my journal 2

This is a discussion on my journal 2 within the Trading Journals forums, part of the Reception category; Getting back to my 100 trades on the chart game: new rule. No need to wait when i lose, because ...

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Old Feb 6, 2010, 2:06pm   #181
 
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re: my journal 2

travis started this thread Getting back to my 100 trades on the chart game: new rule. No need to wait when i lose, because i get hyper even when I win. The rule will not be to wait one minute between trades because it doesn't make sense. The rule will be to wait at least ten click between trades. Each click is one week. I must not seize more than one trading opportunity every 10 weeks. If I do, it means I've switched into compulsive trading mode.

Thus, my one and only rule, on top of the stoploss rule: each trade must be more than 10 clicks apart from the previous exit. Each stock must be at least 5 minutes apart.

Both in real trading and in the chart game, I must find a way to avoid getting into a trading frenzy.

Last edited by travis; Feb 6, 2010 at 2:46pm.
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Old Feb 6, 2010, 2:16pm   #182
 
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re: my journal 2

If you are going to hold trades for 12 months, then the chances are that at some of the time you will be fully invested. Personally, I would avoid that unless you can neutralise market risk.

Let's say you 'diversify' all of your money amongst 20 long trades in the US market. As soon as the market takes a dive, it'll wipe out months or more profit. Stop losses may not help you when this happens.

You could, of course aim for 50% long trades and 50% short (as long as your shorts aren't on stuff like SKF which is inverse to the market). This will give you SOME cushion in the event the market takes a wild move in one direction or the other.
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Old Feb 6, 2010, 2:45pm   #183
 
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re: my journal 2

travis started this thread Yes, thanks for the advice. However the 12 months idea was just a hypothesis and I didn't even use it once. Also, I am always talking about the chart game, where diversification is not possible. Let's forget about this 12-months hypothesis altogether.
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Old Feb 6, 2010, 4:06pm   #184
 
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re: my journal 2

Quote:
Originally Posted by travis View Post
Yes, thanks for the advice. However the 12 months idea was just a hypothesis and I didn't even use it once. Also, I am always talking about the chart game, where diversification is not possible. Let's forget about this 12-months hypothesis altogether.
OK - fair enough ! Good luck with the next 'game'
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Old Feb 6, 2010, 4:59pm   #185
 
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Richard Dennis on emotions (from Market Wizards)

travis started this thread Richard Dennis on emotions (from Market Wizards), which is my biggest problem. He seems to adopt a solution I've been thinking of: let time pass between trades. As much time as necessary not to be emotional and affected by the previous trade.

Quote:
How do you handle a losing streak?
Cut back. If it is really bad, stop and get out.
Do you sometimes need to get away from the markets for a few days?
Generally, it just takes a day or two, but you do need to stop for a period of time. It is almost like a pitcher not balking. Before he throws the ball, he has to stop at least for that second. That is what I try to do—at least have a pause. It could be for just one day.
Quote:
So you are able to avoid the emotional trap?
Yes, but the flip side is that I also avoid the emotional elation when things are going well. There is no way to play just one side of that street. If you feel too good when things are going well, then inevitably you will feel too bad when they are going poorly. I wouldn't claim that I realized that after three years of trading, but after you've done it for twenty years, it either drives you crazy, or you learn to put it into perspective.
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Old Feb 6, 2010, 5:29pm   #186
 
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re: my journal 2

travis started this thread It's working so far. I'm up 100% on 10 different stocks. Lost a few times, and each time I am taking a break between trades, and a 5 minute break between stocks. During those short breaks I've been watching some short videos on youtube. I'll post my results once I'll get to 100 trades. I haven't lost control yet and let a small loss turn into a huge loss. I did feel some anger after each loss and felt rushed to make my loss back. Another time a 20% profit turned into a small loss because I wasn't happy with not getting out at the bottom (which to some degree you must accept if you let your profit run).
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Old Feb 6, 2010, 5:46pm   #187
 
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re: my journal 2

travis started this thread Still going ok. Up about 150% after 30 trades. Still 70 trades to go. Still haven't lost control over my losses. They happened, and I cut them. Not easy. Each time I am tempted to get mad at the market, just like in real trading. Keeping trades apart helps very much. I noticed that the temptation is to wait less than the 20 weeks I had decided to wait. It's like an addiction, that I develop immediately, and that compels me to trade more and more frequently, and that's how things get out of control: if I do that, I weigh my entries much less, and totally lose control if I lose. Thanks to this chart game, I have finally realized what exactly was wrong with my trading: rather than my understanding of the market, a latent addiction that is always there, ready to screw me.

Other than that, trading long and short, and I am wrong about once every 3 times, and lose when I am wrong less than what I make when I am right.

Right now I am not trading with a univocal system, but entirely discretionary: with the rules I mentioned above (stoploss, time between trades). If I'll manage to find a method to be profitable over 100 trades, which rule out luck, that will give me a lot of confidence for my real trading as well. Never before have I been able to be consistently profitable with discretionary trading. Maybe exactly because I was never able to wait long enough, for the right opportunities. Something my automated trading achieved from the start.

Last edited by travis; Feb 6, 2010 at 5:56pm.
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Old Feb 6, 2010, 8:30pm   #188
 
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One loss just got away (and luckily came back)

travis started this thread Still going, about 300% after about 50 trades. On one occasion, just now, I was distracted, frustrated... and lost control: one loss got away, and turned from just 2% to 50%... then I kept it open and it ended at -6%. The 100-trades series was saved but I do have to record this, that at trade #49, I didn't have the patience, calm and rationality to stop a loss at the -10% threshold.

But I cannot have any such moments. These situations may work out more than not, but are what causes me to blow out my account over and over again. You cannot, even once, let that loss get away from you. That's what makes automated trading so superior, in that it never loses its control over trades.
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Old Feb 6, 2010, 8:53pm   #189
 
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re: my journal 2

travis started this thread The more I look at it, the more the US $ Index's 5-day moving average seems to be the right filter for my automated systems:

http://futuresource.quote.com/charts...%2C5%2C5%29%3B

If I had followed such rule and reversed all their signals when the US $ Index was above its 5-day moving average, I'd have made a 100% monthly average profit for the whole 6-months forward testing period.

If I won't use it to reverse my trades (which might be a bit daring), I should at least use it to forbid my regular trades. It seems much better than the "no trading if past week unprofitable" rule, which was a pretty good rule to begin with.
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Old Feb 6, 2010, 9:59pm   #190
 
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re: my journal 2

travis started this thread At 52 trades, still profitable: over 300%. Basically one must catch his breath while trading and cannot ever be breathless or he'll pick his entry/exit carelessly.
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