hey torntech,
here is a quote from trend fader from the bronks-thread i like to put in here:
-------------------------------------
"What is it that separates successful traders from unsuccessful? "
--- There usually is always 2 types of traders. Trader #1 has high % winners.. but their gains are minimal. And trader #2 is averaging over 2:1 profit/loss and is right under %50 of the time. The other factor in this equation is frequency of trades. Assuming what I said above is equal regarding the 2 traders above... the trader that will make more $ is the one that has more trades given X amount of time.
In a nutshell the point is.. you will be trader #1 or #2.. and the HARDEST part of trading is taking care of the frequency of trades. If you want to be trader #1 then you should be looking to trade more often... perhaps you should never avoid your signal (whether mechanical or discretionary). Trader #2 can be gun shy.. and stalk the market. Only entry when everything clicks.
Now here is what separates the winners from the losers. The pro knows that he is trader #1 or #2 and accepts this notion and his trade frequency will be subject to the rules set above and will find the balance of the proper amount of trade frequency. The losers.. will try to be trader #1 and undertrade.. or try to be trader #2 and overtrade (very common). The worst traders of them all.. don't know whether they are trader #1 or #2. (most common)
Many traders only focus on entries.. as I mentioned a lot on the thread. The exit is what separates the men from the boys. Decide whether you will be trader #1 or #2. Then before you consider working on entries... work on your exits. Do you want your exit to be a function of volatility, trailing, whatever? the more determined you are-- the better exit you will have. Decide what type of market (trending, choppy, whatever) best suits your exit strategy. Decide the type of profit to loss ratio you want. The pro's treat their gains as multiples of their loss. Then once you have determined all of this.. work on entries. What I I just mentioned above personally took me years to figure out.
In my honest opinion, and this is definitely controversial.. I believe that all exact entries sooner or later will be random, however market conditions.. trending or choppy will be here forever. Types of patterns, technical, mathematical, whatever.. that try to pinpoint exact entries never really last forever. So if you backtest... then use your entries as random, market conditions as a filter.. and the exit part as the constant.
If your system would still be profitable with random entries.. then you have found the holy grail. If you can improve the performance of your system with entries of your own (mechanical or discretionary) and hold your exit strategy and market condition filters constant in "realtime" trading then you will be a super trader.
Final note, what I just mentioned above is pure methodology. Once you know "who" you really are as a trader.. paper trade, paper trade, paper trade!.. then back it up with some hard earned money. Otherwise, you will be fighting a war thats already be lost.
--MIKE
-------------------------
so, what typ of trader are you ? or what typ would you like to be ?
are you a "scalper" or a "swing/position-daytrader" ? seems, you are more typ #1. thats ok, but if so, be consistent.
trading
