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I've been on sim since last monday. I wanted to test a few things and confirm a few things.....I do so well on sim I'm thinking of starting a trading room where I post up front I am in sim and participants can emulate me if they like! I mean everyone does well in sim right? So why not have a trading room where people KNOW you are in sim, KNOW you do better in sim because there's no pressure and simply copy the trades you take? What could be better than being paid for sim trading!!!
But honestly, sim trading has its place, for me its about testing new ideas, money management, trade management, etc....and I do reasonably well on sim even testing new ideas. That being said, as a trader, I still have issues that perhaps will never really go away.
To help mitigate these issues, I've struggled with various methods and strategies over the years trying to find something that allows me to have it all, big wins, short time in the market and very low risk.
To my everlasting chagrin, you really can't have it all. There's really no such thing as a big win, ultra low risk and a very short trade duration. Yes sometimes it happens but its the exception not the rule....and I've always wanted it to be the rule and not the exception.
So this last week and this, I've been working on who I really am as a trader. A scalper looking for a single leg, an intra day position trader or perhaps both.
Here's what I am discovering, I do not want to be an intra day position trader PRIMARILY. I want to book profits early and IF I get a nice runner then wonderful. That being said, going forward, I plan on always allowing at least one runner opportunity....especially if I see a confluence set up that is screaming big day potential.....even without this, sometimes a "normal" day is 100+ ticks....and it can do that on a rotation day since the ranges have expanded so nicely.
Which means a scale out approach and if its within my time opportunity window, a scale back in to add to the runner. I know the scale out approach is mathematically inferior, but its much more emotionally superior. I thought doing the correct thing mathematically would make me feel emotionally better....incorrect assumption.
A few things I've tried these last few days;
1. Mean reversion....there's a reason this is called "mean". The market is quite unfriendly to this type of trading, you could even call it 'mean".
2. Top and bottom picking, This actually works IF you are picking TOPS in a down trend, but all you get by picking bottoms in a down trend is stinky fingers. Choosing tops or bottoms is fine as long as you are trading in the direction of the dominate trend.
3. Adding to trades; I've worked on this this before and I have yet to master the art of it, but that being said, this is the way to make a fortune in this business, adding to winners.....and I"m getting better.
4. Finding entries off the one minute chart while taking direction from the 5M and higher time frames; This also is an art and one that I think will pay dividends down the road, but once again, its not something I've mastered but will continue to improve on as time goes by.
5. WIDE stops; Ok this is MUCH harder to do emotionally BUT it sure works well! Especially if you are picking tops in a downtrend or bottoms in an up trend. Why is this/ Because you are going with the trend and if you look at levels, moving averages, etc along with any other ways to determine an overbought situation in a down trend, you can do pretty well with wide stops. It keeps you out of the noise and allows for the fact that you may have missed the top by a bit but still got the zone and the timing right. All in all, I think wide stops are fine, IF the trade is with trend, otherwise you are toast.
6. Really large (for me) targets. This works really well IF you just leave the darn thing alone and let it play out UNLESS you get (rare) reversal signal the opposite direction.
Whats the end result of all this? A few things.
1. Trade with the trend always and if you can't determine a trend. don't trade.
2. Mean reversion trades are ok IF there is plenty of room to get at least one to one RR. Even then they should be with small size and tight stops. Be aggressive in closing these trades if they stall or go negative. And don't pick the bottom blindly, instead use the reversal tools I have even if on a smaller time frame to find the reversion trades....or just wait for the continuation trade...safer anyway.
3. Use the tools I have, they do in fact identify trend and direction.
4. I'll be scaling out and in....I'll just have to deal with the benefits and drawbacks of this. The cost of doing business
5. I will be using aggressive money management to increase my size. Its the only way. I've created a MM system to tell me when to increase and when to decrease.
6. I won't be managing my trades much any longer. Its counter productive.
7. Its kinda ok to just not doing anything while the large targets are working.
8. Time is easier and cheaper (safer) to leverage than my trading account.
This post has ran a bit long, I've been writing it for several days now. I've not had much time to sit and just write and even now I'm a bit pressed but I wanted to get it published before tomorrow.
cheers.
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
I ditched all moving averages on my entry chart (5M)......they can be quite misleading.......try it you might like it....They've been a crutch for a LONG time.....
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
Well it happened, someone stole my banking information from somewhere and cleaned me out....every single penny....happened yesterday....thankfully not ALL my money was in the bank but enough of it to cause a very sleepless night last night after the fraud control department hung up with me at 8:30 last night.....
Just finished up at the bank this morning....they were very good about it....most of the fraudulent charges have already been reversed and the last few are in process, should know tomorrow but in the meantime, the bank has offered to front the cash until its all cleared up....which was nice of them.....
Turns out I was in Atlanta and Arizona yesterday at the same time using the same card which is what triggered the investigation by the fraud department.
Crazy days we live in, people work so hard at stealing other peoples stuff its like they have a full time job which is what presumably they are trying to avoid in the first place....
Sheesh....
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
sorry to hear that Panda, hopefully you can get it worked out. good luck.
I have approximate answers, possible beliefs and different degrees of certainty of different things. But I'm not absolutely sure of anything and there are many things i don't know anything about.
Yikes sorry to hear that Brian. Was it credit card or checks? In person use or internet? Just curious because a friend went thru this many years ago with stolen checks, it was a nightmare
