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The Crude Dude Oil Trading System
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The Crude Dude Oil Trading System

  #751 (permalink)
Elite Member
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Okina View Post
Very interesting questions that I ask to myself everyday.

The gambler logic should be to "leave the casino" once you have made a good gain. But I think it does not apply to markets.

Someday your setups perfectly describe the market and you have an incredible success most yours calls are right and I think you should capitalize on those day - it is also the most rewarding day from a personal point of view so why not taking pleasure. Someday the market behave completely differently and your setups mostly failed. This is the time to leave. Also someday after 1 or 2 trades you really see that the problem is not the setups but you, in that case it is also the time to leave (at least for a moment - in that case I leave for real and take a walk outside - unless it is -20 in Montreal lol).

The critical hours for me are 9:30 to 10:30 if at that time I see that my setups as lead mostly to bad trades I leave and will only consider going back for the close which is a different market by itself. I don't have max gain limit but I have max loses limit per day when this number is reach I also leave.

Backtesting: If I could do a complete backtesting of all the setups it will mean that I can automate the system and that I am not longer necessary - it is a dream in my case. I would like to be able to do it but I can't. I have backtested some little part of the system just to see if they make sense (like my trend patterns). But I test them on charts (but it is a difficult and not always reliable exercise since you see the result so your mind is biased) and with market replay. But the setups are always evolving even if the core of the system remain the same.

Great comments. Thanks, Okina.

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  #752 (permalink)
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In my beginner's opinion, I believe setting daily or weekly goals serves the purpose of controlling emotions and discipline whole lot more than money management itself. If you're on a roll, I'm pretty sure that your emotions will (sooner than later) take over your rationale. If you're behind, same thing: chances than you dig yourself into a deeper hole increase. Because after all, even if you stack the odds in your favor (positive or negative) with your knowledge of the market, trading ultimately remains a probabilities game.
Additionally, since we can't predict the future, you wouldn't be able to know that a big move happened later in the day until it would have happened. The next part of the day after you were ahead by 40 ticks could have easily been a crappy consolidation period where you give back all your gains. You know you missed out on a big winner once it has happened. Same thing with a big loser where after seeing it you could say: " Man, I'm glad I didn't get into that one".
Maybe a good way to deal with all this would be to lower your size once you've achieve your daily/weekly goals. Any extras is bonus and additional losses hurt much less. The ultimate "STOP TRADING" rules would then apply after your reduced size bonus trades.
Or you could just raise your size (just like you did going from 1 contract to now 5) instead of looking at it like "missing out on winners or losers".
My beginner's 2 cents...

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  #753 (permalink)
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gobeagle View Post
In my beginner's opinion, I believe setting daily or weekly goals serves the purpose of controlling emotions and discipline whole lot more than money management itself. If you're on a roll, I'm pretty sure that your emotions will (sooner than later) take over your rationale. If you're behind, same thing: chances than you dig yourself into a deeper hole increase. Because after all, even if you stack the odds in your favor (positive or negative) with your knowledge of the market, trading ultimately remains a probabilities game.
Additionally, since we can't predict the future, you wouldn't be able to know that a big move happened later in the day until it would have happened. The next part of the day after you were ahead by 40 ticks could have easily been a crappy consolidation period where you give back all your gains. You know you missed out on a big winner once it has happened. Same thing with a big loser where after seeing it you could say: " Man, I'm glad I didn't get into that one".
Maybe a good way to deal with all this would be to lower your size once you've achieve your daily/weekly goals. Any extras is bonus and additional losses hurt much less. The ultimate "STOP TRADING" rules would then apply after your reduced size bonus trades.
Or you could just raise your size (just like you did going from 1 contract to now 5) instead of looking at it like "missing out on winners or losers".
My beginner's 2 cents...

Very good points.

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  #754 (permalink)
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I have been really getting good results lately from locating those areas where there is a huge probability that there are a tremendous amounts of stops underneath. Usually in a trending move, you get a lot of entries of traders after a pullback. Of course there will be a lot of stops placed above/or below the failed countertrend swing area. What I see happen often is that price will be heading for a support or resistance area...and therefore many traders are staying in their positions untill their s/r levels are hit. But then, unexpectedly, price fails to go up to the level everyone thinks it will ..and it starts reversing. Then when it takes out that previous swing area where there's a ton of stops...and order flow is showing all those trapped traders getting stopped out..there becomes a great opportunity to catch a strong quick reversal.

The more you can figure out areas and situations that create trapped traders, the better you can exploit these moves. I would imagine there are algorithms designed specifically to locate trapped traders. It's easy to just look at charts and lose sight of the fact that there are "herd mentality" traders all following some chart pattern together...and when they are squeezed out on the wrong side, you can really capitalize on it.

This is obviously not a new concept, but simply one I have been paying more attention to lately.

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  #755 (permalink)
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The competency model

Two things that never leave my mind since I learned them. I'm sure everyone has a version of these:

“The History of every major Galactic Civilization tends to pass through three distinct and recognizable phases, those of Survival, Inquiry and Sophistication, otherwise known as the How, Why, and Where phases. For instance, the first phase is characterized by the question 'How can we eat?' the second by the question 'Why do we eat?' and the third by the question 'Where shall we have lunch?”
― Douglas Adams, The Restaurant at the End of the Universe

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For some (likely motivated by the money alone, the 'poor savers' of society?) conscious competence might lead to complacency instead further exploration but that is the basic idea.

Daily/weekly goals or trade till you start to tire, when you know what you don't know and have some proficiency I don't see it as a debate. With some history of success you know whats working for you and your other commitments and might even mix things up.

The 3rd best trader I know trades two hours (not to a monetary target) then goes to do voluntary work in his kids' school or community voluntary work / fishing. Its keeps him sane and happy.

Off for lunch at a picnic place

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  #756 (permalink)
 R.I.P. 1969-2016 
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Rory View Post
Two things that never leave my mind since I learned them. I'm sure everyone has a version of these:

“The History of every major Galactic Civilization tends to pass through three distinct and recognizable phases, those of Survival, Inquiry and Sophistication, otherwise known as the How, Why, and Where phases. For instance, the first phase is characterized by the question 'How can we eat?' the second by the question 'Why do we eat?' and the third by the question 'Where shall we have lunch?”
― Douglas Adams, The Restaurant at the End of the Universe

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).


For some (likely motivated by the money alone, the 'poor savers' of society?) conscious competence might lead to complacency instead further exploration but that is the basic idea.

Daily/weekly goals or trade till you start to tire, when you know what you don't know and have some proficiency I don't see it as a debate. With some history of success you know whats working for you and your other commitments and might even mix things up.

The 3rd best trader I know trades two hours (not to a monetary target) then goes to do voluntary work in his kids' school or community voluntary work / fishing. Its keeps him sane and happy.

Off for lunch at a picnic place

Funny drawing how many of those have you on your computer, I am amazed by the number of them you post everyday?

I find this one especially interesting for me. In everything I have done in my life the stage 3 has always been my ultimate goal. I can work incredibly hard to reach it but once it reached I "waste" (it is not a waste for me) my time and money in some interesting (when I am lucky) place/activity in the world It may sound crazy but even if I had a magic wand that could provide me with one wish about trading I will never choose something like: make me the new Soros. Strange?

R.I.P. Olivier Terrier (aka "Okina"), 1969-2016.
Please visit this thread for more information.
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  #757 (permalink)
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Okina View Post
Funny drawing how many of those have you on your computer, I am amazed by the number of them you post everyday?

I find this one especially interesting for me. In everything I have done in my life the stage 3 has always been my ultimate goal. I can work incredibly hard to reach it but once it reached I "waste" (it is not a waste for me) my time and money in some interesting (when I am lucky) place/activity in the world It may sound crazy but even if I had a magic wand that could provide me with one wish about trading I will never choose something like: make me the new Soros. Strange?

Google images as quite a few pictures haha. I was a trainer for some years, I got into the habit "picture says 1000 words" and it both amuses me and trains my memory finding a remembered image. I don't doubt there is a connection between a good visual memory and my eclectic but increasingly successful style of trading.

I understand what your saying, I have a similar migratory stage 3 pattern. I have climbed the (2nd) highest mountains, spoken to the wise men across the Earth and the honest ones always had the same answer about their life's work.. Not a clue what its all about really but it pays the bills.

"Dave Spritz: I remember once imagining what my life would be like, what I'd be like. I pictured having all these qualities, strong positive qualities that people could pick up on from across the room. But as time passed, few ever became any qualities that I actually had. And all the possibilities I faced and the sorts of people I could be, all of them got reduced every year to fewer and fewer. Until finally they got reduced to one, to who I am. And that's who I am, the weather man."

My mother used to say (kindly) "Rory, bored people are usually boring people" (even unto themselves) and it still motivates me to not be that guy.


Last edited by Rory; April 17th, 2016 at 02:26 PM.
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  #758 (permalink)
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lancelottrader View Post
Like many other traders, I have often assigned myself a weekly goal and sometimes even a daily target in terms of how many ticks I want to achieve. The weekly goal was based on what I felt would be a healthy amount of profit that over time leveraging contracts would add up to a substantial income. It also was based on a number I felt was achievable on a consistent basis. What it was not based on was the result of statistical research. .
The questions that I would like to discuss are:
1. Should one try to achieve a set amount of ticks each day? Should a weekly goal be set and once achieved, should further trading for that week be halted?
2. Unless someone has taking all good setups in their daily sessions over a long period of time, do they truly know what kind of results their system produces? In other words if you get to 20 to 40 ticks in a day and decide to stop and then ignore some fantastic moves that happen later, are you depriving yourself of big days..that could possibly offset bad, losing days? I know when trading live and I'm up good on the day, there is a strong desire not to give back my wins. So, many times if I have made what I feel is a decent amount, I stop trading. But then I miss some trades that would work well.
3. For the math to add up, knowing that in all setups there is a random distribution of wins and losses, can you know what your "batting average" is if you decide to quit because you won a few trades?
Also, if you are 30 to 40 ticks down..should you quit for the day and possibly miss out on a huge winner ..because of some max daily drawdown rule..that ignores the math of random distribution of wins and losses?
4. Should,at least on SIM, if one is testing a system...take all good setups each day that occur..regardless of wins or losses..over a period of time so they have a reliable set of statistics that accurately measures their skill level?

I would be interested in reading what some others on here think about these questions.

It seems the answer would vary depending on the stage of a trader's development. In general, the more skilled a trader becomes, the further into the day/week they can continue to expect to trade profitably. It all comes down to a trader's ability to discern opportunity vs danger, or to change tactics with changing conditions. Novice traders are less skilled at recognizing these conditions and therefore tend to give back gains on days when they trade well early, while digging ever deeper holes on days when things aren't going well. Therefore for a novice trader it is probably best to guard gains and limit losses.

For someone like yourself, who is more adept at recognizing the difference between opportunity and danger, I would think you could trade deeper into the day/week, perhaps even changing tactics with the changing conditions.


Last edited by Tap In; April 17th, 2016 at 08:31 PM.
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  #759 (permalink)
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Rory View Post
"Dave Spritz: I remember once imagining what my life would be like, what I'd be like. I pictured having all these qualities, strong positive qualities that people could pick up on from across the room. But as time passed, few ever became any qualities that I actually had. And all the possibilities I faced and the sorts of people I could be, all of them got reduced every year to fewer and fewer. Until finally they got reduced to one, to who I am. And that's who I am, the weather man."

So true.

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  #760 (permalink)
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Rory, I'm curious - what is your profile pic of?

Sorry to briefly detour y'all's discussion

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