more with my broker’s charts. Working with zone to zone for target areas for now. I want to see how far they work in terms of targets and risk to reward.

Thursday and I’m still on. The market failed to create a new HH but, I mean, it ain’t over yet. Still waiting to see if the buyers are strong enough to push past the 15k level. My targets are still killing me.

Alright, that reversed on me again at 2:30pm (SMO). Confirming that the Nasdaq100 is in a range. The bulls and bears are at equilibrium right now. My targets for ranges are supposed to be the next zone. My target should have been at 15050 not 15090. Anyway, lesson learnt.

Albeit, I haven’t been stopped yet. I’m glad for the lessons learnt.

It’s currently 9:49pm Thursday—The market is almost at my SL and I’m down 1.4% already. A trade that was actually supposed to be a winner. I noticed that the levels I placed my TPs mostly makes my trades turn out to be a loser. I’ll be focusing on odd numbers now for TPs my SLs are actually great. Noticed the Nasdaq gets easily manipulated at these psych levels.

Now, I’m also working on Discretionary trading. Two skills to master, including my intuitions and Targets. Although, not over—but I’m glad I’m allowing my targets work for me.

Today 11th February, 2022 (Friday) it’s being exactly 36hrs since I took that trade. The Sl hasn’t been hit yet. Albeit, close to kicking me out. This week has been really indecisive—lost twice due to bad targets and dismissing my intuitions.

Which would be my main focus for the coming weeks. Any-hoo, I’m going to bed. Whatever I wake up to, will he updated. Good morning, same day, but it’s now 8:03am. The market hit my SL and I lost 1.66%. Well, lesson learnt; onto the next.

Trade 6/20

At 17:40, Friday, 11th February, 2022. I took another trade. The Nasdaq100 created a bearish pullback after a break and double top. No hesitations, no over-thinking. Took the trade either way. I’m going to risk 1.1% to gain 1.5% as—I’m working on my Targets (TPs) as well and I’m paying more attention to my intuitions. No even numbers were used.

I’ll be waiting to see how this one goes.

Hey, it’s 19:39 and that smashed. Target reached. Lesson digested. I realized I only need just a portion from the pot. I’ll keep working on this. From this trade, I learnt there’s really nothing to be scared of if you have an edge and you’re okay with the “anything can happen” rule.

Went home with 1.5%.

I also need to learn how to not get too excited after a win. At the end of the day, the only reason why a trade goes right is because of the people in the market at that time.

Have a great weekend.

Trade 7/20

Happy valentine’s day guys. It’s 19:30 14th February, 2022. I took a sell trade risking 1.26% to gain 3.04% (focus on 2:1 trades for now).

Made corrections to my targets, risk-to-reward and followed my edge (intuition). The Nasdaq has shown serious decline but I’ll need the sellers for this to go well. Yup, bye for now.

It’s 9:43am, Tuesday 15th February, 2022. I lost that one yet again (1.26%)—In this trade, I learnt that I’m still a little bit worried of outcomes which I’m getting better at though not completely gotten rid of. My targets are still not exactly perfect. There’s a progress as well. So far, I can see that I’m doing well.

Plan followed, The buyers just tripped in at the pre-markets. Also I need to not add or subtract from my edge as it keeps me focusing on outcomes instead of the process.

I don’t want to think at all. Learning to be swift in my decisions with signals from my edge. So far, I’ve been able to work on targets, fear of failure, trust and focusing my attention on the process. The habits are forming not really great but there’s progress.

Trade 8/20

Good evening, currently 16:24 Wednesday, 16th February, 2022. Took a trade risking 1.9% (again, damn—If I do this again, I don’t deserve to be a trader) to gain 4.12%. The nasdaq100 showed a bearish pull on the daily which I couldn’t ignore My edge gave a signal, I took it.

No hesitations, fear or judgements. Calculated my risk immediately and jumped on it.

If the bears troop in then it would be a winner if not, a loser.

Till then—Have a nice day.

20:30 same day, lost this one. The buyers rushed in! rendering my position useless. Lol—anyway, I’ll be waiting for the next stop.

Lesson: trust your guts. I’m still finding it hard trusting myself. I wonder why. Targets have been worked on (still working on it—but, better), I seem to not be so scared of failure any-more. However, this “trust” thing that’s been revealed is actually my biggest weakness. Next trade, I need to be more of a listener than a speaker. That is, how exactly am I feeling before I take a trade. Although it was a signal from my edge but, before I took it, I was to wait for more confirmation which I failed to listen to. The bulls however have given me the confirmation.

8 trades taken, 4 wins, 4 losses. Woah. intense. Love the challenge. My current win rate is: 50%… Anyway, till next trade.

Edge corrections:

Targets (exit): odd numbers. Discovered odd numbers aren’t easily manipulated. For the pullbacks, avoid daily pulls unless there’s a third candle. All trades should be on the 4-hours—the daily remains for the bigger picture.

Noticed that the daily pulls with a second candle, isn’t always a pull might be a fake-out. As for risk, 1-1.5% not more. I need to stop reading some things I don’t need any change at this point. Avoid learning any strategy, focus more on executions (main-triggers[retest]), then perfecting my 3-ways.. Noticed there’s no balance in my account. The risk to reward is appalling, the losses are more than the wins—which should be the opposite. So, 1-1.5% only. Finally, watch out for those zones—very important.

Looking to focus more on orders (especially limit orders) for entries, then—2:1 for target profits.. Remain consistent! don’t change or slow down for anything, don’t miss a day. Finally, take all trades!

Trade 9/20

At 10:18 am, Friday 18th February, 2022. I took a trade. It’s a bearish pullback after the breakout from a double top. Took a sell risking 0.76% and trying to gain 2%. I made sure my risk was less and reward more, made sure there wasn’t any hesitations this time, avoided psych levels for targets, trusted my guts as well. Just so you know, trade 8 decided to go my way yesterday. Lol. just found it funny… Timing is everything and then again it depends who is in the market at a particular time.

Proving to me that anything can happen—Yet again. I’m just really proud of my growth though.

Currently 17:03, just gained 2% and ended the week well. Anyway, Learnt to just trust myself and edge, have target (exit plan), accept the risk, allow the market do it’s thing and every other thing would be taken care of. Going with the trend gives you a higher chance at winning though. Have a lovely weekend.

Trade 10/20

Hey good morning, it’s currently 9:12am, Tuesday 22nd February, 2022.. I took another trade risking 0.794% to gain 2.43%. Well, I was a bit hesitant because I had no idea where my Target would be—then I remembered my 5 fundamentals “anything can happen” and I remembered I’m learning to also trade like the casino. That was the motive behind taking this trade. Anyway, I’m looking to short Nasdaq100 from 13656 to 13413.

The bears have been roaming the market. Although, I don’t really know when the bulls will be back but, we’ll see. There’s this head and shoulder pattern involved and I’m just really playing along with the signals I received from my edge. Today, I’ll be going over my journal and I’ll be posting this particular one. I’m really grateful for my growth.

Back here, it’s currently, 9:52am and I lost that one ($7.94).. The buyers are still roaming not back-down.. Didn’t take time at all. I’m actually grateful that I cleared my doubts and played along. Anyway, lessons digested as usual. Now my weakness is in: executing trades.. I’ve got no issue with analyzing.

After-Math Of Episode 1

Finally, for this article, I decided an episode should consist of 10 trades—rather than 20. That way, I can post them immediately—I’m done. review them, see what works and what doesn’t. At the end of this, Out of 10 trades, it’s a total of 6 wins and 4 losses. Figured this isn’t bad. Considering the fact that I decided to take all trades irrespective of the emotions and thoughts I feel.

Although, there’s still a lot of work to be done. At the end of this episode I realized, my entries aren’t great at all, I still have trust issues and My target profits is really not accurate. These are the three problems I have encountered so far. 

A funny observation, I can’t be a swing trader because I am pretty impatient. I realized my max hold is maybe: 2 days after that, I get tired and anxious. Not a great sign. Thanks to Late Mark Douglas, I’m glad I did this. Risked $200, made an extra 6%. A great start!

P.s: After episode 2, I start working with my trade log, Since I will be increasing my risk. It will be straight-forward and all on Google’s sheet. 


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