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Old Jan 22, 2004, 11:29pm   #22
 
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frugi started this thread $86.40
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Old Jan 23, 2004, 12:24pm   #23
 
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Frugi,

Please take this the right way as your honesty deserves respect.

You say that your trading plan allows for a max loss of $400/day. I assume that means that if you lose $400 you stop trading for the day. Does your trading plan also include detailed rules on set-ups, entries, exits, risk control and money management?

It looks to me that you are entering and exiting the market pretty much at random trying to chase a few ticks here and there and seriously overtrading.

My advice, for what it's worth, would be to step away from the market. Develop a trading system that details exact entry and exit rules. Backtest it extensively. Develop a money management system based on the maximum drawdown in your backtest. When you come to trade your system judge your performance against your system not against your daily P&L. So one day you might lose $400 but when you check, after the close, your system actually lost $412.50. Your actual trading made you a tick ahead of your system - well done you're a good trader.

There are two parts to trading, the system and the actual trading. 95% of people only do the trading part and have no plan. It's probably no coincidence that 95% of traders also blow their dough in no time at all.
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Old Jan 23, 2004, 4:44pm   #24
 
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frugi started this thread sidinuk,

No offence taken at all - I am very grateful for every bit of advice that comes my way.

Yes, if I lose $400 I stop trading for the day.

Quote:
It looks to me that you are entering and exiting the market pretty much at random trying to chase a few ticks here and there and seriously overtrading.
Spot on. I overtraded like a fool yesterday and the bulk of my trading plan was on holiday.

However I am also capable of making two or three good trades a day and feel I have a reasonable discretionary system (that incorporates the essential elements you mention) with which to pocket a couple of points a day. By discretionary obviously I mean I like to "manually" interpret price action, pivots, TICK divs. pattern formation etc. in real time and act according to my view of the situation. Though discretionary, the system is quite strict and I trust it. You will probably not believe this given my first two p/l statements but I believe there is a good trade or two lurking among the dross.

The trouble is that I am ill disciplined and and apt to make several, as you say, virtually random trades, just trying to grab a tick here and there, especially when I am already losing. I am trying to eliminate this nasty self destructive habit which is mainly why I'm posting my trades in public. That way kind folk such as yourself can point out the error of my ways and I can learn from my losses.

Quote:
When you come to trade your system judge your performance against your system not against your daily P&L. So one day you might lose $400 but when you check, after the close, your system actually lost $412.50. Your actual trading made you a tick ahead of your system - well done you're a good trader.
I'm afraid don't really understand this statement. Surely if you have a different result from your system's at the end of the day then you have not followed the system, i.e. broken your rules, which is just what we're trying to avoid? Also I imagine it would be difficult to test one's results against a discretionary system, as part of it is, by definition, subjective.

On any given day I will be pleased with my performance if I have simply followed my rules and ended the day with a profit, however small.

Today is going better so far. Patience patience....

Best wishes.
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Old Jan 23, 2004, 5:32pm   #25
 
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Frugi,

A little clarification with how I compare my trading results to my trading system. I have clear rules in the systems that I trade (6 in total over 3 instruments) which dictate when I should enter and when I should exit trades depending on what the individual markets are doing each day. This is purely mechanical and I have an Excel spreadsheet set up which can examine 1 min OHLC data for the day and list out the trades that should have been taken. The is the same spreadsheet that I have used for backtesting the systems. That's the system part. The trading part is actually executing those trading strategies in realtime. Making sure that I am calculating the correct levels for entries and stops throughout the day and making sure that those orders get executed at the prices I want.

Of course I do sometimes make mistakes - a couple of weeks ago I miscalculated a stop level and wound up $600 down on my system results. I still made just over $1,000 that day but I wasn't happy - my trading had not been up to scratch. It's no good making $1,000 on a day you should be making $1,600!

I Spend every day looking for ways to improve the trading systems and then concentrate on executing that plan exactly.


We do have different trading styles though. I cannot trade with discretion, I need to know that what I am doing works. The only way that I can know that is by formulating rules and backtesting those rules. Backtesting discretionary trading styles is impossible because you know what happens next no matter how much you try not to - it's too easy to ignore the losing set-ups.

I actually think that you can formulate rules for 'discretionary' trading. You must be looking for a particular pattern or set-up or divergence or what ever to occur before entering a trade - well it's all just numbers so formularise(!) it. If your just looking at the chart thinking, hmmm I think it might go up here so I'll buy it, then forget trading - you have no edge, you will lose. That's the random trades that you talk about as opposed to the 'good' trades that you take. Study the good ones and find out exactly why you entered them - if there is a pattern then there is your formula for the basis of your plan.
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Old Jan 23, 2004, 5:55pm   #26
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One thing I noticed, and this is obviously easy with hindsight is that with your second trade you bought at 40.25. At one point you sold at 47.25. If you had traded just these two times, you would be better off by $350 + $86.40 (saved in commissions) = $436.6 - costs. why not look to see how you could have traded here?
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Old Jan 24, 2004, 2:07am   #27
 
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frugi started this thread Today: $125 - ($10*4.80) = $77
Day 3 running total: -$112.20

Only made two bad trades out of ten today which is an improvement.

From the bottom:

1+2 Bought the open for a quick half
3+4 Waited for opening gap to fill. Time zone was right for reversal and pivot offered support. Long for 2 points.
5+6 Shorted DT (and high from yesterday) for a quick half. Should have held this but thought R1 might have done an RS switch.
7+8 Scalp off bottom of rectangle for another half
9+10 Tried the same but was stopped out on a spook out dip. Stop too tight.
11+12 Same again, but bagged three quarters this time
13+14 Bad trade. Tried to long after consol break when it hit a well established trendline (light blue line on 10m) but should have waited as the consolidation target was a couple of points lower. Lost a point for my impatience.
15+16 Lost another point bottom fishing around S1. The price seemed to stabilise after three 10m bars but I ignored the fact that a wave 5 down was more likely than a bottom.
17+18 Once the consolidation around S1 was clearer I scalped a half off the bottom
19+20 Bought the first bounce off the pink trendline. Guests were due so I had to close for a quarter and pack away all me pencils at this point.

+2.5pts not too dreadful, though it should have been 4.

Or 9 if I had simply held short from 1148 and moved my stop down sensibly with each consolidation break. I must learn to love trends and not fight them tooth and claw every time - it's much harder work and considerably more risky.
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Old Jan 24, 2004, 3:15pm   #28
 
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frugi started this thread Having some grief from my .gifs - will try and sort this out.
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