Awash's Journal

2 to 3 weeks to feel comfortable????.....1 to 2 years....and u might feel comfortable....if you join the 5% club, the dues are high..I am not a member yet...all the paper trading in the world will never equal realtime, real money trading.....simply because emotions aren't involved unless money is on the line....find your best system { you are not there yet} , watch it everyday until it becomes as familiar to you as shaving each morning...over and over....collect the daily charts....over and over....study the system everyday...over and over...maybe even only one trade setup is the answer...I have four entry signals...provides early entry on all good runs and reversals....thousands of hours studying them give me confidence .....DEAD CHARTS CAN TALK...SIMPLE MOVING AVERAGES CAN TALK...watch the trendline indicator patterns..not the bar patterns..TOO MUCH INFORMATION IS BAD FOR BUSINESS......NO EXTERNAL INFORMATION ALLOWED FOR ME....TRADE WHAT IS HAPPENING ON THE CHART SCREEN .......STUDY the huge number of TRENDLINE combo's until u see the interesting, recurring PATTERNS, then backtest them with the charts u have saved each day..then test them realtime...sad days outnumber happy days for a long time, and then the worm begins to turn in your favor, if your dedication is what it must be to win..when others call u a gambler, even though discipline and stops MINIMIZE THE RISK, and your family says u r addicted to this stuff, FULL STEAM AHEAD...IT IS A BUSINESS...ANY LESS THAN EXTREME DEDICATION AND YOUR BUSINESS FAILS...LOVE IT OR LEAVE IT..... If it becomes an addiction for some, I feel sorry for those traders, as they need to get a life...

This is not advice, just early morning boredom

I WISH YOU ALL THE BEST
 
Thanks again Boomer, tradersaavy, lindq, ig0r, peterfigliozzi, nkhoi, fast_trader, fan27, Baruch, and porgie for posting good constructive criticism concerning last weeks trades on 11/12/2003. Sorry I didn’t reply earlier but my time was very limited.


Quote from kserra:



Awash,

It looks to me like you really overtraded today, I haven't seen too many posts where you have done seven different trades.

As far as the longer time frame goes, i just recently switched from the 3 to the 5 minute chart and i have noticed that I am more patient because of this. I can't say this will be better for you, but it certainly seems to have helped me. This may help you also seek out larger profit targets.

Just curious, what do you have set up as your risk to reward and how often do you expect to win when you enter a trade? I haven’t seen these things defined in your journal, and have always been curious. You seem to be the type of person who likes to win a lot, maybe this is why you sometimes exit your trades early ?

just some food for thought hope some of this helps.
More...

kserra,

You’re right, I generally don’t place a lot of trades. My overall goal was to execute more hoping this would reduce my fear of entering the market. Did it help? Yeah, but the setups weren’t perfect for a trend reversal trader! I was able to manage my risk exposure a bit and that’s probably why I didn’t take a huge loss for the day; total loss: – 1.5 points not to include commissions.

As to risk/reward and stop management I’m highly flexible per market conditions and each trade. I don’t have hard nor fast rules concerning “Risk to Reward” but I generally place stops 2 – 3 points against my initial position and I also try to reach for a profit target of 2 – 3 points.

Does this happen all the time? No! But when I effectively learn to manage my trades from beginning to end, that’s when you’ll see me hit my targets. For me, proper trade management will take time, experience and numerous trades. But I’m taking your advice concerning the 3 minute chart. I’m relying more on it for larger profit targets.

You seem to be the type of person who likes to win a lot, maybe this is why you sometimes exit your trades early? Of course, I would love to win on each trade but that’s not possible for my level of knowledge and experience. Like I mentioned above, proper trade management is the key and will help reduce my early exits.



Quote from lindq:



But what is the QUALITY of those signals when you are dealing with noise? Is it possible that a longer timeframe, while generating fewer signals, will provide overall greater profits?

IMHO, improvements in a traders attitude and psychology - which you seem to be focusing on quite often - aren't going to overcome the basic difficulties inherent in trading on the 1 minute level. You obviously have skills and intelligence, and I am just wondering if instead of digging the same hole over and over, you might be better moving elsewhere to strike your gold.
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lindq

Thanks again for expressing your concern. You’re completely right and it’s possible to achieve greater profits (and vice versa, no profits) from higher time intervals.

Undoubtedly, there are inherent difficulties in trading off a 1 minute chart, especially when you know false signals can be produced. From my limited experience, I’ve learned it doesn’t really matter what system and/or chart interval a trader uses, but rather a trader should be completely aware of the strengths & weaknesses of the system/chart interval and know how to combat the weaknesses when they arise.

For instance, as a trend reversal trader I rely heavily on lower time charts to confirm trend direction change as these charts are more recognizable and the lag time is reduced considerably.

Now these charts aren’t perfect and they definitely have some weaknesses, especially on trending days. More importantly, I’m fully aware of these weaknesses and I know how to react when they appear.

Weaknesses of 1 minute chart
1. After strong price moves (trends), 1 minute divergence can be unreliable
2. During low volatility periods (lunch hour or regular intraday) price action produces a lot of noise and false signals are generated.
3. Severe price volatility distorts indicators (usually during a major release of economic data and/or earnings release, e.g. DELL on 11/13/2003)


Resolutions to 1 minute chart weaknesses
Weakness 1: Avoid 1-minute divergence completely or look to scalp for quick profit
Weakness 2: Be more observant of NOISE and always use higher time charts in conjunction to verify price direction.
Weakness 3: Completely avoid severe price spikes until it stabilizes


In conclusion, each trading day is different, some similarities are apparent but overall price action and signals differ from day to day. IMHO, switching to a higher time chart won’t necessarily help me. It’s undoubtedly beneficial!!!! However, focusing more on the weaknesses of my system/chart interval and implementing resolutions to these problems will greatly increase my chances of success.

Lastly, thanks for point this out to me. I’m completely aware of it but sometimes I fail to effectively reduce these problems. From now on, during the 3 – 4 minutes prior to signal confirmation I will ensure all criteria is met before placing the trade. If you have time and if it continues (trading within the NOISE), feel free to point it out in the future. In the meantime I will work on the psychological barriers that too impede my trading.
 
This weekend I was able to thoroughly analyze my LIVE trades. Consequently, I will no longer continue to place live trades, instead I will use my simulator for the remainder of November.

I decided this is the best thing to do because the bulk of my trades weren’t consistent with what I’ve learned over the past seven months. I have made repeated mistakes while trading since going live and I need to bring a quick resolution to my problems and mistakes.

Below you will find the errors I will focus on over the next two weeks.

Frequent Errors
1. Failure to recognize overall big picture of the market.
2. Early & Late Entries.
3. Missing trade signals on both 1 & 3 minute charts.
4. Failure to attack my support & resistance levels especially around the low or high of the day.
5. POOR TRADE MANAGEMENT.


Elimination of Errors

Error 1: On 11/12/03 I was shorting in an uptrend. I failed to scrutinize all my market breadth indicators to gauge which direction ES was moving. I will analyze NASDAQ A/D Ratio, NYSE TICK, VIX & PRICE more through the day.

Error 2: This is my most frequent error! I either enter late because I have no confidence or early because I’m eager to get in. Once signal confirmation appears I will execute. No excuses from this point on!

Error 3: On 11/06/03 I missed several opportunities to enter the market. I think I miss signals because of psychological barriers but I recently learned that when you fail to execute it’s a result of you not trusting your system.

Error 4: This is the most powerful signal ever that I miss all the time. My support and resistance levels are reliable especially when price makes a new low or high for the day. I’ve seen too many opportunities when the market sells off in the morning and pulls back in the afternoon. This will be a good opportunity to attack my support and resistance levels.

Error 5: This actually is the most difficult to resolve and I know only time and experience will help me. Everything after the entry from initial stop, trailing stop, profit target, continuing price analysis, support & resistance and most of all PATIENCE will increase my chances of success. I just want to focus on PATIENCE and I will do this by using my 3 minute chart for exits.

Hopefully, I will reduce errors 1 – 4 over the next few weeks. By the beginning of December I will start anew. Until then, my charts will reflect paper trades.
 
Have you tried breaking it down? For instance, for one week, just attack those S/R trades and don't worry about anything else.
Then, onto the next thing, etc. etc.
 
Quote from peterfigliozzi:

Have you tried breaking it down? For instance, for one week, just attack those S/R trades and don't worry about anything else.
Then, onto the next thing, etc. etc.
More...

Peterfigliozzi,

Early on I broke it down and focused on s/r levels then on divergence setups, etc. But now I need to put it all together so I will not miss trades.

It's imperative that I focus on all errors if I want to have some success. I'll try to do this over the next few weeks. I may just paper trade the remainder of the year as I continue to focus on what's preventing me from being successful.
 
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