temptation!?

[hermit_trader]

I make a plan and try to stick to it. But the market tried to give me some temptation breaking my own rules. It is a very challenging game. Here is an example:

My plan is only enter when the 5 moving averages are sorted. But there are some occasions that only 4 of them were sorted and if I put on a trade then I could make 6 or 7 points. Another occasion that all 5 of them were sorted and I put on a trade, I only got 2 or 3 points. Ah! Then I got a feeling that I don't need to stick to my own plan and still could make a even better trade.

 

[bungrider]

http://www.elitetrader.com/vb/showthread.php?s=&postid=208399#post208399

 

[acrary]

It's only temptation if you're doing this and you don't want it to be part of your plan. I have multiple systems that I choose to front run, override, and pass on trades. I also do some pure discretionary trading outside of my systems.

What I do is keep a log for every system; it's entry/exit, my execution around that system, and the net improvement. I also keep a log of discretionary trades. I love to trade, so this allows me to be involved with my systems in an active way. I'm also competitive, and this gives me a way of competing against myself and helps prevent falling asleep during the day.

I can see in the logs that my executions are improving my results well beyond the results of the system. If I didn't, I'd either contract out for someone to execute my stuff, or I'd just do a pure mechanical approach.

 

[tfmoney]

I agree with you, In addition to this one of my problems has been forcing trades. When I can't find the obvious I have found myself forcing trades, and not sticking strictly to my trading plan. If you can't find the prefect trade that meets you trading plan it is a good idea not to trade!

 

[bungrider]

yep, that's another problem with this market. not many opportunities. i've been keeping my hands AWAY from my computer, waiting for setups, and thinking more about some new setups...

 

[opm8]

Quote from bungrider:

http://www.elitetrader.com/vb/showthread.php?s=&postid=208399#post208399

The post that this link points to is definitely one of the most helpful things I've ever read on this forum.

One other point I'd like to add that made a big difference in my trading (slightly off topic here) is to never give back more than 50% of my profits on a trade. ie. if I'm in a trade that's moved two points in my favour (say I have a 4 point target) I move my stoploss to one point away. If it retraces I'm out. Maybe it'll eventually get to my original target but this way I'm guaranteed profit and that's very important to me, especially in this crazy pre-war market.

--opm8

 

[harrytrader]

You read in list of "101 rules from Anonymous trader" that you must make a trading plan. Sure but those kind of list is just a short reminder. The important is not to make a trading plan per se but to make a good trading plan. And how to do that just requires an entire book. In fact each person has his own definition and criterias. As for myself a plan could be, by using an image:

- a map like the plan of London. Concretely they are my model charts where points are joined by lines exactly like cities are joined by subways. Maps have different scales so do my maps.
- an estimation of the environment and "atmospheric" conditions . Concretely I have color trends defined on my pseudo elliott charts for different scales so that I know the direction of the winds on local and global regions. Possibly I know the dynamic of the winds that is to say how the wind will change direction at some points.
- a set of scenarios with a set of preconditions. Preconditions are requirements necessary to validate a scenario. For example a precondition on opening.
- a strategy for each scenario: wait, buy, sell, stop

etc.

P.S.: what is important is to note details in a journal. This phase is a hard work much more than preparation phase that's why I bet not much people do it. Also it is more important to note the failure than the success. It is failure that will show you where to improve things, since improvment is the goal, the goal is not contemplation of your good work

Quote from hermit_trader:

I make a plan and try to stick to it. But the market tried to give me some temptation breaking my own rules. It is a very challenging game. Here is an example:

My plan is only enter when the 5 moving averages are sorted. But there are some occasions that only 4 of them were sorted and if I put on a trade then I could make 6 or 7 points. Another occasion that all 5 of them were sorted and I put on a trade, I only got 2 or 3 points. Ah! Then I got a feeling that I don't need to stick to my own plan and still could make a even better trade.