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The PandaWarrior Chronicles
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The PandaWarrior Chronicles

  #111 (permalink)
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Last week was a profitable week BUT it came in a very unproductive manner. Basically the entire week was a wash except for Friday when I made 50 ticks of profit. That put me over the hump of having consecutive profitable weeks. However, I was really displeased with my trading overall. In particular, I made a mental error not once but twice on inventory day last week. That haunted me all week. I had a hard time shaking the feeling in the pit of my stomach about how badly I performed that day.

I did shake it off to a degree in time to have a good Friday but in all honesty, I thought I was past the stupid mental errors for the most part. I suppose the mark of a good trader is maximizing the time between mental errors.

When Fat Tails posted his VisualSMA for plotting time based MA's on non time based charts, my world shifted. I've always struggled to make real sense of MTFA. I understand it should and does work, but reconciling the different charts has always been a struggle. Some days I would get it and others it would be like staring at a black hole.

But when I was able to plot moving averages from say a 5 min chart on my range chart, something clicked into place for me. I was able to see the trend better and more importantly, how my range chart was playing out inside that context. My love/hate relationship with moving averages was over in an instant and while not the holy grail, the chart set up I concocted over the last couple of weeks using this tool has helped me reach a new level of confidence of being able to "see" the market.

Today I traded for the first time in real time, the chart set up I think I will use from now on. I've have simplified my charts over time, rearranged the colors, and in general made all manner of changes. Now, all I have are two moving averages, one of which is the 5 min plotted on the range chart and some fib levels. Thats it. And I like it.

So going forward, no changes to anything for at least two weeks. I have a couple higher time frame charts I will look at but not plot on the range chart. Its to messy as it is now and by the time I get through drawing trend lines on it during live trading, it can be really bad.

Keeping in mind this journal is primarily for me to look back at periodically and remind myself of where I've come from and what the journey looked like, I feel it necessary to address a couple of things.

1. What happened to the super trend indicator? First of all, this was a necessary step in the journey. I needed to be able to only trade the trend and as the name suggests, it is a super trend indicator. Its wonderful for keeping you in trades for long periods of time. BUT, I don't trade that way and so it was useless to me in the sense that its primary purpose was staying in a single trade for a long time. Secondly, I found it just as useless in chop as a normal moving average. So the two main areas of importance were of no use to me.

2. Why these changes now? If what I had was working, why change? Good question. As I told a friend of mine, I think the reason I am alive to fight another day is this. Rigid adherence to money management policy. In other words, honor my daily stops and use my losing streak circuit breaker. That way when I am losing, I lose small and when I win, I win at a level that while not fantastic, keeps me in the game. Otherwise, I told him, I still feel like 50% of what I do is flying by the seat of my pants and not 100% rule based.

After this last week and especially today, I am willing to not be 100% rules based in terms of what the set ups look like. In other words, I now know pretty much what a set up "SHOULD" look like but it does not have to be exact. I have freed myself to be a little more reliant on feel......based on what the market is doing right now.

3. Why not trade the five min chart if you are using that for trend? Another excellent question and the answer is simple....the size of the stops are almost way to much for me. Using the range chart allows me to see the action inside the 5 min chart and place stops closer than would otherwise be possible with the 5M. That being said, I recognize the possibility of being stopped out on a trade that would otherwise been just fine using the stops on the 5 min chart. I accept that as the price to pay for needing to limit my per trade draw down.

Lastly, I've settled into a mentality that says "I no longer demand the market give me "x" number of tick per trade. Instead, I've changed it to "I believe price will attain "x" level based on the current look of the chart. Therefore between here and there, I will attempt to extract "x" ticks in "x" increments. In other words, if I think price has room to run 100 ticks, I will look to pull between 10-20 ticks per trade. To do this, I am looking at pull backs in the trend to a moving average and more importantly, a hand drawn trend line. I will exit the trade BEFORE the high/low of the current swing. I do not want to have to make a new high or low to obtain my profit on this trade. If in the execution of this plan, I am stopped out but believe the premise is still valid, I will reenter. If the premise has changed, I will remain flat until a new premise is developed.

Just another stop on my journey.

Cheers

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #112 (permalink)
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PandaWarrior View Post
Last week was a profitable week BUT it came in a very unproductive manner. Basically the entire week was a wash except for Friday when I made 50 ticks of profit. That put me over the hump of having consecutive profitable weeks. However, I was really displeased with my trading overall. In particular, I made a mental error not once but twice on inventory day last week. That haunted me all week. I had a hard time shaking the feeling in the pit of my stomach about how badly I performed that day.

I did shake it off to a degree in time to have a good Friday but in all honesty, I thought I was past the stupid mental errors for the most part. I suppose the mark of a good trader is maximizing the time between mental errors.

Panda, you made a few mistakes, you realized your mistakes and then you worked on correcting them... Sounds like you are ahead of the game. You even came out of the week with a profit. Great post man, it sounds like you recognize your mistakes and are working on them. Next week you'll knock em out!

Keep it up!

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  #113 (permalink)
Market Wizard
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I see you are trying out Perry method with your own tweak. Maybe we can simplify it more.

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  #114 (permalink)
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cory View Post
I see you are trying out Perry method with your own tweak. Maybe we can simplify it more.

I happened upon this by chance. I had decided never to change my charts but I kept noticing how many people were participating in the thread so I watched the webinar and decided I liked the premise.

And while I loved the idea of the HTF ma's, with such a short term profit objective of 4 ticks on 6E, I didn't see the point. If I was gonna shoot for 100 ticks, then sure, I would absolutely trade with the higher time frames. On Cl with a short profit target, you can be wrong about the HTF and still make 10 or more ticks.

So I dumped all the extra MA's concentrated on the DMplus and the correct stack along with some feel and was I every surprised.

That being said, I the DMplus is a little difficult for me to read. I confess to being less than wonderful with eye hand coordination. So I need something super simple. I will check your template and see how it compares.

From where I sit, I'm not sure how much more simplified it can get. 3MA's and a single filter at the bottom. I like the idea of bars at the bottom instead of intersecting lines so we will see.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #115 (permalink)
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Just wanted to be in and out today. +20 ticks using a variation on Perry's method.

That's it for today.

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Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #116 (permalink)
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sometimes it doesnt go your way

The little red triangle is the one I didn't take....

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Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #117 (permalink)
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PandaWarrior View Post
The little red triangle is the one I didn't take....

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Try putting back the PPmas ie. at least the SMA(1)typical and the SMA(3) typical, and see if they would not have filtered out your losing trades. Then for fun see if a HTM would have also helped using anaVisualSMA(1)typical. I have attached a chart showing this. I hope I understood what you were trying to do.

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  #118 (permalink)
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Emotions got the better of me today. My daily circuit breaker stop loss kicked in. I broke it by a few ticks. Not enough to cause to much damage but enough to make me sit back and examine why I did it.

Regarding the simplified Perry method, I have this to say about that, each day that goes by trading this simpler set up is one more day that I like it more and more.

Today, I began the process of writing my own rules for it. Mostly they will revolve around how many trades to take and when. I have also observed some price action filters that help frame the next trade. I'll elaborate more when I have formalized them.

Essentially though, I am just scalping here. 10 ticks most of the time. Its not much but Perry demonstrated how you can make plenty of money taking high probability trades and scaling up as the equity curve grows. So that's what I am doing. My identity crises over what kind of trader I am is behind me. The runners don't bother me anymore. I just want to nibble some off the carcass of the elephant as it were. There are plenty of excellent set ups to get 10 or so ticks without to much trouble.

Trouble is, this still demands I work with my emotions. They come and go and its hard to tell when they will usurp control over my behavior. I've fought them a lot the last few days.

Tomorrow, my game plan is ten trades following my still fledgling rules. After that, I quit no matter what. The goal is not to just make money but to recognize and work with my emotions and to have a goal of executing ten trades with precision regardless of the outcome of those trades.

Tomorrow, I'll post a chart with the trades notated.

Cheers.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #119 (permalink)
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Seems Like the Same Road


PandaWarrior View Post
Emotions got the better of me today. My daily circuit breaker stop loss kicked in. I broke it by a few ticks. Not enough to cause to much damage but enough to make me sit back and examine why I did it.

Regarding the simplified Perry method, I have this to say about that, each day that goes by trading this simpler set up is one more day that I like it more and more.

Today, I began the process of writing my own rules for it. Mostly they will revolve around how many trades to take and when. I have also observed some price action filters that help frame the next trade. I'll elaborate more when I have formalized them.

Essentially though, I am just scalping here. 10 ticks most of the time. Its not much but Perry demonstrated how you can make plenty of money taking high probability trades and scaling up as the equity curve grows. So that's what I am doing. My identity crises over what kind of trader I am is behind me. The runners don't bother me anymore. I just want to nibble some off the carcass of the elephant as it were. There are plenty of excellent set ups to get 10 or so ticks without to much trouble.

Trouble is, this still demands I work with my emotions. They come and go and its hard to tell when they will usurp control over my behavior. I've fought them a lot the last few days.

Tomorrow, my game plan is ten trades following my still fledgling rules. After that, I quit no matter what. The goal is not to just make money but to recognize and work with my emotions and to have a goal of executing ten trades with precision regardless of the outcome of those trades.

Tomorrow, I'll post a chart with the trades notated.

Cheers.

Hi,

Just wanted to say that I had been following Perry from his initial days simply because his style closely resonated what I was looking for, i.e. Simplicity and Scalping. I admit that the new nuance (post webinar) is great but I am still having trouble with the HTMA's and have decided to drop them (the usual reason that it looks great in hindsight but in real time it's eithe going the wrong way or tough to decipher). I am trading the 6E and use either a 4RB or 6RB chart. All these years of being rules driven, I now find that to take the trades based on what I am seeing on the chart is difficult because the rules are not hard and fast, kind of in the mind's eye.

Maybe we could compare some notes on the rules?

And Hats off to Perry for putting so many of us on the right path.

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  #120 (permalink)
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Tons of trades today


I took the trades shown on the screen live. After that, I took nearly 40 sim trades today testing all aspects of the rules I posted on the chart.

Every successful trader I have ever talked to says super simple is better. I agree. Now more than ever. Look at the chart. Its basically @Perrys chart or at least it started out that way. To be honest, I understand the reasons behind all the moving averages and I agree with their purpose. But the chart is to messy for me so I needed to strip it down a bit and use the basics and just trade PA in and around the remaining MA's.

I tried the DMplus for a couple of days and found that it seriously lagged a true pull back entry. Most of the time it did not confirm a trade until at least two bars had passed and sometimes three. By then, the trade was almost over if you think in terms of taking a trade at a mean regression or to put it simply, a pull back to a moving average and scalping your profit out BEFORE the swing high or low is reached. I think this accounts for the 4 tick target Perry is using. To be fair, this does work for small profit targets so no disrespect to Perry on this. He has found something that works for him and I applaud him for it. For me though, giving up so much of the trade in order to have confirmation was problematic. It demands a large stop. One that is large enough to fit nicely behind the most recent swing high or low. So on a 4 range chart, a 12 tick stop will usually get that done. Of course, on a 4 rang chart, you can exit much sooner than that since the chart structure could very well change and nullify your trade before that stop is hit. On an 8 range bar, doing this would result in a fairly large stop in relation to the profit targets.

So yesterday after trading was over, I got away from my charts and just mentally picturing the charts in my head, I began to visualize what a good entry looked like but more importantly, what a bad one looked like. Oddly enough, it was clearer to me doing this mentally instead of doing it looking at a chart because the visual of the chart prejudiced me. But mentally, I could see the bars, the MA's and how price played out around the MA's and I suddenly realized the true purpose of the PPma's that Perry uses. They really do show the very short term market internals and so I dashed back to the computer, threw them back on the chart and realized the PPma coincided most of the time with a certain 5EMA pattern. That is reflected on the chart in rule 5. No need for the extra MA's. The existing one shows the same thing for the most part.

So after live trading with at least a nod toward obeying the rules I posted....at the time they were just in my head, I took many sim trades testing these rules in real time. Obeying them produced mostly winners and breaking them produced mostly losers. I think I got away with a rule break once or twice but the evidence overwhelmingly proved to me that obeying these simple rules will keep me on the safe side of the trade. Not 100% but enough.

4 Range charts on CL is way to fast for me. Even today, an 8 range was pretty quick at certain times when price was flying around all over the place so I placed my 12 range chart on top of the 8 with the exact same EMA combination and while things were hectic, I waited for the same setups on the 12 range and entered them 4 ticks early on the 8 range. This worked pretty well and I may consider using this more in the future. Mostly I did this to quiet the noise on the 8. On less volatile days, the 8 will be ok.

I'll try to simplify things further tomorrow but I think its pretty simple now. After the last few days in which I have battled my emotions and came away with some scars to show for it, today was fun. Going in I knew exactly what I wanted to see in terms of a set up, exactly how many ticks to shoot for and most importantly, what "set ups" to ignore.

I will repeat this experiment tomorrow in real time. Hopefully I can simplify even more and tomorrow I will try to execute only rule based trades instead of take all trades approach I did today.

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Cheers.

PS. I need to make it clear here that I am NOT creating a new method that I would teach to any one nor am I saying my method is better or worse than Perry's. He has done something that is repeatable and sustainable and I for one am glad I stumbled across his thread and benefited from his thinking. My main issue is I have trouble processing so many different indicators on the chart and I quite frankly hate oscillators of any kind.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris

Last edited by PandaWarrior; September 22nd, 2011 at 07:14 PM.
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