Blotto: Thank you very much for your time and advice. I agree with you that i need to find a way which fits me. First I would like to share my thoughts on all advice given to me. No matter who gives me advice, experienced traders or developing traders, not only i believe in the value of the advice but i follow the advice which fits me the best, and I took full responsibility for any advice i decided to follow. Today's trading mistakes are caused by myself but not by any advice. Secondly, I believe writing journal is helping me to find a way which fits me. My first goal is to follow my trading plan consistently particularly not widening the stops; during the process i will modify the plan/setups and observe the markets. Writing this journal is really helping me to move closer to this goal. Your advice is helping me greatly to think deeper how to find a way that fits me. For the reasoning above, i will continue to write journal and have no intention to offend you. Thank you.
Mistakes on Entry: As shown in the chart, when it is in a TR 8:45 to 10:45 (clear it is a TR around 9:45) after down trend, i long the TR top half because i was looking so hard for trend reversal. It is ok to anticipate trend reversal, but either to do nothing or to treat it as a TR before it really BO to start a new up trend. If i was buying bottom of TR or short top of TR, 2ps stop is sufficient. I made the same mistakes again for the next 2 hour TR. Mistakes on Exit: Suppose i made the above entry mistakes, the same principle would have helped me in exit. If i had follow the basic TR trading principle, i would have hold the long near the bottom of the TR but exit long around top of TR, hold short around the top of the TR and exit short around the bottom of TR. (using 1ps or 2ps above TR bottom for long and above TR top for short). I would not use it because it requires a 5ps or 6ps stop for today's 4ps range TR for too expensive entry. Still the lesson is very clear: Before sure about the start of a trend BO from a TR, just do nothing or follow basic TR trading principles: buy TR bottom and sell TR top. the key is to identify TR bottoms or tops. If not clear about TR boundaries, then just observe the market.
Perhaps others can learn a lesson here. I found the nature of the response interesting, if predictable. Note the evasion and politeness. Politeness, because we do not wish to acknowledge 'unpleasant' truths. Not all opinions are equal. Not all traders are equal. By being overly polite, we seek to use social cues to telegraph the range of "acceptable" debate. Because if the thread starter examined himself, the objective is neither learning nor profitable trading, but following a preconceived path according to a roadmap which has already been decided based on principles which have already been accepted as true. Evasion, because the issues are not addressed - that the advice being relied upon is likely worthless for the purposes of profitable use of the futures markets, is of questionable provenance, and is being accepted unquestioningly. Begging the question: keeping this journal helps me because it is helpful. No explanation of the connection, if any, between publishing a trading diary and the decision to program trading software to modify the price of a stop order is offered. This continues with the subversion of my initial advice "you need to develop your own theories and should not uncritically accept popular opinion" into "I agree with you that I need to do what suits me best". It isn't known to the extent this process is volitional or subconscious, but already we can detect a subtle re-interpretation of information to fit the preconceptions of the thread starter. With this bias in evidence, only the quality of the initial preconceptions will dictate the outcome, regardless of any data which may be presented. If the initial preconceptions are wrong, and a fully open minded approach is not adopted, then the subject will be incapable of objectively interpreting any data from the environment that tends to show that the approach used is unproductive. Instead, data will be selectively interpret to conform to existing bias. The mental gymnastics to thwart cognitive dissonance will be both astonishing and educational to the astute observer. The title of this thread is "a beginner's mind". We can stand to learn a lot from how this particular beginner has ordered his mind when approaching the task. This is infinitely more interesting than the predicable outcome of the subjects trading. Our first lesson is the use of labels. We see the subject adopt the nomenclature of technical analysis, which is unhelpful as it is not sufficiently precise or descriptive, and does not show any qualities of market structure - therefore of no assistance in the goal of short term prediction of prices. The subject makes no claims for this analysis, and does not relate it to the stated goal of successful trading. He hasn't argued for why it should assist this goal, or how he will use it to do so. This is assumed, and no debate on the merits will be admitted. Interestingly, we do not make too much of an effort to seriously pretend that we are seeking success. Apply some technical terms and you can decide to believe that you have understanding - after all, you are using the correct labels! The alternative is facing the intimidation of the blank page and the necessity of discovering your own meaning from scratch. The responsibility to determine what data will be used, how it will be represented, and how to create an effective trading plan. Instead the subject chooses to uncritically adopt an unproven and vague set of technical terms as a substitute for understanding. The second lesson is the substitution of the social for the factual. We will attempt to alter reality by controlling in which way we discuss it. The audience, who have vested interests (perhaps to be discussed later), will aid and abet the subject in enforcing the predetermined "window" of acceptable viewpoints. Detractors will be marginalised, suffer further ad hominem attacks, the ignore list will be suggested, and dramatic pleas from the thread starter to respect (his view) of the (one true) purpose of this thread. (predictably, requests to cease contributions which advance views not endorsed by the subject) Nowhere in this process will consideration or priority be given to facts, the merits of various approaches, or results - namely whether the theories advanced can or do lead to successful trading. We will continue to collectively perpetuate the canard that some progress is being made, some learning done, and that unfocused guessing is part of some process towards effective trading. This will be accepted without question as the guessing is legitimised by the nomenclature and arguments from authority. The third lesson is to profile each of the participants in this "game" and discern their motives. Successful trading is not the true objective for many here, although it serves as a useful pretext. Lets list our dramatis personae: the aspirant - "I want to learn to trade" (but am actually using trading and trading forum to indulge some idiosyncratic personal fetish) the detractor - "successful trading is not possible / the game is rigged" the enabler - encourages the aspirant to trade and will give positive feedback - lives vicariously through the aspirant, helps give false hope, attacks practitioners and detractors. Trades rarely or has quit completely but still lingers in forums. the salesman - "I know how to trade, you need to write a trading plan, read Al Brooks and Trading in the Zone, learn TA, work on your psychology" (note this character is selling something, but usually gets paid in something other than money - can you work out their payoff?) the troll - stirs up controversy, baits other players the practitioner - will occasionally offer sensible contributions grounded in years of experience as a market professional - in topsy turvy world this individual is treated as a court jester or fool by the other characters the hopeful one - a fragile sideshow character who will launch random attacks against detractors and practitioners who threaten his hope - these outbursts can get rather out of control the mystic - Jack Hershey, the chap quoted above who tortured eastern philosophy into market advice: "water has no ego", the astrologist. So let us continue with Act I, Scene 3 of our production "The Beginner's Mind", which is suspiciously similar to many other similar shows which have played out on this and other forums. With the same cast each time. The rhetorical question: are beginners fungible? The liquidity they provide sure is.
Our first lesson is the use of labels. We see the subject adopt the nomenclature of technical analysis, which is unhelpful as it is not sufficiently precise or descriptive, and does not show any qualities of market structure - therefore of no assistance in the goal of short term prediction of prices. The alternative is facing the intimidation of the blank page and the necessity of discovering your own meaning from scratch. The responsibility to determine what data will be used, how it will be represented, and how to create an effective trading plan. Instead the subject chooses to uncritically adopt an unproven and vague set of technical terms as a substitute for understanding. Blotto: Please help to elaborate by specific examples "does not show any qualities of market structure." and Please let me know specifically why my trading plan not effective so that i can do better in the future. If possible, i hope you could use specific examples to show me the direction on how to do better. Thank you.
Week1 3rd day of 15-day sim-trading ES. The purpose is to build good habits to follow the plan and setups consistently. Today I watched 5m(RTH)/2000T candle charts (globex) and 1m bar chart for entries. I had 5 losing trades buying the top and shorting the bottom of opening TR. But i was not overtrading since i was deliberately taking trades in order to search for the direction and practise to take the setups without hesitation. In the future i need to correct two things: identify TR in advance and then short the top/long the bottom; and when searching for a direction, exit for a small loss but donot wait for being stopped if the market doesnot move as what i anticipated . The good thing is that i did have 3 good trades, good entry and good exit. 5m candles: http://i.imgur.com/ot8MUfp.jpg 2000T: http://i.imgur.com/V2EyUeb.jpg
So hopefully, this time you can trade forward test 20 trades using this one and only one set-up. Any backtesting done on it just for the information ?
smallStops: Still in the process of modifying the setups because in real trading i realized the areas i should modify and i believe i will find other aspects of the setup to be modified in the future. Did not do exact backtesting, however the process of iterative modifying is part of backtesting. Need to get a precise setup first. Thank you for your time.
Week1 4th day of 15-day sim-trading ES. The purpose is to build good habits to follow the plan and setups consistently. Focus on entry more than exit; step by step. Today Globex ES BO above the large box top 1666 and entered upper large box. Had 3 losing trades, 2 good trades, 2 trades with good entries but ok exits. 6 longs, 1 short. I shorted at the bottom of small up channel; prob in the future better to draw channels to help me to avoid shorting the bottom and buying the top. The first long: i was not waiting patiently. The short should absolutely not be taken. Daily and 60m: http://i.imgur.com/pCN7M7W.jpg trades: http://i.imgur.com/Sq8VoSi.jpg http://i.imgur.com/fpwRAwW.jpg 2000T: http://i.imgur.com/RdOKCSl.jpg
Posts i found informative which i will review in the future. Quote from niko: I would cancel the buy stop, because the RET did not go and instead this is turning into a TR, so I will reassess and avoid being sucked inside a TR on a fakeout, as would have been the case here. Am I wrong? DB: Yes, you're wrong. You're predicting the future, and it's all bad. You're assuming that everything is going to go wrong because it's gone wrong so often before. But every trade is unique, and the outcome is unforeseeable. You have not yet accepted those facts, which is one reason why you continue to have trouble. A more productive response would be to decide in advance just exactly what you would do IF your buystop were triggered and IF price did not move upward as anticipated. At that point, you'd have a point at risk. If you weren't willing to risk a point, then you should cancel the buystop. However, none of this has anything to do with following price. If you were following price, you would note that it is holding above the low of the trading range and you would be in position for the opening move. But you're not following price; you're following what your fears tell you price MIGHT do and you're attempting to insulate yourself from those possible and unforeseeable consequences. Quote from Huyang: DB: I need to ask you a related question: Suppose before the open, i have a buystop @70.75. It is clear that I need to think in advance what i should do if the buystopp are triggered but price does not move upward as anticipated. But i have difficulty to find a reasonable sell stop price if price indeed does not move as anticipated. I guess i could decide the sell stop price based on low of TR, also below a small supple line drawing from 9:03 EST high. Then how many points below low of TR prior to the open would be good? the low of TR is 67.75. DB: Again, there are no stops. Exit when the trade isn't doing what you expect it to do. As to where that might be, that's one of the objectives of testing. Again, there are no stops. An exit from the bottom of the trading range would be a signal that the trade was going wrong.
Week1 5th day of 15-day sim-trading ES. The purpose is to build good habits to follow the plan and setups consistently. Focus on entry more than exit; step by step. Today Globex ES BO above the large box top 1685 and entered upper large box. Had 2 losing short trades, 2 trades with good entries but ok exits. 3 longs, 2 shorts. I think today all my entries are ok since i didnot short the bottom or buy the top of TR, but exit for shorts are bad. But anyway, working on better entry is my first objective; having better exit will be my next objective. Daily and 60m: http://i.imgur.com/pCN7M7W.jpg trades: http://i.imgur.com/FVpZ2uo.jpg http://i.imgur.com/g2sPtIC.jpg 2000T: http://i.imgur.com/EhEHqBP.jpg