EXITS
1) Bracket order of 20 ticks.
2) You can exit early if you wish, but not increase the distance of the stoploss.
3) If the trade is still open after 1 hour, close it as soon as both averages are against it.
I was doing some heavy
hoping, as usual, that it'd go my way, especially when it hesitated for a few red candles, on its way to the target profit. But I felt less stress than on my first trade, which was something special to me, because it was my first non-gambling trade, and I really wanted it to go well.
I appraised that the time was right, because any trend that prevailed during the night (CET), tends to go on all the way to 9 AM CET and a bit later. Correlations were saying that everything was going up and there was room to go up more. Pivots were ok, and there was room for rising more. So I made the trade. At the start, despite all conditions being there, I waited price to correct for a few more 1-minute candles before going long.
So far I am quite happy with my non-gambling, as it seems that even if I am in a frantic emotional state during the trading (certainly it's not non-emotional trading), I manage to follow the rules, and reap the benefits.
So far this is what happened with my non-gambling trades:
20091130: takeprofit
20091130: takeprofit
20091201: early exit with 1 tick profit
20091202: stoploss
20091203: takeprofit
I can't say it'll be profitable, but it's definitely not unprofitable. At the worst it will be a breakeven trading, which is better than losing thousands per year, as I've been doing until now. I think I will go for 2 contracts per trade as soon as I reach 10k of capital, and out of 20 trades I get a win ratio (including if I make a few ticks by exiting early) higher than 66%.
"WHEN WILL IT STOP RAINING?" ANALOGY
This method seems almost too easy, almost as if it were unfair to follow such a method. I basically do the opposite of what I've been doing: I go with the existing trend, hoping it will continue, rather than try to pick a top or a bottom. There's no challenge at all. Before this I felt like I was a genius in trying to pick turning points, and now I feel like I am being stupid in thinking that it will do what it's been doing. Yet I make money, because the turning points in one day are on average two (they tend to happen at 10 CET and 22 CET), whereas it keeps on doing what it's been doing for the rest of the time. So if you enter at any time in one direction, your best bet is to bet it will continue to go where it's been going, because you'll only have two moments at which you can be right if you try to pick a turning point. It would be even obvious, but people like me who look for challenges in everything, try to challenge themselves to become better, will look for the challenge and go for the top and bottom picking. In reality what I've been doing is as if, when it's raining, one said: "i am now going to predict exactly when it will stop raining", and then "ok: now it will stop raining, and this was exactly the last drop". What the others do is "it's raining: I bet it will continue", and "it is sunny: I bet it will continue". In short,
I went from a "when will it stop raining?" method, to a "it's going to keep raining" method.
Unlike Elder's use of bulls, bears and hogs analogy, which sucked and caused his drowning in the bath tub, this sun and rain analogy is much better. So I congratulate myself. Yes, because rising in the markets (stock market and similar) happens as often as sun (at least here). And rain happens as rarely as falling (even though markets fall faster than they rise, even the EUR). So it's a perfect comparison. If it's raining outside, you get the umbrella, and you don't say "it will stop in five minutes". And if it's sunny you get your sunglasses. All these years I've been taking the umbrella when it was sunny, and saying "it will start raining soon", and got my sunglasses when it was raining, thinking "it will be very sunny in exactly one minute".
I am finally starting to understand that I have to stop being an anticonformist as far as trading at least. I always thought and wrote here how I think it's best to do the opposite of what crowds do, not watch the most popular movies, read the most popular books, listen to the most popular music, and now the market is forcing me to follow the trend, unless I want to keep on losing money. Probably following the trend is the best behaviour in many other fields, where I act unprofitably as well. But trading is a field where you understand immediately if a behaviour is profitable or not, and where it's clear from the start that your objective is profit. So you're forced to look for the cause of your unprofitability and then you're forced to remove it: no matter how much this will go against your nature, because your nature is in the way of your reaching the objective, which is clearly profit.
In other fields, like with women or on your job... your objective is not as clear. No wait: the objective is sex with women and promotion on the job. So maybe in that field it is harder to identify the cause of your failure... no wait: it's just the same. Everything is the same: the objective is as easy to identify, and the mistakes you might be making are as hard to detect. I think the difference is that I wanted to make money more than I wanted to have sex or be promoted. And the reason is that with money you don't care about sex, nor promotions, because you can buy them both. I mean, you can quit your job.
Other than this, I must note that weather and seasons are much better analogies for prices and trading than animals, like that Elder guy used, which caused me to drown his book.
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Now I'll go to work, and tell them I am there just for one pivot table and then I'll go back home because I am too stressed out by them and by the burgeoning amount of work they're giving me, increasing at the same time quality and quantity demanded of me, and all relying on my work, while they go for long coffee breaks. Then I'll definitely come back home, by lunch time.
