Rol's Trading Journal
- Thread starter Rol
- Start date
Greetings d08 and Kohanz, I wondered how long it would be before those following along wondered what happened to me 
. I am in my usual DD along with the market, but it is worse due to not following my system (12K DD). I thought keeping this journal would make me stick to my system better, but it has not. I originally intended my strategy to be completely passive and when I try hedging discretionary, it spills over into all of my trading, and I lose control. A major goal of mine was to see if a 100% mechanical system is possible. I am reading Alexander Elder's Trading For A Living, and he talks about losing traders as alcoholics, and to be a successful trader you need to view yourself as a recovered alcoholic for the rest of your trading career. When I start trading discretionary, I feel like a recovered alcoholic that starts drinking again. I am net negative with my shorting efforts for the year, so hedging has not worked for me. It might work for others, but I have to acknowledge and respect my weaknesses. It may seem dumb to others, but I feel more comfortable viewing myself as a Captain that has the courage to go down with his sinking ship, confident that it is seaworthy, rather than abandoning ship at the first signs of an approaching storm, to cling to any driftwood that floats along, hoping the sharks don't get him. I have decided to withdraw about 30K, to pay off an auto loan, a credit card, and a loan from my 403B. I also think my goal of trying to hit 100K by end of year has not helped and may have contributed subconsciously to my discretionary trading. At least for me, setting dollar goals is not helpful because I don't know how the markets will behave. Traders should get use to sporadic gains and losses as the norm. I may start a new journal beginning the New Year with a clean slate. I feel like I need a break. Switching to IB will have to wait. I would likely need closer to 130K anyway to use portfolio margin effectively because a DD could put me under 100K which would trigger a margin call. Looking on the bright side, my system looks as if it took some nice entries in futures, which often end up profitable.
. I am in my usual DD along with the market, but it is worse due to not following my system (12K DD). I thought keeping this journal would make me stick to my system better, but it has not. I originally intended my strategy to be completely passive and when I try hedging discretionary, it spills over into all of my trading, and I lose control. A major goal of mine was to see if a 100% mechanical system is possible. I am reading Alexander Elder's Trading For A Living, and he talks about losing traders as alcoholics, and to be a successful trader you need to view yourself as a recovered alcoholic for the rest of your trading career. When I start trading discretionary, I feel like a recovered alcoholic that starts drinking again. I am net negative with my shorting efforts for the year, so hedging has not worked for me. It might work for others, but I have to acknowledge and respect my weaknesses. It may seem dumb to others, but I feel more comfortable viewing myself as a Captain that has the courage to go down with his sinking ship, confident that it is seaworthy, rather than abandoning ship at the first signs of an approaching storm, to cling to any driftwood that floats along, hoping the sharks don't get him. I have decided to withdraw about 30K, to pay off an auto loan, a credit card, and a loan from my 403B. I also think my goal of trying to hit 100K by end of year has not helped and may have contributed subconsciously to my discretionary trading. At least for me, setting dollar goals is not helpful because I don't know how the markets will behave. Traders should get use to sporadic gains and losses as the norm. I may start a new journal beginning the New Year with a clean slate. I feel like I need a break. Switching to IB will have to wait. I would likely need closer to 130K anyway to use portfolio margin effectively because a DD could put me under 100K which would trigger a margin call. Looking on the bright side, my system looks as if it took some nice entries in futures, which often end up profitable.Sad to hear that. Your journal was the most interesting one, not only because I follow a similar type of strategy but because you offered the most insight into the development process.
We've all had the "itch" to interfere and it's one of those things you just need to control. You have to be "perversely" disciplined about it, in that you have to have blind trust in your system. I guess since you were successful or at least a breakeven trader with your discretionary methodology, it gave you extra confidence which ended up hurting you when trading auto.
In my view, hedging is needed only in the following cases: drawdown sensitive fund managers who need to offset risk and are willing to sacrifice returns or when it's a part of the strategy. The proper way to hedge an RTM strategy is to use another trending one which more often than not wouldn't correlate, easier said than done.
Hope to see you going again in 2012.
We've all had the "itch" to interfere and it's one of those things you just need to control. You have to be "perversely" disciplined about it, in that you have to have blind trust in your system. I guess since you were successful or at least a breakeven trader with your discretionary methodology, it gave you extra confidence which ended up hurting you when trading auto.
In my view, hedging is needed only in the following cases: drawdown sensitive fund managers who need to offset risk and are willing to sacrifice returns or when it's a part of the strategy. The proper way to hedge an RTM strategy is to use another trending one which more often than not wouldn't correlate, easier said than done.
Hope to see you going again in 2012.
You can read my new journal here Hammering away, slow and methodical.