Thank you RN. Reviewed and printed out. BTW, not trading today. Into office late, internet issues and rollover. I'd say that's a sign but actually the PA looks pretty clear today.
I'm not trading this week due to expected slow holiday volume. Plus I'm doing review work. After my recent review of different exit/ management strategies I'm now going to do a more thorough study and compiling statistics of entries/exits/targets/runner & PnL. Basically the testing of the plan. I've done this in limited amounts in the past but stopped when I started questioning if I would have really taken the trades in real time. So, now I'm approaching it again with more objective rules. I've been resistant to hard rules because I've thought that it doesn't reflect the reality of the market. A simple example is a TL break can be an exit signal, it can be an exit and reverse signal or it can mean hold but expect consolidation. An objective TL break still depends on the overall context. However, in order to test my methods bar by bar and to get consistently profitable I need to spell out the context to make it more objective. Or, in this example, simply treat every TL break the same way. It reminds me of what Ed Seykota said, 1. Always follow the rules 2. Know when to break them I need to still be at stage 1 and add in my discretion later. In doing all this I'm considering besides a target exit how can I exit a runner ? After some review it hit me. Look at your trading plan ! I've done this work before. Yes, I do have rules for exits. A channel target, weakness followed by second attempt failure etc. Which brings up the thought that, I've got a plan but I have not internalized it. I've taken the time to learn something but I haven't taken the time to practice it. That's what's going through my head currently. So, i'll add a few more objective rules and compile stats which I expect will give me the confidence and practice to trade it profitably. It nearly sounds like to me I'm close to being caught in that endless loop of trying to tweak the system just a bit more. But honestly I think I'm doing the work (testing with clear rules) that I should have done previously. ======================= Merry Christmas Traders !
My discretion tended to get me in trouble and the more objective I got, the better the outcome over time. The market environment varies, but price action is price action. Develop rules for recognizing and trading (or not trading) strong breakout/trend, channeling trend, and range environments. Then instead of trying to tweak the results of a simple effective plan, just follow it until it's second nature, until you no longer hear the voice in your head that tries to offer you umpteen reasons the trade will fail, LOL! I very rarely take trades outside my plan, even after several years. I can't trust what I think/feel about the market; I have to stick with what I know works and that's what I see price telling me based on my objective rules. The main discretion I use is whether to use a fixed profit target or a flexible one on a trade. Here's a post I just made showing an environment where I look for a larger profit than my minimum: http://www.elitetrader.com/vb/showthread.php?s=&threadid=280137&perpage=10&pagenumber=4 (Scroll to the post with the charts.) Merry, Merry Christmas to you and a Very Positive Expectancy New Year!
Yep, that's me. The recent structure stop and target exit study I did was eye opening to me. It's that kind of data that should boost my confidence and discipline. Thanks and Merry Christmas and prosperous New Year to you as well !
Quick update: Had a bit of a cold around x-mas/new years so didn't get to do as much back testing as I would have liked. Planned on doing sim a few days this week but having connection problems. Anyone using Mirus/Zenfire knows that their system has been down pretty much since xmas. No data, no charts , no order routing, not even sim. Yesterday I opened an acct with Interactive Brokers and should be up and running tomorrow. The back testing I'm doing is going bar by bar on a 1 minute then advance the 5 minute, repeat. Each bar I'm looking to see if a set up is forming or entry is triggered. It's very slow going but possibly more beneficial than market replay. Sometimes I catch myself seeing a possible entry and thinking, too extended or too 'something' then I say wait what are my entry criteria. Is this a valid signal ? Often yes so I mark the chart, log the trade and surprise it worked. Same on exits sometimes. I think, well it failed there I should exit but my rules I'm testing say to hold. Often the trade ends up working. It's teaching me patience, not to try to predict (which is easy to say but hard to do) and making me really understand set ups, triggers and market structure in a deeper way. The results so far are nicely positive which will help with my confidence. The big benefit though is I expect I will have a bit better understanding of what I should be doing. That is, a better understanding of how to follow my plan. Hmm, I think what I've been doing they call deliberate practice.
Thanks RN. And i do remember the days where I felt I had to trade everyday. Always afraid I'd miss the big move. Finally over that. ============== I've simmed the last couple days like I've never simmed before. Taking it seriously and with a plan that I'm following with good discipline. The trade management rules I discussed previously I'm now using. A late morning trade today I did pass on that I should have taken. I'm not perfect yet. I had thoughts of exiting outside of plan but did not. Followed the plan as noted on the chart. In one trade it would have improved the results the other it would not. It was a very different feeling trading with this discipline. Less stress and ambiguity. This is not a case of sim vs real money. It's me not trying to be right. I used to ,even in sim, micromanage, second guess & exit early 'cause I was trying to do what I thought was right at that instant. Now I'm relaxed, seeing bigger picture and trusting the trade management rules. There is still room for plenty of improvement but it feels like a significant step forward. +27 sim ===== It never occurred to me to research the data feed with IB. They have filtered data vs the unfiltered I was getting with zenfire. My understanding is it should not make a difference if trading off the 1 minute charts as I'm doing. Still the idea of it bugs me. I may add kinetick data. If anybody has any thoughts on this I'd appreciate it.