Hi Kp I can't believe you spent the day trading! You could have spent today developing a trading plan, testing ideas, testing an embryonic trading plan...
I won't chide you for trading real $$ sans a concrete plan - the market does a really good job of that all on its own. I will, however, kindly remind you that the very things you struggle with in coming up with a plan: when to fan trendlines, when not to, when is the breakout real, when isn't it, how large of a stop, etc obviously don't go away when you begin to trade real $$, in fact those issues become further clouded by your emotions. You absolutely have to do this work either after market hrs or in sim mode before you risk real money or (as you *surely* already know) total account destruction is merely a matter of when not if.
KP... you are right about pnl.... better to focus on how many ticks or points per contract you can pull out of the market.... some traders use 1 contract and make 1 point other traders use 10 contracts and make 1 point for 10 times the profit. so you cant tell by pnl and can get confused as to how people can pull that much money out of the market during a day when the market didn't move. Well, except when it moved a point in their favor for 10 contracts. toucan
Your trading is inadequate because you're gambling. Do you have at least 100 days worth of spreadsheets analyzing the MAE/MFE of even a single setup and documenting the price action environment surrounding each instance? Did you do this yet for 1 trading week? If you can't bring yourself to analyze every appearance of a setup for one trading week, how will handle the work required to investigate potential plans for trading the setup?
how are you quantifying the price action environment? Might it be things like price in relation to a moving average, whether we are near to the HOD/LOD etc? Come and do some ES trading in the ESjournal! I'm getting bored in there calling trades on my own, as it's so quiet nowadays, and it would be nice to learn something, as God only knows I don't know what the hell i'm doing!! lpl
Well I do still plan to be around for every open, but what I should be doing it trading it in SIM for the first hour and then work on the plan. Kind of like a mix of going to a practicum one day of the week and then doing theory in class for the other days. Anyway, I got a bit discouraged trying to do this last night. The collection of stats has me a bit confused still. I almost wonder if it wouldn't be better to just track in more simple terms. The outlined method by ND, although excellent, left me a bit confused as I was going through it. Of course the important thing to develop is to know that "if I see this and enter here, does it work often enough to put this trade on every time". That part I fully understand. But I almost wonder if it wouldn't be easier for my brain to simply take 20 screen captures of this "thing" that I'm looking for, loaded them up side by side, and visually try that if it works, how far against me does it goes, and if it doesn't work, at what point do I know this and hence should get out. This is no different than using a spreadsheet I guess, but perhaps with this trading business, I'm far more visual. I will solve this, but still dragging my heels a bit here.
Does it ever! I think I have demonstrated this beautifully! Right there in the moment is when I find myself struggling with the "I wish I knew what to do here based on the probability of it going this way". The account destruction is also a fact. I'm proud to actually only be down $3500 after so much time! But there certainly is no need to bring it to zero.
I stumbled a bit when I really sat down to do this last night for the first few days this week. I had more questions about the setup than I did answers, and I couldn't even say if this thing that I'm looking at here is the setup or not. I tried to track all the parameters you outline, and this is where I got stuck. I do of course fully understand tracking if the entry right at the break is better than an entry above or below the RET, but when the time factor was involved, I didn't know what to do. I didn't know if I should collect these stats for a set time period after the break, or at what point I should measure. (ie. At 2 minutes, the trade might be working, at 5 minutes, it might not) Without knowing what R:R I'm looking for, since the idea is to find out what the ideal R:R would be, I just didn't know how to collect this data. I think moving forward I may jut have to pick something first, such a a fixed stop of 4 or 5 points, or pick a fixed stop based on the breaking of the low or high of the previous bar, and track this, tracking just this one thing. Then I could just say "ok, over the past 20 occurrences, price hit the profit target of 2 times the stop 60% of the time if the stop would be the low of the previous bar". But then of course if I want to see what would happen if I pick a different stop, then I'd have to go through the exercise all over again. The whole spreadsheet data collection I couldn't wrap my head around.
Pick a fix stop and back test it... If you want to back test two stops then back test both of them at the same time.. Simple! Any more excuses ? Please let me know.. I will answer them..
Thanks MA... I will absolutely take you up on it and shoot you a question if I get stumped. Falling down is sometimes not so bad as long as you get back up again!