Hi NoDoji. I enjoy following your journal. I notice that you are getting away from stocks more lately and focusing on ES. You seem to be getting more gun shy than you have been in the past and while you are not losing much you are not making as much either and have now mentioned the "j word" < gasp >. Maybe stocks are your bread and butter. It is always easier to master one discipline rather than two so I just hope you don't get too distracted in futures and get frustrated. BUT futures are amazing and well worth the effort if you continue down that road too! Anyway, my two cents, and good luck with the Douglas 20 test. I could never make it past 10 or so which is why I finally had to automate my entries and then stay out of the way. Nothing ruins a great trade more than not taking it.
my wife said "the market is just like a fish in a pond, I can see it, but when I try to grab it, it swims away, and it is still there". then I told her, "the water is too clear, when you can see it, the fish can see you too, so the best way to catch fish is throw your line and your bait and leave the spot a while, you can not see the fish and the fish can not see you, there is no clear water problem, you will finally get your fish". take it easy. bear in mind, everyday is unique. if you did fade today, you net great. since you have too much thoughts such as breakdown/breakup (morning hig/morning low signal), trending days are very limited
think trading as driving a car, do you think the road shape/materials/conditions is a"should be" question? absolutely not, you can drive on a road as it is, as for why it is curved or zigzagged, it is irrevalent. one fact: you can not change it. the same applies to the market, who knows how it goes up or goes down or wobbles around, if you have a thought "it should move in this way or that way", then you are asking the market to do you a favor, can the market change its movement ways because of your thoughts or bias? NO! then why try hard in vain to do that?
Hi NoDoji, A couple points: 1) If you are day trading stocks, I think you would do better with prop account, the reason to trade futures is better access to margin during the day. 2) Some your comments about ES don't make sense for example a 6 year old being able to trade your signals. I can look past market after the day is complete and say oh now I see my signal would have worked. What matters is the hard right edge which is the decision point. 3) Did you calculate you win% and stop loss per trade, if so what on average are looking to make for profit target, stop target, and win%? 4) If you like feel free to pm me, I am more than willing to exchange one of my signals for one of yours and I will test it out with my real money trades. 5) I usually only try to take trades when I get a few confirmations instead of just thinking something may work. I also try to do at least one trade per day. If I am already winning, I may stop trading. Sometimes if I am in a losing day, I may over trade which makes things worse.
Hi Brocklanders, I'm glad you enjoy my journal. I've been mainly paper trading lately, some stocks based on strategies much different from what I used to do, and mainly ES. I have a strategy that works on paper. On paper I take all my setups, and I never move my stops too soon. On paper I have nothing at risk, so there is NO reason to give any thought to anything except the signals. On paper, I have no bias whatsoever. Paper trading is like living in the town of Retrospect. In Retrospect, all trades are perfect. And paper trading, since I take all my signals immediately and my signals seem to provide an overall positive expectancy, every trade is perfect. I'm either profitable or I'm out at an acceptable loss. Sadly, I can't purchase anything with my paper profits. Don't think I haven't tried. I went to Target to purchase a child's birthday gift and at the register I said, "Hey, I paper traded the S&P futures today. I went long at least a few times and made some nice coin, and since you're one the S&P 500's finest retailers, I figured I could use my paper profits to pay for this." They weren't impressed. In all seriousness, though, no matter how much potential I have, or whether I have an "edge", or even if I have a multi-millionaire trader whispering perfect trades in my ear, if I don't actually trade, I have nothing. The reason I use the "J" word is because if trading isn't my sole source of income, I might be a whole lot more confident.
That's why computers make much better traders. If you already have your signals coded in software or even a spreadsheet then you can take the next step of automating without too much difficulty. Sometimes I'll watch the computer and think "no way would I take this trade, it looks too risky" and then watch in wonder as it turns a profit. I am quite sure I would not make most these same trades if I had to actually pull the trigger myself. I started this past January and had a working system in about a month. With testing it all took about three months total before going live. I leave the trading to the computer and only do overall risk management and testing of new strategies during the day.
I look at the scary hard right edge, and I form an opinion, and I pass on the trade, yet I paper trade it just so I have a large sample size of trades to base whether my strategy has positive expectancy or not. At the end of the day, I realize that I would've ended the day net profitable, had I been the unbiased 6-year-old who was told when that bar reaches this point, go long, and when the this bar reaches that point, go short, and if you do it the very moment the bar hits that point, you get 2 pts! The 6-year old will treat is as a game and come out a winner. My win % appears to be better than 70% on average (assuming I were to trade every signal, rather than pick-n-choose), so I decided to settle on a R:R ratio of 1:1. My stop is 2 pts and I shoot for a 2 pt gain or better on each trade.
Yes, the harder part of the entire games two part process and well worn axiom of cutting losers and riding winners is holding the winners or at least knowing how to "MILK" the winners. I like to say be wrong small and be right big. That is not about the size of the trade, it is just about the relationship of the losers compared to the winners. Here is why i found holding winners is a lot harder to get ingrained in our brain more difficult than cutting the losses. Well, to put it mildly, losers hurt, thats easy enough. We find real early losers will knock us out of the game so we first work on correcting holding losers. How many times have we heard it is necessary to learn how to lose and the profits will take care of themself? Right, we all have heard that but guess what? It is an incorrect statement. The reason we learn to correct the losers first is to relieve the pain of losers. Thats the motivation, to save the bankroll. We still face a major problem because the profits will NOT take care of themself, thats total BS. Trading is not gonna produce profits by cutting losers small. The missing ingredient is harder to understand because the trader has not yet learned what is required to actually produce profits. Let us take Nod's idea of trading breakouts, retraces, continuations and reversals as an example. Ok, she sees a test of yesterdays high and is expecting price to go up and test said high. She assumes the other big dogs are seeing that spot as a hydrant and they are in need of doing a leg lift and will go to the hrdrant to at least sniff it. Ok, she goes Long a couple handles or maybe a couple ticks before the TEST. She has placed a bet price will make the test. She is assuming based on TA odds that the test will indeed happen and even show follow through as the big dogs like the smell and decide to continue on. That is the essense of a BO, you are placing a small bet to get on base and hope fully the other batters will move you around the bases to home plate. OK, here is the difficult part in the beginning. After many many small losers and even a few gut wrenching MAALOX, MYLANTA dandies the new trader still has not learned how to trade good enough to produce profits. Why not? Because the trader has not yet learned how to read the mkts ability to produce trends and how to understand the psychology behind what makes a trend. Price is a show of what the other players are thinking and doing. The new trader must learn how to read the mind of the trend. Trends are manufactured they are not from osmosis. Reading how a trend forms and reverses is a process, it is a skill, it is the art part of trading yet it is everyday ability. It will come, it is vital to produce profits because you can not produce profits unil you can visualize the chart setting up to make the move in advance. Nod is working on just that very situation. She is seeing the potential in different styles of going for the profits, they are there she knows it. Profits are produced only after you visualize them in advance and adjust your gameplan accordingly to capture them. They do not just pop up on the screen out of nowhere, that is reserved for those darn losers. Profits are TARGETS, they are the next level, they are that BO you are looking for, they are the continuation after the retrace you just witnessed of the first leg of a possible 3 legged trend. Visualize getting on base instead of striking out.
Hey Nodoji, I just wanted to say best of luck tomorrow (and beyond) with your ES trading. I hope it goes off to a great start and continues to get better and better. I know your dedicated putting in time day after day of watching the charts and reading. and always remember this is a marathon not a sprint : o ) Best of Trading to you Robert
Profits are produced only after you visualize them in advance and adjust your gameplan accordingly to capture them. They do not just pop up on the screen out of nowhere, that is reserved for those darn losers. Profits are TARGETS, they are the next level, they are that BO you are looking for, they are the continuation after the retrace you just witnessed of the first leg of a possible 3 legged trend. Visualize getting on base instead of striking out. big hog u sound very convincing in all your posts but will help more if you post a chart along with it; u know a pic worth a thousand words; some dropout types cant learn just from words and books; thanks