my journal

This is a discussion on my journal within the Trading Journals forums, part of the Reception category; [... reading...] I am liking it a lot, but I don't see how this is going to change my trading....

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Old Nov 29, 2009, 8:42am   #897
 
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Re: my journal

travis started this thread [... reading...]

I am liking it a lot, but I don't see how this is going to change my trading.
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Old Nov 29, 2009, 10:55am   #898
 
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Re: my journal

Travis
Seems to me that you rebel against all the things that would make you succesful, as if somehow you know better, despite your 12 yr performance.
In your discretionary trades, you appear to act like one of Fowlers pidgeons, constantly pecking away for random rewards, which is typical of gambling addiction.
Even discretionary trading can be mechanical in that it can be done using fixed rules. The discretion arises in knowing when to use them and when to stand aside. e.g. markets are not technical all of the time, so don't trade technically (or at all) at those times.
Maybe if you imagined that your trading pot is someone elses money, someone important to you like your mother, then you would control and behave yourself and do the right thing for her, instead of trying to endlessly prove to yourself that being a rebel is a good thing.
You have to take the 'you' out of all this, otherwise nothing else can change. Your mech systems are telling you that.
So let me really wind you up by patting you on the head and saying "there there, be a good boy and make your Ma some money". That should make you both angry and confused, but it might open a different door in your mind.

Glenn
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Old Nov 29, 2009, 12:04pm   #899
 
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Re: my journal

travis started this thread Yeah, it's fine advice. It seems like pretty correct analysis of how I feel. But I can also tell that my precise rebel's problem is this: top and bottom picking. I am always looking to predict when the ongoing trend will end and reverse. And when it does, I stay with the new trend for a bit, and then start looking for the opposite reversal. So I think that if I can trade only within those moving averages I wrote about (both pro-trend), I'll have solved my problems.

One thing you said that made me unsure is this:
Quote:
The discretion arises in knowing when to use them and when to stand aside. e.g. markets are not technical all of the time, so don't trade technically (or at all) at those times.
On the one hand, alowing exceptions could be profitable, but I am pretty sure that I am NOT ready for it, because all my trading so far has been about not having ANY rules, and if I had them it was about breaking my own rules. So I would try to have a few rules not to be broken in any case, because the possibility of exception in my case can always lead to removing my stoploss and blowing out my account.

Recapitulate these are going to be my rules:

Quote:
ENTRIES if:
1) the 15-period 15-minute ma is in favor
2) the 15-period 1-minute ma gets crossed by price (in favor)
3) your entry and your take profit are both 1/5th away from any pivot lines
EXITS
Bracket order of 20 ticks. You can exit early if you wish, but not increase the distance of the stoploss.
The discretionary part I am allowing is that I can discard entry signals, and that I can exit early, in terms of both profit and loss.

Right now I am reading Elder, to see if I can get any good advice.

Last edited by travis; Nov 29, 2009 at 12:37pm.
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Old Nov 29, 2009, 12:14pm   #900
 
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Re: my journal

travis started this thread Elder book was written in 1993. Compared to then, trading has become much easier. So far I've only read the Introduction. He speaks in detail of slippage and commissions as huge costs. They used to be. And back then getting market data was also a problem. Everything now has become much easier, even compared to when I started, in September 1997.

I really have to become profitable, because I definitely can do it, and because I owe it to myself, and to everyone I bothered so far, also the readers of this journal. I will then tell you a lot about what I am doing right, after spending 800 posts telling you about what I was doing wrong.

Out of all the interesting things Elder says in the Introduction, I have found only one good piece of advice (because I already implemented on my own the rest of his advice, on getting a cheap broker and so on): get off the emotional roller coaster and postpone the short-term pleasure from thrills you get by gambling in the markets. In synthesis, that's his advice: stop trading and being in denial about how your trade is going. He's right about the description of my psychological state after I make a trade, and even before: impulse trading, looking for thrills.

Click the image to open in full size.

After I make the trade: if it goes well, I am happy, and if it goes badly, instead of acting, I start feeling bad. I don't close it... I never used stoplosses, and when I had them in place, I often removed them.

You could still trade a whole day with stoplosses and lose in ten trades as much as you'd lose without them in one trade, but if there's trend, and you go with it, you will make more money than you lost on those bad ten trades, which you could have avoided to begin with. If you use this method, with these strict rules, you will at least break even. Instead what I've done until now is losing in days with trend as well, which is unforgivable, because it can be avoided with simple rules.

Now I will read chapter one, and write down, as I read, the advice he's giving me.

Last edited by travis; Nov 29, 2009 at 12:30pm.
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Old Nov 29, 2009, 12:43pm   #901
 
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Re: my journal

travis started this thread Hmm, this is beautiful, but I am always keeping in my mind this incessant question: how is this helping my trading? I will now comment it as I read it, because it completely applies to me. But I will also ask at the end "how is this helping my trading?", because this is the reason I didn't want to read this book to begin with.

Click the image to open in full size.

Deceptively easy: yes, I noticed, and I wrote it in this journal, just like he phrases it.
Feels invincible, loses everything: yes, it applies to me.
Money in a hurry and freedom: all said here.
Enjoying the challenge: yes, said it here.
Loner looking for risk: yes.

Advice? I don't know. Maybe, don't let trading deceive you into thinking it's easy. Yeah, but I knew this already. It feels good to read a book that says exactly what I think, but what's the point? Let's keep on reading. I won't quote everything or it will take me too long to read. As I said, I will just write down the advice he seems to be giving me.

So far this is what I got out of it: renounce to the short-term pleasure you get from impulse trading. And yes, this sounds good, but did I have to read 10 pages to get one sentence out of it?

Last edited by travis; Nov 29, 2009 at 12:53pm.
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Old Nov 29, 2009, 12:59pm   #902
 
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travis started this thread
Quote:
The trouble with self-fulfillment is that many people have a self-destructive streak. Accident-prone drivers keep destroying their cars, and self- destructive traders keep destroying their accounts. Markets offer unlimited opportunities for self-sabotage, as well as for self-fulfillment. Acting out your internal conflicts in the marketplace is a very expensive proposition.
Yeah, he may be talking about me above, and here:
Quote:
Traders who are not at peace with themselves often try to fulfill their contradictory wishes in the market. If you do not know where you are going, you will wind up somewhere you never wanted to be.
Ok, the part that follows, about fantasies and myths, does not apply to me at all. Finally something I am not doing wrong.

It'll be a miracle if I finally, next week, start respecting my own rules. A miracle. He talks about losers and what they do, and he's right again about what I do: i take risks that are too big. No stoploss means that I'm willing to risk everything I have in order to make 250 dollars, that is usually the money I consider enough to close my position. My rules definitely take care of this problem of risking too much (my entire account to make 250 dollars, that's what I risk each time I place a trade).

He talks about good traders being realistic. Why do i keep on writing here and truly thinking that I will never have a losing day? Am I being unrealistic? I don't know, maybe. Somehow I really feel confident that I will not have any negative days, and that I can turn into a very good trader as long as I use those simple rules I listed. We will see in a little more than 24 hours. I can't wait. Trading discretionary is a lot of fun to me, it's like playing risk, the strategy game.

Wow, sometimes he really contradicts himself. This is just one instance:

Click the image to open in full size.

"They expect to lose a large amount of money before making any!" and "Amateurs neither expect to lose nor are they in any way prepared for it" are two sentences that cannot be written about the same people, and yet they are: he's talking about the bad traders, the amateurs. I am thinking that maybe his English was poor in 1993 and he had someone else help him write his book, and somehow some mistakes were caused by the fact that two different people worked on the book. Otherwise I don't know how to explain this, maybe he's not totally logical, or he forgot what he wrote a few sentences earlier, or he wrote the two sentences in two different days...

Last edited by travis; Nov 29, 2009 at 1:27pm.
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Old Nov 29, 2009, 1:52pm   #903
 
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Re: my journal

travis started this thread Good, here I can't help laughing because I know how wrong he is. Thanks, Elder, for spreading false information about automated trading systems. I can't lie so I am glad you're doing it for me: "automated systems do not work". Thanks for keeping people ignorant and unprofitable. Because few people are reading my 800 posts, but many are reading your first chapter.

Click the image to open in full size.

I still have to read some advice on what I should be doing other than "stop gambling".
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