Firewalker's Journey: A path of discovery in search for enlightenment

This is a discussion on Firewalker's Journey: A path of discovery in search for enlightenment within the Trading Journals forums, part of the Reception category; First of all, let me state that the main purpose of opening my own journal is to learn stuff. Learn ...

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Old Jul 31, 2006, 2:28pm   #1
 
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Firewalker's Journey: A path of discovery in search for enlightenment

First of all, let me state that the main purpose of opening my own journal is to learn stuff. Learn by reading and understanding what others think or would have done in the situations I will present. I have been studying quite a lot and trying hard and although I have been at times successful, I'm not at all able to produce consistently profitable results.

My trading has improved because I'm sticking to the plan and left out the impulsive trades... but perhaps the plan just isn't good enough. I'm not expecting to have a 70% ratio of good trades, but something has gone wrong and I'm in need of someone who will guide me back to the right path.

I hope the members of this forum can help me back on track.
I don't expect anyone to write fully detailed analysis of every chart I post, but if they're willing to, please do.

Please let me know if I need to improve my "journalistic qualities" or if you have any feedback whatsoever.

Last edited by timsk; Nov 28, 2009 at 6:10pm.
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Old Jul 31, 2006, 2:32pm   #2
 
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firewalker99 started this thread I won't be doing this each day, but let me begin be describing what I do first.
Apart from checking out the news releases, I try to get a picture of what happened last month, last week, last day... Then I visualize what could happen today and try to establish where I'd like to be and what could be the "right" side of the market.

i'm trading futures on the DAX (papertrading for the moment).
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Old Jul 31, 2006, 2:39pm   #3
 
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firewalker99 started this thread Attached two charts:

The first one without notations, the second with my comments.

Although this one is a profitable trade, I'm not happy as I'm not really understanding the principles that make the price go up from 5700 on modest volume...
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Old Jul 31, 2006, 3:16pm   #4
 
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not clear at all

firewalker99 started this thread this one for example has me totally screwed up...

it breaks the down move, goes up - although on modest volume (12:30-13:15) - than volume drops off until about 14:00. In my eyes, a small retracement could happen but no lower than perhaps around 5710... Instead just minutes before 1500 it breaks down fast and (remains to be seen) a selling climax? I'm not sure where the sudden move came from, no news was released...
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Old Jul 31, 2006, 4:57pm   #5
 
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Quote:
Originally Posted by firewalker99
Attached two charts:

The first one without notations, the second with my comments.

Although this one is a profitable trade, I'm not happy as I'm not really understanding the principles that make the price go up from 5700 on modest volume...
Re the first column on your chart, were these the extent of the tests of 5722.50? Or were there additional tests prior to the left edge?
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Old Jul 31, 2006, 6:01pm   #6
 
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Re the first column on your chart, were these the extent of the tests of 5722.50? Or were there additional tests prior to the left edge?
no, at 8 o' clock the DAX opened... at 9 volume pumps up because other European exchanges open...but I like the DAX becaused you can get "a glimpse" of what's about to happen (sometimes)
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Old Jul 31, 2006, 6:13pm   #7
 
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success ratio

firewalker99 started this thread Do you find 50-60% low? I'm not aiming at specific target, but personally I'd be happy with a 60% win rate, because for the moment it's nowhere near that.

I do think that the % matters less if you take in account the risk:reward ratio. Somebody who uses a risk:reward of 1:5 can be happy with 30% good trades in my opinion, if and if losses are cut short. Correct me if I'm wrong, I'm only hear to learn. And learning is still what I have to do a lot.
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Old Jul 31, 2006, 6:14pm   #8
 
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fixed targets?

firewalker99 started this thread I try to enter a trade with three contracts. Of course it depends on the volatility of the moment and the probability of my entry. Then I place one fixed target at 2 times the ATR, another at 3 times and the last one I only exit when I see signs indicating the end of the move. From the moment my first one reaches it's target, I change the remainder stop at breakeven.

Does this seem too conservative?

I've experienced I've often lost a trade because my stop was too tight. How do you guys place a stop? A mental stop? A fixed stop? I use the average true range and depending on how high it is, I buy less contracts. If ATR is low, I buy more. Lately I've not been buying a lot because I've experienced quite a bit of losses so it's back to papertrading for me
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Old Jul 31, 2006, 6:59pm   #9
 
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Quote:
Originally Posted by firewalker99
no, at 8 o' clock the DAX opened... at 9 volume pumps up because other European exchanges open...but I like the DAX becaused you can get "a glimpse" of what's about to happen (sometimes)
By "previous tests" I didn't necessarily mean that day. Would it be too much trouble to post a chart of the previous day or zoom out to show the previous week?

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Old Jul 31, 2006, 7:07pm   #10
 
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Quote:
Originally Posted by firewalker99
Do you find 50-60% low? I'm not aiming at specific target, but personally I'd be happy with a 60% win rate, because for the moment it's nowhere near that.

I do think that the % matters less if you take in account the risk:reward ratio. Somebody who uses a risk:reward of 1:5 can be happy with 30% good trades in my opinion, if and if losses are cut short. Correct me if I'm wrong, I'm only hear to learn. And learning is still what I have to do a lot.
Whether or not this win rate is low depends on the profit:loss ratio.

First, the risk:reward ratio is irrelevant since you have no idea what the reward is going to be. I know there are various ways of calculating targets, but I haven't found that any of them pan out. You may find differently in your work, and that's fine. But don't rely on opinion. Rely on the results of your own work.

Second, cutting losses short is only part of it. There are many traders out there who die the death of a thousand cuts because they maintain tight stops and cut their "losses" too short. But this issue has to be addressed in the work, not in general posts about what the average individual should or shouldn't do.

Therefore, you have at least two tasks in front of you. Achieve such a high profit:loss ratio that your win rate isn't critical to your success, or achieve a higher win rate so that your profit:loss ratio needn't be so high.

At this point you may be tempted to ask how you go about accomplishing all of that, but I don't want to short-circuit your thinking process. Mull over this for a while and we'll come back to it.

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