So I have been trading since i mentioned that i started at a prop firm.
I had days where I would place 100 orders a day. and days where I would have 1 order a day.
Chasing 1-3 cent gains proved to be something I cant really do well. It requires fast movements, fast thinking and semi automated trading. All things I am bad at. I'm pretty sure I am one of only a few discretionary traders who does HF.
How was it ?
Well to get a fare idea lets look at me best day!
my best day consisted of 99 trades I think all on the spy. I'm gonna be honest here. The first half o the day I was buying in a downtrend on the tick chart. I swear I caught every up tick. I covered at every micro high and bought at every micro low. What most consider noise was clear as water to me. For this reason I strongly believe that by discretionary trading has a place. Also listening to the squack I see that the big banks tend to buy or sell a few minutes right after me.
That being said the rest of the day was crap. How could I have been dead on about 50 trades and dead wrong on the next 50 ?
who cares. fact is that it happened. that day represented a truth to me. Even on the day that i am as sharp as a ginzu knife i still f up. It will be that day that will represent a turning point in my trading.
now a number of things can be said about what i did wrong.
1. order entry!!! cant tell you how terrible I am at this
2. Order entry !!!
3 buying/selling at market !!!!
4 order entry
5 risk management
so the above with a few more can be blamed for this. but fact remains that even with this fixed i would have lost in the second half of the day.
This made me pull out all my stats. I did not go too deep in to them but realize that I should take the time to do that. turns out I am I am not that great after all.
I let my looser run and take profit to fast. as the nature of discretionary goes one tends to find them selves juggling analyzing charts and proper order entry./ trailing stops, stop losses ect.
I decided to pop up some moving average lines on my chart. noticing the watching the 2 lines intersect seemed like it was pretty accurate. Not having a means or the knowledge to back test the moving averages i decided to say that they are equivilant or better then my system.
this most basic of systems may be not as good as many. but the beauty is in its simplicity.
my old system did not give me the returns i wanted for the amount of effort put in to it.
This moving average will allow to free up my mind and study other subjects of trading.
I have come to the realization that I am most probably focusing on the wrong subject (entry and exits)
decided to think of it like a gamble instead. And i used to play around with numbers with gambling so thought id do the same.
this is where i came in to the idea of what is referred to as risk to reward ratios.
the idea was that if one was to draw a line through a chart free hand and place buy/ sell orders around the line having good ratios one should be sucessful.
further. if i was to use my old Technic and do the exact opposite of my instinct having proper risk to reward ratios I could be profitable.
It would be nice to test these ideas out but i just wont.
one day i decided to place a 3 cent trailing stop behind my orders and for some reason it did not work out .
Hmmm i thought thats odd. Knowing that the 3 cent was not based on anything i tried 2 cents and 4 cents. did not make money.
great some sort of calculations will have to be done. wich will be hard to do with discretionary system.
so my goal is to get in to this moving average system but it is very hard to let go of what i made.
Now i was over trading. I decided to controll my trades to where i felt there would be a turnaround in the markets in the day.
So every day I look for this turnaround point.
It is still discretionary, but not nearly as much work as it know where to get in before markets open
this system seems to do the best. So far I can say that I have not been "wrong" with this system and been right a few times.
i have limited experience with it as my tendency is to lean back to over trading.
some times i spot the low and then markets dont turn around but go side ways. Often I am expecting that but hopeing im wrong.
anyways in this case I tend to get lucky and make just a few cents a share. but if i was too loose i would not let a big loss occure.
again this is the discretionary system that is simple as it can be done after hours. I'm basically trying to add some risk management to it and have a way to analyze my results
naturally the moving average would be the best way but i would really have to have a good understanding of what risk to reward ratio to use for that and know how to back test.
since those are my weak points , i will focus on the "after hour discrtionary system"
I'm trading the spy and looking for a mathamatically simple system to use in determining my targets/stop losses.
I really have no idea where to start and saving me some trial and error would be really appreciated.
so far im looking at the ATR average true range and find it to be something that may need to be in my formulea. the rest i have no idea where to start. Hopefully this revisit to my journal will represent a new stepping stone towards success.
