Quote from random trader:
A quick summary after 3 weeks:
Something seems to be wrong.
My remarks only apply to the ES, since you have not been trading any of the other markets during the 3 weeks.
The first thing that's wrong is that your "bias" is wrong. If you will look back to some of my original posts you will see that I commented that the "trend" was not down. At worst it was sideways, although there was enough evidence in other stock market averages that you could easily make the argument that the trend was up. Bottom line is that having a "bias" that was negative was hard to understand. And as it turns out, is responsible for the losses you have experienced. So far, had you simply bought at any time since you started and placed a 20 point stop, you would have been profitable.
You evidently arrive at your "bias" through looking at the MACD and CCI if memory serves. One thing to understand: MACD starts to loose momentum when the market goes sideways. BUT, loss of momentum does not necessarily lead to a decline. CCI is an overbought/oversold oscillator. In other words, both indicators could be used to top-pick. Top-picking as a strategy is a strategy that few will end up mastering.
Further, your indicators are derivatives of the market, not THE market. Just remember though, the market is what you're playing, not the indicators. Those squiggly lines don't tell the market what to do....the market tells the squiggly lines what to do.
Worse though, you still don't have any experience with the idea of taking this 6-8 point profit versus the 18-20 point loss (whichever it is). I think what you will end up finding is that when you get your 'bias' right, you will selling out way too quickly, thus limiting your profits versus the losses you are taking now.
Finally, coming back to this 'bias' idea, one point that should be obvious to you, is that a market that moves to new highs is not a market with a downward 'bias'. Further, even if the market you're trading is not moving to new highs, if other indexes are, it should at least serve as a warning to you. In the case of the stock market, small cap stock and their averages such as the Russell 2000, Value Line Arithmetic, the cumulative A/D have been consistently moving higher. These tend to drag the averages higher. So again, if you see these types of conditions, it should make you think hard when you're about ready to buck that trend.
In summary, what wrong with your ES trading is that you're fighting the tape. I note that you did the same thing in the bond market, although so far this has given you a profit. Goes to show, it's possible to do...but what you make in the bond market will not offset what you have now lost in the stock market, because your entire strategy is one that minimizes gains.
OldTrader
