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Lord Sidious's Trading Journal
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Lord Sidious's Trading Journal

  #21 (permalink)
Trading for Fun
Portugal
 
Futures Experience: Beginner
Platform: IGMarkets
Broker/Data: IGMarkets
Favorite Futures: Dow Jones Index, Light Crude
 
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Jaguar52 View Post
There is a tremendous difference between sim and cash trading. I suggest you repeat your sim with exactly the same size account size you intend to use real cash. Also, that you achieve a sustained profitable performance level in sim for at least 3 months using an approach that will be duplicatable in real cash. For example, if you are in sim and at week number 3 and decide to double up and take a loaded up trade, then will you really do this if you are down in cash? Will you double up a loser to fix it, and will you trade beyond your loss limit?
One of the most deceptive things about sim trading is that we tend to bend the rules and fudge a lot. You need to have some kind of accountability and stick to a strict approach technically while in sim. This includes strategies and money management.

Also, in sim, there is no point to trade with more than 2 contracts. Trading 2 contracts would enable you to include a runner money management. Trading 5 contracts in sim is pretty much pointless and it will paint a false picture .... one that with a 5 contract drawdown will do little to portray the real pressures of real cash loss.

Also, until you are stable in cash, I suggest you reduce your risk per trade to under 1/2% so you can weather the learning curve drawdown.


When I did paper trading, I trade according to my real account, and respected the 2% loss rule. However, things are differente with real cash, our cash.

You have good suggestions. Thank you.

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  #22 (permalink)
Elite Member
Bala, PA, USA
 
Futures Experience: Intermediate
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Lord Sidious View Post
When I did paper trading, I trade according to my real account, and respected the 2% loss rule. However, things are differente with real cash, our cash.

You have good suggestions. Thank you.

I think two major things generally affect discretionary trading behavior when switching to live vs sim. One is confidence in your method, the other is trading scared money. If you don't have confidence in your method, fear will cause most traders to change how they select and manage trades. If you are trading with money you can't afford to lose or are afraid to lose, it will also cause most traders to change their trade selection and trade management approach. Their discretionary trade selection will become more restrictive, and their profit taking will become premature.

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  #23 (permalink)
Trading for Fun
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Balance


Well, I finally did one thing I should have done already - look at my notes and evaluated my trades.


Since, I have no software, I had to do this by hand first and then to do it on Excel. This is a very simple balance of all my trades since the beggining of this year:


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Conclusions:

- I now realize that after all, Crude is the most profitable of what I trade;

- I rarely trade Forex but it also has been profitable;

- I only trade 4 times stocks (Check Point Software Techologies, Oracle Corp, Cisco Systems and Akamai Tech). My loss comes only from commissions, as my trading decisions were correct. However, insecurity forced me to exit too early, and did not let the profits run;

- I must conclude that my worse performance is trading Stock Index futures;

- I really do have more winning trades than losing trades. Thats a good sign, although my losses are bigger than my profits.



Analysis on my worse trades of Stock Index futures:

- My worse loss occured when I clearly broke my rules. Plain stupidity! Specifically:

- a) - US SPX500 - the max contracts (1 per point) I decided to trade, judging my trading account, is 25. For 5 times I tried to trade with...100 contracts (1 per point). Pure greed, but greed leads to fear, and as soon as the market turned against me, losses where big;

- b) - DJI or Wall Street - absence of stop loss, expecting to correct a bad trade with one or two more, in order to cover the previous losses (catched several falling knives);

- c) - In the beggining I didnt use the 2% loss rule.


More lessons learned from this analysis.

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  #24 (permalink)
Elite Member
Miami FL USA
 
Futures Experience: Advanced
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Lord Sidious View Post
I think that my following step should be to get a good trading software. All of them are two expensive for me. Its hard to have a profit each month, so how can I pay for monthly use of software? Its hard.

With the 1700 Euros you lost since you started this thread, you could have paid for many months of trading expenses....

I typed ""open futures trading account with $5000"" into google and quickly got; Optimus, Velocity, Tradestation, Alpari and Trade Pro, I guess it's still very do-able and very common. Whether any of these are available to you in Portugal is unknown to me. To be absolutely clear, I'm not recommending live trading with a $5000 account.

Opinions are like what each of us sit upon, we all have one and they usually stink! I'll post mine in the hope that someone (if not you) may benefit from it, and in return save themselves some money.

There's some good information and direction appearing on your thread pertaining to paper, simulated and live trading. I consider "paper" trading just that, reviewing either printed charts (on paper) or charts on a screen and writing notes (on paper) as to hypothetical entries, stops and exits. Although exciting when I reveal a string of (hypothetical) winning trades and find myself dreaming of living in a beach house in the Cayman Islands with my private indoor snorkeling reef, the exercise is mostly emotionless. Probably more frustrating than anything.

IMO, Simulated trading with an electronic trading platform is a step up from the prior. Not only can I test my methodology and theories in the live market, I simultaneously learn the limitations, liabilities and risks involved in electronic trading. It's been mentioned up thread but I'll state it differently. Have you ever heard the expression, "Figures never lie, but Liars figure." There's no place to hide when trading a live account, but simulated trading platforms offer many dark corners for traders to hide from their trading reality. Just ask Jamie Dimon, I bet he'd agree. Simulated Trading results are only as reliable as the honesty of the trader. Check out the Top Step Trader video in futures.io (formerly BMT)'s video archives, I believe it's a great model/idea and I also believe it's going to catch on quick. The specter of accountability is brought front and center, leaving the "simulating trader" no place to hide.

With all my previous ranting laid out I'll get to my point. I believe new traders often confuse learning how to trade with making money. The lure of making a lot of money fast is the nemesis of most newbies. Is it possible, yes. Is it probable, no. When considering an attempt to trade in today's markets, don't bring a sling-shot to a gun fight. I suggest reverse engineering your goals. Ask yourself, what tools do I need to trade the market in a professional manner with my methodology. Shop around and find the charting platform that fits your needs, does it have the indicators and studies you need or will you have to import third party tools into the program. Are you comfortable with the software, do you trust the third party tools to perform day in and day out. Not all data feeds are created equal, some might work for you but not for me. Know the limitations of the data and be aware of the effects your data has on certain indicators/studies. How about trade execution, do you prefer trading from the chart or do you prefer a DOM. Dynamic, static or self centering DOM, know what you're getting before committing.

Armed with the proper tools who've selected now you can begin to learn to trade. No one can do it for you, it's an inside job. Give yourself plenty of time forward testing on a good simulator, the market will always be there, waiting to take your money. You're competing with serious traders with serious attitudes who are in this business to make serious money. I suggest you get serious too.

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  #25 (permalink)
Elite Member
Miami FL USA
 
Futures Experience: Advanced
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Lord Sidious View Post
Well, I finally did one thing I should have done already - look at my notes and evaluated my trades.


Since, I have no software, I had to do this by hand first and then to do it on Excel. This is a very simple balance of all my trades since the beggining of this year:


- I now realize that after all, Crude is the most profitable of what I trade;

- I rarely trade Forex but it also has been profitable;

- I only trade 4 times stocks (Check Point Software Techologies, Oracle Corp, Cisco Systems and Akamai Tech). My loss comes only from commissions, as my trading decisions were correct. However, insecurity forced me to exit too early, and did not let the profits run;

- I must conclude that my worse performance is trading Stock Index futures;

- I really do have more winning trades than losing trades. Thats a good sign, although my losses are bigger than my profits.



Analysis on my worse trades of Stock Index futures:

- My worse loss occured when I clearly broke my rules. Plain stupidity! Specifically:

- a) - US SPX500 - the max contracts (1 per point) I decided to trade, judging my trading account, is 25. For 5 times I tried to trade with...100 contracts (1 per point). Pure greed, but greed leads to fear, and as soon as the market turned against me, losses where big;

- b) - DJI or Wall Street - absence of stop loss, expecting to correct a bad trade with one or two more, in order to cover the previous losses (catched several falling knives);

- c) - In the beggining I didnt use the 2% loss rule.


More lessons learned from this analysis.

Funny you posted your analysis at this time. I wanted to add a snip of the Scouting Criteria from the Top Step Trader website, before you put me on your ignore list!! I'm posting this as a guide for you to consider as you glean further information from your own trading. Don't get me wrong, oh Lord (Sidious), you're obviously doing something right since you have survived the last year and a half. I'll respond to your win/loss % with a guarded not bad. What jumps out at me is your risk management. Protect your trading capital. You mentioned Ninjatrader in you resent post, I like their account performance analytics, if you understand how to use them they're very helpful. I've used the NT DOM and performance analytics for years and have limited knowledge of other platforms for comparison. I'm adding another snip you may find informative.

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).



Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).

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  #26 (permalink)
Trading for Fun
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Futures Experience: Beginner
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Favorite Futures: Dow Jones Index, Light Crude
 
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Cashish View Post
Funny you posted your analysis at this time. I wanted to add a snip of the Scouting Criteria from the Top Step Trader website, before you put me on your ignore list!! I'm posting this as a guide for you to consider as you glean further information from your own trading. Don't get me wrong, oh Lord (Sidious), you're obviously doing something right since you have survived the last year and a half. I'll respond to your win/loss % with a guarded not bad. What jumps out at me is your risk management. Protect your trading capital. You mentioned Ninjatrader in you resent post, I like their account performance analytics, if you understand how to use them they're very helpful. I've used the NT DOM and performance analytics for years and have limited knowledge of other platforms for comparison. I'm adding another snip you may find informative.

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).



Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).



Lol! Ignore List? I wouldnt, believe me!

Im here to learn, and for that I am willing to see my faults and errors. Thats why I try to improve seeking (and to work) my weaknesses as a trader. And for that, I do thank you, my friend, because youre helping me!


Thanks for the attachments. I know the last one, but thank you, anyway!

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  #27 (permalink)
Trading for Fun
Portugal
 
Futures Experience: Beginner
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Broker/Data: IGMarkets
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monpere View Post
I think two major things generally affect discretionary trading behavior when switching to live vs sim. One is confidence in your method, the other is trading scared money. If you don't have confidence in your method, fear will cause most traders to change how they select and manage trades. If you are trading with money you can't afford to lose or are afraid to lose, it will also cause most traders to change their trade selection and trade management approach. Their discretionary trade selection will become more restrictive, and their profit taking will become premature.

I agree, monpere! I find paper trading helpful, but one have to be in the real cash market to see how it is.

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  #28 (permalink)
Trading for Fun
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Futures Experience: Beginner
Platform: IGMarkets
Broker/Data: IGMarkets
Favorite Futures: Dow Jones Index, Light Crude
 
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Posts: 91 since Apr 2012
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Results of the stupidity!

Guys,

In my previous post, I posted my balanced resulting of my notes/trades evaluation.


Well, I did another exercice on my trading analisys and honestly, Im shocked and angry, but at the same time happy, to verify the result of my greed, rules violation and my stupidity.


Here is the balance I firstly posted:


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Like I also wrote, I did several trades where greed, rule violation and stupidity won. Here they are:

- a) 2 trades on US SPX 500 where trade with...100 contracts (1 per point). According to my rules Im not allowed to exceed 25 contracts and I must set stop loss at the 2% loss rule (about 120), which I didnt. Result: 750 loss!!!!

- b) 1 trade where I ignored my rules, was very risky. I trade 100 contracts, but I was able do profit 50. Nevertheless, I should have avoid this situation. Result: 50 profit.

- c) 3 trades on Wall Street (DJI) where I did not use stop loss rule, and worse, where I kept entering trades against the trend, hoping to cover the previous loss. Result: 469,50 loss!!!


Now lets look at my balance without this 6 stupid trades:


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857,60 loss turned into 317,22 profit!!!


I know that "IF" is an inconsequent matter, but I must conclude that was I sticked my rules, Id be profitable! Im not trying to say Im a good trader or to convince myself I know lots of trading stuff. It simply allows me to see that maybe Im a little better I think I I was. Knowing that if I stick with my tactics/setups and follow my rules makes me to be profitable (or at least to have better results) helps me and gives me even more desire and will to learn more things in the future! My preserverance, patience and will to suceed boosted even more at the moment I did this more analysis!


So many lessons learned since I start analysing my notes and trades!!!

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  #29 (permalink)
Elite Member
Berlin, Europe
 
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@Lord Sidious: As you have kindly invited me several times to comment your trading journal I will post now.



You have shown the courage to post your trades, and to show the results. So I hope that you do not mind that I will comment your trades without telling you that everything is wonderful, and that you can stand the criticism. The same comments would have applied to myself some time ago , an expert is somebody who has already made every possible mistake, and I am not even an expert.

I think that successful trading requires three things. For me they are equally important. If one of them is missing, you will be quickly taken out of the game. You need and edge, you need to know yourself and master your emotions and you need to apply some basic money management rules. That is all. It sounds simple, but it is difficult to achieve. You don't have an edge and you don't have appropriate money management rules. And as you don't stick to your (ever changing) rules, you also don't master your emotions. Actually nobody does when beginning to trade, and you are paying your tuition fee to the lucky counterparty that you selected for your trading endeavour. Others, who trade via an exchange pay the tuition fee to other traders.


Psychology

You state that

"I really do have more winning trades than losing trades. Thats a good sign, although my losses are bigger than my profits."

I don't think that it is a good sign. It just shows that you are not sticking to your rules. This is what is typically happening:

(1) FEAR that losers turn into winners: The fear that a winner will turn into a loser scares the trader into taking an early profit. Also it is not only fear. If you click the mouse button you will be rewarded with the SATISFACTION that you have made winning trade.

(2) LOSS AVERSION: If the trade is underwater, the trader refuses to acknowledge that it has been a losing trade and therefore does not close it, but either hopes that it will move back into positive territory, or even worse, doubles the position to average down the breakeven point. This will make it easier for the positive to move back into positive territory, but on the other side it will double all losses.

Fear and loss aversion leads to many small profits and a few large losers. This shows as a high percentage of winning trades, but an average losing trade twice as high compared to the average winning trade.

Now let us have a look at your rules. Excellent that you have a target and a stop loss for each trade, before you enter the position. So far you have published the following trades:

Post #1, Trade 1: Target 81 points, Stop 9 points, R-Multiple 9, Result 3 points
Post #2, Trade 2: Target 100 points, Stop 20 points, R-Multiple 5, Result - 20 points
Post #10, Trade 3: Target 25 points, Stop 12 points, R-Multiple 2, Result - 12 points
Post #11, Trade 1: Target 8 points, Stop 8 points, R-Multiple 1, Result 8 points
Post #11, Trade 2: Target 8 points, Stop 8 points, R-Multiple 1, Result 8 points
Post #11, Trade 3: Target 8 points, Stop 8 points, R-Multiple 1, Result -8 points
Post #11, Trade 4: Target 8 points, Stop 8 points, R-Multiple 1, Result 0 points
Post #12, Trade 1: Target 22 points, Stop 10 points, R-Multiple 2, Result - 10 points

This set of trade reveils a few things:

- You do not have a proven edge to trade, because you are frequently changing your rules. I do not see any positive expectancy, it more looks like gambling. In the first trade, you have a R-multiple (potential win divided by potential loss) of 9, then it comes down to 5, 2 and 1. A high R-Multiple always means a low winning percentage, a lower R-Multiple increases the odds of winning, which is more satisfactory. Therefore I am not astonished that you are gradually decreasing the R-Multiples, as this will lead to a higher number of positive experiences.
- For the trades that you posted you were able to mostly stick to your rules. Out of 8 trades, 6 have ended with one of the two announced results, which means a profit or a loss at the announced levels. This is good. Only for the first trade and the second but the last trade you have cut your profits short. Both cases confirm the point (1) above, the first within the context of that trade, the second but the last day within the context of the day, as it was a winning day and you did not want a winning day to turn into a losing day.
- However, if I look at your intended R-Multiples between 9 and 1, and the realized R-Multiple of 0.37 (average winning trade = € 1721.83/47 = € 36.63 versus average losing trade = € 2465.20/25 = 98.61), then there is a huge gap. Your average losing trade was 3 times higher than your average winning trade, which suggests that you were suffering from both fear and loss aversion.


Where is your edge?

To succeed in trading you should either have 10,000 well spent hours of screen time, - you are now an artist - or alternatively a proven edge.

"Well, I bought 5 contracts near the days low. Stochastics were near 0, MACD Hist were diminushing, MACD lines were about to cross, MA 5 was starting to reversal and pointing up"

This is definitely no edge. It is just the standard idea people have, that two lines are crossing and price should now move up. Also see video thread "Awesome Chart".

"There was a MACD divergency with price. MACD lines were rising and MACD hist also, keeping above 0."

This is no edge. Mathematically a rising MACD below the zeroline means that negative momentum slows down. Imagine that you drive with a car from Lisboa to Porto and that you reduce your speed. This does not mean that you are going back to Lisboa! You are still driving to Porto, albeit at a slower speed. The MACD histogram above zero is bullish, if the MACD is above the zeroline, but not if it is below.

"Setup Rules to Follow: Pay attention to price action. Days High and Low as the prefered zone to enter. Watching for Fibonacci points. In a considerable price change, looking to enter the rally or pullback. Do not enter if there is at least a minimum of 10 ticks of price change in the reverse price change. Always expect for at least two candles to hit the same "low" or "high" of the considerable price change, in order to get a confirmation. "

This is confusing. How do you know where the day's high and low will be prior to the fact. The reward-to-risk ratio may be good at those points, but the winning percentage is particularly low. This is not good for the self esteem of the trader and you will probably not stand it. How do you determine Fibonacci points? I like your idea with the pullback, but so far you have not posted a single pullback trade. I don't see the necessity for a 10-tick filter in general. I like the idea to enter a trade on the second attempt that price makes in any direction.

Definitely you don't have any edge so far. Just looking at the MACD and the Stochastics is not enough.


Money management

Minimum requirements:

(1) Define maximum loss allowed per trade (for example 1% of account size). Calculate the maximum loss for your account and adjust your position size accordingly. For example if you have an account of € 5,000 - you should not lose more than € 50 per trade. The only advantage of a CFD account is that you can trade small and adjust your position size. Make use of that advantage and trade small. For the wall street contract if you stop is 20 points and the contract is € 1 per point, than 20 points mean € 20 per contracts and you should not trade more than 2 contracts.

(2) Define maximum loss per day and stop trading after it occurred. For example you could stop after 3 losing trades (3%). If you don't respect this rule and continue trading after the third losing trade, stop trading for a week. Also define a maximum loss per week, for example 10% of the account, and stop trading for one week if that loss has occured to review the trades and the reasons for the drawdown.


Recommendations:

- Only trade 1 contract until you have been profitable for 8 consecutive weeks. Your account will last longer and you will learn as much, as if you trade 10 contracts. The psychological pressure will be less, so you it will be easier to master your emotions.
- Trading CFDs means high spreads, so the odds are skewed against you. A spread of 6 cents for CL will not allow you to be profitable. This is another reason to only trade 1 contract. You mention slippage. There cannot be any slippage on a CFD contract. The market is quote driven. It means that your counterparty just changed the price. You are trading against a financial institution. They take your orders on their book, because they know that it is likely that oversized spreads and emotions will quickly lead you to make losses. They have invested in IT infrastructure to get your € 6000,- - and for sure they will get it. They don't even hedge your positions, why should they. You are being cheated into a game that you cannot win this way. In case that you make regular profits, they will increase your slippage. Your only advantage is that you can trade small.
- Don't touch Crude Oil, the spread is too high.
- Before you continue trading, try to find a setup with a proven edge.
- Don't always change your position size, but keep it simple and enter all trades with a same size defined by the risk calculation (maximum loss allowed per trade).

I have posted this with mixed feelings, as I do not want to embarass anyone - well with a few exceptions , but you are certainly not in that group. In the end I could not resist to simply write what I think. I wish that it may help a bit ....




and I hope that you will be able to improve your bottom line. Good luck!

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  #30 (permalink)
Trading for Fun
Portugal
 
Futures Experience: Beginner
Platform: IGMarkets
Broker/Data: IGMarkets
Favorite Futures: Dow Jones Index, Light Crude
 
Lord Sidious's Avatar
 
Posts: 91 since Apr 2012
Thanks: 8 given, 15 received



Fat Tails View Post
@Lord Sidious: As you have kindly invited me several times to comment your trading journal I will post now.



You have shown the courage to post your trades, and to show the results. So I hope that you do not mind that I will comment your trades without telling you that everything is wonderful, and that you can stand the criticism. The same comments would have applied to myself some time ago , an expert is somebody who has already made every possible mistake, and I am not even an expert.

I think that successful trading requires three things. For me they are equally important. If one of them is missing, you will be quickly taken out of the game. You need and edge, you need to know yourself and master your emotions and you need to apply some basic money management rules. That is all. It sounds simple, but it is difficult to achieve. You don't have an edge and you don't have appropriate money management rules. And as you don't stick to your (ever changing) rules, you also don't master your emotions. Actually nobody does when beginning to trade, and you are paying your tuition fee to the lucky counterparty that you selected for your trading endeavour. Others, who trade via an exchange pay the tuition fee to other traders.


Psychology

You state that

"I really do have more winning trades than losing trades. Thats a good sign, although my losses are bigger than my profits."

I don't think that it is a good sign. It just shows that you are not sticking to your rules. This is what is typically happening:

(1) FEAR that losers turn into winners: The fear that a winner will turn into a loser scares the trader into taking an early profit. Also it is not only fear. If you click the mouse button you will be rewarded with the SATISFACTION that you have made winning trade.

(2) LOSS AVERSION: If the trade is underwater, the trader refuses to acknowledge that it has been a losing trade and therefore does not close it, but either hopes that it will move back into positive territory, or even worse, doubles the position to average down the breakeven point. This will make it easier for the positive to move back into positive territory, but on the other side it will double all losses.

Fear and loss aversion leads to many small profits and a few large losers. This shows as a high percentage of winning trades, but an average losing trade twice as high compared to the average winning trade.

Now let us have a look at your rules. Excellent that you have a target and a stop loss for each trade, before you enter the position. So far you have published the following trades:

Post #1, Trade 1: Target 81 points, Stop 9 points, R-Multiple 9, Result 3 points
Post #2, Trade 2: Target 100 points, Stop 20 points, R-Multiple 5, Result - 20 points
Post #10, Trade 3: Target 25 points, Stop 12 points, R-Multiple 2, Result - 12 points
Post #11, Trade 1: Target 8 points, Stop 8 points, R-Multiple 1, Result 8 points
Post #11, Trade 2: Target 8 points, Stop 8 points, R-Multiple 1, Result 8 points
Post #11, Trade 3: Target 8 points, Stop 8 points, R-Multiple 1, Result -8 points
Post #11, Trade 4: Target 8 points, Stop 8 points, R-Multiple 1, Result 0 points
Post #12, Trade 1: Target 22 points, Stop 10 points, R-Multiple 2, Result - 10 points

This set of trade reveils a few things:

- You do not have a proven edge to trade, because you are frequently changing your rules. I do not see any positive expectancy, it more looks like gambling. In the first trade, you have a R-multiple (potential win divided by potential loss) of 9, then it comes down to 5, 2 and 1. A high R-Multiple always means a low winning percentage, a lower R-Multiple increases the odds of winning, which is more satisfactory. Therefore I am not astonished that you are gradually decreasing the R-Multiples, as this will lead to a higher number of positive experiences.
- For the trades that you posted you were able to mostly stick to your rules. Out of 8 trades, 6 have ended with one of the two announced results, which means a profit or a loss at the announced levels. This is good. Only for the first trade and the second but the last trade you have cut your profits short. Both cases confirm the point (1) above, the first within the context of that trade, the second but the last day within the context of the day, as it was a winning day and you did not want a winning day to turn into a losing day.
- However, if I look at your intended R-Multiples between 9 and 1, and the realized R-Multiple of 0.37 (average winning trade = € 1721.83/47 = € 36.63 versus average losing trade = € 2465.20/25 = 98.61), then there is a huge gap. Your average losing trade was 3 times higher than your average winning trade, which suggests that you were suffering from both fear and loss aversion.


Where is your edge?

To succeed in trading you should either have 10,000 well spent hours of screen time, - you are now an artist - or alternatively a proven edge.

"Well, I bought 5 contracts near the days low. Stochastics were near 0, MACD Hist were diminushing, MACD lines were about to cross, MA 5 was starting to reversal and pointing up"

This is definitely no edge. It is just the standard idea people have, that two lines are crossing and price should now move up. Also see video thread "Awesome Chart".

"There was a MACD divergency with price. MACD lines were rising and MACD hist also, keeping above 0."

This is no edge. Mathematically a rising MACD below the zeroline means that negative momentum slows down. Imagine that you drive with a car from Lisboa to Porto and that you reduce your speed. This does not mean that you are going back to Lisboa! You are still driving to Porto, albeit at a slower speed. The MACD histogram above zero is bullish, if the MACD is above the zeroline, but not if it is below.

"Setup Rules to Follow: Pay attention to price action. Days High and Low as the prefered zone to enter. Watching for Fibonacci points. In a considerable price change, looking to enter the rally or pullback. Do not enter if there is at least a minimum of 10 ticks of price change in the reverse price change. Always expect for at least two candles to hit the same "low" or "high" of the considerable price change, in order to get a confirmation. "

This is confusing. How do you know where the day's high and low will be prior to the fact. The reward-to-risk ratio may be good at those points, but the winning percentage is particularly low. This is not good for the self esteem of the trader and you will probably not stand it. How do you determine Fibonacci points? I like your idea with the pullback, but so far you have not posted a single pullback trade. I don't see the necessity for a 10-tick filter in general. I like the idea to enter a trade on the second attempt that price makes in any direction.

Definitely you don't have any edge so far. Just looking at the MACD and the Stochastics is not enough.


Money management

Minimum requirements:

(1) Define maximum loss allowed per trade (for example 1% of account size). Calculate the maximum loss for your account and adjust your position size accordingly. For example if you have an account of € 5,000 - you should not lose more than € 50 per trade. The only advantage of a CFD account is that you can trade small and adjust your position size. Make use of that advantage and trade small. For the wall street contract if you stop is 20 points and the contract is € 1 per point, than 20 points mean € 20 per contracts and you should not trade more than 2 contracts.

(2) Define maximum loss per day and stop trading after it occurred. For example you could stop after 3 losing trades (3%). If you don't respect this rule and continue trading after the third losing trade, stop trading for a week. Also define a maximum loss per week, for example 10% of the account, and stop trading for one week if that loss has occured to review the trades and the reasons for the drawdown.


Recommendations:

- Only trade 1 contract until you have been profitable for 8 consecutive weeks. Your account will last longer and you will learn as much, as if you trade 10 contracts. The psychological pressure will be less, so you it will be easier to master your emotions.
- Trading CFDs means high spreads, so the odds are skewed against you. A spread of 6 cents for CL will not allow you to be profitable. This is another reason to only trade 1 contract. You mention slippage. There cannot be any slippage on a CFD contract. The market is quote driven. It means that your counterparty just changed the price. You are trading against a financial institution. They take your orders on their book, because they know that it is likely that oversized spreads and emotions will quickly lead you to make losses. They have invested in IT infrastructure to get your € 6000,- - and for sure they will get it. They don't even hedge your positions, why should they. You are being cheated into a game that you cannot win this way. In case that you make regular profits, they will increase your slippage. Your only advantage is that you can trade small.
- Don't touch Crude Oil, the spread is too high.
- Before you continue trading, try to find a setup with a proven edge.
- Don't always change your position size, but keep it simple and enter all trades with a same size defined by the risk calculation (maximum loss allowed per trade).

I have posted this with mixed feelings, as I do not want to embarass anyone - well with a few exceptions , but you are certainly not in that group. In the end I could not resist to simply write what I think. I wish that it may help a bit ....




and I hope that you will be able to improve your bottom line. Good luck!



Thank you so much for your input, Fat Tails! It was extremely helpful!


Thank you, again!



Good trading!

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