Day trading difficulties

Thank you for your post.

There were plenty of profitable entries trading trend lines correctly over the last week.There was good 200 to 300 pips to be made on trading only the euro/usd on intra day.

My apologies , as I was not seeing the picture clearly.

 

Right out of that popular trading song entitled "Consistent Profitability".

 

Hi,

It seems you're comparing what you see in real-time while under the stress of trading to what you see in "hindsight". Simply, be very careful because "anyone" can see the picture clearly on a hindsight chart after the fact in comparison to what they see in real-time with real money on the line.

The real question is why do you think you were not able to see those key price areas outlined by those trendlines. ???

Next, will you be prepare to trade any trade signals you're using when those trendlines are tested again that's outlined on your chart for future reference. ???

Another question, what's the lifespan of those trendlines considering new ones will appear every trading day. ???

I'll repeat something I said earlier...you already have profitable swing trading strategies that's still making you money...

Why mess around with day trading ???

Your change in profit level, while still profitable, can be due to change in volatility or market context. That's normal. I'll repeat, it's normal and your adjustment should not be trying a new type of trading. Instead, tighten your wallet and personal lifestyle needs until suitable trading conditions return that allows your profit levels go back to where they unless you have a fear that your profit levels will continue declining in your swing trading.

*****
My point is that you have profitable methods and you should be concentrating on improvements in your "trade management after entry" of your existing swing trading strategies instead of messing around with learning a new trading style called day trading.
*****

Last of all, the years you stated had a particular type of volatility that change dramatically in 2008 and is still changing as of now. Thus, I strongly suspect your swing trading methods are very sensitive to key changes in volatility.

Mark

 

Can somebody post a snap shot of that well known chart that shows the emotional roller coaster traders go through when hanging onto a position?

Thanks!

 

No problem, I was just trying to help out.

Thanks

 

OilXPro

In June 2004 I went to a trading expo in Chicago (If my memory is correct). After one of the presentations at the expo on trading stocks was complete, a trader next to me stood up to ask this question. “…if markets only trend 20 % of the time, then trends fail 80 % of the time. Right. Then how come it doesn’t show up on charts? If you look at chart of the Dow from 1980 to 2000 I don’t see 4 failed trends…”

For the life of me I can’t remember the presenter. It may have been Larry Williams? But I never forget the answer that was given back to us. So I will try to paraphrase it:

“…Don’t be mad at me when I really tell you what price trend in stocks really means. Because it is not going to fit your definition or the text books definition. To me it is the general direction in which stock price tends to move. But for many this is too simple a definition …”

“…you have stated the 80/20 rule which is tough to use because it gets so twisted by everybody who uses it as an example of trend in the markets. What it originally meant in the first articles written about it was that when a stock price moved in a direction that about 20% or 1 bar in 5 really contributed to the movement in that general direction (the trend). The other 80 percent of the price bars or 4 out of 5 create price noise that cannot be seen as contributing to price moving in that direction…”

“…But in today’s literature this saying as come to mean any number of twisted variations. Things like 4 out of 5 breakout set ups fail to work intraday…Only 1 trend in 5 produces good results and the other 4 are duds. Or that 4 out of 5 bars on a chart are not part of trends… All of these are false and contribute to traders not understanding when a trend is taking place on a chart…”

Take an example say of a chart of the weekly price bars from March 2009 to today for the S & P 500. Try to explain to us the directional price movement for the S & P 500 using your 80/ 20 rule. Can you show us what periods where it trended 20% of the time and what periods where 80% of the trends failed?

 

I have answered your questions above .

For day trading , I am now going to trade only trendlines using the 15 min/1 hour and daily charts using the 15 min trendline break method.Nothing else will be traded.This will eliminate the problems I had with day trading.I have been looking at variations of this method for around a year.

Using a robust day trading /swing method ,a trader should be able to consistently average about 500 pips a week on oil, indexes and currencies using a $100k account. It should make about $250k a year, with probably a draw down of no more than $10,000.This is based on 1 lot future contract @$10 per point.

In comparison the automated system currently makes about 22% a year with 10 to 15 % draw down on $100k account.

Here is a similar method to mine.

http://www.forexfactory.com/showthread.php?t=163012

 

Trend lines are subjective; there can be intermediate trend lines, medium term trend lines and longer time frame trend lines.

Take a look at this chart, very choppy.several failures here.

 

This thread seems to have quickly developed into a "strategy re-design" discussion and not about the psychological difficulties involving day trading.

My point, it seems like you're doing something very common I see occurring in the Journal section of this forum for the past 2 years.

Simply, you're trying to resolve your psychological problems in day trading and breakdown in discipline via tweaking your trade method. I don't think it's possible to fix such problems via making changes in your method as seen over and over again in the Journal threads.

Mark