Been there done that. What you would need to do is go back and examine your trading results carefully and retrace your steps to think WHY did you make that decision and match your decision and the results with the market situation at the time. Only by re-examining your trades like this you will find out what works and what doesn't work for you and where is the strength and weakness of your trading system and you can improve your system accordingly and eventually obtain the breakthrough that you need.
My Head is Spinning
- Thread starter DocPMD
- Start date
Been there done that. What you would need to do is go back and examine your trading results carefully and retrace your steps to think WHY did you make that decision and match your decision and the results with the market situation at the time. Only by re-examining your trades like this you will find out what works and what doesn't work for you and where is the strength and weakness of your trading system and you can improve your system accordingly and eventually obtain the breakthrough that you need.
Sound advice - thanks.
I'm pretty sure if you read every single book out there related to trading/markets, you will get a "grasp" of what other successful traders are doing. When I was a beginner, I literally thought all I would have to do is sell when MACD tells me to and buy when it tells me to. Just taking everything out of a book at face value, but now I say "most" TA books are garbage. I think it's good to get an idea of what the public is sold to at least.
My best advice would be to get data as far back as you can.
Next, start asking yourself why price peaked there, why it bottomed there, why it moved sideways, etc...., what caused gold to start rallying from 2000....why did the Sp500 bottom where it did in 2009, Once you start understanding the why, you will start to be able to understand the "structure" of the market. That is the "science" part of the market. If price was all random, I guarantee you there would not be successful traders that are consistently pulling money out of the ATM machine.
Once you learn the science, the next part comes the art......but we shall leave that for your next thread once you begin to see the light.
P.S. On another note, you can hack into Paul Tudor Jones trading journal and steal his secret sauce
My best advice would be to get data as far back as you can.
Next, start asking yourself why price peaked there, why it bottomed there, why it moved sideways, etc...., what caused gold to start rallying from 2000....why did the Sp500 bottom where it did in 2009, Once you start understanding the why, you will start to be able to understand the "structure" of the market. That is the "science" part of the market. If price was all random, I guarantee you there would not be successful traders that are consistently pulling money out of the ATM machine.
Once you learn the science, the next part comes the art......but we shall leave that for your next thread once you begin to see the light.
P.S. On another note, you can hack into Paul Tudor Jones trading journal and steal his secret sauce
Handle123, thanks for the fascinating post. Over the years, how did you develop your systems? Did you adopt something wholesale from a book(s), or person(s), or did you just study and study and invent your own methods from what you learned? Where would you advise a beginner such as myself to look for good knowledge? The only source for info I know are books (there are so many on Amazon I could spend years reading them without much good learning, I sent my first 3 back already).
Thanks,
Jim
Thanks,
Jim
Consider this. There really are no secrets in the markets. We all see the same info on the charts. There is only ignorance and lack of execution. I know I have no secrets and nothing to hide in price action trading except for one calculation that I really don't even need to trade but am just not inclined to divulge it. Furthermore, it is totally unnecessary to becoming a successful trader. Thus, I have no fear of explaining the ends and outs of why I took a trade. I am not leery that my "spilling the beans" will cause it to quit working.
Consider this: Joe Montana was a great quarterback. He had nothing to hide. What he did was all out in the open for all to see, and observe. One could even tape every play and look at it in slow motion. One could study exactly how he stands upon releasing the ball. However, in spite of seeing everything and studying everything not many can duplicate his feats. Why? Nothing is hid. Whats the deal? What gives? It boils down to execution. And to get good in execution requires relentless, never ending practice. It also requires discipline. And psychological preparation.
In trading even mediocre systems can be quite effective in the hands of a master. In the hands of someone whose execution is continually being honed to near perfection. It is "how" we do "what" we do and "when" we do it that makes the outstanding difference. Good execution can only come from knowing what to do and then practicing it over and over until ones execution becomes second nature. Then, and only then, will performance become exponential. TRADING IS A HIGH PERFORMANCE ACTIVITY.
Consider the Olympic athletes.
Consider this: Joe Montana was a great quarterback. He had nothing to hide. What he did was all out in the open for all to see, and observe. One could even tape every play and look at it in slow motion. One could study exactly how he stands upon releasing the ball. However, in spite of seeing everything and studying everything not many can duplicate his feats. Why? Nothing is hid. Whats the deal? What gives? It boils down to execution. And to get good in execution requires relentless, never ending practice. It also requires discipline. And psychological preparation.
In trading even mediocre systems can be quite effective in the hands of a master. In the hands of someone whose execution is continually being honed to near perfection. It is "how" we do "what" we do and "when" we do it that makes the outstanding difference. Good execution can only come from knowing what to do and then practicing it over and over until ones execution becomes second nature. Then, and only then, will performance become exponential. TRADING IS A HIGH PERFORMANCE ACTIVITY.
Consider the Olympic athletes.
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First of all, I'm not an options trader nor I wanted to be one. I started out in FX domain but traded some stocks also. My main domain of interest lately are index futures (DAX, NDX) and gold spot. Trading these 3 alone I made in less than 2 months 318% on balance.
Since I'm in Europe my focus is on London session and NY session open.
I use Elliott Waves to give me the direction. TLs S/R levels of interest. EMA3 EMA9 cross for entry, EMA5 EMA13 for 2nd entry combined with candlestick pattern, harmonics for targets or predefined measured move for exit. I make calculations prior to trading how much I need to achive the daily plan. According to that I seek for a setup that can give me what I need.
If it's 20 points on DAX that's what I trade. As soon as I get what I planed the day is over. If it's 5% on balance, as soon as I make I close everything and enjoy the rest of the day doing something else.
I know many would disagree with my point of view but this works for me. I made a fortune with this trading attitude last year and made enough for this whole year in just under 2 months. You don't need to spend the biggest part of the day working. Cheers
a combo with good indicators and price action can do wonders ... I use sma9 and slowsto(14,2,3)
Hi Doc... perhaps PMD stands for Paid My Dues... or paying them
If you look at the work of Susanna and Stealth and DJMartin, there are some common themes that may be helpful to you. Putting the three of them together -- compare and contrast them -- might let you develop something that suits you, that is your own.
Here is a repeat of something I wrote to another who expressed a similar POV/experience as your's:
..................................................
If you learn from reading… Mark Douglas’s last e-book is a good place to start. It was written specifically for those without a real background in finance. It helps you understand what trading is, and how you can fit yourself into it. Why trading does or doesn't work for some people.
As to reading, here on ET I always liked Susanna’s thread:
http://www.elitetrader.com/et/index.php?threads/the-price-action-journal.132170/
…I would ignore most of the posts other than hers. It’s not so much what she does, as the way she thought about it. The one exception, she references 'Stealth'. Look up every post he makes in ET and study them.
Both Susanna and Stealth do something similar to DJ Martin:
If you learn from videos DJ Martin has a current thread
http://www.elitetrader.com/et/index.php?threads/the-mind-of-a-trader.292247/
Start with his videos in his posts #150 and #151 on ~pgs 15 & 16 of the thread -- that is the basic thing you need from him to combine with Susanna and Stealth.
Watching Mark Douglas's video after reading his book can help:
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As to what to journal… your personal journal is your own, as to trading you might not need to do much more than Mr Speedo who said:
http://www.elitetrader.com/et/index.php?threads/why-journal.297532/page-2
Every week, I go over each days chart and enter on a legal pad with a #2 pencil the valid signals per my trade plan(keeps me closer to the action than excel etc.) Outside the margin goes the date, inside the margin goes the numbered trade of the day (1,2,3,4,...) next to that goes L (long) or S, next is the entry price, next is my shorthand for the type of trade, next is time of entry, next is maximum favorable excursion, next is maximum adverse excursion if a win and no entry if a loss as I have a max stop loss, finally W or L with the ticks of either.
I then print out my actual executions for the week and compare the two documents.
Did I take all my signals?
Were all my entries valid?
Did I get out before target?
etc.
I found that this exercise has helped to illuminate my weaknesses and strengths and keeps my game sharp. I've done this for years and will continue as long as I trade.
I neglected to add that the final column also notes scratches. At the end of the week I add up the number of trades, wins, losses, scratches, and associated ticks, net and figure percentages. At the end of the month I do the same additions and summary. Periodically, I pull out the stack of pads and review trends through the weeks, months and years.
………………
As to platforms to begin with, I like Sierra Charts. For about a dollar a day you have access to historical data, automated trading, etc. etc. You don't have to put a lot of money in an account to get started. They don't try to bait you in with hidden fees, whatever. There are many other choices.
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If your head is spinning, maybe it's because you're confused. Being confused can be a sign that you're on the right track, you're starting giving up what doesn't work. After confusion, there's a chance to gain clarity, but confusion may be necessary to shed broken/obsolete knowledge.
You also mention that no matter what, price still seems random. If that is so, what can be learned from that? In hindsight, price certainly look less random. After attaining the correct bias, it seems almost destined to move exactly how it moved. But if any signal is 40-60% junk, what can be learned from trying to box in price?
Random prices may also be a sign that you're still trading too big. Do you know how to withstand 50% drawdown on a stock, if not, what is required to be able to withstand it? Can you trade smaller, anticipate drawdowns, then ride the small positions and start gaining something? Will having some success to draw on, pull you further investigating in some new unknown directions?
Being breakeven is a partial success in my book, at least you're able to play the game somewhat and surviving, alas not thriving. I'm sorry I have no idea how to improve further or on short-term trading, but at least know that you're not alone.
You also mention that no matter what, price still seems random. If that is so, what can be learned from that? In hindsight, price certainly look less random. After attaining the correct bias, it seems almost destined to move exactly how it moved. But if any signal is 40-60% junk, what can be learned from trying to box in price?
Random prices may also be a sign that you're still trading too big. Do you know how to withstand 50% drawdown on a stock, if not, what is required to be able to withstand it? Can you trade smaller, anticipate drawdowns, then ride the small positions and start gaining something? Will having some success to draw on, pull you further investigating in some new unknown directions?
Being breakeven is a partial success in my book, at least you're able to play the game somewhat and surviving, alas not thriving. I'm sorry I have no idea how to improve further or on short-term trading, but at least know that you're not alone.