The eroding profits while reducing losses tradeoff is a real sticker. I sometimes think that if I go over the same thirty days' work one more time . . . But going back over the same road again and again, trying various approaches, is the only way I know how to make progress, then apply whatever I come up with to a new set of days. Sometimes, though, I get stuck, which is where threads like this help me to back off and look at the same old same old in a different way, possibly rejuggling what I already do and either modifying it in some way or adding something new.
But reducing losses while increasing profits seems to me to be less a matter of tweaking a mechanical system and more a matter of trying to improve a discretionary system. For example, there's the whole lunchtime thing. Used to be you could set your watch by that 1230 reversal. Those were the days. And even now there are occasionally some nice reversals and trends during that time.
But looking at a month's worth of charts, or more, in an objective and rational way, the percentages just aren't there. and since it's difficult enough to maintain the morning's focus throughout midday, one is most likely to miss the correct entry anyway.
What I've been missing most of all is what I call "velocity" or energy. With rare exceptions, this is to be found only in the morning hours, and often not even then. Granted there are trends and reversals to be found even on those days when it seems as though everybody's gone home. But I get real nervous watching even a 1m bar just sit there and sit and sit and sit, locked into a 3 pt range for a half hour. I'm hardly addicted to action, but please!
When one looks, then, at reducing losses and increasing profits, one way, at least for me and at least for now, is simply to stop at 1130 to 1145. Just stop. If nothing else, it helps one learn whether he's trading to make money or trading for the action.
--Db
I'm not very good at looking at long runs of failures either, and this way I manage to keep my blood pressure down 