Successful Trading and Compounding - On Steroids
- Thread starter gmst
- Start date
There are many ways.
Second, it doesn't matter.
All situations are dynamic.
You state that a move is underway. To make money, you join in.
It is known that all moves do end. After that, you have taken the profit segment.
Practically speaking, a way to manage your position in a move is a very concrete thing.
Anyone can state their methodology and then another person can iteratively refine it to accomplish two things:
1. Remove problems, and
2. Add missing parts.
To comply with Ammo's quote of Jim, add the following pane to your charts:
A combo of DMI + and DMI -. (Welles Wilder, 1978)
A move starts BEFORE the two lines cross. Wait until the lines cross. Go long for a DMI + crossing above. Go short for a DMI - crossing below.
Notice you will be exiting on prior signals to your re-entry. What this means is that the EXIT signal is at a peak or trough of the DMI line with which you are associating.
If you have a belief in "chop", use this belief to exit any entry as soon as you have the emotional twinge (the CW set is anxiety, fear and anger) you associate with recognizing "chop".
:eek:they are all random in the beginning,just a bunch of lines on a chart,so you start playing wheres waldo and look for one thing,when you find waldo the game is just beginning,you try to find him on every chart, as time goes by waldo is easy to find, so to keep from being bored you look for his wife, then his kids,when you can spot the whole family easily,then it's not random anymore, every chart is the different but the same,random but not,find waldo..then..
Happy Thanksgiving and Delicious Turkey to everyone!
Hello everyone, thanks for great comments. There is a lot of wisdom in those comments.
I had 5 consecutive negative weeks. I never had such a string of bad performance before. Only time, I had such bad performance was in 2009, when I was starting out in trading. This has taken its toll on my psyche and I have decided that I will do non-frequent updates on the improvements that I make on my trading process, discipline etc. etc. but I won't necessarily do weekly updates of equity values for next couple of months. Just taking some time off to get everything back on track.
One positive thing to report is that I have managed to develop one more setup in ES. I had this idea around 3 months ago and I have been working on and off on this idea since then. Got done few things over the last fortnight, and now it seems I have one more tradeable thing. Results are very encouraging, just need to do a little bit more backtesting on longer historical data to validate that strategy holds long term.
Hello everyone, thanks for great comments. There is a lot of wisdom in those comments.
I had 5 consecutive negative weeks. I never had such a string of bad performance before. Only time, I had such bad performance was in 2009, when I was starting out in trading. This has taken its toll on my psyche and I have decided that I will do non-frequent updates on the improvements that I make on my trading process, discipline etc. etc. but I won't necessarily do weekly updates of equity values for next couple of months. Just taking some time off to get everything back on track.
One positive thing to report is that I have managed to develop one more setup in ES. I had this idea around 3 months ago and I have been working on and off on this idea since then. Got done few things over the last fortnight, and now it seems I have one more tradeable thing. Results are very encouraging, just need to do a little bit more backtesting on longer historical data to validate that strategy holds long term.
A major reason for my losses these last 5 weeks has been:
1) Unability to keep a profitable trade on for a long time. Example, yesterday I became bullish on Euro and bought it at 1.286 with stop at 1.272 (140 pip stop) and two targets at 1.31 and 1.34. My plan was to move the stop to breakeven once euro had moved 120 pips in my favor.
I rode it till 1.291 (for 50 pips profit) and then switched to short for an opportunistic trade. Goddammit - I never cut that opportunistic trade when it started to move against me and gave back 50 pips of profit. Finally cut it at 1.296.
Had I stick to my plan, I would have been sitting in 110 pips profit now with stop moved to breakeven, and as things appear, a very good chance of hitting my first target of 1.31 sometime next week.
2) Another example was on wednesday couple weeks ago when I shorted ES and covered and went long after it moved 10 points in my favor. I eventually lost 2 or 3 points on that day, instead of making 20 points for the day!!
Learning So, my take-home from these experiences has been that I really need to work on letting a trade run for major part of a day or for more than a day at times. Till I can learn this aspect, I should not trade longer hold period trades ideas, since eventually I will end up losing money while being right on direction and analysis. Being right on analysis but still losing money - this condition has a very deteriorating impact on psychology.
1) Unability to keep a profitable trade on for a long time. Example, yesterday I became bullish on Euro and bought it at 1.286 with stop at 1.272 (140 pip stop) and two targets at 1.31 and 1.34. My plan was to move the stop to breakeven once euro had moved 120 pips in my favor.
I rode it till 1.291 (for 50 pips profit) and then switched to short for an opportunistic trade. Goddammit - I never cut that opportunistic trade when it started to move against me and gave back 50 pips of profit. Finally cut it at 1.296.
Had I stick to my plan, I would have been sitting in 110 pips profit now with stop moved to breakeven, and as things appear, a very good chance of hitting my first target of 1.31 sometime next week.
2) Another example was on wednesday couple weeks ago when I shorted ES and covered and went long after it moved 10 points in my favor. I eventually lost 2 or 3 points on that day, instead of making 20 points for the day!!
Learning So, my take-home from these experiences has been that I really need to work on letting a trade run for major part of a day or for more than a day at times. Till I can learn this aspect, I should not trade longer hold period trades ideas, since eventually I will end up losing money while being right on direction and analysis. Being right on analysis but still losing money - this condition has a very deteriorating impact on psychology.
Another big mistake that I have done is that on some trades, I did not have a fixed stop and my leverage was high for not having a fixed stop on these trades. There were at least 10 trades like this over the last 5 weeks. I lost around 4-8% on each of these trades. This really set my account back.
Around a year ago, I used to lose a lot of money by frequent trading, quickly changing direction after being stopped. So, I would buy ES at 1350, sell at 1348, buy again at 1350, rinse and repeat and will get chopped. Now, I have overcome this way of losing money. I think over the last 5 weeks, there was not even a single trade on which I lost money due to stop and reversing and getting chopped. This is a positive development and helps with confidence that I have overcome this tendency that used to cause losses historically.
So, only major remaining practices that are causing me big losses as of now are:
1) Inability to sit in a winning position longer (say for whole of day)
2) Not having a hard stop on ALL my trades.
I will put in a simple rule to help me overcome 2nd issue: Always have a hard stop and if get stopped, then I can reenter at a better price, but it should be substantial better price and again this trade should also have a stop. No trades in the same direction after 2 consecutive stops for the day, as it means a strong trend is in works.
Now having identified these issues, next step is to fix these issues. My plan is to have 0 errors on above 2 issues till end of year.
Around a year ago, I used to lose a lot of money by frequent trading, quickly changing direction after being stopped. So, I would buy ES at 1350, sell at 1348, buy again at 1350, rinse and repeat and will get chopped. Now, I have overcome this way of losing money. I think over the last 5 weeks, there was not even a single trade on which I lost money due to stop and reversing and getting chopped. This is a positive development and helps with confidence that I have overcome this tendency that used to cause losses historically.
So, only major remaining practices that are causing me big losses as of now are:
1) Inability to sit in a winning position longer (say for whole of day)
2) Not having a hard stop on ALL my trades.
I will put in a simple rule to help me overcome 2nd issue: Always have a hard stop and if get stopped, then I can reenter at a better price, but it should be substantial better price and again this trade should also have a stop. No trades in the same direction after 2 consecutive stops for the day, as it means a strong trend is in works.
Now having identified these issues, next step is to fix these issues. My plan is to have 0 errors on above 2 issues till end of year.