crude light marathon

Discussion in 'Journals' started by clightmarathon, Oct 16, 2011.

  1. The purpose of this journal:
    To help myself to become consistently profitable through "public" scrutiny and accountability.

    Instrument traded:
    Crude Light.

    Trading hours:
    I am in Europe, so I will trade both London and New York hours.

    Discretionary scalping and intraday swing trading using price action flavoured with few MA's and trend lines.

    About myself:
    I have been trading for a while now. I don't want to mention how long I have been struggling with inconsistency.
    You would think I am insane or hopeless. Either I should have given up or turned the corner already. But I did not.
    This journal is my final attempt to become consistent.

    Basic assumption:
    My system works and has an edge. This assumption is based on manual back and forward testing, and occasional live winning streaks lasting 1-3 weeks.

    The main problem:
    Lack of discipline originating from my fear of pain from losing.

    Manifestations of the main problem:
    - Not entering all signals. I always find reasons to avoid entering. And finally when I enter I have the cunning ability to cherry pick my systems losing trades. The other day I had some 15 signals, 5 losers and 10 winners, I handpicked the signals for entry and managed to pick 4 losers.
    - If I somehow finally enter a trade, I quit following my exit rules and exit early on most winners. I always take my stops though.
    - Rouge trades: trades not according to the plan, always out of frustration and revenge after mistakes.

    After entering a trade my state of mind changes abruptly. I am in the fight or flight state, and I become a completely different person. It is very interesting, I really take trading as a self discovery process. I always did, but never thought it will be so difficult.

    The premise:
    I hope that the fear of public humiliation and ridicule for not following my own rules and my own plan is bigger than the fear of pain from losing. Also, I might receive suggestions I have not thought of from fellow traders.
    I will find out doing this journal.

    I have 3 types of signal I have been trading.
    - type I: trend continuation signal - faster trends.
    - type II: trend continuation signal - deeper retraces.
    - type III: counter trend signal - If I expect deeper retrace I enter counter trend signals.
    - type IV: experimental for larger swings. I hope that If I can follow my rules on my scalping trades, I can enter and hold for larger swings.

    Risk management:
    I hate when a trade goes much against me (who does not), so my signals evolved so the entries are such that the trades should not go against me more than 15 ticks. I guess one can do better than that.

    - risk per trade: currently risking 15 ticks max per trade
    - profit targets: 15-30 ticks at the moment
    - after 10 tick profit I move stop to break even
    - after 2 consecutive losses I will stop trading for the day

    How to improve discipline:
    By honestly posting my progress here.
    I believe discipline is like a muscle, it needs to be exercised, and it needs to penetrate all aspects of life. So for this final attempt, which I will not fail, I decided to register and prepare for a marathon as well which will be at the end of February to improve my discipline in my trading. I think consistent trading is like running a marathon. But how would I know? I have not done either one.
    I will post daily and weekly summary of trades and progress. Since I mostly scalp, I don't intend to post real-time trades.
    I will also post charts when I feel it is necessary.

    I am rather an introvert person, and this “public” journaling is not that easy for me, but I am at my wits end how to change myself, and hope this angle or approach will push me out of this long lasting self-sabotaging behaviour.

    In short: I have a trading plan, if a signal occurs I have to execute flawlessly. Only an accepted signal can get into my normal journal and statistics. Even if the entry was a mistake, I can only exit with my normal exit rules.
    If I mark the signal on my chart I have to enter it. It is that simple. Currently I mark all the signals on the chart but mostly enter the losers, and exit the winners early.

    I know I am the nth person and this is the nth journal with this type of problem on this forum, and I read many of them learning a lot from them. Journaling worked for some and it did not for others, I hope I will be in the first group.

    Your comments are welcome.

  2. Be accountable to yourself - public scrutiny has nothing to do with your consistency.

    That's a hell of an assumption. Either conduct a proper backtest - and then you won't need to assume - or stop assuming altogether. 1-3 weeks of winning streaks will happen both with profitable and ruinous systems.

    If you can backtest it, you can automate it. Some people are naturally wired for discretionary trading and add value to an automated system, that does not seem to be your case. Stop banging your head against the wall thinking that if you manage to hit the wall in a disciplined manner you'll break through. Open a door instead. If you cannot backtest your system and turn into hard-coded rules you shouldn't be trading in the first place. If you have hard-coded rules for your trades, but lack experience automating strategies, ask for specific help in the proper forum.

    Adding fear of humiliation to fear of losing is like thinking that getting gonorrhea will help you with your syphilis. It will not.

    You will have better feedback if you ask for specific suggestions about concrete matters. Journals tend to attract trolls and naysayers.

    Leave the experiments for once you're consistently profitable. Three types is more than enough

    Backtest moving your stop to breakeven after 10 tick profit: does it improve or deteriorate performance. Act consequently. Don't let the fear of losing screw your trading plan.

    Even if you have a system with 80% winners, you will get two losers in a row plenty of times. This is another rule that is reflecting your fear of losing, not sound trading practices. Having a (reasonable) number of losing trades after which you will stop trading (or a maximum dollar loss for the day/week/etc.) makes sense to avoid blowouts even if it will normally deteriorate performance, but it's got to be a reasonable number of trades or $ amount. Two or three losing trades in a row is nothing.

    It's great that you want to make some changes in your life aside from trading, but read this NYT article first:

    Fear of losing usually means either of two things (or both): you're trading with scared money or you have a fragile ego. Publicly exposing yourself will do nothing (positive or negative) about the money part, but if you're not following your plan because you need to be right in order to protect your self-esteem a public journal will only compound the problem.

    "flawlessly" --> perfectionism. Just enter the trade - it will never be perfect.

    "Even if the entry was a mistake, I can only exit with my normal exit rules." --> stubbornness. If the entry was a mistake, simply get out.

    "but mostly enter the losers, and exit the winners early" --> Either you have prophetic vision (impossible) and thus are sabotaging yourself (maybe) [impossible + maybe = impossible] or your applying hindsight to the analysis (and backtesting) of your system.

    In short: the bad news is that I think you're wrong (about "you" being the problem), the good news is that if you do a proper backtest you will eventually come up with a profitable system that you can automate.

    (Sorry to rain on your parade, not trying to be a dick, just honestly trying to save you months of personal pain).
  3. Hey, Picaso, thanks for taking the time to reply to my first post.

    Yes, I agree with you that 1-3 weeks of winning or losing streak don't mean too much. In my case the system
    if followed has good statistics, but the 1-3 weeks I mentioned was reffering to the case when I was in the groove and executed more or less properly and live results agreed with the results of manual backtesting.

    About your backtesting argument:
    In short : If this attempt fails the next step is automation. So mostly I agree with you.
    In long: I have swing traded in the past, fully automated.It was not an easy task , and I did not do all the programming myself. That system was doing fine but stopped working, and I thought, no problem, I know how to trade. Well, see my first post.
    AT this point I beleive the rules and the discretion of my system is such that automating would be a very difficult (if not impossible ) and resource intensive task. So , for the time being let's not talk about automation and see how the journal is going.

    Funny. If I fail your metaphore is true :)

    You are right if your trades are independent. But if losing begets losing as it could be the case in a discretionary setting where the correct mindset and focus are very important, then limiting your bad decisions might be a good idea.
    Assuming, I will follow the plan, it is better to change that rule to the following: If I make 2 mistakes: acting not according to the trading plan than I have to stop for the day.

    Thanks for the link, I had already read it, and find it very interesting. Eating more sugar since :).
    Also, I am already a runner, just always stopped at the half marathon. And seems with my current trading level, that I need to run all the way. As you like metaphores.

    Flawless means to me that according to my rules. So, I think in that sense I have to aim to be perfectionist at this level, untill execution and rules are second nature. A losing trade can be flawless too.

    Yes it sounds stubborn, but it comes from statistics: If I take all my trades again, mistakes, rouge trades, all, and just follow my exit rules I would be better off, and consinstently winning. So, that is the reasoning behind this rule.

    No problem. I really appreciate your answer.
  4. Mate you NOW have 2 options, ONLY 2, and so if you fail to choose 1 then you are automatically choosing the 2nd!!

    Option 1- You listen to all of what i tell you, AND you then actually DO the actions that i tell you to do.


    Option 2- You follow your current stratergy which will lose you almost all of your money in a few weeks - few months.

    You likely do not know who i am as you are new to the websitee, but if you look through my thread history you will see the journal where over 1year i turned £759 into £36,500 profit (whilst withdrawing every week to keep my capital under £6,000),
    and the market i specialise in is Crude Oil! :D

    And so if you want2 trade Oil you i am your master, simple as that.

    I don't waste my time fucking around by talking about trading in polite lovey-dovey language,
    i talk direct and straight.

    And so i am telling you directly now that if you use a 15ticks stoploss to try trading oil you WILL get bent over and fucking ass raped!! You will get spit-roasted, ass whipped, raped and the destroyed son!! :p

    I don't know where the fuck you got the idea thatv15ticks was a LOGICAL stoploss for oil,
    but i trade oil with a 12ticks SPREAD!!

    And so if you think its logical and the easiest way to consistently make money from oil is to use a stoploss which is even tigher than the spreads which most traders use then you are going to get raped, raped sooo hard and fast, and raped to such an extent that you will never walk again! :p

    And 2ndly trying to be a trend-casher and then also be a reversal-trader at the same time is just fucking stupid, and will do nothing except book you in for alot more rape sessions!

    Ask yourself ''Why do i want to be a fucking stupid mug by being a trend-chasing fool??''

    Your method isn't the method of an intelligent Trader, its the method of a man who wants to trade just for the sake of it and out of bordem, as it gives him something to do.

    If you are happy to pay for ''an activity to pass the time'' then i highly recommend you be a trend-chasing fool.

    However if the ONLY reason you want to trade and risk your own cash is to make profit consistently everyday, every week, every month,
    then you need to ONLY ever enter a trade when its EXTREMELY unlikely that you will be able to lose money on that trade.

    And the best and most effective way to do this that-

    You ONLY ever enter a trade on oil is when it has moved minimum 8-9% in 1direction without more than a 1.5usd pullback during that move, and without any strong fundamental news causing that move.

    You then wait until it forms a reversal formation pattern on the 1-2minute chart,
    and then you short-sell if the 9% move had been upwards/buy if it had crashed 9%,
    and you are then extremely likely to endup having profitale trades over 95% of the time,
    and trades which have extremely little potential of moving much further against you from your entry.
  5. That was a very interesting link. Thanks for sharing
  6. If Spanish wrote a book I would by it. You get me so fired up with all this raping and common sense thinking.
  7. oraclewizard77

    oraclewizard77 Moderator

    I disagree with Spanish. I think you can have an 11 tick stop with CL, however, this depends on where the chart based stop is located and how much slippage is occurring in a standard candle.

    Also, you need an edge based setup. What does this mean? Its basically a setup that you are able to recognize in time to enter a trade that has a probability of 60% or better.

    You do not need a 95% probability to be successful. You could even have a 40% probability of success if your reward is much greater than your risk.

    Also, the 1 min chart is basically noise. Trading noise is random.

    Also, getting out after 2 losing trades is fine, but you could instead have stop loss amount for the day, and a profit target amount if you like.

    I am not a big fan of raising the stop to BE. I believe you need to give a trade room to breath. However, if you have a wide stop, and the trade starts going your way, you can start to tighten it a little.
  8. pma


    Spanish-I enjoyed reading your post:D
  9. Now I have gonorrhea, syphilis and ass-raping on the thread on the first day. I have to ask the moderator to make the thread R-rated, or change the title to
    "crude light marathon - or Can gonorrhea cure syphilis? memoirs of an ass-raped trader."

    Anyway, thanks for your opinion Spanish.
    I have not seen your journal yet but I will look at it, and test your suggestions later on.
    But at first sight there are not that many occasions fulfilling your conditions of 8-9% move without news and substantial pullback. Not mentioning that on 1-2 min tf you have plenty of reversal formations counter to the big trends giving you lots of stop outs.
    Also, I don't see your 12 tick spread, but I don't trade 50-60 contracts to be worried about that yet. If that were be the case, your argument would be correct, and using such a small stop loss would be suicidal. I have been using this 15 tick stop loss for a while now and “anal-izing” my result shows that it is not the cause of the inconsistency.

    I started my discretionary trading carrier as a counter trend trader and, simply, it did not work out for me.
    I am not saying it is not possible, and certainly it has the best risk reward ratio if you do it at the right time and consistently pick the tops and bottoms (no pun intended).
    I realized that at my level it is much easier to be on the right side of the trend than trying to go against it. It took me a long time to stop fading, but my results improved since. Even my current counter trend signal is such that it is not trying to pick absolute top or bottom, but just takes advantage of a deeper retrace and expecting the continuation of the preceding trend.

    So you do your thing, I do mine and later on we can compare notes again. You know what they say about the cat and its skin...
  10. I used to see 1 min chart as noise for a long time, but now I think it is tradeable but with less quality signals than what my current time frame the 5 min gives.

    Yeah , moving stop to BE after a 10 tick move in my favour is a big question. Currently, my stats support this decision, and I will watch out if new result show differently.
    #10     Oct 17, 2011