I enjoy reading your journal!!
Do you plan on trading again this week or are you taking some serious time off?
Best of luck
Do you plan on trading again this week or are you taking some serious time off?
Best of luck
The Evolution of an E-mini Trader
- Thread starter Huios
- Start date
Back trading tomorrow 1, although I don't do the chat room much. I find it too distracting at this stage of the game. I'm too busy reading what everybody is saying, and miss my trades!!!! Tell wildman I said "Kalymera", and nitro and glass I said "Hey".
My expectancy spreadsheet is done, and man, is it cool. Here are the results, and some of my thoughts.
All this is for the month of June.
My R was 1 ES point, so my numbers are based on an ES point, which is worth $50.00. My positive expectancy was .74 of a point. My negative expectancy was .82 of a point. Subtract the negative from the positive and you get the total expectancy for the system, which for the month of June was -.08 of a point, which means for every point I risked, I lost .08 of a point. To say it another way, for every dollar I risked, I lost 8 cents.
If I were to throw out (I wish) my two biggest losses, a 4 and a 4.5 loss, my expectancy would jump to a positive .02 pt per pt risked, or a positive 02 cents per dollar risked. However you want to look at it.
If I did not have my big 7.5 gain, my expectancy would be -.16 pt. per pt risked, or negative 16 cents per dollar risked.
So, I look at my losses. Can I expect that 2% of my trades will be 4.5R losses or there abouts, or will there be more, or less of them? Were they psychological mistakes?
What about my winners? Can I expect more than 1% will be 7.5 pt. winners? Am I cutting my winners too short? Another psychological mistake?
These are questions I will be looking at in my trading this week.
I will be looking at the 5 min. for "stalking" my setups, and the 1 min. for my "trigger" for entries. I will be looking to exit based on the 5 min. chart also. Gonna give the trade more room to work, in the beginning, and during the trade. S/R lines will play a part, along with some of the prop GET features.
Something is brewing in my brain as it relates to trading. I donât know what it is, but something is happening.
Rock and Roll.
My expectancy spreadsheet is done, and man, is it cool. Here are the results, and some of my thoughts.
All this is for the month of June.
My R was 1 ES point, so my numbers are based on an ES point, which is worth $50.00. My positive expectancy was .74 of a point. My negative expectancy was .82 of a point. Subtract the negative from the positive and you get the total expectancy for the system, which for the month of June was -.08 of a point, which means for every point I risked, I lost .08 of a point. To say it another way, for every dollar I risked, I lost 8 cents.
If I were to throw out (I wish) my two biggest losses, a 4 and a 4.5 loss, my expectancy would jump to a positive .02 pt per pt risked, or a positive 02 cents per dollar risked. However you want to look at it.
If I did not have my big 7.5 gain, my expectancy would be -.16 pt. per pt risked, or negative 16 cents per dollar risked.
So, I look at my losses. Can I expect that 2% of my trades will be 4.5R losses or there abouts, or will there be more, or less of them? Were they psychological mistakes?
What about my winners? Can I expect more than 1% will be 7.5 pt. winners? Am I cutting my winners too short? Another psychological mistake?
These are questions I will be looking at in my trading this week.
I will be looking at the 5 min. for "stalking" my setups, and the 1 min. for my "trigger" for entries. I will be looking to exit based on the 5 min. chart also. Gonna give the trade more room to work, in the beginning, and during the trade. S/R lines will play a part, along with some of the prop GET features.
Something is brewing in my brain as it relates to trading. I donât know what it is, but something is happening.
Rock and Roll.
Huios - Unless the trades you ran the numbers on were all taken with the same entry and exit rules - ie. consistent - then I would have to ask what do you believe the resulting expectancy is actually telling you?
Another way of saying it would be to ask what level of confidence would you have going foward with regard to your entry and exit rules? If the trades you've taken thus far represent all manner of variation and exception to your rules (or a changing set of rules) then why even look at an expectancy number?
Take 30, 50, or more trades executed flawlessly (with regard to following a single set of rules) and THEN calculate expectancy. Otherwise you may be mislead by a number that has no real bearing.
Another way of saying it would be to ask what level of confidence would you have going foward with regard to your entry and exit rules? If the trades you've taken thus far represent all manner of variation and exception to your rules (or a changing set of rules) then why even look at an expectancy number?
Take 30, 50, or more trades executed flawlessly (with regard to following a single set of rules) and THEN calculate expectancy. Otherwise you may be mislead by a number that has no real bearing.
First, it is a beginning. It tells me things nothing else can, and gives me questions to think about. I don't hold hard and fast to anthing, at this point. But I do take to heart some of the wisdom that is on this board.
Second, I think anyone would be hard pressed to flawlessly execute more than 30 trades consecutively, unless you are a systematic systems trader, whose computer spits out your orders directly to your broker (who is also flawless), who automatically puts them into an electronic market (that never goes down), and all you do is lie on the beach. (ok, a little overboard)
Third, I don't believe this game is about being flawless, it is about playing the game consistantly. Which, I am beginning to see, is in itself, a separate game to master.
Of course, all this is just my opinion, based on limited knowledge, subject to change, and like my mother-in-law says, "Everybody has two things, opinions and defecating orifices" (she uses a different word).
Yes trading is about interpreting incomplete information, using imperfect hardware, software and other tools. The aim is to implement an imperfect approach based on interpretation of the market action and do it consistently. Even with all this imperfection and lack of confirmation, traders can still make money.
