Feedback appreciated. My Journal Begins...

Losses on a friday, ruin my weekend, another reason just not to bother.

Hell of a first week, we all get bad days / months in my case.
 
sowterdad said:
Hello JS.....
I hope my personal disclaimer was thorough-I indeed know nothing about the type of trading you are involved in-
I did hope to provoke your thinking though- I think Turveyd 's response to my somewhat rambling commentary made a good point
"Daytrading is where the money is made big money and big losses at first ofcourse."

The "big Losses" come after a trader over trades, trades too large, trades on emotion, doesn't trade his plan because he is trading due to his emotion- (discretionary) not his analytical discipline- and does not follow a strong position sizing approach. JMHO- Been there, done that personally- Again- mostly on swing trades- you will be capable of doing that so much quicker day trading!

Again, I do not know Anything about the product you trade, NOR Daytrading ( sampled it a few times over the past 15 years on vacation days ) (although it is a micro of swing trading - Charts are simply wider) - but i do understand lack of discipline- failure to follow a well thought out strategy- the tendancy to not follow a disciplined well executed approach but to give in to discretionary trades . Impulse trading- and all the other mistakes one can make........
I was hoping to challenge you a bit- perhaps get a different perspective-
You answered most of my questions- Thank you
"
ou will eliminate the overtrading - you will take only the best setups- Won't trade chop- How will you know when a transition from chop to trending occurs? How would you get on board?
Those are good questions. Ranging and CHOP are different to me. Chop is generally lower highs and higher lows forming into a wedge of sorts. Range usually has respected extremes, and price is hovering around a certain price that traders are finding value at. Lately in the NQ, 3980 has been a rangy price point many times over the past 4 weeks. Yesterday was filled with wedges, CHOP to me. Not ranges.

I cannot predict the transition. Generally I play a pullback after a range or chop break. If it trends, good. If not, try again. Are you asking so that I have this in my plan, or are you showing interest?

I think this is where Art and science diverge- The question is - is this a good -higher- probability entry? I'm only asking You- I would point out that as a "new" trader, you would likely do best to have a limited arsenal- only target those trades - and stalk them- that have the highest probability of success-

"questions here need to be answered pertaining to each setup. I do not have ALL of those answered in paper, but I know them. They should be on the paper as well?

I think the exercise and the act of actually writing something down on paper helps solidify the thinking.
I think every trade - when printed out- written- presents a starting point for analysis-
Perhaps- Consider - looking at each & every individual recent trade- in hindsight- once the emotion of the moment has passed.....
What is a big loss? Is it 50% needing a 100% gain to get back to where you started?
Does a 30% loss pay the tuition fee? After the loss comes what? Enlightenment? Experience?
From there does success and consistent trading start?


t this point, I'm risking what I SIM traded. Very little. This is how I'm surviving this curve. I'm not adding contracts, I'm not risking more than 1 to 1.5% of capital on each trade.

This seems very responsible ! If you were initiating a swing trade - However- If you take 15- trades each day, your port risk on any one day is 20% +/- exposure/ ?????? That seems quite large an average Risk -every day- unless you substantially reduce the # of trades you make- JMHO.

I think daytrading has got to be one of the most rigorous occupations out there-
As a new trader- you have absolutely no experience in the Ring in real time- You will do well to give yourself 'Ring time' and survive the learning curve.
Simply step back and try to only take what you consider the "Best" Quality trades-
Don't worry about making money at this point- Concern yourself with executing well disciplined trades and see if you can build an actual foundation of entry and exit signals-

While i am not a daytrader- One should always know what the next higher time frame direction is-
Trades in the lower time frame that coincide with the higher trend direction will usually prove to be more lengthy & profitible- My Opinion..... Trades that are countertrend bounces should be held with a tighter stop to nail any weakness/shift back to the predominant trend- Reversion to the mean prevails. Does that always hold true/ How much volatility?

Again, good luck in your journey- If you decide that longevity has it's merits- don't worry about getting Rich in the next week or two! Instead, Plan to be Here for the next Year or Two- or Ten.
Forget the noise- Find the very best of the best setups and focus on them- ignore the rest as noise-
Analyze them, find out what works- develop a focused strategy on your best entries/exits You have the rest of your life to determine what those really are- They will change- You will change.
I think the Key here is to be a survivor first- Understand that the expectation is that you will simply be another well intentioned casualtie of the trading environment.

Why would you be the exception to the norm?
Yes- I am asking you why it should be "Normal" that as a new trader you should have "big" losses/
Are you prepared to sustain "Big losses?"

If "big Losses' are the norm- and you don't want to be normal- don't trade the way new traders trade
You perhaps started that way-
Good Luck to your Future Success!
SD
More...

Thanks for the response man. You are very insightful and I especially gave more thought to your money management information. You are correct, if I were to risk 1% per trade, and trade 15 times a day, and lose on 10 of them, that is a 10% hit to the account. However, at least on my back tests and statistics, the method had an pl ratio of close to 4 to 1. So if 10 losers = -10%, 5 winners at this pl ratio = +20%. If my math is correct.

However, that is the pl ratio that's back tested. It's definitely a little different as I try and trade it with real money.

Your comment makes complete sense though, especially risking 10% of the entire account in one day. It does seem a little risk-averse. woops.

Thanks again,
Smacks
 
But
jsmacksem said:
Thanks for the response man. You are very insightful and I especially gave more thought to your money management information. You are correct, if I were to risk 1% per trade, and trade 15 times a day, and lose on 10 of them, that is a 10% hit to the account. However, at least on my back tests and statistics, the method had an pl ratio of close to 4 to 1. So if 10 losers = -10%, 5 winners at this pl ratio = +20%. If my math is correct.

However, that is the pl ratio that's back tested. It's definitely a little different as I try and trade it with real money.

Your comment makes complete sense though, especially risking 10% of the entire account in one day. It does seem a little risk-averse. woops.

Thanks again,
Smacks
More...


But if you lose 10 out of 15 based on 1% then your at -5% day trading in a day, only difference with Swing trading is the same trades would take a month or more, how important is your time to you ?

Also you have been making 14 for risking 2 at times, thats 7 losses covered in 1 trade.


NQ looks good today, dax is just dead no follow through at all.




Home time :)
 
I've got an interesting question....can one's edge in the markets actually be money management, and not related to set-ups at all?

I ask this because many set-ups are identical for many systems..especially the buy/sell on a pullback. Whether it's a breakout of a range/wedge pullback, a demand/supply line test, etc... What if one takes what they can get on the most pristine setup and call it a day?

I might not be making sense, but I've been looking at myself and how I always want price to go "that much further". What if it's not about that? What if it's about taking 10 points home, daily, on a very consistent basis?

If people were to stop after 10 points profit, and do this consistently, and have the discipline to not continue to trade, just observe, that's 50 points a week!

You do the math. Especially after raising your lot size?

Can one's edge simply be management in this sense? The edge is locking it in, and calling it a day. Simply stated. Why continue when you've got what you need?

Thoughts?
 
My random thoughts


You’re thinking completely counter intuitively…, and also correctly - good job

Just needs a little additional refinement - but you do have the framework


Btw.., you’re rudimentarily describing day trader scalping – as opposed to traditional scalping – it is a proven method


And some would say it is not an edge – Not me


===================


Fact is..., each time we enter the mkt we risk losing

So once we've gained what we need for a day - why risk it


Making money - anyone can..., keeping it - is what separates.., and defines consistently profitable traders


RN
 
Last edited:
jsmacksem said:
I've got an interesting question....can one's edge in the markets actually be money management, and not related to set-ups at all?

I ask this because many set-ups are identical for many systems..especially the buy/sell on a pullback. Whether it's a breakout of a range/wedge pullback, a demand/supply line test, etc... What if one takes what they can get on the most pristine setup and call it a day?

I might not be making sense, but I've been looking at myself and how I always want price to go "that much further". What if it's not about that? What if it's about taking 10 points home, daily, on a very consistent basis?

If people were to stop after 10 points profit, and do this consistently, and have the discipline to not continue to trade, just observe, that's 50 points a week!

You do the math. Especially after raising your lot size?

Can one's edge simply be management in this sense? The edge is locking it in, and calling it a day. Simply stated. Why continue when you've got what you need?

Thoughts?
More...

Money managent is just the only risking 3% simple logic everyone fixates on because its the simple part and handles the what if i lose 10 times in a row fear. So not in that sense no.

Stopping at 10 doesnt work, what if you lose 30 2days in a row, your still -30 on the week, got to milk as much as possible out before you get tired or bored and lose focus. ( over trading isnt an amount of trades most think it is, its trading while your brain is fried ).

Every trade has a risk, risk it 10mins after your last trade or the next day makes no different, infact if the market is moving well for your method, then its less risk than the next day which may not be.

Trade management is key, when to exit a trade at BE or +1 as its likely to go to SL or hold for 20pts.


Moving to a more scalpy method like yours next week, my method worked great but cant get it consistent enough for me, wasted too many months tweaking it, time to give up sadly.

Focus needs to be 100%, 1 hour on, 1 off, while on no tv, phones not silent, no forums.
 
Also, if you set a target even a low 1 what happens if you first trade is a loser, your then going to try harder to hit the low easy target, possibly while not in the right mindset, creating more losses.

So just take what the market will give you, when you have had enough walk away.

And dont trade Fridays especially the afternoon, or Monday am when we all half ass everything.
 
Redneck said:
My random thoughts


You’re thinking completely counter intuitively…, and also correctly - good job

Just needs a little additional refinement - but you do have the framework


Btw.., you’re rudimentarily describing day trader scalping – as opposed to traditional scalping – it is a proven method


And some would say it is not an edge – Not me


===================


Fact is..., each time we enter the mkt we risk losing

So once we've gained what we need for a day - why risk it


Making money - anyone can..., keeping it - is what separates.., and defines consistently profitable traders


RN
More...
Thanks RN. When you say I do have the framework, are you suggesting this works, but consider adding rules to let winners ride, instead of exiting a potentially really profitable trade?

I don't understand the difference between day trader scalping, and traditional scalping. Is traditional scalping for small ticks with large size where as day trader scalping is more for points?

So an edge is then the knowledge we gain from our research, testing, and implementation of our plan/method? The edge is also the correct psychology to coincide with all that?

I always thought a daily point target is good, but also allowing room for more winners.
 
Turveyd said:
Money managent is just the only risking 3% simple logic everyone fixates on because its the simple part and handles the what if i lose 10 times in a row fear. So not in that sense no.

Stopping at 10 doesnt work, what if you lose 30 2days in a row, your still -30 on the week, got to milk as much as possible out before you get tired or bored and lose focus. ( over trading isnt an amount of trades most think it is, its trading while your brain is fried ).

Every trade has a risk, risk it 10mins after your last trade or the next day makes no different, infact if the market is moving well for your method, then its less risk than the next day which may not be.

Trade management is key, when to exit a trade at BE or +1 as its likely to go to SL or hold for 20pts.


Moving to a more scalpy method like yours next week, my method worked great but cant get it consistent enough for me, wasted too many months tweaking it, time to give up sadly.

Focus needs to be 100%, 1 hour on, 1 off, while on no tv, phones not silent, no forums.
More...
I hear ya. I find that when I'm trading, I start getting worn out by the afternoon session, and this leads to a lack of discipline.

Trade management is a really effective tool I'd agree. I generally risk between 1.5-3 points each trade, however, I've been able to scratch some at B/E or simply -1 o -2 ticks, and this enables one to stay in the game a while. Good point.

Scalpy? :) RN said something similar. I'm trying to get a definition here...thoughts?

Thanks again TD
 
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