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Trading fast markets


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Updated January 25th 2016 by billbohm
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Trading fast markets

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  #111 (permalink)
Manchester, Greater Manchester, UK
 
Experience: Intermediate
Platform: NinjaTrader7
Trading: YM
 
Posts: 88 since Nov 2012
Thanks: 363 given, 136 received

@xelaar,

Thanks for posting.
Tough way to end the week, so it's a good thing you ARE tough
IMHO, I think you are absolutely right to look for bigger winners.
Even though your trade duration has been very short, you have made a lot of money.
In one way that is brilliant - (time in market x profit made = massive annual %age return on capital) however with your skill, knowledge and aptitude for timing entries in big momentum moves, you may find you can increase your profits by holding a bit longer.
This is just encouraging and supportive of your trading plan above and is in NO WAY meant as criticism.
Have a great weekend
Good trading next week.
JS

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  #112 (permalink)
prague, czech republic
 
Experience: Intermediate
Platform: NT7, MT4
Broker: LMAX
Trading: DAX, Gold, Euro
 
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Posts: 1,517 since Feb 2013
Thanks: 1,740 given, 2,565 received


jmsUK View Post
@xelaar,

Thanks for posting.
Tough way to end the week, so it's a good thing you ARE tough
IMHO, I think you are absolutely right to look for bigger winners.
Even though your trade duration has been very short, you have made a lot of money.
In one way that is brilliant - (time in market x profit made = massive annual %age return on capital) however with your skill, knowledge and aptitude for timing entries in big momentum moves, you may find you can increase your profits by holding a bit longer.
This is just encouraging and supportive of your trading plan above and is in NO WAY meant as criticism.
Have a great weekend
Good trading next week.
JS


Thank, man, appreciate it. One of the reasons why I look to increase profits and get away from those few-tics winners is that it will be tougher to trade this way live, especially with size like I put on Combine or more, without incurring slippage. So what works on demo or 1-2 car live with taking these 3-5 ticks winners consistently will be a breakeven trading at best when traded live with 10 contracts or more. The only good way to get away from this trap is to allow more losers and break even trades but capture more profit on winning trades. I have built a cushion large enough and took enough winning trades to pull this strategy in this Combine without risk of ending up with profit target hit but not passing due to failed metrics. I think taking it safely in beginning and using accumulated profit and metrics as leverage later is the name of the game. After all, this is how live money should be traded, and any new enterprise or experience should be built. Trading is no different.

PS in a perverted sense I am glad about today: good days won't change the way you do things, and I need this change to happen, only bad ones will make you stop the presses, think about and implement this change. I need to change, I need runners.

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  #113 (permalink)
Belgium
 
Experience: Intermediate
Platform: Ninjatrader
Broker: Ninjatrader Brokerage, CQG
Trading: FDAX, FDXM ...maybe
 
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Posts: 388 since Sep 2012
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Don't try to make money .... wait until you can just take it !


@xelaar

You're doing a great job but if you want some frank and honest feedback ... you are on the edge in terms of your risk taking. Testosterone and a wish to finish it off and make money are clouding your judgement.

Before last week, when you had a couple of those short days when you were racing and then came back to the hotel and saw and took those quick trades, your method was different. You were calm and patient. Before you would have waited for the excellent setups and you would have also taken the heat on those two tick losers while the trade picked up momentum.

In a word, impatience.


Here are the signs:
- 5 winning days in a row (your journal starts talking about a knockout punch)
- 2 days when you traded and won ... but you didn't plan to trade and got lucky with the timing ...(after a day of racing ... your head and judgement is not 100%)
- 7 winning days in a row now and you start to openly talk about finishing early ...you get (very well deserved) praise from @kevinkdog

What did your journal say on those days ... ? It should have said ... "I took a couple of shots from the hip and got lucky". Patience is an essential part of your edge.

Take some time to look at the two most recent webinars from Peter Davies from Jigsaw Trading (aka @DionysusToast) and Linda Bradford Raschke.

They both cover similar topics (liquidity, volume and price and the little wobbles that happen) and also will explain and illustrate a little how come you are exiting at precisely the best moment to take the trade. You will also see how come patience and timing are important.


You have an edge .. just don't forget where it came from. Like on the bike .. if you force it too early in the corner then you lose it. Wait for the right moment when you can see the line on the bend opening up .. that is your signal.

@syxforex has a nice little thought for you in today's Panda journal

"Two questions to ask before every pull of the trigger.. Is this an A+ shot, Am I being patient. Post it notes!"

You are a racer ... but you are not competing against anyone except yourself. 25 days ... 31 days .... 39 days .. it doesn't matter. 1 year .. 3 years .. 5 years ...15 years ... 20 years. These are the timelines that matter.

Have a great weekend! Everyone is supporting you !


p

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  #114 (permalink)
prague, czech republic
 
Experience: Intermediate
Platform: NT7, MT4
Broker: LMAX
Trading: DAX, Gold, Euro
 
xelaar's Avatar
 
Posts: 1,517 since Feb 2013
Thanks: 1,740 given, 2,565 received

Hey, thanks for your post. I think you are onto something here. Winning streaks do affect judgement. However I must say all trades I took this week including Friday and those taken on race days were planned and disciplined. No blind shots like during the first losing day. WhereI failed is at unconsistent trade management so you are right about pointing out that I closed trades when they should be opened. Butthis problem did not appear just now, it just became very pronounced testerday as most setups however good did not have follow through so I have got many losers. Usually most of them have some follow through so taking smaller wins on slower trades pays off. This is the good side of a failed day like yesterday because it highlights the problem. Now I will just work on it. Next week will be dedicated to trading strictly according to the plan I posted above. I still have enough time in Combine left to afford this sort of experiment.

Anyway thanks for the sobering comment. Appreciate it.

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  #115 (permalink)
prague, czech republic
 
Experience: Intermediate
Platform: NT7, MT4
Broker: LMAX
Trading: DAX, Gold, Euro
 
xelaar's Avatar
 
Posts: 1,517 since Feb 2013
Thanks: 1,740 given, 2,565 received

Day of reconing

After giving it lot more thought, especially after the comment from Podski, and rethinking my original and new plan, here is what I have came with - actually the new plan is, surprise-surprise, the old original plan, just that I did not follow it to the letter in a sense of trade management and scaling in, instead going for increasing size right from the start (I have to say market wasn't too cooperative with scaling in on many days).


However I have realized my another problem lies not in handling losers (this part I consider to be fine), but with handling winners, not only individual trade management but winning days completely. I tend to stop trading too early when market is fine for my method, so I frequently stop with a small profit and miss possible profits. However, overtrading is not the answer, so I will put a minor addition to my plan right here:
1. Still stop after having 3rd full loser for the day
2. Allow 3 to 5 trades per day, not counting break-even trades
3. Take ALL good looking setups until any of these two rules above kick in (3 losers or 5 resulting trades taken)

This will maybe add an odd losing trades on some days but will no doubt give more profit on good days. That again was a part of my original plan but wasn't written in quantifiable terms (3-5 trades) and in results I stopped trading on good days after reaching some marginal profits, way too short of my original profit targets for the second part of Combine where I am now (up to 3500 usd per day profit). I don't put any profit target on the day, as it is not up to me to hit it or not, but what I can control is my losses and how much and how good trades I am taking. And control these I will!

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  #116 (permalink)
Legendary Market Wizard
Cleveland Ohio/United States
 
Experience: Advanced
Platform: Tradestation
Broker: Tradestation, DeCarley, others
Trading: futures
 
Posts: 2,768 since Jul 2012
Thanks: 1,422 given, 5,327 received


xelaar View Post
1. Still stop after having 3rd full loser for the day

I know the way TST calculates winning and losing trades may be different for a person scaling in or out, but not counting yesterday, TST says you have 3 days where you had more than 3 losses. I assume yesterday was a fourth day of 3+ losses (by the way, could you post your current TST performance snapshot?).

So, my question: have you been able to adhere to the "quit after 3 full losers" rule up to this point? I think it is a very good rule for someone who needs to read the market everyday - it limits losses on bad read days.

THANKS

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  #117 (permalink)
prague, czech republic
 
Experience: Intermediate
Platform: NT7, MT4
Broker: LMAX
Trading: DAX, Gold, Euro
 
xelaar's Avatar
 
Posts: 1,517 since Feb 2013
Thanks: 1,740 given, 2,565 received


kevinkdog View Post
I know the way TST calculates winning and losing trades may be different for a person scaling in or out, but not counting yesterday, TST says you have 3 days where you had more than 3 losses. I assume yesterday was a fourth day of 3+ losses (by the way, could you post your current TST performance snapshot?).

So, my question: have you been able to adhere to the "quit after 3 full losers" rule up to this point? I think it is a very good rule for someone who needs to read the market everyday - it limits losses on bad read days.

THANKS

Hi Kevin, thanks for commenting.
Yes, I have been adhering to 3 full losers rule. Yesterday I took 4, but only because I have split my last shot into 2 by halving position size, so first 2 were 10 cars each and last 2 were 5 cars each. T4 stats can show somewhat different, but you can see the truth by the time trade was taken from my spreadsheets. Some trades were entered as two positions 5 cars each with different profit targets, so T4 counts them as 2 different trades. For me though important is how much I risk in dollars, not how T4 breaks it down.




Stats-wise, I feel bad about the big winner I let turn to be a loser yesterday, by being absent, not only I lost 6 ticks instead of catching up to 30 ticks winner, but ruined my holding time stats with almost 8 minute loser. I don't think that is very important at this point, I am sure I can maintain other two metrics, and hopefully with more lengthy winners I am planning to take next week, my winner holding time will improve, and loser holding time will decrease.

Another small addition to plan after some consideration: I will cut trades right on the spot that after the triggering don't make any single tick of profit and hang instead at several ticks loss. As per trade screenshots review, these trades nearly never made to profit. This is different to a trade where it made at least a couple of ticks to profit and hung in there bouncing a little, this sort of trade has decent chance of being a winner and should be left alone. This is a hard call but I will try my best to cut non-performers right away.

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  #118 (permalink)
Belgium
 
Experience: Intermediate
Platform: Ninjatrader
Broker: Ninjatrader Brokerage, CQG
Trading: FDAX, FDXM ...maybe
 
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Posts: 388 since Sep 2012
Thanks: 494 given, 469 received


xelaar View Post
After giving it lot more thought, especially after the comment from Podski, and rethinking my original and new plan, here is what I have came with - actually the new plan is, surprise-surprise, the old original plan, just that I did not follow it to the letter in a sense of trade management and scaling in, instead going for increasing size right from the start (I have to say market wasn't too cooperative with scaling in on many days).


However I have realized my another problem lies not in handling losers (this part I consider to be fine), but with handling winners, not only individual trade management but winning days completely. I tend to stop trading too early when market is fine for my method, so I frequently stop with a small profit and miss possible profits. However, overtrading is not the answer, so I will put a minor addition to my plan right here:
1. Still stop after having 3rd full loser for the day
2. Allow 3 to 5 trades per day, not counting break-even trades
3. Take ALL good looking setups until any of these two rules above kick in (3 losers or 5 resulting trades taken)

This will maybe add an odd losing trades on some days but will no doubt give more profit on good days. That again was a part of my original plan but wasn't written in quantifiable terms (3-5 trades) and in results I stopped trading on good days after reaching some marginal profits, way too short of my original profit targets for the second part of Combine where I am now (up to 3500 usd per day profit). I don't put any profit target on the day, as it is not up to me to hit it or not, but what I can control is my losses and how much and how good trades I am taking. And control these I will!



No need to "over think" your method @xelaar. You are doing fine! I agree that the setups you have been taking are good in all cases. Just remember you need two things for success.
a. the right market conditions
b. the right mental approach

It's also normal for males to be over confident. We are programmed for it. Too much testosterone. I read a great book recently called "The Hour between Wolf and Dog". It's great to read for any competitor. Learn to keep an eye on your judgement and mood.


Recently I have had a couple of days where I brought a previous day's frustration at missing out (a.k.a. fear of missing out or FOMO) to the opening of the market. I was going to take all those bloody setups and scoop hundreds of points out of the market. I was going to work those trades. Wallop. Bang. Boom. I got drilled.

We are not fighters. We are not warriors. We are not boxers. We are going fishing. Think of @Gary the CL Assasin. He kills the market by letting it trip up and fall over itself. He says.

"We get paid to wait. We wait to get paid."

You are doing just fine. Just don't rush it. Keep a smooth right hand !

p

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  #119 (permalink)
prague, czech republic
 
Experience: Intermediate
Platform: NT7, MT4
Broker: LMAX
Trading: DAX, Gold, Euro
 
xelaar's Avatar
 
Posts: 1,517 since Feb 2013
Thanks: 1,740 given, 2,565 received

I hear what you say. I think the biggest mental issue for me is when trade is happening desperately not wanting to get a loser instead of small winner. Thus taking small winners. Sometimes it prevents from taking a loser for sure, but also kills huge winners, and never prevents true losers from happening - those that never show any profit, triggering and then reverting to hit SL. Need to distance myself from "I want to be a winner" attitude. Need a more spectator approach.

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  #120 (permalink)
Belgium
 
Experience: Intermediate
Platform: Ninjatrader
Broker: Ninjatrader Brokerage, CQG
Trading: FDAX, FDXM ...maybe
 
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Posts: 388 since Sep 2012
Thanks: 494 given, 469 received



xelaar View Post
I hear what you say. I think the biggest mental issue for me is when trade is happening desperately not wanting to get a loser instead of small winner. Thus taking small winners. Sometimes it prevents from taking a loser for sure, but also kills huge winners, and never prevents true losers from happening - those that never show any profit, triggering and then reverting to hit SL. Need to distance myself from "I want to be a winner" attitude. Need a more spectator approach.

This is the only thing we discretionary traders need to get right in order to move into the top 10%.

You know what it is that you need to get right and you have time to get it right.

You are in a great position. Enjoy it and you will learn to sit out those longer winners.

p

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