I've revisited the rules of my automated strategy and by changing the timeframe from 5-minutes to 30, I can simplify the system even more and don't have to worry about chop. I can also do away with the three-step ATM strategy and use the cross over between moving averages as both the reverse point and the profit target. I'll live with this strategy and think about it more before handing it over to be programmed so I don't become a statistic that has to make a numerous revisions. One thing that changes is that I will be in the trade 24/7 and won't be closing out my positions at the end of the day. But Dan Gramza stays in positions over night.

Well the day felt like a failure and the desire for an automated trading system an illusion to eliminate emotion from my trading. But my take on the day is different now.

Today I didn't take any trades. I didn't even try. I feel so defeated even on the Sim. I poured all my effort into perfecting the rules for an automated trading strategy so eliminate emotion from my trading. Have I said, I want to eliminate emotion from my trading? I have to admit, it was a remarkably simple system that would work on CL in the current political climate in the Middle East but would be less effective in a less volatile market. But the inability to successfully automate a system now feels even more futile than controlling my emotions during a trade.

But the day doesn't feel like a failure to me now. (1) I spent so much time putting the charts under a microscope today that I realize my attention and focus was never as strong as it was today. (2) I'm wondering now for the first time if I could actually try out the rules I wrote up for a 1/2 hour time frame. Of course, no more new rules for another week. But I was fascinated by the use of the point where the two moving averages cross over as my stop to get out of the trade. Other than that crossover, there were no other stops, and on the charts, at least, I was able to capture huge swings. Yes, I missed the very extreme highs and points, but I'm not that greedy. I wonder if anyone on this board uses a 1/2 hour time frame. If I can't eliminate my emotions the longer time frame certainly addressed the issue.

With respect to my current rules, putting the charts under so much scrutiny today, although I didn't trade, gave me a renewed desire to want to continue striving to improve my trading skills.

Yes, I might use one, just for confirmations.

Look, every trading system you make will work for a while and then die. That's how this game works. It's a never ending battle for profit. There's no get rich quick thing to be found. There's no I'm smarter than the markets thing. It's a battle, every day, over and over. Fight better than the opponent and you win, otherwise you lose. That's the truth of the market. There's no : My technique works on every instrument and every time frame blablabla. This business is full of lies, one liners, and a lot of crazy book talk that doesn't work.

Find something that fits you combined with an instrument that fits you, and start looking at it for 10.000's of hours. There is no magical indicator or system, it's all about you and how you handle your opponents and your inner demons. I have 3 to 4 winner days to 1 to 2 loser days in a typical week. My winner days are probably a loser day for somebody else. End of story.

Big Mike gave me good advice the other day when he said to use the Sim to learn to trade instead of to make virtual money. I'm so wrapped up in my fake profits and trying to be perfect that I haven't even given myself the opportunity to just go out in the field and swing the bat. Take a thousand swings during practice out in the field by myself and learn how to swing. I haven't done that one day. monpere said the same thing to me when I was Simming Perry's system. He said just take as many trades as you humanely can. No wonder I never learned NT. I never used it. Hah. I have this depressionary* type attitude that everything is lacking but it's really only in head not in life. Monday, I will play around with and explore Stop, Limit and Stop Limit orders on TOS and f-k my P&L for the day.

*not the word I was looking for.

deprivation mentality is what I had in mind.

Monday will be fun. I'll do Exercise #1 and be in the market all day in either a short or long position. Haha. That will limber me up. Talk about talking swings out in the field. And I'll stick to my rules performing this exercise on the 5M with the 8 and 21 MA's. Target=Stop. 1:1. Might even peek at a 30M chart for direction. I'll play with the Stop, Limit and Stop Limit orders as mentioned. Monday will be a marathon. Looking forward. I've neglected the fun factor in my trading journey.

Daily Trading Exercises:
Try a few of these exercises each day, alternating them, and making extensive notes on your performance each time you undertake an exercise:

1. Try being in the market ALL DAY. If you are not long you must be short. Gruelling but an incredible exercise. Try to come out profitable doing this. Very, very hard. Hit market to take each position.

This exercise forces you to have a directional opinion at all times and to best manage your position in the market on the back of that.

2. Try scalping off of the order flow without watching the charts at all. Turn your charts off and try to see support and resistance on the ladder alone.

Many prop firms ask new recruits to initially start to trade without access to any charts; that is to say no indicators, no trend lines, no patterns and, as a result, no temptation to seek the technical analysis holy grail that does not exist. You need to be comfortable executing trades with nothing more than the market depth at your disposal. It is this ability, developed as a result of many hours of intelligent observation and interaction with the market, which actually enables you to employ technical analysis effectively! Technical analysis is a decision support tool for traders. The charts themselves represent a very small percentage of the total, available information upon which elite traders make their decisions.

3. Try just scalping the bigger levels of the day (from 30m charts and higher, rather than shorter timeframes).

This will help you to better use bigger picture information, for short term advantage.

4. Try getting a 10 lot position into the market, using 2 lots at a time without going offside more than 1 tick on your average position. Very hard.

This is another exercise helping you to learn using the Depth of Market. Try to scale in and use averaging to your advantage, forming a very short term opinion on momentum and using the bid/ask to your advantage for defending your view but this exercise will also show how the market can punish you if you get it wrong and you average a loser.

5. Try LOSING as much money as you possibly can in a day without just buying and selling at market to cross the spread.

This is not as easy as you might think, and will hopefully give you a more realistic view of any fear of losing that you may harbour. Additionally, if you can lose money and understand how, by doing the opposite you should be able to make it, or at the least, better understand what behaviour to avoid.

6. On a real-time chart flip a coin to take a short or long entry when the latest bar is half formed (eg: half an hour into a one hour bar or five minutes into a ten minute bar etc etc). Once you’re in, manage the trade to gain the best result over the next 10 bars.

This exercise gives you with a chart-full of info, but takes away any entry consideration making you focus on the relatively short term action from a given point in the context of managing what you’ve got to best advantage (or least dis-advantage) utilising the info you have in the chart.

7. On an empty real-time 5 min chart (ie: bring current bar back to the left hand edge without looking at what has gone before) and watch the first 4 bars print. You must enter long or short on the open of the 5th bar – you must then manage the trade to a profitable conclusion.

This exercise leaves you with no info bar the immediate price action. It, too, gives a focus to short term action both in the context of arriving at a long/short decision and also in the context of managing that trade to best advantage.

Cheer up! A positive attitude is essential to success. It's OK to be unhappy with poor results, but not OK to let those results interfere with smart decision making. Fine line between overcoming obstacles and losing control.

If your automated system encountered a setback, it is not the end of the world. If your discretionary method had a losing day, not the end of the world. It just means learn from it, improve upon it, and then begin again the next day. It also does not mean kill off everything and start clean slate --- although this can be helpful every now and then, it should happen very infrequently (once a year perhaps).

Mike

Big Mike 

Cheer up! A positive attitude is essential to success. It's OK to be unhappy with poor results, but not OK to let those results interfere with smart decision making. Fine line between overcoming obstacles and losing control. If your automated system encountered a setback, it is not the end of the world. If your discretionary method had a losing day, not the end of the world. It just means learn from it, improve upon it, and then begin again the next day. It also does not mean kill off everything and start clean slate --- although this can be helpful every now and then, it should happen very infrequently (once a year perhaps). Mike

Thanks, Mike.

I'm not as unhappy as I might come across, or if I am fooling myself, and really am, I'm not unhappy about my unhappiness. Why? This journaling process is so helpful. It gives me hope. It enables me to hear myself think and more importantly respect those thoughts and respond to them. When I'm just thinking my thoughts but not writing them my mind feels like a motor boat going round in circles without anyone at the wheel.

My automated system idea encountered a setback as I read all the negative responses on futures.io (formerly BMT) about AS, including YOURS, Mike. That said, I admire your equanimity to treat the idea with respect on this thread/journey of mine even though I don't believe you would be caught dead having/using an AT system, imho based on your comments.

You're so right, when you say I shouldn't "kill off everything and start clean" you're so accurate. I give up everything when I get discouraged. I realized this in my journal that I have a tremendous capacity to do just that. Suddenly in 24 hrs. the AS system is dead, my two week Sim commitment using a variation of Mike Winfrey's method is aborted, I come close to even throwing in the towel with the journal and suddenly I'm seeking Trading Universities to divert myself from one big truth: I GIVE UP VERY EASILY! As much as I consider myself a survivor I'm also a quitter. Even quit NT at the first frustration.

So I'm not going to put all my eggs in one basket but neither will I take them all out.

Thank you, Mike.

Namaste.


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Just reread that first exercise and it says take market positions not limit orders. I will take both and I will be in the market all day.

1. Try being in the market ALL DAY. If you are not long you must be short. Gruelling but an incredible exercise. Try to come out profitable doing this. Very, very hard. Hit market to take each position.

I'm passionate sometimes about what I post -- I just went back and re-read what I posted about automation. You should understand I am only speaking from my own experience and in many cases experiences that I shared with others on this forum as they went through something similar. You shouldn't abandon automation (or any decision) solely based on one post made by me. Stand by your convictions if you believe you are right and I am wrong.

Automation doesn't work for me, and I know of no retail trader where it does work. Sure automation can work for the big guys, but they are not in the same league as us. So I stand by my recommendation to focus on discretionary trading, but you should understand the reasons behind that --- I have found most people search for automation to try and cure shortcomings they have with their own trading, like fear of pulling the trigger or inability to follow the rules, or over trading.

But they end up replacing one bad set of problems with another. Automation is so much more difficult than discretionary trading. Again, in my opinion, as everything I write always is... With todays software and backtesting engines, you either get caught up in software errors and inadequacies, or you get caught up in over optimization and over curve fitting. Both of which require a very highly experienced systems trader to identify and understand, then ultimately overcome. The sweet spot is very small. I feel pretty confident that if a highly experience systems trader reads my post, they will likely agree that the normal trader seeking automation would be better off if he spent all his time, energy and money improving his discretionary trading skills rather than seeking the automation path. But that's just an educated guess.

One thing is for sure, you will almost certainly not be profitable trying to follow someone elses exact method. Trading is a hugely personal thing, so much intuition and feel, things that are unique from one trader to the next. You only have to look at the famous story of the Turtle Traders, they were all taught an identical method but had wildly varying results. What is important is finding your own path, even if that path is made up of rocks and concrete from other traders. You must completely own your method and it must fit with your trading style, so that you have the full confidence required to execute it as well as understand everything about it.

Keep posting, keep moving forward

Mike

I want to give you a heads up on trading without a chart and just looking at the market depth on a dom.

If you meet a guru that is teaching that system run away, fast.

The market depth is one of the most manipulated things we have in trading. Orders are on there to disappear a fraction of a second later. In fact, that's how the HFT cheat many retail users. They trap retail users by placing big orders in the market depth to let them disappear just before price hits it. They are not fighting you with the same army of weapons, you might have an M16, they have nukes.They have servers running a few feet away were the data is being MADE with a latency a fraction of a millisecond. Same with T&S, big orders are being cut up by algorithms so it's very hard to detect them. A 100 or 500 order will be fired up into several extremely small orders.