my journal

This is a discussion on my journal within the Trading Journals forums, part of the Reception category; I am on page 38-39, and he says how you should take emotions out of trading. I don't agree with ...

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Old Nov 29, 2009, 7:55pm   #916
 
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Re: my journal

Yamato started this thread I am on page 38-39, and he says how you should take emotions out of trading. I don't agree with this. I want to win tomorrow, and winning will make me happy. I crave to win, and as long as I respect those rules, the worst that can happen is that I lose 250 dollars tomorrow, which is still a victory because I will be within my "businessman's risk", as he calls it. I don't see why I should take the joy out of my trading. As long as it doesn't interfere with my rules, I am going to feel proud and happy that I was so good as to make the right trade.

Ok, here we go... another 4 pages and I'm done with the book that turned my trading around (I am exaggerating a bit), together with my willingness to change. The other two chapters, two and three, will be entirely read for entertainment and curiosity, because this AA, gambling-related chapter is exactly what I needed, and all I needed.
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Old Nov 29, 2009, 8:08pm   #917
 
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Re: my journal

Yamato started this thread Hmm... he forgot to list the 12 points of AA... or maybe I'll find them later in the book.

I am done. I read the whole first chapter. Maybe it added something to my thinking, maybe not. Let's see what tips I can get out of it:

1) Admit you've been a gambler
2) Stop gambling, by, day after day, never taking a loss greater than your predetermined risk

That's all basically. Thanks, Elder. Maybe if you wrote a post with these two lines on a forum, I wouldn't have gotten your point and would have replied "the usual psycho-bull****", but since you wrote 20 pages explaining this point, I understood better. Yes, it was worth reading it. Thanks, wprins.

Had Elder posted these two principles on this journal, I would have called him a pretentious sonuvabitch, but now I am saying thanks to him.

Tomorrow I'll go to work and print chapter two and three, and read them in the bath tub or on my way home. But for entertainment because now I have everything I need to be profitable.

If I'll follow my plan, at the end of next week I should be at either 5k (because now I am a bit over 6k), or, as i hope, at about 8k. I am hoping to make about 500 dollars every day, except for two in which I'll break even. My systems will also place a couple of trades, and so I could even be as high as 9k. I am ready to be at 20k by Christmas. Yeah, because if this stuff works, I'll make about 2k per week, plus what systems make. But let's not be too optimistic either. I'll be at 14k by Christmas, and I will be very satisfied if that happens, because it will mean more than doubling in one month.

I can't wait to be a profitable discretionary trader in control, for the first time after a 12 year long trading career as a compulsive gambler.

Last edited by Yamato; Nov 29, 2009 at 8:23pm.
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Old Nov 29, 2009, 9:38pm   #918
 
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attached pics of Elder's excerpts missing because of my mistake

Yamato started this thread Small accident with the pics of the book. Sorry everyone. I guess you can't remove attachment or they won't show in your post. When I posted them they were all showing, but things are different two hours later and from a different computer. I am really sorry. I guess they were either in my cache or get deleted after a few hours. They were from pages 0 to 41 of Elder's book, "Trading for a Living".
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Old Nov 29, 2009, 10:05pm   #919
 
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Going over tomorrow's plan

Yamato started this thread I will now go over my trading plan for tomorrow, and will have to review a little bit my system as well (as long as I don't do it during a trade it's ok).

Here's my system right now:
Quote:
ENTRIES if:
1) you haven't lost over 250 dollars for the day (from discretionary trading)
2) the 15-period 15-minute ma is in favor
3) the 15-period 1-minute ma gets crossed by price (in favor)
4) 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.
CONCEPT OF STAYING AWAY FROM PIVOT LINES
I am using this concept of "your entry and your take profit are both 1/5th away from any pivot lines" which has to be defined better and first of all explained to all of you. I'll never go against the trend, because I'll only trade with those two averages in favor of my trade, therefore, if price is approaching/passing a pivot line on its way up or down, I will go LONG or SHORT (never viceversa).

>10 TICKS AWAY FROM APPROACHING PIVOT LINE
Now: when price approaches a pivot it either bounces or slows down, entering an area of uncertainty. I want to make sure that my take profit is placed before that area. So my new rule will not be 1/5th because we never know how big is the distance from pivot to pivot. It will be 10 ticks away. So, new rule: take profit has to be >10 ticks away from approaching pivot.

>10 TICKS AWAY FROM SURPASSED PIVOT LINE
By a similar reasoning, when we're close to a pivot, even after surpassing it, price will hesitate before taking off into the unknown area beyond the pivot. It will linger around the pivot line for hours sometimes, in a tight range. So I don't want to be caught in that range, so I want my entry to be >10 ticks away from that pivot line. I should be using percentage of daily range or distance between pivot lines but sometimes there are no pivot lines and at some hours (and my system can trade in all hours) of the day daily range values don't mean anything. So I am using absolute ticks.

Also, very importantly, this 10-ticks requirement includes a situation, unimaginable, where you could actually respect the rule, but start a trade BEFORE an approaching pivot line planning to end it AFTER surpassing that same pivot line. That would totally unreasonable.

So here's my new, more precisely defined, system:
Quote:
PRO-TREND DISCRETIONARY SYSTEM
HOTKEYS
Set up hotkeys: "B" for "buy 1 at market" with 20 ticks bracket order, "S" for "sell 1 at market" with 20 ticks bracket order, "C" for "close position".
----------------------
CHARTS
SET UP THESE EUR.USD@IDEALPRO CHARTS ON IB'S TWS:
2 DAYS OF 15-minutes CANDLES WITH PIVOTS and 15-period moving average
4 HOURS OF 1-MINUTE CANDLES WITH 15-periods moving average
----------------------
ENTRIES if:
1) you haven't lost over 250 dollars for the day (from discretionary trading)
2) the 15-period 15-minute ma is in favor
3) the 15-period 1-minute ma gets crossed by price (in favor)
4) your entry and your take profit are >10 ticks 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.

Last edited by Yamato; Nov 29, 2009 at 10:24pm.
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Old Nov 29, 2009, 10:14pm   #920
 
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Tomorrow's situation

Yamato started this thread I CAN DISCARD SIGNALS BASED ON ANY IDEAS
Mind you, I can always decide to discard signals, based on anything I observe about the markets (discretionary part). But if I make any discretionary trades it will be according to signals in all the rules present in my system.

I CAN EXIT EARLY BUT NOT LATE
In the same way, I can exit early (before the 20 ticks bracket order) any trade, but I not beyond the 20-ticks of the bracket order. Also, I cannot start a trade if my loss exceeds 250 dollars in one day. Which could mean that I start a trade if my loss is say 240 dollars. That's ok. My final loss could even go up to 490 that way. That's all within the plan. No tricks played on my plan.

LET'S PREPARE FOR TOMORROW...
Let's look at the chart we'll set up, even if they're different from what we'll see tomorrow. Let's pretend it's already tomorrow, and act likewise.
CHARTS
SET UP THESE EUR.USD@IDEALPRO CHARTS ON IB'S TWS:
2 DAYS OF 15-minutes CANDLES WITH PIVOTS and 15-period moving average

There's no tomorrow yet on TWS' chart, but this will be the chart settings I'll use tomorrow:
snap1.jpg

4 HOURS OF 1-MINUTE CANDLES WITH 15-periods moving average
This, too, is Friday's chart. But the type of 1-minute chart will be the same tomorrow.
snap2.jpg

If these charts were representing now and if now it were tomorrow, I could go LONG at the next 1-minute 15-period moving average bullish crossover, because entry and exit would be >10 ticks away from pivot lines, and because price is above the moving average in our 2 days chart.




Last edited by Yamato; Nov 29, 2009 at 10:31pm.
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Old Nov 30, 2009, 7:35am   #921
 
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potential trading allowed

Yamato started this thread Analysis of the situation, looking for trades

That's good. I thought I might be able to place a trade but we're exactly at the pivot point and it's lingering, as expected. On top of that, price is neither above nor below the 15m 15p average.
2d.jpg

So we can't trade at all.

I am going to show the 4 hour chart even though it's not even relevant, because trading is not allowed by the 2 days chart.
4h.jpg

ENTRIES if:
1) you haven't lost over 250 dollars for the day (from discretionary trading)
2) the 15-period 15-minute ma is in favor
3) the 15-period 1-minute ma gets crossed by price (in favor)
4) your entry and your take profit are >10 ticks 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.

I'll come back in about 9 hours to see if there's any opportunities for trading, according to the rules above.
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Old Nov 30, 2009, 7:54am   #922
 
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I felt a very subtle temptation

Yamato started this thread Elder said it clearly: like for a recovering alcoholic, staying without drinking/gambling for a few days it's easy. And yet today, as I was looking at those charts, I did feel a little temptation to look for trading opportunities beyond what the rules of my system allowed. It's going to be an achievement if I can do it for a whole week, and without efforts even. Because even as of this morning, less than 24 hours from reading the chapter and promising to myself that I'll try, I did feel some temptation there, even not completely conscious, I did look at charts to spot any opportunities and not just those allowed by the system.
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Old Nov 30, 2009, 8:16am   #923
 
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Re: my journal

Yamato started this thread Going to work. I looked again, compulsively, but there were no opportunities still. There would have been, SHORT, if we had crossed the 1m 15p ma bearishly below 1.5050, but it did so at 1.5055, so it doesn't qualify as a signal, because it's less than 10 ticks away from the pivot line at 1.5060.
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Old Nov 30, 2009, 10:49am   #924
 
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Yamato started this thread I slept well. I am going to buy some propecia. Then I'll go to the vending machines and eat something.

I am doing ok, even though the rest of my office isn't. My office is overflooded with work, that is passing through me, but that I don't have to actually do.

I only have to register the reports, do a lot of statistics on them, and let them take care of the heavier work. However, I am the one who's working the most, so everything here is in perfect order, statistics are on time and perfect, and all the work is behind schedule. We're... they're in deep trouble. My statistics certify that we are in deep trouble. We're behind schedule by 131 reports not processed. Two years ago, with a different boss and different processing requirements, we were at zero reports not processed. Now 131. I'm receiving over 20 reports per week, and they're processing less than 10. We're screwed. They're screwed.

But they can't get me involved because I am working most of the time, and producing ten times the work they produce. If anyone of them wanted to do what I am doing and let me do what they're supposed to be doing but are not doing, I'd be able to do it, but they wouldn't, so that's why they're not even remotely considering that possibility.
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Old Nov 30, 2009, 11:33am   #925
 
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Re: my journal

Yamato started this thread I went to eat something, at a cafeteria rather than at the vending machines. I feel I can now afford to spend some extra money. Now that I'll start trading with a reasonable discretionary method. Or maybe I wanted to eat healthy for once.

I bought all the pills, propecia and melatonin, and placed them in the case. I threw in the trash empty boxes and it will look to the cleaning lady like someone tried to commit suicide by taking dozens of pills.

I will now go to brush my teeth, and start working again. By the way, I also printed Elder's second chapter, which I'll read during breaks from work or in the bath tub. Or in the cab. Probably I'll finish it by tomorrow.

I can't wait to get home in just 4 hours and make all my money back with discretionary trading. I can't wait to test my new method and finally trade and make money. Another four hours and, either way, we'll know if I am in control of myself or not. Tonight I'll trade for sure, because the signals are there. I will trade for sure and I will either get out with a loss of 250 (250 to 490 to be precise), or I'll get out with a win of... up to any amount. I'll definitely find out if I can resist gambling or not. I'll see if I can trade within the rules I set or not.
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Old Nov 30, 2009, 1:58pm   #926
 
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My first day of non-gambling trading

Yamato started this thread The final countdown has begun. In just two hours I'll go home and make my first non-gambling discretionary trade (my automated systems have been doing that for two years already), according to all the rules of that method I posted, which does allow some margin for discretionality, in the sense that I can ignore signals, but of course not imagine signals that aren't there, and in the sense that I can close a trade before my bracket order, but not beyond the 20 ticks allowed by the bracket order. Everybody make sure you're here to witness the event. It could be the start of discretionary profitability for me.

Remember, the difference between trading and gambling is that the gambler's losses are out of control, whereas, as Elder said, the trader never takes "a loss greater than his predetermined risk". That's the point one needs to understand about this book, or at least that's all I needed to understand.

snap.jpg

Click the image to open in full size.

Last edited by Yamato; Nov 30, 2009 at 2:17pm.
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Old Nov 30, 2009, 4:10pm   #927
 
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Finally home!

Yamato started this thread Ok, this is it. I am home, ready to make some money, any amount of money, or to lose a limited, predetermined, amount of money.
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Old Nov 30, 2009, 4:17pm   #928
 
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Slow average and pivots

Yamato started this thread From this chart, our next trade will have to be a LONG entry, based on a 1-minute chart moving average bullish crossover signal, 10 ticks below the 1.5061 pivot line. But price will also have to be above the slow average, which is at 1.5026. And it may be hard to satisfy both conditions (less than 1.5051 and more than 1.5026 while getting a 1-minute bullish crossover).

snap1.jpg

Indeed, here's my rules again:

CHARTS
SET UP THESE EUR.USD@IDEALPRO CHARTS ON IB'S TWS:
2 DAYS OF 15-minutes CANDLES WITH PIVOTS and 15-period moving average
4 HOURS OF 1-MINUTE CANDLES WITH 15-periods moving average
----------------------
ENTRIES if:
1) you haven't lost over 250 dollars for the day (from discretionary trading)
2) the 15-period 15-minute ma is in favor
3) the 15-period 1-minute ma gets crossed by price (in favor)
4) your entry and your take profit are >10 ticks 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.

Last edited by Yamato; Nov 30, 2009 at 4:24pm.
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Old Nov 30, 2009, 4:27pm   #929
 
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waiting for bullish crossover here >1.5026 and <1.5051

Yamato started this thread I don't have to take the signal, according to the discretionality allowed by the system. So I will wait until it's a bit more oversold. Plus I want to look at correlated markets.

snap1.jpg
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Old Nov 30, 2009, 4:29pm   #930
 
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Re: my journal

Yamato started this thread I am not taking the signal, because the slow ma is in favor but not by so much, and because we've been in this area for too long, and because we're overbought as well. All within the system. I hope I'll get a short signal, because it looks better to me right now.

snap1.jpg
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