You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
Mabenn's Place
- Thread starter mabenn
- Start date
Quote from monti1a:
It's actually the edge, entry, exit, and trade management that determine the degree of profitability. You must have an edge to begin with, as well as have spot-on rules for managing the trade.
All great trading ideas do not necessarily lead to profitability.
I agree, I think I am placing more emphasis on my entries at this point, less on my exits / management.
I traded on the SIM for about a month before going LIVE.
I think I attached the SIM results in a previous post which were enough for me to go LIVE. Attached again here.
I appreciate the feedback.
Attachments
Quote from mabenn:
I agree, I think I am placing more emphasis on my entries at this point, less on my exits / management.
I traded on the SIM for about a month before going LIVE.
I think I attached the SIM results in a previous post which were enough for me to go LIVE. Attached again here.
I appreciate the feedback.
First, I would suggest mechanizing the trade signals, entry rules, exit rules and trade management rules. Otherwise, you will be left to the whim of your emotions which will most likely be detrimental to your account since you're new at this. Additionally, biases are introduced during testing which can lead you to believe that you have an edge when you really do not.
Second, after you have a mechanized system, I would suggest that you "slow it down", and sim trade the strategy for at least 5-6 months so that you can see how it will perform over a variety of market conditions. Obviously, the longer you can sim trade, the better your odds of success will be. No need to rush it. The markets will be there. In addition, during this period of sim trading you should be looking out for trade qualifiers that enhance your win rate and profitability.
Third, based on the spreadsheet you would have paid about $1,000 in commissions (assuming $4.25 RT per contract), but you only made $1,930 in profit. Your commissions are more than 50% of your gross profit. That type of profit margin will not allow for any room of error or mistakes. That's why you should test longer to see if this strategy is workable.
The classic mistake that most newer traders make is the "crime of small numbers". In essence, you have one good month (or a small sample size of good trades) and try to extrapolate that good month into the future. Always expect the market to disappoint you and plan for the worst case scenario.
Ideally, you want 6+ months of sim trades and 300 - 500+ simulated trades.
Oh, and one more thing..If you make a significant change to your rules, do not modify your historical results to look better. Instead, restart the forward test count from the date in which the rule change was made. In other words, reset your forward trade count to "0". This is very critical and will prevent you from curve-fitting your results.
Quote from monti1a:
First, I would suggest mechanizing the trade signals, entry rules, exit rules and trade management rules. Otherwise, you will be left to the whim of your emotions which will most likely be detrimental to your account since you're new at this. Additionally, biases are introduced during testing which can lead you to believe that you have an edge when you really do not.
I have no clue how to mechanize my entry strategies. I basically just look for 2+ thing to line up that give me around a 50% chance of reaching my exits. Perhaps I should mechanize my management/exit rules which would eliminate the mistake of getting out too early. I know how to do that.
I Agree, the more data the better. I have been SIM Trading different strategies/market's for years. My coach suggested opening a small account and trading 1 or two lot's at a time, which would give me a huge leap in my education, even if I lose 20% of my account at that point if it happens - go back to SIM TradingQuote from monti1a:
Second, after you have a mechanized system, I would suggest that you "slow it down", and sim trade the strategy for at least 5-6 months so that you can see how it will perform over a variety of market conditions. Obviously, the longer you can sim trade, the better your odds of success will be. No need to rush it. The markets will be there. In addition, during this period of sim trading you should be looking out for trade qualifiers that enhance your win rate and profitability.
[/B]
One of my goals is to have a good risk/reward overall including the comissions I pay. I agree that paying 50% of my profits in commision is unacceptable. One way to eliminate that is to take only the highest quality trades. I am impatient in that regard. So If i can master my ability to be patient for the highest odd trades while maximizing my exit's, then I don't mind paying the comissions since they won't add up to much in comparison to my profits, risk/reward ratio. One of my weaknesses is over-trading. So I am working to fix that by filling my non trading life with excitement so I don't trade for excitement...Third, based on the spreadsheet you would have paid about $1,000 in commissions (assuming $4.25 RT per contract), but you only made $1,930 in profit. Your commissions are more than 50% of your gross profit. That type of profit margin will not allow for any room of error or mistakes. That's why you should test longer to see if this strategy is workable.
The classic mistake that most newer traders make is the "crime of small numbers". In essence, you have one good month (or a small sample size of good trades) and try to extrapolate that good month into the future. Always expect the market to disappoint you and plan for the worst case scenario.
Ideally, you want 6+ months of sim trades and 300 - 500+ simulated trades.
Oh, and one more thing..If you make a significant change to your rules, do not modify your historical results to look better. Instead, restart the forward test count from the date in which the rule change was made. In other words, reset your forward trade count to "0". This is very critical and will prevent you from curve-fitting your results.
300-500 trades would certainly give me a good idea of my expectancy, and what level of position sizing I need to reach my goals. I think I am a bit too quick to jump the gun and hope to make consistent profits right away. If, in a year I am reaching that goal that would be great.
When ever I change my strategy very much I start a new test. I h ave no interest in curve fitting. I am focussing on developing and maintaining a dynamic strategy that changes when the market changes, however I have noticed several relationships that exist in all time frames, and for as far back as I have looked.
Expansion/contraction, Or Ranging to breakout
Ebb/flow, Pullbacks and Breakouts in a trend
Divergence/Convergence
Also I noticed in one of your posts that you mention your dynamic strategy. Please elaborate on what you have found that stands the test of time if it's not too much trouble, of course without giving away any of your secrets!
Again I appreciate the feedback.
I got long @ 58 before the breakout on the YM following the 8am news release.
OF course before that I was probing for a short so a nice 40 point move put me at +20 for the day.
Attached is the chart.
As you can see from the footprint profiles, volume was skewed to the top as the market traded toward the day's high.
Plus the Market profile (not shown) was strongly bullish, and while the prices went higher the volume profile kept gaining new bids/new volume.
All pointing to the area of most vulnerability, which would have been a break of the day's high on an already very bullish day.
OF course before that I was probing for a short so a nice 40 point move put me at +20 for the day.
Attached is the chart.
As you can see from the footprint profiles, volume was skewed to the top as the market traded toward the day's high.
Plus the Market profile (not shown) was strongly bullish, and while the prices went higher the volume profile kept gaining new bids/new volume.
All pointing to the area of most vulnerability, which would have been a break of the day's high on an already very bullish day.
Attachments
It looks like I definatly have some things to work on. Also Van suggested I suspend trading until i go through volumes 4 and 5 of Peak Performance course, which I have.
I will hit those hard.
I am looking forward to more focus and direction in regards to mastering myself as a trader.
See attached.
profile is available to take at www.iitm.com
I will hit those hard.
I am looking forward to more focus and direction in regards to mastering myself as a trader.
See attached.
profile is available to take at www.iitm.com
Attachments
A few really good signals, some not so good, but it appears all of them would have allowed me to get to BE with my exit/management rules.
Where I got long and where my exit was. Before that was two short probes, both lost 10 points each, so I only ended the day with +20 points, not bad considering my string of losing day's lately.
Along that note, I failed to execute on some very obvious patterns simply out of fear that I would lose my winning day. Instead of being an trader I was being fearful.
Where I got long and where my exit was. Before that was two short probes, both lost 10 points each, so I only ended the day with +20 points, not bad considering my string of losing day's lately.
Along that note, I failed to execute on some very obvious patterns simply out of fear that I would lose my winning day. Instead of being an trader I was being fearful.
Attachments
I haven't updated my tracker for a couple days. Been putting it off.
Anyway, today was interesting. I'm down 15 points overall, but it was interesting because my entry signals really proved themself but I didn't do a very good job of making good use of them.
That's why I believe that psychology, Position Sizing, and Exits are more important than entries.
I'm working on my psychology and Exits, and need to get some rules set up before I keep trading or it will be a futile effort.
I was bidding at the low of the day pretty much today. In hindsight I should have used a market order, but I had no way of knowing at the time.
Also got some nice short signals but didn't stick to my exit plan which was to ride them for 50 points with basically a 20 point or 1-1Risk/Reward stop.
See attached.
Anyway, today was interesting. I'm down 15 points overall, but it was interesting because my entry signals really proved themself but I didn't do a very good job of making good use of them.
That's why I believe that psychology, Position Sizing, and Exits are more important than entries.
I'm working on my psychology and Exits, and need to get some rules set up before I keep trading or it will be a futile effort.
I was bidding at the low of the day pretty much today. In hindsight I should have used a market order, but I had no way of knowing at the time.
Also got some nice short signals but didn't stick to my exit plan which was to ride them for 50 points with basically a 20 point or 1-1Risk/Reward stop.
See attached.
Attachments
I will post my results for the last couple day's and some screen shots this weekend.
I had a nast -$600/day. So it's time to go back to demo trading for a while until I can be sure of my edge.
I will post what I did wrong, etc.
I have a session with my trading coach tonight - Should give me a fresh outlook. I will post the notes from that.
I had a nast -$600/day. So it's time to go back to demo trading for a while until I can be sure of my edge.
I will post what I did wrong, etc.
I have a session with my trading coach tonight - Should give me a fresh outlook. I will post the notes from that.