If it wasn't for Brett Steenbarger's "Enhancing Trader Performance", I might not be able to answer your question ... but I read it several times, in this light it is "obvious" that you are missing a trading system with verified (by you) performance, a system that you would really trust & trade without hesitation.
Waking up early to do your homework based on new market data is a good step forward. However, a red overnight does not necessarily mean more downside, same with gap ups. You must study the relation of price with support and resistance areas, at the same time, you must learn to recognize when technical damage has occurred. Don't be discouraged it does take time, in the meantime, don't use cash, you can work on your discipline after you have gotten a clue using paper money. As far as US markets, the action is usually around in the first two hours after the open, not counting economic releases and/or FOMC days. The morning is for placing trades, the afternoon is for managing the morning trades.
Yes, that is very true. I actually did confirme that to myself a few times already throgh my records. I made mone when I left the trade alone for a while. It is intresting, that when I used simulator, and I used it seriously, I did some profitable trades, some losers ones. After a period I came out as a winner and not because I got every move, sure not, but rather because I left the winners alone until a strong indication of the end of the move came. I am yet to find a trader who trades swings and positions so I could discuss my questions further. Z
I do not know that book but the message is there all right. I rather believe in trading methodology as oppose to system. Sure, applying the method SYSTEMATICALLY is a must and I thank you that you highlighted this. I believe that I have a method, but as you think I do not have, I might as well be deluted and fooling myself. I trade as follows: I want to identify the background of price direction. I do not meant at all, that I want to know the WHY. I just want to see it is happening. That the price is going up is not enough to me because the price does that and other things all the time. For stocks I want to see a relatively strong fundamental background, improving earnings, small debt, profit margin, return on equity. If I have these, I am interested in general. I can not just simply enter at the market though. For futures I have a look at the COT. For currencies as well, so Iknow at least that the big money is acting heavily at that level. Not good enough for a trigger either, but good to start to focus. For everything, in general, I check the Volume and Price action at important levels. I want to see that others are heavily involved in buying or selling. Than I check the price action of the instrument for a reasonable entry. I like pin bars, reversal bars appearing at S/R levels. Than I like to short on the break of a low Volume up bar and long on a break of a low Volume down bar. Or an aggregate of low Volume bars at a level. One bar is also just an aggregate of many bars ona lower TF after all. Basically I llok for Wyckoff and VSA principles. I also get interested if an unusually heavy Volume appears. Just in a nutshell. This thread is not about my methods though. Now, I may not get it correctly what it means to have a valid system verified by me. I tried many things and I believe that nearly every method or system works at times and does not at others. Like the system of Williams. It made him a lot of money, but sure there are falls signals too. That is when I would exit and wait more. Admit that I was wrong. I admit that quickly if the move does not come. Does this still sound that I do not have method?
Agreed. I am by no means discouraged, I still have my whole life fortunately to master myself. Because it seems that I need to master myself, as I alone make it or screw it. Interestingly, paper trading never worked for me. I had no fear and that is a part of live trading. Fear of loosing money. I am not afraid to lose paper money. I started live quite fast. I still remember how nervious I was with having a micro currency position some 30-50 USD in red. lol. Good old times.
It still sounds like you have not verified the performance of your method on a large enough sample of setups (500+), and as a result you do not trust your own method. If you did trust your own method to be profitable in the long run ... you would know that some trades are going to be losers, and this is the price to pay to get the winning trades ... as a result you would not be bothered by the idea that the current trade might be a loser, and you would let it play out as per your method. You would also know what kind of drawdown to expect, and would not be bothered either because the last few trades have lost more than they won, and you would keep trading your method faithfully.
You are sure right. the 500+ is rather difficult to test as I am trading the daily TF, but not impossible. How I rather understand it is testing myself as my method requires discreation, judgement. But testing me using my method is quite the same as testing a system. I am the engine of the system. Anyway, thank you for your comments, they actually help.