I trade 1 ES

I have to be honest with myself. Ever since TGregg (page 3) posted that (19,8) had a better expectation than (20,5), I have been fighting with myself whether to switch to a target of 8. The fact that I had a GTC buy @982 from day 1 and I declined to take a 5 point profit today clearly demonstrated that I have chosen to use the 8 point target. I was only paying lip service to the 5 point.

Events leading up to today show that I really have been using the (20,8) combination. It does not constitute a change of parameter halfway through the experiment that I announce now it's officially 20 stop and 8 target. This should rid my internal conflicts and allow me to concentrate more on market actions.
 
What the heck! Why not use (18,9) as is? This should not change the course of the experiment so far.

OK, so (18,9) it is. GTC buy @982 cancelled, replaced by GTC buy @981.
 
Quote from random trader:

I have to be honest with myself. Ever since TGregg (page 3) posted that (19,8) had a better expectation than (20,5), I have been fighting with myself whether to switch to a target of 8. The fact that I had a GTC buy @982 from day 1 and I declined to take a 5 point profit today clearly demonstrated that I have chosen to use the 8 point target. I was only paying lip service to the 5 point.

Events leading up to today show that I really have been using the (20,8) combination. It does not constitute a change of parameter halfway through the experiment that I announce now it's officially 20 stop and 8 target. This should rid my internal conflicts and allow me to concentrate more on market actions.
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I doubt there is any combination of stops versus targets that would give you a real edge. Perhaps though TGregg would chime in on this.

Where the edge comes from in my mind is a superior entry, with a wide enough stop that 'noise' will not stop you out 'most of the time'.

Personally, I tend to use 10 point stops. For me it's a 'fail-safe' mechanism...if my entry was that bad then I want out to reassess.

However, I snug that 10 points up over time, once my trade has time to 'mature'. I don't set a target per se, but when I think I've milked the trade enough I get out.

The idea that there is some idealized stop/target combo minimizes the thought process that goes into the superior trade. To make money over time I don't think you can minimize thought.

OldTrader
 
Quote from OldTrader:


Where the edge comes from in my mind is a superior entry, with a wide enough stop that 'noise' will not stop you out 'most of the time'.

Personally, I tend to use 10 point stops. For me it's a 'fail-safe' mechanism...if my entry was that bad then I want out to reassess.

However, I snug that 10 points up over time, once my trade has time to 'mature'. I don't set a target per se, but when I think I've milked the trade enough I get out.

OldTrader
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Believe it or not, there is very little difference between our approaches. I will show you when I have more time.
 
Quote from OldTrader:


The idea that there is some idealized stop/target combo minimizes the thought process that goes into the superior trade. To make money over time I don't think you can minimize thought.

OldTrader
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My problem is the contrary--I tend to over-analyze.
 
I know this thread is based on an experiment; I think RandomTrader has the right attitude - No fear, no greed, lots of patience.
I just wonder if daytrading the indexes is the right arena in which to exercise a lot of patience on a trade, if one is satisfied with small gains.
No fear, no greed, for sure!
But lots of patience might be better employed with a different vehicle [think soybeans or cotton] or a longer timeframe [minimum of a week].
I'm not promoting this outfit, but check it out for a better explanation of what I'm trying to say.

http://www.longtermtrading.com
 
Quote from OldTrader:

I doubt there is any combination of stops versus targets that would give you a real edge. Perhaps though TGregg would chime in on this.
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With an invite from OldTrader, how can I resist? :D

Now, I've got an empty bottle of merlot (that was mighty good, and cheap to boot), and a nearly empty bottle of chardonnay (yeah, I drank the merlot first - we had steak for dinner), and it's way past me bedtime.

But, I would most assuredly not advise anybody (even Mr. Market) to trade on that curve-fitted optimization I found. While it did technically make money over the traded time frame, even significant money, the equity curve looked very near random.

Now, I'm no expert in stats - in college I had a calc-based stats book that I used for insomnia (I am not making this up - I'd read about 2 pages and man, I was sleepy). However, this results curve was about the nastiest I have ever come across in my research. And I started in TradeStation 4, back in `97! (I had been involved in trading research much earlier than that, but TS4 was the first decent system I had).

So, it is with the strongest possible terms that I say to Random Trader (and anybody else), do not trade based on that fine example of a curve-fitted system!

It is an example of the worse sort of horse manure that scam "artists" sell in trade rags. You know, where they tell you their system makes a zillion an hour (this might be a slight exaggeration), but they are willing to sell a copy to you, their buddy that they never even heard of, for only $50.

Furthermore, it's late and I'm drunk, but I distinctly recall looking at the dailies (not gonna fire up all my monitors to take another look), and thinking "Tomorrow might just be a nice up day." I know there was a swell bullish white hammer on ES daily just yesterday. I remember thinking even 1010 was a possibility (albeit a slim one). On the other hand, today was weird how we sold down on supposedly better than expected news at 10. But we came back. I gotta say I'm bullish on tomorrow. And that news is almost worth the price of hitting this free web site :D.

Note: The Spell Checker does not know about chardonnay or merlot. Sheesh!

EDIT: Now if Random Trader gets rich on this strategy and wants to send me $50, I won't refuse. :D
 
Yes, there is indeed a decent stop-loss/profit target system that does have a nice curve. It just about covers commissions. And the weird thing about it is, that you have to take your profits early, but give your losers a chance to turn around.
 
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