Going about it the right way ?

dontrader01

Newbie
9 0
Hi,

I'm New Sorry if im asking the wrong questions in the wrong area, im still learning.

I'm looking for a lot of info to help my current system become more efficient. I’m really just trying to find the right tools to use to make it work better.
My system is basically based upon Van Tharp’s beliefs and Dan Gramza Swing trading technical analysis. I Let my Profits run and cut losses short.

This is a basic run down of my system.

I receive my entry and exit points via Dan Gramza Video Report on a daily basis. I’ll then go ahead and put my buy and sell lines on my charts. At the moment my portfolio mainly consists of Futures (silver, gold, oil, wheat, soya, coffee), indices (S&P, Dow and Aus200) and forex (Aus/Us & Eur/Us). I get the feeling trying to trade to many different markets with the same system is not the greatest idea.

I’ll then enter my buy and sell positions into my trading platform (currently with CBS Falcon trader) as a stop. If and when the price hits my buy or sell line its automatically bought or sold through my stop depending, which way the market goes. I'll then put in a stop loss a few points behind depending on the index. 
If the price keeps going in the direction of my trade, ill take my first exit (getting out half my position), once this happens I’ll then move my stop loss up to where I first entered the trade this usually doing 2 things for me.


1: if the market goes against me ill get knocked out but wont loose any money.

2: if the market goes in my favor I’ll still be in the trade but with only half my position.



For Example:

Gold Sell: 1855 (50 ounces)

Stop loss: 1859 (4 points buy back 50 ounces)

First exit (magnitude objective): 1849 (6 points Buy 25 ounces) move stop loss to 1855 (buy back 25 ounces if executed.)


If the trade continues to go my way I wait till im given a new buy line by Dan Gramza which will act as a stop loss and Buy line. Then the process starts all over again but in the opposite direction.


Each loss costs me $200, if my trade hits magnitude objective (which is where I sell half my position) its turned into a free trade, if it the trade keeps moving in my direction, well the profit is limitless. Or until the market turns and hits my buy line.


Where my system is letting me down is, my Tools and I. I know a good trades man never blames his tools but my platform being a market maker I have realized that of course it never gets me in at the exact price and usually always just touches my stop losses before shooting in the opposite direction. So ive been looking into ECN type brokers (problem is they only work with forex, well so that I know, I need one that does futures and forex)

When I say me, im meaning I’ll find I stay up till about 5 am trading I might take 8 losses in gold ($1600 loss), I’ll end up going to bed and whilst im sleeping miss the big move. This has happened a lot.



I've made all the losses and missed the big moves making my system profitable. Ive back tested my system and it is profitable if traded 24 hours a day. I trade with my father; I take the night shift he takes the morning. Honestly its really hard staying up all night and also we both find it very hard to get in at the exact price and most of all with the risk being so small and with the volatility of some of the markets today the market will move away before we even get back in.



So Automated Trading, ive been told is the way forward.

I downloaded Metatrader 4 through IC Markets whom supposedly are an ECN Broker. Its good but only works with forex and I have to learn a whole other language just to automate systems.

Im at the point where I think trying to trade forex and futures on one platform which is not a Market Maker is like trying to find the holy grail!



Im looking for someone to point me in the right direction for :



1. A good broker (to trade futures and forex, if cant do both then a good broker who focuses on futures and one that’s good a forex)



2. Data, Ive been told free data, is well its free so not as great as data you pay for, is this true? And if so where would we go to get it.



3. Programmers. I signed up to mql4.com forum for help with programs and scripts for metatrader, I pretty much got laughed at cause I couldn’t even speak in their language. And most of them being from Overseas, how would I know if the script is written exactly to how im needing it. So I guess im going to have to learn C++ language. Trading in its self is already hard, Im trying to learn this language but surely there are programmers out there I can pay to work on scripts and teach me in the process. I’m looking for a programmer or software, which attaches itself to metatrader4 making automating trading easy.



4. Metatrader 4, Amibroker or Omnitrader or is there another software for the type of system im trading?



I want to learn. My father has been trading for about 6 years and still is not having much luck; he’s learning and has a very positive attitude. He sold his business and has been focusing all his time on the stock market. He’ll never give up till he’s successful at it. I’ve been trading on and off for about 5 years too since my father started. I’ve always been interested in trading and its my fathers passion, we both help each other and keep each other motivated. My father has a big ego and believes he’s better than the market and knows best, he’s learnt some painful mistakes thinking like that. I on the other hand am very open mined and believe the share market is like a river, you put out 10 crab traps some will catch others wont and some will get taken with the current. My father and I read a lot of books attend the ATAA meetings and try to trade what we learn. I think he also just attended one of Van Tharp’s workshops.After all of this i still feel were just going around in circles, making a bit then loosing it, even with proper position sizing and risking 1% of our capital at a time. After doing all this were not making much if any money. My father always tells me if we stick at it long enough we’ll eventually find a system that works. I believe this so am looking and working at it. But it also gets me thinking if i can find someone whos making a living from the stock market and successful at it,,,, why cant we learn from them?

I quit my job and trade with him full time. Since ive started with him, we’ve started testing systems and playing with position sizing and recording everything we’re doing. I’ve recommended doing automated trading and learning from people who are doing what we want to do. I don’t know if I need to go to University, or take a course or just learn a system that works on the stock market. I believe the stock market is really complicated enough and there’s so much info out there that knowing to much will cause problems when it comes to pushing the button.

I know there’s many ways of skinning a cat and with the stock market there’s many ways of trading. I believe in keeping things simple and to keep trying no matter what, never give up.

Is my trading system the right way? I don’t know, it works great when tested, but trading live is another ball game especially when its not automated. Im going to keep climbing the ladder till it works, thing that crosses my mind though is, if there are so many ways to trade is the ladder im climbing leaning up against the right wall?

Im reading up alot of stuff in this forum, and you guys have been a massive help so far, im sure whilst continuing to read ill find all the answers to my questions, but Just thought i'd put my situation out there and see if someone knew something i did'nt. Please if you can share your thoughts on what you think, are we going about it the right way ?

cheers



Ryan
 

tomorton

Legendary member
8,421 1,346
Sounds like a classic approach to trading, though I can't say anything for / against the quality of the signals you are receiving and playing.

Might be interesting to be aware of where you lose money and why, such as -
Do you have a very low win rate so that large numbers of small losses outweight the few big winners?
Are you letting profits from potential winners go back into the market?
Are the signals timely or are you always chasing price on entry?
Do you find you get out of a trade just before price takes off?

You have to know what's going wrong before you can correct it.
 

timsk

Legendary member
7,605 2,379
Hi Ryan,
Welcome to T2W.

The impression that I get from reading your post (and it is just an impression - so I may well be wrong) - is that you're casting your net far too wide. Trying to trade lots of different markets 24/7 will drive you (and your dad) crazy! Also, while it's great to have a family member who really cares about you to share your highs and lows with - there is a downside if you're trying to trade a discretionary methodology in tandem with one another. Namely - it's never going to happen! Give the simplest of trading rules to 10 different traders and you'll get 10 different sets of results. The only solution is either to completely automate your trading or to separate your respective activities; let your dad do his thing and you do yours. Quit trading through the night - you gotta get your beauty sleep and dramatically cut down the number of markets you trade. The only traders that I've ever heard of that trade lots of different markets and do well are extremely experienced and have been making consistent profits for a long time. All (that I know of) started off by trading one market, and only one or two instruments in that market. At the moment, I suspect you're a 'Jack of all trades and master of none'. If you can trade the ES (S&P 500 e-mini futures) and make a consistent profit - you'll make all the money you could ever want and have no need to ever look at any other market ever again. You can trade along side your dad from 2.30 - 5.00pm (U.K. time), bounce ideas off one another, and then have the rest of the day to do other more important things in life - such as going fishing!

Just my $0.02 worth!
Tim.
 
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dontrader01

Newbie
9 0
Sounds like a classic approach to trading, though I can't say anything for / against the quality of the signals you are receiving and playing.

Might be interesting to be aware of where you lose money and why, such as -
Do you have a very low win rate so that large numbers of small losses outweight the few big winners?
Are you letting profits from potential winners go back into the market?
Are the signals timely or are you always chasing price on entry?
Do you find you get out of a trade just before price takes off?

You have to know what's going wrong before you can correct it.

Hi,

Thanks for your questions, I seem to be loosing money when im not trading the system. I've been recording every trade whether i traded it or not, as well as platform hiccups. At the end of the month i write out a report with. Win and loss trades, expectancy of the system, average win rate and loss rate as well as all commissions and fees.

The system seems to vary depending on the indicie. On about half the indicies traded im recording high loss rates with low win rates. My wins however are big making the system profitable. Some months are great others aren't. I'm still testing so guess i need a few more months before i can have a fair idea about how the system really works. OR do I ? How long would someone trade a system to figure out whether its successful or not?

At the moment im not letting profits from potential winners go back into the market? I'll look into that.

I'm always chasing the price, which makes the system not work so great cause having to get in and out at certain prices,,, and with the market movements sometimes makes it really hard.

I'm finding that when the trade takes off and my stop loss hasn't been kissed (knocked out) i'm in the big moves. I've taken up to 15 losses in a row before getting a big move. But i try and always make sure im on them because that's what makes my system profitable. I've been frustrated on many occasions where ive missed the boat and had to bear the loss. And mainly due to my platform, freezing or just knocking me out and screaming in the opposite direction.

Thanks for your questions, and you're right i do need to know what my system and myself are doing wrong before i know how to fix it,, so please be critical. I need as much advise as i can get.

cheers
 

dontrader01

Newbie
9 0
Hi Ryan,
Welcome to T2W.

The impression that I get from reading your post (and it is just an impression - so I may well be wrong) - is that you're casting your net far too wide. Trying to trade lots of different markets 24/7 will drive you (and your dad) crazy! Also, while it's great to have a family member who really cares about you to share your highs and lows with - there is a downside if you're trying to trade a discretionary methodology in tandem with one another. Namely - it's never going to happen! Give the simplest of trading rules to 10 different traders and you'll get 10 different sets of results. The only solution is either to completely automate your trading or to separate your respective activities; let your dad do his thing and you do yours. Quit trading through the night - you gotta get your beauty sleep and dramatically cut down the number of markets you trade. The only traders that I've ever heard of that trade lots of different markets and do well are extremely experienced and have been making consistent profits for a long time. All (that I know of) started off by trading one market, and only one or two instruments in that market. At the moment, I suspect you're a 'Jack of all trades and master of none'. If you can trade the ES (S&P 500 e-mini futures) and make a consistent profit - you'll make all the money you could ever want and have no need to ever look at any other market ever again. You can trade along side your dad from 2.30 - 5.00pm (U.K. time), bounce ideas off one another, and then have the rest of the day to do other more important things in life - such as going fishing!

Just my $0.02 worth!
Tim.

Hey Tim,

$0.02 worth of advise is better than none, Thank you for it. I agree with you on casting my net to big. My father and i started with trading 12 markets. And sometimes at 3 or 4 o' clock in the morning they would all start to move.

I would miss a lot of opportunities that way as well as 4 in the morning i was pretty much half asleep, not much fun. I did end up going a bit crazy so we cut it down to only 7 Markets and try to find an automated way of trading . At the moment im trying to find out as much as i can about automating systems and trading our Dan Gramza system but still its to much to trade. Some markets work like a charm though Soya and wheat are very slow moving so once im in i dont need to pay much attention to them.

You're right about Giving the simplest of trading rules to 10 different traders and you'll get 10 different sets of results. My father and I are totally different and have different views. So what we've decided to do is design our own system each and have our generic system and work on them. I'm in the testing stages and just want to paper trade the systems, or better yet if i can use MetaTrader to backtest a system that would help alot.

I Like your idea about trading the S&P 500 e-mini futures between 2:30 and 5:00. I need sleep and am only going to start trading one indicie. Its true trying to trade different markets is not helping and i should concentrate into trading only one. Then hey work it form there. Thank you for your advise i really appreciate it.

Do you trade full time from home ?
 

timsk

Legendary member
7,605 2,379
Do you trade full time from home ?
Hi Ryan,
I trade the YM (e-mini Dow futures contract) during the U.S. morning session - i.e. 2.30 - 5.00pm U.K. time and occasionally the evening session, i.e. 7.00 - 9.00pm U.K. time.That's not my idea of full-time work - and I'm a T2W member of staff - so I guess the answer is no - I'm not full-time, but I do trade from home.

Incidentally, I don't trade any other markets. I watch the ES every day and, once in a while, try to trade it - but I've never really liked it or had any success with it. I used to day trade U.S. equities and one of the problems I never got to grips with is having a basket of different stocks and trading a sloth like MSFT one minute and then a volatile jack in the box like AAPL the next. A bit like you missing good moves late at night, I found that I would be looking at one stock and be missing an excellent move in another. It drove me crazy. I no longer have that problem. Instead, I have to cope with being patient and sitting on my hands and not trading when there's precious little happening. Trading the YM presents a different set of challenges than trading equities (or even the ES) - but ones that are more suited to my personality and style of trading. That's why I think you'll do much better if you drill down and really get to grips with one market and 2 to 3 instruments tops. There's really no need to be sitting up half the night staring at your screen waiting for something to happen!
TIm.
 

tomorton

Legendary member
8,421 1,346
Hi,

Thanks for your questions, I seem to be loosing money when im not trading the system. I've been recording every trade whether i traded it or not, as well as platform hiccups. At the end of the month i write out a report with. Win and loss trades, expectancy of the system, average win rate and loss rate as well as all commissions and fees.

The system seems to vary depending on the indicie. On about half the indicies traded im recording high loss rates with low win rates. My wins however are big making the system profitable. Some months are great others aren't. I'm still testing so guess i need a few more months before i can have a fair idea about how the system really works. OR do I ? How long would someone trade a system to figure out whether its successful or not?

At the moment im not letting profits from potential winners go back into the market? I'll look into that.

I'm always chasing the price, which makes the system not work so great cause having to get in and out at certain prices,,, and with the market movements sometimes makes it really hard.

I'm finding that when the trade takes off and my stop loss hasn't been kissed (knocked out) i'm in the big moves. I've taken up to 15 losses in a row before getting a big move. But i try and always make sure im on them because that's what makes my system profitable. I've been frustrated on many occasions where ive missed the boat and had to bear the loss. And mainly due to my platform, freezing or just knocking me out and screaming in the opposite direction.

Thanks for your questions, and you're right i do need to know what my system and myself are doing wrong before i know how to fix it,, so please be critical. I need as much advise as i can get.

cheers


Do you feel you might be taking too many trades and trading too many markets simultaneously? I am always wary of systems with low win rates that use big winners to dig positions out of holes - suppose a random entry price 31 minutes after breakfast every day would do just as well? Is the system you're trading really a trading system?

Bad months do happen, but don't be hung up on making x profit every month, coming in like a pay cheque. Even some of the biggest businesses in 'real' industries can be highly seasonal. But you must understand if possible why your losing periods are so poor even if you can't avoid them.
 

ronblack

Active member
177 12
My system is basically based upon Van Tharp’s beliefs and Dan Gramza Swing trading technical analysis. I Let my Profits run and cut losses short.

How do you or your trading gurus know when a loss is a loss and a win is a win so to either cut losses or let profits run?
 

tomorton

Legendary member
8,421 1,346
There are lots of false objectives in trading that, even if you make them, don't necessarily make you more profitable. Like:
trading full-time, that is, all the hours your selected markets are open
a risk reward ratio of 1:2 or 1:3
a win rate of 80%
running you winners: I never do this, I just take the money when price hits target: if it doesn't hit target in the time I thought it would, I just take what's on the table and re-set for another trade.
 

dontrader01

Newbie
9 0
Hi Ryan,
I trade the YM (e-mini Dow futures contract) during the U.S. morning session - i.e. 2.30 - 5.00pm U.K. time and occasionally the evening session, i.e. 7.00 - 9.00pm U.K. time.That's not my idea of full-time work - and I'm a T2W member of staff - so I guess the answer is no - I'm not full-time, but I do trade from home.

Incidentally, I don't trade any other markets. I watch the ES every day and, once in a while, try to trade it - but I've never really liked it or had any success with it. I used to day trade U.S. equities and one of the problems I never got to grips with is having a basket of different stocks and trading a sloth like MSFT one minute and then a volatile jack in the box like AAPL the next. A bit like you missing good moves late at night, I found that I would be looking at one stock and be missing an excellent move in another. It drove me crazy. I no longer have that problem. Instead, I have to cope with being patient and sitting on my hands and not trading when there's precious little happening. Trading the YM presents a different set of challenges than trading equities (or even the ES) - but ones that are more suited to my personality and style of trading. That's why I think you'll do much better if you drill down and really get to grips with one market and 2 to 3 instruments tops. There's really no need to be sitting up half the night staring at your screen waiting for something to happen!
TIm.

Hi Tim,

That sounds pretty good, I agree with you on only trading one market and becoming to good grips with it. I've stopped trading all the other markets and have started focusing mainly on Aus/Eur and thinking about doing a course on programing (only mainly becuase down the track i will be wanting to focus on automating systems). Do you manually trade or Automate your trading?
 

dontrader01

Newbie
9 0
Do you feel you might be taking too many trades and trading too many markets simultaneously? I am always wary of systems with low win rates that use big winners to dig positions out of holes - suppose a random entry price 31 minutes after breakfast every day would do just as well? Is the system you're trading really a trading system?

Bad months do happen, but don't be hung up on making x profit every month, coming in like a pay cheque. Even some of the biggest businesses in 'real' industries can be highly seasonal. But you must understand if possible why your losing periods are so poor even if you can't avoid them.

Hi Tom,

I do feel with the type of trading im doing right now is trying to trade to much in to many markets. The high losses have have mainly been due to my stops being to close. Plus adding the spread ontop of that hasnt been helping the situation. Yup i get what you mean with it being random, It is a trading system in the making. At this stage it hasnt been working to well, but like you say it could just be a bad month. Like Tim has mentioned i need to focus more energy into just one market and once able to conquor it, move to the next. What kind of trader are you ?
 

dontrader01

Newbie
9 0
How do you or your trading gurus know when a loss is a loss and a win is a win so to either cut losses or let profits run?

Hi Ron,

My thoughts would be If the trade gets knocked out due to its stop being hit. Both the Gurus have the belief, to keep jumping on the train untill it leaves the station. As well as setting the parameters of the trade to suit their system and altering the position sizing to the amount of funds they have to risk.
 

dontrader01

Newbie
9 0
it is the fact ,but do you have more good ideas or ways to do better ? i think everyone can just avoid losing just by the experience of trading , more information and communication with others will be a good choice !:)
g.php

I agree with you, the more i trade and talk to others the more ways im finding to trade. What do you usually trade?
 

dontrader01

Newbie
9 0
running you winners: I never do this, I just take the money when price hits target: if it doesn't hit target in the time I thought it would, I just take what's on the table and re-set for another trade.

So do you base your trading rules on the amount of time a trade has to perform rather than price action of the trade ?
 

timsk

Legendary member
7,605 2,379
Do you manually trade or Automate your trading?
Hi Ryan,
I'm a 100% discretionary trader although, like many others, there is mechanical element to what I do. For example, when each trade is executed, there is an automatic stop loss attached at a pre-set level. This invariably gets moved closer to my entry point, but it's a useful safety net in case my connection goes down.

I wouldn't know where to start with an automated approach. Even if I had an IT genius on hand 24/7, I wouldn't know what to ask him/her to do. I don't know of many people on here who trade a predominantly automated methodology. The only person who springs to mind who claims to be successful (and I've no reason to doubt him) is the hare. Unfortunately, he rarely posts on this little discussed topic but, when he does, it's usually useful and insightful. If I were in your shoes, he'd be the first person I'd contact for help and advice. That said, it's just as well I'm not in your shoes, as he happens to hold me in particularly low regard and would probably take great delight in telling me to travel to distant lands and copulate with the natives!
;)
Tim.
 
 
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