my journal 2

This is a discussion on my journal 2 within the Trading Journals forums, part of the Reception category; Yup. I had to look it up to explain to be-positive why I am calling him an "idiot": he ruined ...

Closed Thread
 
LinkBack Thread Tools Search this Thread
Old Jan 24, 2010, 4:10pm   #41
 
Yamato's Avatar
Joined Mar 2003
re: my journal 2

Yamato started this thread Yup. I had to look it up to explain to be-positive why I am calling him an "idiot": he ruined my previous journal without any personal gain.
Yamato is offline  
Old Jan 24, 2010, 6:23pm   #42
 
Yamato's Avatar
Joined Mar 2003
re: my journal 2

Yamato started this thread Ok, I figured it out. I can make any trades and be profitable, but I have to see it in terms of quality rather than quantity.

There's no way I am going to make a sequence of 50 good trades without losing track of what I am doing. I can only focus on making ten good trades at a time. Then I have to take a break. If I don't, losses start coming in.

So this is how I am going to play it, in this game, and in real trading. Only x number of trades without taking a break. In real trading, one trade per day should do it.

In this trading, I can pretty much be confident that if I only make 10 trades, the balance will be a positive one. If instead I start out with the plan to bring my account from 10k to 100k, it will not work out. Because I'll be in a rush, push my luck, and see opportunities where there aren't any. Right now I don't feel there's any need for indicators of any sort. The chart tells you enough. But maybe indicators are what I'd need to make more than 10 trades in a row: they're probably what's necessary to implement a semi-automated trading system (manually executed). The only problem is that I don't know yet what exactly I am doing in those ten trades that makes me profitable. I can't describe it univocally yet. What I do know is that each time I exceed that number of trades, I start losing money. In real trading, it's worse, and, as soon as I exceed the two trades per day, I start losing money.
Yamato is offline  
Old Jan 24, 2010, 6:38pm   #43
 
Yamato's Avatar
Joined Mar 2003
re: my journal 2

Yamato started this thread Ok, I am done for a few hours. I've played about 5 (round-trip) trades, and managed to be profitable. Next time I'll play I'll try to do the same. Once I can make a rule out of this profitability on about a dozen of trades at a time, I might try to increase the number of trades. However, once it becomes the norm, I will develop some confidence in my (technical) analysis, and such confidence will also be there when I trade with real money, and, if that happens, I'll trade better, and finally, hopefully, become a profitable discretionary trader.

My trades and performance vs buy and hold. When it says "2" trades, it means one round-trip trade.
snap2.jpg

Comparing my results with others, and comparing buy and hold vs my results.
snap1.jpg

This trading simulator is a gift from heaven, because it's better than any other trading simulator. As it speeds up the charts, which is not achieved by IB's paper trading account. I believe this is the best single tool available for learning technical analysis, if you can only get yourself to use it long enough, without getting bored with it.

I never considered this before: being consistently profitable does not mean that you have to be able to constantly pick overall profitable trades. It obviously just means that the trades you pick are overall profitable. No one is forcing you to trade incessantly. One guy could be profitable by making 100 trades per day, and another guy could be profitable by only making one trade per day. Maybe the guy who can make 100 trades per day is slightly better. Maybe he has improved over time.

What this simulator has taught me very clearly is that the same person (me) can be profitable in his first 20 trades and unprofitable in his second 20 trades. And this happens constantly. It has taught me that my judgement gets worse over time. It has taught me that I have little patience and a short attention span, and that I can only make 10 good trades at a time, but nonetheless it has taught me that I can be profitable, if I trade at my own pace. And even that I can take my losses, once I know that I am capable of wins as well.

I will now have to practice a lot more to see if this is really true and I can have a sequence of 10 overall profitable trades at any time, on any chart I am given. Once I develop total confidence in that, it will just be a matter of adapting my skills from the customizable speed of the simulator to the constant speed of the markets (if that can be done): obviously the real market does not go forward when i click a button (like on the simulator). It goes faster and slower, depending on the timeframes, but never at the optimal speed for me. If I wanted to see an acceptable speed from the real markets I'd probably have to trade 1 minute candles, but that may be too fast and then I would not have enough time to detect s/r levels, and commissions and spread costs would kill me.

The one thing that spoils me in this simulator is that you can make it go forward exactly when you're ready for it. It would be like playing tennis with someone and be able to freeze the other player for a few mintues, to take a break. It would as if you were boxing and were able to freeze the opponent to evaluate him and then avoid getting punched by him. The real market keeps on moving, and by the time you appraise it, it might have punched you with a move against you, and, without a preset stoploss, that will hurt so much that you won't be able to react, and keep him from punching you further.

With this option to freeze the other player (price, your opponent), this simulator takes all anxiety away from trading (also for the fact that you're not investing real money). However it is a very good tool, the best trading tool I've ever found. Better than any book, manual or similar.

Last edited by Yamato; Jan 24, 2010 at 7:13pm.
Yamato is offline  
Old Jan 24, 2010, 9:22pm   #44
 
Yamato's Avatar
Joined Mar 2003
re: my journal 2

Yamato started this thread To concisely describe what seems to work, I'd say: you look at the chart, and if it goes up, you look for long trades, if it goes down you look for short trades, and if it goes sideways, you look for counter-trend trades. In all situations, you go against the smaller timeframe. If it goes up, you go down and viceversa on the shorter timeframe. On the larger timeframe, if it goes sideways you can pick both directions. If it goes up you can only pick long trades, and if it goes down, only short trades. This is like my previous weather comparison: if it's raining you bet on more rain, if it's sunny, you bet on more sun. The range comparison is not available as far as weather.

Another important thing is that you play s/r levels mostly in range situations, whereas they're much harder to use when you have a trend.

Another thing to say is that in these 3 situations:
1) uptrend
2) downtrend
3) range

Things could change, and if price suddenly breaks out of the range, this turns the chart into an uptrend. All things said over and over again in forums and text books but you never care about it unless you see for yourself, and actually hearing it repeated over and over again has kept me from understanding it, since I perceived it as the usual crap that everyone talks about. I mean you hear on tv people praising madonna and britney spears, saying they're great artists, and similar stuff, so pretty soon you automatically assume that if everyone says something, that thing is bull****. The same applies to horoscopes, religion... everything. So that's what I assumed about trading facts as well. Cnbc? Crap, since everyone is watching it. S/R? Crap. But maybe in trading things everyone talks about are actually important simply for the fact that everyone talks about them. In this sense, it might be a great idea to start listening to cnbc as well. A clear example of this is the 7.30 CST news, which drive the markets crazy, and which I would have wrongfully dismissed according to the theory that if everyone talks about it, it's crap. I realize that for intraday trading, it's hard to ignore the 7.30 CST news, at least by staying out of the market.

Last edited by Yamato; Jan 24, 2010 at 9:57pm.
Yamato is offline  
Old Jan 24, 2010, 10:21pm   #45
 
dog4's Avatar
Joined Feb 2004
re: my journal 2

That chart trading software is pretty cool. More than anything else it highlights how much randomness there is short term. The only way I was able to do well was by looking at 4-year chart patterns
dog4 is offline  
Old Jan 25, 2010, 12:03am   #46
 
Yamato's Avatar
Joined Mar 2003
re: my journal 2

Yamato started this thread Oh yeah? Me, too. So far the four year weekly charts are the ones that are easier to read.
Yamato is offline  
Old Jan 25, 2010, 12:15am   #47
 
Yamato's Avatar
Joined Mar 2003
re: my journal 2

Yamato started this thread From now on, here's how I will test my games. 5 trades, see how i did, take a picture, come back here, and post it. 5 trades is about what i can do right before starting to get impatient. It's a small challenge. Still work, but not so much that i'll quit in the future. I can do a few of them every day. No indicators, just s/r. I am hoping to get to a point where I'll never have an unprofitable 5-trade series.

Starting from now:

snap1.jpg

Four big losers (no stoplosses, total gambling, due to the added pressure from having to post my trades here), and one small winner.

Last edited by Yamato; Jan 25, 2010 at 12:24am.
Yamato is offline  
Old Jan 25, 2010, 12:34am   #48
 
Yamato's Avatar
Joined Mar 2003
re: my journal 2

Yamato started this thread snap1.jpg

Getting better. 4 good trades out of 5 (managed to cut the loser, even though I still feel some pressure from having to post results and impress people, but less since I initially showed such a bad performance, and that got rid of most pressure). Actually I am indeed not using indicators, but I can't say I am using s/r alone: I am also using gaps and looking at how overbought/oversold price is. If I see a gap or a huge fall, and it happens next to s/r, then I take advantage of that as well. But I am not using any of the indicators offered. Just looking at the chart.

I hope i won't get tired of doing this, and will post many more of these tests in the coming weeks. Hopefully to a point where identifying support and resistance and the way to play this game will become second nature to me.

Until now, this is the summary of how I play it: if the 4 years go up, I look for long trades (based on diagonal s/r levels, or even horizontal ones, but these are rarely levels of major importance). If it goes down I look for short trades (it's rare than a stock chart goes down for 4 years). If it goes sideways, I look for both trades, based on major s/r levels. There's also situations in which a range situation turns into an trend by breaking out of the range, and I play accordingly. But these situations are not as easy.

The constant thing is that I expect price to keep behaving the way it's been behaving until now. If it's been rising, I expect it to keep on rising, until it stops. If it's been ranging, I expect it to keep on ranging until it stops. It's like the weather. If it's been raining, I expect the rain to continue, and not to have an unpredictable rotation of rain and sun. One thing this game is teaching me is to not go against the trend, because I just lose. You don't bet on sun when it's raining.

Last edited by Yamato; Jan 25, 2010 at 12:52am.
Yamato is offline  
Closed Thread

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Similar Threads
Thread Thread Starter Forum Replies Last Post
say hello to my little journal gozinsky Trading Journals 13 Sep 27, 2011 9:37pm
my journal Yamato Trading Journals 2334 Jan 18, 2010 12:57pm
The EA Journal! Victor90 Trading Journals 1 Oct 28, 2008 12:47am

LinkBacks (?)
LinkBack to this Thread: http://www.trade2win.com/boards/trading-journals/85510-my-journal-2-a.html
Posted By For Type Date
Science Forum - why Standard deviation is better than Avarage Deviation This thread Refback May 22, 2010 2:34am

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)