my journal

[Yamato]

Yeah, it's an important rule which - if followed - will keep me from gambling. In the sense that I can't get out of any automated trades either, because that would qualify as a discretionary trade, but I've already done it today. But then if I am not trading I might write a little less here, too. A change that reminds me this: I have to keep myself from getting addicted (in an obsessive-compulsive way) not just to trading but to any activities, because that is my constant tendency, probably some sick reaction to the anxiety my dad instilled in me.

I am not one of those guys who wash their hands like the guy in the movie "as good as it gets". But obviously, even though it may seem to me less sick and irrational, I am doing a similar thing as far as posting here, using the "befriend" feature (I add anyone I see reading the journal - I can't help it). I was doing it as far as trading. I was doing it all night as far as checking out continuously my trade until I made it fail, a perfectly good trade. I do it as far as scratching my head. Basically it's a really ingrained pattern in my actions.

It comes from growing up with a father who's continuously sweating you, suffocating you, and repeatedly asking you "have you done this? have you done that? did you take care of this? did you take care of that? are you prepared for this unexpected event?", a father pouring on you lots of anxious remarks and recommendations several times a day. How you react? You become like him. Even when he's not with you, you hear a constant voice within yourself saying "have you taken care of this?", and this is what keeps me from going home without having taken care of all emails at work, which is a quality deriving from an obsessive-compulsive behavior. Also, looking for bugs on my excel sheet's vba, that's another good consequence of a sick behavior.

I should limit this sick - but sometimes useful - "checking and double-checking" behavior wherever it's not necessary. For example, how many good trades can I find in a day? One. Then I should just trade once. Do I have to check on the trade throughout its life? Then I might limit that as well. How useful is it for me to keep on "befriending" forum members? Then maybe I should try to limit that behavior as well. How about writing on the journal? And the list goes on: scratching my head, flipping channels with the remote control, always walking the same itinerary when going home... I should stop living a life that is nothing but the sum of several compulsive behaviors.

Ever since I come home, where there are no external influences (which could change the compulsive routine), all my actions are nothing but a predetermined list of repetitive behaviors, and I feel uncomfortable unless I am frantically doing something, like writing on this forum right now, or checking how many views my journal has had. Or checking my balance on the account. If I took out the useless repetitive behaviors from my hours at home, I would be left with 5 empty hours, which probably would make me uncomfortable and that is why I am filling them with "checking and double-checking and triple-checking" behaviors. I should instead learn to empty my list of tasks, and do things on the spur of the moment rather than compulsively. What do I really want to do now that is not something devised to just fill my time? Do I really want to go to the computer screen for the 50th time and check how my automated trades are doing? Or maybe I could go out and get a mozzarella? What do I really want to do?

The essence of the anxiety that my father instilled in me is best represented by my phone call to him several years ago, from a foreign country where I was working. I'll never forget it, because of how well it represents the tragedy of having him as a father. During that phone call, I told him, even if he hadn't asked me, that I was happy, because I had a girlfriend, I had a job... I was, overall... "happy". This to him probably sounded like a dangerous state of mind, because he immediately got even more serious than usual and told me: "all you have, right now, is your health, and you never know how long that lasts". This meant: never relax, danger is always around the corner. To him "I'm happy" sounded like "I'm being stupid, superficial and reckless". But to me his answer also sounds like he thinks that I don't have the right to be happy, that he doesn't care, and actually he's bothered by the fact that I'm happy.

One Flew Over the Cuckoo's Nest

 

[Yamato]

You've got to lose to know how to win.

 

[Yamato]

BACK TO AS LITTLE AS 5000 DOLLARS OF CAPITAL
Major losses from my systems. I'm now down to less than 5k again, like a week ago after a few days of full scale gambling mode. Major major challenge for me now. Good opportunity to learn the value of money and proper money management. No point in rushing anymore, because it just gets me to either stay at the same capital or go lower.

Hey, this time it wasn't my fault at all. I simply got unlucky with the systems. One of the safest systems took a terrible unexpected loss on the GBP.

My work situation really made me unstable but it had neither the power to make me lose via discretionary (overall I made some money), nor the power to destabilize my automated systems of course. So it was just an accident. Even the best money management, given my situation of almost no capital, didn't protect me from such an event. Of course, if I had more capital, I could protect myself from these events, but at the price of lowering my leverage (of course if you have 1 million and you buy one contract, you'll lose less than 1% of your capital, but you'll also make nothing from the systems).

Actually I am happy because two of the newer systems, that hadn't traded yet in forward testing, have made a trade apiece. So I am just missing a couple of systems on the opening gap principle, that trade very rarely and have not traded at all in forward testing.

 

[Yamato]

DO NOT MAKE TRADES LIGHTHEARTEDLY
What I have learned from this week is that if you make a trade lightheartedly it could actually still be a good trade but you won't stand by it, and you will exit early, with a small loss or a small win, which is always bad, because of commissions and slippage. Instead, if you make a trade after some careful planning, you will stick by it, and it will be first of all a better trade, and second of all you will be less hurt by commissions and slippage.

I WAS ALWAYS CONVINCED IT'D BE EASY FOR ME, BUT I WAS WRONG
The concept is not new to me. I've come across it several times in the past 12 years, but my desire to make money easily, my deception that it was easy, and my desire to bet, has outweighed my desire to actually increase my capital, so I never made the effort to apply the principle that I had learned (that betting lightheartedly doesn't take you anywhere). All these years, I've always been willing to make money easily. I wasn't willing to make money with hard thinking and by refraining from impulse trading. So my accounts always suffered, but I never saw it as a tragedy. I think that in my life, I've never accepted the concept of hard work. I ended up working harder than everyone else, even with trading, but I never accepted the idea that I was embarking on a task that required hard work. I don't know exactly why. Some reasons I can think are: I thought I was so intelligent that if others needed hard work, I did not, because I was smarter than them. The markets are not like professors, whom I can accuse of having a bias against me. They failed me, without having any prejudices against me, and have basically told that I've been pretentious and arrogant. And they have passed plenty of other people. So, I've been humbled, and I am here to admit it with my journal. I had thought it would have been easy for me, but it has not.

BUT HARD WORK SIMPLY MEANS NOT TRADING LIGHTHEARTEDLY
With trading, at least in my case, you don't get failed because you don't know the markets. You get failed because your bet was wrong. There was a possibility that it might do what you expected it to do, but it wasn't high enough. The only hard work required of me at this point is not to study anything, nor reading, but simply to refrain from betting lightheartedly on all things that i infer from looking at a chart. I just have to refrain from doing that. That's the only hard work really required of me to be "passed" by the markets. Let me see... in school this would be like having a multiple choice test, and, just because you know the subject, expecting to do well by crossing the boxes that look right but without even bothering to read all of them, and without even taking all the time you're allowed to review your choices. That's the equivalent of what I've been doing in the market for 12 years, and it means that basically I didn't care about failing, or I wanted to be able to say: "well, you know, I didn't even try my best...". So maybe that's why I came here: to get shamed. So that I would finally start minding failing. Because that's all I need - to be ashamed of failing this test I've been taking for 12 years - in order to finally read all the boxes of the multiple choice test, before crossing one of them. I had gotten so used to failing this test, that I almost didn't mind anymore.

WILL I START MINDING MY CONSISTENT FAILING NOW?
Or does it even make me uncomfortable and afraid to finally pass this test and graduate? Maybe so. I remember a similar thing that happened to me in college. I had to finish my two math requirements in order to get my Bachelor of Arts college degree. I had taken those math classes my freshman year, dropped them, then later and failed them all the way to my senior year and graduation. Then on my senior year, I took them during summer school, staying on campus for two summer school sessions, and I failed them again. Then I had to stay an extra semester, just to take those two math classes, and I failed them again. Then I went to work at a bank somewhere in Europe, to dodge the Italian army one-year requirement, and, they let me go back to the States for six weeks to take a summer school session, so I could graduate, and I failed those two classes again. A year later the bank let me go again, and I failed again. Then I quit my job at the bank. On the next summer, I took two summer school sessions (7 years after my freshman year had begun) and I managed to pass one of the two courses. Then I came back to Italy and attended a math course at an american university in rome and my college initially was giving me problems, but later, maybe out of pity, accepted the math course I passed there. So I ultimately graduated from college in almost 8 instead of 4 years. One quick answer as to why I did this, would be: I didn't want to give in. Failing was my way of rebelling to the system, basically resisting against my father, a professor himself, who had always stressed me out because to him I was never doing well enough in school, I was never studying enough (he even went to complain to my teachers because they weren't strict and demanding enough, and weren't giving me more homework). When I passed my math requirements and graduated I didn't feel like it was a victory, but a failure: I had given in to my father and all the other professors. I had stopped rebelling and received their piece of paper, called "diploma", acknowledging that I could be trusted, and hired, because I was submissive enough to eventually give in.

Now I need to make another revolutionary change and pass not the math requirement, but the profitability requirement. One thing in my favor is that my dad was always against trading, because to him it's immoral to make money without producing anything for society. Also it's good that he doesn't think I'll ever make any money with trading, and he even made fun of me about it. Another good thing is that I know I don't like my job. I don't like Rome. I want to quit. But is that enough to finally win at something I have all tools to win except my will? Money is precious, why did I blow it at restaurants when undercapitalization is now giving me all these problems? It's not easy to make money. I am still in time. I can still make it happen. Let's try to put some effort into this.

WHAT MIGHT BE GOOD ABOUT THIS JOURNAL
Some readers like it and some dislike it. Especially the fact that I talk about non-trading problems, and basically write freely about anything I please. It's as selfish as all journals I guess. My problem is that I talk about myself even at work, even to unknown taxi drivers, but doing it on a journal is almost normal I would say.

I CAN TALK TO MY READER-SHRINK
Also, the complaining part where I go on for pages and pages about the same problems: my relationship with my dad, my colleagues, myself. But this is one thing that is good: I feel that I can complain and that someone is listening to me. And that is quite good for me.

I HAVE TO FACE THE TRUTH
The second good thing I can think of is that my relationship with the reader (and in some cases that reader is me, days after being the writer), with the reader's objections, forces me to make some sense and be logical. I can't say "from now on I won't gamble" and then go on gambling for the next three months as if I never said anything. I can't say "in two weeks I'll have doubled my capital", and then still be at the same capital after 3 months (ever since I started this journal I've been in the range between 13k and 5k). I could do it if I didn't write it here. I could do it if no one read it. I could lie to myself, deceive myself. But I can't lie to the reader, and therefore I can't lie to myself either. I don't lie, or at least I rarely lie, or at least I lie less than average, and I lie to others even less than to myself, and all this forces me to confront the truth.

AND THE TRUTH IS...

UNPROFITABLE BOTH AS AUTOMATED TRADER AND DISCRETIONARY
From my point of view and from what I saw myself write on this journal since early September, my situation as a trader is that I've been unprofitable both as a discretionary trader and as an automated trader. These facts cannot be denied, as I went from 13k to 5k of today. The causes of unprofitability as far as automated trading is definitely a lack of capital, but also other things, like my impatience and my reckless money management (letting systems with big drawdowns trade). The causes of unprofitability in discretionary trading is my compulsive gambling in one word. In neither automated nor discretionary trading do I have a problem with the profitability of my systems: I have profitable systems in both cases, but in the first case their drawdown is too big for my small capital, and in the second case I don't have the patience to use the method.

AFTER 12 YEARS OF A DOWN TREND IN MY BEHAVIOUR... WILL I REVERSE?
The good things I can see from inside is that I've been improving in some areas of trading, like my knowledge of the markets and my trading systems. Also in my knowledge of the best broker and best financial instruments to trade. In my programming knowledge. I've been improving in every area of trading except the one that requires will power: the will to win by resisting myself, by saying "no" to myself, the ability for a rebel like me to follow at least some rules, the will to sacrifice some freedom to achieve an objective.

AM I WILLING TO RENOUNCE TO SOME OF MY FREEDOM?
That's been in a constant down trend, and this journal is pretty much witnessing that, and hoping to fix this problem. Do I want to win, enough to sacrifice my freedom, my habit of rebelling to every single rule I'm confronted with? Do I renounce the freedom of trading however and whenever I want without following any rules? Do I renounce to get entertained and thrilled by trading when I need distraction from my boring and frustrating life?

The Godfather

 

[Yamato]

Automated Systems Update

Using all systems, even the ones that have lost since the start (something I wouldn't do in real trading), also the 49th week of the year turned out to be unprofitable, the fourth red week in a row:

week Total
30 1,400
31 5,900
32 1,000
33 -800
34 4,200
35 1,900
36 500
37 1,400
38 4,600
39 6,000
40 500
41 4,800
42 -2,800
43 6,700
44 12,100
45 2,900
46 -900
47 -7,300
48 -2,600
49 -10,500

The systems that have been doing worse are the ones most recently added, the weekday bias systems, with a combined loss of 8000 dollars so far. So far, forward testing seems to say that there is no "weekday bias" in the markets. The best systems instead have always been, since the start, the ones that go with the trend, and that is why I chose, against my nature, to trade an intraday discretionary system that goes with the trend.

In total about 800 trades in 20 weeks, with an average of 40 trades per week. If we consider holidays like thanksgiving, when I halted trading - also as far as the day before and after - my systems make about 10 trades per day.

Here's what the equity line looks like:



Now, to trade all of them at all times, I would need about 50k, because the drawdown here is as bad as 20k, so I'd need to still have money to invest in all of them after losing that 20k. That is if I get lucky and the drawdown doesn't double in the next few weeks. But even with as little as 20k I could still trade them all, but only in the case I started with 50k. If instead I try to trade them all by starting with just 20k, then, unless I get lucky, I could go down to zero in two weeks.

Of course, in reality, I wouldn't trade the systems that have only lost money so far. But I can't count on that to work, because what could happen is that the systems that lost until now start making money from tomorrow, and viceversa.

The higher the drawdown, the lower the Return On Account
Since my dream/objective has always been since 12 years ago to make 100% a month, I've been deceiving myself into thinking that these systems do make 100% a month, but that is with reckless money management, that will make me double one month and lose almost everything the next month. Yes, because when you see systems reach 50k in 3 months, and you know they only need about 20k to be all used, you could think you're doubling every month, and it is true. But then, with the same money management, what happens on the month you lose 20k, like it happened in November? You lose everything. So this leads me to realizing that what my systems need is actually > 40k to be used all together, and therefore their return is 50% a month, and even that money management is still reckless, because it's assuming that this drawdown won't continue in the coming weeks. But actually that's a pretty good estimate, considering that in real trading I wouldn't use the systems that lose money and would trade more contracts for those with a low drawdown and viceversa, using my Return On Account formulas.

My Return On Account has been halved due to November's drawdown
If I apply similar ROA formulas to the whole of my systems, I find that the ROA has been cut to half in the past month. Yes, because, without any drawdown, the ROA would be the gain divided by the margin needed, so about 100% a month. But as the drawdown increases, you have to divide the gain by: margin + drawdown incurred. Say monthly gain is 20k, and you need margin of 20k. That is the 100% I was dreaming of. But now what I got is 20k of drawdown, so I'll have to divide 20k of gain by 20k of margin plus 20k of drawdown. So I don't get 20/20=100%, but I get 20/40=50%.

I should play it more safely than I feel like
That is why for me it could be preferable to use systems that make little money but have almost no drawdown instead of systems that make a lot of money but have a high drawdown. On the other hand, one never knows what your systems will do in the future, and, as long as forward tests prove, after a few more months of forward testing, that they are all profitable (as they've obviously been in 10 years of back-tests, or I wouldn't have automated them), then it would make sense for me to use all systems, even those with a high drawdown, for the sake of diversification, and allowing more contracts for systems with higher ROAs. But I must stress also that I suck at formulas and that these money management formulas are a mess, so I am positive that I am going in the right direction, but I am sure that all the formulas I am using are not all coherent with one another. Obviously the best thing would be to not push my luck, and to be on the safe side by investing... I wouldn't even go as far as saying that, given this drawdown of 20k that we have seen so far, I would need 100k to invest safely in all systems.

But for now all this is not a problem, because with almost no capital, I am only allowing only the best ROA system to trade, systems that have lost 300 dollars at the most. Yesterday one of them, on the GBP, took its maximum loss from 300 to 1300. So that was where my formulas have failed to protect me. Maybe I should have considered the highest loss in back-testing rather than in forward-testing because I still do not have enough forward-test data. But I didn't implement such a formula, because it was too much work, and I am tired after all the work I've done to implement yet another formula and go look for data in the tradestation reports.

I should force myself to play it more safely than my greed would allow
In light of the past 12 years, I must say something about problems related to money management. After 12 years my capital is still what I started with. Not only this: it's been replaced over and over again by new money being transferred, for a total loss of about 50 thousand dollars. I've spoken long enough about my compulsive gambling. But that is not my only problem, because also my automated systems have not excelled as much as they could have. They have been profitable, very much so, but I am still at 5k and this cannot be explained just with my gambling losses deleting my automated gains. In other words: they have been very profitable in forward testing, but have not given me much money, and this is because of improper money management.

Indeed, besides my gambling addiction, what hurt me was that, both for discretionary and automated trading, greed made me neglect money management. In discretionary trading, on top of my compulsive gambling, my greed made me go for trades that weren't worth the risk, and the risk is unlimited since I didn't use any stoplosses, so basically no trades were worth that risk.

In automated trading, due to the same greed, I allowed trading by systems with huge drawdowns, like all CL systems. So what happened was that one day I took a loss of 1000 dollars, and the next day I stopped using them, but often that's when they made 2000 dollars. So what was wrong? Not the fact that, out of prudence, I stopped them from trading (because, had they made another few -1000 dollars trades, my account would have been blown out), but rather the fact that I allowed them to trade in the first place, hoping to get lucky.

So the solution is, for both discretionary and automated trading, to create and stick to rules that will force me to play it more safely than my greed would allow. For automated trading, such rules are precisely the ones I already created for automated trading: maximum forward-testing loss must not exceed 5% of capital (7% with a small capital of 5k), and drawdown must not exceed what I can afford or the system won't be allowed to trade. For discretionary trading, the first two rules are that I will only be allowed to trade within the mentioned pro-trend system and to make only trade per day, or things will quickly get out of hand. The second rule is obviously that its maximum loss will be 250 dollars, since it can ony make one trade per day.

So everything is now ready for me to play it safely and here's the latest version of that system:

PRO-TREND DISCRETIONARY SYSTEM
HOTKEYS
Set up hotkeys:
"B" for "buy 1 at market" with 20 ticks bracket order,
"S" for "sell 1 at market" with 20 ticks bracket order,
"C" for "close position".
----------------------
CHARTS
SET UP THESE CHARTS ON IB'S TWS:
1 MONTH TO 15 MINUTES OF ES, CL, GBP "line" mode
2 DAYS OF EUR.USD@IDEALPRO 15-minutes CANDLES WITH PIVOTS
4 HOURS OF EUR.USD@IDEALPRO 1-MINUTE CANDLES WITH 15-periods and 210-periods moving averages
----------------------
RULES
ENTRIES can be made if:
1) it's your first discretionary trade today (you can't trade discretionary outside this system)
2) your entry and your take profit are >=10 ticks away from any pivot lines
3) you've looked at "correlated" chart (both 1 month and 15 minutes)
4) the 225-period ma is in favor by >= 5 ticks
5) the 15-period ma gets crossed by price (in favor) after touching the other side >= 3 minutes
EXITS
1) Bracket order of 20 ticks.
2) You can exit early if you wish.
3) If the trade is still open after 1 hour, close it as soon as both averages are against it.

Aside from all I've said, I must accept the fact that by following all these rules there'll be great opportunities that I'll be missing. Great opportunities that... have lost me 50k in the past 12 years.

Once upon a long ago children searched for treasure.
Nature's plan went hand in hand with pleasure.

 

[wprins]

Re: Automated Systems Update

That is why for me it could be preferable to use systems that make little money but have almost no drawdown instead of systems that make a lot of money but have a high drawdown.

Yes. In one of my previous posts I made a similar argument. Your first job as trader is risk manager. The further trouble with large losses/drawdowns (that you've apparently not touched upon above) is that the larger the draw down, the bigger the job to recover from it. This is a problem because it unnecesarily "blunts" the edge in your system as it will then end up fighting just to survive (get back to break even) instead of making profits for you as is the real goal. As I mentioned before, a 50% loss/draw down requires a 100% from then on just to break even again, whereas a 10% loss/draw down requires only about 11% to break even again. A 75% loss/draw down requires 400% (!!!) just to break even again.

This is why, averaged out over a long period, I submit that a *realistic* averaged monthly return is likely a *lot* less than 100%... (and just to be clear, that's on average - in reality even then you'll still have losing months occassionally...) You help your systems by not over-leveraging/giving them an easier time recovering from losses and generally having more realistic/modest expectations. Anyway, I'm sure you know all this already. and I'll stop now as I'm repeating myself and you don't like that

Have a good weekend.

 

[wprins]

DO NOT MAKE TRADES LIGHTHEARTEDLY
I WAS ALWAYS CONVINCED IT'D BE EASY FOR ME, BUT I WAS WRONG
BUT HARD WORK SIMPLY MEANS NOT TRADING LIGHTHEARTEDLY
WILL I START MINDING MY CONSISTENT FAILING NOW?
WHAT MIGHT BE GOOD ABOUT THIS JOURNAL
I CAN TALK TO MY READER-SHRINK
I HAVE TO FACE THE TRUTH
AND THE TRUTH IS...
UNPROFITABLE BOTH AS AUTOMATED TRADER AND DISCRETIONARY
AFTER 12 YEARS OF A DOWN TREND IN MY BEHAVIOUR... WILL I REVERSE?
AM I WILLING TO RENOUNCE TO SOME OF MY FREEDOM?

Can I just say, I thought this was an incredibly good post. :clap: Incredibly honest and soul searching. It would seem that you are certainly making progress conquering the things that stand between you and becomging a consistently profitable trader. For this I salute you.

 

[wprins]

Here's a quote I hope you can draw inspiration from:

"Nothing in this world can take the place of persistence. Talent will not; nothing is more common than unsuccessful people with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent." - Calvin Coolidge

FWIW, I think you must be one of the most persistent and determined people I've met.

Edit: Seeing as I'm on a quote posting spree, here's a few more motivational quotes I've pondered and drawn inspiration from in my life:

"The greatest mistake you can make in life is continually fearing that you'll make one." - Elbert Hubbard

"Unless a man undertakes more than he possibly can do, he will never do all that he can." - Henry Drummond

"A man can succeed at almost anything for which he has unlimited enthusiasm." - Charles Schwab

"A journey of a thousand miles begins with a single step." - Confucius.

"It's not the size of the dog in the fight, it's the size of the fight in the dog." - Mark Twain

 

[Yamato]

Can I just say, I thought this was an incredibly good post. Incredibly honest and soul searching. It would seem that you are certainly making progress conquering the things that stand between you and becomging a consistently profitable trader. For this I salute you.

Thanks for your feedback and the compliments. I enjoy writing and I've always written journals in particular. It's one of the reasons why I am writing a journal and it explains why I write so much instead of just listing my trades. The other reason, as I said, is that maybe the journal, especially thanks to the readers, will make me face reality and then change reality. Reality is described here, because I write the truth. The second step is seeing the reality I describe, and remembering the reality I describe. Had I kept this journal in 1997, I might have turned profitable much sooner. It's forcing me to think out loud.

Do you know where you're going to?
Not exactly, but hopefully towards profit. I just want to increase my capital from now on.

Do you like the things that life is showing you?
Not much, I think that if I can make some money, life will show me better things.

Where are you going to, do you know?
As I said, hopefully towards profit.

Do you get what you're hoping for?
So far I haven't. Overall, I've just incurred losses, and blown out my accounts over and over again.

When you look behind you there's no open doors?
No, I always lock my door.

What are you hoping for, do you know?
Hoping to make money, once and for all.

Theme from Mahogany (Do You Know Where You're Going To)
Watch "Mahogany"

 

[drzakir]

hi,i am dr zakir, one thing i am notice u said psycology not important in trading but ur discussing it most of the time in round about way thereby contradicting urself[ btw thats normal for humans].the other thing is u have to decide between discretionary or mechanical system and u have to make a decision that means ur psyc involve 100% of times,thats mean at certain level ur entirely discretionay.my take is mechanical system at the highest order are discretinary in nature and there is no way one can work outside the parameter.ur right when u say one has to has a method before anything else but then ur psyche is deciding factor whether ur going to stick to the method or not and therby profitability. its a very dangerous proposition when one start talking about taking oneself out of equation entirely therby completley nullyfying oneself to the point of nonexistence [as sufis concept of 'fana' YOU ARE ME AND I AM U THERE IS NO DIFFERENCE i.e YOU ARE GOD AND I AM ME AND I AM GOD AND UR ME] then one one will go mad and will have nothing to hold on to and be sane.so i would like to trade within certain parameter and take responsibility for the results whether good or bad and surrender to the outcome [islam]and move on and try again[thereby discovering oneself and becoming spirtualy stronger every moment.so in one sense trading is a process of finding oneself.and in the process becoming a better person,a tender person then it achieve something extraordinary for u which is beyond profit and loss.A FULFILLED PERSON.[money is important but with certain limitation.Godspeed goodluk trading.

 

[Yamato]

Hi, thanks for the feedback.

Well, I didn't exactly contradict myself, but yes, I changed my mind and I acknowledged it in more than one of my 800 posts on this thread. Actually, I remember correcting myself within my first 100 posts, and stating that, even though psychology does not apply very much to automated trading, it applies a lot to my discretionary trading.

I agree that I am understanding more about myself, so I could even agree that I'm becoming a better person, but I wouldn't go as far as saying that money isn't 100% of my objective.

Regarding automated systems, right now I still believe that, as long as the system is good, one should be "taking oneself out of equation entirely thereby completely nullifying oneself to the point of nonexistence", and actually I would be quite rich now if I had done just that, since I began automated trading in early 2008. As long as I hadn't increased the contracts (but I might have done that in my reckless money management), by now I'd have hundreds of thousands.

 

[Yamato]

Made some changes to my discretionary system due having back-tested it. Here's the backtests for 2007:

View attachment protrend_discretionary_basis_only_good_2007.XLS

For some reason it only works in 2007 and does so so in all other years. Well, I don't care because I am adding to it pivots and correlations (which are too complicated to test), so I'll still use it since it's overall a profitable systems (it kicks ass in 2007, without pivots and correlations, and breaks even in the other years).

Here's the new discretionary system (which is very close to the previous one, but more prudent: changes in red):

PRO-TREND DISCRETIONARY SYSTEM
HOTKEYS
Set up hotkeys:
"B" for "buy 1 at market" with 20 ticks bracket order,
"S" for "sell 1 at market" with 20 ticks bracket order,
"C" for "close position".
----------------------
CHARTS
SET UP THESE CHARTS ON IB'S TWS:
1 MONTH TO 15 MINUTES OF ES, CL, GBP "line" mode
2 DAYS OF EUR.USD@IDEALPRO 15-minutes CANDLES WITH PIVOTS
4 HOURS OF EUR.USD@IDEALPRO 1-MINUTE CANDLES WITH 15-periods and 210-periods moving averages
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RULES
ENTRIES can be made if:
1) time is 15.00 to 20.00 CET
1) it's your first discretionary trade today (you can't trade discretionary outside this system)
2) your entry and your take profit are >=10 ticks away from any pivot lines
3) you've looked at "correlated" chart (both 1 month and 15 minutes)
4) the 225-period ma is in favor by > 10 ticks
5) the 15-period ma gets crossed by price (in favor) after being on the other side >= 4 minutes
EXITS
Bracket order of 20 ticks.
ALL OTHER EXITS WERE TAKEN OUT TO SIMPLIFY THINGS, which is always good when possible.

 

[Yamato]

This is a tricky situation
I've only got myself to blame
It's just a simple fact of life
It can happen to anyone

You win - you lose
It's a chance you have to take with love
Oh yeah - I fell in love
And now you say it's over and I'm falling apart

It's a hard life
To be true lovers together
To love and live forever in each others hearts
It's a long hard fight
To learn to care for each other
To trust in one another right from the start
When you're in love

I try and mend the broken pieces
I try to fight back the tears
They say it's just a state of mind
But it happens to everyone

How it hurts - deep inside
When your love has cut you down to size
Life is tough - on your own
Now I'm waiting for something to fall from the skies
And I'm waiting for love

Yes it's a hard life
Two lovers together
To love and live forever in each others hearts
It's a long hard fight
To learn to care for each other
To trust in one another - right from the start
When you're in love

Yes it's a hard life
In a world that's filled with sorrow
There are people searching for love in every way
It's a long hard fight
But I'll always live for tomorrow
I'll look back on myself and say I did it for love
Yes I did it for love - for love - oh I did it for love

 

[Yamato]

 

[Yamato]

 

[Yamato]

 

[Yamato]

 

[Yamato]

 

[Yamato]

 

[Yamato]