Taking all of the trades vs taking trades/selling based on feelings.

[K-Pia]

"The most important thing is to get the frame right. Otherwise, you’re going to get the right answer to the wrong problem."

 

[Visaria]

I have 0 problems following my plan on the loss side because if I'm wrong the stock usually collapses. My biggest problem is being up and taking too small of gains just to see the stock blow past my expectations. Maybe just because I don't want to see it pull back and go negative on me. All I can say is I'd be up 10 times more than I am right now if I would have followed the strategy like a robot. I believe nobody is perfect enough to realize 100% and even the best probably only realize 60% of what their strategy calls for

Take half of your position off at target. The rest you can use a trailing stop.

Your equity curve will become more volatile but your long term profits will be far greater.

 

[Handle123]

I have a completely mechanical strategy that I use and my scanner probably throws 1-3 trades a day that have good risk/reward. There are very few differences between patterns that work and patterns that don't but over the past week I've probably only taken 5/16 of the trades and often times ones that I'm skeptical about end up working and going much further than i would have expected. Some days 2/3 may fail and other days all of them will work. my current hit rate is 4/5 and out of all of the trades somewhere around 12/16 would have worked and hit the target. Obviously none of you know my strategy but my question is, if you took all of the trades and traded perfectly (Let it either kick you out or let it hit your target which is hit most of the time). Would this be much better than taking profits based on feelings? What would you do if you bought a stock and you're up 30 cents but your target is 50 and it begins to collapse? and then ends up kicking you out and tanking. Rather than having a mathematical projection would it just be better to use a 25 period moving average on the 1 minute chart or something? or even both

I have kept journals for over fifiteen years of "taking dumb trades" or cherry picking trades, I am running at 95% losers. But in the fifteen years, I have followed my Trading Plan, but ever time I get urge to do something or not do something, I write it down. I am a good systems trader that one day will be nearly all automated, world we live in.

If you have well back tested Trading Plan, you should just surrender yourself to the fact the Trading Plan knows better than you. And it is hard to "throw up your hands" and just take all the trades. I ave down on all my trades, I have done massive back testing to be able to just take the trades, after awhile you become like a program and just do it without thinking, you train or brainwash your brain this way, end result you do better.

Since you still have questions, you need to do much more back testing to have better Trading Plan, you don't have all the answers to your questions.

 

[rajesheck]

I would suggest that your emotions is the best faculty to guide you provided you master your emotions

http://www.elitetrader.com/et/index...motional-intelligence-than-emotionless.299723

 

[Stockmarketmap]

- don't quit your day job
- don't use leverage
- migrate / transition over to positioning in longer term trends reflecting the underlying growth of the U.S. economy / equity markets
- much of performance deterioration is letting emotion guide decisions rather than strategy ( strategy that has an empirical foundation )
- utilize strategies whose transactions occur on predefined dates throughout the year. This relieves being a "hostage" to the markets.

James
Director of Quantitative Research
XOXOX
Boulder, CO

 

[pk3r1234]

My loses are totally under control I will never take a bad loss because of the amount of discipline I have. My problem is my profit taking strategy, I believe if you're using profit targets it's predicting. Even if they often get hit, but indicators don't help either. From all of the research I've done I've never found one indicator outside of maybe a moving average to be of any use. In fact, you can simply change settings and all of them are the same.

 

[qxr1011]

"The most important thing is to get the frame right."

Correct !

But wait, why don't you explain how to do that...

 

[Xela]

I believe if you're using profit targets it's predicting.

I don't understand this perspective - why is using profit targets any more predictive than not using profit targets? I see that it's arguably, in one sense, more specifically predictive, but both are surely predictive, if you're using the word predictive loosely enough (and if you're not, neither is predictive).

My perspective is that I can't, and don't, and make no attempt to predict the outcome of any individual trade other than as a probability-function, but I can predict the collective outcomes of my next 300 trades to within a percentage-point or two of their total outcomes. That's the power of statistically significant sample-sizes for you.

indicators don't help either.

They don't help me, certainly (but there are others - including some making a living - whose experience is different).

In fact, you can simply change settings and all of them are the same.

Here, you're seriously over-generalising, in my opinion. Some measure and display very different parameters from others. I can readily appreciate the value, to some people, of some indicators, such as "average true range" and even "Donchian channels", though I admit I have no personal use for them.