The Bad Trader?

K

K-Rock

About a year ago I (a newbie) developed an ES emini day trading method that seemed to be effective. As a result, my account grew consistently for about three months. However, as I began to trade more size and started to read more about risk management, to reduce risk, I began to tweak my strategy accordingly. Unfortunately, I believe all the tweaks completely ruined the system. Now, a year later I find myself back at square one with a similar method that seems to be working again. However, it’s a high risk strategy and is contrary to many trading truisms (and tweaks that were made to the original method). For example:

1) It's a counter-trend strategy (seeking to pick tops and bottoms).

2) It uses very wide discretionary stops (even for minimum rewards).

3) It’s not extensively back tested (less than 30 days), but based on real time observations.

4) It has predictive entries near perceived support and resistance levels, and allows for averaging down or up and targets are adjusted accordingly.

I’m curious if one could trade this way successfully (without getting into my specific method) or is it just a matter of time before the truisms kick in and I blow up my account?
 
Yes it is just a matter of time.

Since you don't have an edge, your system will at some point just stop working, and you will know that because the string of consecutive losses will grow to a point where it is psychologically too much for you to handle. Depending on your account size, that point may come when you have just about depleted your funds. We call that "blowing out your account". Always an educational experience....

My suggestion, turn lemons into lemonade by making an introspective film about the experience. You know, you mount a camera in your trading room and put in a chalk board and you mark each consecutive loss and then write down your ever declining balance. Then the close-ups of your anguished face as you realize that all your hard work is going straight into the toilette. The final scene is where you are living in a dumpster behind the local fast food place, eating scraps, using their bathroom to bathe, donating blood and volunteering as a subject for medical experiments to earn some spending money.

Who knows, your film might make it to the Sundance festival and you could become the next (what the hell is that guys name) anyway. I am sure you can make this work somehow.

Good luck, and let us know where you land. Oh and if you have a choice, choose an Arby's dumpster rather than a McDonalds....

Steve
 
Perhaps the gypsy lady around the corner that reads Tarot Cards will know, I will give her your screen name!
 
Quote from steve46:

Yes it is just a matter of time.

My suggestion, turn lemons into lemonade by making an introspective film about the experience. You know, you mount a camera in your trading room and put in a chalk board and you mark each consecutive loss and then write down your ever declining balance. Then the close-ups of your anguished face as you realize that all your hard work is going straight into the toilett. The final scene is where you are living in a dumpster behind the local fast food place, eating scraps, using their bathroom to bathe, donating blood and volunteering as a subject for medical experiments to earn some spending money. I have been there, done that and still have the T-shirt. :D



Steve
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Not too sympathetic but pretty funny. I have actually been working on a screenplay that is eerily similiar.
 
When I first started to trade this method I had 30 consecutive winning days and over a 90 day period only about 5 losing days. To date the revised method I’m trading has produced 4 consecutive winning weeks. I believe I have discovered an edge (I see price react to it everyday) however I’m just trying to reconcile how to best exploit it.
 
Quote from K-Rock:

About a year ago I (a newbie) developed an ES emini day trading method that seemed to be effective. As a result, my account grew consistently for about three months. However, as I began to trade more size and started to read more about risk management, to reduce risk, I began to tweak my strategy accordingly. Unfortunately, I believe all the tweaks completely ruined the system. Now, a year later I find myself back at square one with a similar method that seems to be working again. However, it’s a high risk strategy and is contrary to many trading truisms (and tweaks that were made to the original method). For example:

1) It's a counter-trend strategy (seeking to pick tops and bottoms).

2) It uses very wide discretionary stops (even for minimum rewards).

3) It’s not extensively back tested (less than 30 days), but based on real time observations.

4) It has predictive entries near perceived support and resistance levels, and allows for averaging down or up and targets are adjusted accordingly.

I’m curious if one could trade this way successfully (without getting into my specific method) or is it just a matter of time before the truisms kick in and I blow up my account?
More...

Keep it simple, kinda like a car that has to many bells and whistles will have more potential to break.

Use it till it no longer works. Trading methods that work now may not work in the future.

I did a similar thing with my trading method. I made it to complex and this reduced my profits substantially. I went back to what worked.

Too much tweaking creates illusions, and you lose track of the reality.
 
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