Consistently profitable traders...

Discussion in 'Trading' started by DEM BONES, May 29, 2011.

  1. I've never heard of a magazine that sends free subscriptions to random strangers. But if you say so, it therefore must be so.

    Why would you waste precious time on a Memorial Day weekend reading birdcage liner when you could invest that very same energy right here, amongst all the other highly vocal = highly successful traders?
    #21     May 30, 2011
  2. This is the secret...As the momentum of the market changes, you need to re-align indicator values with time-frames so that divergences only appear at TP's. Try different values & time-frames, not just the traditional.
    #22     May 30, 2011
  3. NoDoji


    If you've done thorough research and backtesting, selected setups and defined trading rules based on probability offering you a statistical edge, then real-time qualitative assessments can lead to failure.

    Qualitative assessments are made during the mathematical analysis phase (research and backtesting to develop the plan). The trading plan (business plan) is designed based on the quality setups you choose to trade. Because successful trading is the result of a statistical edge based on tossing the coin every time a pre-qualified setup presents, consistent profitability depends on trading all setups and managing them according to the plan.

    Ask any struggling trader here who has an edge what their biggest problems are and I assure you the majority of them will fall into one of these categories: hesitating/failing to trade a setup (picking and choosing), taking profits smaller than target, moving stops to break even, moving stops further away inviting larger losses, getting impatient and jumping the gun on trades.

    A proper trading plan doesn't allow allow this kind of micro-management. By trading that way, you're messing with your statistical edge. You're trading as if you believe you know what's going to happen next. You don't.

    IMHO, qualitative assessments and necessary adjustments should be made at the end of the trading day, not while trading.

    I'd have twice as much money in my account right now had I followed the original trading plan I developed last year without any real-time qualitative intervention on my part.
    #23     May 30, 2011
  4. Bingo... The trader subjectively tries to pick only the winners and eliminate the losers and, in the process, trades away the statistical edge.

    #24     May 30, 2011
  5. I agree that if you "subjectively" try to pick only the winners, you will end up trading away the edge. However, adding an additional variable with predictive power, e.g. a filter based on an objective factor which is either present or absent at the time your original strategy's trades gets triggered, is a viable way to decrease the number of trades you take, while increasing the statistical power of the edge. The tradeoff then becomes one of the overall pace of equity curve growth under the two variations of the strategy.
    #25     May 30, 2011
  6. NoDoji


    Yes, I've honed my edge over time, but doing this while actively trading is not the time for that. I review each day, add filters over time if it makes sense to, then trade the updated plan without applying subjective filters to each setup when it appears.

    I've experienced many valid setups that "felt" so improbable at the hard right edge turn out to be some of my best trades.

    One bit of micromanagement I do engage in is if I have a trade on and a significant news release is pending. If the trade isn't close to my minimum acceptable profit, I'll very likely close it out before the release. I've traded through so many news releases lately though, I think that in the long run it doesn't impact an edge much.
    #26     May 30, 2011
  7. Thx for trying to clarify which confounds me even further. Which markets do you trade pls? Perhaps, that would help me to understand your wisdom and techniques much better.

    Would love to follow your trade on Tues when market reopens. May I pls? Thx much.

    #27     May 30, 2011
  8. Daveb351

    "This is the secret...As the momentum of the market changes, you need to re-align indicator values with time-frames so that divergences only appear at TP's. Try different values & time-frames, not just the traditional."

    I am glad you are successful, but the above is to me just stating the basic problem with divergence indicators. Any oscillating indicator (macd, rsi, sto, cci, etc.) all work great in retrospect if you change the settings to match price performance. You only see the need to "re-align" after the trade failed. FWIW.
    #28     May 30, 2011
  9. Yes, trading hours are for trading and after-hours and weekends are for reflecting on the results and testing changes.
    #29     May 30, 2011
  10. You are the MAN

    who possesses the true insight and understanding.... in my book.
    #30     May 30, 2011