Best Thread My Journal at a Prop house

[pozzyp]

Hi Pozzi

Have you tried to automate this strategy?

Cable 20 pips stop /filter isn't enough in my opinion, cause it kicks about with fakeys.What is your opinion on this?

O D T

Hi ODT,

I have spoken to a few people in regards to automating a strategy but nothing has ever really developed and I have no programming experience what so ever..... if there is anyone out there who would like to have a look at it then please do get in touch and we can look into it further.

In regards to 20 pips on cable as a tight stop I think is a very valid point. For me If price isn't going my way I would rather close out the trade and wait for another opportunity. If things do turn around I'll just retake the same trade again so a 20 - 30 tick stop Is fine for me. If I was going to take a larger stop I would just use a longer timeframe, a 10 - 15 min chart would be less aggressive with fewer trade signals throughout the day and positions would have more room to move about..... as with most of these things it's down to personal preference.

Thanks for the post

Pozzy

 

[oildaytrader]

Pozzy

From the knowledge I have gained through backtesting thousands of variations of systems, I have learned the following:

Taking small profits is cutting your own balls , in fear of losing a few pips i.e stop loss .The most profitable strategies make their money in only a few days of trading through the year,when they have big breakout days, the rest of the year they are getting nowhere.These few days is when they make their profits for the whole year.If anyone has a small t/p strategy ,they will eventually lose out on the winning days.That is my view.I have no evidence to the contrary.

O D T

Maybe I am not cut out for

 

[pozzyp]

Pozzy

From the knowledge I have gained through backtesting thousands of variations of systems, I have learned the following:

Taking small profits is cutting your own balls , in fear of losing a few pips i.e stop loss .The most profitable strategies make their money in only a few days of trading through the year,when they have big breakout days, the rest of the year they are getting nowhere.These few days is when they make their profits for the whole year.If anyone has a small t/p strategy ,they will eventually lose out on the winning days.That is my view.I have no evidence to the contrary.

O D T

Maybe I am not cut out for

Fair enough ODT I respect the opinion. I don't take small profits though I am just taking the risk off the table, I'll run that last 3rd for as long as I can (often 100 - 150 ticks) as you will see in some of my posts, so I wouldn't call it a small T/p Strategy it's simply managing my trade. This is also an intraday strategy, so I am only looking to capture an intraday move. If cable on average only moves 170 odd ticks a day (by my ATR) then aiming for a profit target of 60-70% of that move is not really taking a small profit. As I said I do take longer term positions in which case I'm focusing on a bigger move so my profit targets and stop will be greater but for this particular strategy it's a scalp, its a small short term intraday position so it has an intraday target with an intraday stop. If you are trading with a weekly or monthly view targets would be bigger and so would the stop.

Pozzy

 

[bedsit]

With a due respect to other traders on this forum, I found Pozzy's way most suitable for day trading – especially his trade management. I've been doing day trading for some time now and through trial and error came to conclusion that this day trading business should be seen as a marathon rather than a sprint. IMO most important thing is to control losses (make them as small as possible) and when opportunity comes try to go for big wins. It sound boring, but any other way looks to me as gambling.

In August last year I had string of wins and would increase my account 10% on daily bases. After some time of constant wining I grew big headed and came to wrong assumption that market is there to provide me with regular wins and was thinking not if, but when is first million coming. Unfortunately market disagreed. Since than I had some serious losses (although never managed to blow away my account), and was trying all sort of different systems. So after all that ups and downs decided either to quit all together or stick to a sound system. Nowadays I experience odd 10% a day success, but never more than 4% loss. This is since I started using a style of trading similar to Pozzy's (understanding how crucial is money management in trading business)

PS There are some exceptional traders out there - I know of a trader who turned 10k into 2m in less than a year, but again that's an exception - good to be realistic.

 

[pozzyp]

Just a quick post,

I'm glad the Journals has gotten off to a good start and I'm really enjoying posting, also finding it really useful as there is no hiding from making a trade plan if you force yourself to write it up and post it on here.

I wanted to keep this Journal just about my trades at work but I have made a side blog that I will post videos of trades from my personal account on (just because I'm lazy and it's easier than typing them), Sooo if for any remote reason you are interested then Check it out. http://pozzytrading.blogspot.com/ (not sure if thats a little presumptuous but I'm enjoying doing them and they are helping me trade so why not post it) any feedback is more than welcome. Woop woop

Pozzy

 

[Black Swan]

With a due respect to other traders on this forum, I found Pozzy's way most suitable for day trading – especially his trade management. I've been doing day trading for some time now and through trial and error came to conclusion that this day trading business should be seen as a marathon rather than a sprint. IMO most important thing is to control losses (make them as small as possible) and when opportunity comes try to go for big wins. It sound boring, but any other way looks to me as gambling.

In August last year I had string of wins and would increase my account 10% on daily bases. After some time of constant wining I grew big headed and came to wrong assumption that market is there to provide me with regular wins and was thinking not if, but when is first million coming. Unfortunately market disagreed. Since than I had some serious losses (although never managed to blow away my account), and was trying all sort of different systems. So after all that ups and downs decided either to quit all together or stick to a sound system. Nowadays I experience odd 10% a day success, but never more than 4% loss. This is since I started using a style of trading similar to Pozzy's (understanding how crucial is money management in trading business)

PS There are some exceptional traders out there - I know of a trader who turned 10k into 2m in less than a year, but again that's an exception - good to be realistic.

Just as an aside/example to support a couple of your points I'd kinda had one of those days last week when I simply could not face charts/trading, I was exhausted with it...Once I had six active trades off my 7 pairs, (entered following my usual rules) I set limits, stops and went on a very long bike ride...

I'm never completely relaxed when in the market and usually I play through a few scenarios whilst our for 5-6 hours..but I was relaxed knowing that even in the v. worst case scenario (hell freezing over) I could probably only lose 8-10% of my account...However, playing out the correlations in my mind and based on the probability of past patterns/results I reckoned the worse situation would be B/E, I've never had a running P/L at greater than 3% down on a day ...

Got back, three trades had reached limits/closed at 50 pip profits, 2 had closed at 30 pip losses, one was still live and running at a 15-17 pip loss but was looking sick so I closed...Just thought I'd mention this in relation to a couple of points you raised, stops undeniably are .v important but limits can be very effective too. You don't have to go for as you called it "big wins" when day/intra-day trading; if you trade the right pairs, off TFs that give you enough time to react/manage them, you can set achievable targets/limits (based on past movements) that still have a high probabilty of being hit...

Hope that makes sense..

 

[pozzyp]

With a due respect to other traders on this forum, I found Pozzy's way most suitable for day trading – especially his trade management. I've been doing day trading for some time now and through trial and error came to conclusion that this day trading business should be seen as a marathon rather than a sprint. IMO most important thing is to control losses (make them as small as possible) and when opportunity comes try to go for big wins. It sound boring, but any other way looks to me as gambling.

In August last year I had string of wins and would increase my account 10% on daily bases. After some time of constant wining I grew big headed and came to wrong assumption that market is there to provide me with regular wins and was thinking not if, but when is first million coming. Unfortunately market disagreed. Since than I had some serious losses (although never managed to blow away my account), and was trying all sort of different systems. So after all that ups and downs decided either to quit all together or stick to a sound system. Nowadays I experience odd 10% a day success, but never more than 4% loss. This is since I started using a style of trading similar to Pozzy's (understanding how crucial is money management in trading business)

PS There are some exceptional traders out there - I know of a trader who turned 10k into 2m in less than a year, but again that's an exception - good to be realistic.

Thanks Bedsit,

I completely agree, I heard a great example of a trader who was mentoring some trainees and he would pick 5 random instruments (be it indicies/stock/Fx whatever) and say on each one, if the next person that walks past is a women we will buy if it's a man we will sell, he would then manage the posistions correctly and still make a profit. The point of the excercise was not so much focusing on wether or not to buy or sell but just to cut your losses and run your profits. The market can only move in two directions if its going with you then great if not get out, there will always be another opportunity. Not sure how true the story is or how practical but I thought it was a great concept none the less.

Thanks for the input

Pozzy

 

[pozzyp]

I've had a fair few msgs about working for a prop firm and how I got into it etc.... some people asking why whats the point? and others who are looking to find one asking how to go about it, so I thought I would write a post.

To be honest and not meaning to be harsh I am rapidly discovering that while there are pros there are also a fair few cons.

While I am still very much at the start of my trading career and don't have the same experience as some of the market pros who have been trading for the last 20 - 25 years Trading has been my main source of income for nearly 3 years. I started in the city as an investment broker boiler room style making stupid amounts of calls a day pitching
anyone with a pulse which meant I had a good sales patter. After about a years trading I managed to talk my way into managing an account of about £20,000 for a couple of ozzys that I knew (I was in Sydney at the time). Things went well but I had to return to the UK and they wouldn't let me run the account from here so we went our separate ways.

After about 6 months of trading at home I was getting a little fed up and didn't really feel that I had a "proper Job" as I was working from home. I also didn't feel like I was actually a trader and that mates of mine who worked in the city never really believed what I was doing or that I couldn't possibly understand something like that and only People with Phds in rocket science could be a trader.

Soo I went off looking for a prop firm as I thought that would be the best option and here I am just finishing my 3rd month. The experience has been great and I have enjoyed it, however I am not really sure about the future prospects. The cost of working is very high, once you take into account desk fees, clearing costs, travel costs all of which dent your profits and add to your losses. It's nice to be in an office with other traders and not at home on your own all day, but trading can be a very slow business and when you are sat at a desk you feel the need to do something and there is pretty much nothing else to do apart from sitting and watching your screens. This makes the trigger finger evvvven itchier and as I only have access to two pairs at present things can often be painfully slow.

If you had a £10,000 trading account and you were working from home and you made 10% return in a month then you have made £1,000. That money is yours, you can leave it in your account and grow it further or you can bank the whole lot it's up to you. A prop firm could back you with £40,000 and you could make a 10% return over a month and you would break even. From the 4K that you have made, £2,500 has gone on fees, the remaining £1,500 is split (50/50 just as an example) leaving you with £750. You cant draw the whole amount out and it has cost you £500 a month in expenses (getting into work etc) on top of that another £2,000 is coming out for next months desk costs.

So the big question why do it??????

I suppose the bottom line is money. The only advantage that I can see is that they provide you with the cash. They put up the money and therefor they carry the risk and if you want to get into the industry but don't have the capital then it's a solid opportunity. I do however feel that they are a dying breed and that the future is most def in being a retail home based trader. Internet access at home is fast and cheap and with soooo many brokers out there provding such high leverage opportunites I really can't see any other advantage of working for a trading company apart from the fact that they will back you or if they provide training.

I hope that gives a little bit of a better insight

p.s whilst typing the GBP trade on my personal account just triggerd short so I will update the blog once I get a sec.

Any comments on this are welcome as usual (and sorry if there are any prop traders out there I have just bashed, I am sure there are plenty who make good money)

Thanks Pozzy

 

[Pat494]

hi pozzy

Just a suggestion but maybe you could get the best of both worlds now that you know HOW TO trade well, is by finding 1 or 2 friends nearby and meet at each others places to trade togethor. Might have to help them a bit to start with, but often one learns the finishing touches from teaching someone else rather than being taught.

Anyway just my 2p worth

 

[pozzyp]

hi pozzy

Just a suggestion but maybe you could get the best of both worlds now that you know HOW TO trade well, is by finding 1 or 2 friends nearby and meet at each others places to trade togethor. Might have to help them a bit to start with, but often one learns the finishing touches from teaching someone else rather than being taught.

Anyway just my 2p worth

Hi Pat,

Thanks for the suggestion I'm actually looking at taking a small office round the corner from me.I have got another trader who is interested in chucking in as well so the plan is to be our own little prop house (posh way of saying we are pooling funds ). It's just talk at the moment though but would be great to eventually take on a 3rd trader but can't see it happening for a while. I am enjoying posting on here as well and making the vids which is enough to feel like I'm apart of a "working enviroment"

On a side note Finallllyyy that GBP is ticking down.

Thanks

Pozzy

 

[pozzyp]

Little bit off track the last day or two so thought I would get the Journal back on posting trades.

Sooo

Euro March 10 Contract:

The Euro range that I had marked off is still holding strong. There was a little false break to the upside (red circle) Lucky enough the pattern never developed on the lower time frame and so I never took the trade but now the top of the range is moved up to the breakout high.

So in the usual way I took a fib of the range and price has just touched on the 61.8% retracement which I know has the potential to be a level of support so Jumping down to a lower time frame to have a butchers at what price is doing.

On the lower time Frame price has made lower high, lower low (which is the touch of the 61.8% fib) its then made a lower high, higher low (blue circle) So the blue circle is hinting that price might be turning around but until I see the higher high move the full pattern is not complete so the trade is not quite there yet. (sorry I marked it as 50% should of been 61.8)

As I was typing the Higher high is almost there so hopefully we should get the full pattern and the long setup in the next bar or two.

As always any comments or posts are welcome. Yesterdays Spot rate trades turned out ok and I'll try and get an overview up on the Blog shortly.


Thanks

Pozzy

 

[pozzyp]

The Euro Trade just running out of steam. Managed to get the higher low, higher high, entry goes above the Higher high but price never got there and is now heading south falling back down to the 61.8% level.

Pozzy

 

[pozzyp]

Euro pushed down to the 78.6 Fib

So from my definition my market is range bound and at a potential interesting location within that range so I drop to my lower time frame to see what price is doing.

Now I am waiting to see if I get some form of reversal pattern here to suggest that price is going to turn around at this level if it continues to push down then I'm looking for it to test the base of my range.

little bit slow on the Euro had a couple of setups but nothing really develop. Back to the waiting game.

Pozzy

 

[pozzyp]

Euro not really setting up for me at present, should of selected a different pair to follow for the day but oh well. Looked like It was going to fall back to the base of the range but now we are caught in no mans land really. Past the 78.6 and too far away from the bottom maybe a bit of US money will get things moving this afternoon.

Pozzy

 

[pozzyp]

Finally this Euro setup is stating to play out as price just ticks along to the bottom of the range. So now looking for the breakout and a short, or for price to hold in which case there is the potential for a punt to the long side.

I'm at an area of possible support so dropping to my lower timeframe to see what price is doing.

So price looks like its turning around at the break of a previous swing high (light blue circle) giving me a long entry at 1.3560 (light blue line) which has just triggerd. Stop goes at my pullback (redline) there is an alternative stop placement on this setup but I've not posted it yet and just wanted to keep things as how I'm trading them. So stop at 1.3540 = 20 ticks and I'm looking to scale out 2/3rds of my trade at half the stop loss size 1.3570 (green line)

Come on Euro me old son don't let me down!!

 

[pozzyp]

Wooop Euro scaled out so last 3rd of the trade is running and worse case is break even.

Thanks

Pozzy

 

[pozzyp]

Euro trade running nicely however due to the break of a previous swing low Stop has been moved.

Stop now at 1.3570 locking in +10 on the last 1/3rd of the trade, worst case now is +30 on a 1/3rd of the overall position. So not shooting to the stars but not bad for a cheeky scalp and the position is still open

pozzy

 

[SuperDriveGuy]

Euro trade running nicely however due to the break of a previous swing low Stop has been moved.

Stop now at 1.3570 locking in +10 on the last 1/3rd of the trade, worst case now is +30 on a 1/3rd of the overall position. So not shooting to the stars but not bad for a cheeky scalp and the position is still open

pozzy

Hi PozzyP,
I have been following your journal and learning a lot. I have been trying to follow your setup on my charting package(Ninja Trader) and realised that the HigherHighs HigherLows etc are probably better served by an automated indicator.

With reference to your 1.370 stop(which is based on your initial stoploss and 2/3rd TP), isn't it better served by applying your entry logic to it ie below the LL 1.361? That way as you have already locked in a 20 pip profit, worst case could being 20(2/3rds) and 1(this last 1/3rd).

Sorry if you have already experimented with this kind of SL and realised your existing method works better. Just trying to show we are paying attention and learning.

I have posted a 3min 6E chart of today with the NinjaTrader indicator(not in the traditional sense) which calculates the HH,HL,LH,LL etc there maybe an equivalent one for CQG too. Maybe you don't need it as you are so accustomed to it, but newbies may find it useful. It also has the alternative exit(SL) for the 1/3rd position. I am thinking the position would still be in play???

Is your 1/3rd still open, or was the stop at 1.3570 hit?

Regards,

SDG

 

[pozzyp]

Hi SDG thanks for the input and the suggestion.

You're 100% right in the logic you have applied and that is exactly what I'm doing, It's just a coincidence in this case that the stop has been moved to that T/P location as well there was no intention in that it's just how it panned out.

The only difference is how we are defining our swing points. So on my chart for this trade my lower low was at 1.3573 so I place my stop in at 1.3570. The logic used is identical but ninja trader has marked the lower low at 1.3561 which would make the stop at 1.3555 which would make you +10 on 2/3rds of your trade and -5 on the last 1/3 so worse case now is going to be +15 on a 3rd of the position. (I think thats what you were saying please correct me if im wrong)

The last 3rd was stopped out but I managed to get long again and take a few more pips but still nothing spectacular. That range setup is still in play and while it's not paid me a fortune it's trickling the pips in slowly and hopefuly there is still another bite of the cherry to be had.

Thanks again for following.

Pozzy

 

[pozzyp]

Feeling like I might get caught with my hand in the cookie Jar here. Euro was at the 38.2 level on my range set up so I was checking for the short.

There are grounds to say that on this setup you shouldn't trade the 38.2 as it's always going to be close to the range extreme but Its personal preference and I took the punt as I was feeling a little aggressive.

Not looking great but its still just hanging in there maybe if you all start shorting it will push it down to my scale out

Pozzy