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The PandaWarrior Chronicles


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The PandaWarrior Chronicles

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  #801 (permalink)
 VinceVirgil 
Toronto, Canada
 
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Took a few days off from posting. Lost interest for a few days. Had a few things to work on personally and I just didnt want to post.

Back to normal.

I am toying with the idea of posting my PnL as well as my charts. Not sure I'll go that far yet....

Anyway, after a hard sell off overnight, the entire cash session was less than half the overnight range.

I used the daily range x 10% as my profit targets. Targeting 50%+ of the daily range as a measure of effciency means if the range is 100 ticks, then 50 ticks is 50% of the daily range.

Today was 125 ticks for the cash session. I did 62. That seems reasonable to me.

I made two mistakes today. One of omission and one of commission.

I passed on a great trade and took the crappy catholic trade which resulted in a missed 20 tick profit along with a 15 tick loss. A 35 tick mistake.

The other loser was one I was watching closely to set up off the higher time frame and I got distracted and missed the early entry so i took the confirmation trade, it would have been a winner had I put the stop significantly higher. I was unwilling to take that risk and so took a stop and then a winner.

Removing one of of these two mistakes puts at least another 20 ticks of profit on the table.

I am starting to prefer these kinds of days as opposed to the hard trending days.....more opportunity or so it seems.


lol...the Catholic trade...need for confirmation.

Nice work on a tight day.

BTW, i like the background and the new candles on your chart. Very easy on the eyes...

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  #802 (permalink)
 PandaWarrior 
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lol...the Catholic trade...need for confirmation.

Nice work on a tight day.

BTW, i like the background and the new candles on your chart. Very easy on the eyes...

I am on a quest for simplicity and serene color combinations. Price is the important thing and all the bright flashing colors distract.....

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #803 (permalink)
 PandaWarrior 
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I am on a quest for simplicity and serene color combinations. Price is the important thing and all the bright flashing colors distract.....

I should mention here that simplicity is only useful if in the end, its actually useful. Albert Einstein said to make it as simple as possible but no more.

I've learned some valuable lessons this last week. Simple is better and whatever helps you keep it simple is good.

I'm not an indicator fan. But one thing I've learned this last couple of week is I am not good enough to trade without something to lean on. Without them, I have struggled to maintain confidence in my ability. Continuously second guessing myself and consequently over trading, taking trades off to early, etc...

Then I was goofing off with something and it clicked for me at least in terms of providing rule based entry methods. But even that wasn't enough. I needed to nail the exits. I've been killing myself these last two years trying to decide on where to exit. A runner? fixed targets? scalp? What was I to do?

I watched a video about exits and its like the light went on for me and a bit later on, another light turned on in terms of risk control after a conversation with one of my trading buddies.

Three components of successful trading gelled on Friday afternoon.

1. Rule based entries.....keep it simple and sustainable
2. Rule based exits....make it simple but also dynamic in that they expand and contract with risk and market conditions
3. Risk control. Position sizing in relation to risk is the key here.

I've had all three drilled into my head over the last couple of years but stubborn me, I couldn't package all three together in something that made sense to me....

But now it does.

I am taking the next week or two to sim trade my ability to work with the three R's as detailed above. After that, I have a plan but I need to demonstrate my ability to do what I now have a lot of mental and emotional clarity about.

There will be no charts during the next couple of weeks...but I am going to post my sim pnl during this time. Daily average target is $1600.00. I may sim one week or perhaps two depending on how I feel about my progress.

At the end of the a successful sim trial period, I will be rewriting my business plan, making some adjustments to my spreadsheets as well as embarking what I think will be a new and improved chapter of my trading journey.

Here's to aha moments...

Cheers

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #804 (permalink)
 Nicolas11 
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Wish the best to your new (simple!) ideas, PandaWarrior!

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  #805 (permalink)
 NW27 
Newcastle, Australia
 
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Hi
What was the video on exits?
Do you have a link for it?
Neil .

Sent from my GT-I9100T using Tapatalk 2

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  #806 (permalink)
 Anagami 
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PandaWarrior View Post
I should mention here that simplicity is only useful if in the end, its actually useful. Albert Einstein said to make it as simple as possible but no more.

I've learned some valuable lessons this last week. Simple is better and whatever helps you keep it simple is good.

I'm not an indicator fan. But one thing I've learned this last couple of week is I am not good enough to trade without something to lean on. Without them, I have struggled to maintain confidence in my ability. Continuously second guessing myself and consequently over trading, taking trades off to early, etc...

Then I was goofing off with something and it clicked for me at least in terms of providing rule based entry methods. But even that wasn't enough. I needed to nail the exits. I've been killing myself these last two years trying to decide on where to exit. A runner? fixed targets? scalp? What was I to do?

I watched a video about exits and its like the light went on for me and a bit later on, another light turned on in terms of risk control after a conversation with one of my trading buddies.

Three components of successful trading gelled on Friday afternoon.

1. Rule based entries.....keep it simple and sustainable
2. Rule based exits....make it simple but also dynamic in that they expand and contract with risk and market conditions
3. Risk control. Position sizing in relation to risk is the key here.

I've had all three drilled into my head over the last couple of years but stubborn me, I couldn't package all three together in something that made sense to me....

But now it does.

I am taking the next week or two to sim trade my ability to work with the three R's as detailed above. After that, I have a plan but I need to demonstrate my ability to do what I now have a lot of mental and emotional clarity about.

There will be no charts during the next couple of weeks...but I am going to post my sim pnl during this time. Daily average target is $1600.00. I may sim one week or perhaps two depending on how I feel about my progress.

At the end of the a successful sim trial period, I will be rewriting my business plan, making some adjustments to my spreadsheets as well as embarking what I think will be a new and improved chapter of my trading journey.

Here's to aha moments...

Cheers

Great post! Seems like another step forward. When trading, we all need 'something to lean on'. Until we develop competence, we look for crutches like indicators. Once competence starts to emerge, we just feel like we 'have to' put on certain trades, and accept whatever happens because we instinctively recognize good opportunities through our experience.

If you get a chance, check out De Bono's "Simplicity" book:

There's some insights in that direction (his other books can be helpful too).

"The mind is its own place, and in itself can make a heaven of hell, a hell of heaven." - Milton
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  #807 (permalink)
 PandaWarrior 
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NW27 View Post
Hi
What was the video on exits?
Do you have a link for it?
Neil .

Sent from my GT-I9100T using Tapatalk 2

it was one of those emails from a vendor trying to sell something. I've already forgotten the company but will try to find it and post a link.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #808 (permalink)
 PandaWarrior 
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I made 4 mistakes

1. I tried to anticipate a signal and went early. No dice. Costliest mistake of the day. Throw this out and my day is profitable. This trade had multiple problems. I also had left the size on from the previous trade and entered with that when the risk demanded half that size.
2. I let a winner two ticks from my target turn into a loser. Should have been BE
3. I had a signal I didn't like. I took it because I am still working on a couple of simple filters to decide when NOT to take a trade.
4. I took a 5 min break for lunch. The trade I had been looking for showed up and I missed it.

However, over all I am very satisfied with the days results in terms of simple entry and exit rules. Only think I want to do is add a slight filter to not take certain trades and another one on when to cut losers short. both of these a I have as working theories now. Will validate them the rest of the week.




Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #809 (permalink)
 PandaWarrior 
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Charts have all indicators removed for ease of viewing price and location of trades. I am using an indicator but not really ready to post it here yet. Its pretty darn simple indicator. Its one I borrowed from a well known futures.io (formerly BMT) member. I am testing it and finding that each day it is providing clear entries and my exit method is providing logical and easily identifiable exits. Whats missing is better although vastly improved sizing as well as potential scale in methods. I scaled in today on a trade and it made the difference between being profitable and not.

One area I am really dialing in on is when to exercise discretion as NOT take a trade. With no signal, there is no trade but with a signal, I am looking for reasons NOT to take a trade. In other words, to quote @researcher247 I trade by exception only. There are a couple of things I am looking at to filter those trades that are in fact legit signals but offer smaller reward potential and smaller likelihood of payoff. This filter is price action only, no further indicators.

One last thing I am looking at is something I have heard over and over again. Let price action determine when you should exit a bad trade prior to stop being hit. I've never figured out how that is possible. I mean after all, the stop means you are wrong. Not so. Today I saw two trades....the -1000 and the -700 trades turn in to losers but as I watched price action, I knew several bars before they stopped out they were going to be bad trades. But for the purposes of this weeks exercise, I let them play out.

Both trades could have been exited with a much smaller loss and the last one could have been exited at BE at one point long after I knew it was a loser.

I am beginning after all this time to understand chop as a good thing. It needs to be avoided yes if possible but at the same time, all directional moves originate in chop. I prefer the term non directional momentum or NDM. Basically price is coiling up like a spring storing energy in preparation for a directional move. After a while, it explodes in a directional move that we all dream about. So no more dreading NDM. It is to be desired and looked forward to as it preceedes a money making opportunity or an MMO. We make our money waiting through the NDM while anticipating the arrival of an MMO. Once the opportunity presents it self, it must be taken maximum advantage of.

In recognition of this, I am wondering about the concept of risk in light of these MMO's. If one recognizes a very good MMO, should one go at the maximum number of contracts one has available given the account balance and margin requirements? Or should one stick to a specific percentage of the account as risk...ie...1-2-5% of the account as risked on each trade.

As this week has progressed, i am not that concerned about the actual PnL. But next week, I will and will be trying to maximize the PnL every day. Right now I am simply concerned about following signals, learning to filter certain trades out and when to cut the losers short. i think i have a decent handle on this and will be looking to improve the pnl tomorrow while at the same time continuing to tweak the nuances.

I am learning to listen to that part of me called intuition. Listening to that voice that tells you things your head may have ignored or forgotten. Coupling the head and heart together could yield very nice results....

Anyway, cheers....




Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #810 (permalink)
 PandaWarrior 
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Hedge Fund Market Wizards: Covel Interviews Schwager | The Big Picture

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #811 (permalink)
 PandaWarrior 
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Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #812 (permalink)
 trs3042 
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PandaWarrior View Post



Nice work. Great job on keeping your losses small.

Rick

"If you're going to panic during a trade............. panic early."
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  #813 (permalink)
 indextrader7 
Birmingham, AL
 
 
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Wow. How do you do that? (All losses tiny tiny compared to all wins). I'm really struggling to get better than 1:1 avg win:loss myself.

Please lay some knowledge on me.

Most appreciative.

-IT7

 
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  #814 (permalink)
 PandaWarrior 
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indextrader7 View Post
Wow. How do you do that? (All losses tiny tiny compared to all wins). I'm really struggling to get better than 1:1 avg win:loss myself.

Please lay some knowledge on me.

Most appreciative.

-IT7

Those were not "losers" they were BE minus commissions. Look at the previous day for a more realistic picture of winners vs losers....

If you are 1:1, you better know where your exit is and it better be at least the size of your risk....and then you need to be better than 50%. I am currently better than 50%, risk is about 1:1 and sometimes 2:1 depending on the risk and target areas......the difference is size.....as the girls always say, size matters....you need to eat like and elephant and crap like a bird. Most people eat like a bird and crap like an elephant.

If you are a one lot trader, this is much harder...but still doable, just make sure you never take a trade you think your reward is less than your risk....and dont chicken out on the winners.....if your target is legit, then wait until its hit or price action tells you the trade is over....if you can do this, you'll be fine.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #815 (permalink)
 indextrader7 
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PandaWarrior View Post
Those were not "losers" they were BE minus commissions. Look at the previous day for a more realistic picture of winners vs losers....

If you are 1:1, you better know where your exit is and it better be at least the size of your risk....and then you need to be better than 50%. I am currently better than 50%, risk is about 1:1 and sometimes 2:1 depending on the risk and target areas......the difference is size.....as the girls always say, size matters....you need to eat like and elephant and crap like a bird. Most people eat like a bird and crap like an elephant.

If you are a one lot trader, this is much harder...but still doable, just make sure you never take a trade you think your reward is less than your risk....and dont chicken out on the winners.....if your target is legit, then wait until its hit or price action tells you the trade is over....if you can do this, you'll be fine.

Yeah, I really should have realized that. I had a moment due to a long day of moving heavy things in the heat!

Ok, that all sounds exactly like I trade (when I don't break any rules that is). Lately I've been hanging around 60% wins, and ranging from 1:1 to 2:1.

I can really relate to a post you had earlier where you talked about how when you know a trade is going to hit your stop, and you (and me) just watch it go there. Something I've been trying to improve as well.

Thanks for the response, I appreciate it.

 
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  #816 (permalink)
 PandaWarrior 
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2 loser trades today. Both of which I knew were gonna lose. 1st one not in plan...so I just closed it out. However the reason I took the trade was greed. Trying to anticipate the signal.....stupid....

2nd loser was a real valid trade signal. However, I had a gut feeling from the second the entry filled. I expected it based on the location and the level to travel pretty quickly to at least some type of profit but instead it immediately went into drawdown. Thats ok sometimes but this time through, from the way it acted, I should have just closed it immediately. Instead I waited for a bit of price action confirmation it would fail, I got that confirmation and closed before my stop was hit. A few mins later, I could have gotten out at BE but thats the way the chips fell on that trade.

I also passed on a great trade late in the day. I was on the phone, watching price action, up nicely on the day after a hard day of trading and decided to pass on the trade....that pass cost me $500. But again, I made a decision on the fly based on my feelings about the day and so I accept full responsibilty for it. No one forced me not to trade.




Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #817 (permalink)
 Anagami 
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PandaWarrior View Post
2 loser trades today. Both of which I knew were gonna lose. 1st one not in plan...so I just closed it out. However the reason I took the trade was greed. Trying to anticipate the signal.....stupid....

2nd loser was a real valid trade signal. However, I had a gut feeling from the second the entry filled. I expected it based on the location and the level to travel pretty quickly to at least some type of profit but instead it immediately went into drawdown. Thats ok sometimes but this time through, from the way it acted, I should have just closed it immediately. Instead I waited for a bit of price action confirmation it would fail, I got that confirmation and closed before my stop was hit. A few mins later, I could have gotten out at BE but thats the way the chips fell on that trade.

Reading this reminds me why psychology is king.

After some period of trading, we all 'know' how to make good trades and manage them properly. But we get psychological interference that sabotages us. Unfortunately, trading is more about avoiding mistakes than anything else.

"The mind is its own place, and in itself can make a heaven of hell, a hell of heaven." - Milton
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  #818 (permalink)
 PandaWarrior 
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Yesterday being the beginning of an early holiday weekend, it was expected to be slow. However, I decided to continue trading and perhaps look at trying a couple of things out besides my normal trading signals...basically counter trend trades or looking for a bit more in terms of my normal exit parameters.

As you can see, those did not work so well...mostly the extra ticks on the exits....looking at the MFE, you can see there was plenty of profit available yesterday.....deviating from exit parameters caused a losing day as opposed to a nicely profitable day.

This week has been an excellent exercise in what works and doesn't work for me. I tried a few different things within the context of a trend following method, found they do not work and also experimented with being somewhat greedy on purpose. Also a bad thing.

Next week is now a singular focus on trading only the signals generated and only exits as prescribed by my method.

After two years of searching and trying to marry the three things you need to have a successful trading method, I think I've finally found something I can work with longer term....What I am doing now is simple to see, simple to execute, simple entry and exit rules and simple money management based on risk. Simple is good. I know what doesnt work and what does...so next week is all about maximizing what I have learned this week as I finally put two and two together.....

Last week was the first week ever in which I didn't feel like I was guessing about what I needed to do. I didn't have to wonder if it was a trade or not, didn't have to wonder about exits or how many lots to trade. My confidence level rose significantly and at the same time, a healthy dose of humility began to infuse my trading. I finally recognized how truly out of control I am of every thing that happens once I take a trade and to be ok with that.

I also recognized and worked both with and against that intuition traders talk about. I felt certain trades would be good trades and stuck with them, I also felt the opposite and deliberately decided to let the trades play out even though I intuitively understood they needed to be closed immediately. I did this for the express purpose of seeing how these worked given my new, somewhat elevated sense of my own self awareness. This bit sounds like so much psychobabble, but for once, I am not discounting it.

I am looking forward to another week on sim. I set a goal of $1600 a day for the two weeks I am doing this experiment. Last week fell far short of that. However, I knew the first week would be tough as I worked on executing everything real time and worked out the kinks and understand certain nuances. Next week, $1600 a day is definitely my goal.






Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #819 (permalink)
 PandaWarrior 
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6 things I wish I knew the day I started Berklee | Derek Sivers

A great read....its about music but applies to everything in life

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #820 (permalink)
 Deucalion 
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PandaWarrior View Post
6 things I wish I knew the day I started Berklee | Derek Sivers

A great read....its about music but applies to everything in life

Indeed a great read, I am so guilty this year of violating the very first and most sacrosanct rule, of focus, and it shows in my yearly PNL. Focus, single mindedness with simplicity is the only thing, You, PW, do well to emphasis them in your journal.

Although not sure why you want to do the sim thingy, seems like a distraction.

I am currently reading Gigerenzer's Gut Feelings and I can see why when I complicate things, I set myself up for failure in a number of ways - doing too much, getting scatterbrained and most of all - just plain trying to outsmart the market (which is always doomed to fail).

I thoroughly recommend this book, to all traders that trade purity - price bars, DOM, Tape etc....



Boris (although I do not endore his products) - has a lovely succinct way of putting tthings in perspective, I enpjy reading those as it often gives me a reality check. ........ Boris Schlossberg | BK Forex Advisor | Boris Schlossberg | Kathy Lien | Forex Trading Signals

 
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  #821 (permalink)
 PandaWarrior 
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Deucalion View Post
Indeed a great read, I am so guilty this year of violating the very first and most sacrosanct rule, of focus, and it shows in my yearly PNL. Focus, single mindedness with simplicity is the only thing, You, PW, do well to emphasis them in your journal.

Although not sure why you want to do the sim thingy, seems like a distraction.

I am currently reading Gigerenzer's Gut Feelings and I can see why when I complicate things, I set myself up for failure in a number of ways - doing too much, getting scatterbrained and most of all - just plain trying to outsmart the market (which is always doomed to fail).

I thoroughly recommend this book, to all traders that trade purity - price bars, DOM, Tape etc....



Boris (although I do not endore his products) - has a lovely succinct way of putting tthings in perspective, I enpjy reading those as it often gives me a reality check. ........ Boris Schlossberg | BK Forex Advisor | Boris Schlossberg | Kathy Lien | Forex Trading Signals

Sim thingy is for really one reason, to see if in fact the aha moments were real and to do some slight optimization without real money on the line.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 PandaWarrior 
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No trading today as I slept in on this Memorial Day....but after I got up, cleaned up and got some nice breakfast, I came and marked the entries as they would have presented themselves.

Some targets are small but with proper sizing today, it was enough to have made a couple of grand....

Now off to do other more important things....like take a nap or read a book....my family is out of the house and so there is some peace and quiet....might last for another hour or so.....got to take advantage of it while I can.

And while I am not a war monger, I certainly honor those that volunteer to place their lives at risk for mine....God bless the troops and keep them safe.


Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #823 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

Just wanted to drop a humble opinion here after seeing how you set goals throughout your journal.

I don't know if you played sports or not (most traders did), but it's really important not to set OUTCOME based goals (like 30-50 ticks a day, or $1600/day) This opens up a whole box of psychological barriers to peak performance. Imagine if a tennis player focused on having a certain score for the set/match rather than hitting more high percentage cross-court forehands to his opponents weaker side.

From much better traders than myself, I've heard it's most beneficial to set PROCESS goals. Things you can directly control... because as we know, if you take care of what you can control... your ticks and $$ will follow accordingly.

Couple those process goals (with your current struggles), with good trading statistics (win%, avg win:loss, etc) and you'll be full aware of what weaknesses are showing up. Then re-adjust process goals to suit. A never ending process for me, I think it IS trading.

All the best,

IT7

 
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  #824 (permalink)
 Anagami 
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indextrader7 View Post
Just wanted to drop a humble opinion here after seeing how you set goals throughout your journal.

I don't know if you played sports or not (most traders did), but it's really important not to set OUTCOME based goals (like 30-50 ticks a day, or $1600/day) This opens up a whole box of psychological barriers to peak performance. Imagine if a tennis player focused on having a certain score for the set/match rather than hitting more high percentage cross-court forehands to his opponents weaker side.

From much better traders than myself, I've heard it's most beneficial to set PROCESS goals. Things you can directly control... because as we know, if you take care of what you can control... your ticks and $$ will follow accordingly.

Couple those process goals (with your current struggles), with good trading statistics (win%, avg win:loss, etc) and you'll be full aware of what weaknesses are showing up. Then re-adjust process goals to suit. A never ending process for me, I think it IS trading.

All the best,

IT7

That's exactly right. Process goals make sure that one is working on developing relevant skills. Developed skills result in improved performance automatically, without worrying (and self-sabotaging oneself) over outcomes.

"The mind is its own place, and in itself can make a heaven of hell, a hell of heaven." - Milton
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  #825 (permalink)
 PandaWarrior 
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indextrader7 View Post
Just wanted to drop a humble opinion here after seeing how you set goals throughout your journal.

I don't know if you played sports or not (most traders did), but it's really important not to set OUTCOME based goals (like 30-50 ticks a day, or $1600/day) This opens up a whole box of psychological barriers to peak performance. Imagine if a tennis player focused on having a certain score for the set/match rather than hitting more high percentage cross-court forehands to his opponents weaker side.

From much better traders than myself, I've heard it's most beneficial to set PROCESS goals. Things you can directly control... because as we know, if you take care of what you can control... your ticks and $$ will follow accordingly.

Couple those process goals (with your current struggles), with good trading statistics (win%, avg win:loss, etc) and you'll be full aware of what weaknesses are showing up. Then re-adjust process goals to suit. A never ending process for me, I think it IS trading.

All the best,

IT7

Outcome based goals are a direct result of correctly pursuing process based goals. I know that if I execute my process based goals, my outcome based goal at least right now should average around that much per day give or take a couple hundred dollars.

The goal is not to make exactly $1600 a day, simply to execute my edge, money management and patience well enough to arrive at this outcome based average. Some days it will be more, some less.

I know all about process based metrics. I built and managed a very successful business based on the processes of doing the right thing over and over again and of course the money took care of itself...but guess what....over time, the law of large numbers took over and I could more or less guarantee I would make "x" number of dollars per day over time. And thats what happened. Same here, do the right things over and over again and over time, a pattern emerges.

The $1600 daily average is a number I arrived at from extensive review of average daily win given certain entry/exit rules combined with position sizing based on risk and a fixed % of my account I was willing to risk per trade and per day.

So I understand you point....its well made and totally relevant, however, it was arrived at after first determining the process needed to produce that daily.

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 PandaWarrior 
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I had one trade where it seemed I just couldn't wait to get in....impatience set in...so I sized down, got in, go ten ticks and the feeling of having to trade left me. Patience took over and I had a nice day.

I was gone for the big move down but so what. I took my kid to school and that was worth it.....its why I trade. I was up $1200 at that point and if I got no further trades on the day, I would have been happy. I finished with one more, got $463 on it and finished over my daily average target. Enough for the day.





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  #827 (permalink)
 Surly 
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indextrader7 View Post
Just wanted to drop a humble opinion here after seeing how you set goals throughout your journal.

I don't know if you played sports or not (most traders did), but it's really important not to set OUTCOME based goals (like 30-50 ticks a day, or $1600/day) This opens up a whole box of psychological barriers to peak performance. Imagine if a tennis player focused on having a certain score for the set/match rather than hitting more high percentage cross-court forehands to his opponents weaker side.

From much better traders than myself, I've heard it's most beneficial to set PROCESS goals. Things you can directly control... because as we know, if you take care of what you can control... your ticks and $$ will follow accordingly.

Couple those process goals (with your current struggles), with good trading statistics (win%, avg win:loss, etc) and you'll be full aware of what weaknesses are showing up. Then re-adjust process goals to suit. A never ending process for me, I think it IS trading.

I have believed this viewpoint for quite some time but I now doubt its validity. Most traders will say that you cannot control the market (which is true) and that as a consequence, you cannot control your return (which is "less true"). An opinion I share with many others is that trading is a performance activity. In other words, success at trading is, like professional sports, a matter of psychology, knowledge/skill, experience, drive, etc. In sports, the process of setting specific goals has the effect of driving one towards those goals, of giving one a structure within which to both create guidelines for action and to judge the results of one's actions. I would argue that this process works in trading as well. By setting specific goals (either on a daily, weekly, or monthly, etc basis) one creates a framework within which to judge one's actions. A goal can help a trader limit losses and let winners run. A goal can help a trader use proper size when the probabilities are skewed (such as in strong trends).

Most of my viewpoint on this matter comes from studying the work of Ari Kiev. To say that Kiev "believes strongly" that a trader must set specific, monetary goals to achieve their highest performance is a massive understatement - this view is the very basis of his life's work and worldview.

I'm going to use a non-trading analogy (with apologies to Monpere) which Ari Kiev uses. Kiev worked with olympic athletes for over a decade and he has said several times that there is no athlete who had the goal of "doing the best they could" who achieved a gold medal. In fact, he says that the ONLY athletes who won a gold medal were those who created the very specific goal of winning a gold medal and then did what it took to create that result in the face of uncertainty, setbacks, competitors, etc. He has worked with hedge-fund traders for much longer and his viewpoint has been reinforce by this work.

It is worth considering these ideas before jettisoning the idea of "promising a specific result in the face of uncertainty and with no guarantees of achieving that result".

Seek freedom and become captive of your desires. Seek discipline and find your liberty. - Frank Herbert
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  #828 (permalink)
 indextrader7 
Birmingham, AL
 
 
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Surly View Post
I have believed this viewpoint for quite some time but I now doubt its validity. Most traders will say that you cannot control the market (which is true) and that as a consequence, you cannot control your return (which is "less true"). An opinion I share with many others is that trading is a performance activity. In other words, success at trading is, like professional sports, a matter of psychology, knowledge/skill, experience, drive, etc. In sports, the process of setting specific goals has the effect of driving one towards those goals, of giving one a structure within which to both create guidelines for action and to judge the results of one's actions. I would argue that this process works in trading as well. By setting specific goals (either on a daily, weekly, or monthly, etc basis) one creates a framework within which to judge one's actions. A goal can help a trader limit losses and let winners run. A goal can help a trader use proper size when the probabilities are skewed (such as in strong trends).

Most of my viewpoint on this matter comes from studying the work of Ari Kiev. To say that Kiev "believes strongly" that a trader must set specific, monetary goals to achieve their highest performance is a massive understatement - this view is the very basis of his life's work and worldview.

I'm going to use a non-trading analogy (with apologies to Monpere) which Ari Kiev uses. Kiev worked with olympic athletes for over a decade and he has said several times that there is no athlete who had the goal of "doing the best they could" who achieved a gold medal. In fact, he says that the ONLY athletes who won a gold medal were those who created the very specific goal of winning a gold medal and then did what it took to create that result in the face of uncertainty, setbacks, competitors, etc. He has worked with hedge-fund traders for much longer and his viewpoint has been reinforce by this work.

It is worth considering these ideas before jettisoning the idea of "promising a specific result in the face of uncertainty and with no guarantees of achieving that result".

I was going to send a PM, as to not hijack a trading journal thread, but I find it dangerous for others to read your post. Your make several valid points on their own, but they do not validate the topic of setting a $ P/L goal for a single trading session.

The key is that A) we cannot control our return over a single session. Just like a casino can't control a session, nor can a professional poker player (both having an edge such as a trader). and B) the difference between a long term goal or a vision must be differentiated from daily goals. They are two different animals that work together, but have separate roles.

If one sets outcome goals for a single session then there is a problem, the outcome is largely out of our hands. The market may not offer opportunity for it on that day/session. Some days a breakeven session is a success. If you have process goals, success on a day like that will be evident. If you keep your $ P/L goal (outcome goal), you will have to break your own goal rules to realize it was OK to breakeven that day.

Your point on sports/olympic gold medalists is valid, and true for setting a VISION.. not goals set to get there. A vision is very very important and will help motivate and stay the course through setbacks and such as you mentioned. Research into peak performance and sports psychology will tell you this. This vision setting example is not applicable to our discussion on setting a $ P/L goal for a single trading session.

If you must set $ P/L goals, then given what we do (trade an edge with random distribution of winners and losers) we must set the $ P/L goal over a period of sessions, not a single session.

Most respectfully

 
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  #829 (permalink)
 Surly 
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indextrader7 View Post

The key is that A) we cannot control our return over a single session.

This vision setting example is not applicable to our discussion on setting a $ P/L goal for a single trading session.

If you must set $ P/L goals, then given what we do (trade an edge with random distribution of winners and losers) we must set the $ P/L goal over a period of sessions, not a single session.

Most respectfully

Yes, I don't want to hijack either - I will just say a couple things: The statements above are true only if you believe that trading is a mathematical game with a random distribution of winners and losers and that in trading you just have to follow your trading rules and take whatever the market gives. If, on the other hand, you believe (as I do) that trading is a performance activity and that your skill, experience, and psychology determine whether you win or loss based on how well you are able to trade, then the above statements are not true. Be sure you choose which of these two viewpoints you believe in before risking money on trading.

Seek freedom and become captive of your desires. Seek discipline and find your liberty. - Frank Herbert
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  #830 (permalink)
 Nicolas11 
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The participants did not want to hi-jack the trade, but I have to say that I like a lot this kind of hi-jacking!

Thanks, @PandaWarrior, for having let it unfold. The discussion is quite interesting.
I was recently asking to myself: during a day, am I supposed to stop trading after, let's say, I have reached twice my average daily "target", or am I supposed to let the statistical game follow its course, and just take what the market has to give or not.
I know that there is no "final answer", and I have seen both attitudes in the journals on futures.io (formerly BMT).
Thanks, @Surly, @indextrader7 and @PandaWarrior for this discussion which has given me food for thought.

Nicolas

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  #831 (permalink)
 PandaWarrior 
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Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #832 (permalink)
 Adamus 
London, UK
 
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PandaWarrior View Post
6 things I wish I knew the day I started Berklee | Derek Sivers

A great read....its about music but applies to everything in life

Just passed the link on to my nephew who's in his first year at music school - thanks. Hopefully good for my trading too.

I can't help wondering though whether the ability to shut oneself away and train intensively is a hell of a lot easier if you are suffering from a bit of autism or obsessive-compulsive disorder - or like me are just a bit anti-social and prefer books and computers to social interaction.

You can discover what your enemy fears most by observing the means he uses to frighten you.
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  #833 (permalink)
 Lornz 
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Adamus View Post
I can't help wondering though whether the ability to shut oneself away and train intensively is a hell of a lot easier if you are suffering from a bit of autism or obsessive-compulsive disorder

Are you referring to me?

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  #834 (permalink)
 PandaWarrior 
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Yesterday after I had posted my final chart and pnl, I had an urge to trade. I lost 100%+ a bit on the very next trade and then the old urge to make it all back came over me....I succumbed and went +/-/+ to end the day at +600 at which time I quit and watched for three hours without a single trade.

The first three trades after getting the urge to be in the market were the ones that leave you feeling a tad hung over, like you're not quite sure what just happened. After the last one though, I recognized what had just happened, took a break, reset and came back for a winner that ended my day. I was clear headed after that but forced myself to not trade as a punishment or exercise in discipline.

While not happy with the relapse, i am glad I short circuited it before it did serious damage. Today was back on track with clear headed thinking and trade planning. probably done for the day.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #835 (permalink)
 tigertrader 
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see the market for what it is and not what it appears to be
understand market structure, liquidity, and price action
develop a framework for analyzing the market
somewhere between bottom-up & top-down lies the sweet spot
which allows you to see the market in the proper context
this provides you with a compass,
which will keep you from feeling lost
and will show you the way

-tt

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  #836 (permalink)
 PandaWarrior 
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Took a huge risk on the first trade, got stopped out and spent the rest of the morning digging out....I took smart entries, managed them somewhat poorly and manged to get back above break even....

I think I am done for the day....unless we get something that looks good, I'm probably staying flat.





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  #837 (permalink)
 PandaWarrior 
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Prep work...

Sitting here trying to decide where support might possibly be. Fundamentals dictate 85-95+ a barrel. So from a macro standpoint, I think long just because I know the producers need it. On the other hand, inventories have been creeping up dictating a further reduction in prices. From the chart standpoint, I see no further support until the mid 70's.

The question now is, what its gonna do? Its already gone through all the major fib levels, so deep pull back buyers are underwater at this point and the 88-85 target zone for some of the major funds have been breached with no real trouble at all.

So for longs on a macro level, I am waiting until I see price action tell me its long. So far, its telling me the selling isn't quite over yet.

In the meantime, on an intra day basis, I have no bias. I will trade the chart the way it unfolds. I don't hold trades for hours so I have the luxury of not caring which way it goes.


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  #838 (permalink)
 PandaWarrior 
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Oil Falls a Fifth Day on Concern U.S., China Demand Will Falter - Bloomberg

Simplicity is the ultimate sophistication, Leonardo da Vinci


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  #839 (permalink)
 PandaWarrior 
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  #840 (permalink)
 Big Mike 
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Nice 0 MAE entry

Mike

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  #841 (permalink)
 VinceVirgil 
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Big Mike View Post
Nice 0 MAE entry

Mike

I concur... You have to love those MAE 0 entires.

Nicely done.

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  #842 (permalink)
 PandaWarrior 
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Been struggling last few days with a serious problem. I scale out of my trades using a specific formula based on risk. This generally produces a net 1:1.5% RR.

Trouble has been this. Holding the second scale to full targets. Fear of losing what I already have on the screen. Yesterday I held a loser for almost an hour. To be fair, the original stop was not hit in that hour but the trade had stalled out and never really got above water. However, today, I had a few good trades on, and was unable to hold the second scale on all the trades. Out of 4 trades, only one was held properly. I see this as a significant mental problem.

After spending to many years looking for perfect entries that minimize or eliminates losers and finally coming to the realization that will never happen, I've finally learned the exit is just as important or perhaps more so than the entry. I don't feel like a beginner any longer, but this issue relegates me back to that status. Learning where to exit is both an art and a science. The science I have down pat. The art is more mental than anything else. Can you feel the market telling you the trade will continue as hoped or will turn and fail? Where to get to BE on the second scale? How much room and for how long....some science as well as art in this component as well.

I'm staying on sim a few more days while I work this issue out....I am getting better....just not good enough fast enough for me......

I left lots of money on the table today based on my method. I did pass on a trade as punishment for mismanaging the third trade.

Here's my pnl for the day.

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  #843 (permalink)
 indextrader7 
Birmingham, AL
 
 
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Been struggling last few days with a serious problem. I scale out of my trades using a specific formula based on risk. This generally produces a net 1:1.5% RR.

Trouble has been this. Holding the second scale to full targets. Fear of losing what I already have on the screen. Yesterday I held a loser for almost an hour. To be fair, the original stop was not hit in that hour but the trade had stalled out and never really got above water. However, today, I had a few good trades on, and was unable to hold the second scale on all the trades. Out of 4 trades, only one was held properly. I see this as a significant mental problem.

After spending to many years looking for perfect entries that minimize or eliminates losers and finally coming to the realization that will never, I've finally learned the exit is just as important or perhaps more so than the entry. I don't feel like a beginner any longer, but this issue relegates me back to that status. Learning where to exit is both an art and a science. The science I have down pat. The art is more mental than anything else. Can you feel the market telling you the trade will continue as hoped or will turn and fail? Where to get to BE on the second scale? How much room and for how long....some science as well as art in this component as well.

I'm staying on sim a few more days while I work this issue out....I am getting better....just not good enough fast enough for me......

I left lots of money on the table today based on my method. I did pass on a trade as punishment for mismanaging the third trade.

Great job on that discovery of exits being as equal (or more imho) important than entries. You're no where near a beginner level, you're great and it's enjoyable to keep up with you on here.

Something I say to myself to help in in those moments... "Trust myself, trust my strategy, where's the strength?, where's the weakness?, hold while the premise remains valid." One of the best traders I know says those things (and trades just like we do as far as style goes).

Keep up the good work my man.

 
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  #844 (permalink)
 eudamonia 
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@PandaWarrior

You are not a beginner. Yes, you may be frustrated with your trading. Yes, you may not be trading your best. But that doesn't take away from the fact that you are an awesome trader.

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  #845 (permalink)
 PandaWarrior 
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I've been in a push toward more and more simplicity. I had a chart with some auto fib lines drawn, an opening range indicator, a current day OHLC, a prior day HL, daily pivots and what I have been discovering is that I don't really use those things that much. Worse, they sometimes put me off taking a perfectly good trade. So I figured if they weren't helping and sometimes hurt me, why have them.

The main reason I kept them so long was I was afraid of not having "context" or a fully naked chart. So I put those things on my higher time frame chart and I keep that minimized most of the time.

I still have a couple of indicators on my trading chart but here is what it looks like in terms of where my trades were today. I still keep the daily range indicator, the range and ATR indie at the bottom and of course the news indie. All of which I use constantly.

Arrows are trades I took and triangles are trades I could have and passed for some reason....the last one I was not at the screens so of course couldn't take it anyway, just marking it for posterity.


Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #846 (permalink)
 researcher247 
Chicago, IL
 
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PW,

Have you ever thought that if price gets to 75% of your 2nd target a way of mechanically managing the trade @that point with logical WIGGLE room (enough for it to go to full 2nd target and tight enough to take SOMETHING in ticks if it reverses and eventually would come all the way back to your original entry)?

Reason I write that is that MANY professional traders use the concept of, if my trade gets to 75-80% of 'extended' target I will give it room to breathe but not enough to take it all back.

Some use volatility stop @that point or a 'time stop' (not my preference) or an 'overbalance' in the opposite direction or they use a mechanical trailing indicator for stop out @ the mentioned 75-80% of the extended target.

Good luck getting to the root of your issue. Stay the course.

peace

hedvig

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PW,

Have you ever thought that if price gets to 75% of your 2nd target a way of mechanically managing the trade @that point with logical WIGGLE room (enough for it to go to full 2nd target and tight enough to take SOMETHING in ticks if it reverses and eventually would come all the way back to your original entry)?

Reason I write that is that MANY professional traders use the concept of, if my trade gets to 75-80% of 'extended' target I will give it room to breathe but not enough to take it all back.

Some use volatility stop @that point or a 'time stop' (not my preference) or an 'overbalance' in the opposite direction or they use a mechanical trailing indicator for stop out @ the mentioned 75-80% of the extended target.

Good luck getting to the root of your issue. Stay the course.

peace

hedvig

I've been experimenting with moving my trail to the 1st target if price gets to 75-80% of the second target...only done that once or twice and both times it cost me the second target.....but I still think its probably a good idea...

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Anyone using this stuff with noticeably positive results?

HeartMath stress relief, resilience and wellness building tools

Simplicity is the ultimate sophistication, Leonardo da Vinci


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 researcher247 
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Yes, but 2nd hand source.

My brother (he runs a GM Union Pension Fund in Detroit--don't hate on him for that please).

He has a kid on the way @44 years old (in addition to his 2 adopted children).

His commute is 45 minutes into the GM building each day so he reads it while his driver gets him to and fro. Then he uses it when he is frazzled at work and especially at home.

His older kid, now 12 stresses him out and his in-laws can do so as well (@times).

I turned him onto it after I posted about it in my journal (on another site 3/16/12); so I bought the Emwave 2 and 3 books/courses for him in late March--he is digging the vibe after 10 weeks {especially the Emwave 2}.

He is thinking of testing it on his 2 underlings {but not in an official capacity @GM}.

I don't have one because I don't have any stress (no kids/no wife/no boss) and am a deep-breath afficianado and I have done Yoga since my hippie mother introduced it to all of her kids around 30 years ago.

peace

hedvig

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Yes, but 2nd hand source.

My brother (he runs a GM Union Pension Fund in Detroit--don't hate on him for that please).

He has a kid on the way @44 years old (in addition to his 2 adopted children).

His commute is 45 minutes into the GM building each day so he reads it while his driver gets him to and fro. Then he uses it when he is frazzled at work and especially at home.

His older kid, now 12 stresses him out and his in-laws can do so as well (@times).

I turned him onto it after I posted about it in my journal (on another site 3/16/12); so I bought the Emwave 2 and 3 books/courses for him in late March--he is digging the vibe after 10 weeks {especially the Emwave 2}.

He is thinking of testing it on his 2 underlings {but not in an official capacity @GM}.

I don't have one because I don't have any stress (no kids/no wife/no boss) and am a deep-breath afficianado and I have done Yoga since my hippie mother introduced it to all of her kids around 30 years ago.

peace

hedvig

Thanks for the input. I've noticed in my trading that during a trade, especially one that isn't moving very fast toward my target or one that has moved quickly toward target and then stalls just before the finish line, I start to lose the ability to think rationally about what is happening. This is not 100% of the time but often enough that it sabotages my PnL.

So reading the HeartMath book and realizing there might be a reason for the irrationality based on emotion, it seems plausible that this might work.

I'm also beginning this Knowledge Products : The Strategic Coach online store : books, audios, software, serials. | Strategic Coach® Knowledge Products. next week. I started once before but didn't really see the point but I think it is the kind of thing that helps keep a person centered and focused on whats really important. I was a client of Dan's coaching at one point and found his stuff to be some of the most simple yet most powerful I've ever come across....but also extraordinarily expensive....

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 researcher247 
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@PandaWarrior,

I enjoy reading about you getting to the 'root' of your issues w/some high-end products that do work over time.

Alot of psychology is hit and miss because you can't just say it and affirm it. It has to be internalized to the point that it is like breathing to a trader.

It is NOT about willpower. It is about being true and 100% accountable to yourself; 'cause you are the CEO and you don't want to piss off the boss, now do you?

peace

hedvig

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Simplicity is the ultimate sophistication, Leonardo da Vinci


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 VinceVirgil 
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Good discipline.

Theres a great lesson in that.

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Today is day one of my gratitude project. For the next 30 days, I going to find something to be grateful for and express it publicly and if that gratitude needs to be expressed in person face to face, I'm gonna do that as well.

More than just expressing gratitude, I intended to deepen the project by thinking through the reason I am grateful and sharing that as well.

So here goes.

Today, I am grateful for my family. My wife and kid bring a sense of purpose and stability to my life. My wife is a rock for me and while the last five years have been stressful beyond reason, she has refused the easy solutions for her personal comfort and made the conscious decision to do what's right for all of us.

My kid is simply the light of my life. Nothing has ever brought such joy and pleasure to me. The day we adopted her was both the most exciting and terrifying day of my life. A little Thai kid that spoke no English had the power to both lift me higher than I had ever known as well as destroy me with her unacceptance of me. the first two months were devastating. It's been pure bliss ever since. I simply can't even remember what life was like before she came along and what's even odder than that is I can't remember who I was before her either. I'm a better human being today because of her.

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@PandaWarrior,

I enjoy reading about you getting to the 'root' of your issues w/some high-end products that do work over time.

Alot of psychology is hit and miss because you can't just say it and affirm it. It has to be internalized to the point that it is like breathing to a trader.

It is NOT about willpower. It is about being true and 100% accountable to yourself; 'cause you are the CEO and you don't want to piss off the boss, now do you?

peace

hedvig

Been thinking about integrity lately. The idea that engaging in performance related activity that requires your heart, mind and body to be in sync in order to perform at optimum levels dictates that one operate in extreme honesty with oneself and with ones accountability partner(s).

Here's the deeper stuff. If we continually say we will do one thing in terms of practice (sim) and yet constantly act in opposition to what we say will do, we create a conflict. Then we can magnify the conflict by lying about it to our accountability partner(s) which creates even more conflict. Thereby reducing our ability to act in harmony with our stated self interest. Our psyche sabotages the very thing that would help us in the long term.

Engaging in high performance activities with internal conflict raging is sure to lead to defeat. How can I expect to behave predictably in public if my private behavior is random? Translation: how can I trade live profitably if my sim trading is random because I have the thought process that its only sim?

How can you build confidence if you say you will stop trading after "x" ticks of profit or "x" ticks of loss and then you continue to trade? Or you will only take longs above a certain MA or shorts below?. Or you always do "x" when "y" is present? I realize that sometimes you are in the zone and you need to maximize these things. But in general, if you have a guideline for a trading variable, particularly regarding money management, that is continually violated, confidence will erode. Expectations will be unmet. Stress will ensue.

Example; today I told my trading buddy I would was gonna hold to my profit targets. Then I sent a screen shot of the trade along with the ending PnL. I did what I said I was gonna do. Confidence increased. Then after a bit, I started slipping out of that state of mind that I like to trade in so I said to him I was gonna stay flat and just watch and mark. Along comes a great looking trade. Decision point. Do I trade or do I honor what I said I would do?

A case can be made for both sides. I don't know that either side is wrong. But for me, I elected to stay flat today. Other days I've done the opposite. I almost always pay for that in terms of PnL. At that point, I am trading in conflict with what I said I would do. Nine times out of ten, I am tempted to lie about it and say I stayed flat. But now, I send my PnL at the end of the day to him and we verify our integrity. Like the great one said, "Trust but verify". There's no teeth in the arrangement except for the one that reveals duplicity and no one likes to be called much less proved to be a liar. So it makes it easier to remain true to my stated intentions.

Part of a public journal is the accountability to others....but since its anonymous, there's really not that much one can get out of it unless one is first honest with oneself and acknowledge his/her own short comings. Besides, no one wants to step on someone else's toes and offend them by calling them out for things they do that's not in their best interest. Some have done that with me, some tactfully and others not so much. At first I was really pissed they did that...sticking their nose in someone else's business. I would spend an inordinate amount of time writing a rebuttal only to realize they might be right and not post it, but now, I think I get it. I am often tempted to do the same on other journals.....its a hard temptation to resist. And today I am grateful for the somewhat pointed comments others have made regarding my trading journey.

At one point in my very early working life, I had a mentor that called me over to his house one day and we sat out in his front yard and for 2 hours, he chewed my ass about some personality issues I had that were keeping me from succeeding. It was HARD to swallow. It did not taste like chicken. It tasted bitter and unpleasant. But the truth of what was said that day saved my life in more ways than one. Now, I occasionally revisit the spirit of that afternoon and try to breath new life into the concepts and action points we discussed that day so long ago. This weekend, I am revisiting that day as it relates to trading.

Later this weekend, I plan on laying out some of the more difficult aspects of my trading life in plain sight so I can see them more clearly. I want my path forward to be clear of all obstacles created by the past and its conflicts.

Who would have ever thought trading would turn out to be an exercise in personal psychological improvement.

Simplicity is the ultimate sophistication, Leonardo da Vinci


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Today I am grateful for the little things we take for granted. The food on my table, the clothes on my back and the income stream that provides them.

In this modern age when poverty, hunger and homelessness are so prevalent, it is truly a blessing to have these basics. I sometimes think of my friends in developing world countries as well as the poor and desperate here in the land of abundance and we throw away more food in a week than they might see in a month sometimes. They wear the same clothes day in and day out. And for most, no real way of earning more than a subsistence income.

This does not make me feel guilty or somehow responsible for them and others like them and yet my blessings are to be used both for my good as well as others. I choose today to share out of gratitude and compassion, not out of obligation or guilt.

Simplicity is the ultimate sophistication, Leonardo da Vinci


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Today I want to present a snap shot of my journey with some bullet points detailing some difficulties, lessons learned and then finish it off with a freeze frame of where I am currently and a projection of the future in terms of actions I am taking and will take. Some of what I post here I have not discussed much if at all in my various threads. I figured the threads were about trading and not so much about the tiny details. But I want it here so I can remember it as time goes by and to perhaps give a narrative of what I consider to be a typical journey for a lot of traders.

My journey began about 2.5 years ago with a purchase of a trading room vendor DVD and a monthly trading room membership. This cost me $1000 +75 a month. I remained in the room for two months and then I left after the moderator chewed me out over what I considered a routine simple question. He was right about a lot of things though including the absolute insistence that simple is better. Its from him I learned my intense dislike for all things squiggly at the bottom of the chart. Therefore there has been no attempt from me to learn to use a MACD, RSI or Stoch. I've tried them but every time I compare them to price action alone, they always lag way to much. So no oscillators for me.

He had been a successful tech bubble entrepreneur and sold a tech company back in the day when tech was booming. He turned to trading so he didn't have to work so many hours and according to him, spent 5 years and nearly a million dollars of his own money losing using various methods. He said he learned to hate oscillators as a result of getting in trades based on what they were saying and finding out they were way late. He said he became successful when he dumped everything but three moving averages and learned how to use multiple time frames. At the time I met him, he was trading 50-150 lots on ES and scalping for 4-12 ticks at a time. I know this sounds odd but I actually met the guy. Turns out he lived in my small home town for a long time, then moved to a larger city to develop his tech company and his parents still live in my city and he comes in once in a while to visit.

I then went on the Holy Grail hunt for the perfect indicator and risk elimination method. During this process, I tried Viper Trading Systems (dont laugh, i learned some stuff from them) I tried Channel-trading.com with Kevin Hudson. I really liked that guy but I understand he's disappeared at this point. Kevin spent a lot of time with me at no extra cost and he's also the one that directed me to futures.io (formerly BMT) for the free MP indicator for NT 6.5. Like me or hate me, blame Kevin Hudson. He traded MP in a way that seemed 100% counter trend. I could see a short trend setting up on my non MP charts and he wouldn't trade it short. Instead he'd wait til price got to 1-2x IB and go long. And then most of the time, price just stalled. This was trading ES during the few months in 2010 that ES left its volatility behind. I even tried those guys over at Back To The Future trading. I liked those guys as well and they proved to me that indicator based trading could work because they really did trade totally mechanically based on the indicators they used. I can't remember why I left them but it seems like they kept wanting more money or something...could be wrong about that though.

I figured I needed to trade trend at that point and moved on. Attended lots of free webinars and workshops. Read tons of threads on futures.io (formerly BMT) looking for something that spoke to me. Nothing really did. So I decided to create my own.

This creation of something uniquely mine has occupied my time the last year or so. Along the way, I've struggled with creating repeatable entries, exits and money management. I'd get some clarity on one and feel real excited about things and then find I was ignoring the other two. I'd switch focus to another one of the issues, get some traction and then find I needed attention on the last one. None of it seemed to gel at the same time. All along I knew I was making progress, I was just extremely frustrated with the 2 steps forward, three steps back shuffle.

Every time I would make progress, it seemed like a layer of complexity would be added to my thinking and one thing I knew was, I wanted simplicity. And so it would be back to the drawing board in an attempt to coalesce new knowledge into something I could do repeatably and then simplify it.

During this process my account history is as follows....all these ran concurrently with the discussion above. I don't remember exact times but the narrative is enough.

Account starts small but enough. I trade sim for two months just to get used to the mechanics and pretend I know what I am doing.

Start live trading. Account shrinks by about 1/3

Go back to sim. Get more comfortable.

Live again. Shrinks to about half. back to sim and thus begins holy grail hunt...

Trade live with Viper Trading auto traders. 50/50 success rate. Can't tolerate drawdowns. back to sim

Try various trade rooms. Account reduced to about 25%

Start to think its more about me than the method...back to sim to figure me out.

I think I have it, refund account, trade live. More shrinkage. Hunt for method with tiny stops...death by a thousand cuts.

I find TopStepTrader. Give that a try. I had no idea the level of discipline required to trade under those kinds of guidelines. It was absolutely excruciating. Took their combine three times in a row. No luck. Could not trade with the level of discipline they demanded.

Back to my own account. This time with the discipline drilled into me by TST. Still stuggling with exits and money management but now I at least know I need these more than entries.

Alternate between live and sim working on these issues. Start to see some level of success. Mostly break even.

Give TST a try again. My account is still pretty small even with the refunding process I went through and so TST looks good. Took a couple of tries but went live with TST. Traded live with them for awhile. Can't remember how long but blew that account out. Could not maintain discipline. They felt I need some more time to work on certain issues.

Back to alternating between my live and sim accounts working on the things TST said to work on.

Tried again. Went live again with TST. Again, had trouble with exits. Just could not figure out when and where to take profit. Scratched a lot of trades and slowly drew down the account. Learned more about risk control. Started to get it in terms of how to use stops and where they should go.

Back to my account and sim. Tried lots of different ideas in a fairly short period of time looking for ways to use real stops but minimize their size. Gave that up and just decided the right thing was to put them where they belonged and just live with it. Mostly break even both live and sim. Odd how my sim trading mirrored my live trading or is it vice versa?

Back to TST. Went live once again. This time kept the account for quite a while. Slightly better than break even over time. However, TST is not in the business of backing BE traders and so for a third time, a live account is gone.

This time I decide I need to once and for all figure out the mental aspect of the game before I risked another live dollar either with TST or my own money. This is where I am currently.

During this time, I switched instruments several times. I started with ES, then NQ, TF, ZB, 6E and now CL. Combine instrument changes with chart changes and you can see why its taken me so dang long to make something out of this wonderful opportunity.

Now the last two weeks have been sim and have been done with the express purpose of solidifying three things I think I finally got to come together three weeks ago in a brief moment of clarity. Those three things were: Simple entry rules that did not demand intense intellectual gymnastics to figure out, Simple and repeatable exits but with the caveat the exits MUST be dynamic with market conditions and third, rock solid money management for both initial size, daily stops and subsequent sizing increases once profits are the norm and not the exception.

The first item, Simple entry rules was something I had been thinking about for a long time. I went to the simplest entry method I had used and decided I wanted to make it visual. It needed two things, momentum on its side as well as sound price action structure. I found I just didn't have the chops to do the kind of work that @Private Banker or @GaryD or some of the other analysis heavy ideas required. I found it in something @TMFT uses. Its just EMAs but it helps me visualize price in a way I've never done before. It has two things going for that I value, momentum and structure and then a third very important component for me, visuals for both. Further, filtering trades was easy and each entry had to have certain characteristics. Otherwise no trades. I experimented with some of these over the last two weeks and have determined for the most part which ones to take and which ones to leave alone. Nothings perfect but at least its repeatable.

The next item, exits came about 3 months ago when a friend told me about a forex trader that used a certain type of fib based exit but I had trouble working the method into my trading in a simple, repeatable manner. It took me a bit longer than I thought to figure this part out but since I am a scalper and like to be out on whatever swing I am trading, I needed something that would maximize the swing while not being to greedy. I wanted to leave some but not to much on the table. Further it needed to be dynamic with market conditions and it needed to be 100% repeatable with no grey area. Lastly, it needed something approaching reasonable risk/reward ratio of at least 1:1.

I finally got this dialed in when I watched a video by Todd Mitchel as he talked about his exits. What he did made perfect sense to me, fit my personality style and was mathematically sound and repeatable. Basically its a 2 stage exit. 1X risk and 200x risk. I use it slightly different than he does but thats ok, it works for me and best of all, its dead simple. It produces an over all 1.5X risk if both exits are hit. The trail stop was something I worked on last week and while nothings perfect, I've decided to do this. Stop is moved to BE once first target is hit. Once price is within 75-80% of 2nd target, move stop to 1st target. At that point, worse case is AIAO at first target. I'm sure this will not be totally optimum but for now, this is what I've decided to do.

The last item, money management which has two parts for me, daily stop loss and its derivative, per trade position sizing came AFTER the first two items above became available. I simply took what I was willing to risk daily, divided by 4 and calculated position size on a per trade basis based on the result of that simple division problem and the size of the risk. I then created a simple grid of risk in ticks, plotted the resulting size next to it and viola, money management. I further refined it by deciding when to increase my daily stop which will in turn allow me to increase the number of lots per line item in my risk grid by a factor of two since every trade has two positions, all lot increases must be able to be increased by two as well to make my exits even....i suppose I don't need even exits but it seemed logical at the time.

So emotionally I now feel better about the three critical areas of trading. Entry, exit and MM. The last area I am struggling with is one I think I will always struggle with. Allowing the trade to fully develop and giving it time to mature to the second exit. I've done some work on all in all out at 1X risk and while its fine in terms of dollars, a two stage exit at 1X and 2X risk is better in terms of overall PnL. Of course that assumes you hold to that second exit. Otherwise its just better to be AIAO at 1X risk and hope for decent win ratio.

Here is my plan for the near future.

As the last couple of weeks have been sim working out the finer points of what I have just outlined, this next week will be a crucial forward test of both me and the method to produce consistent profits taking only system trades and then holding for system targets. Using position sizing on each trade to manage risk.

If this week goes well, then I intend to re-qualify for TST the following week. They have a great program for those of us with smaller accounts but big dreams. Further, it appears they have implemented several trader coaching programs to help traders with the mental aspect of the game. Dr. Menaker does a regular spot on Friday and there are other regular contributors to the traders development. The one thing they didn't do then nor does it appear they do now is teach you to trade. You need to learn that yourself. The mental aspect of the game they do focus a lot of attention on and I plan to take advantage of that as much as I can.

Now I know I am gonna take some heat over various aspects of this trading plan. But I don't really care. This is for me and me alone. This thread is a place for me to document my journey and its been invaluable for this purpose.

My monetary needs can be met with 3 lots and 20 ticks a day net over time. That's within my safe zone for plausibility given my current skill set and emotional stage. However, my desire is to attempt to triple that each day to allow for loser/scratch days and for days I don't want to or can't trade. This works out to around $1800 as a theoretical target each day. My risk management grid says that's possible on 1-2 trades depending on risk of course. So we'll see going forward. As the Marines say, "All plans get shot to hell once the bullets start flying. You'd better be able to adapt and advance".

Lastly, since the mechanics are more or less set, I've decided to focus most of my time on the mental and emotional aspects of life and of trading. To this end, I've begun a daily habit of a brief time of meditation, reading a brief inspirational story or passage from my Bible, I began the gratitude project two days ago and I am reading this book https://www.amazon.com/The-HeartMath-Solution-Revolutionary-Intelligence/dp/006251606X/ref=sr_1_1?ie=UTF8&qid=1339307235&sr=8-1&keywords=the+heartmath+solution and it looks like it might be invaluable in helping me with my holding trade problem as well as other areas of stress reduction.

Over all, I'm really excited about the future again. Many things that have been eluding me seem to have come into focus. I have a level of confidence I've not felt since I could quote the FNMA underwriting guideline from memory!

Attached are two charts. The one on the left is my final chart. Its from @TMFT. Next to it is a naked chart I keep up. I have the levels marked on it along with my entries the trading chart gave for Friday. You can see the levels are respected, they are in line with both break outs and pull backs based on momentum. I've found over the last two weeks this holds true. I've also done about a year of visual back testing. Nothings perfect of course but that was pretty labor intensive and it produced enough consistency to warrant further forward testing.

As a trend follower, the old adage that you take the middle third out of the trend applies here. This method has the same inherent flaws any moving average method does. Its especially vulnerable on very narrow range days. On days like that, I've given myself permission to size the chart down to a time frame low enough to produce a trend. The targets will shrink as my profit projection method is dynamic. This is in line with the idea that you take what the market is giving, not what you are demanding the market give. The good thing about CL is that most of the time, it moves enough in one direction to give you decent opportunities to profit. Its a rare day price goes only sideways.

Well thats it for tonight. Its 11:30, I'm tired and tomorrow no charts or anything trading related.

Feel free to ask questions or make comments but nothing personally negative. I've decided to just block anyone that's negative from posting in my thread from now on. To be fair, that's only happened a couple of times but for some reason, I get the feeling there may be some negative blow back on this post.....not sure why....


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 Big Mike 
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Brian,

I believe congratulations is in order for what you have accomplished.

It is easy to focus on what you don't yet have, and not realize what you have already. In this case, you have accomplished so much, and are so far ahead of the curve compared to where you started.

Keep at it, and I absolutely know you will succeed. Just play it small, knowing that there is no single thing that will suddenly convert you into a profitable trader. It is a mountain of things all working in unison.

Set realistic expectations and keep working to improve your trading. Look at how much you have improved in the last 3 years, the last 2 years, the last 1 year, the last 6 months. Imagine where you will be in 6 more months, or 3 more years.

Make sure you position yourself to give you the opportunity to continue that path of growing and learning. Most traders fail because they don't give themselves the opportunity to last long enough in this profession to ever master it. As I've said before, a master trader is simply a trader who has made all the mistakes and survived.

Mike

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  #859 (permalink)
 Big Mike 
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And I think you meant to call Ben, @Private Banker. Apparently there is also a @Privatebanker on the site, different user.

Mike

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 PandaWarrior 
In the heat
 
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Big Mike View Post
And I think you meant to call Ben, @Private Banker. Apparently there is also a @Privatebanker on the site, different user.

Mike

Indeed. I corrected it. Thanks for pointing it out.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #861 (permalink)
 Big Mike 
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PandaWarrior View Post
The Gratitude Project Day 2

I wanted to say how awesome this is, and thank you for posting about it. I started to write this post earlier, but couldn't figure out a way to word it without offending people. We'll see if I succeed this time or not.

I feel like I am in a pretty unique position with the site. As most of you know, I am not just an "administrator", managing things from far away. I am involved. I read every post. I spend almost all my spare time here, and am immensely proud of what the community has accomplished together.

But every now and then I get hung up on why people are so ungrateful.

Don't get me wrong. I get wonderful messages all the time from users saying how much futures.io (formerly BMT) has helped them, and how thankful they are. And it is these messages that give me the inspiration to be so involved and spend so much of my free time on the site.

But then there are the people that are just ungrateful and sometimes rude. They expect everything to be given to them with no regard for how much time or energy might go into it. They just expect it, and if they don't get it, they even complain.

I know the overwhelming majority of the 26,000 members of the site do not post. That is human nature. I get hundreds of messages "I would post, but I have nothing of value to add". I do not believe it, and try to tell everyone that in fact they are not alone, many feel this way, and that in itself is reason to post so you can all help each other as you go through the same things.

But even though most do not post, the site still has over 5,000 people logging in daily. Yet the overwhelming majority of these people never thank a single post. This bothers me much more than it should. I don't know why, but I almost take it personal.

To me, it's like these people have been invited into my home. I have a really big home that seats 5,000 people at a time. I then put on all kinds of entertainment for their benefit. Each thread on the site is like a "guest speaker" or an artist or author that has been invited into my home to present and talk about a subject that is dear to them. In other words, the people that actually contribute posts to the site -- these are the golden ones in any community, because they create the community. The rest of the attendees are there to watch the presentation and to enjoy or benefit from the entertainment, and that's fine.

But what I don't understand is how people can basically benefit from the education put forward by these "guest speakers" [post writers], and then not even be thankful. It isn't even about whether they agree with what was said. But why can't you be thankful that the other person took the time to try and help you? It seems that people simply expect it, and don't even consider the need to say thank you.

And what really set me off on this was the last webinar. We gave away 17 prizes in the webinar, and one guy made rude remarks because he won a hat instead of a lifetime license. And the majority of the other 17 prize winners haven't pressed the thanks button on the post identifying them as the winner, and many of these 17 people haven't even replied to my private message so I can share their info with NinjaTrader to get them the prizes. I feel like saying "Your welcome, I'm sure.". But I know I am overreacting, so this is all hypothetical

Still, it bothers me in that I don't understand why so many people expect so much to be given to them, and show no appreciation towards others.

OK this turned in to a rant. But I feel better!

Mike

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  #862 (permalink)
 Big Mike 
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Last thing then I'll shut-up for a while.

My profile indicates I've thanked over 18,000 posts on the site.

You can be sure I thank posts all the time where I do not necessarily agree with the conclusion of the post or the trading methodology of the poster.

But I thank the post because I am thankful that the poster has taken the time and energy to compose it. I believe that in doing so, he has helped himself, as well as the community. So that is worthy of my appreciation towards him.

Then I look at other members profiles, people that have been here for years and read thousands of posts, but never thanked a single one. Keep in mind, every new user to the site receives a couple of emails from me that covers the basics of the site, how to use it, including how to use the thanks button. So I don't feel that it is technical ignorance ("what thanks button?"), but instead a personal choice.

OK, rant done.

Sorry for hijacking your thread

I wish you luck on your continuing gratitude journey. I know you moved a lot of people in the "Millions Made, Now What?" thread when you shared how you helped others through your trading, it speaks volume to the kind of person you are.

I read an article recently that said in 100 years, everyone will still remember Bill Gates due to his philanthropy. But no one will remember Steve Jobs. I think it is interesting, and I mostly agree.

Mike

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  #863 (permalink)
 Private Banker 
La Jolla, CA
 
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Big Mike View Post
And I think you meant to call Ben, @Private Banker. Apparently there is also a @Privatebanker on the site, different user.

Mike

Another Private Banker? How dare them! Lol!

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  #864 (permalink)
 cory 
the coin hunter
virginia
 
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Big Mike View Post
...
And what really set me off on this was the last webinar. We gave away 17 prizes in the webinar, and one guy made rude remarks because he won a hat instead of a lifetime license. And the majority of the other 17 prize winners haven't pressed the thanks button on the post identifying them as the winner, and many of these 17 people haven't even replied to my private message so I can share their info with NinjaTrader to get them the prizes. I feel like saying "Your welcome, I'm sure.". But I know I am overreacting, so this is all hypothetical

Still, it bothers me in that I don't understand why so many people expect so much to be given to them, and show no appreciation towards others.

OK this turned in to a rant. But I feel better!

Mike

give none-replyers 5 minutes to reply it's cut off time. btw, it's Sunday I assume the majority of people won't be checking in until Monday.

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  #865 (permalink)
 Big Mike 
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cory View Post
give none-replyers 5 minutes to reply it's cut off time. btw, it's Sunday I assume the majority of people won't be checking in until Monday.

It was posted Thursday and PM's sent Thursday just a few minutes after the event ended. But I don't want to go more off-topic in Brian's thread.

Mike

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iPlayGames
Tokyo Japan
 
 
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Big Mike View Post
I wanted to say how awesome this is, and thank you for posting about it. I started to write this post earlier, but couldn't figure out a way to word it without offending people. We'll see if I succeed this time or not.

I feel like I am in a pretty unique position with the site. As most of you know, I am not just an "administrator", managing things from far away. I am involved. I read every post. I spend almost all my spare time here, and am immensely proud of what the community has accomplished together.

But every now and then I get hung up on why people are so ungrateful.

Don't get me wrong. I get wonderful messages all the time from users saying how much futures.io (formerly BMT) has helped them, and how thankful they are. And it is these messages that give me the inspiration to be so involved and spend so much of my free time on the site.

But then there are the people that are just ungrateful and sometimes rude. They expect everything to be given to them with no regard for how much time or energy might go into it. They just expect it, and if they don't get it, they even complain.

I know the overwhelming majority of the 26,000 members of the site do not post. That is human nature. I get hundreds of messages "I would post, but I have nothing of value to add". I do not believe it, and try to tell everyone that in fact they are not alone, many feel this way, and that in itself is reason to post so you can all help each other as you go through the same things.

But even though most do not post, the site still has over 5,000 people logging in daily. Yet the overwhelming majority of these people never thank a single post. This bothers me much more than it should. I don't know why, but I almost take it personal.

To me, it's like these people have been invited into my home. I have a really big home that seats 5,000 people at a time. I then put on all kinds of entertainment for their benefit. Each thread on the site is like a "guest speaker" or an artist or author that has been invited into my home to present and talk about a subject that is dear to them. In other words, the people that actually contribute posts to the site -- these are the golden ones in any community, because they create the community. The rest of the attendees are there to watch the presentation and to enjoy or benefit from the entertainment, and that's fine.

But what I don't understand is how people can basically benefit from the education put forward by these "guest speakers" [post writers], and then not even be thankful. It isn't even about whether they agree with what was said. But why can't you be thankful that the other person took the time to try and help you? It seems that people simply expect it, and don't even consider the need to say thank you.

And what really set me off on this was the last webinar. We gave away 17 prizes in the webinar, and one guy made rude remarks because he won a hat instead of a lifetime license. And the majority of the other 17 prize winners haven't pressed the thanks button on the post identifying them as the winner, and many of these 17 people haven't even replied to my private message so I can share their info with NinjaTrader to get them the prizes. I feel like saying "Your welcome, I'm sure.". But I know I am overreacting, so this is all hypothetical

Still, it bothers me in that I don't understand why so many people expect so much to be given to them, and show no appreciation towards others.

OK this turned in to a rant. But I feel better!

Mike


Hello BigMike, I'm one of the people who doesn't have much of value to add. I log in everyday, read a handful of posts and often forget to say "thanks" to the posters. but I want to say that I'm very grateful to what you have done to maintain this wonderful forum. and I'm very grateful to the people who frequently posts here. I'll remember to express my gratitude more often from now on.

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 PandaWarrior 
In the heat
 
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Today I am grateful for my futures.io (formerly BMT) friends. There are a lot of them. In no particular order.....

@ZTR for more than I can ever say publicly. He swore me to silence before he passed. My heartfelt thanks for believing in me long before I believed in myself.
@trippenlatin you know why
@Mickey caine for the companionship and your encyclopedic knowledge of the British royalty
@syxforex for never giving up even in the darkest of hours
@Zondor for his incredible programming skills and for showing me what true health can be like. I am in awe of your physical prowess.
@Ryanb for teaching me all I ever wanted to know about head and shoulders patterns but was afraid to ask
@MWinfrey for the incredible five minute oddessy. Its because of you I am on a five min chart
@VinceVirgil for giving me far more credit than I deserve
@tderrick my brother from the recording capital of the world. I sure enjoy our chats
@soumi71 for grace under pressure and for the incredible accent
@Fat Tails for his integrity in suggesting a free solution when I was prepared to pay
@ThatManFromTexas for his humor and constant reminder that simple is better and for a cool little indie
@GaryD for being so darn transparent. Sometimes I feel like I'm looking the mirror.
@Private Banker for being so kind and forthcoming not just with me but many others on the forum
@gtichauer for being the coolest dude I know in Argentina
@tigertrader for not holding back even though I often thought he should
@Deucalion for sharing his charts and his thought process
@researcher247 for sharing his cool tunes with me, it shortens the day and makes everything else a little groovier
@papa15 for keeping it about the main thing
@Gary for never changing his charts and his post about why he trades. Thanks again Gary
@Gabriyele for the unidentified thread, very entertaining
@liquidcci for telling me static profit targets were ok and that he makes all his money with position sizing

Everyone that voted for me in the best thread competition.....

@Big Mike for the forum, for taking a chance with me as a moderator for subjects I knew nothing about and for his encouragement over the last couple of years.

Everyone that's posted in my threads, sent me PMs about various subjects and for everyone whose read my threads, I think I have well over a 100K views over three threads.

I'm sure I've forgotten a few people, its not by choice.....to those of you I've forgotten, please forgive me.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #868 (permalink)
 Big Mike 
Site Administrator
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That is the best post I've seen in a long while!

Thanks Brian, you are a stellar guy and I am glad to know you.

:bmt-rocks:

Mike

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 PandaWarrior 
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I know it sounds trite but I am thankful for Benjamin Franklin. While there is some dispute about who actually got public libraries going in this country, he is generally credited with making public libraries part of the social fabric of society. I make very liberal (the good meaning of liberal) use of them.

Since I am a voracious reader, free libraries are a godsend for me. I've read around 50 books this year so far and have around 50 more on my reading list plus another 25-30 I'd like to read but am having a hard time finding due to subject material is generally frowned on by library staff. I know where to get these books but it can be some trouble to get them for free.

I can find a lot of them electronically but to be really truthful, I hate reading books on the screen. Articles and shorter type works are ok on the screen but anything longer than 10-15 pages should be on paper, besides, I like the smell of books....

In any event, libraries serve to feed my reading habit for free and for that I am grateful.

Charts later today.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #870 (permalink)
 PandaWarrior 
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Decided to look at larger gains in terms of the runner based on @tigertrader 's insistence the larger gains is what makes or breaks you.

However, since risk is an issue, I decided to take risk off at 1X and let the rest go to 3x.

I have also been using the techniques in The HeartMath solution to reduce stress while in a trade. The book says that stress comes from unmet expectations. And I have an expectation that trades will fill my profit targets very fast. This very often is NOT the case, therefore I have stress.

The FreezeFrame technique seems to work. I used it yesterday and today with decent results. Of course more practice is needed to really dial it in and see if it works long term or not.

More than likely one and done today. I passed on the second signal after waiting a long time for it. When it came, the risk was to much by half and so I decided to pass on the trade. Its currently working and close to the first target but its taken a long time to get there. We will see. I didn't really like it anyway as this area we are in now is where we sold off from yesterday. I was willing to buy into it earlier but not that close and not with that much risk.




Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 PandaWarrior 
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Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #872 (permalink)
 MWinfrey 
Lubbock TX
 
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PandaWarrior View Post
@MWinfrey for the incredible five minute oddessy. Its because of you I am on a five min chart

Incredible and I'm not using a 5 minute at all. Well gee whiz. I guess I can't see the trees for the forest...and yes i know that's reverse.

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  #873 (permalink)
 cory 
the coin hunter
virginia
 
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MWinfrey View Post
Incredible and I'm not using a 5 minute at all. Well gee whiz. I guess I can't see the trees for the forest...and yes i know that's reverse.

it goes to show one man experiment is another man gold.

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 PandaWarrior 
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We've had nothing but selling for the last month or so. A beautiful down trend. Yesterday's low and today's globex low are only three times price has closed this low in over a year. What does this mean? Maybe nothing.

But with the potential double bottom put in and today closing on its highs, I think the time is ripe for a rally. I might be wrong but at the very least, we could see several if not many days simply going sideways on the daily chart. That being said, I think this rally has an upside of 90-92 as a target. That represents around $7 worth of rally. 700 ticks perhaps over the next few days or perhaps couple of weeks. Depends on how long it takes to break the recent swing high at 87.10.

For now, I am looking to be long but cautiously. Recognizing the oscillating nature of price in what appears to be a corrective leg forming at this point. If I were swing trading, I think I would be buying dips at this point on 60M charts. However, I am day trading and that means I trade what I see on a 5M chart. In that light, I'll simply trade what I see on the chart. The HTF is simply for my enjoyment and to see if I can anticipate with some degree of accuracy what price MIGHT do on the daily chart.

Here's my daily chart. Its actually a 1440M chart as NT doesn't seem to get the daily chart setting correct.


Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 researcher247 
Chicago, IL
 
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"But with the potential double bottom put in and today closing on its highs, I think the time is ripe for a rally. I might be wrong but at the very least, we could see several if not many days simply going sideways on the daily chart. That being said, I think this rally has an upside of 90-92 as a target."

Me: Hey! I resemble that comment.

"If I were swing trading, I think I would be buying dips at this point on 60M charts. The HTF is simply for my enjoyment and to see if I can anticipate with some degree of accuracy what price MIGHT do on the daily chart."

Me: Hey! 2-4 day rally, methinks. Today was a bottom daily cycle. I am buying this b*tch on every pullback and adding to my intial positions taken early in globex before today's pit open (6/12/12). Do great minds think alike or am I retarded??



peace

hedvig

p.s. How the hell does multi-quote work; I'm learning challenged, ya know?

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 tigertrader 
Philly, Pa
 
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Those are some serious professional gaps down on the daily, with an admittedly, rather loose interpretation of a diamond formation at current levels. If I may regress back to the days of McGee and Edwards, the majority of the time , they are continuation formations, when they are not - they are most likely to be found at tops, and not bottoms. You can't give the physical stuff away; China has all but turned off the demand spigot. I see the deflationary spiral in commodities continuing, and the dark stuff trading down to 74.71 -70.00.





So herein lies the problem with technical analysis and other heuristic techniques, they are always going to be open to interpretation and influenced by bias. The crude oil market is in a pronounced down-trend. Yet there are many who are more than willing to pick a bottom, and discount the strength of the trend.

The human mind was made to create patterns. It will see patterns in random data. The human eye tends to pick up the times these patterns accurately called minor bottoms/tops, but it misses all the false signals, and the extent to which they were wrong, during trends.

The mistake is the confusion between prior and posterior probabilities. For example, it's true that a lot of moves to an old low/high, will produce a double bottom/top. All that's telling you is, the probability of having a double bottom/top, given a price move to a previous low/high. What you really want to know is, what is the probability of having a move to a previous low/high, and a reversal in trend, given that you have a double bottom/top.

That is a very different probability. Just because one probability is high, no way implies that the other one is high as well. If 85 percent of all tops and bottoms have property X, but property X also occurs often enough in other patterns, using that pattern as a signal will lead you to ruin.

Yet, these approaches are appealing because they play into powerful human tendencies that induce one to pick bottoms and tops, or get out early form a strong trending trade. It's always tempting to liquidate a good trade on flimsy evidence.

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  #877 (permalink)
 Big Mike 
Site Administrator
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researcher247 View Post
p.s. How the hell does multi-quote work; I'm learning challenged, ya know?

Click the multi-quote button on the first post you want to quote, and the second, third, fourth or etc. Then finally press the regular quote button to bring up the actual reply screen.

Then each post will be quoted, and you can reply to them all.

If you want to multi-quote a single post, the easiest way is just to copy the quote string. For example, for this quote, the string is [QUOTE=researcher247;230684]

So I could quote you multiple times as follows. Remember to close the quote block always with [/quote]


researcher247 View Post
How

blah


researcher247 View Post
the

blah


researcher247 View Post
hell

blah


researcher247 View Post
does

... etc etc

Mike

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  #878 (permalink)
 websouth 
Perdido Beach, AL
 
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Panda ...just catching up with your posts. Awesomeness on your self reflection and the things we all have to be thankful for. Sounds like you are on the right path in many ways...congrats and best wishes.

re: wave trading. I do not want to mess with your mojo so please ignore me if this is not helpful. I have traded like this for a while. (recently doing other things but...) One thing you may look at in combination with these waves is inside and outside bars to assist with entries (mid wave entries maybe) and exits. In every sense... see the screen shot. Today crude could not get out of the initial balance or 1st hour so the whole day was an inside bar... So if little waves are stuck inside big wave levels don't forget to notice this. On a tighter level (5min) the outside bars are marked with light red and you can see how breaks of these lined up with beginnings of new waves.... and the breaks of these levels let you know that there is a problem with the wave structure - potential chop. The indie I used didn't catch them all so I drew some in with blue. Hope it helps.


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 PandaWarrior 
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Those are some serious professional gaps down on the daily, with an admittedly, rather loose interpretation of a diamond formation at current levels. If I may regress back to the days of McGee and Edwards, the majority of the time , they are continuation formations, when they are not - they are most likely to be found at tops, and not bottoms. You can't give the physical stuff away; China has all but turned off the demand spigot. I see the deflationary spiral in commodities continuing, and the dark stuff trading down to 74.71 -70.00.





So herein lies the problem with technical analysis and other heuristic techniques, they are always going to be open to interpretation and influenced by bias. The crude oil market is in a pronounced down-trend. Yet there are many who are more than willing to pick a bottom, and discount the strength of the trend.

The human mind was made to create patterns. It will see patterns in random data. The human eye tends to pick up the times these patterns accurately called minor bottoms/tops, but it misses all the false signals, and the extent to which they were wrong, during trends.

The mistake is the confusion between prior and posterior probabilities. For example, it's true that a lot of moves to an old low/high, will produce a double bottom/top. All that's telling you is, the probability of having a double bottom/top, given a price move to a previous low/high. What you really want to know is, what is the probability of having a move to a previous low/high, and a reversal in trend, given that you have a double bottom/top.

That is a very different probability. Just because one probability is high, no way implies that the other one is high as well. If 85 percent of all tops and bottoms have property X, but property X also occurs often enough in other patterns, using that pattern as a signal will lead you to ruin.

Yet, these approaches are appealing because they play into powerful human tendencies that induce one to pick bottoms and tops, or get out early form a strong trending trade. It's always tempting to liquidate a good trade on flimsy evidence.

I agree with the longer term downside potential here, nearer term, I think we are due a pull back. However, I am having trouble reconciling the inventory build up we've had this year with the need for the all the producers needing 85-90 oil. Then there's the dollar/euro dynamic. If the euro is going to rally like @researcher247 says then we are likely to see a dollar depreciation which means higher oil prices. If the euro takes a dive, the dollar goes up and prices take a dump which would fall in line with higher inventory and slumping world wide demand. Topping it all off is Saudia Arabia saying they intend to continue current production in the face of lower prices and OPEC demands for a decrease in production to help prevent a further deepening of the world wide recession.

So I suppose the big answer is this; who the heck knows what's gonna happen. I vote for lower prices since I want lower gas prices. But I can't move the market with my gas tank.

Here's a slightly more detailed chart with my thinking about a couple of short scenarios....keep in mind this is not my forte so please no trading decisions.


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 PandaWarrior 
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websouth View Post
Panda ...just catching up with your posts. Awesomeness on your self reflection and the things we all have to be thankful for. Sounds like you are on the right path in many ways...congrats and best wishes.

re: wave trading. I do not want to mess with your mojo so please ignore me if this is not helpful. I have traded like this for a while. (recently doing other things but...) One thing you may look at in combination with these waves is inside and outside bars to assist with entries (mid wave entries maybe) and exits. In every sense... see the screen shot. Today crude could not get out of the initial balance or 1st hour so the whole day was an inside bar... So if little waves are stuck inside big wave levels don't forget to notice this. On a tighter level (5min) the outside bars are marked with light red and you can see how breaks of these lined up with beginnings of new waves.... and the breaks of these levels let you know that there is a problem with the wave structure - potential chop. The indie I used didn't catch them all so I drew some in with blue. Hope it helps.


Very interesting. I'm glad you posted. I've been noticing the inside and outside bars but have not really explored it yet. I'll spend some time looking at this as well as real time analysis.

Quick question for you....why do you use one hour for the IB? Don't most people use 30 minutes? I don't use the IB at all so doesnt matter to me but I am curious.

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 sleepy 
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Anyone using this stuff with noticeably positive results?

HeartMath stress relief, resilience and wellness building tools

Yes

Biofeedback for Trader Psychology | Articles-Psychology

sleepy

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 websouth 
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Quick question for you....why do you use one hour for the IB? Don't most people use 30 minutes? I don't use the IB at all so doesnt matter to me but I am curious.

quick answer... Original I believe was 1hr. It got perverted after that. Now people just use anything. It's something I am just watching for now.

Market Profile Terms

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 Big Mike 
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websouth View Post
quick answer... Original I believe was 1hr. It got perverted after that. Now people just use anything. It's something I am just watching for now.

Market Profile Terms

I've always heard it as 1 hour.

I've heard 30 minutes used as an opening range before. And of course opening range and initial balance are the same thing, just a matter of whether you are a profile trader or not, and then of course the length of time.

Mike

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 PandaWarrior 
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Not a fabulous day for my method. It does better on structured trend days instead of days with V turns and 100+ tick moves with no pull backs.But thats ok. I filled in the blanks with a couple of other trades I see regularly. These seem to only really work on days like today so it worked out.

The best method trade was before I got to the charts and it hit is 4X risk target around 60 minutes after the signal and before I sat down. Gotta be able to wait for those.

The non system trades I took conservative profits on and I passed on a system trade as I didn't like the price action inside the wedge. Its discretionary for a reason.

Anyway, traded small for the most part and took the last trade off a bit early as the end of the session was close and I didn't want to hold to much longer so I locked in some ticks and if it ran from there, great, if not, no worries.

I almost missed the last trade. I had decided I was done for the day, was watching ESPN for a few minutes and my kid came in, talked to her and then looked back at the chart as i was gonna do my post and saw something interesting set up but with a large risk. I took it with small size and got my stop to BE before first target hit....I was willing to let it run but not come back on me at this point in the day. Got the first target then moved stop to +40 once +50 had printed. I got 40

Anyway, a tough day that worked out ok.





Here's the indicator list for those of you that asked. However I make this statement about the indicators. This method is not about the indicators. Nor is it about the settings.Its about something that seems to make sense for me and its about risk management and profit targets.

I'm really reluctant to provide settings and indicators for the reason that its not a holy grail or anything close to it. Its just a method that follows trends that work out in a certain manner. The key is to take the trades with proper risk management and be patient with the winners. Something I am still working on.

Here's the thing. I am very profitable with this method since May 21. The first 2-4 days I struggled with the entries. I had trouble believing the thing would work. Then I sized to large. Then I got the sizing thing correct. Then I had trouble not inventing trades when the thing said not to trade. Then I started just doing what it said but struggling with the exits. The long and short of it is this; I am profitable despite sub optimal trading. Go figure. A positive reinforcement of a negative behavior. This time through though, I am treating the positive results as improvement points which can only be improved with positive behavior.

Then @tigertrader said to be really damn patient with the winners. Now working on that as my main priority. Looking back over the last few weeks, being patient with winners would have been really nice.

So for those that want to use the indie or whatever, I beg of you NOT to accept what I say or do as some sort of trading method that might work for you. You must believe in yourself, not me. I PROMISE you I will lead you down the wrong path. My path is very different than yours. I believe in myself. I sure as heck don't believe in anyone else, otherwise I would have bought a system and just traded someone else's view of the market. It doesn't work that way. Others can help and for sure many have helped me but I wish to God that early on I would have had a mentor that taught patience vs finding entries. One that taught targets might take all day to get filled. Of that they might never get filled and what to do about that.

The reason this seems to hold promise for me is it reinforces something I already believe about the market, its super visual which is something I need and the only things that really makes it work are position sizing and being patient with winners....something that's true of any system.

If you decide to use the indies, please take the time to figure out exactly how YOU will enter and exit the market. Figure out exactly how you will size your trades and exactly how you will manage trades. Do not take my word for anything.




Cheers.

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 PandaWarrior 
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I have a relationship that has been strained over the last couple of years. Its mostly my fault although he is somewhat complicit. Nevertheless, I have been wondering how to fix it now for some time. To be 100% transparent I had no idea how to fix this thing.....so I did the only thing I knew to do. I prayed about it. Sure enough, without any real effort on my part, the ice has started to thaw. Its at a point now where I think we can discuss things rationally without doing further damage.

I'll be spending some time with him in the next couple of weeks to talk things out. Its not done yet but I am grateful the process has begun.

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 PandaWarrior 
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websouth View Post
quick answer... Original I believe was 1hr. It got perverted after that. Now people just use anything. It's something I am just watching for now.

Market Profile Terms

Another thing I wonder about. If its one hour or 1/2 an hour, do people that use the IB as an integral part of their trading not trade the IB period? That first hour often seems to be the best trading hour of the day.

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 Private Banker 
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PandaWarrior View Post
Very interesting. I'm glad you posted. I've been noticing the inside and outside bars but have not really explored it yet. I'll spend some time looking at this as well as real time analysis.

Quick question for you....why do you use one hour for the IB? Don't most people use 30 minutes? I don't use the IB at all so doesnt matter to me but I am curious.

For CL, I've used 30 minutes in the past but have found that 60 minutes for an IB seems to be more engaging which is contrary to many CL traders... If you're using a 30 minute IB and price repeatedly does not react to those levels unless it's in confluence with the 60 minute levels... Time to rethink that. Of course engagement (of price) is in the eye of the beholder.

My thought is traditional MP theory's IB is the first two 30 minute bars. I've done extensive analysis on the difference between the two with regards to how each reacts to price. I just think for a volatile market like CL, to have an IB in such a short period of time (30 minutes) doesn't make sense...

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 addchild 
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For CL, I've used 30 minutes in the past but have found that 60 minutes for an IB seems to be more engaging which is contrary to many CL traders... If you're using a 30 minute IB and price repeatedly does not react to those levels unless it's in confluence with the 60 minute levels... Time to rethink that. Of course engagement (of price) is in the eye of the beholder.

My thought is traditional MP theory's IB is the first two 30 minute bars. I've done extensive analysis on the difference between the two with regards to how each reacts to price. I just think for a volatile market like CL, to have an IB in such a short period of time (30 minutes) doesn't make sense...

I would firmly agree with this. With CL opening at 6am PST, using a 30 minute range would be easily skewed by volume from the rest of the market opening up at 6:30.

.
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 websouth 
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Not to dilute this further but the Mark Fisher ACD system is what you might be thinking of. This can use various opening ranges such as 10 minute, etc. 1st 10 days of a quarter, etc (I think)

+++++++++++++++++

... While working on a system to trade as a graduate student at the Wharton School of Business in the early 1980s, Fisher observed the importance that the opening range held in setting the tone for the trading day. In the case of crude oil (where the opening range at the time was 10 minutes), the opening range was the high or the low of the day between 17 to 23% of the time. If markets were truly random, and since there are 32 ten-minute periods in the trading day, one would expect the opening range to be the high or the low 1/16 (or 6.25%) of the time (1/32 for high and 1/32 for low). Put another way, the likelihood that the opening range will be either high or low for the day is more than three times what one would expect if market movements were truly random, as has been postulated by the random walk theory. Fisher is not the only person to have discovered this fact. A number of trading systems in use today rely on an opening range for providing clues to directional bias.

Read more: Spotting Breakouts As Easy As ACD




+++++++++++++++++

Like the colored wave. Glad it is working for you.

wma 3-21 with
15 period - 1.5 atr /20 period - 2 atr bands
outside bars marked and some entry ideas.


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 tigertrader 
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There is no doubt, there is a difference between great and average traders, (great traders make a lot more money) but I think the real difference will surprise you.

I've been trading for about 40 years and have been lucky enough to have been exposed to a lot of great traders. Leo Melamed first showed me how to keep and interpret a chart, and Tom Dittmer showed how me how to trade in the pit. I stood next to Tom Baldwin for 10 of my +20 years in the Bond pit, and I talked with Pete Steidlmayer often , when I went into the grain room to trade Beans. Both Dennis Gartman, and Michael O'Brien (one of the turtles) were friends of mine, along with many other great traders, including Charlie D.

I had always thought my success was a result of my ability to look at a chart and determine the market's future direction. Along with a functional understanding of the markets and what drives price, I could integrate the two disciplines into a consistent enough strategy to achieve profitability. For years, I believed this was my most important personal edge. But as I look back, I realize that while these skills contributed greatly to my success, they were not the most important, and it is why I continue to emphasize the following message.



the markets are nearly random, and nearly efficient

the difference between futures prices and certain random walks is often too small to detect

yet incredibly, with an effective methodology, a trader can still be profitable

but not for the reasons most people believe

predictions and opinions are often going to be unfounded and incorrect

forward looking chart interpretations are going to be biased and wrong

information will always be asymmetrical,

and destabilizing emotions will interfere and impede with decision making

which means the analytical process, is far from efficient

yet, a trader can develop a critical edge

and, it has nothing to do with being wrong or right the market,

nor the frequency with which he is wrong or right,

but rather, by how much he is right and wrong

“cut your losses, let your profits ride”

its the ultimate trading cliche

however, its the universal truth in trading

money management and trade management

will ultimately be the reason (most responsible) for the longevity of a trader’s career

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 PandaWarrior 
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tigertrader View Post
yet, a trader can develop a critical edge

and, it its has nothing to do with being wrong or right the market,

nor the frequency with which he is wrong or right,

but, by how much you are right and wrong

“cut your losses, let your profits ride”

its the ultimate trading cliche

but, its the universal truth in trading

money management and trade management

will ultimately be the reason most responsible, for the longevity of any trader’s career

I've not been trading to much the last couple of days. Yes I have been entering trades but since its a sim period, I've been focusing on holding trades far past my comfort zone.

Why you ask? Its simple really....@tigertrader 's admonition here and in other threads about reducing slippage, transaction costs and pressing winners has finally started to sink in.

Over the last couple of days, I've spent some time looking at what big targets do for your PnL vs just finding and trading smaller swings. Here's the result. Using a 4X risk model, there are FAR fewer trades, and MUCH larger profits as well as very small transaction costs expressed as a percentage of profit.

Here's the down side, large profit targets sometimes take all day to reach. With maybe only one trade all day. This means my job went from finding several good entries and exits to finding one entry and perhaps 2-3 exits depending on how I want to scale out. It also means even more waiting than what I am used to both for set ups and exits. I may need to find a hobby I can do while sitting on my butt all day.

And it may be more beneficial to use a higher time frame chart to trade off of. Less noise, fewer trades and bigger targets....who knows....for now though, just seeing how the fewer times you trade and holding for larger targets appears to be the path to long term success.

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 VinceVirgil 
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tigertrader View Post
There is no doubt, there is a difference between great and average traders, (great traders make a lot more money) but I think the real difference will surprise you.

I've been trading for about 40 years and have been lucky enough to have been exposed to a lot of great traders. Leo Melamed first showed me how to keep and interpret a chart, and Tom Dittmer showed how me how to trade in the pit. I stood next to Tom Baldwin for 10 of my +20 years in the Bond pit, and I talked with Pete Steidlmayer often , when I went into the grain room to trade Beans. Both Dennis Gartman, and Michael O'Brien (one of the turtles) were friends of mine, along with many other great traders, including Charlie D.

I had always thought my success was a result of my ability to look at a chart and determine the market's future direction. Along with a functional understanding of the markets and what drives price, I could integrate the two disciplines into a consistent enough strategy to achieve profitability. For years, I believed this was my most important personal edge. But as I look back, I realize that while these skills contributed greatly to my success, they were not the most important, and it is why I continue to emphasize the following message.



the markets are nearly random, and nearly efficient

the difference between futures prices and certain random walks is too small to detect

yet incredibly, with an effective methodology, a trader can still be profitable

but not for the reasons most people believe

predictions and opinions are often going to be unfounded and incorrect

forward looking chart interpretations are going to be biased and wrong

information will always be asymmetrical,

and destabilizing emotions will interfere and impede with decision making

which means the analytical process, is far from efficient also

yet, a trader can develop a critical edge

and, it its has nothing to do with being wrong or right the market,

nor the frequency with which he is wrong or right,

but, by how much you are right and wrong

“cut your losses, let your profits ride”

its the ultimate trading cliche

but, its the universal truth in trading

money management and trade management

will ultimately be the reason most responsible, for the longevity of any trader’s career

Such a simple yet profound description.

We have heard "cut losses short and let profits run" so often it is a cliche. Yet, cliches are always true, thats why they are cliche.

Personally I find the greatest challenge is consistently embracing losses, recognising that losses tell you something about how to gain.

Great post.

This journal seems to contain an inordinate share of very good posts.

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 tigertrader 
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It also means even more waiting than what I am used to both for set ups and exits. I may need to find a hobby I can do while sitting on my butt all day.

I think that's why there's so much internet porn out there!

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