Quote from diversions:
I have been trading a reversal strategy for about 4 months I have been taking about 2 trades a day.
I have one set up I know inside and out and I look for it in basically all of the tradable symbols
Index futures currencies oil gold etc
I looked into my trade station trade manager and I found that I had a profit factor of 224
On my longs and 118 on my shorts. I knew I was doing a lot better going long but the disparity surprised me
My setup cant be back tested because it involves multiple time frames and plenty of subjective interpretation
I am trying to figure out if I should just drop shorting altogether. Which would make life a lot easier or will things eventually even out ?
In other words is fading like buying in reverse or is there an innate difference
I am hoping some one can give me an informed answer as for theorizing I can do that well enough on my own
Thanks in advance for your time
Trading a multiple time frame basee setup about 2 times a day gives us a clear picture of your trading fractal. Interestingly, others do that here and are making the same errors as you are.( See redneck and talontrading, for example)
You are entering and exiting to make money. The amounts of money you make is differerent from the amounts you lose on a given direction. One direction (long) has better results than the other (short) by a factor of almost 2.
Is it a market matter or a trader matter? You use a symmetric set of edges so you can eliminate the market as having something wierd about it (the market). That leaves you RN and TT in the same boat with a trader issue.
Check the slower fractal than the one you trade. If on your multichart view, you can discover that you do not know when the slower fractal is still in progress or at the end of its progress, Why could this cause the imbalance you have? You may think and be influenced by what you think is a symmetric condition of the market.
It is apparent to me that you take trades in a very imbalanced way, vis a vis long or short, because you cannot figure out the trading context of taking a trade AND more important, exiting an edge you believe you have.
So the main problem you have is determining how far along the next slower container is relative to the container you trade upon. In technical trading language, you take more retraces short than you take reversals long. This means more often you are exiting from a non dominant move than you are exiting from a dominant move.
The group of traders you can be id'ed with (by common mistakes) do not use all the market informantion available especially while in the market. This is why you do not, as a rule determine at their very beginning, the difference between a retrace and a reversal. Not knowing this you can "believe" while in a trade, that it is trending (going in the dominant direction) when it is actually not.
The consequence is that you lose more on short trades than you lose on long trades.
To increase your skills. always keep conscious of the slower fractal's status (how far it has progressed). Second, refine your edge that you use to be able to use it in dominant price moves and use in in non dominant prices moves, knowing the difference for each application. The "holding" comes early in the trade and the exit is the later concern.
Your very basic operational failure is that you associate increasing volume with long trades and not with short trades. With short trades you associate decreasing volume. The way this pans out for you is how you look at volatility of bars and how you regard overlap of adjacent bars. you see both as a gravity function. Such is not the case.
You lack the saved data on your trading to see, simply, how "long" in duration trades are for you. There are four types of trades involved: the combination of winning and losing and long and short. If you sorted them on Excel, you would immediately see how biased you became over the last four months. Emotionally, you are learning to stay on the sidelines most of the time. Too bad.
Your suspicions are correct about short trading. The values you quote of your trading are improprerly stated. 118 isn't 118.
Lots of work to do. Too bad.
If you do not understand what I've said, don't worry about it.