Working on Consistent Profitability

[NoDoji]

Quote from tlow:

I have a general question about how you guys define a system...

How specific do you get? I mean, with PA it can be very very specific or maybe not so much...

There are a lot of ways to trade and you need to study constantly to determine the time frame and edges that give you the most confidence. For example, a scalper might do something as simple as watch for 2 bars in one direction and then buy or sell a 1-tick break of the second bar's high or low in the same direction with a 2-tick stop and a 3-tick profit target.

No one can do that for you; you have to find what you're comfortable with.

I think ES is one of the most difficult instruments for a beginner to trade.

 

[bigsnack]

Quote from NoDoji:


I think ES is one of the most difficult instruments for a beginner to trade.

You know what, I never really thought about this, but you have the dusty gears in the back of my head creaking now. What instrument would you recommend for the beginner who just wants to trade with the trend, support resistance breakouts, maybe with a little volume tossed in there for flavor? I always push people to the ES, but just because it's what I'm used to.

 

[NoDoji]

Quote from bigsnack:

You know what, I never really thought about this, but you have the dusty gears in the back of my head creaking now. What instrument would you recommend for the beginner who just wants to trade with the trend, support resistance breakouts, maybe with a little volume tossed in there for flavor? I always push people to the ES, but just because it's what I'm used to.

I think since beginners are trading such small size, NQ or YM would be easier because of the smaller tick size. Once some favorite setups are chosen it's then less "costly" to trade 2 lots and decide if any kind of scaling process works for you.

For high liquidity on a tactic like scalping small moves with really large size, I think nothing beats ES.

 

[tlow]

Quote from NoDoji:

There are a lot of ways to trade and you need to study constantly to determine the time frame and edges that give you the most confidence. For example, a scalper might do something as simple as watch for 2 bars in one direction and then buy or sell a 1-tick break of the second bar's high or low in the same direction with a 2-tick stop and a 3-tick profit target.

No one can do that for you; you have to find what you're comfortable with.

Ya I guess thats why I posed the question. I know what I am trying to do and my "set-ups" are and how detailed they are, but I was wondering if there is a "more" correct way of doing it.

 

[tlow]

Another rough day. I traded really really poorly today...I give myself a "D" As I said earlier, just did some really stupid stuff and made similar mistakes that I should've learned from by now. I watched the 512 tick chart today after going thru some with bigsnack and I think Im going to go back to that chart. I like it a bit more and its a bit easier to see where price stalls out. Anyway, here are the trades.

Trade 1:

7:20-Short 1153.50 Stop 1155.75 Target 1150.50
7:57- Stopped out at 1155.75

-2.25 pts

So to start the trade set-up pretty well. I was happy with my entry and happy with the way I set it up on paper. Half way through the trade is when it went downhill. Price moved in my favor but then came back for a retest of the last support level, it made a small push above it, no big deal and then came back in my favor....I wrote down that I need to exit if price didn't break below that last recent support area of 1153.00 b/c at that point there is a local HL put it and it will probably turn against me. So I followed my notes when price turned. I sent the order to sell at 1154.00 for a small loss. I was a second or so late and it got put on the bid and instead of just selling it at the market I left the limit order in. Then like a deer in headlights watched price march straight up to my stop. So, instead of a 0.75 pt loss I turned it into a full stop loss. Unbelievably, frustrating. This was a clear cut case of trying to keep every tick, not being able to concede I was wrong and get out of the trade. I completely let my emotions dictate how I exited this trade.

Trade 2:

10:54- Long 1159.75 Stop 1158.00 Target 1164.50
11:04- Stopped out 1158.00

-1.75 pts

Im not even going to bother going thru this one. I violated about every rule I have to violate. The only thing I can say about this trade is that I was in the shower and instead of coming back nice and calm I felt the need to get in at that moment. I didn't have the trade completely planned out on paper or anything...just did it. No idea what I was doing or thinking.

Trade 3:

12:32- Long 1162.00 Stop 1160.5 Target 1165.00
12:44- Move stop to B/E
12:56- Stopped out at B/E

+0.00 pts

At this point, I still have some lingering frustration with myself and not terribly happy with how Im trading. I shoud've called it a day after the previous day. Anyway, I was a little late to the party on this one and I think my target was a bit optimistic. Had I gotten in earlier, I think I would've made the target a little more appropriate. The other thing is that when price failed to break above the 1164.00 level for the 3rd time I should've just exited for a small profit. That peanuts compared to my other mistakes but a mistake nonetheless.

Im not sure what my deal is mentally and emotionally. Maybe I can try being more diligent about taking notes about my emotions and the emotions I have about any given trade. I don't really do that now, just write the details of the trade. Again, I have to fix these issues. If not, I may be down to my last week or so of this type of trading. Maybe mentally Im not cut out for this type of trading. I am working on developing the tools, but something is missing big time with my mentality. At this point, it doesn't matter how profitable the system is...if there's any discrection in it, I am screwing it up.

I've been going back in my notes and try to figure out when I had a pretty good run, what I was doing differently. And the only thing I can come up with, was keeping it simple, following my set-ups, and not being super emotional about anything. Is it really that simple? I think it may be. Or were my mistakes being overshadowed by winning days?

Anyway, Im not totally mentally broken, it may sound that way. Im just sick of making mistakes. That may be a goal to start next week. Just get through a day mistake free. If that means 1 trade so be it...just one solid mistake free day.

Total Trades: 3
Winners: 0
Losers: 2
B/E: 1
Total Points: -4.0
Avg. Win: $0
Avg. Loss: $100.00
Total Win Rate: 0%
Total Profits: -$200.00

 

[Redneck]

Quote from tlow:

And the only thing I can come up with, was keeping it simple, following my set-ups, and not being super emotional about anything. Is it really that simple? I think it may be.

Yes Sir it is

But vast amounts are spent every year trying to convince otherwise



btw: When a person’s beliefs and actions are in complete alignment – emotion, conflict, whatever – is completely eliminated (there’s nothing for it to feed on….)

Food for Thought Sir

RN

 

[NoDoji]

Quote from tlow:


Trade 1:

7:20-Short 1153.50 Stop 1155.75 Target 1150.50
7:57- Stopped out at 1155.75

-2.25 pts

So to start the trade set-up pretty well. I was happy with my entry and happy with the way I set it up on paper. Half way through the trade is when it went downhill. Price moved in my favor but then came back for a retest of the last support level, it made a small push above it, no big deal and then came back in my favor....I wrote down that I need to exit if price didn't break below that last recent support area of 1153.00 b/c at that point there is a local HL put it and it will probably turn against me. So I followed my notes when price turned. I sent the order to sell at 1154.00 for a small loss. I was a second or so late and it got put on the bid and instead of just selling it at the market I left the limit order in. Then like a deer in headlights watched price march straight up to my stop. So, instead of a 0.75 pt loss I turned it into a full stop loss. Unbelievably, frustrating. This was a clear cut case of trying to keep every tick, not being able to concede I was wrong and get out of the trade. I completely let my emotions dictate how I exited this trade.

I addressed this trade in detail in my previous post here. I took the same trade at the same price at the same time (7:19:49 our time) and it went 2 pts in my favor and that's when I moved my stop to b/e and was stopped out. The way I see it is, price needed to make it to 1150.50 with some conviction, otherwise anything less would be a pivot off a higher low. I was targeting a test of the pre-market low. When it found support at a higher low, I was out of there. I see no reason to let a 2-pt winner become a loser when the short side was losing validity, because I can always re-enter or switch sides.

Quote from tlow:


Trade 2:

10:54- Long 1159.75 Stop 1158.00 Target 1164.50
11:04- Stopped out 1158.00

-1.75 pts

Im not even going to bother going thru this one. I violated about every rule I have to violate. The only thing I can say about this trade is that I was in the shower and instead of coming back nice and calm I felt the need to get in at that moment. I didn't have the trade completely planned out on paper or anything...just did it. No idea what I was doing or thinking.

The mistake here was going long after a break of the deeper trend line and the 20-bar EMA. Best to wait for a break back up through the 20 (break of our 11:15 bar high), or on the first pullback following such a break as long price finds support there (break of our 11:55 bar high). At either of those points you have shorts drawn in by the trend line break and lower lows and even more are attracted by the breakout that occurred during our 11:00am bar that turns out to be a failed breakout and bear trap. These shorts will start covering if price breaks back up through 1159.50, and this will help fuel a move up that should test the high of the day.

Your last trade was fine. So, two good trade entries and one entry with the right idea (with the larger trend), but you didn't wait for confirmation of when to enter long. You're too hard on yourself. Have a good weekend, and have a great time trading next week. You know what to do!

 

[~~~]

Quote from tlow:

just did some really stupid stuff and made similar mistakes that I should've learned from by now.

Unbelievably, frustrating.... I completely let my emotions dictate how I exited this trade.

I violated about every rule I have to violate.

I still have some lingering frustration with myself ....

Im not sure what my deal is mentally and emotionally..... I have to fix these issues.....

something is missing big time with my mentality.

I've been going back in my notes and try to figure out when I had a pretty good run, what I was doing differently. And the only thing I can come up with, was keeping it simple, following my set-ups, and not being super emotional about anything. Is it really that simple?
...........................................................................................................

tlow,

You are having some hard times in trading and mainly because you can't control your "emotions' well ... so frustration & all the bad emotions will 'blind' you to think or see clearly and it will caused you to trade poorly.

if you have a mentor by yourside when you're trading ... he/she will remind you again & again or knock you on the head hard.. when you're repeating the same mistake or when you allow your emotions to dictate your trading ... if you're trading poorly still ... he/she will order you to take a "break" to relax/calm/clear your mind etc.

You don't have a mentor.. so how??? first, you gotta train yourself to be "mentally very strong" and must "master' youir emotions ... but how to do that??

we're only humans and humans are full of emotions ...bad emotions & good emotions ... i'm a person that full of feelings & emotions ... but when i'm trading ... i am totally "numb/calm/cool"... i will focus on what i need to do .. if i'm right ... i made big profit and if i'm wrong.. i took small loss and i won't let it affects me emotionally ... basically.. i put all my emotions to my loved ones, friends, music & art, food, gardening, do some charity works etc... and i go for swimming and yoga to relax... when trading .. i'm an ice-cold person to the "market" but outside of "trading" i am a passionate person.

Yes..keeping it simple, following your set-up and not being super emotional about trading ( you can be emotional about other things, like music or art etc) it's really simple key to success but sometime the smart engineers can't accept it coz it's too simple LOL

tlow ...i wish you good luck and if you can "master' your emotions then you'll be CP

 

[NoDoji]

Quote from tlow:

And the only thing I can come up with, was keeping it simple, following my set-ups, and not being super emotional about anything. Is it really that simple?

Yes, it really is that simple. I have an automated trading system in testing. In order to provide my programmer with information he could turn into code, I had to throw out a lot of what I do as a discretionary trader.

As good as I am at certain kinds of trading, those setups aren't quantifiable, they're based on the "Great Trading Secret" Red_Ink once shared with me: Mojo The problem is that there are too many times when I abandon my rules, resulting in unnecessary losses and too many valid setups that I would overthink, end up not trading and miss excellent profits.

I wanted proof that all I had to do was follow a set of my own basic rules and the result would be very good. My ATS simply trades based on a set of very basic rules. When it identifies a setup, it creates an order. When price triggers the order, it follows specific rules for risk management and trade management and holds the position until the rules tell it to exit.

It's consistently profitable despite the fact that it does not identify trends, nor does it know when price is in a narrow range that I wouldn't even consider trading. It has no idea what a 20-bar EMA is, nor the volume being traded at any point in time. It only looks at a 5-min chart, never at a daily chart, and never at a 1-min chart. It has no idea when news events are coming out, not even the major news that causes the most volatile price action.

It trades through price action environments and news events that I'd never trade through, but it's captured multiple 100-tick runners, something I've yet to do even though I'm the one who provided it with the very simple trading rules to follow.

So, yes, keep it simple, follow your setups, check your emotions at the door; it really is that simple.

 

[Went Fishing]

Tlow,

Ever since 9-21 or 9-22 when you had your -$350.00 day, and then the next day when you couldn't or wouldn't post your chart or stats you've changed. I really wanted to "call you out" about not posting that day, but I (thought I) let it go. Also prior to those couple of days you mentioned a few distractions, surfing the web, phone calls with friends and we all remember the dog. This is a tough business and distractions while trading have cost me money, every time. I suggest you take the steps necessary to provide yourself with the most "distraction free" environment possible. If you're trading off a single screen, balancing your checkbook or making credit card payments should be done after the market closes. You are competing with serious people with serious attitudes trying to make serious money. I'll guarantee you, these participants are not surfing the web trying to find out if the Formula One track in Korea will be finished on time.

I believe you took a pretty good hit in those couple of days and now you're harboring a fear of losing more. A draw down is only relevant to you, no one else! Most of us here, (if we're honest) have spent our time in purgatory, clawing our accounts out of a significant (to us) draw down. A draw down that was emotionally fueled by over trading, trying to quickly recover a small loss that grew and grew causing us to revert to the most undisciplined & reckless trading of our careers.

The bright side is, We learn much more from our own mistakes, than we do from the mistakes of others. You don't have to (but you probably will) go through this again, if you protect yourself. Stop trading when you DD to some predefined % level, it's a hell of a lot easier to come back from a 3% DD than it is a 33% DD. Set this level and stick to it. Your methods seem sound, and you're inexperienced and struggling with emotions you weren't anticipating. All this happens at the same time in the markets and the more I think of one, the more the other issues are clamoring for my attention. You can do this, but it ain't easy. I suggest you come to terms with the risks involved with trading and set DD limits to protect your account, from yourself. And stop trading for the day at the first sign of emotional trading, just walk away, you'll be glad you did.