Quote from ymtrader:
Hello;
I have been trading ym & es futures for 4 years with some good months and some bad months, trying to learn as I go. I developed a system based on market observation and probabilities at the start of my 4 years in the market, and have since worked on back testing and forward testing it throughout the years.
The last 2 years it has continued to make money.
The problem is that I don't take every trade! It's killing my profitability. I know there are hundreds of threads on this board from people in the same boat as I, and maybe I just need to rant a bit, but I'm looking for any advice or processes that can help me trade one day at a time so I can realize my expectations.
A little about my system: I trade the ES, I know my login name is ymtrader, I used to trade only ym. And I usually average 12 contracts.
Statisitcs:
~82% profitable trades
average win ~$2000
average loss ~$4800
max drawdown ~25%
Over time my system does extremely well, it's the day to day fluctuations that are hard to deal with...it's our old friends fear and greed that befuddle me.
As you can see the my win/loss ration is only around .42, but this is how my system has been designed, but I also think that is why it is hard for me to take every trade.
==============================
ym(es)trader
Y-EStrader
1.0] A variation of valente discipline exhortation;
try 1.2 contracts instead of 12.
See if you cant cut the loss size but thats still average maybe of 200 profit with 480 loss.Thats a lot for ES, especially med or less time frame
Actually as far as a short or medium system wouldnt want those size losses/wins in ES, either Y-EStrader]
1.2]If it depends on scale in ,find another system;
& since you mentioned had traded it 2 years & really cant blame you at all for not taking every trade, sounds like you are TRYING finding a way to cut down from $4200 losses .Hope it helps
Wisdom is profitable to direct;
frankly wouldnt take every trade with 4.8 k loss to 2k win myself, want to whittle down that loss size also.
why can't I follow my system?
- Thread starter ymtrader
- Start date
Hi Murray,
Good point...the main reason I don't take every trade is that I fear the large loss. Because of this, I 'cherry pick' my system trades, forcing my own emotions on the probabilities of the next trade, usually resulting in my sitting on the sideline while my system trade turns into a missed profit.
Either I must take every trade, or come up with a system that doesn't have as large of an average loss as I have currently.
Good point...the main reason I don't take every trade is that I fear the large loss. Because of this, I 'cherry pick' my system trades, forcing my own emotions on the probabilities of the next trade, usually resulting in my sitting on the sideline while my system trade turns into a missed profit.
Either I must take every trade, or come up with a system that doesn't have as large of an average loss as I have currently.
ym,
I trade systematically as well and it was difficult initially taking trades as they come.
After a while, and much examination of trading results, I eventually convinced myself that I add little value in the trading decision process and stuck to the program.
It's a human urge to second guess, meddle, fiddle with a system.
I know I can't entirely remove that urge, so I limit my fiddling risk reduction - ie taking profits early or taking losses early.
Whether you get over this human urge is your personal battle.
Remember the story of odysseus and the sirens - bind your arms or stuff your ears with wax to avoid succumbing to the temptation of your bad habits.
I trade systematically as well and it was difficult initially taking trades as they come.
After a while, and much examination of trading results, I eventually convinced myself that I add little value in the trading decision process and stuck to the program.
It's a human urge to second guess, meddle, fiddle with a system.
I know I can't entirely remove that urge, so I limit my fiddling risk reduction - ie taking profits early or taking losses early.
Whether you get over this human urge is your personal battle.
Remember the story of odysseus and the sirens - bind your arms or stuff your ears with wax to avoid succumbing to the temptation of your bad habits.
Here's why.
The real risk of this type of scenario actually happening? (what will actually happen in the markets)
Very Low.
The psychological risk of this type of scenerio actually happening? (what your mind is telling you can happen in the markets)
Very High.
The system sucks.
It's OK.
Just get another one.
Best,
Jimmy
Sorry if that came off a little strong.
But I think it's better to just cut to the chase, correct the problem, and keep moving.
Your Protective Stop is very appropriate for trading the ES. It has a lot of "chop and churn" before making a directional move.
The problem is limiting yourself to just 2 pts of profit.
All you have to do is move your protective stop to breakeven (+ a tick for commisons and slippage) AFTER you make your usual 2.00 pts ES, incorporate a trending indicator (like any SMA 20 to 40, EMA34, VWAP, you name it) which will tell you which side of the market to stay on, and let the 2nd half of your trade ride for as much profit as the market will give you ... 2 or 3 times a week, you're gonna catch a hell'uva trend.
Best,
Jimmy
P.S. Spend the next month backtest - with just two contracts - and you'll see what I mean. Then you'll have the knowledge to take your trades and keep a good psychological state-of-mind, because you'll know your system has GREAT positive expectation!
P.P.S. And after you've finished backtesting the system, just trade 2 contracts until you've earn the right to trade more, earn your contracts (@ about 4,000 margin per contract you'll be trading with 5% risk).
But I think it's better to just cut to the chase, correct the problem, and keep moving.
Your Protective Stop is very appropriate for trading the ES. It has a lot of "chop and churn" before making a directional move.
The problem is limiting yourself to just 2 pts of profit.
All you have to do is move your protective stop to breakeven (+ a tick for commisons and slippage) AFTER you make your usual 2.00 pts ES, incorporate a trending indicator (like any SMA 20 to 40, EMA34, VWAP, you name it) which will tell you which side of the market to stay on, and let the 2nd half of your trade ride for as much profit as the market will give you ... 2 or 3 times a week, you're gonna catch a hell'uva trend.
Best,
Jimmy
P.S. Spend the next month backtest - with just two contracts - and you'll see what I mean. Then you'll have the knowledge to take your trades and keep a good psychological state-of-mind, because you'll know your system has GREAT positive expectation!
P.P.S. And after you've finished backtesting the system, just trade 2 contracts until you've earn the right to trade more, earn your contracts (@ about 4,000 margin per contract you'll be trading with 5% risk).
Jimmy-Jam,
Thank you for your suggestions. I have thought about what you mention, but have not coded it in TS yet. I will look into coding and backtesting this more seriously, I have always thought that if I could let me winners run a bit more, that I could improve this thing.
My system actually has been fully coded and automated using TS's easy-language. But I have found problems in execution and stability through-out the day b/c I cannot monitor TS while I'm at work, and I have a hard time leaving it unattended at home. I tried it for a while, but my system is pretty simple, so it, should be, easy enough for me to just place my trades in a manual manner. The glitches, data connection issues, etc... are just too common to allow TS to run unattended. On the downside: I must enter the trades myself rather than allowing the automation to drive it.
Thx for the feedback!
-chris
Thank you for your suggestions. I have thought about what you mention, but have not coded it in TS yet. I will look into coding and backtesting this more seriously, I have always thought that if I could let me winners run a bit more, that I could improve this thing.
My system actually has been fully coded and automated using TS's easy-language. But I have found problems in execution and stability through-out the day b/c I cannot monitor TS while I'm at work, and I have a hard time leaving it unattended at home. I tried it for a while, but my system is pretty simple, so it, should be, easy enough for me to just place my trades in a manual manner. The glitches, data connection issues, etc... are just too common to allow TS to run unattended. On the downside: I must enter the trades myself rather than allowing the automation to drive it.
Thx for the feedback!
-chris
there are plenty of great sites, i hear that http://www.smartquant.com/ is really good.
you may want to look into it.
you may want to look into it.