my journal 2

This is a discussion on my journal 2 within the Trading Journals forums, part of the Reception category; Back to just 5 trades in a row. I am realizing more and more that by the time I get ...

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Old Jan 27, 2010, 4:54pm   #89
 
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back to only 5 trades in a row

Yamato started this thread Back to just 5 trades in a row. I am realizing more and more that by the time I get to my tenth trade, I am sick and tired of stressing about which trades to make. Optimal would be just one trade at a time, and one day apart, but that wouldn't be a good measure of my method. So I'll go ahead and make 5 trades in a row, and start writing it here when I don't miss any more 5-trade series and I am always profitable at them.
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Old Jan 27, 2010, 5:41pm   #90
 
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re: my journal 2

Yamato started this thread If I'll manage to stay focused and thus profitable for a series of 5 trades, it will be a good achievement, because usually, within 5 trades (in paper trading and real trading), this is what happens to me:

1) totally focused and balanced, and neutral on the market: almost always succeed
2) "hey, this is easy" attitude: more likely to miss
3) if I didn't miss trade #2, then "hey, I got it all figured out" attitude
4) by the fourth trade, I've missed one trade for sure, so it's the "you mother ****ers" attitude
5) by the fifth trade, I've missed two trades, and it's the desperate "I can't afford to lose on this one" attitude: stoplosses are now out of the picture

I don't mean that it has to be one trade per day, but usually that's how long it takes me to reboot my mind. The most I could dare is 2 trades, many hours apart from one another.

This of course only applies to discretionary trading, because if and when I have a univocal method ("trading system"), then of course I can make as many trades as that method allows me. However I only have methods that trade once a day, and they're all automated already (yet have a bigger drawdown than my one-trade-a-day discretionary trading).

I don't know why I've never implemented the one-daily-trade policy before. I am confident it works, but pretty soon, after seeing how well it works, one way or another, I abolish that rule, and I start making two trades, then three, then pretty soon I am out of control and give back all my gains. It's really hard to see all these opportunities go by. However the only good ones are the ones I pick on my first or second trade per day. The others make me return everything I've made on the first one/two trades.

Last edited by Yamato; Jan 27, 2010 at 5:51pm.
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Old Jan 27, 2010, 5:44pm   #91
 
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re: my journal 2

Yamato started this thread Usually by my 5th trade I get addicted to the market (especially when trading with real money, but also with paper trading) and my eyes are those of someone on drugs. I stop thinking and start clicking "BUY" or "SELL" on impulse.
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Old Jan 27, 2010, 5:55pm   #92
 
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re: my journal 2

Yamato started this thread Here's what I am going to do: force myself to only make 1 trade per stock, so that will be a way to reboot my mind and to force myself to miss some opportunities and to not get into a trading frenzy.

So the new method will be (similar to an earlier one):

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

Also, similar to an earlier method, I will force myself to post every single 5-trade series I played, whether good or bad, so this will somewhat force me to get serious about every single game.
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Old Jan 27, 2010, 6:48pm   #93
 
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Way to go!

Yamato started this thread Not only did I not exceed one trade per stock. I even waited so long as to skip a few stocks that didn't look good. Result: 3 good trades out of 5, with a huge profit, since on one of the losses, I lost nothing, and on the other 3 wins I made more than on the only one real loss.

Very satisfied and very tired. If this is what it takes to be profitable, it worth it though. However it would be very very hard to do this in real time, since real money is at stake, and a week does not go by with one click. However, if I have found a way to be profitable here, with all these rules and filters, this deserves more attention, in order to see what I do (in picking bottoms) and systemise it.

Right now I can say that i look for these things:
1) extremely oversold conditions
2) one candle of confirmation or at least uncertainty with regards to the previous downtrend (i never enter on a red candle, but also the confirmation doesn't allow a candle to be so big and green that the market becomes overbought)
3) All this happens on a previous level of support (which often was previous resistance)

snap2.jpg

It will take me hours before I can reboot my mind and do this again. Maybe even tomorrow. But I absolutely want to do it and want to get good and profitable at least at one type of discretionary trading.

In terms of risk/reward and probability of wins, I've done more or less what all my systems do, and I even do with discretionary trading (when I only trade once a day): a slight majority of wins, and a bigger average win.
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Old Jan 27, 2010, 7:37pm   #94
 
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the market is moved by a consenus of edges

Yamato started this thread Hey, kind of interesting what I did with the system above.

I summed up 4 different types of edges or more:
1) RSI ("extremely oversold")
2) Support/resistance
3) Moving averages ("some kind of confirmation or uncertainty with regards to previous trend")
4) "LONG only trades": knowledge that stocks go more up than down (that's why people say "Buy and hold" but not "sell and hold")
5) Stoploss and takeprofit: a specific approach to trading, which is not a given

The sum of these different "edges" seems to be profitable.

As I approached the markets in the past, I went through moving averages, pivots... all these things, and always said "hey, this thing doesn't work" or "this thing is unprofitable", and then I quit using them. I now realize how much the market is moved by a bunch of people like me, unprofitable and each trying to make money with their single edge: fibonacci, elliot, news, cycles, "my neighbour told me...", you name it. When all these people come together, or rather, when enough of these theories and trading methods, that alone might not be profitable, come together and agree, the market turns. I suppose one could build a system that weighs each edge with a value attributed to the edge which is simply a function of how many people use it, or rather how much that edge moves the market.

I often said "forget the news", "the news is useless"... wrong, of course. The news moves a lot of people. But probably the news alone will not make you profitable. The point is to be able to incorporate in your trading as many edges as you can compute mentally (in a correct way), because all these edges move people. A very elaborate automated system could definitely do this, but I am not capable of building it, so I am going to stick for now to my discretionary/automated systems based on just 3 or 4 edges, or better said, "ingredients".

Another way to achieve it and use all these edges together would be to gather 10 people using ten different edges (even better if 20), regardless of whether they're profitable or not, and ask them how they would trade and why. When there's a majority in favor, you can make the trade. Of course they could each be given different weight and so on, but you get my point. All edges are good, as long as you can weigh them correctly. And of course you can't say: I'll only make the trade if all edges agree, because then you might trade once a year or never.

I guess one simple way to do this is to spot, even on different forums, ten different users employing ten different edges, prolific users, who write posts all the time about their views on the market and their trades. Then you put all their links to their latest posts on one web page, and check it out as you're about to make a trade. These are the kind of users I would try to spot:
1) newbie trading just on news (doesn't matter if profitable or not) and mentioning them all the time (today this and that...)
2) elliot wave guy
3) support/resistance guy
4) pivot guy
5) fundamental analysis guy (long term fundamental trend) who comments about the economy
6) top and bottom picking guy (like me), who's always trying to pick a bottom and is always unprofitable
7) others I am forgetting...
8) and so on...

Actually this is exactly what I will do next, looking mainly on the trading journals across a variety of trading forums, such as elitetrader, this one and some others.

Last edited by Yamato; Jan 27, 2010 at 8:02pm.
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Old Jan 27, 2010, 9:58pm   #95
 
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re: my journal 2

Yamato started this thread Here's where I'll look for people who express frequent opinions on the markets according to different trading methods:
http://nuclearphynance.com/
http://www.fxstreet.com/forum/
http://www.elitetrader.com/vb/
http://www.trade2win.com/boards/
http://traders-talk.com/




I might have to focus on one specific market in order not to disperse my energies.
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Old Jan 27, 2010, 10:39pm   #96
 
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re: my journal 2

Yamato started this thread I have scanned all the forums, and I think the best predictions, opinions, and similar might be here:
http://www.elitetrader.com/vb/forumd...?s=&forumid=29

here in general, but harder to find:
http://www.elitetrader.com/

A lot of posts, and many posts are exactly on what I want.

Last edited by Yamato; Jan 27, 2010 at 10:45pm.
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