Focus got me thinking and he/she has a good point: What exactly are your "setups"? I don't know if I have a clear idea of what your ideal trade scenarios are. Do you have specific setups that you are looking for? What does your trading plan look like at this point? Would you be willing to share exactly what your plan is?
Working on Consistent Profitability
- Thread starter tlow
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Focus got me thinking and he/she has a good point: What exactly are your "setups"? I don't know if I have a clear idea of what your ideal trade scenarios are. Do you have specific setups that you are looking for? What does your trading plan look like at this point? Would you be willing to share exactly what your plan is?
Focus, (I like your handle btw
)I really like your idea of "mentally trading" I may switch over to that instead of the sim in the next couple of days if Im not working stuff out properly.
Backtesting, yes I have done some backtesting, not a whole lot..but for me recognizing the patterns/signals, is much much simpler when Im not emotionally attached similar to the sim. I like Nod's idea of replaying the day b/c its fresh in my mind and Im attached (monetarily speaking) to that day. I definitely need work in seeing patters, range days vs trend days, etc so maybe I can mix that in with the replaying of the current day. Definitely need to visit these ideas to prevent and minimize mistakes.
Stops, im not sure if I follow you on this one. For example if Im going short/long right off a support/resistance point, why would I use a large(r) stop? If the trade is going to work it will head in my direction and if it breaks thru chances are I set the trade up wrong, so I would be wrong in the first place. Or maybe it just doesnt work and blasts thru the support/resistance. Also, I think my trade today was a good example of moving the stop to B/E...price ran within 0.75 pts of my target but didn't hit and eventually reversed the other way...the trade didn't work out how I set it up but I minimized the risk by moving it to B/E. Maybe Im missing something to begin with on the entry and/or trade set-up? Is that what you are getting at?
Lastly, the number of trades, this past week or so the trades have been up, but before that it was in the 1-5 RT range...anymore than 5, yes, I am most likely doing something wrong
Thanks for the input...I really appreciate everyone chiming in. I am by no means attached to any set-up so I have no problem trashing/startingover/tuning/whatever. But if I make a mistake due to emotions or not thinking things through, isnt that a mental error, not a set-up one? Maybe I will just have to backtest more strictly...the process continues.
Focus and bigsnack,
You guys are definitely right...I am going away from my plans and thinking about too much stuff and trying to get "everything right"
So here is my plan, Im only going to stick to these set-ups...
1.) Breakout/down plays with the trend
2.) playing off support/resistance only with the trend
3.) Breakout/down on reversal plays once major confirmation has been established and a reversal is confirmed (Ie making a HH, 5m bar, whatever) not sure if that is still considered a reversal since the trend has probably shifted at that point, so maybe falls into the same category as (1.)
What do you guys think? Now that Im thinking about his more, this has definitely been a dilema the past week or two of not following what I do well (maybe what Im "trying" to do well is a better way to put it
)To everyone who has helped me up to this point, you guys rock! Pointing out all these big and little things really help a noob understand and keep him/her on track. Thanks!
Quote from tlow:
What do you guys think? Now that Im thinking about his more, this has definitely been a dilema the past week or two of not following what I do well (maybe what Im "trying" to do well is a better way to put it
Write down your "A" setups and only trade them. If it's not an "A" setup, then no trade is the best trade.
As soon as you see the setup forming prepare in advance (place a stop order in advance if entry requires price confirmation such as a breakout or a break of S/R, or place a limit order in advance if it's an anticipatory entry such as a trend line touch).
Your stop loss is the cost of admission to the trade and should be placed at a price that would invalidate the setup. If it's an "A" setup, you should simply accept the cost of admission and leave the trade alone until it hits your target.
Doesn't that sound so easy?
Quote from tlow:
Focus, (I like your handle btw
I really like your idea of "mentally trading" I may switch over to that instead of the sim in the next couple of days if Im not working stuff out properly.
Backtesting, yes I have done some backtesting, not a whole lot..but for me recognizing the patterns/signals, is much much simpler when Im not emotionally attached similar to the sim. I like Nod's idea of replaying the day b/c its fresh in my mind and Im attached (monetarily speaking) to that day. I definitely need work in seeing patters, range days vs trend days, etc so maybe I can mix that in with the replaying of the current day. Definitely need to visit these ideas to prevent and minimize mistakes.
Stops, im not sure if I follow you on this one. For example if Im going short/long right off a support/resistance point, why would I use a large(r) stop? If the trade is going to work it will head in my direction and if it breaks thru chances are I set the trade up wrong, so I would be wrong in the first place. Or maybe it just doesnt work and blasts thru the support/resistance. Also, I think my trade today was a good example of moving the stop to B/E...price ran within 0.75 pts of my target but didn't hit and eventually reversed the other way...the trade didn't work out how I set it up but I minimized the risk by moving it to B/E. Maybe Im missing something to begin with on the entry and/or trade set-up? Is that what you are getting at?
Lastly, the number of trades, this past week or so the trades have been up, but before that it was in the 1-5 RT range...anymore than 5, yes, I am most likely doing something wrong
Thanks for the input...I really appreciate everyone chiming in. I am by no means attached to any set-up so I have no problem trashing/startingover/tuning/whatever. But if I make a mistake due to emotions or not thinking things through, isnt that a mental error, not a set-up one? Maybe I will just have to backtest more strictly...the process continues.
Hey no problem... Now let's talk about stops.. In order to set the best stop possible, you will have to backtest this.. You said today you broke even and the trade went the opposite way.. which is true.. But that's just one trade... you can't base your whole strategy on one trade.. I used to trade support/resistance so I know you do have to give it wiggle room.. Not every trade is going to bounce right off supp/resistance.. Listen, I'm going to tell you what you should do for now.. You may not like what I'm about to say, but hey that's life.. First, you need to come up with a strategy, plan, or whatever you want to call it.. Then go 6 months back and backtest it.. If you are real serious, you will go back 1 year and backtest it.. When you backtest you will write down which stops work the best for your set up.. Test multiple stops.. Test fixed stops only.. Then test breakeven stops.. Write down which one worked the best(also write down which profit target is the best).. If your backtest results come up positive than forward test it either with real money or fake money (for a month)... You see, this is how you build a system.. You don't create a system and blindly test it out with real money.. I'm all about results not guess work.. The real issues is YOU DON'T HAVE A PROFITABLE SYSTEM.. In this business you shouldn't guess.. Forward testing is a waste of time for right now because it will take forever.. At least 6 months to a year.. Do you have that amount of time to waste? You can replay charts, but that also is going to take forever.. Don't waste time on unnecessary stuff.. It shouldn't take more than a week to Backtest.. If you do it the other way around (forward test/replay) it's going to take 6 months to year.. Do you have that much time to waste..? They way you are doing things right now is backwards... So let's break it down.. T
1) Create a strategy (backtest 6months to a year)
2) Keep it if it turns out to be a positive system.. Trash it if it turns out to be negative and repeat step one again..
3)Forward test the positive system for a month to see your real results..
Tlow,
It does seem like the trading plan needs a lot more definition before it can be executed without emotional bias. Your setups need to be a lot more locked down. A setup should be something like this (just an example):
I will trade the first 50% pullback from recent lows to highs if and only if:
1. The selling that preceded the "reversal" was at least the second wave of selling, and was on lower volume than the first
2. The reversal was leaning against major support (pivot point, market profile, previous support / resistance on a longer term chart, etc.)
3. The neighbor's dog has barked exactly 16 times in the last 45 minutes.
Get REAL specific. Then at that point, backtest and lock down your stats. How successful is that setup over 6 months to a year? If you approve of the win rate, then you have something to start with, and then like the others have said, just iron that setup into your brain until you can recognize it while on autopilot.
The process takes time, but it is those that don't go through it that bleed out and give up before they have a chance to really lock it down. Also, if you can, don't put any type of deadline or pressure on yourself to "get it" by this date or that date. If you take the time and enjoy the learning process, the light bulb WILL go on eventually.
It does seem like the trading plan needs a lot more definition before it can be executed without emotional bias. Your setups need to be a lot more locked down. A setup should be something like this (just an example):
I will trade the first 50% pullback from recent lows to highs if and only if:
1. The selling that preceded the "reversal" was at least the second wave of selling, and was on lower volume than the first
2. The reversal was leaning against major support (pivot point, market profile, previous support / resistance on a longer term chart, etc.)
3. The neighbor's dog has barked exactly 16 times in the last 45 minutes.
Get REAL specific. Then at that point, backtest and lock down your stats. How successful is that setup over 6 months to a year? If you approve of the win rate, then you have something to start with, and then like the others have said, just iron that setup into your brain until you can recognize it while on autopilot.
The process takes time, but it is those that don't go through it that bleed out and give up before they have a chance to really lock it down. Also, if you can, don't put any type of deadline or pressure on yourself to "get it" by this date or that date. If you take the time and enjoy the learning process, the light bulb WILL go on eventually.
Ya I need to go back and do some more reviewing and backtesting. To be perfectly honest, I haven't been that strict with my set-ups and haven't backtested near enough. This is probably where a lot of my problem is coming from. So I will probably start looking into that today and start working through everything.
Focus,
back to the topic of stops...I think what I am going to do is just be real specific as to whether or not I move it to B/E or whatever. IE if it goes 50% in my direction, +2 pts in my direction, whatever and then backtest that. Right now, the moving of the stops is very discretionary which may be hurting me as well
Focus,
back to the topic of stops...I think what I am going to do is just be real specific as to whether or not I move it to B/E or whatever. IE if it goes 50% in my direction, +2 pts in my direction, whatever and then backtest that. Right now, the moving of the stops is very discretionary which may be hurting me as well
Sorry no update yesterday, I was only around for the first and last hour or so of the trading day, got 1 trade in for a gain of 1.5pts. Nothing very exciting. But I've decided to take a bit of time off from trading for real to do some backtesting, practicing, refocusing, sim, all of it.
Right now, I feel like Im forcing things a bit so I want to reevaluate my systems, myself, and my trading in general. It may be a couple of days or it may be longer. What finally got my to this conclusion was at the end of yesterday I really didn't feel like trading and I was somewhat mentally checked out and this morning. I had no interest in the potential of losing or gaining money today.
So off to study and work. I will post any questions that may come up or ahh haa moments, otherwise, back to live trading a bit later.
Right now, I feel like Im forcing things a bit so I want to reevaluate my systems, myself, and my trading in general. It may be a couple of days or it may be longer. What finally got my to this conclusion was at the end of yesterday I really didn't feel like trading and I was somewhat mentally checked out and this morning. I had no interest in the potential of losing or gaining money today.
So off to study and work. I will post any questions that may come up or ahh haa moments, otherwise, back to live trading a bit later.