How does anyone do this?
- Thread starter Clueless
- Start date
Obviously I need to find a plan I can trust. But my belief is that mechanical plans don't work. And since my belief that discretion and "hunches" for entries and exits are important, those must be worked into the plan. But how do you define a plan for these hunches? Should you? After writing all this out, maybe that is my dilemma.
Clueless,
Why not go to all the message boards available and read the ones that talk about trading, whether it be trade setups or indicators or how to build systems. Take some of the ideas presented there and begin to build or define the one idea that is the easiest setup for you to trade. Then chart that idea as a template and look for all the tickers that match that one setup. I know a trader who looks at hundreds of charts every night just to find his preferred setups. He makes, on average, anywhere from 40 to 60 trades a day. And, from what he's said he makes a good income. Another trader I know papertraded for 5 years until he found and felt comfortable with a certain trading style. He once weathered a drawdown of over $600,000 before the trade he was in turned around. These are individuals who are committed to their business. And they haven't your IQ. My second friend barely graduated from high school. My first friend uses very few tools or indicators prefering chart patterns and a few trendlines to define what he's looking to trade. Many of the people I know who are traders with some longevity have literally memorized Edwards and Magee.
Bruce
Clueless,
Why not go to all the message boards available and read the ones that talk about trading, whether it be trade setups or indicators or how to build systems. Take some of the ideas presented there and begin to build or define the one idea that is the easiest setup for you to trade. Then chart that idea as a template and look for all the tickers that match that one setup. I know a trader who looks at hundreds of charts every night just to find his preferred setups. He makes, on average, anywhere from 40 to 60 trades a day. And, from what he's said he makes a good income. Another trader I know papertraded for 5 years until he found and felt comfortable with a certain trading style. He once weathered a drawdown of over $600,000 before the trade he was in turned around. These are individuals who are committed to their business. And they haven't your IQ. My second friend barely graduated from high school. My first friend uses very few tools or indicators prefering chart patterns and a few trendlines to define what he's looking to trade. Many of the people I know who are traders with some longevity have literally memorized Edwards and Magee.
Bruce
Clueless, I believe you have just begun to tap into "learning yourself." You have come to the realization, at least for yourself personally, that your profitable days tend to occur when you come into the market with what you refer to as a "fuzzy" plan, and then just go with the flow of the market. You are starting to understand how your personality interfaces with the market. My gut instinct tells me that, on your losing days, you are coming into the trading day with too many preconceived ideas. It's OK to have a plan of attack, but you must be willing to break your plans on at the drop of a hat if the market begins to play out differently than you expected. In the financial markets, anything can happen at any time for any reason...or for lack of any reason. It just happens, and the best place to be mentally is in a state where you can tap into the flow of the market. Bend as a reed as the wind blows.
One question for you is: What kind of training/mentorship are you receiving (if any) at the prop firm where you are trading now? It seems to me like you are not getting enough help from them...but I'm only guessing. If you are not getting the support you need, you might look into moving to another firm. Some are infinitely better than others in the mentorship category.
Re: IQ. I, too, have an IQ in the 140 range. Not bragging...just true. (For the record, I am not a big believer in standardized IQ tests such as the Stanford-Binet and the Wechsler, but I got tested just because I was curious.) IQ is not in and of itself an important factor in your success or failure as a trader. What matters is whether or not you have a good methodology (that is appropriate for the prevailing market conditions) and whether or not you are able to follow it. Notice that I used the word "methodology" rather than "system." A methodology can include an assemblage of setups and rules for entries and exits. However, a methodology need not be a strict mechanical system that is unbending and totally rigid. A methodology sets guidelines for you, but allows for a level of discretion. I have yet to see a 100% mechanical system that couldn't be improved by having it implemented by a talented trader who injected perhaps 5-10% discretion into the mechanical system.
Well, Clueless, the good news is that you have not lost a lot of money. You are well ahead of many other traders who have taken massive drawdowns...so you're getting close buddy!!
Good trading,
PEG LEG JOE
I took an IQ test once and got 153. No lie! Not saying I truly believe it.. I even have the results saved:
"Your IQ according to this test: 153"
F. "Smarty Pants" PeBBLe
"Your IQ according to this test: 153"
F. "Smarty Pants" PeBBLe
Clueless,
I don't want to be critical but you sound like you're all over the place. Find one or two things that work and focus on them. A lot of prop traders seem to like doing OO's. Don Bright has a thread on it here. Others work pairs, which seem to combine statistical edge with the prop firm imperative of doing large volume.
If you are willing to spend some time, you ought to go back through the archives of Seanote's threads here. He was the one trader who posted a real time journal here and made big bucks while doing so. Many of us confirmed his entry and exit prices as he posted, so it was not bs.
I don't want to be critical but you sound like you're all over the place. Find one or two things that work and focus on them. A lot of prop traders seem to like doing OO's. Don Bright has a thread on it here. Others work pairs, which seem to combine statistical edge with the prop firm imperative of doing large volume.
If you are willing to spend some time, you ought to go back through the archives of Seanote's threads here. He was the one trader who posted a real time journal here and made big bucks while doing so. Many of us confirmed his entry and exit prices as he posted, so it was not bs.
Clueless,
you raise some interesting points in your postings.
I recommend reading "The Psychology of Trading" by Brett Steenbarger to you. I should be reluctant to do so, because I'm just half through that book, but I think the rest of it can't be that bad.
You will find Steenbarger describing the exact things troubling you.
It is about the way a trader views the markets (how people learn), about that gut feeling and about the problems a trader faces.
He gives sound explanations based upon hard research, no mumbo-jumbo.
Regards
Bernd Kuerbs
you raise some interesting points in your postings.
I recommend reading "The Psychology of Trading" by Brett Steenbarger to you. I should be reluctant to do so, because I'm just half through that book, but I think the rest of it can't be that bad.
You will find Steenbarger describing the exact things troubling you.
It is about the way a trader views the markets (how people learn), about that gut feeling and about the problems a trader faces.
He gives sound explanations based upon hard research, no mumbo-jumbo.
Regards
Bernd Kuerbs
Quote from FRuiTY PeBBLe:
I took an IQ test once and got 153. No lie! Not saying I truly believe it.. I even have the results saved:
"Your IQ according to this test: 153"
F. "Smarty Pants" PeBBLe
I took a Mensa test years ago. Got 26/25... couldn't get one and got 2 extra points for finishing before the time limit.
They said "Welcome, Brother", but I never joined. Collectively, they were too weird. Much rather hang out at the tennis court and drink beer.
Clueless:
You covered a very broad area. Starting with your trading, system/plan, yes, try to keep it simple. Market price movement is simple and so should your system. But youâre right, simplicity by no means implies ease of doing. Relative ease or difficulty has to do with what goes on in your mind; your beliefs when it comes time to act on your signal, your plan.
While you can program your ideas into TradeStation to generate signals, you realize of course that it can never work all the time on all the stocks, under all market conditions. So it helps not to anticipate it would. If you have a hard time trusting a system that doesnât work all the time for all stocks, then I dare say youâll probably not find ANY system that you can trust. If you said in your original post that you âunderstand expectancyâ and looking for something with âpositive expectancyâ, then youâll know that itâs just that: positive expectancy, NOT positive guarantee.
Come up with a methodology that puts the odds in your favor and place your trust in YOURSELF to consistently and flawlessly execute your edge in the market each time, every time.
If you claim that you believe in going with discretion and "hunchesâ as being important to your methodology, try wording your hunches/intuition/sixth-sense in your trading journal (if you havenât already done so) every time it pops up in your head. Record the market scenario under which it occurred; how you felt at the time plus any other pertinent information regarding the trade. After some period of time, go back to your journal and pick out those that worked and those that didnât and see if you canât distill some pattern from it. That might be the basis from which to form a plan.
I also got the impression from your posts that somewhere along the way, youâve picked up positive reinforcements for NOT following our written plan (e.g. up days --> fuzzy) and negative reinforcements FOR following your plan (e.g. wrong on every trade). IMO, that must be reversed.
Kermit
You covered a very broad area. Starting with your trading, system/plan, yes, try to keep it simple. Market price movement is simple and so should your system. But youâre right, simplicity by no means implies ease of doing. Relative ease or difficulty has to do with what goes on in your mind; your beliefs when it comes time to act on your signal, your plan.
While you can program your ideas into TradeStation to generate signals, you realize of course that it can never work all the time on all the stocks, under all market conditions. So it helps not to anticipate it would. If you have a hard time trusting a system that doesnât work all the time for all stocks, then I dare say youâll probably not find ANY system that you can trust. If you said in your original post that you âunderstand expectancyâ and looking for something with âpositive expectancyâ, then youâll know that itâs just that: positive expectancy, NOT positive guarantee.
Come up with a methodology that puts the odds in your favor and place your trust in YOURSELF to consistently and flawlessly execute your edge in the market each time, every time.
If you claim that you believe in going with discretion and "hunchesâ as being important to your methodology, try wording your hunches/intuition/sixth-sense in your trading journal (if you havenât already done so) every time it pops up in your head. Record the market scenario under which it occurred; how you felt at the time plus any other pertinent information regarding the trade. After some period of time, go back to your journal and pick out those that worked and those that didnât and see if you canât distill some pattern from it. That might be the basis from which to form a plan.
I also got the impression from your posts that somewhere along the way, youâve picked up positive reinforcements for NOT following our written plan (e.g. up days --> fuzzy) and negative reinforcements FOR following your plan (e.g. wrong on every trade). IMO, that must be reversed.
Kermit
Quote from FRuiTY PeBBLe:
I took an IQ test once and got 153. No lie! Not saying I truly believe it.. I even have the results saved:
"Your IQ according to this test: 153"
F. "Smarty Pants" PeBBLe
Excellent, Fruity... you are smarter than me...