Trading Journal, January

Sure would be nice if this was all black and white, but if it were then I guess everyone would be doing it perfectly and there would be no market

Magna, I agree trading is not black & white, it is probabilistic. This game is all about probabilities. My point is too many people look at the psychology aspect thinking that if they are losing they did something wrong, or if they are winning they did something right. Trading is not about wrong or right, it is about probability and degree.

As for my trading methodology, it is well grounded in statistical probabilities. Is it perfect? Of course not. Is non-optimized backtesting over a 20 year period a guarantee that future results will be the same? Of course not. Is out-of-sample forward testing a guarantee that the trading approach will work? Of course not. Is paper trading a guarantee of successful real-time trading? No.

But what would you rather have, a trading approach that you have rigorously tested on historical data, walk-forward out-of-sample test, and paper traded all with successful results... or anything less?

I recognize that not all trading methodologies can be fully tested properly, which is why it is even more important for those who trade such methodologies (e.g. discretionary) to question their methods first, not their psychology. That is why I have been asking Stockk specific questions regarding his methodology. Too many traders accept various "trading myths" without looking at the facts for themselves. Separate truth from dogma and you will find valuable & practical trading ideas.
 
"I have decided to suspend my journal here indefinitely. I just find that it is too much headache to deal with. "

Sorry, I thought you were posting in the expectation of receiving some feedback. If you just want to show your trading results perhaps you could post a spreadsheet every couple of weeks.
 
>I just find that it is too much headache to deal with.

HA! what headaches? a few critical comments? get off it! if you were green all over you would not have "headaches" (or a problem posting your wins). sounds to me like you're red again today and you just don't have the heart to face it. HA!
 
AAA:

You just stated exactly what I was thinking. This debate is over an assumed "methodology" which is a very different thing between discretionary traders and system traders. When I system trade (usually some form of swing trade) I have no problem waiting for the right signals and executing. But in most discretionary trading, there is no exact system to follow. If there were, I could program my computer to do it. Decisions tend not to be based on the old "If A happens, then B" format, but rather a multitude of signals and events and most importantly, a "gut feeling". That feeling is not just some random instinct but just everything we have learned thus far applied to our current situation. It isn't always right, but it is necessary to have in making extremely quick decisions. If your mind is not sharp, you will make poor decisions. That is why many successful traders suggest not trading at all when sick, depressed, or afflicted with some other emotional ailment. In theory, it shouldn't matter to our trading efforts, but in reality it does.


Magna:

You covered the other thought I was thinking. While I try to be as "detached" in my trading as possible, it is impossible for me to not be affected by my previous trades. In theory, I always assumed that it would be better not to be affected by anything (like the robot). It sounds like a wonderful idea. Until reality sets in, and I realize that I am human. And then it occurred to me that instead of fighting this that perhaps I should try to embrace those feelings I have, telling me to slow down, trade smaller size, or just walk away. Maybe if I pay attention to those feelings and try to harness them into some form of "indicator" it could help my trading. Because as you stated, pretending they don't exist is not a realistic approach.


I guess the point I'm trying to make is that it's a whole different ball game in discretionary trading, where a healthy, focused, and trained mind making decisions is much more important to the bottom line than in system trading. So while a system trader has to try to estimate his risk/reward on a particular trade, a discretionary trader must do that also but in addition has to take into account his psychological risk/reward for that trade. For example, if you are down $500 right from the start, and you claw your way back to +$2 near the end of the day, is it worth going for that last trade to make another $20 even if according to your "methodology" you have a 60% chance of success? No, because the positive mental attitude you will have from ending the day positive will put you in a better frame of mind to succeed tomorrow (which just might be the breakout day you're looking for - provided you are mentally sharp and focused). Fail, and you just may put yourself out of the game tomorrow (mentally speaking).

DeeMan
 
Originally posted by STOCKKBROKER
I have decided to suspend my journal here indefinitely. I just find that it is too much headache to deal with.

Thank you for all the kinds words y' all. I will still be lurking around.
More...

Good luck Stockkbroker, and thank you for your contributions.

I will leave you with something to ponder upon:

"Defense is for times of insufficient strength and offense is for times of great strength"
SunTzu
The Art of War

'Headaches', I assure you, are a transient phenomenon... more often than not, they are but a malignancy of the trading mind, and the solution is found through a re-assessment of trading strategy and/or of trading attitude.
 
In general I'd like to add: Trading is a balancing act. Only reason psychology is so important it is because we are emotional beings.

The fight or flight auto response have been part of or survival instincts for thousands of years. I am not sure if they can be suppressed ignored or denied.

It maybe a valuable exercise to run a statistical correlation pattern between our state of mind (positive/negative elevated/depressed) and our trading performance.

Stockbroker,

Enjoyed reading your journals. Good luck with your career.

Josh
 
Discipline
here is my Self Talk for Discipline..
Originally posted by Qwiktrade


Today I will trade with discipline. If there is one quality that separates all great traders from the vast majority who wallow in mediocrity and failure, it is discipline. In order to excel at trading I have adopted a set of rules that regulate my trading. These rules do not restrict me, they free me to achieve my potential. Indeed, I have not become a slave to my rules, I have become their master. These are the rules by which I trade, and I never deviate from them.

1.) My first concern with any trade is my risk. Before I place any trade I determine the stop price. The stop price on any trade is never more than .25. Once I place my stop, I never move it back.

2.) I am patient and wait for good opportunities. If there are no good opportunities, I do not trade. I do not feel the need to trade. I only take trades that fit my setup criteria. I never shoot from the hip. I do not desperately search for trades. I calmly allow the market to bring opportunities to me. I am calm, focused and relaxed. If I trade then I trade, if i don't trade then i don't trade. I am fine with this.

3.) I always trade with the trend. The trend is like the vast undercurrents of the ocean. When properly harnessed its force will propel my trades toward success. If violated, though my setup is perfect, I will fail. Therefore I always trade in harmony with the trend.

4.) I accept responsibility for the outcome of my trading. If that activity produces a loss of more than 300 dollars in one day, then I stop trading for the day. Trading is more than the sum of one days work. By preventing a large loss on any one day I give myself time to learn from my mistakes and ensure my long term survival. Time teaches all things to he who lives forever but I have not the luxury of eternity. Yet, within my allotted time I must practice the art of patience for nature acts never in haste. To create,the olive, king of all trees, a hundred years is required. An onion plant is old in nine weeks. I have lived as an onion plant. It has not pleased me. Now I will become the greatest of olive trees and, in truth, a great trader. -(borrowed part of this from Og Mandino)

5.) I spend time every day sharpening my most valuable tool, my mind. Every day I educate myself about trading by reading books or other literature for a minimum of 30 minutes. I enjoy learning and my mind easily remembers new information.

6.) My mind and body are closely related. How can I expect to be at my best mentally when my body is out of shape? Therefore every day I take time to get proper exercise.

7.) Keeping paperwork in order is important to my success as a trader. I keep trade records, account information and bank statements organized and in their proper place.

By allowing my behavior to be guided by these rules, I give myself the gift of self-discipline. And with discipline I will become a great trader.
 
Although I have decided not to post my daily results anymore, I do not discourage people to address any pertinent questions or insights that they might have about the trading day.

I will also post any articles of interest that might educate us about trading in general. The idea is to keep the forum fun and flowing without all the unnecessary name callings and finger pointings.

Good trading y'all.
 
ProTrader,

Why don't you stick it where the sun don't shine. This kid has more balls than you ever will. If you're such a great trader, or you think you can do better than stockk, then post away. You're like most "traders" I meet, all talk and no action.
 
Stockbroker your last post on discipline is in my opinion the best and most helpful post I ever read. I will print it out and keep it with me througout my trading career. Thank you.

Shortee
 
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