my journal 2

This is a discussion on my journal 2 within the Trading Journals forums, part of the Reception category; Not good. My mind is starting to deteriorate. One more and then I'll stop for today....

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Old Jan 25, 2010, 12:08am   #50
 
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re: my journal 2

travis started this thread Not good.

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My mind is starting to deteriorate. One more and then I'll stop for today.
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Old Jan 25, 2010, 12:16am   #51
 
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re: my journal 2

travis started this thread Even worse... no criteria whatsoever in picking entries and exits... no stoplosses... not s/r, nothing at all. After a few trades, I start trading worse. After a few losses, I trade even worse. Whether on the simulator or not.

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There's really no way out: you can only make as many trades as your mind can take. Probably one per day for me. Because after a win, I feel invincible. After a loss, i feel like "**** this"... there's no other way than making one trade at a time and placing a lot of time in between. I think I read this somewhere, either Elder or Douglas, about someone who said he had to reset his mind after each trade. I feel like this as well. That's why automated trading is so superior: they can place 10 trades per day, 50 trades per week without letting any previous outcome affect the next trade.
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Old Jan 25, 2010, 12:33am   #52
 
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re: my journal 2

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Old Jan 25, 2010, 3:03pm   #53
 
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re: my journal 2

travis started this thread Just got home from work, mind totally fresh, opened the simulator and managed to get a series of 5 overall profitable trades:

snap1.jpg

I'll keep doing it just like a videogame. More than 5 trades in a row would be a little too much stress and boredom and I'd start underperforming. 5 is a a good amount. I can almost do them on just one stock (using weekly charts). I'll just keep doing this until I get good at reading charts, and until I get good at cutting losses and letting profits run. And until I just can't help being profitable. I am telling you, this chart game is better than any technical analysis manual. You just give this web site to anyone, and they'll become profitable at trading.

This chart game is good in that it isolates one component of profitability: reading the charts. Can you read the charts? Then you can be profitable at this game. After knowing this, you still don't know if you can be profitable in real time, because here you can speed/slow charts. In real trading the other component of profitability is: can you wait until it gets there? I definitely have more problems with that than with reading charts.

I tend to be compulsive, restless... one thing is trade a chart where you push a button and make the market move by a week, and then can stop it for as long as you want. Another thing is to play the same game with a market that keeps going at its own speed, which is usually too slow for me (but if I go on the lower timeframes it's too fast). On the simulator all I need is a click to make a week go by. In real trading I need 7 days, during which i will change my mind about the trade about 10 times, and will get in and out of the market accordingly. So i have to first make sure i can read the charts, and then find a way to fix this other ingredient (waiting), if I ever will be able, because otherwise I can only do automated trading, as I suspected from the start.

Last edited by travis; Jan 25, 2010 at 3:44pm.
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Old Jan 25, 2010, 3:58pm   #54
 
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re: my journal 2

travis started this thread I am now looking at this stuff, to see if I can find a simulator for forex, which i did already (and for futures):
http://www.genesisft.com/
http://www.tradingsimulator.net
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Old Jan 25, 2010, 6:25pm   #55
 
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re: my journal 2

travis started this thread The genesis software is not very user-friendly but it works all right, and even though it uses massive means to do a little more than what the chart game does, it does indeed achieve quite a bit more.

You can invest on any future, index and so on, and speed up or slow down price as you please. It's almost as good as watching a movie, except you get to be part of it. If I can manage to make money on this simulator, too, the only unanswered question remains: can I do it at the real speed of the market? However, these are great steps ahead.

The question "can i do it with real money?" is not as important, because I've never hesitated in investing real money. It's almost indifferent to me: what matters is winning this game, whether with real money or with simulation. The boring part was not - as I erroneously thought - that I was investing real money, or rather it wasn't just that. The boring part was the speed of the markets. The simulator going fast is almost as exciting as investing real money when the 7.30 CST news gets released.
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Old Jan 25, 2010, 7:07pm   #56
 
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here's the ratio

travis started this thread Here's the ratio that you need to profitably trade any chart... 200 candles of any timeframe are good to predict the next 10 candles.

Whether in real trading, in chart game, or in genesis' trading navigator, regardless of whether I set up hourly candles, weekly candles, 15-minute candles, regardless of the future or stock I was trading (without even knowing which stock it was), the constant seems to be that I made money by using price only... and basically support/resistance, which is another way of saying price, but what I mean is without adding any indicators to the chart, not even trendlines... well basically everyone ultimately trades according to price, even those using 10 indicators (which are derived from price).

So, given these results (which I'll keep on monitoring in the future, because one can never be too sure about this), and the fact that stock or timeframe do not matter, but just the past 200 candles are necessary to predict the next 10 candles, we could say the past 200 candles on any timeframe and any stocks seem to be good enough to predict the future 10 candles. All you need to understand a chart and its s/r levels is the past 200 candles, which will then allow you to make a reasonable prediction on the next 10 candles. Always use this ratio of 20 to 1, and avoid getting lost in a sea of useless data. Another matter is if the next 10 candles are so small that commissions and spread costs will take away all your profits, and yet another matter is if the next 10 candles are so slow that you'll change your mind 20 times by the time those 10 candles have gone by.

Oh, and "what time it is" is an extra help which on intraday charts should not be thrown away. In the sense that there are major (reversal) cycles that take place according to what time it is. For example, 7.30 CST (the news) is an important moment, so is 8.30 (Wall Street open), so is 15.00 (the close), so is around 2.00 CST (Europe's open)... these are things that should be looked at, on top of price.

Anyway, this is fascinating... I first noticed this on the chart game, where, without knowing anything about the stock I was trading, I was making good predictions for a few candles ahead, based on the past 4 years of weekly candles (208 candles, to predict a few candles forward). We might be able to apply this rule to anything, like predicting where a person will go according to his past 20 steps, and similar... or whether it will rain in the next hour if it's been raining for the past ten hours... it's fascinating. I guess technical analysis could be defined as the prediction of future behaviour according to past behaviour (and this ratio might be implicit in this, in that you need a larger history to predict a smaller future), vs. fundamental analysis being the prediction of future behaviour based on reasons, causes...

Last edited by travis; Jan 25, 2010 at 7:22pm.
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