The answer is right in your first post. You need a system that you believe in, then you will have the courage to take your signals and run with them. SpecterX above has a great suggestion: get three or more systems going at the same time. Find some that work under different market conditions and with different time frames and run all of them. I can't help you with the time frame you prefer. I don't day trade at all. I don't know whether it's a very difficult way to make money, or if I just don't understand how to do it. My time frames are longer.
Try spending less time at the screen.....read the Wall Street Journal every day, Barron's, and watch Bloomberg Business Channel at night. Ideas will come to you during these chores....jot them down for future reference. After a few months, your brain will be able to process and prioritize the major factors that are determining the markets direction. Try learning fundamentals, instead of computer programs. I would put my money with an educated, informed, discretionary swing trader instead of relying on automated trading. Stosh
My opinion and advice to you (OP): You are a technical trader. Leave those financial newspapers, CNBC/Bloomberg channels, picking service to investors. They won't do you anything. Zip. That's my conclusion of subscribing to those in my first 4 to 5 years of trading. Anything aired/published via the media is either yesterday's news or somebody's opinion. They won't make you money. Focus on the charts in front of you. In real time. Not 20-minutes delayed. That is what's happening. NOW. Not someone's opinion that it would go up it would go down. To trade it right, that's what will make you money. But I think you should start small. One small step at a time. You mind may be torned in many different directions, so of which are conflicting. A stock is going up. Do you buy it or do you short it? The answer is: can do either one. It depends on your time-frame reference. Beginners: easier to trade WITH the trend. The past 3 weeks or so has been overly easy. The major trend is up. If you buy any pull back you would have made money. Find something with a meaningful trend. Go in the direction of the trend when it pulls back to about 20MA before the trend gets extended. That's the usual tactic. Look for bull flags, bear flags, breakouts, breakdowns, etc.. Intermediate: you can then fade the late trend in addition to joining the trend. Look for bubbles and price accelerations in late trend. Do the double top, double bottom, head and shoulder kind of thing. Advanced: then you can try trading the range in addition to the above - fade the highs and the lows, intraday and interday swing moves. Pair trade. Relative strengths and weaknesses. etc.. Start with being a one-trick pony. That's okay. Once you are comfortable, then gradually increase your weapon types in your arsenal.
investors business daily has some nice setups and I find they're much more honest than barrons or wsj, give it a look and test it against your style before throwing money into it. they love the cup and handle.
Create your own strategy from scratch. Since you have some experience you can start as follows. 1.- Forget everything you think you know. 2.- Start looking at price without technical or fundamentals. 3.- Add whatever you have used previously that you see yourself using later. 4.- As time goes by, add anything else you think can help you narrow entry and exit, trade selection etc. Focus on price action and keep it simple and as easy as possible. 5.- If results are not getting better with time, start with at Nr. 1 again. 6.- Rinse and repeat as many times as necessary. 7.- Once you think you might have something decent to work with your own psychological makeup will determine how easy or difficult it will be to implement your strategy. You seem determined, a very important ingredient for the process, but your psychological makeup will be your biggest asset or liability at the end of the day. That is why it is impossible to say how long it will take for you to make it. Good luck...you will need luck too..... p.s. write everything down, notes will come in handy many many times....
I have to agree with this. The trade I was most uncomfortable with was the breakout trade: Buying a tick or two above the last high in an uptrend (selling below the last low in a downtrend is also a breakout trade, but I usually short lower highs rather than new lows since we''re in a bull market). The first few times I put on a breakout trade (placing a buy stop a tick above the high of the day, for example, or buying via limit order just as a high is about to be tested), it felt so wrong, because price seemed too high. What the heck was I doing buying ABOVE the high??? I wanted a bargain price! But now I trade breakouts often, because once you've done it a few times, the magic of instant profits is what you feel when a high is about to be tested.
I add this to the "comfort issue". Trend trading is so easy, but it's not comfortable unless you got into the trend at the start. Beginning traders tend to counter-trend trade because they feel that price moving "too high" and then pulling back in an uptrend means it's gonna crash and price moving "too low" and rallying in a downtrend means it gonna fly. They overlook the rising or falling 20 MA, and usually end up putting on the trade pretty close to the point the trend-followers are about to pile in for the next leg up or down. Then they scratch their heads and wonder why they can't seem to make a profit.
This was a fun challenge to handle. The guy has 5,000 hours in and is relatively rich. I'm only posting here because of one sentence he posted. It had nothing to do with his apparent dilema. So I had to change his dilema to something that would trick him away from all his knowledge and skills. think of it a looking at a Venn diagram and finding a place that he never occupied and finding what was in the unoccupied space to fast track him to expert. Then he has the cash flow to do what he wants to do in the future. I am going to key on the order of events of the P, V relation. CW people who have gone too far into CW would not be able to do this work around of his past non performance. Donna is really going to dig this one. People have said that the market doesn't allow people to use the conventional stuff to make money for various reasons. For other reasons, this may actually be true. I want this guy to spend two weeks doing the same thing over and over again. Then after that he can trade both moves with good success and have eliminated all DD situations once and for all. This is about a Sharpe of 60 level of drill. These are two formations that do not follow each other directly. In between each occurance there is another formation as they flow as I specify them by order of occurance specifically. the 1 formation is the retrace. the 2 formation is the reversal. 1 comes then 2 comes for this drill. The two week drill on the 5 min ES is to enter at the beginning of a reversal and exit on the beginning of the following retrace. then sit on the sidelines until the next reversal comes along. This will create a neutral balance on the print of trades and it will afford a good percentage of time in the markets. It also create that all trades as being held through a change of market sentiment AND dominance. The whole purpose is to replace the "scrambled" feeliing with the feleing of support, comfort and confidence. Two years of learning failure by trading with conventional means is a tough situation. This replacement will take four weeks using two trading mechanisms one after another. First, just reversalsare traded and then both reversals and retraces are traded. Knowledgeable traders recognize that I am focussed on introducing the counterintuitive nature of markets. They see that he will be gong through a change of dominance where the end of the dominant state brings the profit taking to an end. Once he has two weeks of this under his belt at a rate of about four trades a day and a low multiple of the ATR and no DD's, he goes to the next stage which is doing two consecutive trades that begin the same way and end in a different way, relatively spealing. I think this is also confidence building to see making profits under two sets of circumstances where the circumstance begins the same reliable way. A month ands and he has been doing 8 trades a day for two weeks. I know that without DD's it is difficult to get a sahrpe as low as 60. Human error will keep it that low. Probably more details are needed from me since I just used names of things and said what to do.