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Short term TF trading


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Short term TF trading

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  #201 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012


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  #202 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012


leaving initial runner on

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  #203 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012


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  #204 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

I'm pretty pumped about starting in a 3k drawdown this am, staying in the right mindset, trading well, and bringing it back to a little over +1k on the day.


I'm done for the day. If anyone has any questions, or wants to know anything about the trades today, don't hesitate to ask.

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  #205 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

haha. I wanted to share one more thing.

I'm in the process of moving, and here's my badass trading setup I traded from today. haha

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  #206 (permalink)
 catdriver 
Hot Springs, Arkansas
 
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indextrader7 View Post
I'm pretty pumped about starting in a 3k drawdown this am, staying in the right mindset, trading well, and bringing it back to a little over +1k on the day.


I'm done for the day. If anyone has any questions, or wants to know anything about the trades today, don't hesitate to ask.

Good job IT7,,,

Hell, I was pretty pumped just watching it unfold...i got chopped up near the open and ejected with an 11tick loss.
As i watched you getting some of the same action, i like seeing you perservere(?) and keep swinging. That's my greatest failing as i see it...not getting back on the horse.

Anyhoo..2 questions:

1) Does or has volume played any part of your trading and
2) How many rounds of ammo after a day like this

-Mike


p.s. Sweet set-up

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  #207 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012


catdriver View Post
Good job IT7,,,

Hell, I was pretty pumped just watching it unfold...i got chopped up near the open and ejected with an 11tick loss.
As i watched you getting some of the same action, i like seeing you perservere(?) and keep swinging. That's my greatest failing as i see it...not getting back on the horse.

Anyhoo..2 questions:

1) Does or has volume played any part of your trading and
2) How many rounds of ammo after a day like this

-Mike


p.s. Sweet set-up

Let's first start by talking about your weakness. It all comes down to your belief systems. From Mark Douglas, if you,
- Have your edge defined, and have confidence in that edge
- Know, and know that you know, that ANYTHING can happen at any time. You can't predict.
- Therefore there will be a random distribution between your wins and losses, we don't know when.
- Completely accept the risk (part of doing business as a trader, embrace it, don't fear)
- Act on your edges without hesitation (afterall, an edge is nothing more than a higher probability of A over B)
- Pay yourself as the market makes money available to you.
- Continually monitor my succeptability for making errors.
- Understand the necessity of these principles and never violate tham.

THIS ^^^ IS SOMETHING I REFER TO QUITE FREQUENTLY TO MAKE SURE I'M IN THE RIGHT MINDSET.

I used to look at volume all the time. I probably should.... but eh... I survive without it.

Many rounds, many many rounds. haha

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  #208 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

@cmmichaels,

No sound on the videos today. Don't have my mic with me at the new place yet. Hopefully they're still useful. If you have any questions about any actions during the trade, let me know where it's at in the video and I'll tell you reasoning (hopefully there was reason behind it!).

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  #209 (permalink)
 WarEagle 
Birmingham, AL
 
Experience: Intermediate
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indextrader7 View Post
haha. I wanted to share one more thing.

I'm in the process of moving, and here's my badass trading setup I traded from today. haha


Ha! Love it. Just shows you don't need 12 (or 2) screens to make a living.

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  #210 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

Spent all evening making this... thank you trading software stats for being useless.


Looks like I can really improve my bottom line by having hard stops at -$360 area.

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  #211 (permalink)
 WarEagle 
Birmingham, AL
 
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indextrader7 View Post
Spent all evening making this... thank you trading software stats for being useless.


Looks like I can really improve my bottom line by having hard stops at -$360 area.


It definitely looks like most of the trades that go beyond that area are closed at or near the MAE line so they aren't recovering by that point.

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  #212 (permalink)
 Big Mike 
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Just a note, you can directly attach MP4 or FLV videos to a post, and they will play instantly on futures.io (formerly BMT).

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  #213 (permalink)
 sambar 
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I notice on your videos when placing an order you have a pop up "confirming order placement" if you do not want to see this just go to tools -------> options and untick the confirm order placement box

Regards
Sam

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  #214 (permalink)
 indextrader7 
Birmingham, AL
 
 
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Big Mike View Post
Just a note, you can directly attach MP4 or FLV videos to a post, and they will play instantly on futures.io (formerly BMT).

Mike

Will they show up as a link (like they do now), or will they show an embedded player like the youtube videos do?

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  #215 (permalink)
 Big Mike 
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indextrader7 View Post
Will they show up as a link (like they do now), or will they show an embedded player like the youtube videos do?

They have download links + a 'Play Video' link which will pop-up a window to play.

Mike

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  #216 (permalink)
eacherlunch
birmingham, al
 
 
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indextrader7 View Post
haha. I wanted to share one more thing.

I'm in the process of moving, and here's my badass trading setup I traded from today. haha

wow, thats a sweet mouse pad.

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  #217 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

Scalping the chop.

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  #218 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

Done for the day today. Time to finish moving.

Overall really good trading.

Good things:
Especially happy with recognizing a choppy early session, and adjusting my trading to profit from it, then adjusting immediately as volatility picked up and swings widened out/trends developed. That's really a major key to trading. Recognizing the structure/environment you're in.

Bad things:
As you can see, I let one loser get too big (-18 ticks) and that hurt my performance today. Here's the ticks (average ticks per contract) for each trade.
+4
-18
+12.75
+5.5
+9
+4.25
+10
-9.5
+13.5
-4
+4.5
-5.5
+6.5
+10.5

Here's the daily P/L for the week:

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  #219 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

Still don't have my microphone to record, but I inlaid text notes to describe every single trade entry today.

Screenr - indextrader7: Written explanations for trade entries today.

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  #220 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

Barely staying above water today... so far...

Not the case now! :-) :-)

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  #221 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

I got risky today, traded a bit more size. Increased my max drawdown to -5.3%, but made a killing.

Today's trades and daily P/L for the week:


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  #222 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012



Nothing impressive by any means, but thought I'd share.

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  #223 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012


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  #224 (permalink)
 cmmichaels 
London England
 
Experience: Intermediate
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Great trading IT7 really happy for you just finished work so looking forward to watching todays video. hope the move and exam went well.

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  #225 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012


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  #226 (permalink)
eacherlunch
birmingham, al
 
 
Posts: 18 since May 2012
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Nice trading today IT7! Killed it indeed. Cant wait for the video.

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  #227 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

THIS IS A TRANSPARENT TRADE JOURNAL, NOT AN EXAMPLE OF ALWAYS PROPER TRADING. Keep that in mind.

I'll do a video and show what I did, but I'm not terribly proud of it. I took a lot of risk, I was negative ticks today. That means I just happened to be right when I had a lot more size on that when I was wrong. Traded with a lot of conviction today, not something I usually do.

Again, I'll show the trades, but I don't recommend trading like I did today.

THIS IS A TRANSPARENT TRADE JOURNAL, NOT AN EXAMPLE OF ALWAYS PROPER TRADING. Keep that in mind.

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  #228 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

Screenr - indextrader7: 5-24 trade recap part one

Screenr - indextrader7: 5-24 trade recap part two

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  #229 (permalink)
 Nicolas11 
near Paris, France
 
Experience: Beginner
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Hi indextrader7,

Thanks again for the very existence and the quality of your journal. It is very very interesting and inspiring.
I really like your trading style ( even if it would probably not suit to me! )

Would you allow me some questions, for my better understanding of the above messages?

a) Is the "max drawdown" the maximum drawdown in the trading capital observed during a trading session? If yes, it means that at one minute, you were at 94.7% (100%-5.3%) of your trading capital calculated some time ago during the same session. Correct?

b) Do you put limits to your drawdown during a session (walkaway rule or similar) or do you trade and only calculate the actual max drawdown at the end of the session?

c) In the win/loss ratio, what are the definition of winners and losers? Is it "winner = trade with gain" and "loser = trade with loss" or is it something different (for instance, "winner = profit target reached" and "loser = negative or scratched-positive")? I guess that I am right, because you do not seem to use profit target, but I just wanted to be sure.

Sorry to disturb you with these questions and... congratulations!

Nicolas

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  #230 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012


Nicolas11 View Post
Hi indextrader7,

Thanks again for the very existence and the quality of your journal. It is very very interesting and inspiring.
I really like your trading style ( even if it would probably not suit to me! )

Would you allow me some questions, for my better understanding of the above messages?

a) Is the "max drawdown" the maximum drawdown in the trading capital observed during a trading session? If yes, it means that at one minute, you were at 94.7% (100%-5.3%) of your trading capital calculated some time ago during the same session. Correct?

b) Do you put limits to your drawdown during a session (walkaway rule or similar) or do you trade and only calculate the actual max drawdown at the end of the session?

c) In the win/loss ratio, what are the definition of winners and losers? Is it "winner = trade with gain" and "loser = trade with loss" or is it something different (for instance, "winner = profit target reached" and "loser = the rest")? I guess that I am right, because you do not seem to use profit target, but I just wanted to be sure.

Sorry to disturb you with these questions and... congratulations!

Nicolas

Great questions, glad to answer.

a) Yes max drawdown is during the session every trade's P/L is used. Correct.

b) I've often thought it a good idea to have a daily loss limit, but I've never been able to apply one. Yes, the max dd calculation is just for performance review at the end of sessions, but I know what's going on and a rough estimate of what kind of drawdown I'm in while I'm trading.

c) win:loss ratio... A win is any trade with a tick P/L greater than zero. A loser is any trade with tick P/L < 0. I most always use a profit target on the first half of my position, and try and let the 2nd half run.

Hope this helps.

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  #231 (permalink)
 Nicolas11 
near Paris, France
 
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Over-clear. Thanks!

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  #232 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

After spending more time here at futures.io (formerly BMT), and seeing what other people say about being arrogant and making things about money, I don't think I should be posting any more P/L figures.

This is a trade journal and we'll make it about the entries, exits, and management of them, my mindset, fears, mistakes, and successes.

I think I've done a fair job so far in making the journal mainly about those things, but I really don't want people to think I'm arrogant or just trying to get followers on the journal for posting $ P/L. I just started doing it because ninjatrader made it easy, and one of the main themes of this journal is transparency.

Back to focusing on ticks P/L and posting from my excel sheet trade log.

Any comments on this issue are welcomed.

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  #233 (permalink)
 bingo17 
toronto canada
 
Experience: Intermediate
Platform: Ninja
Trading: CL
 
Posts: 54 since Jan 2010

IMHO...this is the finest journal on here...that's not a shot at anyone else...it just speaks to me in spades...and the transparency is to be commended...you're just showing the good bad and the ugly...nothing wrong with that IMHO.

Keep up the GREAT work...and thanks again for taking so much of your time and sharing!!!!!

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  #234 (permalink)
 Nicolas11 
near Paris, France
 
Experience: Beginner
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Hi again,

I think that your journal is excellent. In particular, but not only, the part about your "accounting". Not in order to know your figures. But to understand the metrics and methodology you use to follow-up your work.

With respect to the figures themselves, two comments.

First, as an aspiring trader, I appreciate your transparency about P&L. Even if everybody's journey is different, it is good to have some benchmark, some ideas about what is possible or not. I do not say that your results are "standard", far from that. I think that you are very skilled and that your results are excellent. And I remember you said that you "struggle every day" (your words).

When we go along the journey of trading, I think that it is not useless to have some references about what we could see on the road.
Some people say that 5% of the traders become consistently profitable. But what does it mean in term of figures? How many % of capital per day in average? For which risks? Etc.
For some happy few, "sky is the limit". But what does it mean?

I do not want to launch a debate on your thread about the 95+5 or the "possible" profitability figure. I kindly ask futures.io (formerly BMT) members not to react to these aspects. Other threads exist for this purpose.

And, of course, it is not because trader A does this that trader B can reproduce it. Of course not. Everybody has his own way, and his own results.

But your thread shows what is possible for you. And I would say that having seen your success in $ so far has been very encouraging for me, and gave me some additional energy.

Second, I think that the people who think that talking about P&L is arrogant have not solved all their psychological issues towards money. It could be a problem for their trading. I do not pretend to have solved all mine, but one would first try to do it instead of criticizing other people's threads.

I would prefer that you change nothing. But, it is your journal: do as you want!
I will anyway read it with great pleasure.

Nicolas

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  #235 (permalink)
 catdriver 
Hot Springs, Arkansas
 
Experience: Beginner
Platform: ninja
Broker: optimus
Trading: ES
 
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Posts: 30 since Feb 2012
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Hi IT7..

I for one am interested in your process you go through to get to the destination
you desire. And that, i think, is in the trades themselves...good or bad...why
or why not...satisfying or not.

As a newer trader, I am of the opinion that if I want to learn, then I need to
see how others do it, (Good or Bad) and in that, i like reading yours as well as all
the other traders who are nice enough to go through the hassle of putting yourself
out there to journal and then answer questions. I can see some examples of journallers
who are getting more stressed about comments on their thread than the actual trades
they are making. So please don't worry about us the readers, this is about your trading.

I can only speak for myself, but i'd say don't worry it. We can keep track of ticks either
+ or -. The journals i like are the ones that have been around awhile and you can see
where they win some and lose some and you can see their process.

I just hope your still in that catagory in a couple years buddy, because i gotta tell you,
seeing that revenge trading was painful. I know my conservative side is a little tight, but
I sure wish you'd work out a max drawdown into your trading, or set aside a chunk of your
profits to refund your account when another day like this happens and it doesn't work out
as well.

I don't mean to overstep my bounds, maybe you've already done this....and remember this
IS the pot calling the kettle black, as i have not made a rule yet that's been able to stop me

Just my 2 cents and keep up the good work
-Mike

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  #236 (permalink)
 quantismo 
Waco TX.
 
Experience: Advanced
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Trading: anything with the slightest edge..
 
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Its good to see a trader as candid about there trading as you are, you have one of the best journals here IMO. I wouldnt change a thing but thats up to you . I saw the chop this morning and decided to stay out of the market myself, was looking forward to seeing how you faired in those shark infested waters.


Quantismo

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  #237 (permalink)
 tihfa 
detroit, mi
 
Experience: Beginner
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Trading: SPY
 
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indextrader7 View Post
After spending more time here at futures.io (formerly BMT), and seeing what other people say about being arrogant and making things about money, I don't think I should be posting any more P/L figures.

This is a trade journal and we'll make it about the entries, exits, and management of them, my mindset, fears, mistakes, and successes.

I think I've done a fair job so far in making the journal mainly about those things, but I really don't want people to think I'm arrogant or just trying to get followers on the journal for posting $ P/L. I just started doing it because ninjatrader made it easy, and one of the main themes of this journal is transparency.

Back to focusing on ticks P/L and posting from my excel sheet trade log.

Any comments on this issue are welcomed.


it7,

first of all thanks again for the journal...very generous of you to show your trading and most of all teach us!

regarding P/L I think there is a benefit in showing it as far as your activity being a real-life activity that many people including myself aspire to. bottom line is, p/l is all we aspire to and it makes this journal is more concrete rather than just for educational purpose trade and size management.

whatever you are comfortable with. it's all good.

thanks again,
tihfa

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  #238 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

What a moment today has been for me. My first time to ever break 100% return threshold. Thanks for all your support, comments, questions, critiques, and ideas. What a moment.



Slightly different % gain and drawdown than my current account (for May's return/drawdown), due to some changing around when I switched to ninjatrader in early May. This is my older spreadsheet with my initial account value as the starting point. Just in case someone noticed the slight difference.

Savor this today, back to work tomorrow.

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  #239 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012


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  #240 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012


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  #241 (permalink)
 cmmichaels 
London England
 
Experience: Intermediate
Platform: Metatrader
Trading: Spot $
 
Posts: 91 since Apr 2012
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indextrader7 View Post
After spending more time here at futures.io (formerly BMT), and seeing what other people say about being arrogant and making things about money, I don't think I should be posting any more P/L figures.

This is a trade journal and we'll make it about the entries, exits, and management of them, my mindset, fears, mistakes, and successes.

I think I've done a fair job so far in making the journal mainly about those things, but I really don't want people to think I'm arrogant or just trying to get followers on the journal for posting $ P/L. I just started doing it because ninjatrader made it easy, and one of the main themes of this journal is transparency.

Back to focusing on ticks P/L and posting from my excel sheet trade log.

Any comments on this issue are welcomed.

Hi IT7

I like everyone else who has commented agree for me this is the best journal I have ever read I have learnt so much about the psychology of trading I don't think anyone would read this and say you are posting your results to be arrogant. I think it is more the other way round you are being completely open and honest and showing the good and the bad which is a very brave thing to do.

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  #242 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

On one hand, this was a very profitable week, but I took too much risk, and don't feel good about my performance. I'm negative on my average ticks per contract p/l for the week. Not good trading. I've got to be more consistent with my methodology and not feel the need to be right on trades at times and load up too many contracts. I think I got a bit laxed in my risk management and trade selectivity. It could be from having the performance I've had so far this year. Several times in my life I have had the tendency to slip at things once I get really good at them (not saying I'm a really good trader, just saying my performance has been) It's perfect timing for a long weekend for reflection and to get back to what's most important in trading, and that's managing risk.

Daily P/L for the week.



Here's the problem... My returns this week came completely from position sizing. If I would have traded the same position size all week, it would be a losing week. Not good. Here's two charts I whipped up showing this week's $ P/L and ticks P/L to see the difference.



Thank you guys for the kind words on the journal.

Any comments are quite welcomed as always.

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  #243 (permalink)
 Boomer34 
Georgia, USA
 
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Great journal!

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  #244 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

Can't wait to trade tomorrow. I'm holding off on any more scalping for now. Had a profitable week, but it was totally due to position sizing (AKA risk). I Don't even have a 2-range chart up anymore. Backing out a bit to 250 tick, 3 min, and 30 min (short, mid, and long term charts respectively).

Back to pure price action trading on more reasonable intraday timeframes.

Found a good quote:

"It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so." -Mark Twain

SO true in trading.

More details on the move away from scalping methods:

As I mentioned, I was negative ticks/unit trading much more than I have been in the past. Ok, why was this? After much consideration, I think it comes down to not feeling comfortable with knowing where to place stops when I"m so "zoomed in" to tiny price action taking blind limit entries on pullbacks. When I'm trading support/resistance instead of those blind entries, I am absolutely certain where my stops will be.

This lack of comfort in placing stops led me to then add to positions more than I should. When I take a look on longer timeframes at many trades I took scalping, they look absolutely insane.

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  #245 (permalink)
 TrendTraderBH 
Detroit, Michigan
 
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indextrader7,

Great journal....one of the few I read regularly mostly because I learn a lot from it.

Question about last week's trading - you mentioned one day that you had suffered an intraday drawdown and took on much more position size (risk) to reverse your loss and turn it into a massive daily gain.

Do you feel that by doing this you could have dug yourself an even deeper hole? Do you feel that your successful attempt at reversing a drawdown into a massive gain could potentially hurt you in the future?

Reason for my question: this happened to me a few times trading stocks earlier in my trading career and resulted in a blown out account as I relied on it one too many times.

Interested to hear your thoughts and good trading.

Thanks.

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  #246 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012


TrendTraderBH View Post
indextrader7,

Great journal....one of the few I read regularly mostly because I learn a lot from it.

Question about last week's trading - you mentioned one day that you had suffered an intraday drawdown and took on much more position size (risk) to reverse your loss and turn it into a massive daily gain.

Do you feel that by doing this you could have dug yourself an even deeper hole? Do you feel that your successful attempt at reversing a drawdown into a massive gain could potentially hurt you in the future?

Reason for my question: this happened to me a few times trading stocks earlier in my trading career and resulted in a blown out account as I relied on it one too many times.

Interested to hear your thoughts and good trading.

Thanks.

Of course I could have dug myself into a deeper hole! Anything can happen at anytime in the markets, and there was no certainty I was going to be "bailed out"... and that's exactly how it felt.

It actually is confusing to me that you ask... beause in my own mind I made it very clear that I was not happy with this type of trading, and understand that is extremely too much risk, and not even necessary since I have a great edge. It's embarrassing to me to even post here that I did such a thing. Real lack of professionalism on my part. I hope this clarifies my thoughts on it.

Ultimately it's a weakness of belief system on my part. If I TRULY 100% believed that I had a significant edge, and that an edge is only a higher probability of A happening over B, and that there was a random distribution between winners and losers, and that anything can happen at any time.... I wouldn't even think of putting on a trade like that. It doesn't coinside with the aforementioned belief system.

The belief system it DOES go along with is that... I KNOW WHAT THE MARKET IS GOING TO DO, AND HOW DARE IT GO THIS FAR AGAINST ME, I ABSULUTELY KNOW IT WILL TURN AROUND. I HAVE A HUGE DESIRE TO "BE RIGHT" ON THIS VERY TRADE.

Very bad stuff.

Thanks for the question, and see you around!

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  #247 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012


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  #248 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012


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  #249 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

It's so. damn. hard. not to take profits sometimes. Up 31 ticks on the runner, and fighting not to close it out every five seconds. ha.

9:39 tightened stop. out.

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  #250 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

Overall pretty good trading today. Had a few minor issues transitioning away from the scalping mindset, but overall the transition was smooth.

+11.6 ticks for the session
-3.0, +11.0, -12.0, +14.0, -10.0, -2.0, -5.0, -16.0, +24.8, +3.0, +1.5, -15.0, +3.0, +15.5, -9.5, +11.5, -0.2

I consider both the -16 and -15 trades to be trading mistakes. Those losses should have been better managed.




More detailed trade recap to follow.

Hope you guys are doing well today.

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  #251 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

Highlight my mistakes for the day in this video.

Screenr - indextrader7: 5-29-12 recap

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  #252 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

I'm looking for a flawless day today. Not a perfect read on the market direction, but rather a perfect read on myself. I don't want to make impatient entries, no trade decisions based on the last trade/missed trade, and no adding to positions creating a position larger than 8 contracts.

These are my process goals today. The rest should take care of itself.

Kick the tires and light the fires.

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  #253 (permalink)
 indextrader7 
Birmingham, AL
 
 
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  #254 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

T1 hit so half off, stop moved down to protect profits on 2nd half

out 761.6 for 2nd half (due to slowing momentum of down swing on shorter timeframe, but premature exit as I type this, oh well). That'll be it for me today.

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  #255 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

Who would like to take a shot at the reasoning behind that short entry?

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  #256 (permalink)
 cmmichaels 
London England
 
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It looked like it was a nice retest of that swing low from earlier which looked like it was the low of the day for quite a while maybe it was more of a significant level than that?

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  #257 (permalink)
 indextrader7 
Birmingham, AL
 
 
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cmmichaels View Post
It looked like it was a nice retest of that swing low from earlier which looked like it was the low of the day for quite a while maybe it was more of a significant level than that?

Good analysis. I'll put up a chart showing all the thought process, including a big concern entering the trade.

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  #258 (permalink)
 indextrader7 
Birmingham, AL
 
 
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  #259 (permalink)
 indextrader7 
Birmingham, AL
 
 
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Hope you guys are in this one. Same setup again.

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  #260 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

Came across this tonight, and I think I'm going to (possibly, given our conversation here and further research) start focusing on it as a trade performance metric.

I'm using it as daily P/L : daily max drawdown. That is... each bar on the chart below is a ratio of the P/L for the day to the maximum drawdown experienced during that day.


Is anyone else keeping up with this stat? Please post here, or PM me regarding this if you're a profitable trader and keep up with this, or if you have any insight into this stat at all!

I am CLUELESS as to whether these results are awful or great. Intuitively I put a "benchmark" at 1:1 as this seems like a good level to be over. Should I be over 1:1 more consistently? That's what I really want to know.

Looking forward to hearing from ya'll.

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  #261 (permalink)
 josh 
Georgia, US
 
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indextrader7 View Post
I'm using it as daily P/L : daily max drawdown.

Not really a response to this, but how about the performance metric of profit as a function of risk? In other words, I made $1000 today, but my risk assumed was $2000. Not as preferable as making $800 but risking only $400, from a risk management perspective.

This one is kind of hard to quantify depending on how one trades. For example, not everyone uses a true fixed stop on each trade. I have a disaster stop (for me about 6-8 ES points, 24-32 ticks), but I want to see how the market responds when I enter a trade, so I do not always have a quantified risk every time. Thus, the lines become blurry. However, in general, I think it's a good metric to keep track of.

Van Tharp calls these R-multiples. If I risk 8 ticks and make 4, my profit is 1/2 my risk, or 0.5R. If I have another where I risk 20 and make 50, my profit is 2.5R, for an average of 1.5R. If I have a loss of -1R, then the average for all three goes to 0.66R. So, after a large enough sample, I get an idea of how much I can expect (expectancy) to make on any given trade, based on how much I risk. Again, it's a bit murky but can be useful.

I like your idea of profit versus drawdown. I suppose you are measuring open, unrealized drawdown, not just closed losses? In other words, if I have a trade that goes against me 50 ticks and then I close it at breakeven, my drawdown was still -50 ticks. That would be the only reasonable way to calculate it, as the brokers care about unrealized losses just as much as they do closed losses

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toucan94506
danville ca usa
 
 
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Indextrader7 said:

Is anyone else keeping up with this stat? Please post here, or PM me regarding this if you're a profitable trader and keep up with this, or if you have any insight into this stat at all!

I am CLUELESS as to whether these results are awful or great. Intuitively I put a "benchmark" at 1:1 as this seems like a good level to be over. Should I be over 1:1 more consistently? That's what I really want to know.

Looking forward to hearing from ya'll.




I’m not sure what this chart represents… kind of looks like profit/loss factor. How you trade by varying contracts, stops, targets….. It looks like it might be difficult to find a really good measure, other than what you are already tracking by tick profit and tick drawdown.

I looked at this a Long time ago and I think I used to track a lot of what you are looking at today. But over time, as I changed how I trade to fit the risk/reward profile that makes me comfortable, I found that I couldn’t use the canned reports from trading software.

I am very risk averse, so I use an initial stoploss that varies by symbol, trade 3 contracts all in, first profit target to insure minimal losses (to improve my win/loss ratio) and second profit target set to try to gain a 3:1 profit/loss factor or more. Most systems track 2 profit targets as 2 trades and I wanted to track 2 profit targets as 1 trade. So I track everything by hand in a spreadsheet.

A couple of times a year I look at:

profit/loss factor
want minimum 3:1/symbol
getting about 2.5:1 but varies by symbol

win/loss ratio
want >50%/symbol
getting about 62% but varies by symbol

Every couple of months, I look at:
Profit by symbol (11 symbols, may be another 2 next year)
Profit by day of week (Monday through Friday)
Profit by setup (pullback, consolidation, reversal and support/resistance break)
Profit by entry time (covers 8 hours daily)


Hope this helps

Toucan

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  #263 (permalink)
 Nicolas11 
near Paris, France
 
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Hi,

I'm not consistently profitable, but I follow this kind of metrics for myself. I think that there are of the utmost importance, since linked to risk management. I use the "on the table" image:

1) By trade (on average)
This one is close to @josh or Van Tharpe.
Let's say that my "normal" S/L is 10 ticks and my average profit per trade (all together, winners+losers) is 2 ticks (figures just for illustration).
It means that, in average, each time I put 10 "on the table", I get back 10+2.

2) By day
This one is similar to the previous, but at the scale of a day.
Let's suppose that my MIDD was -50 ticks and that my profit at the end of the day was 25 ticks.
It means that, at a moment during this day, I had 50 ticks on the table. And I finished with 25 ticks.

Nicolas

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  #264 (permalink)
 indextrader7 
Birmingham, AL
 
 
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Well, beautiful trades (all three so far), but allllll three have had half the position stopped out for small loss/brekeven before the big moves. I'm still happy, but I could have over double the profits at this point that I have. (Greedy!)

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  #265 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

A slight improvement over the "trading on the floor" (pun intended) situation last week.

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  #266 (permalink)
 indextrader7 
Birmingham, AL
 
 
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josh View Post
Van Tharp calls these R-multiples. If I risk 8 ticks and make 4, my profit is 1/2 my risk, or 0.5R. If I have another where I risk 20 and make 50, my profit is 2.5R, for an average of 1.5R. If I have a loss of -1R, then the average for all three goes to 0.66R. So, after a large enough sample, I get an idea of how much I can expect (expectancy) to make on any given trade, based on how much I risk.

So does Van Tharp mention any kind of benchmark or something to shoot for? Does he say something to the effect of where the top traders R-multiples are? Again, intuitively, the 1:1 seems like something good to be over.

Can you/others think of pros/cons to using r-multiple vs what I proposed? (daily p/l : max drawdown for that day).

I'm really been searching for the best metric to measure risk-adjusted performance. Secondly, I want to have some type of benchmark to gauge my risk-adjusted performance.

Maybe I should just be happy making ticks, ticks, ticks. I don't know.

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  #267 (permalink)
 imPairsonator 
Thessaloniki, Greece
 
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indextrader7 View Post
So does Van Tharp mention any kind of benchmark or something to shoot for? Does he say something to the effect of where the top traders R-multiples are? Again, intuitively, the 1:1 seems like something good to be over.

Can you/others think of pros/cons to using r-multiple vs what I proposed? (daily p/l : max drawdown for that day).

I'm really been searching for the best metric to measure risk-adjusted performance. Secondly, I want to have some type of benchmark to gauge my risk-adjusted performance.

Maybe I should just be happy making ticks, ticks, ticks. I don't know.

I don't think there is any single universal measure of risk for you to measure risk-adjusted performance by. Many use Sharpe ratio or Sortino ratio but each has its drawbacks. Different types of risks matter to different degrees for every trader/investor. Gross profit/gross losses, volatility, downward volatility, max drawdown, avg dd, avg time to recover, VaR over a specific time period, risk of ruin, etc. all measure different aspects of risk and are all valid measures of risk.

My view is that you should look at what matters to you personally and construct your own risk metric(s). This leaves open the issue of risk-adjusted performance comparisons, but you can either set arbitrary benchmarks ("I want 5% additional CAGR for every extra 1% of max drawdown") or compare to buy & hold/simple mechanical strategies.

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  #268 (permalink)
 josh 
Georgia, US
 
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indextrader7 View Post
So does Van Tharp mention any kind of benchmark or something to shoot for? Does he say something to the effect of where the top traders R-multiples are? Again, intuitively, the 1:1 seems like something good to be over.

Can you/others think of pros/cons to using r-multiple vs what I proposed? (daily p/l : max drawdown for that day).

I'm really been searching for the best metric to measure risk-adjusted performance. Secondly, I want to have some type of benchmark to gauge my risk-adjusted performance.

Maybe I should just be happy making ticks, ticks, ticks. I don't know.

I no longer have that book, so I don't remember, but it will obviously depend on you. A 0.1R over a large number of trades (think HFT) is fantastic. Maybe not so much for a very small number, since there is less opportunity, where you will probably want a 2.0R, for example.

An R-multiple gives you how much you were WILLING to risk. Your calculation gives you how much risk you actually realized. They measure similar metrics, but one is theoretically what you were willing to give up, and the other is what you actually did.

I'm glad you are discussing risk-adjusted performance. Today I have made almost to the dollar what I did yesterday, but I had to go 5 deep to do it, whereas yesterday my max cars in any one trade was 3, with most of them being 2 lotters. This is also probably a good thing to track--what's the max leverage used (max number of contracts in a trade)? Finally, the dollars per contract traded. Using the above example, today I have one trade, making +2.1 per contract traded. Yesterday it took me 9 trades, and about +0.5 per contract traded. Which is the better day? Well, today I incurred more risk, but also let my profits run longer. Yesterday, less risk but also smaller profits per trade (though the caveat is that yesterday was much more balance and range bound than today, with fewer directional moves than today).

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toucan94506
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imPairsonator View Post
I don't think there is any single universal measure of risk for you to measure risk-adjusted performance by. Many use Sharpe ratio or Sortino ratio but each has its drawbacks. Different types of risks matter to different degrees for every trader/investor. Gross profit/gross losses, volatility, downward volatility, max drawdown, avg dd, avg time to recover, VaR over a specific time period, risk of ruin, etc. all measure different aspects of risk and are all valid measures of risk.

My view is that you should look at what matters to you personally and construct your own risk metric(s). This leaves open the issue of risk-adjusted performance comparisons, but you can either set arbitrary benchmarks ("I want 5% additional CAGR for every extra 1% of max drawdown") or compare to buy & hold/simple mechanical strategies.


I agree with ImPairsonator.... you should develop your own risk metrics. Your original idea of ticks made vs ticks drawdown may give you what you need right now. In addition, its very difficult to set arbitrary benchmarks without enough trading data to give you an idea what is possible in realtime.

cheers

toucan

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  #270 (permalink)
 indextrader7 
Birmingham, AL
 
 
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josh View Post
An R-multiple gives you how much you were WILLING to risk. Your calculation gives you how much risk you actually realized. They measure similar metrics, but one is theoretically what you were willing to give up, and the other is what you actually did.

Also I think a big deal is that R is on a trade by trade basis. The performance ratio I brought up is a cumulative daily metric, so that is the biggest difference to me.

I think if we execute our plans... what we are willing to risk, often ends up being realized risk. So they are probably about the same over enough of a sample size.


Quoting 
I'm glad you are discussing risk-adjusted performance. Today I have made almost to the dollar what I did yesterday, but I had to go 5 deep to do it, whereas yesterday my max cars in any one trade was 3, with most of them being 2 lotters. This is also probably a good thing to track--what's the max leverage used (max number of contracts in a trade)? Finally, the dollars per contract traded. Using the above example, today I have one trade, making +2.1 per contract traded. Yesterday it took me 9 trades, and about +0.5 per contract traded. Which is the better day? Well, today I incurred more risk, but also let my profits run longer. Yesterday, less risk but also smaller profits per trade (though the caveat is that yesterday was much more balance and range bound than today, with fewer directional moves than today).

Yes, the metric I've heard CTA's talk about using to measure risk based on how many contracts you're using... comes down to MTE or Margin to Equity ratio. The more contracts you trade, the more margin you use in relation to your account equity. From what I've read, that is the most true indicator of examining future risk/volatility one might have. Fund of funds and CPO's use this to evaluate riskiness of a manager.

That's ultimately what the best trader can do (what you've done over the past few days) is use risk to their advantage. It's about understanding risk, understanding what environment you're in, and controlling risk it's not always about minimizing risk, and that's a big point.

Maybe I'll keep up with both, and just see how it goes.

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  #271 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

I've actually been keeping up with my R-Multiple since Feb, but stopped on 5-8-12.

428 trades. Average R-Multiple is 0.22




To me this ends up being pretty worthless though honestly... To know an expectancy, which isn't actually meaningful for any individual trade that you're in is no bueno for me. I know I have an edge, I have other metrics to tell me that. Am I missing something?

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  #272 (permalink)
 josh 
Georgia, US
 
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indextrader7 View Post
I've actually been keeping up with my R-Multiple since Feb, but stopped on 5-8-12.

428 trades. Average R-Multiple is 0.22

To me this ends up being pretty worthless though honestly... To know an expectancy, which isn't actually meaningful for any individual trade that you're in is no bueno for me. I know I have an edge, I have other metrics to tell me that. Am I missing something?

It's nice that you only have a couple of cases where it's < -1R.

All statistical distributions are meaningless, if you try to make the current individual trade you're in, which is a random event, a "known" which must conform to the mean of the distribution.

Stats are only good for looking at where you've been, and none of these stats will matter if you disregard risk on any given trade; for example, if you were to set a stop value at $5000, "expecting" that you will make $1000 because your expectancy is 0.2R. This is obviously not the intent of a stat, to know what "will" happen on any given trade.

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  #273 (permalink)
 Nicolas11 
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indextrader7 View Post
428 trades. Average R-Multiple is 0.22

If I may ask, from a methodological standpoint:
Have you calculated the R-multiple of each trade, and then made an average?
If yes, how have you calculated the R-multiple of an isolated trade? Is it "gain-or-loss divided by hard-stop-loss"?

Thanks!

Nicolas

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  #274 (permalink)
 indextrader7 
Birmingham, AL
 
 
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Nicolas11 View Post
If I may ask, from a methodological standpoint:
Have you calculated the R-multiple of each trade, and then made an average?
If yes, how have you calculated the R-multiple of an isolated trade? Is it "gain-or-loss divided by hard-stop-loss"?

Thanks!

Nicolas

Yeah.

($ P/L) / absolute value(stop loss $ risk)

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  #275 (permalink)
 rmcbeath 
Mountain View, CA
 
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indextrader7 View Post
Who would like to take a shot at the reasoning behind that short entry?

Previous level of strong support becomes resistance after it was breached and should now be a significant resistance line.

Thanks for your great journal of your trading!

Randy

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  #276 (permalink)
 indextrader7 
Birmingham, AL
 
 
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  #277 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012


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  #278 (permalink)
 indextrader7 
Birmingham, AL
 
 
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rmcbeath View Post
Previous level of strong support becomes resistance after it was breached and should now be a significant resistance line.

Thanks for your great journal of your trading!

Randy

Exactly. Good analysis.

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  #279 (permalink)
 indextrader7 
Birmingham, AL
 
 
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  #280 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

Glad to get an hour of trading in today, was swamped with other things to do this AM.

Went 4/4, so that'll be it for today. Maybe I can go the whole month of June without a losing trade. (big joke)

Absolutely beautiful market action today, wish I would have been able to trade it. Hope you guys did well.

Trade ticks today: +10, +5, +8.5, +4.5

Video to come, although I think all the trades are pretty self explanatory from the previous posts today. Shorted at the top of a range, price broke down below the range, I shorted the initial quick retest of the previous range support, then shorted two more pullbacks in the downtrend.

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  #281 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

Screenr - indextrader7: 6-1-12 Trade Recap

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  #282 (permalink)
 WarEagle 
Birmingham, AL
 
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Good start to the month my friend!

Just curious, I noticed in your trading setup pics that you always have a notepad and pen. Do you journal manually or are you using that for something else? I've gone back and forth between manual journals and software so I've wondered what others like to use.

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  #283 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012


WarEagle View Post
Good start to the month my friend!

Just curious, I noticed in your trading setup pics that you always have a notepad and pen. Do you journal manually or are you using that for something else? I've gone back and forth between manual journals and software so I've wondered what others like to use.

Yep, that's the paper and pen journal. I use it as an in-the-moment note taking system. Reasons for decisions as they occur, feelings I'm feeling (desire to move stop or take quick profits), things I notice about the market structure I want to go back and look at, etc.

Honestly, this journal has also become somewhat of a part of what I do, as far as journaling goes. It's more of a part of my end of day review.

Hope you're doing well in life and trading.

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 Boomer34 
Georgia, USA
 
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Great start to the month...appreciate the video recaps also.

Quick question...I have recently stripped my indicators away and am going straight price action...and I have noticed that I struggle a good bit when we are near the lows or highs of the day. Today was a perfect example...I placed a few ill advised long trades when the market was near the lows...do you do anything different when the market is at these extreme levels during the day? What is your thought process?

Thanks for any insight...

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  #285 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012


Boomer34 View Post
Great start to the month...appreciate the video recaps also.

Quick question...I have recently stripped my indicators away and am going straight price action...and I have noticed that I struggle a good bit when we are near the lows or highs of the day. Today was a perfect example...I placed a few ill advised long trades when the market was near the lows...do you do anything different when the market is at these extreme levels during the day? What is your thought process?

Thanks for any insight...

I used to constantly fight the trend and try and pick reversals. Cost me a lot of money.

First off, we can only see that we're at extreme levels (highs/lows of the day) in hindsight, so it's irrelevant for our real-time analysis. I think if you focus on the proper analysis in real-time it will remove the tendency immediately. Try:

1. Define S/R structure on a longer timeframe chart than the one you're mainly trading. Somewhere between a multiple of 5-10x that timeframe will do. Don't pay attention to anything you see on that chart (trends/patterns/etc) because it will be very irrelevant in your trading timeframe. (I used to make the mistake of trying to trade signals on one timeframe, on another timeframe chart. It doesn't work).

2. Define your trend/range on your main trading timeframe. This is the key one to your question. We don't care whether we might "think/feel" like we're at an extreme level or what not. We simply define whether we're currently in an uptrend, downtrend, or range-bound. This determines what type of trade (long/short) we're looking to take. Picking tops/bottoms is a fools game (in my humble opinion, maybe there are guys out there that are fantastic at it, but I think the majority of the time it's bad business.) Now, if we're in a downtrend and heading into one of the longer term support levels we drew in step 1... AND we're analyzing the momentum of that downtrend, AND it's showing weakness on the down legs, and more and more strength on the up legs... then we can take a long trade which is still considered a counter-trend trade (and managed accordingly), but the key is that our analysis of strength/weakness led us to this counter-trend trade... NOT a thought/feeling that we're over-extended/oversold/at an extreme/"price can't go any lower it's gone so far"/etc.

So no, I don't do anything different at these levels. My thought process is the same. The only thing that's different is that sometimes you feel "naked/exposed" because we're trading at levels that don't have any recent S/R to give a framework... we're just floating out in space so to say. We can still rely on our trend analysis and will always have that, regardless of where we're trading.

Hope this helped. Let me know if it didn't, and clarify further.

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  #286 (permalink)
 josh 
Georgia, US
 
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IT7, great post and I appreciate the simplicity with which you present the information. It doesn't need to be complicated solely for the sake of being complicated, and you have shown that very well.

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 tihfa 
detroit, mi
 
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indextrader7 View Post
I used to constantly fight the trend and try and pick reversals. Cost me a lot of money.

First off, we can only see that we're at extreme levels (highs/lows of the day) in hindsight, so it's irrelevant for our real-time analysis. I think if you focus on the proper analysis in real-time it will remove the tendency immediately. Try:

1. Define S/R structure on a longer timeframe chart than the one you're mainly trading. Somewhere between a multiple of 5-10x that timeframe will do. Don't pay attention to anything you see on that chart (trends/patterns/etc) because it will be very irrelevant in your trading timeframe. (I used to make the mistake of trying to trade signals on one timeframe, on another timeframe chart. It doesn't work).

2. Define your trend/range on your main trading timeframe. This is the key one to your question. We don't care whether we might "think/feel" like we're at an extreme level or what not. We simply define whether we're currently in an uptrend, downtrend, or range-bound. This determines what type of trade (long/short) we're looking to take. Picking tops/bottoms is a fools game (in my humble opinion, maybe there are guys out there that are fantastic at it, but I think the majority of the time it's bad business.) Now, if we're in a downtrend and heading into one of the longer term support levels we drew in step 1... AND we're analyzing the momentum of that downtrend, AND it's showing weakness on the down legs, and more and more strength on the up legs... then we can take a long trade which is still considered a counter-trend trade (and managed accordingly), but the key is that our analysis of strength/weakness led us to this counter-trend trade... NOT a thought/feeling that we're over-extended/oversold/at an extreme/"price can't go any lower it's gone so far"/etc.

So no, I don't do anything different at these levels. My thought process is the same. The only thing that's different is that sometimes you feel "naked/exposed" because we're trading at levels that don't have any recent S/R to give a framework... we're just floating out in space so to say. We can still rely on our trend analysis and will always have that, regardless of where we're trading.

Hope this helped. Let me know if it didn't, and clarify further.

good stuff it7!!! amen, brother!

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  #288 (permalink)
 Traderwolf 
Raleigh,NC
 
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indextrader7 View Post
I used to constantly fight the trend and try and pick reversals. Cost me a lot of money.

First off, we can only see that we're at extreme levels (highs/lows of the day) in hindsight, so it's irrelevant for our real-time analysis. I think if you focus on the proper analysis in real-time it will remove the tendency immediately. Try:

1. Define S/R structure on a longer timeframe chart than the one you're mainly trading. Somewhere between a multiple of 5-10x that timeframe will do. Don't pay attention to anything you see on that chart (trends/patterns/etc) because it will be very irrelevant in your trading timeframe. (I used to make the mistake of trying to trade signals on one timeframe, on another timeframe chart. It doesn't work).

2. Define your trend/range on your main trading timeframe. This is the key one to your question. We don't care whether we might "think/feel" like we're at an extreme level or what not. We simply define whether we're currently in an uptrend, downtrend, or range-bound. This determines what type of trade (long/short) we're looking to take. Picking tops/bottoms is a fools game (in my humble opinion, maybe there are guys out there that are fantastic at it, but I think the majority of the time it's bad business.) Now, if we're in a downtrend and heading into one of the longer term support levels we drew in step 1... AND we're analyzing the momentum of that downtrend, AND it's showing weakness on the down legs, and more and more strength on the up legs... then we can take a long trade which is still considered a counter-trend trade (and managed accordingly), but the key is that our analysis of strength/weakness led us to this counter-trend trade... NOT a thought/feeling that we're over-extended/oversold/at an extreme/"price can't go any lower it's gone so far"/etc.

So no, I don't do anything different at these levels. My thought process is the same. The only thing that's different is that sometimes you feel "naked/exposed" because we're trading at levels that don't have any recent S/R to give a framework... we're just floating out in space so to say. We can still rely on our trend analysis and will always have that, regardless of where we're trading.

Hope this helped. Let me know if it didn't, and clarify further.


Great explanation. I take it from this response that you do not execute any anticipatory reversal trades based on levels from a higher timeframe (or even the same timeframe)until you get a reversal signal of some sort from your time frame. Is that correct? I have had the problem of picking reversal points since I can fool heartedly think I can get a smaller stop. It has become my achilles heel and I agree with you it is a fool's game(and I have been one).How did you overcome this tendency short of losing a bunch of money and do you have any recommendations for stopping this tendency? No.. it is not in my plan and yes I am violating my trading plan when I do it. It is the biggest obstacle to me making consistent profits.

Also, I take it a great majority of your trades are with trend. Is that correct and what rough % would be with trend versus countertrend?

Great thread and thanks for sharing.

Wolf

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  #289 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012


Traderwolf View Post
Great explanation. I take it from this response that you do not execute any anticipatory reversal trades based on levels from a higher timeframe (or even the same timeframe)until you get a reversal signal of some sort from your time frame. Is that correct? I have had the problem of picking reversal points since I can fool heartedly think I can get a smaller stop. It has become my achilles heel and I agree with you it is a fool's game(and I have been one).How did you overcome this tendency short of losing a bunch of money and do you have any recommendations for stopping this tendency? No.. it is not in my plan and yes I am violating my trading plan when I do it. It is the biggest obstacle to me making consistent profits.

Also, I take it a great majority of your trades are with trend. Is that correct and what rough % would be with trend versus countertrend?

Great thread and thanks for sharing.

Wolf

Hey, I just want to put a disclaimer on some things I say in this post. They may come across as harsh, condescending, or pretentious, but they're coming from a good place in my heart. Text is hard to pick up on emotion sometime. I'm taking the time to do what I think will help you based on my own experiences, which is all I have to go by. Ok, here's the post.

I may sometimes take what looks like an anticipatory trade on the trading timeframe, but that's when I really want to take a trade against a S/R level for whatever reason. and then (this may help you a lot) I drop down to a lower timeframe and look for some type of reversal pattern/signal/candle and use a stop order to get me in if that pattern follows through there. It's the best of both worlds as it gives you a good R:R, while also giving some confirmation to take the trade.

How did I overcome the tendancy? I found what works for me ^^. Once you do find what works, you don't have to fight against anything. We will do what we believe is best. It comes down to belief systems. Evidently, you need to work on yours. If you truly believed that picking tops/bottoms was a fools game... and I mean truly believed... then you 100% would not do it. There wouldn't be any internal struggle or anxiety or even discipline required. Beliefs! Beliefs! Real beliefs!

Another thing Wolf, is that you may have something else in the way (if you do already believe it's a fools game to catch falling knives), you may know this... and be seeking the thrill of trying to pull off this low % trade! You must find out for yourself. It could be tons of things.

Here's something I want to say about discipline. Some people say that trading requires discipline. I don't believe that. I don't want to insult anyone, but I think it's an "immature" level of a trader if they do. (Not referring to you Wolf, just ranting a bit here.) Think about this... If you know what movie you want to see, and you know how to get there and see it, and you're available to go see it, does it take discipline to go see it? No. Trading is no different.

From some other things in my trading journal (paper) from 5-6-12:

Finding an edge isn't the hard part. It's fairly easy to find. Self awareness is they key to self-management. We can't really control our emotions, we can only control our actions DESPITE our emotions.

Must have ability to tolerate discomfort, and be ok with disappointment.

Self confidence is resilience in the face of discomfort. We try to avoid the discomfort, and the problem is in our actions to avoid the discomfort. Avoid boredom by taking marginal trades, avoid fear of missing out by chasing/impulse trades, avoid anger of being stopped out with a revenge trade, avoid being wrong by hesitating to enter a trade or not exiting a bad trade quickly. All this behavior is some type of discomfort avoidance.

Learn the patterns of your discomfort. This requires a high degree of self-awareness.

Discomfort is unavoidable in trading. It's a big part of it.

Willpower and a desire for money are not enough to change one's behavior. Need to be more open/flexible - motivated to understand yourself. Open minded = more awareness = see things you didn't before and CHOOSE your actions.

Discipline isn't willpower - imposing a demanding "must do" thought. The emotional consequence of not following a self told "must" is huge and counter-productive.

In trading the going always gets tough at some point. The discomfort is a part of trading, hiding them with willpower won't help. Realize the emotion and understand why you're feeling what you're feeling, then CHOOSE (a different) action. To deal with discomfort you must have self-confidence which is resilience in the face of disappointment and self trust.

Learn to control what is WITHIN your control and let go of the rest.

Next time you feel threatened (example, when you want to book a quick profit) think about what you would typically do - what did you do last time? how did that work out?

Anticipate your emotions before they're fully formed. Stress and discomfort are on the way, are you prepared?

Uncertainty is a certainty.

Successful trading = a lot of trades that aren't winners. Focus on doing what's right, not being right.

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  #290 (permalink)
 Traderwolf 
Raleigh,NC
 
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indextrader7 View Post
Hey, I just want to put a disclaimer on some things I say in this post. They may come across as harsh, condescending, or pretentious, but they're coming from a good place in my heart. Text is hard to pick up on emotion sometime. I'm taking the time to do what I think will help you based on my own experiences, which is all I have to go by. Ok, here's the post.

I may sometimes take what looks like an anticipatory trade on the trading timeframe, but that's when I really want to take a trade against a S/R level for whatever reason. and then (this may help you a lot) I drop down to a lower timeframe and look for some type of reversal pattern/signal/candle and use a stop order to get me in if that pattern follows through there. It's the best of both worlds as it gives you a good R:R, while also giving some confirmation to take the trade.

How did I overcome the tendancy? I found what works for me ^^. Once you do find what works, you don't have to fight against anything. We will do what we believe is best. It comes down to belief systems. Evidently, you need to work on yours. If you truly believed that picking tops/bottoms was a fools game... and I mean truly believed... then you 100% would not do it. There wouldn't be any internal struggle or anxiety or even discipline required. Beliefs! Beliefs! Real beliefs!

Another thing Wolf, is that you may have something else in the way (if you do already believe it's a fools game to catch falling knives), you may know this... and be seeking the thrill of trying to pull off this low % trade! You must find out for yourself. It could be tons of things.

Here's something I want to say about discipline. Some people say that trading requires discipline. I don't believe that. I don't want to insult anyone, but I think it's an "immature" level of a trader if they do. (Not referring to you Wolf, just ranting a bit here.) Think about this... If you know what movie you want to see, and you know how to get there and see it, and you're available to go see it, does it take discipline to go see it? No. Trading is no different.

From some other things in my trading journal (paper) from 5-6-12:

Finding an edge isn't the hard part. It's fairly easy to find. Self awareness is they key to self-management. We can't really control our emotions, we can only control our actions DESPITE our emotions.

Must have ability to tolerate discomfort, and be ok with disappointment.

Self confidence is resilience in the face of discomfort. We try to avoid the discomfort, and the problem is in our actions to avoid the discomfort. Avoid boredom by taking marginal trades, avoid fear of missing out by chasing/impulse trades, avoid anger of being stopped out with a revenge trade, avoid being wrong by hesitating to enter a trade or not exiting a bad trade quickly. All this behavior is some type of discomfort avoidance.

Learn the patterns of your discomfort. This requires a high degree of self-awareness.

Discomfort is unavoidable in trading. It's a big part of it.

Willpower and a desire for money are not enough to change one's behavior. Need to be more open/flexible - motivated to understand yourself. Open minded = more awareness = see things you didn't before and CHOOSE your actions.

Discipline isn't willpower - imposing a demanding "must do" thought. The emotional consequence of not following a self told "must" is huge and counter-productive.

In trading the going always gets tough at some point. The discomfort is a part of trading, hiding them with willpower won't help. Realize the emotion and understand why you're feeling what you're feeling, then CHOOSE (a different) action. To deal with discomfort you must have self-confidence which is resilience in the face of disappointment and self trust.

Learn to control what is WITHIN your control and let go of the rest.

Next time you feel threatened (example, when you want to book a quick profit) think about what you would typically do - what did you do last time? how did that work out?

Anticipate your emotions before they're fully formed. Stress and discomfort are on the way, are you prepared?

Uncertainty is a certainty.

Successful trading = a lot of trades that aren't winners. Focus on doing what's right, not being right.


IT7,

Thanks!! You confirm the belief I have that trading is much much more about psychology than about method. Some real gems here.




Thanks again for a great thread..

Wolf

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  #291 (permalink)
 Boomer34 
Georgia, USA
 
Experience: Advanced
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indextrader7 View Post
I used to constantly fight the trend and try and pick reversals. Cost me a lot of money.

First off, we can only see that we're at extreme levels (highs/lows of the day) in hindsight, so it's irrelevant for our real-time analysis. I think if you focus on the proper analysis in real-time it will remove the tendency immediately. Try:

1. Define S/R structure on a longer timeframe chart than the one you're mainly trading. Somewhere between a multiple of 5-10x that timeframe will do. Don't pay attention to anything you see on that chart (trends/patterns/etc) because it will be very irrelevant in your trading timeframe. (I used to make the mistake of trying to trade signals on one timeframe, on another timeframe chart. It doesn't work).

2. Define your trend/range on your main trading timeframe. This is the key one to your question. We don't care whether we might "think/feel" like we're at an extreme level or what not. We simply define whether we're currently in an uptrend, downtrend, or range-bound. This determines what type of trade (long/short) we're looking to take. Picking tops/bottoms is a fools game (in my humble opinion, maybe there are guys out there that are fantastic at it, but I think the majority of the time it's bad business.) Now, if we're in a downtrend and heading into one of the longer term support levels we drew in step 1... AND we're analyzing the momentum of that downtrend, AND it's showing weakness on the down legs, and more and more strength on the up legs... then we can take a long trade which is still considered a counter-trend trade (and managed accordingly), but the key is that our analysis of strength/weakness led us to this counter-trend trade... NOT a thought/feeling that we're over-extended/oversold/at an extreme/"price can't go any lower it's gone so far"/etc.

So no, I don't do anything different at these levels. My thought process is the same. The only thing that's different is that sometimes you feel "naked/exposed" because we're trading at levels that don't have any recent S/R to give a framework... we're just floating out in space so to say. We can still rely on our trend analysis and will always have that, regardless of where we're trading.

Hope this helped. Let me know if it didn't, and clarify further.


IT7...

You nailed it in this post. It was exactly what I needed to read.

On this particular day of dealing with trading at the lows of the day, I had made a handful of great trades earlier in the day, and ended up giving back all the profits trying to catch the falling knife. Then, after it fell some some, I placed a revenge trade out of frustration which put me in the red for the day. I know it was metal mistakes that cost me and had me trading outside of my plan.

Your words on looking at a higher time frame for S/R is very helpful...I can get so dialed in on my trading time frame that I subconsciously disregard the other time frames that I monitor...

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 Boomer34 
Georgia, USA
 
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indextrader7 View Post
Hey, I just want to put a disclaimer on some things I say in this post. They may come across as harsh, condescending, or pretentious, but they're coming from a good place in my heart. Text is hard to pick up on emotion sometime. I'm taking the time to do what I think will help you based on my own experiences, which is all I have to go by. Ok, here's the post.

I may sometimes take what looks like an anticipatory trade on the trading timeframe, but that's when I really want to take a trade against a S/R level for whatever reason. and then (this may help you a lot) I drop down to a lower timeframe and look for some type of reversal pattern/signal/candle and use a stop order to get me in if that pattern follows through there. It's the best of both worlds as it gives you a good R:R, while also giving some confirmation to take the trade.

How did I overcome the tendancy? I found what works for me ^^. Once you do find what works, you don't have to fight against anything. We will do what we believe is best. It comes down to belief systems. Evidently, you need to work on yours. If you truly believed that picking tops/bottoms was a fools game... and I mean truly believed... then you 100% would not do it. There wouldn't be any internal struggle or anxiety or even discipline required. Beliefs! Beliefs! Real beliefs!

Another thing Wolf, is that you may have something else in the way (if you do already believe it's a fools game to catch falling knives), you may know this... and be seeking the thrill of trying to pull off this low % trade! You must find out for yourself. It could be tons of things.

Here's something I want to say about discipline. Some people say that trading requires discipline. I don't believe that. I don't want to insult anyone, but I think it's an "immature" level of a trader if they do. (Not referring to you Wolf, just ranting a bit here.) Think about this... If you know what movie you want to see, and you know how to get there and see it, and you're available to go see it, does it take discipline to go see it? No. Trading is no different.

From some other things in my trading journal (paper) from 5-6-12:

Finding an edge isn't the hard part. It's fairly easy to find. Self awareness is they key to self-management. We can't really control our emotions, we can only control our actions DESPITE our emotions.

Must have ability to tolerate discomfort, and be ok with disappointment.

Self confidence is resilience in the face of discomfort. We try to avoid the discomfort, and the problem is in our actions to avoid the discomfort. Avoid boredom by taking marginal trades, avoid fear of missing out by chasing/impulse trades, avoid anger of being stopped out with a revenge trade, avoid being wrong by hesitating to enter a trade or not exiting a bad trade quickly. All this behavior is some type of discomfort avoidance.

Learn the patterns of your discomfort. This requires a high degree of self-awareness.

Discomfort is unavoidable in trading. It's a big part of it.

Willpower and a desire for money are not enough to change one's behavior. Need to be more open/flexible - motivated to understand yourself. Open minded = more awareness = see things you didn't before and CHOOSE your actions.

Discipline isn't willpower - imposing a demanding "must do" thought. The emotional consequence of not following a self told "must" is huge and counter-productive.

In trading the going always gets tough at some point. The discomfort is a part of trading, hiding them with willpower won't help. Realize the emotion and understand why you're feeling what you're feeling, then CHOOSE (a different) action. To deal with discomfort you must have self-confidence which is resilience in the face of disappointment and self trust.

Learn to control what is WITHIN your control and let go of the rest.

Next time you feel threatened (example, when you want to book a quick profit) think about what you would typically do - what did you do last time? how did that work out?

Anticipate your emotions before they're fully formed. Stress and discomfort are on the way, are you prepared?

Uncertainty is a certainty.

Successful trading = a lot of trades that aren't winners. Focus on doing what's right, not being right.



This is GOLD!

Thank you for the time, dedication and transparency you put in this thread!

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  #293 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

Good trading today. Had 60% losers, but had an average win of 2.2x my average loss. You can see I did a good job today of keeping losers small.


Ticks/trade:
-8, -5, +13, -3, +8, +5, -9, -2, +18, -9, +4, -3, -5, +10, -5, -2, +14, -10, -2, +9
Total = +18 ticks

One or two pretty dumb trades, but didn't let them get too far. Tried a few scalps in the latter part of the day, which only ate away at my gains.


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  #294 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

Daily P/L to daily max drawdown. Something that is a focus of mine now.

Here it is since I started keeping up with it on 5-7-12.



Looks to be improving. (6-1-12 I didn't have a drawdown, so I just gave myself 2.5x... not sure how to deal with that. The most important thing to me is that I consider that day a great day, and I want that stat to look good for that day) Here's the ratio of the previous graph showing both P/L and DD for the day. This one just shows the ratio of the two.

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  #295 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

Interesting to see the consistent trade off between win% and win:loss ratio. It's really finding a balance between the two, but I'm always looking to improve both at the same time. Hard to do that for sure.

The last three swings in Win% (down up down) are exact opposite of win:loss (up down up). We'll keep trying for up up up.


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  #296 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

Quite pleased with reducing the size of my drawdowns as of late. This is certainly due to me not scaling into losing positions and jacking up the risk per trade. Here's the % drawdown chart from May onward.



One interesting thing to monitor is a ticks drawdown chart. This gives me a better picture of what type of drawdown I'm capable of... as far as actual trading performance drawdown. The % drawdown is important, but it's a very different type of information. The % drawdown chart can take a huge dip on a single trade if I load up on a bunch of contracts. The ticks drawdown chart shows me what life is like from a pure trading performance perspective, as if I traded level contract size all the time. Here's the ticks dd chart since I started full time in February. Getting down 96 ticks is the worst performance drawdown.

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  #297 (permalink)
 josh 
Georgia, US
 
Experience: None
Platform: SC
Broker: AMP+CQG
Trading: ES, HSI, Nikkei
 
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Posts: 5,469 since Jan 2011
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IT7, I did a little browsing on risk adjusted performance and found a metric called the Calmar ratio:

Calmar Ratio Definition | Investopedia

It is essentially what you are doing here, only it typically measures a fund's performance over the last 36 months. But the principle could be over any time frame. In short, it is rate of return divided by drawdown. Simple, but effective.

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  #298 (permalink)
 indextrader7 
Birmingham, AL
 
 
Posts: 1,065 since Apr 2012

So, as some of you may know. I scalped during the month of May, and ended up not happy with the true performance. Made $, but it wasn't near as steady and good from a risk-adjusted perspective.

This rolling ticks P/L chart paints a pretty clear picture. I started out (price action trading), and had large periods of ticks profitability, with small periods of negative ticks for the rolling period. When I transitioned to complete scalping, the returns became quite sporadic (as annotated on the picture with the pink arrows). Now that I've gone back to regular price action methods, sure enough... a big block of profitability has begun and I'm still in it.



On another note, does anyone have any ideas why there seems to be somewhat of a cyclical pattern to my performance? Probably can't tell much from this chart alone, but maybe someone has some ideas as to what I could look for in my data to see what's causing the cycles. Maybe it's just that I can't be profitable all the time and this type of cycle naturally will form. I think there's more to it myself. Here's a blank one to see.

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  #299 (permalink)
toucan94506
danville ca usa
 
 
Posts: 51 since Mar 2012
Thanks: 6 given, 41 received

On another note, does anyone have any ideas why there seems to be somewhat of a cyclical pattern to my performance? Probably can't tell much from this chart alone, but maybe someone has some ideas as to what I could look for in my data to see what's causing the cycles. Maybe it's just that I can't be profitable all the time and this type of cycle naturally will form. I think there's more to it myself. Here's a blank one to see.


Indextrader7:

Some reasons for the cycles could be:

The daily range during the hours that you trade (versus the entire trading day range)... ie the best time for me to trade is 5am-8am pst. Trading after 8am is not as profitable.

The natural cycle of inside and outside days... ie small inside days are much less profitable for me than large range outside days.

The structure of the moves during the day. ie A huge move during a small part of the day and the rest of the day is just chop. This allows me a couple of chances at a good trade and the rest of the day for my losers.

Last is how the moves roll out. Sometimes there are days where individual candles are larger than my initial stoploss. Sometimes there are days when price moves in a direction for a long time, but the pullbacks are just a bit larger than my stop during the trades.



At least these are the excuses that I use when my trading day sucks.



toucan

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  #300 (permalink)
 WarEagle 
Birmingham, AL
 
Experience: Intermediate
Platform: SierraChart
Broker: DDT/Rithmic
Trading: TF/ZN/CL
 
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Posts: 30 since Apr 2010
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indextrader7 View Post

On another note, does anyone have any ideas why there seems to be somewhat of a cyclical pattern to my performance? Probably can't tell much from this chart alone, but maybe someone has some ideas as to what I could look for in my data to see what's causing the cycles. Maybe it's just that I can't be profitable all the time and this type of cycle naturally will form. I think there's more to it myself.


I'm not sure if this has anything to do with it, but I see you are using a 50 trade rolling calculation for your charts. If you have large winners (or losers) in the data then they will "roll" through the daily value as they fade into history. I tend to agree with Toucan that it may simply be volatility cycles from day to day. You get larger wins then you get smaller wins (as the absolute negative swings are small it seems losses are not as big a factor as variation in the size of winners). This is just speculation, but you could mine through the actual data and see which is having more impact. Try changing the rolling period and see how that affects the apparent cycle.

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