Working on Consistent Profitability

tlow · Feb 22, 2011

Quote from Redneck:

Tlow

I will say this once more â it is stress that is affecting your actions/ judgment

Market rewards that which is hard

Does it bother you to sit and watch price jiggle back and forth, near where you enteredâ¦

Does it bother you to see price come with a cent or two of your stopâ¦

Does it bother you to sit and watch price go in your favor (meaning you want so badly to take profit, instead of allowing it to hit your target)

It is like lactose building in muscles as we exercise, then effects our physical performanceâ¦ except this builds up and impairs our judgment / actions

It is why all these goobers surf porn while they tradeâ¦ so they can diddle themselves and release the tension (and I am not suggesting you take up diddlingâ¦ I am suggesting you find a way to release the tension build up)

:eek:

Something to ponder Sir - seriously

RN

yes, yes, and yes...While Im in SIM its like whatever...wiggle around, go against me, come within a tick or my stop, it doesn't really effect me that much. Real money is a different story. What you say is exactly why Im trying to figure out how to work my way thru this. As lame as it sounds, I've been reading up on biofeedback, cognitive type exercises to help control these emotions. Some surf porn I guess...I will do these little exercises. I feel for me the trading is just as important as understanding how my body and mind are reacting to a given trading day. Some may say its trust, some may say stress, some may say its the instrument...to me it doesn't really matter...all that matter is that it is there and its needs to be recognized and dealt with appropriately.

BCE, you mention changing instruments...again, you may be right and it may help the problem, but I don't think its getting at the root of the problem. Find me on skype after 3:00ish PST...i should be on and we can get the NT7 stuff figured out.

BCE · Feb 22, 2011

Quote from tlow:

yes, yes, and yes...While Im in SIM its like whatever...wiggle around, go against me, come within a tick or my stop, it doesn't really effect me that much. Real money is a different story. What you say is exactly why Im trying to figure out how to work my way thru this. As lame as it sounds, I've been reading up on biofeedback, cognitive type exercises to help control these emotions. Some surf porn I guess...I will do these little exercises. I feel for me the trading is just as important as understanding how my body and mind are reacting to a given trading day. Some may say its trust, some may say stress, some may say its the instrument...to me it doesn't really matter...all that matter is that it is there and its needs to be recognized and dealt with appropriately.

BCE, you mention changing instruments...again, you may be right and it may help the problem, but I don't think its getting at the root of the problem. Find me on skype after 3:00ish PST...i should be on and we can get the NT7 stuff figured out.

I just was presenting the instrument change as a possibility as you would still be trading with real money, your own, but with less risk and less on the line. This would be better than SIM trading and would maybe help you get past your fears of losses. YM is only $5 a tick and moves much more uniformly and with less volatility than CL.

Don't know if anyone else mentioned it but another possibility would be to put your trade on, put your stop in, put your profit target in, and then leave the computer. Just walk away and come back in a bit and see what happened. This is serious and just might do the trick. I think of lot of us over-manage our trades. We micromanage them. Ask NoDoji even if she thinks this is true.

Just some thoughts.

I'm really tired and just spent some time on the phone with NT support, but thanks for offering to help me and I'll look you up on Skype now.

bigsnack · Feb 22, 2011

Quote from BCE:

I just was presenting the instrument change as a possibility as you would still be trading with real money, your own, but with less risk and less on the line. This would be better than SIM trading and would maybe help you get past your fears of losses. YM is only $5 a tick and moves much more uniformly and with less volatility than CL. Just some thoughts.

This is a good point. The same price action principles apply, but the range is tighter and the tick size is less intense. The YM is probably the best option, because it "flows" more than the ES as well.

BCE · Feb 22, 2011

Thanks again immensely for all of your help setting up NT 7. Got to bring some really good karma and winning, stress free trades.

I will it.

Redneck · Feb 23, 2011

Quote from tlow:

yes, yes, and yes...While Im in SIM its like whatever...wiggle around, go against me, come within a tick or my stop, it doesn't really effect me that much. Real money is a different story. What you say is exactly why Im trying to figure out how to work my way thru this. As lame as it sounds, I've been reading up on biofeedback, cognitive type exercises to help control these emotions. Some surf porn I guess...I will do these little exercises. I feel for me the trading is just as important as understanding how my body and mind are reacting to a given trading day. Some may say its trust, some may say stress, some may say its the instrument...to me it doesn't really matter...all that matter is that it is there and its needs to be recognized and dealt with appropriately.

BCE, you mention changing instruments...again, you may be right and it may help the problem, but I don't think its getting at the root of the problem. Find me on skype after 3:00ish PST...i should be on and we can get the NT7 stuff figured out.

Tlow

I was referring to lactic acid build up when exercising â¦ not lactose (Iâm such an idiot sometimesâ¦ milk intolerance - Ha )

Something to check out â I use itâ¦.

http://www.transparentcorp.com/

RN

tlow · Feb 23, 2011

Nothing like cutting those winners short and getting a b/e stop out only to have it run 80 ticks

I suck

j/k definitely learned a lot today about how my thought process has changed from going from SIM to the real deal.

First thing I really noticed, for example, if i have a 20 or so tick winner and/or hit a soft first target, in SIM, I would think, "ok if I exit here how much could I possibly be cutting myself short?" Where as live, Im think, "i have X ticks already i don't want to lose what I have." I mentioned something similar when I first went back live. The way my trading/systems are set-up if I don't let my winners run it REALLY cuts into the profits.

The other thing...you guys really really (thats 2 reallys

) got me thinking last night about the whole move stop to B/E discussion. I've started going thru my SIM B/E trades last night and will continue today. But Im evaluating those trades much more in depth than I did before...things like rating the trade, the set-up, the heat taken on, max ticks for that move, did it hit multiple targets if I stayed in, etc. Im only about half way done, but there is a definite trend developing of the big winners are coming out ahead of the stop outs. The other thing is some of the B/E's the trade really wasn't that great. I need to finish this up to really get some solid stats but as you all have said, it definitely cuts into both the win% and overall profit.

The one thing that really concerns me is the number of stopouts vs. a b/e. On some of the days in SIM, had I not moved to B/E, I would be looking at 4 losses in a row. Now, assuming the stats will work themselves out over the long run, how would I handle that day and being stopped out 4 times in a row? How would I emotionally cope and would my mentality change? At this point, I think it would definitely be an issue. But it may be one of those things, I really need to take head on to move past.

Lastly, I've already started recognizing some of my mental/physical issues when I get nervous, anxious, stressed or whatever. I think the little exercises and cognitive journal are helping to bring those issues to the surface. Things like I start holding my breath, muscles tense up, heart rate rises...normally anxiety stuff. So hopefully, I can take the next step and resolve it before it affects my trading for the day.

I was away from the computer most of the day running errands and whatnot, so i only got a couple trades in...Stats on the day:

Total Trades: 3
Winners: 1
Losers: 0
B/E: 2
Avg. Win: 31
Avg. Loss: 0
Total Ticks: 33
Total Win Rate: 33.33%

tlow · Feb 23, 2011

Quote from Redneck:

Tlow

I was referring to lactic acid build up when exercising â¦ not lactose (Iâm such an idiot sometimesâ¦ milk intolerance - Ha )

Something to check out â I use itâ¦.

http://www.transparentcorp.com/

RN

RN,

Thanks for the site...Im defintely going to look into this.

Man, I feel totally swamped with work all of a sudden trying to resolve my issues. I guess thats not such a bad thing...at least Im recognizing the issues and trying to take steps to resolve them. I kinda feel like Im barely keeping my head above water...not to worry...im not going to be thrown a life vest so figure it out

at least thats what Im telling myself.

Redneck · Feb 23, 2011

Tlow,

You Are Very Welcome

Getting hit from all sides â I can relate

We just need to keep putting one foot in front of the other Sir

Successful Journey

RN

NoDoji · Feb 23, 2011

Quote from tlow:

Nothing like cutting those winners short and getting a b/e stop out only to have it run 80 ticks I suck j/k definitely learned a lot today about how my thought process has changed from going from SIM to the real deal.

First thing I really noticed, for example, if i have a 20 or so tick winner and/or hit a soft first target, in SIM, I would think, "ok if I exit here how much could I possibly be cutting myself short?" Where as live, Im think, "i have X ticks already i don't want to lose what I have." I mentioned something similar when I first went back live. The way my trading/systems are set-up if I don't let my winners run it REALLY cuts into the profits.

The other thing...you guys really really (thats 2 reallys ) got me thinking last night about the whole move stop to B/E discussion. I've started going thru my SIM B/E trades last night and will continue today. But Im evaluating those trades much more in depth than I did before...things like rating the trade, the set-up, the heat taken on, max ticks for that move, did it hit multiple targets if I stayed in, etc. Im only about half way done, but there is a definite trend developing of the big winners are coming out ahead of the stop outs. The other thing is some of the B/E's the trade really wasn't that great. I need to finish this up to really get some solid stats but as you all have said, it definitely cuts into both the win% and overall profit.

The one thing that really concerns me is the number of stopouts vs. a b/e. On some of the days in SIM, had I not moved to B/E, I would be looking at 4 losses in a row. Now, assuming the stats will work themselves out over the long run, how would I handle that day and being stopped out 4 times in a row? How would I emotionally cope and would my mentality change? At this point, I think it would definitely be an issue. But it may be one of those things, I really need to take head on to move past.

Tlow, if there's a reason to hold a trade for more than 20-30 ticks, then you hold it, even if it retraces all the way back to b/e or close to it. Many traders hold to a full stop out if the profit target isn't reached first.

Today I took a long trade in CL at 9:44am ET @ 97.10 because there was a resistance level of 97.34 on the hourly chart from yesterday that was in play. If price broke the immediate previous resistance of 97.18, I'd move my stop to b/e and watch to see if it could break 97.34. My plan was if it broke 97.34, I would target a test of the round number 98.00 because the next resistance level in line was above 98.00. This was my plan and I followed it. If I'd locked in 20 ticks on the break above 97.34, I would've gotten 20 ticks on that trade. By allowing price to wiggle around on its way to a likely with-trend target, I got 71 ticks. I simply trailed my stop below each 3-min bar as it closed.

Suppose my previous 3 trades were full 15-tick stop outs. Should I manage this new trade any differently? Should I try to scalp my way out of the hole, or should I take the trade off as soon as it became profitable enough to cover my 45 ticks of loss, so I could start with a clean slate, or should I hold the trade until it either stopped me out b/e or reached my expected target zone?

If I'm trading my plan, I choose the last option, because this is key part of my edge and once I start micromanaging my trades, I dilute my edge.

tlow · Feb 23, 2011

Quote from NoDoji:

Tlow, if there's a reason to hold a trade for more than 20-30 ticks, then you hold it, even if it retraces all the way back to b/e or close to it. Many traders hold to a full stop out if the profit target isn't reached first.
...

If I'm trading my plan, I choose the last option, because this is key part of my edge and once I start micromanaging my trades, I dilute my edge.

I guess that is my dilema...the winning trade on the day, it hit my first target (which is where i exited), but there were like 10-12 tick bounces going on at the time...and price stalled out just enough to get me nervous about what was going on and cutting the winner short, when there was a good chance, after the little consolidation it would run more....and it did. Had it come back, it probably would've blasted the other way fairly strongly to either a b/e stop out (or a full stop out had I not moved to b/e)

I guess thats why Im not totally kicking myself, I did exit at my first target, however, as you said, once it made the move and the support became resistance, I probably could've held on since the resistance area held up.

Im not trying to make it black and white, I agree the trade needs to be managed as it goes, watching how it works thru s/r and if those levels flip and hold up. It is just super nerve racking for me and as I said, I don't think my mentality is doing me any favors by worrying about if it runs back to a b/e or a stop out if the technicals are still holding true.