Following a set system.

Discussion in 'Journals' started by andy4, Sep 2, 2002.

  1. andy4


    Hi All,

    it is with great thought that I'm going to write a journal till at least the end of the month.

    Many of you have given sooo much and hopefully this may help somebody. I know and except it's for me also.

    I've been trading on and off for about 4-5 years, time flys when your having fun. The off times have probably out numbered the on's, pretty much due to being out of control, not following my plan, what plan ????

    God has allowed me the time and resources to trade full time. Though I'll be following a system that only generates 1.5 avg trades a day.

    Why did I have to mention "God " ?

    Pretty much because I believe if Glory is not given to Him, then all this is just blowing in the wind. Being at home all day I don't meet too many people, and this journal may give me a way to share about Jesus if anybody asks.

    At this time I don't want to go into too much detail about the system I'll be following, I'm sure it's nothing new, it's certainly not exciting. It is a trend following system of the mini NQ, first trade will be after 10am, WHEN an entry is given, and all cash at 4pm.

    I'm giving it a 20pt stoploss/trailing stop, which will reverse me in the market if hit before 4pm. I will ONLY follow THIS system till the end of the month (about 15-20 trading days, have company coming at the end of the month, will take a break)or till I get 10 straight losses in a row. I realize that comes to $4000 (20pts x $20 x 10trades = 4K)

    What I've been doing in the past has not worked completely, this is an educational exercise taken from Mark Douglas, with lots of ideas added from you guys.

    Guys (I include ladies in this) this is real money for me, but I have to get real and make this work.

    I'm looking to share about the pro's and con's of following a set system. I'm kinda shuddering at the thought of the response I'm going to get from some of you especially the large stop, but I have papertraded this system and feel comfortable testing it live for a while. I am looking to learn lots, plus maybe profit some if I'm honest, but WILL follow the system till at least the 10 losses happen.

    I'll add more tomorrow after my first day of "real" trading.

    Thanks to all those who have helped me in the past,

  2. I would wish you luck but the longer I trade the more certain I am that luck has nothing to do with it. Sticking to the plan is the only way to go. Hope it works for you.
  3. You will, god willing, do just fine!

  4. andy4,

    welcome and hope this works out for you. at some point perhaps you can explain the logic of your system a bit more. I don't regard 20 NQ points as necessarily excessive, but it is on the large side for a daytrading system. one thing I have learned though is that the size of the stop has little to do with the performance of a good system, provided you have good logic for taking profits.
  5. andy4,

    I'm curious why you will pull the plug after 10 straight losses. I can almost promise you that you will experience that at some point, certainly within one year if you follow your system. No doubt your win percentage is <50% and the math is inescapable. On the other hand, after 10 losses may be an excellent time to start trading your system. Some traders trade systems in this fashion, ie attempt to time their timing system by waiting for what they hope is the max drawdown point.
  6. AAA,

    10 consecutive losses? The best odds of that happening are the same as 10 consecutive wins -- and 50/50 odds would correspond to a .097% probability that a 50/50 occurance would happen 10 consecutive times in a row.

    I guess if you were to trade 1,000 times in a year, that raises the probability to 9.7% that one a series of 10 losses will occur -- but it has been awhile since I've taken statistics.

  7. andy4


    Hi all,

    what a day. Watching paint dry would have been easier, but not as profitable :)

    I scored full marks today for following my plan/system. I'm not saying it wasn't without ideas to jump in and change, but I was able to hang in and stick it through to the end. It was a lot harder than I figured, but yours and other friends accountability helped. THANKS

    Entered a sell at 912.5,(about 10.05am, new low of day) covered at the end of the day give or take a few seconds for a nice 12pt profit. God surely gave me a nice day to start off :)

    I actually used a sell stop limit to enter, with a 1/2pt leeway, it filled me at the better price. 912.5 to 912.0, got the 912.5 :)

    Checked it against my papertrading rules, perfect match, just a lot, lot, lot more emotion.

    Found out IB has a trailing stop for futures as well, entered it, but couldn't tell you if it worked (just never got there) The reason for a 20stop is just that I noticed the NQ's seem to whipsaw upto about 15-18pts then keep going in the original direction. I won't judge the large stop until the end of the trail time.

    The larger stop allowed me to peek in and out (every few minutes)and not have to sit completely all day staring into my monitors, though I probably did more time doing that than I needed to, nerves :)

    Also checked in and used Elite Chat, helped break the day up, plus got some good stuff,special thanks, Nitro.

    All in all a great day, completely following the plan, sure gives me a good feeling. One day down 19 to go :)
  8. andy4


    10 losses ?

    That was a number I came across, I think by Mark Douglas, though not sure. It's more to give me an idea of the cash amount I need to test a system. Yes The 10 losses could start off today, Murphys law :-(

    Though it was a number,

    10losses x 20pts x $20 =$4000 that I'm ok with using/risking to test this system.

    Hope this makes sense.

    Of course if I make good money before the losses come it might not mean anything. Also thats including 10 straight whipsaws of 20pts, the 20 pt is a trailing stop, which might take the sting out of a full loss amount.

  9. andy4


    Hi All,

    I'll start off with how I followed my plan, full marks again. Guys this accountability is priceless, thank you :)

    Didn't get my first trade till just after 12 noon. The waiting was tough, saw lots of old scalp plays, but sat tight waiting for my system to signal, score A+ :)

    Went short (902.5)at one stage up $150, but the big stop allowed the market to come back and put me in the red.

    Must say, very impressed at IB's T-stop, filled me at election stop price, (914.5). Down side of it, it is hard to know exactly where the T-stop is placed, it's a matter of so many pt's then submit. I look at the last price to calculate, guess I was a little off today, ended up getting hit 1pt before I thought (should have been 915.5), though it went past there later, didn't effect my plan (actually a pt better off:) This took care of the short and put me long., Blink of an eye :)

    The NQ took off nicely, gave me some scary times, thought I was going to get a double whipsaw :-( Held tight, and closed out at end of the day.(921)

    Those emotions are killers, following a set plan is really helping me. No "if" and "but", just stick to it, also even though I'd like to make some cash during this next few weeks, the mental idea it's "training money" is helping alot to. I know it's only day 2, but I am feeling good about it.

    For the record 1st trade, -12 , 2nd trade, +6.5

    End of day, -5.5pts A loss for the day, but I still feel a winner, no rules broken :)

    May God bless you all, Andy
  10. andy4


    Hi All,

    Talk about talking to yourself feeling :)

    Score for following the plan, A+.

    Seems I'm doing good by my score, but it's harder than I thought, mainly due to pretty much just watching and waiting, guess that's what discipline is all about. To be fair, don't think I'd be doing anywhere near this good if I'd not told so many people what I was looking to do, accountability !!!

    I realize no major money is being made, but do feel pretty pumped about not swaying from my plan/trading rules. It's a good feeling, talk about a peace. For those Christians out there, it's like the "peace " you get when you know your doing what God wants of you.

    Went short just before 10.30am at 886.5, again entered on a stop sell limit order, getting to like them :)

    Soon as I got hit (instantly as price was shown, IB is fast, I gave 1/2pt for slippage, got the better fill) I placed a buy T-stop 20 points away for 2 contracts. One to get out, one to enter the market long..

    Then sat there, sat there and sat a little longer watching, not too much happening :-(

    Finally closed out at end of day (885.5) for a point profit. No broken rules, I'm still a winner :)

    I really need to find things to do, I'm starting to get a back ache sitting around all day, plus my eyes are getting funky things floating by !! I do try to take breaks, swim or walk some, do a couple of odd jobs around the house. I think once I'm confident IB will work the orders good, and the beginners nerves have gone, it'll be better.

    All in all doing good for what I expected, know it's been only 3 days, but I'm a little ahead as well. 17 days to go, actually may be only 16, lost one day because of labor day :)

    Have a super evening, Andy
    #10     Sep 5, 2002