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The PandaWarrior Chronicles

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  #1 (permalink)
 PandaWarrior 
In the heat
 
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This is my first post in my new journal. In it I will attempt to document my set ups, my reasoning behind why I took the trades, along with the emotions I was feeling during the trades.

I will also attempt to post a chart daily and at least once a week, my spreadsheet summary.

The chart legend is as follows:

An arrow with a number is a live trade with the gain or loss notated.
A triangle is a trade that I saw live but did not take for some reason. I will attempt to notate the reasons for this as best I can live.

Indicators are as follows:

Mydynamic Fibs. These are mostly for context and they help me maintain situational awareness.
Anavolatility bands. Everything set to transparent except the ATR function.
jhrangemarker. This helps me plot where the range bar will end.
Super Trend set to ATR with a multiplier of 3
ADXVMA set to 15.
Prior OLHC with open and close set to transparent on the globex chart and the Close set to yellow on the RTH chart. This is for gap fill info only.
TSEconews anchored to the bottom of the chart and closed when all news events are over, otherwise set to open.

Coming soon: Fat Tails Opening range indicator IF I can get it to work right on the ETH chart. I have also asked him to do some programming for me in terms of building some other work off the opening range. More on that later if he is willing and able.

Basic premise is this:

I have several bar patterns that develop on a 12 range chart. These patterns are TREND patterns only. So I must be trading in an established trend. I do that with three tools.

1. Basic trend line drawn by hand.
2. Super Trend
3. ADXVMA.

The idea is that the two indicators help identify trend. My job is to trade with that trend using my bar patterns.

Over the last two weeks, I have been trading mostly naked. I added the ADXVMA and the ST back over the weekend after looking at them historically to see if they helped validate my patterns and my thinking about when to take those trades. While not 100%, they did a reasonably good job of showing me where to take trades.

In time, I will delete one of these indicators and just use one as I dont think both are necessary but for now, I am using both in evaluation mode.

The best trades seem to come at or near a trend line. While my patterns do set up away from the trend lines, the lowest risk ones appear to be very near them.

There are also a couple of patterns that appear during a run. Those patterns are the hardest for me to take. They are pure momentum and therefore there is no real basis for taking those trades other than momentum.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #3 (permalink)
 PandaWarrior 
In the heat
 
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Here is a pic of the chart as it finished the day. Trades are not marked because I accidentally deleted the chart markers but I will put them back on as soon as I go through the trade log.

2011-07-25_1731 - aztrader9's library

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 PandaWarrior 
In the heat
 
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Today was super slow. I almost fell asleep twice. Literally dozed off once or twice. But I managed to be profitable early then give it back plus a bit.

When the tape is slow, I get lulled into complacency and often times I just trade to trade. Today I really tried to wait for set ups before I entered. I think I did well with that today.

On the down side, slow tapes also cause me to second guess signals as well second guessing "trends" even if those trends are slow and small. This caused me to pass on 2 excellent trades and bail out of 2 early. Both of which were winners.

Even though it was slow, I controlled for the most part, my impatience. It helps that I am looking for specific things to happen so I don't feel so bad just waiting even if I do almost fall asleep.

There were three trades I wanted to take that were not in my trade plan. I actually had orders in on two of them and even though the trades were really nice winners, I eventually took the orders down before they were filled and stood aside to watch those trades go by. I felt bad because of the money but I felt good for following my plan.

This week I intend on working on the following two areas.

1. Holding the trades I do enter to either target or stop.
2. Being more patient with the set ups. There are more optimum points in time and space in which to take trades. I need to wait for them. I am doing better but this area needs more work.

2011-07-25_2025 - aztrader9's library

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 Mickey Caine 
Kent, England
 
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I still think PANDA-MONIUM was a better tittle. Good luck my friend.

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  #6 (permalink)
 PandaWarrior 
In the heat
 
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Well not so much killer stops as poor trade selection driven by fear. The stops were also driven by fear in that they were improperly placed.

First of all, I was anticipating a break out day today following 4 back to back narrowish range days. What I was not expecting was the immediate nature of the break down. The break down appears to have been a stop run on the daily chart as it reversed to take out any tight stops and went to make new highs.

Secondly, I was not expecting a major internet disconnect. I was down for almost thirty minutes this morning in the middle of one of the nicest set ups and runs I've seen in a while.

I got a couple of bites out of the sell off. Then in a fit of greed, proceeded to take two trades in a row that quite frankly were just stupid. They were motivated by only one thing....greed and fear....the desire to make more than was being offered and fear I would miss more of the move down assuming it kept going. So I sold it twice in a location that is never part of my trading plan.

Immediately after taking these two trades, my internet went down. After I restored my connection, I saw I had missed a wonderful long series of trades. I was somewhat frustrated by this but as the connection was not my fault, I was only mildly irritated. But then, in an effort to capture some of it, I took a valid pattern but in a non valid location. I got out with less than a full stop.

To compound things, when I did get a great signal in a valid location, I took the trade only to have it stop out at BE because I used an aggressive stop for fear of maybe being at the beginning of a reversal. Bad move. The thing went on to have another nice run.

I then made it worse by repeating the same sequence of errors later on in the move that I had made at the bottom of the sell off. Thats when I called it quits.

As a result of this, I have elected to revisit my risk reward ratio, the exact premise of my trades, the location of my trades and how those trades are managed. I'll be reworking my targets to accomodate better R:R. This is part of the two issues I am working on. Closing winners early and choosing better locations for trades.

With regards to the two issues I am focusing on, today I did not manually close a single trade out early. This is a major improvement for me. The second issue is waiting for better location in time and space. There was less improvement in this area and will continue to require more work.

I dropped the ADXVMA today. The super trend is enough. I can recognize PA and my patterns in the context of the super trend. I'll be using that for at least another week and then decide if I need or want it past then.

In the context of everyday being a great learning experience, today was a good one. Other than that, it was a bust in terms of money. The lessons I learned today are ones I have repeated. But for some reason, they really sank in. I've modified my ATM's to accommodate the stop rules for my pattern trades instead of being in charge of moving those manually, I'll let the computer do it for me.

I've also put the exact nature of where I'd like to see the entries set up in my trading plan. Until now, I've had them in my head. While I know what they are, its really easy to fudge on them if there is no accountability to a written plan. Over the next few days, I will be revising my written plan to delete a few things and add a few in. I may post the plan on the forum if for no other reason than to be accountable to it.

Ok thats it for today.

2011-07-26_1543 - aztrader9's library

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 Big Mike 
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 PandaWarrior 
In the heat
 
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Today was a pretty tough day for me to trade. The slower pace, the directionless drift and the seemingly endless number of possible head fake signals all contributed to an exhausting day.

I took as many as I could. The trades seen are the total of my trades. I netted 60 ticks today plus a few more in sim that were experimental in nature after I got to 60.

I made a few mistakes today, but I compensated for those by holding my good trades as long as I could. This was easier than I thought and gives me hope for the future. I'll settle at some point on an exact number to use as the target but for now, 20 ticks or so is good. There are some 30 tick trades on the chart. I was experimenting with a certain type of trail stop with a 30 tick target and those worked pretty well...

I used two lots several times today and took one off early to give myself a free trade. This is the chicken sh!t way out but it sure felt good to be in a free trade. I think I can use this in the future to really capitalize on some of my entries. Using the combination of 1 and 2 lot trades allowed me to hit 60 ticks without actually getting a total of 60 ticks with one lot. When I was down, I used 1 lot and when ahead, worked with 2. A double edge sword to be sure but it worked today.

In the end, I netted 60 ticks. I am happy about this with the caveat that if I can narrow down my trade locations better, it could be much more with less stress.

Chart is messy but it includes all the live trades and all the sim trades toward the end of day.


Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 worldwary 
Williamsburg, VA
 
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PandaWarrior View Post
I used two lots several times today and took one off early to give myself a free trade. This is the chicken sh!t way out but it sure felt good to be in a free trade. I think I can use this in the future to really capitalize on some of my entries. Using the combination of 1 and 2 lot trades allowed me to hit 60 ticks without actually getting a total of 60 ticks with one lot. When I was down, I used 1 lot and when ahead, worked with 2. A double edge sword to be sure but it worked today.



Good job on the winning day. My one comment is that I'm not a fan of this two-lot, scale out-type method. The additional ticks from the runner seem like a "free" trade only when the trade works out for a decent profit. When the trade stops out for a loss, your loss is twice as big as the winners where you profit on the first contract but scratch out on the second, which due to the "Murphy's law" nature of trading seem to be the vast majority of the trades.

I'm sure you've seen this yourself so I'm probably not adding anything groundbreaking. My experience with the scaling-out concept is that it works best when the initial profit target is at least twice the size of the initial stop. This will help prevent you from getting into a situation where the average loss is larger than the average gain, which is never a good situation in my book.

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 PandaWarrior 
In the heat
 
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Posts: 3,163 since Mar 2010
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worldwary View Post
[/URL]

Good job on the winning day. My one comment is that I'm not a fan of this two-lot, scale out-type method.

I'm not a fan either, but it does take the pressure off letting a runner run. I will eventually get to the place where the initial target is twice the size of the initial stop but not there yet. Currently its just 1:1.....I did let a sim trade go to thirty ticks without the benefit of the scaling out concept....but that was sim....and we all know how different that is.

Its a baby step for sure but I need to get in the habit of holding trades longer and this is the only way I feel I can learn to do that without a ton of stress. Once a trade gets going, i can manage it pretty well, but its that first 10-15 ticks that make me nervous. So getting a contract off inside that range is good. At least for now.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 PandaWarrior 
In the heat
 
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Posts: 3,163 since Mar 2010
Thanks: 6,328 given, 13,385 received


Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 Hapster 
San Diego, California
 
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I have to agree with the two-lot concept. When it works, it does take that pressure off, and there's nothing like having a confidence builder in this game, especially if you're coming off a career of not being profitable and have found something that finally works. I see so much of myself in your journaling, PW. I'd much rather take the risk of that two-lot being stopped out and having it move in my direction and able to book something. Then either it goes or it doesn't -- and chances are -- at least with me lately since I've changed my methods -- that it IS going to go and give you that 25-35 tick winner on top of the 10 or so that the first lot was booked at. At least that's how I roll these days. I've been quitting after one or two profitable trades for the last several weeks and have had only a couple small loser days and I feel I'm making some sort of turn. I am grateful that I have a gig to go to and am not glued to the screen all day.

Anyhow, I appreciate reading your journal(s).

P.S., I'm finding GC to be a pretty good proxy of CL lately, too... FYI ... especially with the volatility of late

Cheers... Hap

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 PandaWarrior 
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Well, I hate to journal on days like this. Pure frustration. 3 trades, three stops. Done for the day.

Lets examine something real close. My method is based on the idea I want to trade in trends. The indicator I use is even called "SuperTrend". I've always known it sucks in sideways markets. That is one reason I stopped using it for so long and went on the hunt for method that works in all markets. The trouble is, you often don't know you are in a sideways market until its to late. Or at least that's the way it is for me. I assume others more professional than I can figure it out sooner.

The super trend is great for days when its following through on trend signals. On sideways days, you can get killed before you even know you are in the line of fire.

I think the last trade I took is the one that cheesed me off. As near as I could tell, there was a bull flag developing. I waited until it broke, even waited for a small pull back, took the trade, was stopped out almost instantly and then the next sequence not 2 bars later did exactly what I thought my trade was gonna do. Even to the target price. From my original entry, that was 30 ticks. Enough to get me back BE plus a little bit. Instead, I hit my daily stop on it and then sit in frustration as everything inside me KNEW the next one was gonna go where I thought it would. And yet, I am forced to stand aside due to my daily stop. I was not at my daily stop but had I been stopped out, I would have been over. So no trade. As it turns out, no heat on the trade. Damn and damn again.

Its been a bit since I stopped trading, market continued to drift sideways until finally, its beginning to move downward a bit. Still not a nice trend but enough to make money.

As I've had time to process, it occurs to me I have a built in problem and a built in solution as well as a new task to work on.

The problem: I use the super trend. It sucks in sideways markets. I've mentioned this already.
The Solution: I use the super trend. Its great in a nice trending market.
The new task: 1. Accept there will be days like today and strive to preserve capital as much as possible. 2. Accept the fact that on nice trending days, I need to make a lot of money if possible and not a set amount. Enough to overcome days like this and still make a living. 3. Make sure my trading plan has at its core, the ability to aggressively take advantage of nice trend days. 4. Work on figuring out as soon as possible when it might be a sideways day and tread carefully.

My issues:

1. In order to capitalize on trends, I must take every valid entry. You never know which one will be the one. @ Big Mike once said, 'treat every trade as though it will be the winner you are looking for", or something to that effect. I must give it enough room to really pay me as much as the market will give. This means I must overcome my tendency to take trades off to early and to set targets to small for trend days. This week, I have been much better at holding trades a lot longer. I am literally sitting on my hands once in a trade.

2. Understanding that 2 or 3 days a week could be sideways or at least marginally directional can lead to a hesitation to pull the trigger while I wait for the "trend". I must not succumb to this temptation. The best I can do at this point is take the best trade I can and then let the market determine what I will get out of it.

Therefore, I will NOT resume holy grail hunting. I will not become discouraged due to the stop out today. Instead, I will recognize it as the by product of a method ill suited to sideways drift and go forward with the understanding that tomorrow could well bring a monster day and I can capitalize on it using my method.

Ok, I'm over it now. I understand that some days will suck. The trick is to make sure the days where there is tons of opportunity are taken advantage of so that days like this suck less.

Lastly, I MAY work on a method to trade days like this. But not sure if that is a worthwhile endeavor at this point. An ancient Chinese trader once said, "Man that chase two rabbits loses both". Better to focus on becoming a master of one thing and simply let the rest go.


Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 tderrick 
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 PandaWarrior 
In the heat
 
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Today I determined to enter my trades and let the market tell me where to get out OR a 50 tick target. First trade was a small loser taken with a method I don't really understand so rather than wait, I just bailed. It would have been a winner but so what. It was not part of the trade plan.

Next trade was after the opening range had been put in. Price was coming out of that range and I shorted it right there on one of my normal patterns. In an effort to allow a runner to make me some money, I took one lot off at 10 ticks and let the other one run for 50. I left 40 ticks on the table but so what. I got what I came for on that trade.

That trade plus a combination of some small losers and other winners had me end the day with 74 ticks. Best day in a while without killing myself.

I also passed on a couple of trades I should have taken but they were driven by intuition instead of methodology. I might take those more often. They are winners a pretty high percentage of time.

I have a new indicator on the chart. Its in evaluation mode only at this time. Its a support and resistance zone indicator and works across multiple time frames although I have not figured out how to do that yet. I'll be emailing the vendor shorting for instructions.

Today is my kid's 9th birthday and so I quit early today to spend it with her.

Cheers.


Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 monpere 
Bala, PA, USA
 
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PandaWarrior View Post
I have a new indicator on the chart. Its in evaluation mode only at this time. Its a support and resistance zone indicator and works across multiple time frames although I have not figured out how to do that yet. I'll be emailing the vendor shorting for instructions.



Have your tried the free DynamicSRlines inticator here on futures.io (formerly BMT)? Looks to be the same principle.

https://futures.io/local_links.php?action=ratelink&linkid=891&catid=19&lpage=1

 
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 monpere 
Bala, PA, USA
 
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Cool video. Steve Vai... One of my favorites shredders!

 
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 Private Banker 
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Great video! I'm glad you posted that. Steve Vai is a true Master of his profession and art. Everything he said in this video can be used towards trading. Just insert trader instead of musician and it's extraordinary.

Cheers,
PB

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 tigertrader 
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Uncanny...if he didn't have a guitar in his hand, I would have thought he was talking about trading. Ahhh, if I could only trade like Steve Vai or Joe Bonamassa play guitar, then I'd be living in LaJolla and Hawaii instead of Philly, lol.


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Rainmaker
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Amazing video! Thanks for sharing

ST

 
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 PandaWarrior 
In the heat
 
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monpere View Post
[/URL]

Have your tried the free DynamicSRlines inticator here on futures.io (formerly BMT)? Looks to be the same principle.

https://futures.io/local_links.php?action=ratelink&linkid=891&catid=19&lpage=1

I have tried those. They are pretty similar and free. I've taken all of it off already though. To much stuff on the screen.

Instead I've added a 36 range chart and hand draw some S/R on that.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 PandaWarrior 
In the heat
 
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Private Banker View Post
Great video! I'm glad you posted that. Steve Vai is a true Master of his profession and art. Everything he said in this video can be used towards trading. Just insert trader instead of musician and it's extraordinary.

Cheers,
PB

I got it from another poster here on futures.io (formerly BMT)....Attitudetrader I think...can't remember at the moment....but still its an awesome video.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 tigertrader 
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Markets “trend” only 20% of the time, which of course means they are range-bound or in equilibrium, with little or no serial correlation, the other 80% of the time. Adopting a trend following methodology, by your own admission, is a severely restrictive trading strategy.

You are more than capable of intellectualizing and philosophizing about what is logical and correct in reference to strategy and execution, yet you cannot control your instinctual impulses to do what makes you feel good, rather than what is good for your.trading. It is the eternal struggle between impulse and intellect, and seems very evident in your writings.

While you judge yourself by your trading progress to a great extent, you are overly concerned about the outcome. You prefer to make a trade on a signal from a lagging indicator, rather than on your own intuitive sense , which you have developed from studying price action. In this way you can blame the indicator, when the market does not do what it “supposed” to do, and not yourself. You talk about trading correctly, in the future, but adopt a methodology you know is incorrect in the present.

Most traders allow their emotions to fluctuate with their P&L and the quality of their execution, instead of remaining consistent and even tempered. To combat this tendency, traders need to be prepared at all times. They have to have an idea of what they are going to do, when the market does what it is going to do.

Too much emphasis is placed on initiating the trade ”perfectly” and not on the exit. Don’t try to predict how long the move will be, let the market tell you when to get out. Get out of your longs when you don’t want to be long anymore, not because it feels good to book a profit. Don’t just take small losses, but take optimal losses. Take your loss and get over with it - you’re not always going to get it right.

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 Hapster 
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tigertrader View Post
Markets “trend” only 20% of the time, which of course means they are range-bound or in equilibrium, with little or no serial correlation, the other 80% of the time. Adopting a trend following methodology, by your own admission, is a severely restrictive trading strategy.

You are more than capable of intellectualizing and philosophizing about what is logical and correct in reference to strategy and execution, yet you cannot control your instinctual impulses to do what makes you feel good, rather than what is good for your.trading. It is the eternal struggle between impulse and intellect, and seems very evident in your writings.

While you judge yourself by your trading progress to a great extent, you are overly concerned about the outcome. You prefer to make a trade on a signal from a lagging indicator, rather than on your own intuitive sense , which you have developed from studying price action. In this way you can blame the indicator, when the market does not do what it “supposed” to do, and not yourself. You talk about trading correctly, in the future, but adopt a methodology you know is incorrect in the present.

Most traders allow their emotions to fluctuate with their P&L and the quality of their execution, instead of remaining consistent and even tempered. To combat this tendency, traders need to be prepared at all times. They have to have an idea of what they are going to do, when the market does what it is going to do.

Too much emphasis is placed on initiating the trade ”perfectly” and not on the exit. Don’t try to predict how long the move will be, let the market tell you when to get out. Get out of your longs when you don’t want to be long anymore, not because it feels good to book a profit. Don’t just take small losses, but take optimal losses. Take your loss and get over with it - you’re not always going to get it right.

Thanks, TigerTrader.... I didn't want that post to end LOL

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 Lornz 
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tigertrader View Post
Markets “trend” only 20% of the time, which of course means they are range-bound or in equilibrium, with little or no serial correlation, the other 80% of the time. Adopting a trend following methodology, by your own admission, is a severely restrictive trading strategy.

A good post!

But it should be noted that increased trade frequency shouldn't necessarily be a goal. Some people prefer RTM-strategies, others are trend followers... It's the P&L that counts, not the number of trades or time in the market...

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 tigertrader 
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Lornz View Post
A good post!

But it should be noted that increased trade frequency shouldn't necessarily be a goal. Some people prefer RTM-strategies, others are trend followers... It's the P&L that counts, not the number of trades or time in the market...

Of course the bottom line is the bottom line. But it's not about trading more, it's about providing yourself with more opportunities to trade and make money. I ‘m not saying that one strategy is better than the other - they each have their limitations. To use a rule based, trend following method, you need a large sample. So you must be diversified and be trading multiple instruments. If you only trade a RTM strategy, then you will not catch the really big moves. So, what I’m saying is you should not limit yourself to either strategy but incorporate both of them into your trading plan. First identify if it’s a range or trend day. In theory you will see 4 trend days and 16 range days in a month, so naturally you will be doing more RTM trading, but it’s those 4 days when you get a trend day, that you can trade more aggressively, pressing and adding to your positions. Incorporating BOTH strategies allows you the flexibility to adjust your strategy to the current conditions in the market.

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 monpere 
Bala, PA, USA
 
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Of course the bottom line is the bottom line. But it's not about trading more, it's about providing yourself with more opportunities to trade and make money. I ‘m not saying that one strategy is better than the other - they each have their limitations. To use a rule based, trend following method, you need a large sample. So you must be diversified and be trading multiple instruments. If you only trade a RTM strategy, then you will not catch the really big moves. So, what I’m saying is you should not limit yourself to either strategy but incorporate both of them into your trading plan. First identify if it’s a range or trend day. In theory you will see 4 trend days and 16 range days in a month, so naturally you will be doing more RTM trading, but it’s those 4 days when you get a trend day, that you can trade more aggressively, pressing and adding to your positions. Incorporating BOTH strategies allows you the flexibility to adjust your strategy to the current conditions in the market.

How do people identify trend days? I generally don't know it's a trend day, until I look back at the day and realize, hey this was a trend day. Of course this may be because I don't care about trends, given my trading method was designed to take advantage of market phenomena that occur regardless of trend. Just wondering how trend traders predict trend days, in order to capitalize on them.

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 tigertrader 
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monpere View Post
How do people identify trend days? I generally don't know it's gonna be a trend day, until I look back at the day and realize, hey this was a trend day. Of course this may be because I don't care about trend days, because my trading method was designed to take advantage of market phenomena that occur regardless of trend. Just wondering how trend traders predict trend days, in order to capitalize on them.

It's not a question of predicting the market, rather than recognizing what it is doing. Knowing where the market is trading relative to that day's VWAP is very helpful in identifying the kind of day you're in.On a strong trending day the market will move away from a steeply sloping VWAP to probe trader interest, and will be accepted. Their will be a relatively wide value area (volume transacted within a wide price band) and the market will continue to stay away from the VWAP.

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 Big Mike 
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monpere View Post
How do people identify trend days? I generally don't know it's a trend day, until I look back at the day and realize, hey this was a trend day. Of course this may be because I don't care about trends, given my trading method was designed to take advantage of market phenomena that occur regardless of trend. Just wondering how trend traders predict trend days, in order to capitalize on them.

Fat Tails offered several methodical ways to 'test' to see if the market is trending in his latest webinar:


I think there are many ways you could do it, none of which are perfect naturally.

Mike

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 PandaWarrior 
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Nice trend day. But I got my profits off before the trend really kicked in.

Was long twice for 40 ticks, passed on a couple of trades in the long. I saw them but didn't like the pace of the tape at that point so just passed. They were winners of course but so what. I made a decision to not trade and that is fine.

I'll be watching FatTail's webinar today per Big Mikes suggestion in the last post.

Only 4 trades today. I am really happy about that. It seems the less I trade overall, the better I do.

The big question is this, could I have had more? The answer is yes but I feel pretty comfortable about where I took my trades and how I traded today. I made some decisions early on during the pre-market about what I thought price might do and decided to use 20 tick targets today.

So done early today and glad about it.


Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 Big Mike 
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Not to venture but if you look at FINVIZ.com - Stock Screener at the top of the page they have a simple way of charting trend:



Now something similar can be done on shorter term as well.

Of course some people prefer to use breadth indicators instead.

There are really a million and one ways to do this, the important thing is to find one that you like and can "relate" to, and do some research on it and get to know it. Then add it to your war chest...

Mike

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 tigertrader 
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Nice trend day. But I got my profits off before the trend really kicked in.

Was long twice for 40 ticks, passed on a couple of trades in the long. I saw them but didn't like the pace of the tape at that point so just passed. They were winners of course but so what. I made a decision to not trade and that is fine.

I'll be watching FatTail's webinar today per Big Mikes suggestion in the last post.

Only 4 trades today. I am really happy about that. It seems the less I trade overall, the better I do.

The big question is this, could I have had more? The answer is yes but I feel pretty comfortable about where I took my trades and how I traded today. I made some decisions early on during the pre-market about what I thought price might do and decided to use 20 tick targets today.

So done early today and glad about it.




Unlike the majority of the time when we have a choppy directionless trade, we have been handed a 5 point trading range in the crude and a 35 point trading range in the ES. Special day, special markets - it's what you live for and wait for as trader. So it seems completely counter-intuitive to me to "shut down" when you're are trading good. If you are trading poorly or the market has degraded into chop, I can understand shutting down. 80 tics is a nice day - Congratulations! If you continued to trade you could have given it back, and then some; but then again you could have made 800 tics.

It O.K. to presuppose market direction and volatility, as long as you are adaptable, and can react quickly, appropriately, and efficiently to change. If you don't have an opinion, however, it's much easier to assess the correlation between what you are observing and what objectively exists This way, you will know what you should do, not what you want to do.

At the heart of most traders' difficulties is not their methodology, but their emotional quotient. The fact that you bare your soul through introspection and self-analysis is very gutsy and brave, but you cannot allow this exercise to turn into a "flight into reason" where the emphasis is on "facts and logic", while avoiding the emotions that drive you decisions.

Experienced traders receive valuable physical and emotional signals that help guide them in their decision making. When most members of this board make the switch from SIM to LIVE, they experience inherent anxiety, (greed/fear), and a myriad of other cognitive rationalizations that override the emotional signals that guide good decision making. It is this temporary lack of access to these signals that leads them to making impulsive or less than favorable decisions when they are LIVE.

In other words, it has felt exceptionally good every time they have had a winning trade. so, when they are in a profitable trade, it activates feelings associated with previous experiences with winning trades. It feels good to be up money so they are already predisposed to get out of the trade,( before it turns into a loser), so they can enjoy the positive feeling. Their decision to get out of the trade is not based on the rational process of risk/reward or money management, rather than the feeling state mixed with the perception of a winning trade.

Yeah, it felt good to quit for the day when you're up 80tics, and it feels good to protect your profits, when you get out of trades too early. But the longer you adhere to these impulses, the more pre-disposed you are to continuing it. Without adjusting your emotions, thoughts and beahviors, it doesn't matter how good your methodology is, because you will instinctively do the wrong thing.

It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change." - Charles Darwin

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 monpere 
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tigertrader View Post


Unlike the majority of the time when we have a choppy directionless trade, we have been handed a 5 point trading range in the crude and a 35 point trading range in the ES. Special day, special markets - it's what you live for and wait for as trader. So it seems completely counter-intuitive to me to "shut down" when you're are trading good. If you are trading poorly or the market has degraded into chop, I can understand shutting down. 80 tics is a nice day - Congratulations! If you continued to trade you could have given it back, and then some; but then again you could have made 800 tics.

It O.K. to presuppose market direction and volatility, as long as you are adaptable, and can react quickly, appropriately, and efficiently to change. If you don't have an opinion, however, it's much easier to assess the correlation between what you are observing and what objectively exists This way, you will know what you should do, not what you want to do.

At the heart of most traders' difficulties is not their methodology, but their emotional quotient. The fact that you bare your soul through introspection and self-analysis is very gutsy and brave, but you cannot allow this exercise to turn into a "flight into reason" where the emphasis is on "facts and logic", while avoiding the emotions that drive you decisions.

Experienced traders receive valuable physical and emotional signals that help guide them in their decision making. When most members of this board make the switch from SIM to LIVE, they experience inherent anxiety, (greed/fear), and a myriad of other cognitive rationalizations that override the emotional signals that guide good decision making. It is this temporary lack of access to these signals that leads them to making impulsive or less than favorable decisions when they are LIVE.

In other words, it has felt exceptionally good every time they have had a winning trade. so, when they are in a profitable trade, it activates feelings associated with previous experiences with winning trades. It feels good to be up money so they are already predisposed to get out of the trade,( before it turns into a loser), so they can enjoy the positive feeling. Their decision to get out of the trade is not based on the rational process of risk/reward or money management, rather than the feeling state mixed with the perception of a winning trade.

Yeah, it felt good to quit for the day when you're up 80tics, and it feels good to protect your profits, when you get out of trades too early. But the longer you adhere to this impulse, the more pre-disposed you are to continuing it. Without adjusting your emotions, thoughts and beahviors, it doesn't matter how good your methodology is, because you will instinctively do the wrong thing.

It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change." - Charles Darwin

That was a nice soliloquy, very eloquent. So, what is your advice exactly, to the poster? What tangible steps can he take to actually realize the the moral of this most eloquent post, to make him a better trader?

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 PandaWarrior 
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tigertrader View Post


Unlike the majority of the time when we have a choppy directionless trade, we have been handed a 5 point trading range in the crude and a 35 point trading range in the ES. Special day, special markets - it's what you live for and wait for as trader. So it seems completely counter-intuitive to me to "shut down" when you're are trading good. If you are trading poorly or the market has degraded into chop, I can understand shutting down. 80 tics is a nice day - Congratulations! If you continued to trade you could have given it back, and then some; but then again you could have made 800 tics.

It O.K. to presuppose market direction and volatility, as long as you are adaptable, and can react quickly, appropriately, and efficiently to change. If you don't have an opinion, however, it's much easier to assess the correlation between what you are observing and what objectively exists This way, you will know what you should do, not what you want to do.

At the heart of most traders' difficulties is not their methodology, but their emotional quotient. The fact that you bare your soul through introspection and self-analysis is very gutsy and brave, but you cannot allow this exercise to turn into a "flight into reason" where the emphasis is on "facts and logic", while avoiding the emotions that drive you decisions.

Experienced traders receive valuable physical and emotional signals that help guide them in their decision making. When most members of this board make the switch from SIM to LIVE, they experience inherent anxiety, (greed/fear), and a myriad of other cognitive rationalizations that override the emotional signals that guide good decision making. It is this temporary lack of access to these signals that leads them to making impulsive or less than favorable decisions when they are LIVE.

In other words, it has felt exceptionally good every time they have had a winning trade. so, when they are in a profitable trade, it activates feelings associated with previous experiences with winning trades. It feels good to be up money so they are already predisposed to get out of the trade,( before it turns into a loser), so they can enjoy the positive feeling. Their decision to get out of the trade is not based on the rational process of risk/reward or money management, rather than the feeling state mixed with the perception of a winning trade.

Yeah, it felt good to quit for the day when you're up 80tics, and it feels good to protect your profits, when you get out of trades too early. But the longer you adhere to this impulse, the more pre-disposed you are to continuing it. Without adjusting your emotions, thoughts and beahviors, it doesn't matter how good your methodology is, because you will instinctively do the wrong thing.

It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change." - Charles Darwin

I feel bad when I follow my rules, have particular targets in mind, take the trade and then "protect profits" to early. I feel bad when I follow my rules, wait for a trade, then pass on it irregardless of its eventual outcome.

I DO NOT feel bad when I follow my rules, put my targets in, irregardless of what they are and hold my trade to its conclusion. Either stop or target. I was asked today by a trading buddy..."I bet you're pretty happy right now?" And the answer was not really. I just felt like I had done the job I set out to do today. Nothing more, nothing less.

So what if I quit at 80 ticks. The trend could have been over at that point and I would spend the rest of the day giving back. That's the uncertainty of the market. Its easy to judge in hindsight. I don't care at all that it continued on for quite a while. I got what I came for. On the other side of this coin, had I followed my rules and then passed on the trades and price did what it did, I would be pissed at myself. But for the sole reason of having not taken the trades. It has nothing to do with 80 ticks or 800 ticks. The only question I have to answer for myself each day is this.... Did I trade well given the current state of my journey? That's it.

If I was aware of my emotions at the time of each trade, did not allow them to overcome the rational thought process with regards to my trade plan for the day and allowed each trade to play out, then the answer is yes. If not, then the answer is no.

Today the answer is yes.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 tigertrader 
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monpere View Post
That was a nice soliloquy, very eloquent. So, what is your advice exactly, to the poster? What tangible steps can he take to actually realize the the moral of this most eloquent post, to make him a better trader?

Az is an intelligent person. He realizes the difference between proper technique and improper technique, but allows his impulses to guide his actions. Then, it's a classic case of cognitive dissonance/adaptive preference formation.

So what if I quit at 80 ticks. The trend could have been over at that point and I would spend the rest of the day giving back. That's the uncertainty of the market. Its easy to judge in hindsight. I don't care at all that it continued on for quite a while. I got what I came for.

He does something"wrong" and acknowledges that fact, but then proceeds to somehow explain it away and justify his actions.Very inhibiting, if not destructive behavior for a trader. He needs to be honest with himself, and acknowledge his pattern of behavior. He needs to place as much, if not more, emphasis on the emotional/cognitive aspects of trading, than on methodology, markets, and money management.

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Rainmaker
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I hope you don't mine me adding my opinion, but I would have to agree totally with Tigertrader. It seems to me that PW is lacking confidence either in his methodology or with himself the trader. I agree, these are the days we wait for and take full advantage of it and take all you can get because not everyday is like today. An experienced trader is confident in his method and himself that when he sees a valid trade, meaning everything lines up and is a high prob trade he pulls the trigger without hesitation, it's like being a machine. To break the ice what may be best would be to only take your best trade, what I call my "Type A" setup. And I would recommend a minimum r/r of 2/1. Meaning if your willing to risk 10 ticks, your profit should not be less than 20 ticks for example. The CL market will normally move 30 to 40 ticks in the correct swing or wave. Tigertrader hit the nail on the head "Fear & Greed" are the two main emotions in this business and if you can't control them it will be difficult to survive in this business.

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 PandaWarrior 
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Screen Trader View Post
I hope you don't mine me adding my opinion, but I would have to agree totally with Tigertrader. It seems to me that PW is lacking confidence either in his methodology or with himself the trader.

ST

I don't disagree with this statement. I have had extreme reluctance to trade due to a lack of skill. Then as I recognized its both skill and emotional, I focused on finding a method that more or less suited my personality. Now that I am more or less settled on something, I am focusing on the skill mastery portion of it and that is gradually increasing my confidence. I wish I could make the jump from novice to master as quickly as some would like me to. Sorry, I have to this at my own pace.

On this list of the stages of trading, I am in between stage 3 and 4. I recognize its me that is the secret and I am profitable enough to be mostly break even.

I guess I wonder how I could have traded better today in light of all the advice? Should I have let the trades run out to infinity? I've never done that. I'm not a home run hitter. Currently I am trying to hit for average. Ala Tony Gwyn of the Padres. Not a single trade today was less than 2:1. Granted they could have been 3:1 or better. I have no way of knowing that and neither does anyone else. I guess I have no idea what I could have done different to please @ Tigertrader. He says I justify irrational action. Well maybe, I am still learning to be at peace with uncertainty. To me trading is the trade off between objective set ups and subjective uncertainty about will happen next. At this point in my career, I am both comfortable with progress in this area but yet I realize there is much more to learn and do.

As I stated in the opening post, this journal will be more about the emotional and mental aspect of trading than any particular set up or method.

I am reposting something I found on the forum a long time ago. I copied and kept it for later reference.

The 5 Steps to becoming a trader

Step One: Unconscious Incompetence.

This is the first step you take when starting to look into trading. you know that its a good way of making money because you've heard so many things about it and heard of so many millionaires. Unfortunately, just like when you first desire to drive a car you think it will be easy - after all, how hard can it be? Price either moves up or down - what's the big secret to that then - lets get cracking!

Unfortunately, just as when you first take your place in front of a steering wheel you find very quickly that you haven't got the first clue about what you're trying to do. You take lots of trades and lots of risks. When you enter a trade it turns against you so you reverse and it turns again .. and again, and again.


You may have initial success, and thats even worse - cos it tells your brain that this really is simple and you start to risk more money.


You try to turn around your losses by doubling up every time you trade. Sometimes you'll get away with it but more often than not you will come away scathed and bruised You are totally oblivious to your incompetence at trading.

This step can last for a week or two of trading but the market is usually swift and you move onth the next stage.

Step Two - Conscious Incompetence

Step two is where you realise that there is more work involved in trading and that you might actually have to work a few things out. You consciously realise that you are an incompetent trader - you don't have the skills or the insight to turn a regular profit.

You now set about buying systems and e-books galore, read websites based everywhere from USA to the Ukraine. and begin your search for the holy grail. During this time you will be a system nomad - you will flick from method to method day by day and week by week never sticking with one long enough to actually see if it does work. Every time you come upon a new indicator you'll be ecstatic that this is the one that will make all the difference.

You will test out automated systems on Metatrader, you'll play with moving averages, Fibonacci lines, support & resistance, Pivots, Fractals, Divergence, DMI, ADX, and a hundred other things all in the vein hope that your 'magic system' starts today. You'll be a top and bottom picker, trying to find the exact point of reversal with your indicators and you'll find yourself chasing losing trades and even adding to them because you are so sure you are right.

You'll go into the live chat room and see other traders making pips and you want to know why it's not you - you'll ask a million questions, some of which are so dumb that looking back you feel a bit silly. You'll then reach the point where you think all the ones who are calling pips after pips are liars - they cant be making that amount because you've studied and you don't make that, you know as much as they do and they must be lying. But they're in there day after day and their account just grows whilst yours falls.

You will be like a teenager - the traders that make money will freely give you advice but you're stubborn and think that you know best - you take no notice and overtrade your account even though everyone says you are mad to - but you know better. You'll consider following the calls that others make but even then it wont work so you try paying for signals from someone else - they don't work for you either.


You might even approach a 'guru' like Rob Booker or someone on a chat board who promises to make you into a trader(usually for a fee of course). Whether the guru is good or not you wont win because there is no replacement for screen time and you still think you know best.


This step can last ages and ages - in fact in reality talking with other traders as well as personal experience confirms that it can easily last well over a year and more nearer 3 years. This is also the step when you are most likely to give up through sheer frustration.

Around 60% of new traders die out in the first 3 months - they give up and this is good - think about it - if trading was easy we would all be millionaires. another 20% keep going for a year and then in desperation take risks guaranteed to blow their account which of course it does.


What may suprise you is that of the remaining 20% all of them will last around 3 years - and they will think they are safe in the water - but even at 3 years only a further 5-10% will continue and go on to actually make money consistently.


By the way - they are real figures, not just some ive picked out of my head - so when you get to 3 years in the game dont think its plain sailing from there.


Iv had many people argue with me about these timescales - funny enough none of them have been trading for more that 3 years - if you think you know better then ask on a board for someone who's been trading 5 years and ask them how long it takes to become fully 100% proficient. Sure i guess there will be exceptions to the rle - but i havent met any yet.


Eventually you do begin to come out of this phase. You've probably committed more time and money than you ever thought you would, lost 2 or 3 loaded accounts and all but given up maybe 3 or 4 times but now its in your blood

One day - im a split second moment you will enter stage 3.

Step 3 - The Eureka Moment

Towards the end of stage two you begin to realise that it's not the system that is making the difference. You realise that its actually possible to make money with a simple moving average and nothing else IF you can get your head and money management right You start to read books on the psychology of trading and identify with the characters portrayed in those books and finally comes the eureka moment.

The eureka moment causes a new connection to be made in your brain. You suddenly realise that neither you, nor anyone else can accurately predict what the market will do in the next ten seconds, never mind the next 20 mins.


Because of this revelation you stop taking any notice of what anyone thinks - what this news item will do, and what that event will do to the markets. You become an individual with your own method of trading


You start to work just one system that you mould to your own way of trading, you're starting to get happy and you define your risk threshold.

You start to take every trade that your 'edge' shows has a good probability of winning with. When the trade turns bad you don't get angry or even because you know in your head that as you couldn't possibly predict it it isn't your fault - as soon as you realise that the trade is bad you close it . The next trade or the one after it or the one after that will have higher odds of success because you know your system works.


You stop looking at trading results from a trade-to-trade perspective and start to look at weekly figures knowing that one bad trade does not a poor system make.


You have realised in an instant that the trading game is about one thing - consistency of your 'edge' and your discipline to take all the trades no matter what as you know the probabilities stack in your favour.

You learn about proper money management and leverage - risk of account etc etc - and this time it actually soaks in and you think back to those who advised the same thing a year ago with a smile. You weren't ready then, but you are now. The eureka moment came the moment that you truly accepted that you cannot predict the market.

Step 4 - Conscious Competence

You are making trades whenever your system tells you to. You take losses just as easily as you take wins You now let your winners run to their conclusion fully accepting the risk and knowing that your system makes more money than it looses and when you're on a loser you close it swiftly with little pain to your account

You are now at a point where you break even most of the time - day in day out, you will have weeks where you make 100 pips and weeks where you lose 100 pips - generally you are breaking even and not losing money. You are now conscious of the fact that you are making calls that are generally good and you are getting respect from other traders as you chat the day away. You still have to work at it and think about your trades but as this continues you begin to make more money than you lose consistently.

You'll start the day on a 20 pip win, take a 35 pip loss and have no feelings that you've given those pips back because you know that it will come back again. You will now begin to make consistent pips week in and week out 25 pips one week, 50 the next and so on.

This lasts about 6 months

Step Five - Unconscious Competence

Now we’re cooking - just like driving a car, every day you get in your seat and trade - you do everything now on an unconscious level. You are running on autopilot. You start to pick the really big trades and getting 200 pips in a day doesnt make you any more excited that getting 1 pips.


You see the newbies in the forum shouting 'go dollar go' as if they are urging on a horse to win in the grand national and you see yourself - but many years ago now.

This is trading utopia - you have mastered your emotions and you are now a trader with a rapidly growing account.

You're a star in the trading chat room and people listen to what you say. You recognise yourself in their questions from about two years ago. You pass on your advice but you know most of it is futile because they're teenagers - some of them will get to where you are - some will do it fast and others will be slower - literally dozens and dozens will never get past stage two, but a few will.

Trading is no longer exciting - in fact it's probably boring you to bits - like everything in life when you get good at it or do it for your job - it gets boring - you're doing your job and that's that.


Finally you grow out of the chat rooms and find a few choice people who you converse with about the markets without being influenced at all.


All the time you are honing your methods to extract the maximum profit from the market without increasing risk. Your method of trading doesnt change - it just gets better - you now have what women call 'intuition'

You can now say with your head held high "I'm a currency trader" but to be honest you dont even bother telling anyone - it's a job like any other.


I hope youve enjoyed reading this journey into a traders mind and that hopefully youve identified with some points in here.


Remember that only 5% will actually make it - but the reason for that isnt ability, its staying power and the ability to change your perceptions and paradigms as new information comes available.


The losers are those who wanted to 'get rich quick' but approached the market and within 6 months put on a pair of blinkers so they couldnt see the obvious - a kind of "this is the way i see it and thats that" scenario - refusing to assimilate new information that changes that perception.

Im happy to tell you that the reason i started trading was because of the 'get rich quick' mindset. Just that now i see it as 'get rich slow'

If youre thinking about giving up i have one piece of advice for you ....

Ask yourself the question "how many years would you go to college if you knew for a fact that there was a million dollars a year job at the end of it?


Me again...

I am currently studying both fixed fractional and fixed ratio money management. I will make a decision soon about which one to use. I am also reading about the "science" of fear and how our bodies and brains react to stimuli it considers dangerous. So far, I've just begun this little journey but already I see my trading tracking the various levels of fear based reactions. I suspect through this study, I may end up with better ways of dealing with fear and greed.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #38 (permalink)
 worldwary 
Williamsburg, VA
 
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I guess I wonder how I could have traded better today in light of all the advice? Should I have let the trades run out to infinity? I've never done that. I'm not a home run hitter. Currently I am trying to hit for average. Ala Tony Gwyn of the Padres. Not a single trade today was less than 2:1. Granted they could have been 3:1 or better. I have no way of knowing that and neither does anyone else. I guess I have no idea what I could have done different to please @ Tigertrader.

Thanks for reposting those trading steps. I've seen those a few times over the years and each time I read them, I see something new. Recognizing myself at embarrassing points of immaturity basically.

From my perspective, the only thing you did "wrong" today is deciding to stop trading. Today was a great trending day that gave opportunities for 3-4 times the profit you actually booked. Now you're correct, you can't know that in advance. But if your trading system says that each time XYZ setup occurs, you're more likely to make a few ticks than to lose, then you'd trade every setup without regard to how much you'd won or lost previously in the day. This is part of the emotional detachment that comes from moving into steps 4-5 I think.

It's interesting that I read this post when I did because I just got done reviewing the day's trades and realizing that I left a ton of profits on the table by arbitrarily stopping early in the day (even though I was just paper trading today, it's still an eye-opening realization). So obviously I haven't overcome this drawback myself.

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 tigertrader 
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I am also reading about the "science" of fear and how our bodies and brains react to stimuli it considers dangerous. So far, I've just begun this little journey but already I see my trading tracking the various levels of fear based reactions. I suspect through this study, I may end up with better ways of dealing with fear and greed.


Started researching the subject a while ago, because I take Parkinson's medication. The drug acutely affects my Dopamine levels and has had a profound effect on my ability to make decisions and on my behavior. I found it helpful to understand what was happening to me on neurological level, so that I could deal with it's effects.


You might find the attached doc interesting.

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The PandaWarrior Chronicles-somatic-marker.pdf  
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  #40 (permalink)
 cory 
the coin hunter
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...
I guess I wonder how I could have traded better today in light of all the advice? ....

forget all advice they won't be there when you need them most. Listen to yourself, know when greed or fear talks learn to recognize them then control them and you are all set. (look at the scroll)

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 monpere 
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cory View Post
forget all advice they won't be there when you need them most. Listen to yourself, know when greed or fear talks learn to recognize them then control them and you are all set. (look at the scroll)

How did you learn to control them? That's the kind of advice that can actually help.

 
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 Hapster 
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I think I need to talk to my doc about getting a script' for some Parkinson medication.

H

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  #43 (permalink)
 cory 
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monpere View Post
How did you learn to control them? That's the kind of advice that can actually help.

by knowing oneself, my way of controlling fear and greed will not not be the same as yours. Some use automate system some use semi-automate system for me personally I just reduce my targets to control greed, keep looking for entries to control fear.

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 PandaWarrior 
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cory View Post
forget all advice they won't be there when you need them most. Listen to yourself, know when greed or fear talks learn to recognize them then control them and you are all set. (look at the scroll)


Thanks Cory. This was the response I thought I would get from others.

When writing a public journal and being honest with oneself and with the community, one exposes unpleasant truths about oneself. When potentially good advice is presented in the form of honest criticism, the temptation is to in some way respond in a manner that reduces the criticism from others that may or may not be more advanced than oneself and try to apply where they are in their journey to where you are in yours.

This is counter productive I believe in the sense that it can produce feelings of inadequacy and possible self doubt. When this happens, I am always tempted to discontinue the public journal and just simply retreat into my own little world. Or worse, lash out at people. While these two responses may satisfy the need for self preservation or revenge, neither is constructive long term.

So while I appreciate and value opinions and suggestions from others, I also know trading is a very personal journey. Realizations and aha moments come. Sometimes from others and sometimes from within. It is my sincere desire that most of the aha moments come from within.....by looking at the scroll so to speak.

Thanks again.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 cory 
the coin hunter
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for those who haven't seen the movie here is what panda warrior see when he opens the dragon scroll (it holds the secret make one into a master)

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 Big Mike 
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 PandaWarrior 
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As I progress on this journey, my intuition is beginning to show itself more and more. I have certain pattern trades I really like. At the same time, at certain levels, I feel pretty strongly to take a trade or to pass on a trade with no apparent reason other than a feeling. Today I passed on a couple of trades I felt I should take but were not within my normal pattern trades. These trades worked today. Other times they haven't. Learning to discern when to listen to that little voice and when not to is something to think about.

Over the last few days and weeks, I've been looking at a way to filter my 12 range chart to perhaps finesse some entries better. I've been doing this with a 4 range chart. I've only looked at this on historical charts. But over some time, I've come to think that perhaps I can finesse a 12 range chart pattern by being a bit more selective on the 4R. Today I tried this live. I have marked the trades on the 12R chart where I felt I had better entries than perhaps on the 12R. This was an absolute failure. I am sure its possible but I totally screwed it up. Worse, these trades inspired a level of fear response I've not felt in a while. I was really nervous in these trades. Even worse than this, they were all losers. So I am gonna resort to one of the three "F" responses to dangerous stimuli.....Flight. At least until I figure out how to do it properly, I will not be using the 4 range at all in trading decisions.

I also had some input today from a pretty experienced trader. One that uses much larger stops than I do. This was a very casual input. He thought CL was gonna go to a certain level...which it did by the way, but from a specific price. I entered there on nothing other than his say so. This was instantly stopped out....he was still in the trade due to much larger stops. Eventually the target was hit. I did not follow through with this trade idea once the initial trade stopped out. I realized I had committed a huge trading sin. Trading someone else's trade idea. Since I thought his premise was correct in terms of the target, I tried once or twice to enter using my own patterns and also the previously mentioned 4R method. No luck at all......The only way to take advantage of this was to use the stops he used and hold trades the way he held trades. None of which I am capable of doing at the moment.

In terms of trend following today, I only traded longs this morning. But I still lost money. I did not follow my trade plan at all today in terms of only trading specific patterns on the 12 range. By the time the ultra clean shorts showed up, I was stopped out for the day. Still a net positive week so far but only by a bit.

How do I feel today? I am wrestling with this. On one hand, I feel bad as no one likes to lose money and the really stupid trade I took based on someone else's trade idea. That's a pretty rookie mistake. On the other hand, I thought I had a valid method of getting in my pattern trades early and while they were all losers today, at least I give myself some very small credit for trying to improve the existing method and trying it live. I suppose its a lesson learned. Don't trade something live you've not tested in sim with live data.....or something like that.

Tomorrow, its back to my normal patterns, recognize the fear and greed and work to neutralize them with cognitive rational thought about what the chart is telling me.


Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 tigertrader 
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PandaWarrior View Post
Thanks Cory. This was the response I thought I would get from others.

When writing a public journal and being honest with oneself and with the community, one exposes unpleasant truths about oneself. When potentially good advice is presented in the form of honest criticism, the temptation is to in some way respond in a manner that reduces the criticism from others that may or may not be more advanced than oneself and try to apply where they are in their journey to where you are in yours.

This is counter productive I believe in the sense that it can produce feelings of inadequacy and possible self doubt. When this happens, I am always tempted to discontinue the public journal and just simply retreat into my own little world. Or worse, lash out at people. While these two responses may satisfy the need for self preservation or revenge, neither is constructive long term.

So while I appreciate and value opinions and suggestions from others, I also know trading is a very personal journey. Realizations and aha moments come. Sometimes from others and sometimes from within. It is my sincere desire that most of the aha moments come from within.....by looking at the scroll so to speak.

Thanks again.

No doubt, the road to self-discovery inevitably leads to the path to success. By identifying and eliminating your weaknesses, negative habits, and negative emotions, you will then be able to trade with a clear head and clear vision.

Developing a trading methodology, and defining your risk, is the easy part of trading. Developing the mental skills of focus, discipline, objectivity, and self- confidence is much more demanding and for some it can become a continuous struggle.

Almost every trader experiences anxiety, but it's instinctual that they feel good. Our brain's need for dopamine makes sure it will do anything to achieve this goal. It will even allows us to deceive ourselves to accomplish this end (cognitive rationalization).

Obviously, our experiences often fail to live up to our expectations. Sometimes, it's just easier to be like the fox who failed to reach the grapes, and say we didn't really want the grapes, or they wouldn't have tasted good. It's a very natural defense mechanism. There would be a lot of depressed zombies walking around, if each and every one of us, didn't fall victim to this practice, once in a while.

Successful traders are cognizant of this fact, it allows them to be objective and honest with themselves. They admit it when they are wrong and correct the problem immediately before it becomes ingrained - acceptance vs. denial.

Just don't fall into the trap of saying " It's o.k. to make the mistakes I'm making, because everyone else does."

Instead, say, " I am not going to make the same mistakes, that everyone else makes. In fact I am going to learn from their mistakes and avoid them.” It’s all in your attitude!

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 PandaWarrior 
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tigertrader View Post
No doubt, the road to self-discovery inevitably leads to the path to success. By identifying and eliminating your weaknesses, negative habits, and negative emotions, you will then be able to trade with a clear head and clear vision.

Developing a trading methodology, and defining your risk, is the easy part of trading. Developing the mental skills of focus, discipline, objectivity, and self- confidence is much more demanding and for some it can become a continuous struggle.

Almost every trader experiences anxiety, but it's instinctual that they feel good. Our brain's need for dopamine makes sure it will do anything to achieve this goal. It will even allows us to deceive ourselves to accomplish this end (cognitive rationalization).

Obviously, our experiences often fail to live up to our expectations. Sometimes, it's just easier to be like the fox who failed to reach the grapes, and say we didn't really want the grapes, or they wouldn't have tasted good. It's a very natural defense mechanism. There would be a lot of depressed zombies walking around, if each and every one of us, didn't fall victim to this practice, once in a while.

Successful traders are cognizant of this fact, it allows them to be objective and honest with themselves. They admit it when they are wrong and correct the problem immediately before it becomes ingrained - acceptance vs. denial.

Just don't fall into the trap of saying " It's o.k. to make the mistakes I'm making, because everyone else does."

Instead, say, " I am not going to make the same mistakes, that everyone else makes. In fact I am going to learn from their mistakes and avoid them.” It’s all in your attitude!

I learned something yesterday from the book about fear I am reading. In it, the author states that our desire to avoid uncertainty will lead us to choose the known negative outcome over an unknown positive outcome. This struck a cord in me in terms of holding a trade for a much larger or even unknown target. Easier to opt for the small loss or small win that face unknown amounts of time waiting for an uncertain event.....50-100 or more ticks to materialize or even worse, price action to tell me when to exit.

This was and is, an unnerving discovery. That our brains will short circuit our best intentions. All without a single rational thought to the contrary.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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Rainmaker
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PW,

If my previous post offended you that was not my intentions, let me restate it in a more constructive way. As you probably know that the CL market under normal market sentiments will produce at minimum 30 to 40 tick swings and often will move 1.00 pt or more at least once a day. It is our job to recognize when the correct pattern occurs and get in at the beginning. We are creatures of habit and once we recognize the correct pattern over and over again we will build confidence when we see it happening. For instance with my methodology when I see everything line up exactly as planned its a no brainer I must take that trade. Will it always win of course not, but I know my chances of it being a winning trade are favorable.Why? Because I have practiced it over and over again to the point I was completly confident that when I see that pattern it has a high winning percentage.

Now to take advantage of the entire market move I started with a r/r of a minimum 1.5/1 so if I'm willing to risk 15 ticks my target had to be a minimum of 24 ticks. Once the market has taken you out of the trade hopefully by hitting your target watch closely what the market does, how far it moves. You will get to a point where you will feel confident to the point where you will expand your target to 30 ticks and then 40 + ticks. This market will move 20 ticks in your direction and then move back to your entry and then continue towards your profit target. This is what scares most traders out of the big moves.

In a nutshell, practice creating good habits and not the bad ones. This takes time, but builds strong confidence in your trading. Not sure if this is helpful or I may not have said anything that you haven't already known.

 
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 PandaWarrior 
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There is a story about the host of the TV series Building It Bigger that demostrates how fear can be overcome. The host is an architect whose job it is to travel the world and do tv about gigantic building projects. This requires he ascend to the tops of many of the worlds highest buildings during construction. Turns out, he has a massive fear of heights which he discovered the first time he had to go up on one of these towers. Instead of giving into the fear, he worked on it and eventually was able to mostly overcome it.

During one episode, he asked an iron worker that had just clipped himself into his safety harness why instead of clinging to the steel beams and girders, he simply tested the ropes and harness and then leaned out into the void to do his job. The iron worked said "I'm tied in and you have to trust your equipment".

A light bulb went off in my head. I have to trust the fact that I have good equipment and to learn how to "tie myself in" For me that became the idea that if I have a free trade, then who cares what happens next. I can only control my exits after that.

So I resolved to only trade two lots, scale out early on one, get the trade free and give it a go and let either my target or price action tell me to get out.

I can set targets either with a fixed number, a fib number or support/resistance. For now, I'll do my best to use a logical fib number, trade in the direction price seems to be telling me to go and hold for that target.....UNLESS price action says otherwise.

Do this enough times and the three "F" responses to fear will over time diminish to the point where the learned response to bail early at the first hint of price going against me will be overshadowed with the learned response to think rationally about the exit and what the chart is actually telling vs what I fear its telling me.

Today I did this six times. Twice long, four times short. I had two losers and was close to my daily stop out number. But I knew I had the direction right, all I needed was timing. So I got short again and held to my first fib target. I left a little on the table but it ended up being the largest trade I've ever done with live money.

I waited through the news then got short again, stopped at +5 passed on the next one, waited some more, got long and exited when I though price action was telling me it was over.

Then I got bored watching price action fool around in a narrow range, started marking my chart up and then missed the next sell off. After that my kid got up, came down and insisted I love on her for a bit. Time to call it quits.

I ended the day at +67 ticks.


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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This happened while I was hugging on my kid and posting my journal for the day....Not sure if I would have taken it but the signal was there. 100 ticks...crazy.


Simplicity is the ultimate sophistication, Leonardo da Vinci


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 PandaWarrior 
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Trading Psychology Trading Session: Discipline to Reach the Next Level in Your Trading - Trader Kingdom

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Develop Your Mental Edge by Dr. Andrew Menaker - MarketDelta's library


Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 bluemele 
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100 ticks...crazy.

Not crazy, but she is yours and very beautiful. Just waiting for you to ask her to dance.

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 PHXtrader 
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I just wanted to say a real BIG THANK YOU for posting these links. They have been very enlightening and helpful.

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 PandaWarrior 
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I had a short bias today but my first trade was a long. As soon as I entered the trade, my nerves started jangling. I got profitable right away in the trade but even then, could not shake the nerves.

Next trade was short. Got profitable right away and while I was adjusting the stop, prices simply dropped like a rock, when I looked back at the chart, was up 40 ticks. My target was pretty far away and then before I knew it, I saw 60 ticks on the PnL. Right there my stress level was off the chart. Heart rate was super high, I had dry mouth and sweaty hands. First time I've had these symptoms in a long time. I even experienced some tunnel vision. I could not think rationally at all. Had I tried to rationally trail my stop, there was no way I could have. I don't even remember seeing the swing or the line painted by the supertrend. I just clicked the exit button. I was profitable on the trade of course but it was a major stress.

After exiting the trade, I instantly had clarity. As it turns out, I would have been out of the trade around the place I did exit on a rational trail stop but still, it was a really incredible experience.

However, NOTHING bad happened. I learned that I could exit a trade at the rational place without one of the 3 F's of fear taking over. Hopefully this is an experience that will help unlearn the desire to bail at the earliest hint of giving something back.

After that trade, it took about 30-45 minutes for my nerves to settle down, my heart rate to return to normal and for me to feel like I could trade rationally again. So I didn't trade until I could control my breathing and my hands weren't shaking. There was some news in there, nat gas I think so that was a convenient place to use the bathroom and get some thing to eat.

After that, I could feel my stress level rising slightly every time I contemplated taking a trade. So I passed on a couple but decided I needed to force myself to take the next trade. I used a very aggressive stop on it because I had no desire to stay in the trade long at all. Either it would go my way super fast or I would take a small stop. Well I got out with -3 I think.

After that, the nerves really settled down and I took a couple more trades. One I knew I would be exiting for only a few ticks. I got 11 on that which is about what I thought I could get.

Next I waited through some serious swings until I got the set up I was looking for. I took this trade in a pretty calm manner.....BUT I glanced at the PnL as it was in progress and noticed I was at 100 ticks for the day midway through the trade. That triggered the thought process of "I've never had a 100 tick day before. It would be a pity to be at this level and then give half back." So I bailed right there. I got the 100 ticks plus 7 more so netted 107, but no sooner had I exited the trade than it ran all the way to my next target and then some. So while the trade was profitable, the execution was piss poor at best. I exited the trade for exactly the wrong reason. Fear of loss.

So while today was my most profitable day in a long time, I feel like I executed poorly in terms of taking trades off at the proper time.

This being said, I am super excited that I have given myself the opportunity to at least have days like this. In the not to distant past, my trades would have been at best, 20 ticks and sometimes 10 or 15.

I am grateful to the people that have been harping on me to look at exiting a trade at the correct time as opposed to some fixed number. I will still use fixed targets at times. I did today on one occasion. They do have their usefulness but on days like today, they are useless and counter productive.

Back to the fear issue. The book I am reading, the document that @tigertrader posted and the webinars I have been watching have really opened me up to the idea of embracing uncertainty. I have done this the last two days. Its just the beginning of a brave new world but it has proven to me that I can take advantage of larger move days and not miss vast majority of it. Its also proven to me that nothing earth shattering happens if I don't insist on controlling every last detail of the trading day. Its basically find the entry and exit, take the trade and then do my best to let it play out.

This will be my main task going forward, becoming so comfortable being uncomfortable that it does not induce me to bail out of trades in blind panic.

Cheers.


Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #57 (permalink)
 tigertrader 
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I've got 2 words for you...beta blockers...lol.

Calm down buddy - you're a trading machine.

When you get that nervous, you lose focus.

Focus and forget, i.e., focus on the market, forget everything else. The more you focus on the market, the less nervous you'll be.

That post brought back memories of when I first stepped up my size (in the pit). Although, I was not nervous until I covered my position.. Then my hands began to shake like a leaf, when I was carding up the trade. While I was in the trade though, I was so focused on the market and the pit, that it was impossible to be nervous. After I took my first loss on a 50 lot, and saw it wasn't the end-of-the-world, that I could make it back and more, on the next couple of trades, I didn't get nervous at all anymore.

The market isn't there to take your money, you are there to take the market's money. You shouldn't be nervous, the market should be!!! Don't forget that - it your raison d'etre.

You are still putting way,way, too much pressure on yourself. Stop worrying about your P&L - your P&L will take care of itself, if you focus and trade well. In fact, why don't you hide it for a while , and see if that helps?

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 PandaWarrior 
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I haven't been that nervous in about a year. I really felt in my gut it would be a sell off day and I was hoping I could take advantage of it and not really trusting myself to do so since I'd never done it before. Maybe it was a lack of skill in terms of what I thought might happen that caused the extreme case of nerves.

Total performance anxiety in play today. I've experienced this kind of thing a few times in my life. Usually lasts only a day.

As to the PnL, I can't turn it off. I think I can hide the total PnL but not the current trade PnL.

As to the beta blockers, I'd love them short term but long term I need to face the music.

Cheers

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 tigertrader 
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I haven't been that nervous in about a year. I really felt in my gut it would be a sell off day and I was hoping I could take advantage of it and not really trusting myself to do so since I'd never done it before. Maybe it was a lack of skill in terms of what I thought might happen that caused the extreme case of nerves.

Total performance anxiety in play today. I've experienced this kind of thing a few times in my life. Usually lasts only a day.

As to the PnL, I can't turn it off. I think I can hide the total PnL but not the current trade PnL.

As to the beta blockers, I'd love them short term but long term I need to face the music.


Cheers

Good thought, to keep in mind...

Trading is 40% risk control, and 60% emotional control!

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 PandaWarrior 
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I had 107 ticks yesterday, today was 90 ticks. But today my nerves were only slightly on edge and non existent after the first trade. Strange how that works.

Only three trades today. All winners. I watched in sim for quite a while after that and had some real good sim trades but truthfully, at 90 ticks I was finished. Ended the week with 240 ticks which is my best week ever.

Have to say, its a result of doing the right thing even when it hurts.

I'm done for the week even though markets are still open. I think I'll take the weekend to really process what I have learned this week and hopefully put it to good use next week.

Cheers


Arrows on the 12 range charts are where I took my trades and the arrows on the 5 min and 36 range charts roughly coincide with those levels.


Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 tigertrader 
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I had 107 ticks yesterday, today was 90 ticks. But today my nerves were only slightly on edge and non existent after the first trade. Strange how that works.

Only three trades today. All winners. I watched in sim for quite a while after that and had some real good sim trades but truthfully, at 90 ticks I was finished. Ended the week with 240 ticks which is my best week ever.

Have to say, its a result of doing the right thing even when it hurts.

I'm done for the week even though markets are still open. I think I'll take the weekend to really process what I have learned this week and hopefully put it to good use next week.

Cheers


Arrows on the 12 range charts are where I took my trades and the arrows on the 5 min and 36 range charts roughly coincide with those levels.



Nice job. Enjoy the weekend!!!

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 monpere 
Bala, PA, USA
 
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PandaWarrior View Post
I had 107 ticks yesterday, today was 90 ticks. But today my nerves were only slightly on edge and non existent after the first trade. Strange how that works.

Only three trades today. All winners. I watched in sim for quite a while after that and had some real good sim trades but truthfully, at 90 ticks I was finished. Ended the week with 240 ticks which is my best week ever.

Have to say, its a result of doing the right thing even when it hurts.

I'm done for the week even though markets are still open. I think I'll take the weekend to really process what I have learned this week and hopefully put it to good use next week.

Cheers


Arrows on the 12 range charts are where I took my trades and the arrows on the 5 min and 36 range charts roughly coincide with those levels.

It's great psychological/emotional capital to finish the week positive. So, how many contracts are you trading? What is the size of you initial stop loss?

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 PandaWarrior 
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monpere View Post
It's great psychological/emotional capital to finish the week positive. So, how many contracts are you trading? What is the size of you initial stop loss?


I originally was using a logical 14 tick stop on a 12 range bar. But after putting in the time to study a ten tick vs the 14 tick showed me that based on the premise of my trade method, about 90% of all 10 tick stops would have ALSO hit my 14 tick stop. That meant for the vast majority of my losers, I could cut my risk by $40 per contract. So I am currently trading with a 10 tick stop.

I have three main patterns I am looking for on the 12 range chart that if I am correct on the trade, it will TEND to go my direction pretty darn quick. They trend trades so in this market, they are working pretty well.

Currently I am trading 2 lots. I take the first lot off at 10 ticks and move the stop to -5 on the second one. This allows me a profit irregardless of what happens on the second position. This is not optimum but again, based on the premise of my method, this will rarely happen and in fact, its only happened twice this week that I can remember.

The targets for the second one are currently 50 ticks or one of my fib targets, depending on what my current mental comfort level is. This again is not optimal but I am shooting for baby steps in terms of confronting my fear of holding trades. Today, my first fib target was hit long....BUT I took the trade off at 50 ticks which just happened to be the top of the swing. It pulled back to my entry and reversed hard to race toward the fib target. No way I could have held through a 50 tick pull back at this point in my career.

If and when I can trade 3 lots, I'll take one off at 30-50 ticks and then just leave the last one alone......but that day is down the road a bit. Maybe not this year even.

Anyway, thanks for the nice words.

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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This is from the last two weeks.



This is some data on targets (T1 and T2). T2 is only from this week.


Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #65 (permalink)
 worldwary 
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PandaWarrior View Post
Currently I am trading 2 lots. I take the first lot off at 10 ticks and move the stop to -5 on the second one. This allows me a profit irregardless of what happens on the second position. This is not optimum but again, based on the premise of my method, this will rarely happen and in fact, its only happened twice this week that I can remember.

Good job. It looks like you've made real progress this week in terms of letting winners run longer than you previously would have.

The 12 range chart that you use is pretty similar to the 512 tick chart that I use, as the average range of my bars is around 12 ticks. When I look at your charts I see a couple of good runs per day where a trailing stop would work really well. Just keep trailing the stop beyond the H/L of the prior bar and you should be able to catch some moves that are larger than the targets you've been using.

There is an interesting point embedded in the excerpt of your post that I quoted above. If it is indeed true that your tightened stop on the second contract is hit very rarely, then this means that your scaling out approach isn't doing you much good. This would be a useful stat to track over time. Scaling out might be helpful as a psychological tool but I'd urge you to stay objective about it and reexamine the data once you've tracked enough trades.

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 PandaWarrior 
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worldwary View Post
Good job. It looks like you've made real progress this week in terms of letting winners run longer than you previously would have.

The 12 range chart that you use is pretty similar to the 512 tick chart that I use, as the average range of my bars is around 12 ticks. When I look at your charts I see a couple of good runs per day where a trailing stop would work really well. Just keep trailing the stop beyond the H/L of the prior bar and you should be able to catch some moves that are larger than the targets you've been using.

There is an interesting point embedded in the excerpt of your post that I quoted above. If it is indeed true that your tightened stop on the second contract is hit very rarely, then this means that your scaling out approach isn't doing you much good. This would be a useful stat to track over time. Scaling out might be helpful as a psychological tool but I'd urge you to stay objective about it and reexamine the data once you've tracked enough trades.

I will track the odds of that second contract being stopped out. I have a weeks worth of data and will track it next week as well. So far, the average loser on that second contract is only 2.xx ticks. Which seems to suggest that given the full stop outs I took this week on both positions along with the winners and the -5 tick losers that it would be better to let the entire position run. As I am writing this, I realize that of course it makes more sense to let the entire position run....duh! Still from a psychological standpoint, it feels nice to have a few dollars locked in.

Simplicity is the ultimate sophistication, Leonardo da Vinci


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  #67 (permalink)
 bluemele 
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PandaWarrior View Post
I will track the odds of that second contract being stopped out. I have a weeks worth of data and will track it next week as well. So far, the average loser on that second contract is only 2.xx ticks. Which seems to suggest that given the full stop outs I took this week on both positions along with the winners and the -5 tick losers that it would be better to let the entire position run. As I am writing this, I realize that of course it makes more sense to let the entire position run....duh! Still from a psychological standpoint, it feels nice to have a few dollars locked in.

To me, deciding on your 'technique' is almost moot. Because conditions will change, dynamics will change some and your cashflow will change so I do not believe you will ever find the perfect combination. Just 2 cents from my own experience and watching others who have a lot more trading time than myself. It is always adapted to the market in which you are trading and that of course mutates.

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 monpere 
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bluemele View Post
To me, deciding on your 'technique' is almost moot. Because conditions will change, dynamics will change some and your cashflow will change so I do not believe you will ever find the perfect combination. Just 2 cents from my own experience and watching others who have a lot more trading time than myself. It is always adapted to the market in which you are trading and that of course mutates.

I see a lot traders say things like the market varies, mutates, changes, etc. It is now becoming cliche, like all the advice saying work on your psychology and you will magically become a better trader... never mind your terrible trading method . How exactly does the market vary and change? I think the only major aspect of the market that varies is volatility. The market is not an entity in and of itself. The market is a bunch of human beings, and human beings are cut from the same cloth. When the apes rise up and start trading the market, maybe the market will change in such a way that we might need different approaches to trading it. As long there are human beings trading the markets, the markets will be governed by crowd psychology.

Unless you have a major market altering event like decimalization, the standard trading approaches are not gonna stop working overnight. I have been trading the same rigid method for 6 years. We are not going to wake up tomorrow, and suddenly, the market will stop doing double bottoms, or stop giving divergence, or stop bouncing of of resistance. It is people behind the those patterns, it is fear and greed behind those patterns. So, what exactly is going to vary in the market so much that we have to change the way we trade? I think the day the markets will change in such a drastic way is the day when the market becomes just HFT vs HFT.

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 bluemele 
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monpere View Post
I see a lot traders say things like the market varies, mutates, changes, etc. It is now becoming cliche, like all the advice saying work on your psychology and you will magically become a better trader... never mind your terrible trading method . How exactly does the market vary and change? I think the only major aspect of the market that varies is volatility. The market is not an entity in and of itself. The market is a bunch of human beings, and human beings are cut from the same cloth. When the apes rise up and start trading the market, maybe the market will change in such a way that we might need different approaches to trading it. As long there are human beings trading the markets, the markets will be governed by crowd psychology.

Unless you have a major market altering event like decimalization, the standard trading approaches are not gonna stop working overnight. I have been trading the same rigid method for 6 years. We are not going to wake up tomorrow, and suddenly, the market will stop doing double bottoms, or stop giving divergence, or stop bouncing of of resistance. It is people behind the those patterns, it is fear and greed behind those patterns. So, what exactly is going to vary in the market so much that we have to change the way we trade? I think the day the markets will change in such a drastic way is the day when the market becomes just HFT vs HFT.

Volatility or a instrument physical change is always possible. Remember ER2?

Laws change, a huge change in FOREX over the last couple years dealing with margin among others.

Of course basic rules of trading won't change, but the instrument will change how it reacts to those over time. Ask anyone who has traded the ES for 10+ years.

Believe what you want to believe. But in MY OPINION the market volatility is probably your biggest changer. So setting a 10 tick PT or 100 tick PT doesn't matter right now. You decide later on how your trading evolves.

Or you do your way and be happy with it NEVER changing. Either way, I am sure it works.

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 monpere 
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bluemele View Post
Volatility or a instrument physical change is always possible. Remember ER2?

Laws change, a huge change in FOREX over the last couple years dealing with margin among others.

Of course basic rules of trading won't change, but the instrument will change how it reacts to those over time. Ask anyone who has traded the ES for 10+ years.

Believe what you want to believe. But in MY OPINION the market volatility is probably your biggest changer. So setting a 10 tick PT or 100 tick PT doesn't matter right now. You decide later on how your trading evolves.

Or you do your way and be happy with it NEVER changing. Either way, I am sure it works.

Just wanted to flesh out the details behind the cliches. We are agreed on volatility as I mentioned in my post. I think the example of the ES falls under volatility. Legal changes in FOREX, falls under my example of decimalization. That was a market changer, tons of bid/ask scalpers lost their livelihood when that change took place. These are the exceptions I mentioned. What else could change in such a way to make us change our trading approaches? There may be some aspects of the issue that I am missing, which I should pay attention to.

 
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 bluemele 
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monpere View Post
Just wanted to flesh out the details behind the cliches. We are agreed on volatility as I mentioned in my post. I think the example of the ES falls under volatility. Legal changes in FOREX, falls under my example of decimalization. That was a market changer, tons of bid/ask scalpers lost their livelihood when that change took place. These are the exceptions I mentioned. What else could change in such a way to make us change our trading approaches? There may be some aspects of the issue that I am missing, which I should pay attention to.

I think a big issue is US the trader. If you are mechanical 100% (which even you are not) then yes, but life, kids, travel, illness, values (personal and family), etc.. etc..

I see your point, and yes, you mentioned some generic issues but as a trader you also may find that you like taking longer runs or that you like taking shorter runs and also that changes with the time of day, the time of year, the downgrading of US debt etc..

We are ever-evolving and a structured approach is good, but I think like 'wine', trading gets better with age.

I am happy you have found the perfect pattern for you. It is rare and highly sought after. It is remarkable that you have stuck with the same system for so long and to be commended!

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 tderrick 
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Great job, buddy!!





PandaWarrior View Post
I had 107 ticks yesterday, today was 90 ticks. But today my nerves were only slightly on edge and non existent after the first trade. Strange how that works.

Only three trades today. All winners. I watched in sim for quite a while after that and had some real good sim trades but truthfully, at 90 ticks I was finished. Ended the week with 240 ticks which is my best week ever.

Have to say, its a result of doing the right thing even when it hurts.

I'm done for the week even though markets are still open. I think I'll take the weekend to really process what I have learned this week and hopefully put it to good use next week.

Cheers


Arrows on the 12 range charts are where I took my trades and the arrows on the 5 min and 36 range charts roughly coincide with those levels.




AJ
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 worldwary 
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monpere View Post
I see a lot traders say things like the market varies, mutates, changes, etc. It is now becoming cliche, like all the advice saying work on your psychology and you will magically become a better trader... never mind your terrible trading method . How exactly does the market vary and change? I think the only major aspect of the market that varies is volatility. The market is not an entity in and of itself. The market is a bunch of human beings, and human beings are cut from the same cloth. When the apes rise up and start trading the market, maybe the market will change in such a way that we might need different approaches to trading it. As long there are human beings trading the markets, the markets will be governed by crowd psychology.

Unless you have a major market altering event like decimalization, the standard trading approaches are not gonna stop working overnight. I have been trading the same rigid method for 6 years. We are not going to wake up tomorrow, and suddenly, the market will stop doing double bottoms, or stop giving divergence, or stop bouncing of of resistance. It is people behind the those patterns, it is fear and greed behind those patterns. So, what exactly is going to vary in the market so much that we have to change the way we trade? I think the day the markets will change in such a drastic way is the day when the market becomes just HFT vs HFT.

I have observed that there are a few aspects of the market that change from day to day and can also oscillate in longer-term cycles. For instance:

1. The size of the typical leg of a trend move.

2. The number of major reversal points that occur throughout the day.

3. The tendency of breakouts to fail or to continue in the direction of the breakout.

4. The frequency of "stop runs," where otherwise smooth trend moves are interrupted by reversals that spike down to where stops are likely to be clustered before continuing in the original direction.

...etc. When the market as a whole is trending strongly or has a strong directional bias, these variables might act one way. When the market quiets down and enters consolidation mode, these variables can be expected to act another way. Some of the variables might also evolve independently of the others, such as the "stop run" variable which might change due to the number of traders in a market or due to the influence of HFT algorithms as they learn and develop.

If you have a system that relies on one kind of behavior only, then you can expect to enter "dry spells" as market conditions change. For instance, if you have a breakout trading system, you'll do great when the market is trending strongly with wide range and multiple trend moves per day, but may do poorly when the market is consolidating and rangebound.

I do think that there are some elements of trading that are more universal than others but the details of how the trades should be executed might change over time.

-----------------------------------------------------

"If you must forecast, forecast often."

-- Edgar Fiedler
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 PandaWarrior 
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Early morning platform issues kept me out of some of my fav setups. Then price just stalled out most of the morning. I was frustrated a bit by this but not so much it made me press trades. I think I took it in stride and was able to see clearly for the trades I did take.

I got chopped up a bit, I quit at -39 ticks. Took off to go with my wife for a few quick errands and came back to see price just selling off like crazy.

I believe in discipline. Like a daily stop. I got close and I knew I could make money once the fireworks started but I did not give in to the temptation to trade. Once I break discipline on something like a daily stop, I'm finished as a trader.

So I just sat and marked my entries and let it go by. It was tough I must say. At some future point, perhaps I'll have the ability to stop at a daily loss point and then if market conditions change like they did today, resume trading. But I know myself well enough at this point to know this is not an option currently. Its like moving your stops hoping the trade will come back. It doesn't work. If it doesn't work on a trade, why take a chance of falling victim to it on a daily stop which is probably more important anyway?


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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I fought the tape today and the tape won.

No excuses.


Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #76 (permalink)
 cory 
the coin hunter
virginia
 
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I fought the tape today and the tape won.

formerly known as aztrader9...added per Big Mike's request

interesting, why name change?

 
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 PandaWarrior 
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interesting, why name change?


Its from the movie Kung Fu Panda. Great story about an overweight panda who through a series of comical errors is on a quest to become the "Dragon Warrior" and save his village from the dreaded villain.

The quest to become worthy to open the "Dragon Scroll" which is supposed to reveal the secrets to becoming the worlds greatest kung fu fighter end with the panda opening the scroll and seeing nothing but his reflection.

He becomes disillusioned until he realizes that he can become a kung fu fighter without some secret. He then goes on to fight the villain and save his village.

The moral of the story? There is no secret. Its what's inside that counts.

More or less anyway...

I recommend watching the movie. Its a kids movie but one of my favorites.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #78 (permalink)
 PandaWarrior 
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Today I just went with the flow. Was up at one point 140 ticks trading one and two lots. Then ninja starting hanging up, chart was dragging behind the dom....executing on a different platform showed me how lagging ninja can be during high volatility. So in the middle of trading, I am emailing back and forth with ninja trader support. They want me to shut down ninja, reinstall, do this and do that. Eventually, I ended up creating a new data base and that seemed to fix the issue.

However, I downloaded InfinityAT and test drove that for a while today. I liked the charting package and the dom a lot but the chart trader feature was hard to use.

Next I have a demo scheduled for CQG as well as a CQG data feed for ninja. Days like today can't happen again.

My emotions today were totally under control. I felt like I was playing a video game with no consequences for losing. Just taking as many of my pattern trades as I could considering the constant battle with ninja. I confess I did cuss ninja a couple of times today!

I suppose I should have quit trading when the ninja issues started. I gave back about a 1/3 of my winnings today and I believe that was primarily a function of being distracted and not giving my full attention to the trading.

All in all, even with the tech issues, I was really pleased with the trading results and with the manner in which I handled the losers and also how I handled the ninja problems.

Tomorrow, will be looking at a slightly less complicated set up. During all the trouble today, I kept reducing the number of charts and indicators on the remaining charts to see if that would help. Turns out I don't think I need some of the stuff I have on my charts. More on that tomorrow.

As a result of the ninja problems, I ended up erasing all my chart notations and after all that, didn't feel like re-creating them from the trade log. So no charts today.

Cheers

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #79 (permalink)
 Lornz 
Oslo, Norway
 
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I feel your pain! I know it all too well... I ditched NT for good after 3 instances like that!

But you should be pleased with your trading. Some of my best days have occurred when I just "followed the flow", critical thinking is way overrated! At least once in a while...

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  #80 (permalink)
 papa15 
Wake Forest, NC
 
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PandaWarrior View Post
Today I just went with the flow. Was up at one point 140 ticks trading one and two lots. Then ninja starting hanging up, chart was dragging behind the dom....executing on a different platform showed me how lagging ninja can be during high volatility. So in the middle of trading, I am emailing back and forth with ninja trader support. They want me to shut down ninja, reinstall, do this and do that. Eventually, I ended up creating a new data base and that seemed to fix the issue.

However, I downloaded InfinityAT and test drove that for a while today. I liked the charting package and the dom a lot but the chart trader feature was hard to use.

Next I have a demo scheduled for CQG as well as a CQG data feed for ninja. Days like today can't happen again.

My emotions today were totally under control. I felt like I was playing a video game with no consequences for losing. Just taking as many of my pattern trades as I could considering the constant battle with ninja. I confess I did cuss ninja a couple of times today!

I suppose I should have quit trading when the ninja issues started. I gave back about a 1/3 of my winnings today and I believe that was primarily a function of being distracted and not giving my full attention to the trading.

All in all, even with the tech issues, I was really pleased with the trading results and with the manner in which I handled the losers and also how I handled the ninja problems.

Tomorrow, will be looking at a slightly less complicated set up. During all the trouble today, I kept reducing the number of charts and indicators on the remaining charts to see if that would help. Turns out I don't think I need some of the stuff I have on my charts. More on that tomorrow.

As a result of the ninja problems, I ended up erasing all my chart notations and after all that, didn't feel like re-creating them from the trade log. So no charts today.

Cheers

I would suggest giving Sierra Charts a look-see....it really is a nice platform....

My focus is on:
1. Avoid the opening chop.
2. Honor stops
3. Ensure reward > risk on all trades
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  #81 (permalink)
 cory 
the coin hunter
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PandaWarrior View Post
...
Tomorrow, will be looking at a slightly less complicated set up. During all the trouble today, I kept reducing the number of charts and indicators on the remaining charts to see if that would help. Turns out I don't think I need some of the stuff I have on my charts. More on that tomorrow.

....

Cheers

less indis, more self awareness, you are on the right track.

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  #82 (permalink)
 PandaWarrior 
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I finished the week mildly profitable. Much less than I could have. No worries though. The learning experience I've had from the last two weeks is immeasurable.

Here's what I learned:

1. I can hold for larger targets IF I fee like it. Yesterday I even watched a 40 tick winner turn into a scratch trade because I thought it should have gone up a few more ticks. When it scratched, my normal gut wrenching feeling of having left money on the table simply wasn't there. I didn't like leaving that money on the table but it didn't freak me out like it used to.

2. I can trade with less charts. I ditched the 36 range chart and simplified both my five minute chart and my 12 range trading chart. Less is more.

3. Taking a cue from the past and my experience with these last two weeks in regards to point number 1, I am now going to set all targets dynamically. Range of day x 10% rounded down to the nearest 5. I'll trade all day with that number and be happy with it.

4. I've really developed confidence in my patterns. I've settled on two main ones and a possible third. This has given me further confidence to further refine not only which patterns but when and how many.

Lastly these last two weeks, I've been working on a business plan. I've had one in the past but simply ignored it as a plan requires some measure of consistency and if one thing has been consistent, its my lack of consistency. But with patterns in place, stops more or less ironed out and targeting dialed in, it was time to put the plan together.

Over the last couple of years, I have complied bits and pieces of the plan. This last week the final piece of the puzzle dropped into place. The proper way to size up and when.

So now the plan includes:

1. Individual trade tracking to determine trading metrics from a statistical point of view. Including MAE and MFE, consecutive winners/losers and which trade set ups work best most often.
2. Goals and a way to measure progress against them.
3. Money management procedures. Money management is very different from trade management. Trade management is about stops and targets. Money management is about sizing, drawdown management, etc.
4. Rules of engagement. Definitions of how, when and where to trade and more importantly, when not to trade. Trade stops and daily stops. Trade targets and daily targets.

These items are all intensely personal. They wont fit every one. My stops/targets will simply not make sense to anyone else. They dont need to. They need to fit me and I need to trade to those metrics.

So on Monday, I am starting fresh. Like I just went through a two year long apprenticeship on how to figure out who the hell I am as a trader and how to actually set up a trading business. I'll be open for business for real on Monday.

While I expect mistakes and will need to make adjustments along the way, I feel pretty dialed in at this point. I've sent my trading plan to three people I trust and I will be accountable to them for adherence to that document.

Cheers.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #83 (permalink)
 tigertrader 
Philly, Pa
 
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PandaWarrior View Post
I finished the week mildly profitable. Much less than I could have. No worries though. The learning experience I've had from the last two weeks is immeasurable.

Here's what I learned:

1. I can hold for larger targets IF I fee like it. Yesterday I even watched a 40 tick winner turn into a scratch trade because I thought it should have gone up a few more ticks. When it scratched, my normal gut wrenching feeling of having left money on the table simply wasn't there. I didn't like leaving that money on the table but it didn't freak me out like it used to.

2. I can trade with less charts. I ditched the 36 range chart and simplified both my five minute chart and my 12 range trading chart. Less is more.

3. Taking a cue from the past and my experience with these last two weeks in regards to point number 1, I am now going to set all targets dynamically. Range of day x 10% rounded down to the nearest 5. I'll trade all day with that number and be happy with it.

4. I've really developed confidence in my patterns. I've settled on two main ones and a possible third. This has given me further confidence to further refine not only which patterns but when and how many.

Lastly these last two weeks, I've been working on a business plan. I've had one in the past but simply ignored it as a plan requires some measure of consistency and if one thing has been consistent, its my lack of consistency. But with patterns in place, stops more or less ironed out and targeting dialed in, it was time to put the plan together.

Over the last couple of years, I have complied bits and pieces of the plan. This last week the final piece of the puzzle dropped into place. The proper way to size up and when.

So now the plan includes:

1. Individual trade tracking to determine trading metrics from a statistical point of view. Including MAE and MFE, consecutive winners/losers and which trade set ups work best most often.
2. Goals and a way to measure progress against them.
3. Money management procedures. Money management is very different from trade management. Trade management is about stops and targets. Money management is about sizing, drawdown management, etc.
4. Rules of engagement. Definitions of how, when and where to trade and more importantly, when not to trade. Trade stops and daily stops. Trade targets and daily targets.

These items are all intensely personal. They wont fit every one. My stops/targets will simply not make sense to anyone else. They dont need to. They need to fit me and I need to trade to those metrics.

So on Monday, I am starting fresh. Like I just went through a two year long apprenticeship on how to figure out who the hell I am as a trader and how to actually set up a trading business. I'll be open for business for real on Monday.

While I expect mistakes and will need to make adjustments along the way, I feel pretty dialed in at this point. I've sent my trading plan to three people I trust and I will be accountable to them for adherence to that document.

Cheers.

Sounds like a very defensive Panda, replete with excuses, espousing a manifesto on Trading Relativism:

there are no universal rules or standards by which to trade
they are totally relative to the trader
and as long as they make him feel good
they are valid, even if they are not optimally profitable

Is your objective to make as much money as possible, or is it to make the process of trading as painless as possible?

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  #84 (permalink)
 monpere 
Bala, PA, USA
 
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tigertrader View Post
Sounds like a very defensive Panda, replete with excuses, espousing a manifesto on Trading Relativism:

there are no universal rules or standards by which to trade
they are totally relative to the trader
and as long as they make him feel good
they are valid, even if they are not optimally profitable

Is your objective to make as much money as possible, or is it to make the process of trading as painless as possible?

I'm not sure I understand your point in reaction to this post. What exactly do you find to be excuses in it?

Ok, my comment on the post is on the following statement:

"So on Monday, I am starting fresh. Like I just went through a two year long apprenticeship on how to figure out who the hell I am as a trader and how to actually set up a trading business. I'll be open for business for real on Monday."

If this is where you are in your journey, figuring out who you are as a trader, should you be 'open for business for real'? ...assuming that means you will be trading live money.

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  #85 (permalink)
 bluemele 
Honolulu, Hawaii
 
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tigertrader View Post
Sounds like a very defensive Panda, replete with excuses, espousing a manifesto on Trading Relativism:

there are no universal rules or standards by which to trade
they are totally relative to the trader
and as long as they make him feel good
they are valid, even if they are not optimally profitable

Is your objective to make as much money as possible, or is it to make the process of trading as painless as possible?

Yes, I don't get the excuse deal either? Please explain as the post just seems 'negative' to me?

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  #86 (permalink)
 tigertrader 
Philly, Pa
 
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"I can hold for larger targets IF I fee like it".

"My stops/targets will simply not make sense to anyone else. They don't need to. They need to fit me and I need to trade to those metrics"

Statements like these lead me to infer that Panda is still allowing his methodology to be influenced by his emotions. They lead to me to believe that he is still rationalizing his actions, i.e., doing what's "right" for him, not necessarily...what is right, hence my analogy to moral relativism.

When I left the floor and started trading on the screen
, I had underestimated the disconnect between the two venues and it wasn’t until I accepted reality; that I didn’t know anything about electronic trading, that I was able to begin to learn how to trade again. Everything I knew as pit trader had to be eliminated from my mind as I begun anew, tabula rasa.

Being honest with myself and letting go of what had worked and served my success in the past, was the most difficult part, but it was the start. It was the greatest psychological hurdle I had to confront and overcome on the road back to becoming a successful trader. But, it was a necessary prerequisite if I wanted to provide myself the best chance for success.

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 PandaWarrior 
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tigertrader View Post
"I can hold for larger targets IF I fee like it".

"My stops/targets will simply not make sense to anyone else. They don't need to. They need to fit me and I need to trade to those metrics"

[COLOR=#000000]Statements like these lead me to infer that Panda is still allowing his methodology to be influenced by his emotions. They lead to me to believe that he is still rationalizing his actions, i.e., doing what's "right" for him, not necessarily...what is right, hence my analogy to [I]moral relativism.

Once again, you missed the point completely. The point is this: I mentioned later on in the post that targets will be based on a percentage of the daily range. Sometimes this is quite large and sometimes quite small. On the larger range days, I will now feel comfortable actually attempting to shoot for those larger targets. At the same time, if its not working, I can reduce the target size if I feel like it or I can continue to try and hold for the larger ones. If I feel like it.

The targets and stops are now based on a rational method instead of something that makes me feel good. Those rational methods need to make sense to me and fit my style. If they don't make sense to someone else, to bad. If in the course of time, the method of determining targets results in sub optimal trading potential, I'll revise. But at least I have a metric to trade to and a method of determining if its working or not. The main point is that its dynamic and hopefully will result in taking what the market will give instead of demanding the market give me some arbitrary figure on each and every trade.

This is precisely the opposite of allowing my emotions to dictate my trading. Instead, I've realized my emotions can and do sabotage my trading and that using rational methods that I am emotionally comfortable will result in more consistency. My rational minds says using targets that are function of ATR or ADR is sound. My emotions never really allowed me the freedom to do that. So I defaulted to irrational targets based on emotion. BUT the last two weeks have shown me that nothing bad happens when I trade rationally. Instead, only good happens. Even losers can be looked as "good" in the sense that a trading plan was followed and that specific trade did not work. As long as the reasons for the trade are the same as for the winners, all is well.

So now, I feel emotionally comfortable trading rationally. Does this make sense?

Simplicity is the ultimate sophistication, Leonardo da Vinci


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  #88 (permalink)
 worldwary 
Williamsburg, VA
 
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PandaWarrior View Post
Once again, you missed the point completely. The point is this: I mentioned later on in the post that targets will be based on a percentage of the daily range. Sometimes this is quite large and sometimes quite small. On the larger range days, I will now feel comfortable actually attempting to shoot for those larger targets. At the same time, if its not working, I can reduce the target size if I feel like it or I can continue to try and hold for the larger ones. If I feel like it.

What daily range do you use for this purpose? The prior day or the current day, or maybe some average of the last X days? If the current day, what do you use for trades that occur early in the session, when range hasn't been established yet?

(Sorry if these details have already been posted and I missed them.)

-----------------------------------------------------

"If you must forecast, forecast often."

-- Edgar Fiedler
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 PandaWarrior 
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monpere View Post
"So on Monday, I am starting fresh. Like I just went through a two year long apprenticeship on how to figure out who the hell I am as a trader and how to actually set up a trading business. I'll be open for business for real on Monday."

If this is where you are in your journey, figuring out who you are as a trader, should you be 'open for business for real'? ...assuming that means you will be trading live money.

Well I could have done a better job of using this metaphor. What I meant is that while I've been trading live for quite a while now, due to the lack of a real plan, I was treating my trading more as a hobby than a real business. However, if you would have asked me if it was a real business, I would have said yes not realizing how wrong I was. This would be coming from someone that has owned several successful businesses over the years.

A real business has products or services with a plan on how to produce or market those goods and services. It has metrics, goals, accounting procedures, a sales methodology, etc..... I had none of these. Now I do. It feels good. This is why I used the term, "I'll be open for real on Monday".

As we all know, success is a journey, not a destination.

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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worldwary View Post
What daily range do you use for this purpose? The prior day or the current day, or maybe some average of the last X days? If the current day, what do you use for trades that occur early in the session, when range hasn't been established yet?

(Sorry if these details have already been posted and I missed them.)

I use @Fattail's volatility bands indicator for the range. It has a setting to allow you to see the current day's range along with your choice of historical range. I have mine set to 3 and ten.

I am using the current Globex range to determine the initial range. As it opens up during the day, the indy keeps up with that of course. If it opens up a lot, I'll adjust my targets, if not, I'll just keep them the same as what the overnight session dictates. As time goes on, I'll measure the effectiveness of this and revise as needed.

I have noticed the current day most of the time approximates the most recent 3 days average range, so I am comfortable not worrying that I might miss out by somehow misjudging the range for the day. Occasionally you get a wild day or a super narrow range that throws off the average but in general, its pretty accurate.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #91 (permalink)
 bluemele 
Honolulu, Hawaii
 
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PandaWarrior View Post
Well I could have done a better job of using this metaphor. What I meant is that while I've been trading live for quite a while now, due to the lack of a real plan, I was treating my trading more as a hobby than a real business. However, if you would have asked me if it was a real business, I would have said yes not realizing how wrong I was. This would be coming from someone that has owned several successful businesses over the years.

A real business has products or services with a plan on how to produce or market those goods and services. It has metrics, goals, accounting procedures, a sales methodology, etc..... I had none of these. Now I do. It feels good. This is why I used the term, "I'll be open for real on Monday".

As we all know, success is a journey, not a destination.

da da da da, PW Grand Opening on Monday! Read all about it... Interesting insight. I enjoy your journey as I think we are on similar paths. Congratulations and will enjoy continued reading of your success.

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 worldwary 
Williamsburg, VA
 
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PandaWarrior View Post
I use @Fattail's volatility bands indicator for the range. It has a setting to allow you to see the current day's range along with your choice of historical range. I have mine set to 3 and ten.

I am using the current Globex range to determine the initial range. As it opens up during the day, the indy keeps up with that of course. If it opens up a lot, I'll adjust my targets, if not, I'll just keep them the same as what the overnight session dictates. As time goes on, I'll measure the effectiveness of this and revise as needed.

I have noticed the current day most of the time approximates the most recent 3 days average range, so I am comfortable not worrying that I might miss out by somehow misjudging the range for the day. Occasionally you get a wild day or a super narrow range that throws off the average but in general, its pretty accurate.

Thanks. I'd never thought of this method of determining targets before. Have you tested this method to see how effective it is?

It could be that price swings tend to remain within a certain percentage of the daily range, and that you'd be unnecessarily greedy to expect more. It could also be, however, that price swings tend to be a higher percentage of the daily range on narrow range days than on wide range days, in which case your targets could be unnecessarily small on the narrow range days. An empirical question of course so I don't know which is more accurate, but it's the kind of thing that could be studied.

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 PandaWarrior 
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worldwary View Post
Thanks. I'd never thought of this method of determining targets before. Have you tested this method to see how effective it is?

It could be that price swings tend to remain within a certain percentage of the daily range, and that you'd be unnecessarily greedy to expect more. It could also be, however, that price swings tend to be a higher percentage of the daily range on narrow range days than on wide range days, in which case your targets could be unnecessarily small on the narrow range days. An empirical question of course so I don't know which is more accurate, but it's the kind of thing that could be studied.

I've added a column in my trade tracker to measure this. I'll probably do some sort of analysis in thirty days or so. Someone remind me and I'll try to post my results and thoughts on this.

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 PandaWarrior 
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Well just barely but enough. Today was not a good day for my method, but I managed to stay green. 10 trades, net of 10 ticks. Not great but most days like this I would have been deep in the red. Staying with my signals and holding for a reasonable target based on ADR on the trades that worked kept me green.

I made one mistake. I took a perfect signal, but price failed to break the high of the previous 5 min candle which is what I use for filtering and so I took off the trade at -2. This turned out to be a good trade, price went to exactly my target and reversed down from there.

Other than that, even though it was not a hugely profitable day, I am pleased with my discipline and patience on a day that tested both.

Cheers.

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 PandaWarrior 
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Today's the first day in a while that I really broke my rules. Truthfully, the rule breaks were due to greed/fear of being left behind. last couple of days has seen very few of my normal set ups and there have been lots of failures in the ones that have shown up. Consequently, was feeling left behind, so instead of being patient, I broke my rules and paid for it. Three times.

So after yesterday's minor victory over impatience, I lose a major battle today with the same beast.

Its been a struggle to get to the place where I really recognize my failures. Now that I do, I must really focus on overcoming them. Trading requires tremendous mental discipline and while I am getting better, its days like today that show me I have a long way to go.


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 bluemele 
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Just a mental way to twist things. Here goes:

1. You do not have this habit, the old you did this occasionally but you do not own it.

2. You are a very patient person and you always wait for the right setups.

3. You trade very well every single day due to your patience and clarity.

Feel it, breath it, be it.

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 monpere 
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PandaWarrior View Post
Today's the first day in a while that I really broke my rules. Truthfully, the rule breaks were due to greed/fear of being left behind. last couple of days has seen very few of my normal set ups and there have been lots of failures in the ones that have shown up. Consequently, was feeling left behind, so instead of being patient, I broke my rules and paid for it. Three times.

So after yesterday's minor victory over impatience, I lose a major battle today with the same beast.

Its been a struggle to get to the place where I really recognize my failures. Now that I do, I must really focus on overcoming them. Trading requires tremendous mental discipline and while I am getting better, its days like today that show me I have a long way to go.

After the recent wild market action, I have found the last few days very difficult to trade. Its easy to make money when the market was moving like it did last week. I just started testing an autotrader at that time, and it was making $3k a day all that week on 1 CL contract , yesterday and today, it is barely breaking even. But, I knew that going in, that last week was not the type of market the method was designed for, so I knew not to fully trust the results. You may be experiencing the same situation. We should be carefull not to base our performance on non-standard market behavior.

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 bluemele 
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monpere View Post
After the recent wild market action, I have found the last few days very difficult to trade. You may be experiencing the same situation. Its easy to make money when the market was moving like it did last week. I just started testing an autotrader at that time, and it was making $3k a day all that week on 1 CL contract , yesterday and today, it is barely breaking even. We should be carefull not to base our assumptions on non-standard market behavior.

I agree, but a Master Trader doesn't have this excuse. He either sits out or he trades well even during these conditions as he recognizes it. Like you said, maybe since things are different then he can adjust accordingly. I guess that is all part of being a MASTER.

The key is to recognize the change and adapt the brain accordingly in my opinion. Easier said than done but I do have faith in it being possible. Just my own perspective.

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