ES Journal - 2015

romik said:
Thanks OddTrader, shame not much interaction going on nowadays about trading etc., perhaps the sign of the times we are living in. I doubt it's to do with this specific website, as I don't post anywhere else though to know for a fact. There seems to be a lot of fluff being posted about trading systems though. I've tried various methods, lost a fair bit of money, but that led to realisation that it mostly boils down to successful recognition of predominant trend, seeking out times when trading entities are induced enough to resume trend. That way reward vs risk is at its best, even multiple small losses are all perfectly justifiable as long as eye is kept on reward, which either puts you in the black or erases the previous losses.
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Can't say anything better. You have good signals, and you have good money management. I think your overnight trades are mainly/only big winners. When trading small size, that would greatly reduce the impact of overnight risk.

BTW, another realisation nowadays is probably trading methods could be better than trading systems! Not many would recognise/believe so! lol

http://www.elitetrader.com/et/index.php?threads/does-probability-exist.291261/reply&quote=4132618

OddTrader said:
Q

Generally, people would think that it's better to have more winning trades than losing trades but if there is a black swan, a single losing trade would kill.

To against this thought, we would like to catch the black swan by normalizing the losing trades. More losing trades mean the system is stable and we can control the (expected) loss. On the other hand, we just let the winning trades float.

UQ
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Regarding overnighters. I beg to differ, initiating trades pre-market open (your night time, my early morning time) is where a lot of big reward opportunities 'hide'.
 
romik said:
Regarding overnighters. I beg to differ, initiating trades pre-market open (your night time, my early morning time) is where a lot of big reward opportunities 'hide'.
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In that case, you are taking potentially the overnight risks that many traders with conventional wisdom would not consider to try/trade.

It's OK if your risk management is good enough to protect this risk. Certainly you will!
 
I can't remember, which veteran floor trader told me on this board ages ago how he used to always be extremely 'ruthless' closing trades that used to go against him (no ifs and buts, could, would, should, etc.), as you just don't know where it will stop, not may, will, big difference.
 
Perhaps your pre-market orders logically should be saver than overnighters, because they are not overnighters actually.

"Big reward" as stated below could also imply "Big loss"! As you can't be right every time, can you?

romik said:
Regarding overnighters. I beg to differ, initiating trades pre-market open (your night time, my early morning time) is where a lot of big reward opportunities 'hide'.
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And just a few words about methods used, as what I do implements the edge in money management, I don't go all secretive about the method, it's rather simple. RSI points to oversold/bought, MACD histogram points to buildup of either strength or weakness in price action, you have established predominant trend, so clear on direction of trade/s to be taken as will be banking on support from other trend followers. Now you need to study average range attainable, that way you can establish average loss and average reward. Look for tightening ranges (wedges are my favourite) and potential double bottoms/tops. To substantially reduce risk entry has to be taken from very fast charts, like 1min and below. That's it in a nutshell.
 
OddTrader said:
Perhaps your pre-market orders logically should be saver than overnighters, because they are not overnighters actually.

"Big reward" as stated below could also imply "Big loss"! As you can't be right every time, can you?
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True.
 
romik said:
And just a few words about methods used, as what I do implements the edge in money management, I don't go all secretive about the method, it's rather simple. RSI points to oversold/bought, MACD histogram points to buildup of either strength or weakness in price action, you have established predominant trend, so clear on direction of trade/s to be taken as will be banking on support from other trend followers. Now you need to study average range attainable, that way you can establish average loss and average reward. Look for tightening ranges (wedges are my favourite) and potential double bottoms/tops. To substantially reduce risk entry has to be taken from very fast charts, like 1min and below. That's it in a nutshell.
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Thanks for the info. I think your approach is sound fundamentally! I will take a look further when time/priority is allowed later.

My time-frame is weekly basically. Never check 1-minute or faster charts.
 
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