my journal

[Yamato]

Post-entry LONG

1.5102

 

[Yamato]

Post-exit LONG

It didn't look good. I am allowed to exit early by system.

Feelings: I am pretty satisfied that i've experienced yet another situation without suffering any damage: exiting early. At first I felt uneasy, because it reminded me of usual discretionary trading (in the sense of "gambling"), but then I said: let's practice, for the sake of learning to exit early and I did it.

Another thing: it didn't look good for those big red candles of course, but also the fact that it was lasting so long, and that it crossed and re-crossed the fast moving average meant that pretty much my trade had aborted already, since the way I mean it to go is to cross the average and go straight up. However these are all hypotheses and I will still let myself be free and choose with discretion whether to stay in a trade that hesitates, without including this rule in my system, which must have as few rules as necessary, because otherwise I'll stop looking at them (especially if they don't work: you can't just add a rule because it would have worked this time).

 

[Yamato]

Tell you what. From now on, I won't even write about any prices of entry or exit, but just draw those yellow circles. I don't have to prove anyone anything, plus for privacy reasons... wait, even better: I'll just post the chart when I enter and when I exit with the yellow circles, because the system is clear and I don't have to specify anymore whether I entered long or short. I can also stop posting "pre-entry" titles so I can avoid having to go into "Go Advanced" mode.

Intuition of exiting proved good, and prices are falling now, by ten ticks lower than where I exited.

 

[Yamato]

Ok, for today, I am most likely done. Enough stress, not many opportunities (tuesday is unpredictable), tired from not sleeping, plus I am satisfied with having gotten out of a bad trade without losing any money. Without the help of these rules, it would have never been imaginable, because rather than exiting from a trade without making the money I was expecting, I would have been in denial about possibly being wrong, and I would have risked a loss of 2000 rather than accepting to exit without making at least what I was expecting to make. Pretty amazing sudden and unexpected change. Totally amazing excellent discovery.

Second day sober, which reminds me that it means nothing because last time I went for a month without any discretionary trading (when that meant "gambling") and then relapsed worse than before.

 

[wprins]

Hi Travis

I've read your post (if we put our replies together, you've succeeded in making me read a whole book). Thanks for the infinite patience you've had in replying in detail to all the things I said, even taking time away from sleeping.

No problem, it is always interesting to be able to consider other's point of view and compare and contrast it with your own. I've found it's best to always have the attitude that pretty much anyone can teach you something (or at least, you can learn something from interaction with them). Furthermore, I feel genuine sympathy and even empathy with your struggles and genuinely would like to see you progress and succeed in your mission to become a succesful trader. We are very alike in many ways, even if we are clearly also quite different in many ways.

However, maybe we should try to keep our replies shorter for our health (so we both can sleep at night), because doing things perfectly on a forum (replying to a post, point by point) could hurt us in other areas, like not being able to sleep enough. Reasoning and arguing is important, but also sleeping is important.

Yep, probably a very wise idea to curtail the posts... (and yes, sleep is important.)

What I will shortly say (you wouldn't want to spend another two hours replying to my reply anyway) is this: in my opinion, you're overestimating the usefulness of books, and not realizing how obsolete they have become in the age of internet. Books are way surpassed, their time is over. You don't read a book: you skim through a .pdf, using the search function to find what you need. You use wikipedia, youtube, you chat... books used to be the only tool people had to communicate things to distant people. Nowadays they're surpassed by much better instruments. Text and writing is useful as before, but since you can skim and search, you should do it: reading an entire book is not an efficient way to learn. It used to be necessary because books were written on paper. Not anymore and it should be avoided when possible, except of course when you are reading a novel for pleasure, but I am against that as well.

Well, thanks for stating your point of view so clearly. While I understand it fully, I cannot agree with it. For my part, I actually suspect you underestimate the usefulness of books. For reference, I'm very much a tecno geek (as you might guess from me being a programmer.) We have 5 computers in the house, and you have to remember that I spend all day every day using computers and technology, searching the web, interacting with PDF's and other electronic documents and so on. I'm no luddite as far as technology is concerned, on the contrary I'm very much a pro-technology self confessed geek. As for trading specifically, I have a heck of a lot of PDF's and E-books in electronic form, so it's not like I shun search engines and electronic versions of books at all.

Despite all this, or rather, maybe precisely because of this, I'm acutely aware of the shortcomings of modern technology. In many situations I just simply find the simplicity of a physical book much preferable to the electronic alternatives available today. Searching is useful and well and good, and forums and blogs ceratainly have their place, but to me they can, at least currently, not replace the place of good reference (or other) books. Search engines, forums and the web in general is often ephemeral/transient and fragmented. Sometimes you want to have a thorough (shall we say exhaustive treatise) of a subject in one place, without having to squint at a screen for hours on end. To list just some irritations with electronic books (PDFs):

1) Need a computer to read them, which needs power. Books need no power, and can even be read by candle light.
2) Can't typically annotate easily or at all. (In a book you can underline/make notes, fold over page corners etc.)
3) PDF's can be searched but good books will have indexes as the back anyway, which compensates reasonably.
4) Books are highly portable, computers are not. Laptops are portable but typically the more portable laptops are not that useful for reading e-books.

Bottom line is this: I've read many books in my life, I continue to read books, and I continue to learn a great deal from them. In addition, I follow (for loose meanings of the word follow) 65+ blogs (RSS feeds), are a member on numerous forums, receive probably on the order of 20 newsletters and other e-mail based information pieces per day, am an avid Twitter user to keep a finger on the pulse of the markets where I follow several hundred traders who appear to know their stuff, and generally make extensive use of the internet to further my learning and support my interactions with others. I would therefore submit that on that basis I'm reasonably qualified to have a grounded opinion about how books stack up to their electronic alternatives. The bottom line to me is there's room for both, and anyone trying to use either only books or either only electronic alternatives will be poorer for that choice.

I mentioned the newsletters I monitor. Co-incidentally I noticed this blog post here from John Forman today where it was linked to from an item I received today in the mail. It happens to speak directly to this discussion and your view of books. (Clearly your view/attitude towards books is more common amongst traders than one might think.) :

I quote:

I see the attitude of this emailer in trading book/product reviews all too often. For some reason these individuals think a book which doesn’t lay out a specific trading system or methodology is useless. This is a foolish, narrow-minded viewpoint. In fact, I’ll turn that thought process around.

Trading systems outlined in books are worthless (at best – very costly at worst) to the vast majority of traders.

Why do I say that? For the very simple reason that most trading systems won’t work for most people. I’m not saying the systems are not, or cannot be, profitable. They just have specific timeframes or markets or risk characteristics which are suitable to only a relatively small number of traders. What works very well for one person won’t work nearly as well for most other people because we all come at the markets differently.

The value to be found in books and other educational resources is not in specific trading systems and like. It’s in how the resource guides us in the development of our own unique way of taking on the markets. The reason I always recommend the Market Wizards books is that the allow the reader to benefit from the experience of a group of highly successful traders, ones who had to overcome many of the hurdles we all face on our development path. In their interviews they share how they did that.

I know my own development as a trader (and eventual professional analyst) was seriously accelerated by reading the Market Wizards books. I was able to understand from their experiences the pitfalls I should watch out for and where there might be opportunities for me to pursue things. In that way they gave me much more than I would have ever gotten from some trading system.

Anyway, I can't help but feel that you're somewhat unnecesarily prejudiced against books, perhaps for reasons that lie in your past. Now, if you don't like books (for whatever reason) or don't like reading (for whatever reason) them, then that's fine, but simply admit it and say so then. Please don't instead try to rationalise your prejudices/dislikes, as that is in fact subtle self-deception and will just stunt your progress needlessly. If however after all the above case-making by me you're still truly convinced that electronics are more practical/better in absolutely all circumstances and for all purposes compared to books, then we'll just have to agree to disagree about that. (Which is fine of course, but as I say I just think that you might possibly be doing yourself a disservice as a result...)

In my opinion, also, you're underestimating the power of my reasoning (not everyone's reasoning, just mine, because I am an intelligent person, not the case with the majority of people, who can keep on being told what to think by other people, and be sheep).

Maybe, however I didn't think I was actually doing any estimation of your reasoning at all -- I'm simply responding to your reasoning, arguments and points of view as best I can, outlining where my points of view differ from yours as well as why, so that we both can learn from the exchange.

Yes, by doing all by myself I risk reinventing the wheel and other things that are already explained in some book, but first of all I don't know which book that is, and second of all I don't where that book talks about what I need to know right now (for doing that reasearch, internet is much faster and more efficient, and that is what I do: and that is why browsing on the internet is superior to reading books).

Sure, the internet is *great* for finding relevant books about whatever subject you can think of... :cheesy:

And third of all there's only a limited number of inventions that I need to make in order to become profitable at trading (please don't tell me the usual "but admittedly you suck at trading", because you'd be neglecting the automated systems that I've built).
And I will be done faster with them by inventing them myself, or browsing the web, than by reading books. Yes, I've been an unprofitable discretionary trader for 12 years so far (but a profitable automated trader, and I haven't read a single book - except 2 excel manuals - to build those systems), but reading van tharp and all the other psycho-babble would not have sped up my process (as far as my discretionary trading).

OK, forget about the automated systems then. Just focus on your current endeavour with discretionary trading.

Now, from where I'm sitting, you've been trying for 12 years to get that going as well, and have had a very hard time of it. Just recently, by your own admission I got you to read some of Elder's book, and immediately this seems to have already had a positive impact on your approach to the markets and your discretionary trading. To me this really looks like some little evidence that a bit of book reading did you some good!

And now, if we go back to automated system trading, by your own admission you read a book on systems trading which you also spoke favourably of (by Chen?) and which I interpreted to mean it must've helped you with your automated trading systems implementation etc. So clearly again not totally useless.

So from where I'm sitting, despite your protestations to the contrary, reading some books (even though electronic) has clearly benefitted you!

Why exactly can you not just admit that sometimes books can be useful (whether electronic or otherwise), in addition to other tools like the internet and forums and things? Is this perhaps some sort of rebellion thing again against schooltime experience of books and teachers?

The more you write, the more stupid you get, because when you teach you don't learn (you know it's true).

Sorry but again I have to disagree. Have you ever taught anyone or had to explain something in detail to someone and answer their questions where your role was as subject matter expert and theirs was the as learner/student/trainee? If not then I submit the above assertion is an idle ungrounded opinion which should not be held too tightly.

As for me, I have been in effective teaching/tutoring positions, both while I was student tutor at university as well as currently/more recently in an informal mentoring relationship with one of the younger developers at work. My experience there in the past, and currently work, is that usually there is a very notable syngergistic effect between you as a mentor/coach/teacher, and the "student"/learner. Due to having to explain things and being asked questions, your own understanding also improves. Oftentimes you will be asked a question that you don't know the answer to and will go have to investigate/find the answer. Usually, this process further solidifies/clarifies and strengthens your own mastery and understanding of the subject matter at hand. Even the process of having to reproduce knowledge and understanding in different forms (written, speech) has the effect of involving different parts of the brain, that ultimately also benefit you as "teacher" or "mentor".

So, in summary, I must vehemently disagree with your assertion that "when you teach you don't learn (you know it's true.)" Sorry!

That's why we should keep our posts short. And academics spend their whole life teaching and writing, and that's how they write books like "A Random Walk Down Wall Street", that are widely acclaimed, brilliant and wrong.

I must admit I've not read that book but yes. Things need to be as simple as possible, but no simpler. Unfortunately in some cases this means things will still be relatively complicated, since life often is more complicated than we'd like. While I am just as against "ivory tower academics" as you are, it is a step too far to conclude that since some academics are like this that all academics are like that or that all academic endeavour is completely worthless. As is often the case, I submit reality is a little more complicated than that and that the there's a few more shades of grey present than you seem to allow for.

Anyway, before this becomes another overlength post I'll post this. (Oops, it probably already is, sorry!!!)

Edit: Just read this page here. Sounds usfeul, don't you think (at least if, like me, you have trend following leanings)?

 

[Yamato]

Thanks for your reply. I will read it with calm and answer it tomorrow. Upcoming SHORT trade on the EUR maybe.

 

[Yamato]

1) you haven't lost over 250 dollars for the day (from discretionary trading)
2) the 225-period ma is in favor by at least 5 ticks
3) the 15-period ma gets crossed by price (in favor) after touching the other side >= 3 minutes
4) your entry and your take profit are >=10 ticks away from any pivot lines

 

[Yamato]

1) you haven't lost over 250 dollars for the day (from discretionary trading)
2) the 225-period ma is in favor by at least 5 ticks
3) the 15-period ma gets crossed by price (in favor) after touching the other side >= 3 minutes
4) your entry and your take profit are >=10 ticks away from any pivot lines

 

[Yamato]

1) you haven't lost over 250 dollars for the day (from discretionary trading)
2) the 225-period ma is in favor by at least 5 ticks
3) the 15-period ma gets crossed by price (in favor) after touching the other side >= 3 minutes
4) your entry and your take profit are >=10 ticks away from any pivot lines

 

[Yamato]

It hurts not to be able to take this signal because we're 5 ticks too close to the lower pivot line (1.5071)

 

[Yamato]

Felt the urge to break one of my rules

I was this close to not caring and breaking the one requirement not being met, but that would have been the end of everything. Rather than breaking a rule like this, during the trade, I'd have to remove the requirement beginning tomorrow. But of course I won't do it, because the requirement makes sense, and it's there to protect me from myself when I'm into my manic mode.

 

[Yamato]

Damn... it sucks... it was really going down. Hey, I don't feel bad, because I followed an intelligent rule. Obviously a non-written rule is that you cannot change the rules while you're already into a trade or about to make a trade. So this is really it for today. Also because whatever happens at around this time won't last long enough to allow me to reach my target.

 

[wprins]

Damn... it sucks... it was really going down. Hey, I don't feel bad, because I followed an intelligent rule. Obviously a non-written rule is that you cannot change the rules while you're already into a trade or about to make a trade. So this is really it for today. Also because whatever happens at around this time won't last long enough to allow me to reach my target.

Good job for sticking to your system rules! :clap:

 

[Yamato]

Reply to wprins

Let's start being less academic because it's not good for the reasoning when, like them, one tries to show off his knowledge or intelligence. I have a dad who gets academical even if he has to screw a light bulb, and I am sick of his professorial behaviour, so you get my point. I will reply in random order of what I can remember I had to reply to. This way my post will be shorter and more to the point. Or else we'll keep on going forever, and it'll be like a daily job for us. We need to slowly slow down. I remember doing the same thing with gladiator: we replied to each other for a whole week non-stop.

My dad is there, watching tv. Volume is a bit too loud. I'll try to focus. What do I remember? Hmmm... mumble mumble... oh, right, what you said about teaching. Teaching is good, I agree. But one thing is teaching in person and another thing is writing books.

THE ELDER GUY
Also, listen, by the way, about that Elder guy - he did a good job for chapter one but a bad job on the rest of the book. He doesn't know enough stuff to write more than one good chapter (the first one), the psychology chapter. The rest of the stuff, starting with chapter two is full of bad comparisons, examples, ideas, conclusions... it's just bad, it's a total mess... that comparison of animals: bulls, bears and hogs, he totally gets... i'm failing the guy. I could have written it myself better. And I am sure it's due to the pressure you feel to write a whole book, instead of a post on a forum. That's what Elder should have done: write a post on a t2w or elitetrader. But he went for the book, and since he only had enough good material for one chapter, he had to write bull**** on the rest of the book. You can't help it: if you write a book, you feel the pressure to make it long enough. No one ever wrote a 20 pages book, like Elder should have.

MARKET WIZARDS MIGHT BE AN EXCEPTION: A BOOK WORTH READING FROM BEGINNING TO END
Maybe I'll save Market Wizards (I haven't read it yet), because the approach is a right one: we don't got enough to say but we want to find out so let's interview these guys. Journalist approach: that's the right approach. Not the approach "we don't got enough to write 11 chapters, then let's fill it up with foam". That's what Elder did: he had the inspiration to write one chapter - not 11 or more. I went to work and printed the first three chapters and started reading them in the bath tub, but then, as I kept reading about the bulls, the bears and the hogs, I had to throw all the paper in the water, I drowned Elder, keeping him underwater for a few seconds, but amazingly the pages in the middle didn't get wet at all. So I gave him another try, and read like ten more pages, after which I had to start throwing them on the bath floor to keep away from my reach, like something dangerous for my health.

Reading helped me? Not really. The couple of trading books I read all told me things I already knew (skimmed through them). The only books I read that were helpful were walkenbach's excel manuals, and I skimmed through those as well.

Self-teaching through internet is the way of the future
I still don't believe in reading an entire book, from back to back, for anything other than entertainment (and it's not the most entertaining thing there is either). People who write books to teach you stuff usually get academical (in the negative sense) and when they do they start filling up their books with bull****, starting from dedicating the book to their wife and such: that's when you know they're going to fill it up with a lot of bull****. If you buy a screwdriver or a hammer, you don't see a dedication to someone's wife. The book that teaches you stuff should have the same approach as the manufacturer of the screwdriver or the hammer, to show you the book is there to produce results and it's not about bull****. Same applies to the quotes, and bibliography. When the authors start mentioning thirty authors and quote them... that's when you know they've lost it...the train of thoughts... drowned in all those quotes, showing off all their culture and drowning all reasoning in their refined terms... they've lost it. The clearer the better. The simpler the better. No academics do that, because they wouldn't be taken seriously. To be taken seriously they have to get verbose, quote 50 colleagues, and stop reasoning, and start showing off. This all sucks and all school must be put to an end. Self-teaching through internet is the way of the future, the way of the future, the way of the future...

 

[Yamato]

1) you haven't lost over 250 dollars for the day (from discretionary trading)
2) the 225-period ma is in favor by at least 5 ticks
3) the 15-period ma gets crossed by price (in favor) after touching the other side >= 3 minutes
4) your entry and your take profit are >=10 ticks away from any pivot lines

 

[Yamato]

1) you haven't lost over 250 dollars for the day (from discretionary trading)
2) the 225-period ma is in favor by at least 5 ticks
3) the 15-period ma gets crossed by price (in favor) after touching the other side >= 3 minutes
4) your entry and your take profit are >=10 ticks away from any pivot lines

 

[Yamato]

Short

 

[coopster]

I do think Elder wrote some useful stuff on Money management too. the 2% and 6% rules to help you preserve your capital. Did you get that far Travis? This was what i was referring to in my recommendation of the book. $250 out of $7k is a little high a risk for my liking,

I agree with Wprins & you over the Book vs Internet question. Both exist so why not use both as a useful source of information. Old does not mean out of date when it comes to the markets. Yes the process has sped up a bit but the underlying reasons for market movements are no different from when the books were written compared to now where everyone twitters about it.

I do agree that some authors do just waffle though, but then, so do some Jounal writers! For both, the same applies, skip read if you feel you have got the point.

Ever considered setting the trade, setting your stop loss order and simply walking away? Going out? Socialising? Doing something else? Trading will become easier, the less important it is in your life (so i have been told on one of these forums). If you can't walk away, the money means too much to you and you're less likely to think clearly. This might mean slightly longer timeframes for you though, so less of a buzz i guess.

One other thing i noticed throughout the journal is how you refer to what your account will be if the trade goes your way. This to me would put pressure on myself and make not achieving that goal like a failure. Just consider the potential losses and protect the capital. Ignore what could be the gains.

Anyway, my 2cents while i'm on the train home, glad the trading is improving even if it means that you are doing less of it due to the rules! Trade to trade well, not through boredom! Well done!!

Coop

 

[Yamato]

Thanks, Coop. Everything is going great. Don't expect so much of me right now. It's already a miracle that I am on my third non-gambling day!

I agree on almost everything you said. Basically everyone reading this journal agrees on everything. We just discuss things to reason out loud. We all agree from the start on almost everything or you wouldn't be reading it.

250 is right because I can't wait forever to grow my capital. I do place trades and leave. Like the one that is going on right now, and has been for hours already. Don't forget I also do automated trading. That means letting trades go for an entire day without touching anything.

I am done with Elder, I read chapter one. I was skimming through chapter two but when I read his comparison of the market with animals and so on... it was such a horrible example that I drowned him again and again in the bath tub.

 

[GladiatorX]

I seriously don't recommend Elders books Travis;
His view of trading is one of a pensioner, who is trying to grow funds @ a slower rate than the benchmark indices so that we can all have a little 'fancy investment' in our lives. Nothing serious. Maybe good for the casual investor/trader but not for someone who wants to actually make money without ye' old ' Enter and hope for the best '


If you want to read some books then i recommend for you;
- The hedge Fund edge
- Options Volatility and Pricing
- Trading in the Zone (If your in the mood 2 be psychologically buffed, otherwise don't bother)
- Mastering Futures Trading by Bo Yoder
- The big book of Pokemon
- Market Wizards series
- Reminiscences of a Stock Operator
- Lust: Erotic fantasies for Women by Violet Blue
- Mastering the Trade (Use to be a fav, but i've grown out of it)
- Pit Bull: Lessons from Wall Street's Champion Day Trader
- The art of war
- Portfolio management formula's


I know your not into books though so never mind