Pete's Place
- Thread starter PetaDollar
- Start date
Psych Demands:
Early: Has to have the discipline to make only that one trade. Makes $$$ in large chunks, but they are few and far between. Most of his trades are +/- a point.
Trend: Has to go from zero to 60 when the market says to, without fear. Has to keep pressing, until the market says stop. Furthermore, has to lay off when the market says so.
Reversal: Has to sit back and watch big moves. Has to be objective enough to find true signs of a reversal, and be patient once they start to appear. At the same time he can't be too late or he'll miss the boat. For this reason, the critical timing and discipline aspect, Reversal trader is the most difficult.
Early: Has to have the discipline to make only that one trade. Makes $$$ in large chunks, but they are few and far between. Most of his trades are +/- a point.
Trend: Has to go from zero to 60 when the market says to, without fear. Has to keep pressing, until the market says stop. Furthermore, has to lay off when the market says so.
Reversal: Has to sit back and watch big moves. Has to be objective enough to find true signs of a reversal, and be patient once they start to appear. At the same time he can't be too late or he'll miss the boat. For this reason, the critical timing and discipline aspect, Reversal trader is the most difficult.
New daily worksheet; observations are pre-numbered so I can reference them in the "trades" section.
They can't be traded simultaneously without multiple accounts; e.g. if Early Trader hooks on to one, he's just going to hold on until he sees definite signs of a reversal. Trend Trader would be taking little bites of the move during that time.
Your question was really HUGE, general, and ended with "etc." For now the basic strategies are posted. As for tactics, "the devil is in the details" as they say. Each one requires slightly different entry and stop management. I have a boring, simple list of different entry and exit methods, and I pick out methods to suit each occaision. I'll continue to post the details of the trades this week so you can see what I mean.
It depends on what you are doing.
If you have discretionary entries, like I do, then having your head straight (being objective) is of utmost importance.
If you are executing a mechanical system, you have to be able to take the drawdowns and stick with the system, and resist changing things on the fly.
Your task is really huge as well, at least as stated. You're planning to trade three distinct strategies, each with its own set of tactics, and I assume its own set of entries, exits, trade management schemes, etc. Unless you're highly specific with regard to all this, before you begin, I'm not sure what you will learn from the experience.
I like the concept of a trading model where you have mechanically triggered entries (and you must take each one), but you manually manage the exit. There is a basic profit objective and stop loss, but discretion can be used to take profits later than the objective or to take losses earlier than the stop. In other words, you use your discretion to cut losses short or let profits run.
This type of trading model psychologically has some benefits:
1) the entries are system / method generated and as such you may be less inclined to become attached to the position.
2) You employ your discretion to increasing profits and decreasing losses.
3) It is easy to benchmark your actual performance against the system/method's ideal performance when not using discretion to see if you are really improving or hurting the overall system results.
One of the downfalls is that there is a tendency to not want to take all the signals for one reason or other, particularly after a string of losses, which signals may turn out to be the more profitable ones.
You can also make a good case for discretionarily trading both exits and entries around a mechanical system's basic rules. Of course the shorter timeframe that the system uses, the more likely you are to "miss" entries and exits by waiting to execute at a more favorable price, but like the above method - this method can be easily benchmarked against the ideal system's results.
And then if you trade discretionarily, it comes down to the inner game much more because every decision is your decision, and breaking up (you and your decision) is hard to do.