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The Way of the AttitudeTrader
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The Way of the AttitudeTrader

  #1 (permalink)
Attitude is everything.
Dallas, TX, USA
 
Futures Experience: Intermediate
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The Way of the AttitudeTrader

I have come to a jarring clarity recently. A clarity that has made me realize that I need a new "way."

Thanks to @Big Mike for such a great forum!








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Last edited by AttitudeTrader; June 26th, 2014 at 11:47 AM.
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  #2 (permalink)
Quick Summary
Quick Summary Post

Quick Summary


Last edited by AttitudeTrader; June 17th, 2014 at 06:23 PM.
 
  #3 (permalink)
Attitude is everything.
Dallas, TX, USA
 
Futures Experience: Intermediate
Platform: NinjaTrader, T4
Broker/Data: IQFeed
Favorite Futures: 6E
 
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Posts: 358 since Oct 2009
Thanks: 6,868 given, 857 received

A New Beginning?


I have a lot of “experience” trading, but nothing more than that to show for it. I've been at this for many years, but still have yet to truly begin.

Too many things have gotten in the way of what needs to be done in order for me to trade successfully. But it has to be done.

I'm honestly frightened. I'm frightened because I'm afraid this is going to be painful; I'm afraid it's going to take a long time; the risk of bruising my ego here is large. But I know I must attempt this in order to move forward.

This is my attempt at a new beginning – a new “way.”


Last edited by AttitudeTrader; January 17th, 2013 at 05:53 PM. Reason: Slight rewording.
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  #4 (permalink)
Attitude is everything.
Dallas, TX, USA
 
Futures Experience: Intermediate
Platform: NinjaTrader, T4
Broker/Data: IQFeed
Favorite Futures: 6E
 
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Posts: 358 since Oct 2009
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A New “Way”

I've already heard and read everything I need to know to be a successful trader, but apparently it hasn't made enough impact – until lately. My own recent experiences, and a webinar by PandaWarrior (as well as his journal), have helped me to crystallize the enormity of my lack of respect for what is among the most critical facets of trading: Consistency.

In his webinar, @PandaWarrior shares several acronyms and ideas that twisted the knife that was already in my gut:

CCPP – Constant Change Prevents Profitability: He says that it's because of something called “specialization.” If you don't specialize, you never become a master.

CCFG – Confidence Conquers Fear & Greed: If you've become a specialist, then you've developed a high degree of confidence in your ability to execute something. And you don't have to worry about fear & greed nearly as much as someone who is not a specialist. You can only develop confidence by becoming a specialist.

The Elevator Speech: It says something along the lines of, “If you can't make your sales pitch in an elevator, then it's too long.” With regard to trading, if the amount of information required to make a trading decision is too much then we're probably either not going to be able to make a decision, or we're going to make a bad one. Make the actual trading decision as simple as possible or you just won't be able execute appropriately.

Mentors & Neighbors: The thoughts about the neighbors is what's important to me. His advice is basically, “Keeping up with your trading neighbors is probably not a good idea, because we all have our own journey. Don't compare your journey to others.”

In his webinar, Overcoming Obstacles to Consistency, @FuturesTrader71 makes numerous points regarding consistency:
  • In my (FT71) opinion, I would recommend the following:
  • Understand the risks of trading. Take care of having a risk plan first and foremost.
  • Pick your tools and then get really good with them.
  • Create a plan and then just focus on executing that plan. You aren't going to become a great surgeon by focusing on how much money you're going to make on the surgery.
  • The name of the game is practice. You come up with a plan then you practice it. You document your results. You adjust the plan then you practice some more. You document your results then you adjust and then practice some more.
  • Your plan should drive you to consistency and your consistency should drive you to profitability.
  • Pick three tools and get good with them. Just keep it simple.
These, as well as some specific exercises from The Disciplined Trader and Trading In The Zone, will be the cornerstone for my new “way.”


Last edited by AttitudeTrader; January 17th, 2013 at 06:41 PM. Reason: Slight rewording.
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  #5 (permalink)
Attitude is everything.
Dallas, TX, USA
 
Futures Experience: Intermediate
Platform: NinjaTrader, T4
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Posts: 358 since Oct 2009
Thanks: 6,868 given, 857 received

The Training Starts Now

The first four steps and the accompanying exercise in Chapter 16 (The Steps To Success) of The Disciplined Trader, as well as the concepts and exercise in Chapter 11 (Thinking Like A Trader) of Trading In The Zone will be my guides for the time being.

From The Disciplined Trader:
"As a trader it is more important to know that you will always follow your rules than it is to make money, because whatever money you make you will inevitably lose back to the market if you can't follow your rules."
Step One: Staying Focused On What You Need To Learn
"First and foremost, you may need to change your perspective or the focus of your trading. Until now your focus may have been to make money. If this is so, you will need to change your perspective to “What do I need to learn or how will I have to adapt myself to interact more successfully?” You need to stay focused on mastering the steps to achieving your goal and not the end result, knowing that the end result, money, will be a by-product of what you know and how well you can act on what you know."
Step Two: Dealing With Losses
"Trading Rule 1 – Predefine what a loss is in every potential trade."
"Trading Rule 2 – Execute your losing trades immediately upon the perception that they exist."
Step Three: Becoming An Expert At Just One Market Behavior
"You need to start as small as possible and then gradually allow yourself to grow into greater and greater amounts of market information."

"Starting small and gradually working into other combinations is a real exercise in discipline that has a couple of important psychological benefits. First, you will be building a base of confidence as you learn that you can, in fact, accurately assess what will most likely happen next. It is much easier to gain this confidence if you don't overwhelm yourself with the market's seemingly infinite possibilities. Second, by passing up other opportunities that you are not an expert at yet, you will be releasing yourself from any compelling desire to trade. Any compelling behavior is usually the result of some fear. That fear, in turn, will cause you to behave in many inappropriate ways."
Step Four: Learning How To Execute A Trading System Flawlessly
"The proper execution of your trades is one of the most fundamental components of becoming a successful trader and probably the most difficult to learn."

"To be able to execute your trading systems properly, you will need to incorporate two concepts into your mental framework – thinking in terms of probabilities and correlating the numbers or the mechanics of your system to the behavior. Unfortunately, the only way you can really learn these things is to actually experience them by executing your system. The problem is that rarely will the typical trader stay with his system beyond two or three losses in a row, and taking two or three losses in a row is a very common occurrence for most trading systems."

Today I take my first step on the path to becoming a consistently successful trader. The training starts now.


Last edited by AttitudeTrader; January 17th, 2013 at 05:18 PM.
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  #6 (permalink)
Attitude is everything.
Dallas, TX, USA
 
Futures Experience: Intermediate
Platform: NinjaTrader, T4
Broker/Data: IQFeed
Favorite Futures: 6E
 
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Posts: 358 since Oct 2009
Thanks: 6,868 given, 857 received

Exercises In Consistency

My training begins with exercises in consistency.

Chapter 11 (Thinking Like A Trader) of Trading In The Zone refers to this as the mechanical stage.

In this stage you:
  • Build the self-trust necessary to operate in an unlimited environment.
  • Learn to flawlessly execute a trading system.
  • Train your mind to think in probabilities (the five fundamental truths).
  • Create a strong, unshakeable belief in your consistency as a trader.
I'll be doing my training – this exercise – in my simulated (demo) account.

I've written a simple trading plan with very specific entry, exit and other rules to use for the start of this exercise.

I will trade this plan over a 20-trade sample size. In this first sample size I will be taking 20 trades, all per my defined rules. The exercise is to take every trade regardless of whether I think it's going to work or not. And it is my intent to pay attention to my responses to each trade and record those responses.

The objective of this exercise is to develop the belief in my own ability to act in a consistent and appropriate way. But when the sample size is over I will have the opportunity to modify one aspect of my method if I have determined that the change may be beneficial (I will be keeping detailed stats of the trades). Then I will do another 20-trade sample size.

Meanwhile I will continue to read and re-read both chapters that I've mentioned above to absorb, reinforce and fully understand the content and ideas.

I will post the results of my first day of training shortly.


Last edited by AttitudeTrader; January 17th, 2013 at 06:50 PM.
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  #7 (permalink)
Attitude is everything.
Dallas, TX, USA
 
Futures Experience: Intermediate
Platform: NinjaTrader, T4
Broker/Data: IQFeed
Favorite Futures: 6E
 
AttitudeTrader's Avatar
 
Posts: 358 since Oct 2009
Thanks: 6,868 given, 857 received

My First Day of Training

I'm not going to post any charts or specific entry/exit records because what's important here is the exercise/training that I'm doing, not the charts or simulated account results. My intent here is to share the journey and the work I'm doing to try to reach my objectives. I will be posting some of the trade-by-trade stats captured by the Stage 5 Trade Analyzer though.

Trades will be numbered consecutively through this 20-trade sample size (i.e., tomorrow's first trade will be #5).

Trade #1
09:10 Short on the first valid setup of the day.
09:15 Stopped out. Got that dull sick feeling in my stomach when the chime told me my stop order was hit. -5 ticks. But it doesn't matter because I followed my rules.

Trade #2
09:29 Made a mistake on the DOM while placing the order for the next valid setup. I didn't realize it until a minute or two later. Psychological slip-up – not good.
09:31 Out as soon as I realized my mistake. -0 ticks

Trade #3
09:49 Long on second valid setup of the day.
10:20 Out at target. Took about 31 minutes. Thought for sure I would be stopped out several times. Minor happiness that it was a winner. +6 ticks. But it doesn't matter because I followed my rules.

No Fill
11:00 Order to go long on valid setup. Order price was touched but not filled.
11:15 Price moved to my target level. Per my rules the trade is now over and I have to cancel my standing order for the trade. Would have been profitable if I had been filled, but it doesn't matter because I followed my rules.

Trade #4
12:09 Long on valid setup. I really didn't think this was a good place to be getting long again because price had already moved up so much.
12:41 Target reached after 31 minutes again. What I think is irrelevant at this point. +6 ticks. But the profit doesn't matter. What matters is that I followed my rules.


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Last edited by AttitudeTrader; January 18th, 2013 at 04:22 PM.
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  #8 (permalink)
Attitude is everything.
Dallas, TX, USA
 
Futures Experience: Intermediate
Platform: NinjaTrader, T4
Broker/Data: IQFeed
Favorite Futures: 6E
 
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Posts: 358 since Oct 2009
Thanks: 6,868 given, 857 received

My Second Day of Training

Amazing. The first part of the day I spent mostly in a state of frustration over seemingly missed opportunities. The second part of the day I spent mostly stunned that my winning trades were winners.

It just shows me how much I need this exercise.

No Fill
08:31 Order to go short on valid setup. Order price was touched but not filled.
08:32 Price moved to my target, so entry order was canceled. Made a great move in the direction of the missed trade. But it doesn't matter because I followed my rules.

Report due out in 10 minutes.
08:45 Prelim UoM Consumer Sentiment report due out at 8:55. Order to short on valid setup canceled. Sucks because it was another nice setup but I can't take it – I'm feeling some irritation. But it doesn't matter because I followed my rules.

Report is out.
08:55 Report. Price has reached my target now, so I can't re-enter the order. I'm feeling aggravation – 2 valid setups, 2 solid potential winners, 2 missed opportunities. But it doesn't matter because I followed my rules.

Price moved without me.
10:02 Price pulled back to my original entry level and has now moved further down. Still feeling some disappointment over having missed this move. But it doesn't matter. What's important is that I followed my rules.

Trade #5 (continued from 20-trade sample size started yesterday)
10:17 Short on valid setup.
10:27 Really want to get out of this one now that it has come back to B/E after moving 4 ticks MAE...
10:35 I know this is going to stop me out. Got up and left my office for a few minutes.
10:44 I'm stunned. Price reached my target after 25 minutes and I'm out. I was utterly convinced that I was going to be stopped out of this trade. I had already started the bitch & moan session with myself about how after missing out on 2 good setups because of my rules, I finally got in and now it was a loser. I had also determined that there were some things on the chart and the Volume Histogram on the DOM that should have told me that this wasn't a good trade in the first place. Wow. +6 ticks. But it doesn't matter. All that matters is that I followed my rules! And following these rules is already making it apparent to me that this exercise is exactly what I need to be doing right now.

Trade #6
11:08 Short on valid setup. Now I'm very scared to take this one because I'm confident that price has moved down so much that it's time for it to be trying to move back up and I'm going to feel stupid for taking this trade.
11:20 I can see how important it is to me to win, win, win; and how hard it is for me to take a loser. Obviously it means much more to me than just taking a losing trade...
11:29 Stepping out of my office to make some lunch.
11:51 Stopped out after 42 minutes. -5 ticks. But it doesn't matter because I followed my rules.

Trade #7
13:46 Long on valid setup. Not as much anxiety about this one for some reason. I don't like the looks of it, but I'm not as worried about this one. I'm pretty sure this is going to be a loser because I'm actually going long near the high of the day.
14:31 Target reached after 45 minutes. Stunned again. +6 ticks. But it's irrelevant. The only thing that matters is that I followed my rules.


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Last edited by AttitudeTrader; January 18th, 2013 at 08:25 PM.
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  #9 (permalink)
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Some thought below.


AttitudeTrader View Post
Amazing. The first part of the day I spent mostly in a state of frustration over seemingly missed opportunities. The second part of the day I spent mostly stunned that my winning trades were winners. This happens when you leave your trades alone and quit second guessing them

It just shows me how much I need this exercise.

No Fill
08:31 Order to go short on valid setup. Order price was touched but not filled. why can't you re-enter? I mean if the premise of the trade is still valid, ie...your stops not hit, why not enter on the second time around. Lots of people make money on second entry opportunities. And why not hit market order if it touches your price? Leaving money on the table because it didn't trade through seems petty to me. If you like the level, take the trade.

08:32 Price moved to my target, so entry order was canceled. Made a great move in the direction of the missed trade. But it doesn't matter because I followed my rules. was your gut telling you to take this trade?

Report is out.
08:55 Report. Price has reached my target now, so I can't re-enter the order. why not?
Price moved without me.
10:02 Price pulled back to my original entry level and has now moved further down. Still feeling some disappointment over having missed this move. Again, why not put your order back on? This makes no sense to me. If the trade is still valid, take it.


Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #10 (permalink)
Attitude is everything.
Dallas, TX, USA
 
Futures Experience: Intermediate
Platform: NinjaTrader, T4
Broker/Data: IQFeed
Favorite Futures: 6E
 
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Posts: 358 since Oct 2009
Thanks: 6,868 given, 857 received

It's Not About The Method


@PandaWarrior, I sincerely appreciate your comments and desire to help. But at this point, as I said a few posts ago:

AttitudeTrader View Post
My training begins with exercises in consistency.

Chapter 11 (Thinking Like A Trader) of Trading In The Zone refers to this as the mechanical stage.

In this stage you:
  • Build the self-trust necessary to operate in an unlimited environment.
  • Learn to flawlessly execute a trading system.
  • Train your mind to think in probabilities (the five fundamental truths).
  • Create a strong, unshakeable belief in your consistency as a trader.
I'll be doing my training – this exercise – in my simulated (demo) account.

I've written a simple trading plan with very specific entry, exit and other rules to use for the start of this exercise.

I will trade this plan over a 20-trade sample size. In this first sample size I will be taking 20 trades, all per my defined rules. The exercise is to take every trade regardless of whether I think it's going to work or not. And it is my intent to pay attention to my responses to each trade and record those responses.

The objective of this exercise is to develop the belief in my own ability to act in a consistent and appropriate way. But when the sample size is over I will have the opportunity to modify one aspect of my method if I have determined that the change may be beneficial (I will be keeping detailed stats of the trades). Then I will do another 20-trade sample size.

Meanwhile I will continue to read and re-read both chapters that I've mentioned above to absorb, reinforce and fully understand the content and ideas.

I will post the results of my first day of training shortly.

In other words, this is not about the method. It is entirely, completely, 100% about this exercise in consistency.

However, rest assured that I'm keeping detailed stats and notes about each and every trade and situation for later use.

Thanks again!

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