my journal 2

This is a discussion on my journal 2 within the Trading Journals forums, part of the Reception category; Won again, and I am tired. I guess this is the measure of a good system: it works even if ...

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Old Jan 27, 2010, 11:27pm   #101
 
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re: my journal 2

travis started this thread Won again, and I am tired. I guess this is the measure of a good system: it works even if you're tired and pissed off. Also, switching chart as soon as you've made a trade keeps you off "revenge trading", because once you lose or even win, you're changing chart so you don't hold a grudge towards the stock that made you lose (or win, which also keeps you from being neutral). Every time you change stock in some way you reboot your mind and prejudice about that stock.

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Old Jan 27, 2010, 11:39pm   #102
 
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re: my journal 2

travis started this thread Yup, I think i've got it. I am getting there. First discretionary (or at least manual) system that I'm profitable with.

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Let's sum it up one more time:

RULES FOR BOTH METHODS:
1) on the weekly chart of "chart game", one trade per stock on 5 stocks for a total of 5 trades (only LONG trades allowed)
2) if unprofitable after two weeks close trade
3) if profitable after two weeks, close after 6 weeks

DIVERSIFIED RULES:

BOUNCE ON SUPPORT TRADES:
1) Important support level
2) Confirmation candle, gap down (touching support), uncertainty candle with regards to downtrend
3) Extremely oversold

BREAK THROUGH RESISTANCE TRADES:
1) Not overbought
2) slightly above resistance
3) preceded by long term uptrend (you can't have 4 years of range or else a breakthrough is less likely)
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Old Jan 28, 2010, 12:27am   #103
 
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re: my journal 2

travis started this thread Lesson learned: I really have to let price reach support, without anticipating it, because in most cases it will get there. I have to really trust s/r levels in other words, because they get reached.

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Old Jan 28, 2010, 1:02am   #104
 
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re: my journal 2

travis started this thread I think I am learning something. The last two series were 100% wins. I am learning to read candlesticks, in other words, the way that price moves, which is nothing other than oversold/overbought levels, which I already mentioned. Yeah, because that's what we read in candlesticks. Overall I got about a 66% of wins, and a very large profit. It's working: more wins than losses and bigger wins than losses. I am now only worrying that I won't be able to repeat this in real trading, but this stuff definitely cannot hurt.

Also, I have to mention that most of the stress is gone, shown by the fact that I'm playing these charts dozens of times in a row.

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Last edited by travis; Jan 28, 2010 at 1:08am.
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Old Jan 28, 2010, 1:43am   #105
 
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re: my journal 2

travis started this thread Ok... definitely learning. Learning the value of round numbers on stocks: 10, 30, 50, 100. Just like 0.0100s on GBP and EUR.

Got a bunch of positive results. Would feel like doing 20 trades at a time, but I am afraid that would get me started overtrading, and hanging on to losers, in order not to get an awful series of let's say 20 trades. If I fail on 5, so be it, because I can start all over again. But if I fail on 25, it's a mess, psychologically. On the other hand, the results, in terms of percentage of wins and profit, could be more constant. And I wouldn't have to upload all these images. I'll think about it.

Maybe I'll either play 20 trades or I'll copy paste the results instead of taking snapshots.

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Old Jan 28, 2010, 1:51am   #106
 
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re: my journal 2

travis started this thread I knew it! As soon as I started this feat of 20 trades in a row, it seemed immense and I started slacking off and working less hard in order to finish them faster. It is only natural: with 20 trades, each trade seems less important. Tomorrow or whenever I'll do more, I'll go back to 5 trades at a time.
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Old Jan 28, 2010, 5:22pm   #107
 
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re: my journal 2

travis started this thread I guess we can say that I'm profitable.

These are a bunch of stocks I played, only LONG trades, and the only rule was that, pretty much, if I was wrong, I'd get out by my first or second unprofitable (weekly) candle. I've been allowing myself to stay in trades longer than 6 weeks if profitable (which was a requirement until yesterday, but I now use as a flexible principle). The other rules are the ones I mentioned before, plus some more instinctive stuff that I'll write down as much as possible as soon as I've got it all figured out. On the other hand even if I don't write it down, once I got it I got it. Once I have figured out a way to be profitable, on unknown stocks, I am not going to forget it. It's like playing risk. I keep on winning regardless of how many years I stop playing, or swimming or riding a bicycle.

I'll know that I really have figured it out once I'll get positive outcomes on every so many trades made and so many stocks played, in the dozens, like below. The longer I go on, the more reliable are these results. When I only play 5 stocks, those results are not as indicative of my understanding, because they could be influenced by luck. On the other hand, i had to do it this way in the previous days because after 5 trades I was very tired and stressed out, since every time it was a challenge, being so unsure about my skills. Now I have increasingly more confidence, and I choose more quickly, and with much less stress.

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Last edited by travis; Jan 28, 2010 at 7:27pm.
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Old Jan 28, 2010, 6:07pm   #108
 
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Making only LONG trades allows your mind necessary rest

travis started this thread Awesome! Ten trades on 12 stocks... almost all wins, and profitable on all stocks. I am learning it just like a videogame. This chart game has got something that IB's paper trading account does not have: speed. Real trading sucks: the only exciting thing about it is money and the few volatile moments, around news time. That's why paper trading is so hard to do: because at that speed and without money, it becomes extremely boring. But this simulation game, with the ability to speed it up (in my setup with each click a week goes by), renders boring stock charts an entertaining game (also thanks to the idea that I'll make real money with the skills it teaches me). This enables me to learn trading as if it were a video game. I can make it go as fast as I want.

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I think this is thanks to only limiting my trades to the LONG side (the most probable), which in turn enabled me to focus enough and not go crazy with all the ups and downs. The ups and downs drive you crazy, if you try to profit from both. But if you only focus on going LONG, you can rest your mind while it goes down and prepare for your trade. I think that was the #1 idea that made improvements possible, and kept me from going crazy and giving up. The second good idea was the stoploss, which everyone talks about (even without understanding it), but which is not a reality until you have fully digested it.
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Old Jan 28, 2010, 10:07pm   #109
 
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The chart game took "waiting" out of the picture, and showed me I am profitable

travis started this thread Holy ****! This game is teaching me to have total faith in support and resistance levels, teaching me how to read them, and teaching me that they work very very well.

Furthermore, it's teaching me that if I am confident in a method trading is much less stressful, almost not at all. It's not because I am paper trading, as someone may object, because yesterday I remember how totally stressed out I was, when I was making those 5-trade series, and trying to make the right calls on the market. But now I have found out, gradually and increasingly, that I have an edge, and that profit happens. I can make profit happen. It's the most important thing. Until now I noticed that my automated trading systems could make profit happen but I didn't know exactly how they did it, nor how long it would last. They did it by waiting. Something I don't do when I trade, since I always overtrade. I guess we're all profitable from the start - the only problem is that we don't get rid of those trades we're not positive about. Anyone can see the good opportunities in the markets, but very few can wait until they see them. With this "accelerated" simulator the problem of waiting went away and I suddenly realized that I am capable of being profitable and having an edge.

At this point, i'm tempted to dare further and go SHORT as well as LONG but I will postpone it because first I want to get this right and never really fail (given a certain number of trades), which is being the case in the last few trades. Also I must not forget what I said two posts ago: going in the most probable direction not only gives you an edge, but also allows your mind to rest as necessary. I can't expect to bet on every single move of the market (on top of it with a worse edge), because this will just drive me crazy. I love how how I've been able to let some stocks go without being bothered by the idea that there might have been good opportunities. The problem is that these are weeks that are going by, one week goes by at each click, whereas in real trading I couldn't just let 1 year go by and do nothing for a whole year. Not even for one week.

The good thing is that it's teaching me to wait until the s/r level is actually reached and not anticipate it.

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This above was like the fourth series of profitable trades in a row: I am getting used to making money with this method (see previous posts for method), and even beating the buy and hold approach. But I have to be careful now, because my psychology is changing, and i noticed that on two occasions I didn't respect a stoploss and started hoping because I didn't want to ruin a string of wins, and didn't really accept that I could be wrong.

Anyway, the chart game took "waiting" out of the picture, and showed me I am profitable: if I can wait. So I can be profitable with real money via discretionary trading, if I can allow myself to act as an automated system and trade only once a day, or rather at one moment of the day. Possibly at the reversal time near the US close. Best if by only going LONG on those futures I monitor. And better if I do so in an uptrend, which will be signalled by the fact that my automated systems will have made money the previous week.

The "one trade per day" part has been kicking in recently. After getting from 30k to 3k in six months, and staying at about 3k for the past month or two.

The ideal trading environment for me would be staying at work until 20 CET (13 CST), so I can't trade, and having access to charts so I can look and study what the best opportunities are. Then only get home at reversal time, which is about 14 CST, on pretty much all the futures I trade. But this situation is science fiction, since I get home at 16.00 CET, and then the time is not right to trade (for my bottom picking, I mean). So hopefully good habits will help me out. Because I have zero discipline.

Last edited by travis; Jan 28, 2010 at 10:33pm.
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Old Jan 29, 2010, 8:58am   #110
 
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Only make as many trades you can keep calm with

travis started this thread As long as you're not trading compulsively, you are reasoning. And if you're reasoning, you can find a way to be profitable.

In order to avoid trading compulsively, you simply have to limit yourself to making one trade per day - or as many trades you can keep calm with, which in my case is one trade per day. Do I want to be profitable? Yes? Then one trade per day.

I should approach trading like net fishing. You set your nets and come back and see if you caught any fish. You set your limit buy orders during the day at oversold support levels. Then come back from work a few hours later and see if any of them got executed. If not, too bad. Then you still make your one trade per day, because you can always find one good opportunity every day. This way your capital grows and you stay calm. You want it the other way? Excitement, speed...? Your capital will decrease. It's up to you to decide what you want.
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