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The PandaWarrior Chronicles
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The PandaWarrior Chronicles

  #1601 (permalink)
Elite Member
In the heat
 
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Platform: NT
Favorite Futures: Energy
 
PandaWarrior's Avatar
 
Posts: 3,155 since Mar 2010
Thanks: 6,306 given, 13,250 received

+30 Ticks today. Would have been a lot more but only IF:

1. I had not depended on a Level from Friday
2. I had complete rollover data. Turns out my chart looks nothing like the actual chart due to incomplete rollover data.
3. I had held my trade a bit longer. I trailed out about 1 second to soon.

In a conversation right now with NT as to why my charts will not load correctly. Every time I make a change with regard to the roll over information, i get a new chart that looks nothing like the previous one.

Still, happy to be up a decent amount. After looking at a real chart sent me by a friend, I would have had potentially +70 or so....oh well.....

One thing I've learned this last two weeks:

It does not matter one bit where you put the stop. There is a trade premise and the stop is how much you are willing to lose to find out if that premise is correct. End of story. There does not seem to be a benefit to a technical stop location at all.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1602 (permalink)
Elite Member
prague, czech republic
 
Futures Experience: Intermediate
Platform: NT7, MT4
Broker/Data: LMAX
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There is something about it, however there is something to consider as well:
- there is a point where trade premise will be invalidated
- most obvious technical stop locations ask to be tested and stops collected

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  #1603 (permalink)
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Georgia, US
 
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PandaWarrior View Post
It does not matter one bit where you put the stop. There is a trade premise and the stop is how much you are willing to lose to find out if that premise is correct. End of story. There does not seem to be a benefit to a technical stop location at all.

If the technical stop location is based on something like a prior S/R level ("2 ticks below the low" for example), then I agree 100% -- books and educators have trained retail traders very well over the last several decades to put their stops precisely where they do the most damage to the trader, and the most benefit to those who are willing to take advantage of it.

This is the primary disadvantage of using price alone as "truth" -- while volume can also be manipulated, it does a fairly good job of showing where those with actual skin in the game have the most to lose, and this can often be valuable in ascertaining where stops are located (and hence, where to take the other side).

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  #1604 (permalink)
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josh View Post
If the technical stop location is based on something like a prior S/R level ("2 ticks below the low" for example), then I agree 100% -- books and educators have trained retail traders very well over the last several decades to put their stops precisely where they do the most damage to the trader, and the most benefit to those who are willing to take advantage of it.

This is the primary disadvantage of using price alone as "truth" -- while volume can also be manipulated, it does a fairly good job of showing where those with actual skin in the game have the most to lose, and this can often be valuable in ascertaining where stops are located (and hence, where to take the other side).

I think its one of three options: 1. No stop at all...not to smart in the case of a disconnect or 2. A stop that is within your comfort range if you lost it but far enough that its out of the noise....and I do mean way away from the noise or 3. A fixed dollar stop of whatever you feel like.

I've been using 10 tick stops on CL. Suicide right? Not so much actually. I'm doing much better overall with the ten tick stops than I ever did with the so called technical stops of 15-25 ticks. (I never took a trade greater than 25 ticks of technical stop) And to top it all off, my entries are probably worse than they were before in terms of "ideal" entry locations.

So for now, just going with it.....

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1605 (permalink)
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Turns out I had to update NT, reset my instrument DB and restart NT. Perfect looking charts. I think the primary issue was I was using an older version of NT. Guess I'll do those updates when they say to from now on.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1606 (permalink)
Elite Member
prague, czech republic
 
Futures Experience: Intermediate
Platform: NT7, MT4
Broker/Data: LMAX
Favorite Futures: DAX, Gold, Euro
 
xelaar's Avatar
 
Posts: 1,517 since Feb 2013
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PandaWarrior View Post
I think its one of three options: 1. No stop at all...not to smart in the case of a disconnect or 2. A stop that is within your comfort range if you lost it but far enough that its out of the noise....and I do mean way away from the noise or 3. A fixed dollar stop of whatever you feel like.

I've been using 10 tick stops on CL. Suicide right? Not so much actually. I'm doing much better overall with the ten tick stops than I ever did with the so called technical stops of 15-25 ticks. (I never took a trade greater than 25 ticks of technical stop) And to top it all off, my entries are probably worse than they were before in terms of "ideal" entry locations.

So for now, just going with it.....

It makes a lot of sense if you enter not based on locations (e.g. position trading) but based on momentum. Rightly timed you can get propelled well with 10 tick stop. I had 10 or even 6 working for me in GC, which is CL's evil cousin

Good job!

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  #1607 (permalink)
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PandaWarrior View Post
I think its one of three options: 1. No stop at all...not to smart in the case of a disconnect or 2. A stop that is within your comfort range if you lost it but far enough that its out of the noise....and I do mean way away from the noise or 3. A fixed dollar stop of whatever you feel like.

I've been using 10 tick stops on CL. Suicide right? Not so much actually. I'm doing much better overall with the ten tick stops than I ever did with the so called technical stops of 15-25 ticks. (I never took a trade greater than 25 ticks of technical stop) And to top it all off, my entries are probably worse than they were before in terms of "ideal" entry locations.

So for now, just going with it.....

Without going all nuts about edge, risk and randomness....I only started realizing last year how relentless execution of even a small edge produces a profitable business. For example - Here is random system with 50% win rate, with only a 1.25R gain for every 1R risk (Panda - in your case, if you take 1R to be 10ticks on CL), then the reward is 13ticks. Now assuming, 50G account with 1% risk taken and including commission, I modeled 1000 trades in 100 trade cycles to see if randomness would show robustness. And it does.

If you can sustain a 10tck stop on CL while keeping at least WR in balance would be crucial in this in the long run. Most pros dont manage more than 45 - 55% WR anyway, and they make it up in RR or size. Which is generally my attempt (roughly speaking)

The metrics of the system are very modest, as are the profits on each cycle. Yet, with 3 critical components, this turns out over 300% over a decent sample period. these components are the cornerstones of my business -
  1. Practicing small risk
  2. Execution of that small risk for robustness
  3. Compounding.

I beleive that is 95% of battle. Now there's probably, 100s of traders who do much more comprehensive RR and probability stuff out here, however a rudimentary exercise like this is enough to make one appreciate where the power lies. Like you say, keeps things simple and remember whats really important.

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On an unrelated note regarding rollover, as you already found out, just rollback the Ninja default rollover date on the NT database to an earlier date to copy over volume from previous contract. Fairly basic once you know about it.

Also, unrelated - just skimmed over the AMP/CQG OCO posts - before I was on vacation I was trading one of my three accounts (which is with APM/CQG - other two are Vision and FuturePath). And I don't trust their new OCO functionality. I had a position hang on me one time, when I had 30 ES cars on. It wasn't hard to resolve, although it cost me a little money. Shit happens. Just gotta be prepared. I had a laugh about it later with both NT and AMP.

Having said that, the other two accounts; Vision and FuturePath (the same FuturePath of Linda Raschke and Damon Pavalatos fame), have been spot on. The Photon DOM is spectacular (though still not as simple as NT DOM).

Peace

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  #1608 (permalink)
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What works best to keep me in the zone is to determine in advance the price at which my trade premise would be invalidated, and decide whether I want to pay that price. If the cost is 14 ticks or less, and the minimum potential profit target is at least equal to that, I’m comfortable with the trade and very likely to place the order without hesitation.

There are price environments where technical stops are likely to result in nothing more than a stop run and I generally avoid taking a position until the Battle of Bulls and Bears unfolds to the point that I see a price level beyond which one side is more likely to retreat rather than suffer serious casualties.

For me, the two environments I avoid trading until further clarity appears are price action around a flat 20-period EMA, and initial breaks out of wide ranges or trend/channel lines. This is where the professionals play and are very adept at removing money from the accounts of inexperienced and undercapitalized traders.

With CL, a 10 tick stop on a momentum play (breakout of a key level) makes sense and is reasonable. Sometimes a stop of 20 ticks or greater is reasonable, in which case I wait for a “safer” setup because I find it easy to recover from small losses, therefore small losses have no negative effect on my overall trading mindset.

xelaar, awesome GC trading!

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  #1609 (permalink)
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PandaWarrior View Post
It does not matter one bit where you put the stop. There is a trade premise and the stop is how much you are willing to lose to find out if that premise is correct. End of story. There does not seem to be a benefit to a technical stop location at all.

I completely agree with this, with the exception of benefiting from other peoples terribly placed stops.

IMO, stops are one of the single most important things in trading, but not necessarily stops, just knowing "How much do I need to risk?" Not just this one time, but on average how much do I need to risk to get the outcome that I'm looking for. Or more importantly (IMO), "What am I getting for my risk? How much exposure will x ticks buy me?"

Most retail traders think of risk/reward in terms of profit and loss, and entirely overlook the fact that profit (assuming your skilled and can position yourself on the right side of the market), is entirely governed volatility. You've got no control over how much you will make on a given trade, or 100 trades, the only thing you control is how much your willing to spend.

Something everyone would benefit from is reminding yourself of what it is that your doing when you make a trade and put in a stop, like "I'm spending $156.25 (5 ticks) to expose myself to the change in value of $100,000 of 30 year treasuries." it greatly helps you keep in touch with reality, and maybe give a second thought to "huh, just how important is that little level my order is hiding behind" cause the answer is, NOT VERY!


"If I agreed with you, we'd both be wrong."
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  #1610 (permalink)
Elite Member
In the heat
 
Futures Experience: None
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PandaWarrior's Avatar
 
Posts: 3,155 since Mar 2010
Thanks: 6,306 given, 13,250 received



Deucalion View Post
Without going all nuts about edge, risk and randomness....I only started realizing last year how relentless execution of even a small edge produces a profitable business. For example - Here is random system with 50% win rate, with only a 1.25R gain for every 1R risk (Panda - in your case, if you take 1R to be 10ticks on CL), then the reward is 13ticks. Now assuming, 50G account with 1% risk taken and including commission, I modeled 1000 trades in 100 trade cycles to see if randomness would show robustness. And it does.

If you can sustain a 10tck stop on CL while keeping at least WR in balance would be crucial in this in the long run. Most pros dont manage more than 45 - 55% WR anyway, and they make it up in RR or size. Which is generally my attempt (roughly speaking)

The metrics of the system are very modest, as are the profits on each cycle. Yet, with 3 critical components, this turns out over 300% over a decent sample period. these components are the cornerstones of my business -
  1. Practicing small risk
  2. Execution of that small risk for robustness
  3. Compounding.

I beleive that is 95% of battle. Now there's probably, 100s of traders who do much more comprehensive RR and probability stuff out here, however a rudimentary exercise like this is enough to make one appreciate where the power lies. Like you say, keeps things simple and remember whats really important.

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Peace

I'm currently targeting 20 ticks as the bread and butter trades with a 46% win rate. A higher than usual number of BE but I go BE once I get to +15. If price is moving my way quickly and it looks like structurally I might get a runner, I move the target out and start to add to the runner.....however, I only started this today. I've been looking at how to do it successfully and I think I mostly figured it out.

So far so good...stay tuned.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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