Hey, cool! You are on the right track! I wish you all the best and prosperity! You could be a good example to beginners that pop up on this forum once in a while! Keep your journal coming and, I'm sure, many of us would be happy to help you (if you, of course, need any help). Cheers,
Luto, Congrats. Good first year, I lost '000s in 2003. I take it you are using a system rather than discretionary? Did you use backtesting. I like to know these things as I waver about this.
Use these, for your simulated trading to see if your method works better, they move almost identically . If you decide to trade it use electronically traded contracts . Do not forget about YM, also look at individual Dow stocks if your method is a trend following or breakout type.
IMHO, Discretionary trading requires that one has something to be discretionary about. i.e. it assume you have a base or foundation to exercise discretion from. So for me as a developing trader, discretion was not possible. No basis or foundation to deviate from As for back testing, several things struck me. 1) Writing TOO much code is not a good thing because it is low bang for your buck. One spends a lot of time developing, by definition, very discrete sets of rules. These trading rules are often very hard to code and take a lot of time if they are generalized enough to allow for exceptions. And those exception are critical for flexibility. Also once done, one ends up with a rather sub-optimal result. i.e. a system that works after the fact and due to limitation of time spent coding is usually only an approximation. 2) The only thing that matters, on some level, are the buttons you press on the order entry. i.e. One could dress as a Drag Queen, dance around with c notes hanging from garters belts and sing god save the queen and no one would know. The ONLY thing the market knows about is what buttons you pressed. So given these two thoughts, I "rehearse" instead of "back test". Rehearse the trading not the drag queen stuff lol. I liked the quote about the guy who says he can hit anything with pin point accuracy with his single shot dueling pistol. To which another rebuts, "that's all and well, but can you do it with someone pointing a gun at your heart?" Likewise, the dynamic nature of trading, which I like personally, is what makes the rehearsal fruitful for me. I get a chart and scroll through one bar at a time. On each bar I develop the trade. e.g. This bar a setup is developing, next bar I find and entry and exit, next bar I would prepare an order and find the "Go-No Go" signal, next bar I put in the order, Ok a fill or no fill, here I would set a trail here I would exit etc. This allows me to rehearse all the steps required, in sequence for a trade. Having TS do a strategy report is not what I personally needed. In addition my rules were hard to code up and I have enough software experience to know how to reach an objective efficiently. I learned two things. First some setups were literally untradeable because by the time I do all the due diligence required , the entry that has the right Risk:Reward is gone. Secondly I counted all the button clicks and steps I need to prepare a trade and found a lot of inefficiencies. Like a really good sushi chef (i.e. one in Japan at a high end place), there is great economy of motion. No wasted movements or repeated steps. Hope this answers your question. But of course this is just my experience and personal utility depend on the individual. Cheers
This is bang on! This is my philosophy too! No indicators will make you rich, you will. All TA indicators should be treated as "food for thought" rather than a command. Reflexes, training, experience, associations, reaction etc. are IMHO are the fundamentals for the success. Systems don't win, people do!