Working on Consistent Profitability

Good luck man, keep us posted :)

For what it's worth, the short into the gap fill shocked the heck out of me today. Straight bid up to a double top and then a straight melt into the fill. That's price action I'm not used to.... I went long before the DT and got knocked out shortly after. By the time I had a level to sell, I was taking peanuts considering the push down.
 
Quote from tlow:

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.
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tlow,
Been lurking, nice journal so far with great contributors. Just a heads up--ToS sim is very unrealistic. I believe it buys the bid and sells the ask leading to gross overestimates of PnL. I was burned a few years back on this (so it may be fixed).

Good luck and thanks for sharing,
masterjaz
 
Masterjaz is right, the TOS sim still sucks hard and can easily mislead people with it's superman fills. For friends of mine that have dabbled in trading, I have always recommended signing up for a ninjatrader demo, just to use the DOM and to keep track of all entries and exits automatically.

Another thing that I noticed when rereading a bit of this thread... Just recently Tlow said that there was one morning where he "made only one trade for a 1.5 point profit. Nothing very exciting."

Tlow, that's the RIGHT track! Focus in on that, because I think you will eventually find that statement to be closer to the reality of most professionals out there.
 
Hey Guys,

Ya my plan is to use ninjatrader for sim. ToS definitely sux big time in terms of being realistic. I think Im already getting places on backtesting and reevaluation of set-ups so that is good. I think I will be out of the markets for at least another couple of days while I sort some more stuff out.

Thanks everyone for the input.
 
tlow, dont waist too much time and energy on backtesting, that was my mistake. The ES is just as random as a roulette wheel or the lottery. I've been trading it for 4 months and theres only 1 winner in this game.. my broker.
 
Hey Guys,

so one thing that Im having a tough time dealing with when going back and looking at various stuff is the continuation/extension of a winning trade. Below is an example of a day earlier in the year of what I mean. Pretty good set-up and would hit the target but then continues lower to the 1st support pivot point at 1160.5.

I had the target set-up at a measured move off the 1st wave down. As a newbie, should I just set my targets and forget it? Be happy with the winner?

The continuation of the move could supply a reentry in some cases. But in this case, a new set-up was formed right before the target was reach...would it be better to readjust the trade given the breakdown below the double bottom formation?

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Quote from pcp198:

tlow, dont waist too much time and energy on backtesting, that was my mistake. The ES is just as random as a roulette wheel or the lottery. I've been trading it for 4 months and theres only 1 winner in this game.. my broker.
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You need to change your thinking brother... Just because you can't do it doesn't mean others can't.
 
Quote from tlow:

Hey Guys,

so one thing that Im having a tough time dealing with when going back and looking at various stuff is the continuation/extension of a winning trade. Below is an example of a day earlier in the year of what I mean. Pretty good set-up and would hit the target but then continues lower to the 1st support pivot point at 1160.5.

I had the target set-up at a measured move off the 1st wave down. As a newbie, should I just set my targets and forget it? Be happy with the winner?

The continuation of the move could supply a reentry in some cases. But in this case, a new set-up was formed right before the target was reach...would it be better to readjust the trade given the breakdown below the double bottom formation?

attachment.php
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It's good to see you are back testing.. For right now set and forget it is your best bet.. Let me tell you why.. You will never NEVER know how far one trade will go.. That's why I told you.. when you backtest, you will have to see which profit target will work most of the time.. For ex, you can start backtesting with a 2point stop and 2point profit target.. Do this for one month.. If it proves to be profitable.. Then continue backtesting for another 5 months.. Make sense? Don't make things complicated.. Most people are greedy so they try to capture every single tick.. Don't be like most people because most people don't make it.. Consistency makes you money..
 
Quote from focusonmoney:

You need to change your thinking brother... Just because you can't do it doesn't mean others can't.
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Exactly, I wanted to say something but decided to save the breath.

Tlow, I'm sure those with more experience than me can chime in, but I tend to exit at my statistical average profit, and then I will get in again if another setup presents itself. Since I am just a small lot trader, that's what gives me the chance to end the day with my daily profit target. I have already put together how I will handle my money management when I am trading more contracts, but the couple of times I have dabbled I have struggled and so I decided that I am unable to handle the stress at this point.

My assumption is that large lot traders would be scaling out along the way down, and possibly scaling back in when another setup arrives. This would allow you to get back in and still have a protective stop that was at or near your entry. The context of the trade totally makes a difference as well, such as whether or not the most recent highs are longer term resistance, or what the longer term trend actually is at the moment. It's probably best to just take profit at this point.
 
Quote from focusonmoney:

It's good to see you are back testing.. For right now set and forget it is your best bet.. Let me tell you why.. You will never NEVER know how far one trade will go.. That's why I told you.. when you backtest, you will have to see which profit target will work most of the time.. For ex, you can start backtesting with a 2point stop and 2point profit target.. Do this for one month.. If it proves to be profitable.. Then continue backtesting for another 5 months.. Make sense? Don't make things complicated.. Most people are greedy so they try to capture every single tick.. Don't be like most people because most people don't make it.. Consistency makes you money..
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Ya that makes sense. I guess what makes this trade tough to analyze is change in the trade as it goes on. It didn't make a nice orderly 3 wave move down to the target instead it bounced around a bit, came back for a retest of the resistance area, etc. So really, in my mind, the measured move target is no longer valid...or is it? It just doesn't seem as simple as

1.) enter on break below first Higher low
2.) stop 1 tick above higher low
3.) target measured move based on 1st wave down.

So far, the backtesting of this type of strategy is working well but again, its more of an orderly move when it does work out.

Its easy to say in hindsight that it hit the target, but it would be tough to watch that trade in progress...seeing a some good profit swing against you but then come back...that would be a nerve racking trade.
 
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