Journey to develop a system and an edge

yes, trade with smaller stops than profit objectives. We cannot use a -1pt stop in ES and expect it to consistently hold. We can use -2.0pt or -2.5pt stops seeking +4pts or better and acheive a 40% or greater win ratio.

That in effect sets you up as "the house", whereas -4pt / +2pt ratio makes one the hapless gambler in any casino
 
Quote from TraderStavros:

Rough day yesterday. Two things I need to work on is overtrading and taking profits. I let two winners go because I got greedy. I also felt that wave of emotion overcome as I started having a few losing trades and I need to control that. the 5-8-13 Bollinger wasn't working to well yesterday but going short before noon was. I need to stay consistent and not go against the trend. I am considering trying out the ER2 now that I know what the symbol is on TOS AND I got my commissions reduce to 2.75 each side.

Code: 
Cars	Entry	         Exit	        Points	 Gain	        Initial Stop
1	 1,472.00 	 1,468.00 	 (4.00)	 (205.50)	1468.00
-1	 1,459.00 	 1,456.75 	 2.25 	 107.00 	1464.00
1	 1,451.50 	 1,454.00 	 2.50 	 119.50 	1448.00
-1	 1,455.75 	 1,458.00 	 (2.25)	 (118.00)	1459.00
1	 1,463.50 	 1,464.00 	 0.50 	 19.50          1460.00
1	 1,459.75 	 1,456.50 	 (3.25)	 (168.00)	1456.50
1	 1,457.25 	 1,455.25 	 (2.00)	 (105.50)	1455.25
-1	 1,449.50 	 1,451.00 	 (1.50)	 (80.50)	1451.00
1	 1,452.25 	 1,453.25 	 1.00 	 44.50 	        1449.00

My strategy for today is going to be more calm and a little bit tighter on the stops. I would rather take more trades with smaller losses than these larger ones. This may be dangerous thinking but I would be happy with just $200 or so in gains a day. Would taking a few extra cars a shorter distance be feasible or is that opening a pandoras box of risk until I get the system worked out more? I am thinking that I may be trying to get too much out of each trade and that may be hurting.
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can you show us a chart with your trades overlaid? Tradestation does that. It may give a better idea of your entries and exits.
 
Quote from bandit77:

can you show us a chart with your trades overlaid? Tradestation does that. It may give a better idea of your entries and exits.
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I use ThinkorSwim right now and can do that. I'm in the market for a new charting software and without shelling out huge bucks it looks like the best bet is to move to a new broker. (lower commissions too!) Right now I'm eyeing OpenECry but I am really quite partial to Ninjatrader. I'm going to spend some time today weighing the alternatives.
 
Here are my trades from yesterday.

Code: 
Cars	Entry	         Exit	          Points Gain	Initial Stop
1	 1,460.00 	 1,458.00 	 (2.00)	 (105.50)	1458.00
1	 1,456.75 	 1,456.00 	 (0.75)	 (43.00)	1454.50
-1	 1,454.00 	 1,452.75 	 1.25 	 57.00 	      1456.25
-1	 1,454.00 	 1,456.00 	 (2.00)	 (105.50) 1456.00
 

Attachments

Quote from TraderStavros:

Here are my trades from yesterday.
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I'm no expert, but if I may, you're against the trend most of the time. I see you have RSI on your chart, use RSI the other way around; above 50 bullish, below 50 bearish. Forget the 30, and 70 lines. RSI is not that great for overbought, oversold. It's best used for 50 line crosses, and divergences.

Try that without looking at BB, or the MAs.

Happy trading :)

Schaefer
 
Quote from Schaefer:

I'm no expert, but if I may, you're against the trend most of the time. I see you have RSI on your chart, use RSI the other way around; above 50 bullish, below 50 bearish. Forget the 30, and 70 lines. RSI is not that great for overbought, oversold. It's best used for 50 line crosses, and divergences.

Try that without looking at BB, or the MAs.

Happy trading :)

Schaefer
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I'll give that a try, it's becoming increasingly obvious that I don't have a clue how to chart. What period RSI would you recommend? The typical 14?
 
Quote from TraderStavros:

I'll give that a try, it's becoming increasingly obvious that I don't have a clue how to chart. What period RSI would you recommend? The typical 14?
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Hey, we were all there once. The typical setting is fine for me.

You have too many indicators on your chart, start with one, learn how to use it effectively, then if you want, you can add one at a time.

Then you'll get to a stage, where you'll take 'em off one at a time, until there's nothing left on your charts :D It'll take time, just keep at it, and preserve your capital.

Schaefer
 
More trouble on the eastern front today. I'm down 22 points on the ES from my first trade. I seem to be doing worse too. I hope this is just the learning pangs and I am doing what I can to stay confident. I started the morning off by what it looks like trying to call tops and bottoms. Took a big hit right off the bat with a generous stop thinking the downward pressure would continue, which it did but the whipsaw got me. The next was profitable, but only a small victory. The second to last trade (1:52) was working off of AHGs style but I failed to take into consideration the large amount of volume the buyers had on that move over the trend. Thinking I made a call in the wrong direction I immediately took an opposite position and got wacked there too.

I think I am going to follow AHGs thread a bit more closely as the very simple nature of his method seems to make sense to me. I have been overcomplicating things and clearly misunderstanding the indicators and patterns I am seeing. It's like a buoy of emotions and smarts that keep tipping my trading around.

I've attached a chart of my trading today. The yellow are losers and the green is the winner. I am trying out Open E Crys platform and haven't figured out why there are other arrows on there. (the down red at 9:10)

Code: 
Cars	Entry	         Exit	         Points	      Gain	Initial Stop
-1	 1,436.75 	 1,440.00 	 (3.25)	 (168.00)	1440.00
1	 1,432.75 	 1,434.00 	 1.25 	 57.00 	        1431.00
1	 1,433.75 	 1,433.00 	 (0.75)	 (43.00)	1431.75
-1	 1,428.00 	 1,430.00 	 (2.00)	 (105.50)	1430.00
1	 1,430.50 	 1,428.75 	 (1.75)	 (93.00)	1428.75
 
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