Tradersaavy's Discipline Journal

Hello version and wanderer.

Thanks for the interest.

I kind of feel guilty for not posting in the journal or explaining what I have been doing. I do try to be as communicative as possible but have slacked on many things recently including updating the "discipline journal". (getting sick didn't help either)

I have been working on a new system.
No, not because the current one has stopped working. The current one is just fine.The system in the journal has 62 trades in November so far with a net of 266 YM points, even after the bloodbath on Friday with the downtrend day. Friday was -63 points with 2 breakeven, 1 winner and 5 frickin losers.The system is profitable on a monthly basis even with the 3 or 4 typical trend days every month that are always bad days.
I also found that since I am trading the system very mechanically and my discipline has been exactly what it needs to be: TAKE 15 POINTS, GET STOPPED OR GET OUT IF THERE IS AN OPPOSITE SIGNAL, the journal has become kind of moot. Also, there weren't many participants besides myself so there weren't many motivators left to update the journal.

The "simple system for beginners" thread caught my attention because the new system that I am working on is a break out sytem. I was looking at the 14:00 eastern time move and trying to incorporate it into my breakout system but have shifted gears away from that for now. I am working like crazy in backtesting by hand. I do all backtests by hand. This takes up a LOT of time. But, is well worth it.

I was reading some posts by some Forex traders on another web site and they all have great trend following sytems. But they all complain about how to filter out the non-trending periods which chop them to death. Of course with my systm, if I could filter out the trend days, it would be GREAT too.

I do see how playing the market with what is in front of you is a true survival technique. I suppose some traders can do that. I can not. At least at this point in time. Therefore, I will continue to trade my current system and create new ones that are based on a theme: trending, reversal or rangebound and try to find the best filter that I can to limit the downside when the conditions aren't prime for the theme of the system.
 
Quote from tradersaavy:
Also, there weren't many participants besides myself so there weren't many motivators left to update the journal.
More...
tradersaavy, there are probably many more "participants" in your journal than you're aware of :)

I for one, am fascinated by your journal and the fact that you have had virtually noone pick on you or flame this thread. I rarely post because of that. But you need to know that there are people behind you watching your journal and cheering you on.

Keep up the good work... keep posting your journal :) If you need motivation, we'll post :D
 
Well, well, well.

Guess what ?

I am going to kick this journal back into gear again.

I have modified the trading methodology listed in the beginning of this journal to produce better results. I have been using this live since 12/7.

I will start posting here live starting tomorrow.

The 2nd trading methodolgy listed in this journal will be utilized for my IRA account being that it is slower and will not (usually) produce trades at the same time as the updated method. The IRA account trades will not be posted here.

The updated/new method looks for the following:
YM tick chart.
Sharp move up/down. (discretionary)
Divergence from indicator to price action.
Entry signal is when the indicator turns up/down against the current trend after the previous conditions are met.
Profit target is a band. (like a Bollinger or Keltner)
Stop is 2 ticks past the last swing high/low.


Today there were 5 trades.
Winners of: 16,12 and 14 points.
Losers of : 9 and 11 points.

The only thing that makes me a little nervous about this is that I could not backtest it as much as I would have liked. Esignal has only a certain amount of back data for tick charts.
I was tinkering with this since October so I do have a good feel for it and I suppose you could say that just from experience, it should perform well.
From 12/7 until today it has produced 298 YM points from 53 trades.
We'll see.
I'm sure that trend days will still be a problem for this method, but, like before, the other days of the month should more than make up for it.

The purpose of posting here is because when I post in journals, I always learn something. Being that this method will probably need some tweaking, it seems like a good idea.

 
I have joined a futures trading room.

I will be posting live trades in the room.

I may not have time to post live trades here.

I'll look for a way to print the trades from the room here though and do analysis with charts.

If this is too time consuming or is not beneficial to me or any one else I will not do this. TBD.
 
Quote from tradersaavy:

I have joined a futures trading room.
More...


Anyway you can tell us what room you have joined? If not here,
then maybe by PM? Don't want you to be chastised as being a
spammer... :p
 
So here is 12/20's trades.

I have something to figure out here.

I am trying to decide which entry technique to use.

One is entering on a trendline break.

The other is entering on the divergence indicator's trigger line crossing.

The trendline break confirms the divergence via price action. I know this method works as I have used it for a long time.

Entering on the indicator trigger gets in the trade a lot earlier, produces a better risk:reward ratio, but will produce more false signals.

Divergence can go on and on before price reverses or stalls. This is why a trendline break is good because price is confirming things.

This indicator signal can produce significantly more points though so it is very attractive. As I mentioned in a previous post I only have a couple of months data on this entry method though because of the lack of history on tick data from Esignal. But the results have been very good.

I may have to use the trendline break method and just paper trade the other until I have a coule more months of info.

Oh, on stops:

The trendline break uses an 11 point stop or previous swing high/low.(whichever is less) The 11 points are based on current volatility.

The indicator entry uses the previous swing high/low as a stop. The stop size is usually 5 or 6 points. Sometime is goes to 10 points.

The trendline method would have produced the same number on YM points today, but with one less trade.
 

Attachments

12/21 trades
Indicator Based Entry -7, 0, 11
Trend Line Break 0, 6

12/22
IBE 22
TLB 16


On 12/22, I took the IBE trade but only made 8 points, not the 22.

Here's what happened.

After price moves over 11 points in my favor, I will move my stop to 1 tick above breakeven. Well, I did this on this trade but price was creeping so slowly toward my target, taking so long, and I was seeing divergence showing up against me that I trailed my stop. My trailing stop was hit and exactly at that point price reversed and went directly to my target !
OK, so, lesson learned.
Need to act like I'm in the military at all times, Do or Die.

DISCIPLINE.
 
This column is for informational and educational purposes only. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. Tradersaavy is not a registered investment advisor. Tradersaavy shall not be liable for any damages or costs of any type arising out of or in any way connected with the listed material.
 
OK, so if trading the method that uses
the indicator for entry instead of the trendline break, here's what today produced so far on the attached chart.

The trendline break entries would be negative on the day.

(there are other filters to select the trades that are not reflected on the chart)
 

Attachments

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