I hate that I can justify why I failed ! It just means that I know the problem. So I will ask myself this more often.
Today's answer is:
Sometimes its better to loose money and keep your stats valid, instead of randomly adding new sources of data.
CASE 1:
Often a new source of information is brought to us. Say we are trading mining stocks in a typical day trading fashion. All of a sudden gold spikes to 5000 $ What does this mean for your trading? In many ways this is comparable to looking at 1 min or tick chart and one day peaking at the daily chart.. It is new information.
Example 2:
You trade the 5 min chart, maybe looking at the 1 min and hourly where all information can be inter-related. One day you step back and glance at the daily chart (multi-year data), It is screaming to go the opposite way of your intra day.
Possible solutions:
1. Ignore the long term daily information and take on bad trades. To keep consistency in your system
2. Not trade? Meaning that you do not always follow your system and your results are "fitted " at times?
3. Stop building your short term system and work on a long term system
4. Change from day trading to swing trading (There will be no longer time frame data as historical data may be lacking.
6. Stop every thing and try to build short term systems that are good in different long term situations
7. shorten trade and manage it live so as soon as a trend line is broken get out as to avoid the long term turn around.
Emotional need (The problem)
-----------------
Keep trading.
Emotional responces:
-----------------------
A. Change short term trades to long term trades and change their target and stop loss based on new long term data. (adjust your trades after they have been made) sacrificing non clear entry (see C)
B. Babysit each trade and as soon as one thing is off exit.
Seems lazy, But managing each trade and exiting quickly can mean more trades and profit can be more. It seems to be the basis of day trading.
C. Reject the idea of stats and do what one wants to do.
Problem with this is saying that a system is good means that it has been seen to be good. This IS a stat. It may not be back tested or optimised. But, one has seen it work. (Buy whenever the door knocks, after a few weeks you will decide based on stats if it is a good system.)
Thought
-----------
If stopping trading leads to a lose of attention, trading must continue but in a proper way that one can gauge how the trading is doing.
Ignoring the new information (daily chart) means that you will always ignore it , this is consistent. One may loose a few more trades around key places but eventually short term charts will see the new direction.
While doing this, we should look to see if there is something that can be done to add the long term view. Once a new clear system is made we can switch (all new trades p/l should go to a new set of data)
My conclusion
---------------
Make sure my strategy exits as soon as weakness is shown instead of at a particular price.
Try to see if I can simultaneously hold on to 2 different buys and have them recorded in different places. If so, I can place baby sat trades and long term trades based on long term time frames.
Note:
I tend to day trade, but all my long term calls seem to be profitable I have records of this need to monetize this consistency
Today's answer is:
Sometimes its better to loose money and keep your stats valid, instead of randomly adding new sources of data.
CASE 1:
Often a new source of information is brought to us. Say we are trading mining stocks in a typical day trading fashion. All of a sudden gold spikes to 5000 $ What does this mean for your trading? In many ways this is comparable to looking at 1 min or tick chart and one day peaking at the daily chart.. It is new information.
Example 2:
You trade the 5 min chart, maybe looking at the 1 min and hourly where all information can be inter-related. One day you step back and glance at the daily chart (multi-year data), It is screaming to go the opposite way of your intra day.
Possible solutions:
1. Ignore the long term daily information and take on bad trades. To keep consistency in your system
2. Not trade? Meaning that you do not always follow your system and your results are "fitted " at times?
3. Stop building your short term system and work on a long term system
4. Change from day trading to swing trading (There will be no longer time frame data as historical data may be lacking.
6. Stop every thing and try to build short term systems that are good in different long term situations
7. shorten trade and manage it live so as soon as a trend line is broken get out as to avoid the long term turn around.
Emotional need (The problem)
-----------------
Keep trading.
Emotional responces:
-----------------------
A. Change short term trades to long term trades and change their target and stop loss based on new long term data. (adjust your trades after they have been made) sacrificing non clear entry (see C)
B. Babysit each trade and as soon as one thing is off exit.
Seems lazy, But managing each trade and exiting quickly can mean more trades and profit can be more. It seems to be the basis of day trading.
C. Reject the idea of stats and do what one wants to do.
Problem with this is saying that a system is good means that it has been seen to be good. This IS a stat. It may not be back tested or optimised. But, one has seen it work. (Buy whenever the door knocks, after a few weeks you will decide based on stats if it is a good system.)
Thought
-----------
If stopping trading leads to a lose of attention, trading must continue but in a proper way that one can gauge how the trading is doing.
Ignoring the new information (daily chart) means that you will always ignore it , this is consistent. One may loose a few more trades around key places but eventually short term charts will see the new direction.
While doing this, we should look to see if there is something that can be done to add the long term view. Once a new clear system is made we can switch (all new trades p/l should go to a new set of data)
My conclusion
---------------
Make sure my strategy exits as soon as weakness is shown instead of at a particular price.
Try to see if I can simultaneously hold on to 2 different buys and have them recorded in different places. If so, I can place baby sat trades and long term trades based on long term time frames.
Note:
I tend to day trade, but all my long term calls seem to be profitable I have records of this need to monetize this consistency
