Quote from guavaman:
I have no intention of disputing this statement. I am certain Point One's assertion is accurate. However, from my own perspective I don't see how this is possible.
My experience tells me that if one does not understand every facet and angle of this method you are setting yourself up for big problems. Again, I am not disputing Point Ones claim, but I am trying to understand how one can trade this method without possessing a full and complete knowledge of it. I have a reasonable understanding of the method; meaning more than some and less than others, but I have no dillusions that I can actually trade real money. On a routine basis some of the things that I know for sure just ain't so. So profits evaporate and losses pile up.
This is my point/question. How can one trade with real money/time without a full accounting of the method and the confidence that would accompany it? Are you just very quick to exit? Are you ultra selective in the set ups chosen?
Any thoughts appreciated.
-guava
Hi guava
my comment was only really meant for Spyder, to give him some feedback that his efforts have been worth it for me, despite the confusion I had with some aspects of the recent drill.
One significant thing I have changed in the last few months is to go back to logging in pencil and hilighter pens (green and pink) on a log I designed a while back, which helps me listen to the market. This was further reinforced by the excellent work Neoxx has been doing recently and the use and purpose of the log as espoused by Jack.
Like you, before I had moments of clarity and made good decisions, only to sometimes be left high and dry on a spike or left short and caught on the bottom of a move. WTF! Only with logging was I able to accurately differentiate the areas where I knew I knew from the areas where I was (in)effectively guessing, willing and hoping. The log prevents reacting to one data element, getting tricked by "movement" and getting lost in context (How did we get here? Glance through the prior rows of the log).
A log combined with a properly annotated chart is an honest record of your understanding of what the market is telling you in real time. During debrief, I print out a colour chart, annotate my trades and compare the out-turn with what I thought was going on at the time as recorded in the log. Most of the time if I've made an error it will be obvious within 1 bar, normally the entry bar. This keeps the risk low.
Without the log one can become demoralised because it is natural to neglect the areas where you really did know and focus on the areas that threw you - and only remember these. This can lead to a negative spiral.
I remain sidelined and log until I know I know and take a trade. 2 or 3 washes in a row and I know I'm not calibrated and I take a break. By calibrated I mean I am seeing the 1,2,3 movement on every relevant fractal on 5 minute and 2 minute charts.
More often than can be put down to luck, I catch a move to the second - i.e. the DOM translates and puts me in breakeven wash immediately after my entry. If not, I give my entry bar a chance, but take the hit if it does not close where it should (as I have learned from debrief). A 1 bar loss should not freak you out and I have made peace with that level of granularity given the markets I trade.
[All this is on SPI (Sydney) and DAX.]
HTH.
