A trading epiphany

Discussion in 'Trading' started by serioustrade, Apr 10, 2012.

  1. Like all of you do, I spend a lot of my time flicking between strategies.

    Here are a few that I have considered:
    1) expanding the intraday timeframe to 30 minute bars and looking for volatility contraction, then entering on a breakout of a narrow range bar
    2) slim jim formations on 5 minute bars
    3) pullbacks to the 20 period moving average on 5 min bars
    4) consolidation breakouts to daily highs where there is high volume
    ... and MANY others.

    Like all of you would have found, each and every strategy looks great (for up to a few days) and then serious questions begin to arise about effectiveness.

    I have concluded that the desire to be correct 100% of the time is why I have been unable to stick to a given strategy.

    When I decided to take a more quantitative approach, I realised that the profitability (or lack thereof) of 1-4 above where about the same (perhaps with the exception of 4, which was actually a losing stategy).

    So the issue becomes one of psychology, namely an inability to stick to one approach.

    What is your trading epiphany? This should be an interesting thread, I hope.
     
  2. ocean5

    ocean5

    Means the strategy is not 100% of the time correct.
     
  3. I had the exact same problem - jumped from one to the next, in search of perfection. Like you mentioned, it doesn't exist. But some approaches are definitely better than others. I found simple is key. Knowing how to define a trend/pullback is really all you'll ever need. Classic stuff works the best. Cheers.
     
  4. Simple certainly is key.

    On another note, I see a lot of threads on this site saying that daytrading is impossible. But a formation on a daily chart is traded the same way as one on a 5 minute chart.
     
  5. Trading size. I found I can be right 60-70% of the time being discretionary and using TA, but none of that mattered if I was taking large drawdowns on losing trades. A lot of people, including myself, wanted/ want to make a lot of money with very little which causes traders to try for home runs on every trade.
     
  6. Handle123

    Handle123

    What you have are entries, no mention of Money management rules. You can't get to a 100% of being correct, but you can get real close as your skills at reading Price on charts becomes better and the more Money Management rules you have. Some of the rules are when NOT to take a signal. Not all signals are the same, where is Price in the swing, is trend looking toppy, then having time stops, if price hangs around your entry-is this normal on profitable trades. So you have to do is brainstorming on all the different ways the trade can fail and have rules in place to react to failing trades.

    People who can't stick to one approach is subconscious saying it doesn't believe in it, did you backtest min of 3000 sample size, unless your inner self believes, tough to push the button.
     
  7. Interesting comment....I've always said that as well. The only difference is time-frame and the average trade duration.
    That being said, the important difference may be this:
    Counter-trend strategies have been proven to be more effective INTRADAY than trend following.
     
  8. Where is this proof elaborated upon?
     
  9. Countertrend trading is probably actually included in my opening post, namely pullbacks i.e. buying in line with the intermediate trend but against the short term trend.
     
  10. Keith Fitschen's Presentation on DVD.
    I see he no longer has that for sale....
    http://www.keithstrading.com/
     
    #10     Apr 10, 2012