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Peeling The Onion
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Peeling The Onion

  #11 (permalink)
Elite Member
Adelaide, Australia
 
Futures Experience: Beginner
Platform: NT7
Broker/Data: Mirus Futures/Zen-Fire
Favorite Futures: OIL
 
timwr's Avatar
 
Posts: 22 since Jul 2011
Thanks: 5 given, 18 received

Time to launch

So my system is now in place and took my first paper trade this evening on CL. Made 15 ticks profit and journalled how I felt before, during and after the trade. Plenty of self-doubt and fear in the mix.

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  #12 (permalink)
 Vendor: www.indicatorx.com 
Bridgwater, UK
 
Futures Experience: Beginner
Platform: Ninjatrader
Broker/Data: MB Trading
Favorite Futures: Forex
 
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Posts: 384 since Jun 2011
Thanks: 525 given, 344 received


timwr View Post
I'm also thinking of taking PandaWarrior's advise to trade in micro forex as trading OIL with $10 per tick is just too rich for me to test a new system.

Hi timwr,

I'm 18 months into my learning curve and I have been trading forex with micro lots. I've found MB Trading excellent, I use their data feed too. I'm training using a £10KGBP account and typically risk between 0.125 - 0.5% of capital per trade idea and take a couple of trades a day on average.

It has helped me greatly to not have a lot of money at risk whilst I find my way.

I wish you the best.

know thyself
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  #13 (permalink)
Elite Member
Adelaide, Australia
 
Futures Experience: Beginner
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Broker/Data: Mirus Futures/Zen-Fire
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Posts: 22 since Jul 2011
Thanks: 5 given, 18 received



mokodo View Post
Hi timwr,

I'm 18 months into my learning curve and I have been trading forex with micro lots. I've found MB Trading excellent, I use their data feed too. I'm training using a £10KGBP account and typically risk between 0.125 - 0.5% of capital per trade idea and take a couple of trades a day on average.

It has helped me greatly to not have a lot of money at risk whilst I find my way.

I wish you the best.

Hi Mokodo, thanks for the info. Can you tell me what MB trading is?

timwr

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  #14 (permalink)
 Vendor: www.indicatorx.com 
Bridgwater, UK
 
Futures Experience: Beginner
Platform: Ninjatrader
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Favorite Futures: Forex
 
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Posts: 384 since Jun 2011
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They are a broker

MB Trading - Stocks Options Futures Forex Online Discount Trading

know thyself
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  #15 (permalink)
Elite Member
Adelaide, Australia
 
Futures Experience: Beginner
Platform: NT7
Broker/Data: Mirus Futures/Zen-Fire
Favorite Futures: OIL
 
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Posts: 22 since Jul 2011
Thanks: 5 given, 18 received

Sim results to date

I've been trading in Sim a couple of evenings per week since the beginning of July. Trading 1 contract on CL and have taken 8 trades to show $540 profit to date.

Observations:
I get impatient waiting for setups, this can result in me not sticking to my plan.

I always want to have winning trades and get disappointed with losing trades

As I'm trading in SIM there is a lot less emotional attachment to the outcome of a trade, comapred to trading a live account

My trading style is to take quick trades with very tight stop loss (5 ticks). Yesterday there was a 200 tick drop in OIL and I only profited from 10 of those ticks. I think my fear of loss makes me risk very little but that can result in catching the pennies and missing the pounds. Although I suppose it can also result in reduced losses if the trades were to go against me.


Greg Secker appeared in Adelaide last night looking to sign people up to his mentoring program. I thought he was very good however there did tend to be a lot of focus on winning trades, losing trades were not mentioned too much. Attending the seminar last night made me understand how I need to hang out with like-minded people who are doing the same thing as me, something I'm not doing at the moment.

Does anyone know if there's such a thing as a live webinar to hang out at? I'm not looking for a trading room, just possibly a webinar where some charts and strategies are discussed and attendees can have a chat.

Onwards and upwards.

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  #16 (permalink)
Elite Member
Adelaide, Australia
 
Futures Experience: Beginner
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I can clearly see now how I enter a trade using my rational mind and a rational system however I seem to manage the trade with my emotional mind, hence the fear of loss and then doubt as to when I should close the trade.

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  #17 (permalink)
 Vendor: www.indicatorx.com 
Bridgwater, UK
 
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timwr View Post
I can clearly see now how I enter a trade using my rational mind and a rational system however I seem to manage the trade with my emotional mind, hence the fear of loss and then doubt as to when I should close the trade.

Hi timwr,

For a time this was my biggest issue. In my case it came down to two things: first I was not sure if I trusted my system to actually make money and second - if I could gather some evidence that the system could be profitable, then how could I trust myself to trade it consistently and liberate that profit?

Both questions are taking some time to resolve. In the first instance I backtested my system, and had to learn to code to do that. My system has some discretionary elements so the backtesting was to provide me with an answer to the first question but not in black and white terms. I accepted that I would need to live in a shades of grey world. The backtesting, and perhaps more illuminating the Monte Carlo runs, shed some light on the likely boundaries of the 'codable' parts of my systems. Confidence level of getting more than 10 losers in a row, maximum and average draw downs, things like that. Armed with this I thought - ok, if I can trade it I know how bad things could get, and I put together a risk plan / money management approach that could keep me in the game and not totally strung out if the worse happened.

That was the easier of the two issues to deal with. Feels like the second will be a journey rather than a destination. (Trying to) trade the system within a rule set, for me at least, means reminding myself that I am living in a world of probabilities - no one trade matters. And working on the process, ignoring the outcome. I use a suite of tactical tools that help me try to achieve this.

For example, in addition to a journal I use individual trade cards which have a tick list for entries and trade management. I have recently struggled holding trades for the amount of time my system tells me to. 5x15 minute bars for one set-up, 10x15 minute bars for the other. Now I have a line on my trade card that says "5/10 bar patience Y/N, Explain." I have to note down if I have waited the 5/10 bars and if not I must explain why. Since I've added this specific thing I have kept to the rule 100% (so far!). Another element on the trade card is to calculate what errors I have made and what that has cost me.

I review the trade cards at the end of each day, week and month and these always highlight an area for improvement. I 'll then amend the card to include that issue if needed.

Not saying that this will work for anyone else except me but I've attached an example for reference (the file will ask about macros, which I can't seem to disable) - there is a further bit titled 'Trades Passed' which you can ignore . (I took the trade card idea from "A Trader's Money Management System" By Bennet A Dowell. A good introduction and can be read in an afternoon.)

know thyself
Attached Files
Register to download File Type: xls Trade_Card.xls (28.5 KB, 16 views)
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  #18 (permalink)
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Futures Experience: Beginner
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Posts: 22 since Jul 2011
Thanks: 5 given, 18 received

Hey mokodo,

thanks for the info and insights. I thought about what you said and I think I need to clearly set myself up mentally before each trade. I'm currently so attached emotionally to the outcome of my trades.
  • Impatience - Sometimes I can't wait for a setup as they are a long time coming so I justify in my own mind that I should just take a trade that doesn't fit my plan.
  • Hope - once I'm in a trade it's like a white knuckle ride and I'm hoping it is profitable
  • Fear of loss - i just want every trade to be a winner.
  • Disappointment - when it's a loss-making trade

BUT my system is profitable and I worry unduly about situations that may never occur or are never as bad as I envision they may be.

Sometimes I feel like I'm going around in circles especially when I break my own rules and then need to mentally re-promise to myself that I'll stick to my system next time.

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  #19 (permalink)
 Vendor: www.indicatorx.com 
Bridgwater, UK
 
Futures Experience: Beginner
Platform: Ninjatrader
Broker/Data: MB Trading
Favorite Futures: Forex
 
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Posts: 384 since Jun 2011
Thanks: 525 given, 344 received

Trading is a mental game, but you have given yourself a great head start because you have a system that you have proved profitable in theory. That is a great platform to build on.

I am just a novice myself and I really relate to the things you are dealing with. There are other ideas that spring to mind that have helped me, in no particular order:

Rather than try to control the market (that feeling of frustration when a trade idea doesn't work out and you are willing price to turn your way) - focus only on controlling the things you can actually control, i.e. when to take a trade, how much risk you put on and how you manage it. Grade yourself on how well you do those things, not the outcome of individual trades.

Protect your mental capital (if your strategies allow you to) by setting and forgetting trades with stop and take profit orders sat in the market. This was the only way I could break the habit of intervening with my trades. Now I can monitor without feeling like I'm on a roller-coaster. Initially I would put on the trades and force myself away from the screen for an hour at a time. I'd walk the dog or attend to DIY jobs. Something that got me out of thinking about the trade. It suddenly didn't seem that important once I got some distance.

Trade ridiculously small. And I'm talking pennies - or in SIM. That way the money becomes irrelevant and you can only focus on your execution. Get a track record at this level that shows you you can do this!

Record and analyse eveything you do. I recently went through the last years journals, trade cards and work books, that in itself was a three day project. I tried to work out why I had good spells and bad spells and if patterns of behaviour had triggers. All the answers were in those scrawled notes written in the heat of battle.

Be realistic with your expectations. What is your game plan? I started out expecting to be self-supporting in 12 months. I'm sure some people achieve this, but I soon realised I wouldn't. I'm expecting a 5 year time frame and I spend full time hours on my trading business. I class break-even after costs as success at the moment. As long as I am 'progressing' I am happy to keep going. Are you depending on your trading income to live?

I try to limit a full analysis of my performance to a monthly timeframe. That way I can try to 'play the next point' not think about the match.

Become a student of trading psychology, there are many book and authors in this area that offer great advice

Sorry for the rambling response, I was clarifying my thoughts as much as answering your previous post!

And one more thing I'd like to mention. Trading is incredible tough, even with a profitable 'system' and experience counts for a great deal. There are many many very experienced traders here on futures.io (formerly BMT) and I personally treat the forum as my 'mentor' resource.

know thyself
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  #20 (permalink)
Elite Member
Toronto, Canada
 
Futures Experience: Advanced
Platform: NT
Broker/Data: TD Ameritrade, Dorman/Zenfire
Favorite Futures: CL,ES
 
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timwr View Post
Hey mokodo,

thanks for the info and insights. I thought about what you said and I think I need to clearly set myself up mentally before each trade. I'm currently so attached emotionally to the outcome of my trades.
  • Impatience - Sometimes I can't wait for a setup as they are a long time coming so I justify in my own mind that I should just take a trade that doesn't fit my plan.
  • Hope - once I'm in a trade it's like a white knuckle ride and I'm hoping it is profitable
  • Fear of loss - i just want every trade to be a winner.
  • Disappointment - when it's a loss-making trade

BUT my system is profitable and I worry unduly about situations that may never occur or are never as bad as I envision they may be.

Sometimes I feel like I'm going around in circles especially when I break my own rules and then need to mentally re-promise to myself that I'll stick to my system next time.

Handling , or managing, the phsychological side of trading is the most important aspect of profitable trading. It is because we are waging a battle between the 6 inches between our ears.

It is the self management that makes it so difficult. As traders, we are accountable to ourselves, and only we know whether we stuck to our strategy. It is we, as traders, that came up with the strategy in the first place.

For myself, I have to have my startegy in place before I enter a position. Gary Dayton talks about this on one of futures.io (formerly BMT) webinars.That means price point, Stop loss, target. I have already taking the price action into account, as well as where is support or resistance. Once the trade is on, I now only manage to its completion. In fact, I attempt to visualise the entire trade from begginning to completion. Why...so that there as few surprises as possible, which gives me confidence to see the trade through to its completion, whether it is profitable or not.

A trade can do 1 of 2 things, go up or down. Outcome is random... You edge is based on probabilites of your ability to recognise market conditions of your instrument for a profitable outcome.

Here is an exmplae of my 5 minute below.One of these 2 outcomes...higher or lower, will happen today. to stay between the 2 lines is highly unlikely. My job is determine what outcome is more probable. If I can do that consitently, I will be profitable.

But I will be wrong. Every loss provides me more nformation, which I paid for with real dollars, so I better learn from it, or the money was a poor investment.

Check out the Dayton webinar...

Webinar: Trading Psychology

(The 5 minute is as of this writing) 8:00am

Hope this helps.

PS. here is teh end of the day chart...What did you do today? 3:15 PM

Attached Thumbnails
Peeling The Onion-cl-09-12-5-min-example-7_25_2012.jpg   Peeling The Onion-cl-09-12-5-min-end-day-7_25_2012.jpg  

Last edited by VinceVirgil; July 25th, 2012 at 04:21 PM. Reason: additional chart.
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