Grinding it out, day after day

thursday was a good rtm intraday if one waited until stocks moved about 3 std dev before fading the stocks; however, if one began fading the market before 11:00 am est, it was a very difficult day for rtm, as most folks focused on capital preservation would have booked their loss long before the market reversed. Furthermore, in the tradition of a rtm trader, once the market began to rally in the afternoon, if one attempted to fade the rally he/she would have lost in the afternoon also.

Outside the 3+ std dev, a trader would almost need to have the mindset of a riverboat gambler to capitalize on the market reversal during that afternoon.

On the other hand, if one was a intraday breakout trader, with a profit target of 50% - 75% of the ATR, then Thursday would have been a great day.

Walt
 
Quote from Moneyball:

That's why it's pointless for prop traders to talk about percentages, because it's impossible to calculate- some times he may be using $50K in BP, other times $5MM or more. Get a clue.
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Correct. billy boy get yourself into a prop firm for a couple of mths u will see....
 
Thanks for the response lescor. I will keep refining the system as you recommend - which means fixing psych issues. The mental mind games such as 1) selling way too soon to take profit and it's corollary 2) being afraid to lose real money make my results much poorer than in the papertrading account - although the trading systems are exactly the same.

I did add another 50k today to make the account 100k but will not necessarily increase position size - it'll just keep my margin-to-equity ratio lower - and maybe give me that psych boost that I need.

Amazing how psych issues can affect trading. This is my paper trading account for April 25 - May 25 (save for a recent oil and 10-yr note trade that I just did to test something) which started out with 300k to practice futures first before "going live" in May 25. The returns I'm getting in the live account are less than half the papertrading account (although volatility was higher during the time I was papertrading).

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Regarding your preference for trading stocks over futures: I'd like to also add that the advantage of trading stocks over futures is that there are more beginner market participants trading stocks than futures. I'd also add that futures traders can also puke contracts too not just stock traders - for example if they're trapped on a fake bull reversal bar. I may trade stocks in the future if I can get more levarage - Thinkorswim is only 5:1 and anyway I can't daytrade with my job.

Thanks for your input and making this thread and enjoy your weekend. Feel free to PM me if you have any medical/anesthesia help which is hopefully - no. I would like to return the favor of advice/recommendations. I do not like to be in debt. :)
 
I just realized $40k / month of $1M buying power is 4% return. The results of course are magnified from the $110k starting capital. That means if I get 2-3+% / month, it's not that bad which is what I was trying to figure out - this being my first time to trade semi-pro.

I just wasn't sure if that 2-3% / month is 1) shooting for the stars (it doesn't seem to be) or 2) an abysmal trading record for pro traders.

However, my 100k account can't get that kind of leverage like Lescor on TOS with futures (although I see 400k buying power to daytrade).

Therefore I will just continue refining. I appreciate this forum - it's nice to get to communicate with other traders for a change just to bounce ideas of off.

One more advantage with futures of course is the 60/40 tax. I wonder if that's on the chopping block with the tax changes slated to come expire next year?
 
Quote from anesthesiaman:

I just realized $40k / month of $1M buying power is 4% return. The results of course are magnified from the $110k starting capital. That means if I get 2-3+% / month
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Don't be forced to think in terms of return on capital invested. This is just irrelevant here. Think about return on daily range or something.

Imagine that ABC costs $1000 a share and moves 0.20 a day, XYZ costs $10 and moves 0.20 a day too. Suppose, a skillful day trader can equally profit from either one, apparently, his profit will depend on the daily move of the issue. Therefore, the price doesn't matter for him as long as he doesn't need to think about his buying power (prop leverage). He is free to choose either stock: ABC or XYZ, result will be the same for him at the end of the day.

Range matters. Volatility.

Same as with futures. Stocks become "contracts" of some sort to such a leveraged day trader.

I presume, this is the reason lescor posts his profit/share, not monthly % returns.
 
Quote from boba15:

Don't be forced to think in terms of return on capital invested. This is just irrelevant here. Think about return on daily range or something.

Imagine that ABC costs $1000 a share and moves 0.20 a day, XYZ costs $10 and moves 0.20 a day too. Suppose, a skillful day trader can equally profit from either one, apparently, his profit will depend on the daily move of the issue. Therefore, the price doesn't matter for him as long as he doesn't need to think about his buying power (prop leverage). He is free to choose either stock: ABC or XYZ, result will be the same for him at the end of the day.

Range matters. Volatility.

Same as with futures. Stocks become "contracts" of some sort to such a leveraged day trader.

I presume, this is the reason lescor posts his profit/share, not monthly % returns.
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There are many ways to measure trading results.

For me, my trading capital would not be earning that much in a savings account or money market and that is what I'm comparing to so I use % return / month - to compare overall total returns vs. some other instrument.

Profit / share seems to be a way to measure individual trade or trading system success - which now that I think about it - I should probably be keeping track of also. Thanks for the tip.

However, being a completely discretionary trader and trading only 1-2 systems, I'm not trying to split pennies. I don't know how to backtest (I wish I did), so I just papertrade my ideas to see if they work or not.

Anyone know how to backtest a 100% discretionary trading system based on price action?
 
Quote from anesthesiaman:

Anyone know how to backtest a 100% discretionary trading system based on price action?
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I've been manually backtesting my 100% discretionary trading system based on price action for a while now. What I do is pull up a chart in my time frame with nothing on it but price bars and a 20-bar EMA. I move the chart all the way to the hard right edge to the time I begin trading. I can look what transpired leading up to that point and make note of support and resistance levels (I often use those to target profits).

I then reveal one bar at a time until a pure signal bar or a conditional signal bar reveals itself. A pure signal bar means that a valid setup is in play and a position should be put on immediately upon close of the bar. A conditional signal bar means a valid setup will be in play IF price reaches a certain point and a buy or sell stop should be immediately placed at the price that confirms the potential setup.

If a pure signal bar is revealed, I note my trade entry price at the close of that bar, as well as my protective stop and profit target. I continue to reveal price bars until the stop or target is hit and note the result.

If a conditional signal bar reveals itself, I note the price at which my buy or sell stop entry order is placed and reveal price bars until either the trade entry stop order is triggered (conditions are met) or a new signal bar is revealed. If the stop price triggers an entry, I then note the protective stop and profit target and reveal price bars until one or the other is hit and note the result.

If a trade moves a particular distance in my favor (this amount varies depending on the trade setup), I assume my stop is moved to break even, and so occasionally a trade stops out break even in my analysis. I'll then compare my hypothetical results in this case to the results obtained if the initial stop was left in play without being moved to b/e.

This gives me an idea of the kind of daily profit I should be realizing if I were an automated system programmed to trade all my valid setups instead of picking which ones to trade. My goal as a trader is to reach that level of trading.

When trading live I may move my profit target to a better price if the price action indicates more profits may lie ahead, but I never allow stops to be moved except in my favor.
 
Quote from levitation:

Lescor,

what chart time frame do you spend the most time analyzing? [1, 5 min, hourly, daily, weekly]

thanks!
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It depends on the strategy, anything intraday, I look at 2 or 5 minute charts. Other stuff like swing trades is just daily charts.
 
Who is deleting BillyDeuchBob's posts? If the guy wants to come on here and call me out as a fake and debate some trading related issues, I welcome it. The only posts I've requested to be removed from this thread are either wildly off topic or offensive.

So come on mate, you're obviously reading this thread. Spell out in detail your case.
 
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