Useful things I've found on the Net.

This is a discussion on Useful things I've found on the Net. within the General Trading Chat forums, part of the Reception category; Originally Posted by grantx CB, "I find that by moving up the t/frames it can cost you a lot more ...

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Old Mar 11, 2008, 11:17am   #57
Joined Jan 2007
Thumbs up good advice

Quote:
Originally Posted by grantx View Post
CB,

"I find that by moving up the t/frames it can cost you a lot more to find out you're wrong."

This is a good point. I have a similar attitude which I apply to any time frame: how far does the price need to go to prove you are wrong?

In my post above I refer to stops being around the high/low (of the previous bar). For me, this is only relevant if I can open near that point. In practise, this is rarely the case. So I will close immediately if I sense a change in direction as shown by the rapidity of order flows (on the DOM)in the opposite direction. Of course, on occasions you will close prematurely but I justify this approach in the knowledge that I can always re-enter at the original opening point (sometimes better).

I have a quote written on a scrap of paper (forgot the origin):"Get to the point where you don't lose money then profit will take care of itself". For me this also implies maintaining your trading capital.

As regards fewer signals I think this depends on the instrument and volatility, eg equities, index or bond futures. In my experience there is indeed sufficient volatility to scalp over very short periods, eg on a one-minute time frame. Perhaps an immediate reaction would be, 'not enough points to be made in one-minute'. But this misses the point (no pun intended) - the signals generated provide you with early entries (and exits) which could put in a long and sustained movement.

"NO THINKING ALLOWED". Absolutely, but difficult (I'm still fighting this)

Good Trading,

Grant.
Hi Grant

"I have a quote written on a scrap of paper (forgot the origin):"Get to the point where you don't lose money then profit will take care of itself". For me this also implies maintaining your trading capital."

Good advice/quote Grant 1st responsibility always imho is the protection of your account/trading capital, one good trade counts for a lot if you have churned for a couple of weeks at or around BE

old advice that used to be given to an apprentice body repairer (vehicles/cars) when experiencing difficulties repairing a dent ....................

look after the edges and the middle will look after its self
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Old Mar 11, 2008, 11:27am   #58
Joined Jan 2007
lol

Quote:
Originally Posted by timsk View Post
A reasonable day overall for me yesterday, but it would have been a whole lot better had I stuck to this golden rule. I had two losing trades because my brilliant mind decided (along with a dash of ego) to ignore the blindingly obvious evidence before my eyes, because I thought I was one step ahead of the market. Someone please give me a massive poster to put on the wall with NO THINKING ALLOWED in bold red letters! It'll save me a ton of money. 'NO THINKING ALLOWED' is a more concise, harder hitting variation on Joe Ross's 'trade what you see and not what you think'. I like it.
Tim.
Hi tim

arrrrrrr thinking = dangerous, well always as been for me in the past

I deal with it with a rule.............

thinking is allowed

I write down my thoughts the night before or post some rubbish on T2W/whatever, do not consider it rubbish at the time I might add.

Next trading session I take my trades as per method

BUT ! if market looks to be agreeing with my earlier thoughts / rubbish I am inclined to hold a touch longer or close a touch earlier, seems to work ok and do not have to worry regards having thoughts anymore
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Old Mar 11, 2008, 1:01pm   #59
Joined Jun 2006
Timsk,

I already do something similar. Stuck to my screen is a page of A4, highlighted by fluorescent pens of suitably gaudy colours is various notes:

“if all losses were kept to a maximum of -20 (2 points), the profits would be substantial.

These big losses are your major problem; they will be your ruin/downfall. You have got to earn a living.

Just close [losing positions] for Christ’s sake. Get a grip. What’s wrong with you?

Stop taking flyers.

Only add when in profit.

Need to look for better set-ups.”

Pink,

“one good trade counts for a lot”. Dead right. I’ve found while some/most trades may be losers, as long as you cut them soon enough the really good trades (anything up to three times a day) will more than make up.

“Measure twice, cut once”

Grant.
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Old Mar 11, 2008, 1:12pm   #60
 
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Joined Sep 2003
nine started this thread It seems that not following the plan is a frequent problem. I've always said that day trading is harder than swing trading because the time to make decisions is shorter ... but I wonder if I'm wrong. It could be impulse control fatigue.

When you trade eod you have a 20 minute period when you think about your trades and make your decisions. If you get the impulse to try something "off plan" you usually reject it and then act according to plan. Then you go about your normal business, dinner, tv, kick the cat.

When you day trade, even for only 3 hours as I do, you get multiple opportunities to make an impulsive off plan move. You get one, and you reject it. Then you get another, and you reject it. And you get another, and fxxk it, you do it ... and maybe you even repeat it.

So how do you fix this? One way is a bunch of psychological tricks and some procedural ones as suggested here. Another way is: have a chocolate bar (or just a bit every 15-20 minutes during the trading session.




Resisting temptation is energy intensive:

Cognitive Daily has just published a great write-up and demonstration of a study that illustrates how self-control is an energy intensive process that puts a big drain on the body's glucose levels.

The article tackles a recent study [pdf] led by psychologist Matthew Gailliot that found that exercising self-control in either conversations or in lab tasks reduces blood glucose levels.

The researchers also found that initial glucose levels can predict how well people do on these tasks and that self-control can be temporarily boosted by giving people a sugary drink.

Cognitive Daily's have recreated one of the lab tasks. Go and check it out, it's an excellent demonstration. It makes the task wonderfully clear but also illustrates how even such simple self-control tasks are so difficult.

This sort of 'self-control' is heavily linked to attention - in part, the ability to focus yourself on one particular thing and not get drawn into perceptual or emotional distractions.

This study doesn't tackle brain function, but another recent paper by Gailliot [pdf] does link these findings to what we know about the neuropsychology of 'self-control'.

This ability is particularly associated with the frontal lobes, which are known to play a key role in inhibiting inappropriate responses.

You can see control break down in interesting ways after frontal lobe damage, which can often lead to a range of impulsive behaviours.

For example, patients with damage to this area might display utilisation behaviour, where they are unable to resist carrying out actions presented by their environment.

The affected person might be unable to walk past a door without trying to open it or sit in front of a coffee cup without sipping it, even when they know it's too hot to drink.

What's interesting, is that as the CogDaily article illustrates, we seem to have a mild form of this when we are low on energy or fatigued.

It's interesting to speculate that the reason we get 'snappy' when tired is because we're less able to control the emotions sparked by small annoyances.


from Mind Hacks
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Old Mar 11, 2008, 1:18pm   #61
Joined Nov 2001
Quote:
Originally Posted by grantx View Post
CB,

"I find that by moving up the t/frames it can cost you a lot more to find out you're wrong."

This is a good point. I have a similar attitude which I apply to any time frame: how far does the price need to go to prove you are wrong?

In my post above I refer to stops being around the high/low (of the previous bar). For me, this is only relevant if I can open near that point. In practise, this is rarely the case. So I will close immediately if I sense a change in direction as shown by the rapidity of order flows (on the DOM)in the opposite direction. Of course, on occasions you will close prematurely but I justify this approach in the knowledge that I can always re-enter at the original opening point (sometimes better).

I have a quote written on a scrap of paper (forgot the origin):"Get to the point where you don't lose money then profit will take care of itself". For me this also implies maintaining your trading capital.

As regards fewer signals I think this depends on the instrument and volatility, eg equities, index or bond futures. In my experience there is indeed sufficient volatility to scalp over very short periods, eg on a one-minute time frame. Perhaps an immediate reaction would be, 'not enough points to be made in one-minute'. But this misses the point (no pun intended) - the signals generated provide you with early entries (and exits) which could put in a long and sustained movement.

"NO THINKING ALLOWED". Absolutely, but difficult (I'm still fighting this)

Good Trading,

Grant.
I've always been a believer in close stops but there is a convincing argument for bigger ones. Still trying to figure out who the hell is right.

daCharts.com Articles - The Myth of Tight Stops

I'll repeat the link posted in #2 by BSD.

Very convincing argument. I got closed out of SP yesterday, when I wasn't around to get back in, because of a close stop. The damned index fell for the rest of the day!

Split
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Old Mar 11, 2008, 1:55pm   #62
Joined Jan 2007
Quote:
Originally Posted by Splitlink View Post
I've always been a believer in close stops but there is a convincing argument for bigger ones. Still trying to figure out who the hell is right.

daCharts.com Articles - The Myth of Tight Stops

I'll repeat the link posted in #2 by BSD.

Very convincing argument. I got closed out of SP yesterday, when I wasn't around to get back in, because of a close stop. The damned index fell for the rest of the day!

Split
Hi Split

hope your on a good week Split

Its back to the Stops again

All I want to say regards the taboooooooooo subject is.........

since I moved to real market I can get away with much closer ones and have the confidence to re-enter if required to do so by my method later on in what is essentially the same move.

I used much wider stops but with smaller stakes when in the sb world and it worked out fine, my rules for entry exit were very clear in my mind and on paper so ....
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Old Mar 11, 2008, 2:18pm   #63
Joined Jun 2006
Nine,

Thanks for the Mind Hacks ref’s; will certainly check them out (my survival may depend on it).

Split,

Bigger stops, bigger losses. Of course, the price may then resume its anticipated course, but did the original anticipation include a reversal? Yes? Then why not wait to enter at a more favourable price?


Pink,

“much wider stops but with smaller stakes”. That’s sounds reasonable. Conversely, bigger positions with tighter stops.

Grant.
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