System Trading Journal

ddefina,

Hey there, I am enjoying your journal and I know how difficult it is to post it. I just want to offer some words of encouragement as well as some advice.

First, when you have a system it is so easy to second guess it and pass on entries or take entries without proper signals. The most difficult thing to do is follow the system entry when you see something that makes you try to outguess the system. The thing is that when you have traded a system for a while you "think" you can spot the signals that fail and truth is you cant.

I will give you an example from todays trading. My system gave a long signal at 1030 ( NQ ) at 10:18 this morning. This trade had a stop of 1024 ( lod at the time ) and a target of 1045-1050. It went to 1038 and I moved the stop to 1025.50. If you go and look at any time frames chart you will see this trade went back to 1026 and bounced to 1034 and back to 1026 before eventually hitting my target zone ( 3 hours after entry, WITH me in it ).

I would have bet the farm that this trade was going to stop out while watching it, but I held firm as I have adapted a "stop or target" mentality when it comes to my first trade signal of the day.

All this to say I have done SO MUCH work on this particular signal that I simply refuse to exit a position until the stop or target has been reached. I do extensive research on signal probabilities and there in lies my "edge". My edge isn't the ability to read which signals will fail and which ones wont. My ONLY job is to enter the trade when the signals offers entry and exit at target or stop.

Main thing being, GIVE YOUR SYSTEM THE RESPECT IT DESERVES. I like to think that when I exit a signal early I am showing myself a lack of respect because I know how much work I put into the development of my signals and to sell that work short is a disservice.

Good luck and great trading.

AllenZ

_____________________________

" Have as much faith in your system as it has in you."
 
It's not to often that I have time to read or post here, but I have enjoyed your Journal.

IMHO since you are able to determine your entry/exit signals ahead of time, that you would be well served by using one of the IB software assistance programs, such as Bracket Trader or Auto Trader that have been discussed on this sight in the past.

Just update your entry or exit triggers and let it do the rest. Keep your hands off the key board until the price action warrants changing your trailing stop. Other than that, sit back and let it occur.

One other thing that you can do is enter your stop loss or trailing stop, then back up the screen one bar so that you are not watching the "live bar" until that particular bar is complete and the next "live bar" is starting. If the bar that was just completed, warrants you changing your stop, then do so, and then wait till the next bar is completed before looking at it. If the current "live bar" that is hidden off the screen hits your stop, then so be it.

I am convinced that the hardest thing about intra-day trading is watching the "live bar" bounce around and form different shapes. Watching the price action move up and down and all around is what makes one get anxious. If you are not watching the "live bar", then it's just like the market is closed. And when the market is closed, it is easy to make buy/sell decisions.

When I first started out several years ago, this simple technique helped me build up my discipline tremendously.

Good Luck with your trading.

Sean
 
Quote from AllenZ:


I would have bet the farm that this trade was going to stop out while watching it, but I held firm as I have adapted a "stop or target" mentality when it comes to my first trade signal of the day.

All this to say I have done SO MUCH work on this particular signal that I simply refuse to exit a position until the stop or target has been reached. I do extensive research on signal probabilities and there in lies my "edge". My edge isn't the ability to read which signals will fail and which ones wont. My ONLY job is to enter the trade when the signals offers entry and exit at target or stop.

Main thing being, GIVE YOUR SYSTEM THE RESPECT IT DESERVES.

" Have as much faith in your system as it has in you."
More...

Well said Allen. Completely agree.
 
Quote from phantom:

when that $3,000 - $4,000 day happens with your system, i'd be willing to bet that you don't capture any of it or only a small portion because your discipline following your systems sucks.
More...

That is correct (LOL). And I think that's why most traders lose money even if they have a winning edge. They hold the losers just fine, but fold too easy on the winners. Hopefully my losses can help somebody see how useful discipline is.
 
Thanks Allen. As the disparity grows between the system and myself, it's making me more determined to not break the rules. Today wasn't too bad, but I need some work. I agree that this is a game of statistics and you can't know the outcome for sure, so you should keep your hands off and follow the plan (especially when it's outperforming you.).

Quote from AllenZ:
ddefina,
Hey there, I am enjoying your journal and I know how difficult it is to post it. I just want to offer some words of encouragement as well as some advice.
First, when you have a system it is so easy to second guess it and pass on entries or take entries without proper signals. The most difficult thing to do is follow the system entry when you see something that makes you try to outguess the system. The thing is that when you have traded a system for a while you "think" you can spot the signals that fail and truth is you cant.
I will give you an example from todays trading. My system gave a long signal at 1030 ( NQ ) at 10:18 this morning. This trade had a stop of 1024 ( lod at the time ) and a target of 1045-1050. It went to 1038 and I moved the stop to 1025.50. If you go and look at any time frames chart you will see this trade went back to 1026 and bounced to 1034 and back to 1026 before eventually hitting my target zone ( 3 hours after entry, WITH me in it ).
I would have bet the farm that this trade was going to stop out while watching it, but I held firm as I have adapted a "stop or target" mentality when it comes to my first trade signal of the day.

All this to say I have done SO MUCH work on this particular signal that I simply refuse to exit a position until the stop or target has been reached. I do extensive research on signal probabilities and there in lies my "edge". My edge isn't the ability to read which signals will fail and which ones wont. My ONLY job is to enter the trade when the signals offers entry and exit at target or stop.

Main thing being, GIVE YOUR SYSTEM THE RESPECT IT DESERVES. I like to think that when I exit a signal early I am showing myself a lack of respect because I know how much work I put into the development of my signals and to sell that work short is a disservice.

Good luck and great trading.

AllenZ

_____________________________

" Have as much faith in your system as it has in you."
More...
 
I'll give your advice a try. Currently I try to use alarms and not watch the charts until a price level is reached, then I move my stops. I'm going to look into automation soon I think if I can't follow it myself.

Quote from Sean Juan:

It's not to often that I have time to read or post here, but I have enjoyed your Journal.

IMHO since you are able to determine your entry/exit signals ahead of time, that you would be well served by using one of the IB software assistance programs, such as Bracket Trader or Auto Trader that have been discussed on this sight in the past.

Just update your entry or exit triggers and let it do the rest. Keep your hands off the key board until the price action warrants changing your trailing stop. Other than that, sit back and let it occur.

One other thing that you can do is enter your stop loss or trailing stop, then back up the screen one bar so that you are not watching the "live bar" until that particular bar is complete and the next "live bar" is starting. If the bar that was just completed, warrants you changing your stop, then do so, and then wait till the next bar is completed before looking at it. If the current "live bar" that is hidden off the screen hits your stop, then so be it.

I am convinced that the hardest thing about intra-day trading is watching the "live bar" bounce around and form different shapes. Watching the price action move up and down and all around is what makes one get anxious. If you are not watching the "live bar", then it's just like the market is closed. And when the market is closed, it is easy to make buy/sell decisions.

When I first started out several years ago, this simple technique helped me build up my discipline tremendously.

Good Luck with your trading.

Sean
More...
 
Quote from ddefina:



That is correct (LOL). And I think that's why most traders lose money even if they have a winning edge. They hold the losers just fine, but fold too easy on the winners. Hopefully my losses can help somebody see how useful discipline is.
More...

i think you should set goals in terms of following your system. each time that you want to do something that is NOT a signal from your system you MUST make a conscious effort NOT to do it. you have to realize that you have a profitable system and that you must follow it. realize your edge is your system and having the ability to follow that system. boring, hell yeah, but your bank account will thank you. successful trading involves A LOT of sitting and watching and waiting for a signal. then when you get that signal acting upon it and only it.
 
Quote from phantom:



i think you should set goals in terms of following your system. each time that you want to do something that is NOT a signal from your system you MUST make a conscious effort NOT to do it. you have to realize that you have a profitable system and that you must follow it. realize your edge is your system and having the ability to follow that system. boring, hell yeah, but your bank account will thank you. successful trading involves A LOT of sitting and watching and waiting for a signal. then when you get that signal acting upon it and only it.
More...

Or you could let the system do its job and trade in a discretionary way only to improve its performance when you think you can do it. For example, your system tells you to go long and you do so, but soon find yourself in a situation that you are temporarily down, say 6 pts, and your stop-loss is 9 pts (the actual today's case of one of my systems that does very well), and you think that you can buy another lot because you see signs that the market reached the daily bottom. Yes, you may call it averaging down, but as long as you are confident that the system has called the market direction right, I would call it an act of confidence in your system. And of course, you would exit with two lots when your original stop-loss is violated.
 
I'm sitting here with a 9 point profit on 2 contracts, but my system says hold still. With 9 points being an amazing move in this market it's tough to sit still and not sell. But in the interest of following my system, I've moved my stops to a tick above breakeven awaiting the next signal.

It's been very unusual to not get some 20-30 point days this month (which my system survives on), but the month is not over yet. I feel like I'm using an 8-guage shotgun to hunt squirrels right now.
 
You must log in or register to reply here.
Back
Top