How I stopped making the same mistakes in 2010 and started to make more money

Quote from SomeYoungGuy:

What's stopping you from going fully automated? Too much gut feeling in your rules? Sounds like you have a good plan, do you still lack confidence in it?

Also, your attachments are boring. :p How about a graph?
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I don't know how to automate it. I don't use any indicators, just price action, and it makes it harder to automate, though not impossible of course. Friend of mine is a programmer and sometimes in the future we might get something going together, for now he is just getting familiar with the markets.

As for posting charts, good idea. I'm working on new strats and will try to post some charts next week.
 
Hello Thinkfirst,

You have an enjoyable thread to read and have the best supporting cast of traders giving you posts that ET has to offer. I believe your trading is on the right track even with the few nasty trades you mention. I like your spirit that you came right back from them.

I have a few thoughts on automation for you to think about. I traded many years as a discretionary swing trader before I converted to automated systems. Automating trading is not the panacea for trading problems as some traders make it out to be. Because automating set ups can be tougher on a trader than discretionary trading. I had an enormous learning curve before I made the transition to letting the automation do its thing.

The reason automated systems are tougher on a seasoned trader is you can never completely build automated trading systems to mimic what you learned as a discretionary trader. You have to face the fact that automated systems are dumb and have no artificial intelligence of their own.

For example while trading long with one of my first systems about 8 years ago the markets radically reversed on bad news. As a discretionary trader I knew what to do. I just would waited it out and taken the loss because that was the plan and my rule said don’t second guess the trend no matter what.

With the automated system it was …duh…I did not have any rules about markets in the automation. So I panicked and pulled the plug. Then I saw the long I was trading drop close to where the automated stop would have been (just below support) and turn around. Then it went on to make the profit I never received.

This was the beginning of second guessing the automation for many years. Turning over control to a stupid process can be just has hard as following the rules in your plan.
 
Quote from oraclewizard77:

No, I am not wrong. When really bad stuff comes out against a stock, what you get is margin calls, because longer term investors are long the stock on margin. So as the stock goes lower, you get more margin calls unless the stock was heavily shorted which may provide support as short sellers close their positions at a profit. You need to look at ATR of a stock.
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Just stumbled across this thread.

First, oraclewizard is correct. A stock that reports poorly AND issues soft guidance is a stock that is best avoided if you are trying to play a bounce.

Second, I will pass along a tip that any stock that has a signficant gap down at the open is best avoided if you are hoping to play a bounce off what you hope will be a daily low. (Playing the gap at the open is a different story. I am speaking here about trying to play the low of the day, which it appears is your strategy.)

More often than not, a gap down indicates a problem, and trying to find a low is not over time a winning game.

Good luck.
 
Quote from NoDoji:

You can't get 100% of every move in a trade.
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Quote from bigpapi:

That is not easy to swallow, I look back each and every time I exit a trade and feel like banging my head on the wall for leaving money on the table, but then I remember the times when things turned against me and I gave up most or all of the profits because it had to hit the target, there was no way it couldn't, and then I paid the price.
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I agree with you, we can't get 100% of every move in every trade. And believe me I'm not trying to do it. When I say I left money on the table I mean I didn't wait for my exit signal and that means I didn't follow my rules, plain and simple.
 
Quote from NoDoji:

So true. And if you do what makes sense at the time, that's what's important. But if what you do doesn't make sense, then it's OK to bang head on wall.

Today I was sim trading CL and I closed my position at a previous support level. All I saw at the moment was the previous support (that had found significant buyers, leaving a looong hammer), and price ticking up a tad at that level. What I didn't pay attention to was the fact that I shorted a lower high beneath a falling 20-bar MA. When price makes a lower high in a down trend, it most frequently makes a lower low. Boy did it ever.
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I think when trading we probably always do what makes sense at the time. However the nature of the market is that what makes sense at the time is not necessary what it actually is and might not make sense when you look at your trade after the close. Of course I’m only talking about situations when the plan was not followed and rules were broken. Why do most traders don't let their winners run? Because "at the time" it made sense to close the position.

Every time when I override my rules it makes sense to me why I do it. What doesn't make sense is why I keep overriding my plan when I want sooooo bad to follow it. I am getting much better though, apparently it takes time. I thought you just have to know what to do. Well, there is a big difference between "knowing" and "doing it".
 
Quote from Rabbitone:

Hello Thinkfirst,

You have an enjoyable thread to read and have the best supporting cast of traders giving you posts that ET has to offer. I believe your trading is on the right track even with the few nasty trades you mention. I like your spirit that you came right back from them.

I have a few thoughts on automation for you to think about. I traded many years as a discretionary swing trader before I converted to automated systems. Automating trading is not the panacea for trading problems as some traders make it out to be. Because automating set ups can be tougher on a trader than discretionary trading. I had an enormous learning curve before I made the transition to letting the automation do its thing.

The reason automated systems are tougher on a seasoned trader is you can never completely build automated trading systems to mimic what you learned as a discretionary trader. You have to face the fact that automated systems are dumb and have no artificial intelligence of their own.

For example while trading long with one of my first systems about 8 years ago the markets radically reversed on bad news. As a discretionary trader I knew what to do. I just would waited it out and taken the loss because that was the plan and my rule said don’t second guess the trend no matter what.

With the automated system it was …duh…I did not have any rules about markets in the automation. So I panicked and pulled the plug. Then I saw the long I was trading drop close to where the automated stop would have been (just below support) and turn around. Then it went on to make the profit I never received.

This was the beginning of second guessing the automation for many years. Turning over control to a stupid process can be just has hard as following the rules in your plan.
More...


Thank you for your comments. I think you are right, automation is not a panacea for trading problems. For me personally automation means I can trade more set ups since it can get difficult to trade a lot of stocks at the same time manually. Only after I achieve my goal in being able to let go of attachment to money and being able to truly trade probabilities consistently, only then I might consider to automate some of my set ups so I can make more money (hence build bigger casino so to speak)
 
Quote from lindq:

Just stumbled across this thread.

First, oraclewizard is correct. A stock that reports poorly AND issues soft guidance is a stock that is best avoided if you are trying to play a bounce.

Second, I will pass along a tip that any stock that has a signficant gap down at the open is best avoided if you are hoping to play a bounce off what you hope will be a daily low. (Playing the gap at the open is a different story. I am speaking here about trying to play the low of the day, which it appears is your strategy.)

More often than not, a gap down indicates a problem, and trying to find a low is not over time a winning game.

Good luck.
More...

I actually agree with you for the most part and for a long time I used to trade in the direction of the gap (I might come back to that because I want to trade more strats ). Also let's don't forget, there are many ways to skin a cat, I'm just trading what makes sense to me.
 
if u r trading one contract that is worst fo worst.... 2 or more cars .will eliminate the b/e move being wrong and exits.......point targets....firs t one like see 2 p;ts es or 3 nq exit one move to b/e.....buying low and selling high with tren d will allow this plan to work at it's best....and it is the best........buying low selling high eliminates most fo the deep underwater exp;erineces that u have and then watching i t go where ur system said is it was going only without u because u trade 1 contract.......very simple not rocket science.......
 
Day 1
(yep, here we go again, Rinse and Repeat as you guys often say here on ET)

I was trading like a machine today. Entry setup, execution, exit. Again and again and again.

Over weekend I simplified my trading plan and removed as much discretion as I could. I finally decided to scale out at different targets to smooth my p/l volatility. But I made sure it all made sense before I did that. I went over all my 2010 trades and entered p/l at different exit levels.
This processed helped a lot. I have total confidence in my plan and though it will probably never be black and white and perfect, today was as good as it gets when it comes to executing my plan.

Weak areas, self-sabotaging. There are no overnight fixes for that. It's a process. I'm in the middle of it. More about it sometimes later.

+446
 

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