Consistency is my goal

[mastacoli71]

Quote from NoDoji:

This is easy to recognize after the fact, often again and again, yet sometimes seems near impossible to break through.

It took me months to fill the deep groove worn in the road by my bad habits with good habits so that I could take profitable trips on the smooth highway of my trading plan.

I still get enticed by bias and opinion, but one thing that helped immensely was to say out loud reasons for not trading a valid setup and decide whether those reasons were part of my rules/filters or whether they were my opinion/bias.

Here are some examples -

Reasons that fit my rules:

Major news release due in a few minutes.

Survivable stop exceeds my max allowable loss per trade.

Price is in a range/channel and the S/R level to be tested offers a negative R:R ratio.

Reasons based on bias/opinion:

Price has run up (or fallen) too far and is due to reverse at any time.

Long CL won't get very far, look at the ES taking a dump.

That news was really bearish, I'm not buying into this fake rally.


* * * * * * *

So...I see a valid setup and I now have a choice of whether to place my limit or stop order at the price trigger point.

I either place the order immediately or I do not place the order.

If I do not place the order I have to say out loud why I'm not placing the order. If the reason isn't a rule/filter out of my playbook, I have to hold my nose and place the order.

Now, if I'm tempted to trade against my plan based on bias/ opinion, I remind myself out loud: "The net result of trading my opinion instead of my plan is negative. Trade the plan or take a break."

I can have a very strong opinion and still trade the plan. It's uncomfortable because the ego works very hard to convince you your opinion (ego) is more important than what price is actually doing.

Last week I had a trade setup appear where I was absolutely certain this was going to be that end-of-leg or end-of-trend trade that's the loser (an experienced trend follower will keep trading/adding in the direction of the trend until finally taking a loss on a leg that fizzles). But my plan says to start with a buy stop above the high of the day. The buy stop triggered with almost no pullback (meaning it's a really strong trend) and the result was the best trade of the entire week on a move that took barely over a minute .

Now after that impossible push up to a ridiculous new high, my opinion was that price was absolutely positively due to put in a deep pullback, maybe even a reversal. Price had run up over 3 points ($3000/contact) from the overnight low, but then another continuation setup appeared and my plan advises that I trade every continuation setup until a loss is taken or a breakout fails. So I trailed that buy stop once again, was swept into another long position and captured a profit 2 1/2 times my minimum target per trade.

There was a time when I would've fought that trend and shorted. Then I learned hard lessons and graduated to simply not trading when I had a bias that ran counter to the price action. Finally, I learned to trade the price action according to my well-researched plan and the rewards are huge.

Once you see the consistent profitable results of this exercise of talking to yourself out loud, it eventually becomes second nature to do the right thing, even though it may continue to feel very counter-intuitive to your ego-driven opinion.

Thanks for sharing Nodoji. Have been fighting the same thought process for 4.5 years. I am slowly but surely starting to realize that the trend is your friend.

 

[mastacoli71]

Quote from brokerboy:

you ever think of downsizing right now? you obviously have money but remember its easier to not lose 50k if you trade smaller than make 50k back. its just friendly advice.

Always thinking of downsizing just hard to do. Appreciate the thought of loss versus gain.

 

[mastacoli71]

Quote from shopster:

M71,

your trading is all over the map and the equity curve is full of potholes.

step off the wild mouse ride and re group.

you are trading way too large and spinning in the dirt.

read your posts..........
all the answers are there to get back in the saddle....

navel gaze and balance out.

cheers,

s

Thanks for advice and a good reminder. I did this in Sep and Oct and did quite well. Reverted back to pushing it again and it was obviously costly. Glad I am keeping this journal. It keeps me honest.

 

[mastacoli71]

Quote from cyoungmark:

When you say every successful trader has drawdowns, you are implying you will be profitable again soon. Be prepared to not make money for a substantial amount of time. You must focus on your trading and sticking to your rules. If you starting worrying about the money aspect you will get mad and angry when you aren't profitable after your idea of whatever timeframe you associate with a "drawdown." Just play the game and the money shall come.

I am at that point of not making money for a substantial amount of time. Finally starting to realize what you are saying about focusing. Although I agree with your statement on downsizing, I think there is a time and place for it that helps get you back to focusing.

Worrying about the money aspect is another part of the equation. This has held me back. Just have to accept it is all part of the game and move on. Easy to say hard to do.

Thanks for advice.

 

[brokerboy]

Quote from cyoungmark:

Downsizing just lets you play the game longer. If your trying to MAKE money, downsizing is not the right thing to do.

that is the craziest statement ever. the key to staying rich is not losing your money and be aggressive when things are going your way.

 

[mastacoli71]

Quote from brokerboy:

that is the craziest statement ever. the key to staying rich is not losing your money and be aggressive when things are going your way.

I have heard "be aggressive when things are going your way". The question is can one do this and stay disciplined at the same time; I doubt most can because most end up really pushing the envelope and take on too much risk. I personally loose focus when I do because I end up taking too much risk and we all know where that leads (i.e. the last 4- 5 weeks after my good run).

Simply my viewpoint, not trying to bash your statement.

 

[brokerboy]

Quote from mastacoli71:

I have heard "be aggressive when things are going your way". The question is can one do this and stay disciplined at the same time; I doubt most can because most end up really pushing the envelope and take on too much risk. I personally loose focus when I do because I end up taking too much risk and we all know where that leads (i.e. the last 4- 5 weeks after my good run).

Simply my viewpoint, not trying to bash your statement.

i mean aggressive as in your current style and trade a lot less when your doing poorly. i don't agree or disagree with you. you should do what you think is right because you are the only one who lives with the outcome.

 

[mastacoli71]

Quote from brokerboy:

i mean aggressive as in your current style and trade a lot less when your doing poorly. i don't agree or disagree with you. you should do what you think is right because you are the only one who lives with the outcome.

makes sense, thx.

 

[mastacoli71]

Week ended 12/23/11

+2100

Happy to have a positive week. Decided to paper trade the basket strat the last 2 weeks of the year. This week would have been a wash even with the move in the market.

Pairs did nothing this week; pretty much a wash. Typical for lower volatility although I am starting to notice drift again. If VIX drops below 20, time to make a serious adjustment at how I will trade them going forward. I told myself to watch for this so glad to be on the look out this time.

Futures were decent. I sized down, stayed disciplined, and took only high prob setups with the trend.

Looking to finish the year on a positive note.

 

[mastacoli71]

Week ended 12/30/11

+7100

Dec 2011

-1100

2011

-31k

Ended out the week on a good note. It was a mix of strategies that contributed to the positive week in both accounts although my year end trade performed nicely the last 2 days of the year. Hope to keep this momentum going into 2012.

It was a year I would like to forget but also a year where I have learned a lot. This is the first time in my trading career where I have lost money for the year. As much as I went through both on the trading and personal front I'm surprised it was not worse although 31k is not pocket change.

I am looking forward to 2012 to see if I can apply what I have learned through this rocky road.

Good luck to all.