My Path To Success

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Me:
Rough day...

I had a moderate short. Got stopped out. Became more confident, added size. Got a big short.

Mistake was that I took a small scalp trade against the trend but it wasn't small enough.

So net net.. I'm only about break even on what could have been a huge up day. I would have met my goal +$1000 if I had just ended trading then.

Anytime I take a scalp against strong trend then I do it small size. But I have to be careful not to add and to cut it fast. I was able to get out of part of my long with a small loss but didn't get rid of the whole thing like I should have.

This is a difficult market. My profit typically soars when the volatility increases but this market has been difficult. I'm making steady profit but not really hitting it like I should and any 1 or 2 loss can wipe out everything I've did.

Coach:
Sounds like you've been pegging direction pretty good but your targets are getting a bit off due to the increased volatility?

Me:
That might be it. I'm going to start to look and start thinking bigger. I have special computer generated levels that are the most accurate support/resistance levels I believe.. well that I could find. I rarely use them because when market trends s/r isn't important. But, I'm starting to pay more attention to those so I can get a better idea of the types of ranges I'm dealing with.

Coach:
That sounds like a good idea but remember they are just suggestions and hypothetical. I think when you finish up tomorrow, however it turns out, that it might do you some good to take a break for a few days.

Me:
I agree it is time for a rest break. This market is just offering so many opportunities though that I need to trade but also the up/down of it all is getting a bit much. Fortunately, I'm making steady profit but my edge is slim. It might just come down to aggressiveness or stepping off the gas or on the gas. I can do 1k per day but with my current style then I have to swing 2k-3k to do that. I'm just as likely to be up 2 or down 2k as much as anything...

I want to say if you paper trade with stops and go real money then you're going to have to be just as aggressive. Same way if you use big stops then you gotta use big stops.

I'll use both styles and both styles work. The one style I haven't mastered is using tight stops and big size. This is a style I'm for sure interested in.

The thing is with big stops I can hit a win ratio of 60% to 80%. I'm risking usually 2x to 3x my goal. I lose a lot when going to moderate stops but then I don't take as much risk per trade. I'm risking about 1x or a little more but my win ratio is still probably 55% to 65%.

With a tight stop and big profit target, win ratio will drop to 38% to 55%. It is just a style I haven't made work. The only way I can see it is if I want to trade really big size but if I'm not hitting high win ratio then why the size big.

But in this market, it seems to be rewarding those who pick their stops/spots better.. either long or short.

Coach:
Good observations. Don't get beholden to any certain belief. Do what wins for you but keep an open mind as to other possibilities. Try to find your best way to trade while looking to expand your capabilities. Remember, you're not a hero. You're a predictor. Observe your ideas.. If letting the winners run works then the winners run.. If taking profits works then take profits. Do what works. Keep winning. You're starting to build some momentum.
 
Maybe the market(s) you are trading do not fit you... have you ever considered trading options or equities, ETFs or other futures?

I am constantly looking for the best fit to trade. Started with 3-4 stocks to trade options on, and then over a few months have found better 'vehicles' that fit my style better.

Just an idea

Yes, the market does offer opportunities - a lot. But it is fraught with higher risks. That is always the trade off.
 
iceman,

Thanks. That's a good point. A lot of traders don't experiment to find the markets that best suite them. I tend to call the entire market and the ES suites my purposes fairly ideally.

But I am thinking about other possibilities.. what I really want is a constant volatility ES contract. I mean what I think would be ideal for me would be to trade the ES like a vertical spread. So, instead of constant volatility, I get limited risk/reward. This is basically what NADEX offers but I need it as close "to the metal" as possible. I mean it needs to be really "fair". I'd like to say limit risk/reward to say 12 points or so and lose less then 1 tick on both sides and no premium. My edge is really small. I'd like to get some sort of edge like a market maker edge or maybe build a really good system. I've got a few good systems now which kinda gives me a break. It's kinda like I can put up another trader when I need a break.

This would be kinda like a binary option. I call the direction but I'm not looking for big wins. I'm just looking to make it consistent. If I set a 1:1 stop in the futures then I pay the insurance but I don't get the protection.

My favorite style is to enter on market.. I jump in and then limit myself out. I don't like to set limits to enter on my trades because I missed my best trades too many times that way and then worse I try to use a limit to enter and the trade is already over!! You only guaranteed to get filled on losers.

However..... I'm trying to add bigger size now and more leverage. This means I can't use a super wide stop without risking say up to 3% of my capital which I don't enjoy doing.

Here are the "styles" that work for me:

Big stop style
I enter on market and give the trade a lot of room to work. I'm talking 1/2 daily range or say upward to 2.5% to 3% of my account. I monitor the trade and then try to exit and rely on my accuracy to only take big stop hits on some rare event. This style is pretty darn strong. Using C2's constraint system, I can add more contracts and keep my risk constant. My stop just moves up. I don't risk "any more" when I add size within "reason". Keys to this style is giving the trade a lot of room while recognizing when one is really wrong and cutting it. Will take some big hits on occasion..

Aggressive moderate stop style
This style works but one gives up a lot of performance due to stop hits. Gotta be willing to get back in when stopped out. Requires higher aggressiveness. Losses can be higher but provides one a "time out" to consider the trade. I can enter on market as usual. Will pay a high premium in stop outs and requires aggressiveness... It works better if I vary my size based on my confidence which is something I do anyway -- within limits.

Hedged "Hammer trades"
This is a very promising style where I temporarily hedge in a correlated instrument instead of taking a stop hit. This style can work beautifully when it works but can backfire fairly ugly. Requires intense concentration. Risk is the hedge can become stuck or the instruments may decorrelate too... Will require taking a higher unrealized risk on most trades.

Semi-martingale Limit+Market Combo
This is an experimental style that I haven't fully vetted. But basically I would go to market and then add when the trade goes against me but cut it when it goes too far. Basically I enter at market and then add where I'd be taking my normal stop hit. I feel like this style should work. Basically I increase my max loss up to cut off point. This is basically the same as using big stop with a tight stop.

Tight stop/larger target
This is a style that most traders suggest and maybe surprisingly or not surprisingly the only one that I've had strong doubts about it working. The idea is to pick your spots carefully and enter on a limit order. The idea is low risk and high reward. The problem is the best trades never retrace. So you're going to be losing the best trades and only getting filled on trades that may not work. Also, if you get stopped out then what? You're out. What if the idea was sound? It maybe just goes against my personality. You also become subject to volatility... I mean you're going to have a very lumpy distribution of returns.

I didn't believe this style was even possible to get to work. But I found a c2 system that actually makes this style work. The win ratio is only 38% though but the system makes a great return and trades size with managed risk.

But again, they're not doing this with a 75% or even 55% win ratio.

Of course.. in general it pays to take profits at targets when the market isn't trending but to let profits run when the market trends.
 
I'm always thinking about ways to improve.. to get to that next level of performance. Maybe a tweak here or there could make the difference in 50% returns.

But how do I know what is the best style for me? How do I know if letting my winners run work best or setting a tight stop? I've ran some analysis on my trades and got some ideas but that's fairly rudimentary.

My next big idea is what I'm terming cloning. Cloning is where I take my same trade ideas but change the parameters such as holding time, stop, etc. I had the idea to do this.. instead of trading 1 style then to trade 3 styles at the same time. The problem is frankly it would be a distraction and hurt my performance.

What I plan to do is input all my trades into the computer and then run my own backtesting on my discretionary trades. I can then compare my various clones to see how my ideas would have panned out and maybe adjust my trading. I could take it a step further and even run one of my custom clones against my decisions in real time.
 
Quote from Lucias:

I'm always thinking about ways to improve.. to get to that next level of performance. Maybe a tweak here or there could make the difference in 50% returns.

But how do I know what is the best style for me? How do I know if letting my winners run work best or setting a tight stop? I've ran some analysis on my trades and got some ideas but that's fairly rudimentary.

My next big idea is what I'm terming cloning. Cloning is where I take my same trade ideas but change the parameters such as holding time, stop, etc. I had the idea to do this.. instead of trading 1 style then to trade 3 styles at the same time. The problem is frankly it would be a distraction and hurt my performance.

What I plan to do is input all my trades into the computer and then run my own backtesting on my discretionary trades. I can then compare my various clones to see how my ideas would have panned out and maybe adjust my trading. I could take it a step further and even run one of my custom clones against my decisions in real time.
More...

What you really need is the ability to clone yourself. Of course that would put us all in in a bad spot as the world money supply gradually shifted into the hands of Lucias and clones.
 
Quote from baggerlord:

What you really need is the ability to clone yourself. Of course that would put us all in in a bad spot as the world money supply gradually shifted into the hands of Lucias and clones.
More...

I c he still has completely ignored your prescription post from a few days ago that I bumped up... Nothing but drivel drivel and oooh - drivel...
 
Is this "elitetrader" or "rude trader"? I know some professional traders who refuse to come here because of the trolls and posers here. Riffraff has been ignored and baggerlord, you already complain about your own failure in your thread. Maybe you should worry less about what I'm doing and more about your trading!

Seriously though, I want to address one concern I notice among losers. The losers seem amazed by this idea of trading their own tiny accounts -- no matter how tiny. Yet, they go wrong complaining about how they are losers and how they can't make any money on their tiny little account! Maybe that's because you think like a loser? Maybe the winners approach trading differently?

Maybe the success traders practice and build systems and develop competence over time without risking own money and they become so good that they get to risk other peoples money and make a good living at it? Oh that hurts huh? It hurts because your not good enough to be a PROFESSIONAL. Someone who gets PAYED to do a job by others.

I actually have decided that trading my own account is not the immediate focus any more. When I started my trading systems, I didn't see it as a way to make any money. I haven't made any money yet from my systems (for the record). However, I'm starting to realize if I trade at my best then I will get subscribers and I can make a lot more money then I could by trading a tiny 2k account. I believe I can make enough to fund a real futures account -- in time. Of course, yes it is possible to grow a small account into a respectable size but that takes years.. probably 5 or 6 years minimum. There is no rush.

My plan is really simple. I'm going to continue to do what I do. I'll continue to build subscribers and save my money. And, when I get enough capital for a real account then I'll take my own signals. And contrary to what most here think, it won't make any difference to my performance! I'll just plug it in to shadow me..

Let's see the difference between professionals vs losers

Professionals
Have a long history of experience, practice, and success. PRACTICE
Use models and trading systems that have some observable performance
Trade other peoples money and/or have significant capital
Objectively evaluate trades without undue care about the "feeling" of risking capital
Are rarely observed on elitetrader berating others. When was the last time you seen Soros, Buffet, or Jim Simmons here?

Losers
Have limited experience and eschew simulations and performance training
Eschew models
Trade tiny capital that leaves them unsatisfied even when they win
Place extraordinary significance on the aspect of risking real money
Go around berating others
 
You will probably call this trolling, but I should point out I have traded at least 100x as long as you with real money, and have made quite a bit more money as well. That isn't too impressive considering you have only made $200 over your career. I've lost more money in one hand of poker than your account size was at its largest and handled it better than you handle the thought of making public play money calls.

If I am a failure what does that make you?

Rather than being a failure I would say I have acknowledged that I am not in a position to trade for a living and am pursuing other things full time, while I swing and position trade on the side. I also know where I stand in life from a realistic point of view. You really need to work on that.
 
baggerlord...

Your goals have nothing to do with me. I don't evaluate myself based on others goals. I'm a success because I'm doing what I want too.

Who knows maybe the "prestigious" hedge funds of today are the way of the past! Maybe they are the walking dinosaurs... who knows

but I'm doing things my way.. and that's all the matters,

http://www.youtube.com/watch?v=Q22N1dSXiN0
 
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