critique my strategy

Quote from vulture:

I have an even better solution for you...Leave now...Not even trying to be a smart ass about this, but once you start down this path of trying to "improve" or get "feedback" on your strategy, you are going to get 100+ pages of divergent opinions...You will walk out of this place with another 1000 questions that you never even contemplated in the first place...

For a newbie trader, I think they should hang a banner that says "Abandon all hope, ye who enter here"...
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Being a newbie trader does not mean I lack the intelligence and discipline to employ money management, a methodical approach, and understand market psychology.

You’re assuming I can’t answer questions and qualify divergent opinions -- on my own -- using reasoning and experiment. Part of the challenge of trading is making sense of divergent information. Indeed there are many divergent opinions on ET. A person has to have methods for qualifying these…

This is how I see it. If I make enough trades in enough market situations I’ll (1) know whether I have an edge or not and (2) understand that edge. If I lose too much money or my P/L seems random and I don’t know why, I’ll switch to paper trading and try a different strategy. If I don’t understand my edge, then I’m flying blind.

Even if trading is overwhelmingly difficult as you suggest, giving up now will have taught me nothing.
 
nice words! if you're tough, you'll stick through any market and/or any negative comments that you may receive on these posts.

i think that trading 100 times a day CAN BE excessive, but not if you're making money. the time that it IS too much though is when commissions eat every bit of your profits - the only ones who love these trading methods are the brokers.

i use many systems that are unemotional and mechanical, but look for longer trades with (probably) slightly larger stop ranges. try to see where a trade is going before you exit and churn.

Pete
 
You monitor two level of price movement and you use one exit strategy.

You need to do the following to improve your profits on half your trades and on the other half you need to not trade into a non-profit time segment.

Your log looks like this DNA type sequence: good profit; low profit; good pofit or loss; low profit.

You can switch to: better good profit;better low profit; sideline/or better good profit; better low profit.

Focus on steps 2 and 6. when you change to longer MA, reverse off the inflection beginning This stretches trade a and b of the set of four. Because you then, while on trade b shorted the MA plan to exit if spread stays small or reverse if it increases. You can instead of exit continue to hold and count it a trade c of the series of 4 trades. Repeat the c to d as you did a to b.
 
Quote from 0008:

How many % of your capital do you risk per trade?
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He's flat out. He trades as many contracts as possible and just leaves the odd cash left over in the account. No withdrawals of cash so far.
 
One NQ contract is valued over $20,000. He's trading a $6,000 account. you could say he's risking over 300% of his capital.

My critique for you Prophet, is if you're paying more than 6 commissions a day (maximum!) then you're wasting money as well as personal energy. I see absolutely no reason to target less than 5 points for your trades (5 points=$100) You won't always make that target, sometimes you'll have to stop out with a loss, but I see no reason to close a position with less than 5 points gain unless you've concluded with some certainity that it's actually reversed to the opposite direction.

If all these chart services and candlestick indicators and all the rest were actually giving you an edge on predicting direction of NQ, you would not need to make more than 6 trades a day. You would simply make your trade and wait for the 10-30 point move that NQ can generally be expected to make on any given day.
 
If you are like me...80% of your profits come from the top 20% of your trades.

I beat myself up in 2002 with a ton of trades, but it was my best year ever (a nice percentage over my day job...and the wife finally is cutting me some slack...)

I had a similar pbm...my solution...(I threw all the trades in a spreadsheet and sorted most profitable to least. After a little while it began to dawn on me what happened on the lower end of the sheet...and now I am on guard to eliminate that particular trading behaviour.

Also, I tightened up on my money mgmt and commissions and reduced the leakage there.

To me applying the 80/20 rule with your own knowledge of what you do could give you the biggest gain. Smarter....not harder.

Good luck!!

Regards...
Bruce
 
Quote from prophet:

I'd love to get some criticism on my strategy.
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Prophet,
Myself and some other members are working on something you might be interested in, check out 'Forums ›› Main ›› Trading ›› finding an edge...simple?' pages 4, 8, & 11.
-rlb21079
 
Sorry for ignoring all of you and not replying to this thread. I had not subscribed to it, and stopped checking it having assumed it had fallen out of interest.

In retrospect I was indeed over-trading, and seeing the bulk of my profits from a minority of trades and the biggest price moves. Chop is the devil and I didn’t like the risks involved with scalping. So I don’t believe my strategy is reliable day-to-day. It was also exhausting.

I have since devoted all my spare time to designing fully automatic systems, prototyped in Matlab, then converted to C, compiled and linked in with the IB TWS API in order to receive ticks and issue orders. I am still testing these systems, backtesting on previous data (NQ currently) and doing some papertrading of the real-time code. The equity curves and daily p/l statistics (versus trade frequency and other parameters) look promising (mean/std of daily p/l = 0.5). Overfitting is controlable since I use a-priori rules, not learned (inductive) rules. In that sense these systems are more white-box than black-box.
 
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