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Papa's Trading Journal

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  #391 (permalink)
 papa15 
Wake Forest, NC
 
Experience: Intermediate
Platform: Sierra Charts, Investor RT, Ninja Trader
Broker: VanKar
Trading: NQ
 
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Posts: 527 since Sep 2009
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The week finished on a better note. Was 5 for 6 today. I took one 5 minute pull back trade for a 14 tick winner.

I modified my trading chart slightly. I talked to some other traders this week and one suggested I take a look at the BetterRenko bars, so I did. I put together a chart using those and slightly modified my trading rules/guidelines. Today, all my trading was SIM as I build up experience with these bars. I have not used them before and I don't want to test them out with cash. Besides, this week has been rough on me and I was going to take a break anyway.

The slight modification to the trading rules was to use a 3 bar entry technique. On a long trade for instance, the first bar should be red (or down) and the next two bars must be green. The third bar will complete 12 ticks higher than the red bar completed, so you know where to place your entry (in this respect very much like a range bar). The short term ergodic must be (1) above 0 and (2) above its signal line. Those should be the main criteria, but divergence does come in slightly. I focused on this trade setup today and was 4 for 5 on it. I only posted the 4 BetterRenko chart.

Overall, the net today was 34 ticks. The results are very satisfying after the past three days. I intend to continue pursing this next week to see how it withstands the test of time.

My focus is on:
1. Avoid the opening chop.
2. Honor stops
3. Ensure reward > risk on all trades
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  #392 (permalink)
 papa15 
Wake Forest, NC
 
Experience: Intermediate
Platform: Sierra Charts, Investor RT, Ninja Trader
Broker: VanKar
Trading: NQ
 
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Posts: 527 since Sep 2009
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This week's cash trading was not good. In fact it was bad as far as actual results.

However, from a trade entry perspective, the trades were good. I did check the appropriate factors before entering, with one exception. Overall, from that perspective, I am satisfied. I did much better in that respect than I did last week

I exceeded my daily loss limit on Monday. Not good.

My other big issue this week was allowing trades to go beyond my stop. This happened on more than one occasion. It is the first time in a while that it has happened, but it is of very great concern to me. I know Big Mike suggested I concentrate on fixing two issues at a time, but I am not totally satisfied that I have fixed the 2 I am working on (looking at all factors before entering a trade and honoring the daily stop loss) so I need to spend at least another week on those. But I can't ignore my tendency to ignore the stop loss. I will work on all three next week.

From talking with the other traders this week, not only did I learn about the BetterRenko bars, but it was pointed out to me that the CCI can do just about the same job as the ergodic in pointing out trades. The CCI has some advantages in that its scale is a bit more user friendly. I will probably give it a try.

I don't want to give the impression I am switching methods all the time. Fact is, I have come to realize your method of entry is essentially irrelevant. The vast majority of trade success is wrapped up in trade management. A really good trader could literally flip a coin to determine whether to enter long or short, manage the trade well, and be profitable. I am not one of those. I am not looking for a holy grail either. What I am doing is trying on different styles of setups until I find one that feels just right. I am very, very close to doing that. I am more concerned about my self discipline issues as they relate to trade management than I am about charts (I am more concerned about what is between the ears than what my eyes are looking at, if that makes sense).

Any way, enough rambling. I trust everyone has a Happy Easter and that you fully understand the meaning of the day.

My focus is on:
1. Avoid the opening chop.
2. Honor stops
3. Ensure reward > risk on all trades
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  #393 (permalink)
 bluemele 
Honolulu, Hawaii
 
Experience: Intermediate
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papa15 View Post
This week's cash trading was not good. In fact it was bad as far as actual results.

However, from a trade entry perspective, the trades were good. I did check the appropriate factors before entering, with one exception. Overall, from that perspective, I am satisfied. I did much better in that respect than I did last week

I exceeded my daily loss limit on Monday. Not good.

My other big issue this week was allowing trades to go beyond my stop. This happened on more than one occasion. It is the first time in a while that it has happened, but it is of very great concern to me. I know Big Mike suggested I concentrate on fixing two issues at a time, but I am not totally satisfied that I have fixed the 2 I am working on (looking at all factors before entering a trade and honoring the daily stop loss) so I need to spend at least another week on those. But I can't ignore my tendency to ignore the stop loss. I will work on all three next week.

From talking with the other trades this week, not only did I learn about the BetterRenko bars, but it was pointed out to me that the CCI can do just about the same job as the ergodic in pointing out trades. The CCI has some advantages in that its scale is a bit more user friendly. I will probably give it a try.

I don't want to give the impression I am switching methods all the time. Fact is, I have come to realize your method of entry is essentially irrelevant. The vast majority of trade success is wrapped up in trade management. A really good trader could literally flip a coin to determine whether to enter long or short, manage the trade well, and be profitable. I am not one of those. I am not looking for a holy grail either. What I am doing is trying on different styles of setups until I find one that feels just right. I am very, very close to doing that. I am more concerned about my self discipline issues as they relate to trade management than I am about charts (I am more concerned about what is between the ears than what my eyes are looking at, if that makes sense).

Any way, enough rambling. I trust everyone has a Happy Easter and that you fully understand the meaning of the day.

Papa,

Considering you are going for just a few ticks, why not take trendline bounces? I think you will CCI will cause you just as much grief.

Getting a few ticks off price action moves is easier in my opinion.

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  #394 (permalink)
 papa15 
Wake Forest, NC
 
Experience: Intermediate
Platform: Sierra Charts, Investor RT, Ninja Trader
Broker: VanKar
Trading: NQ
 
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Posts: 527 since Sep 2009
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bluemele View Post
Papa,

Considering you are going for just a few ticks, why not take trendline bounces? I think you will CCI will cause you just as much grief.

Getting a few ticks off price action moves is easier in my opinion.

One of the things I tried this week is increasing the profit target vs the stop loss. I was using essentially a one to one ratio on most of the trades. I was using 12 or 15 tick profit targets with usually a 15 tick stop. I had practiced well with that. This week there were a few losers that would have met my "old" profit targets of 6-8 ticks before the trade turned and went against me. I tried a couple of trades using an ATM strategy of going to B/E + 1 but could not find a happy medium that worked consistently (always seemed to come back and take me out at the B/E area). In truth, this week would not have been too bad except for the 2 or 3 trades I let go past the stops. Had those been honored, the losses would have been less, and with the increased profit targets on the winners, the loss could have been made up much more quickly. My goal is to get my winners to be larger than my losers and have more winners than losers. My typical win percentage has always been high, but the losers were much bigger than winners, so a high winning percentage is not in and of itself, a good thing.

You know, if you really want something to think about, divide your total profit by your total number of trades to determine your average winner....why isn't that your profit target? (I image most people average less than 5 ticks profit per trade, if they are really honest) BTW, I know that no matter how small your profit target is, there will be losing trades, so your winners must really be larger than your average winner to make up the losses.

Again, beginning to ramble on....

My focus is on:
1. Avoid the opening chop.
2. Honor stops
3. Ensure reward > risk on all trades
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  #395 (permalink)
 bluemele 
Honolulu, Hawaii
 
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papa15 View Post
One of the things I tried this week is increasing the profit target vs the stop loss. I was using essentially a one to one ratio on most of the trades. I was using 12 or 15 tick profit targets with usually a 15 tick stop. I had practiced well with that. This week there were a few losers that would have met my "old" profit targets of 6-8 ticks before the trade turned and went against me. I tried a couple of trades using an ATM strategy of going to B/E + 1 but could not find a happy medium that worked consistently (always seemed to come back and take me out at the B/E area). In truth, this week would not have been too bad except for the 2 or 3 trades I let go past the stops. Had those been honored, the losses would have been less, and with the increased profit targets on the winners, the loss could have been made up much more quickly. My goal is to get my winners to be larger than my losers and have more winners than losers. My typical win percentage has always been high, but the losers were much bigger than winners, so a high winning percentage is not in and of itself, a good thing.

You know, if you really want something to think about, divide your total profit by your total number of trades to determine your average winner....why isn't that your profit target? (I image most people average less than 5 ticks profit per trade, if they are really honest) BTW, I know that no matter how small your profit target is, there will be losing trades, so your winners must really be larger than your average winner to make up the losses.

Again, beginning to ramble on....

I believe that following indi's alone is a recipe for disaster. I believe price action is very important, trendlines, formations, round numbers or areas including fib's/murray etc.. That is my beliefs just because I have decided to pay attention to that.

I agree w/ shrinking the losses and increasing the winners.

You know what you are doing, just a recommendation on my part.

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  #396 (permalink)
 papa15 
Wake Forest, NC
 
Experience: Intermediate
Platform: Sierra Charts, Investor RT, Ninja Trader
Broker: VanKar
Trading: NQ
 
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Posts: 527 since Sep 2009
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bluemele View Post
I believe that following indi's alone is a recipe for disaster. I believe price action is very important, trendlines, formations, round numbers or areas including fib's/murray etc.. That is my beliefs just because I have decided to pay attention to that.

I agree w/ shrinking the losses and increasing the winners.

You know what you are doing, just a recommendation on my part.

I wholeheartedly agree with your first sentence. I agree wholeheartedly with watching price action. I am not as enthusiastic about trendlines, formations, and based on reading the Random Number thread and my own experience, fibs/murray math. Round numbers, my jury is still out.

If you look closely at the chart from today, you will notice entry following the price action of (for a short) a green, red, red candle formation with price beneath the moving average and going in the direction of the slope of the moving average. All the indi is used for is to visually confirm all that I just wrote. It is an aid.

I have a really, really hard time with trend lines (where do you draw them, when and how do you update it, what really is a break of it, etc). Lots of subjectivity. What is a trendline to me, may not be to you. Formations. More power to you if you in real time can see the head and shoulders and the others. I admit I can see double tops and bottoms, usually, but that is about it. As to fibs, which one will work this time? 23.6, 38., 50%, 62.8....oh wait, 50% is not a fib....Murray Math seems far fetched to me. So, really price action is the ticket. In a perfect world, that is all that would be on my chart....

My focus is on:
1. Avoid the opening chop.
2. Honor stops
3. Ensure reward > risk on all trades
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  #397 (permalink)
 bluemele 
Honolulu, Hawaii
 
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papa15 View Post
I wholeheartedly agree with your first sentence. I agree wholeheartedly with watching price action. I am not as enthusiastic about trendlines, formations, and based on reading the Random Number thread and my own experience, fibs/murray math. Round numbers, my jury is still out.

If you look closely at the chart from today, you will notice entry following the price action of (for a short) a green, red, red candle formation with price beneath the moving average and going in the direction of the slope of the moving average. All the indi is used for is to visually confirm all that I just wrote. It is an aid.

I have a really, really hard time with trend lines (where do you draw them, when and how do you update it, what really is a break of it, etc). Lots of subjectivity. What is a trendline to me, may not be to you. Formations. More power to you if you in real time can see the head and shoulders and the others. I admit I can see double tops and bottoms, usually, but that is about it. As to fibs, which one will work this time? 23.6, 38., 50%, 62.8....oh wait, 50% is not a fib....Murray Math seems far fetched to me. So, really price action is the ticket. In a perfect world, that is all that would be on my chart....

I agree with your last sentence.

Trendlines are better on longer term timeframes in my opinion. If you trade off them, like today, there was a beautiful bounce on a trendline on the TF, but none of my indicators were saying this is where it is going up.

At the end of the day, traders cause the market to move up. If enough of us believe a certain thing is important, well, a bunch of orders will achieve just what we wanted, well at least for a little while.

I am glad I am typing this as I haven't been paying as much attention to trendlines and patterns!

Yes, Fib's are a challenge, BUT, if you have a major (larger timeframe) FIB area with the Indi's saying let's rock-n-roll, then you have something. If I trade CL @ like 20x speed I am profitable every time w/ at least 3 points daily! No joke. Consistently, every single day. I take trendline bounces and 76% retracements and that is it. It is beautiful but also my MACD's have to say so as well. My issue is patience....

Funny how that reflects my real life...

I realize doing that trading like that does my bank account very little good though as in real life I will just click click click!!!

Maybe you moving stops says something like, "You don't like to lose..." or "You don't like to be seen as losing..." or "You can't accept defeat..." etc.. etc... (Please don't take offense, but something to think about or not)

Oh, and if you ever trade FOREX, ROUND NUMBERS ARE HUGE..... Because futures are just a fraction of that real pricing, then I think it gets all mucked up when trading them, etc...

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  #398 (permalink)
 papa15 
Wake Forest, NC
 
Experience: Intermediate
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Broker: VanKar
Trading: NQ
 
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bluemele View Post
I agree with your last sentence.

Trendlines are better on longer term timeframes in my opinion. If you trade off them, like today, there was a beautiful bounce on a trendline on the TF, but none of my indicators were saying this is where it is going up.

At the end of the day, traders cause the market to move up. If enough of us believe a certain thing is important, well, a bunch of orders will achieve just what we wanted, well at least for a little while.

I am glad I am typing this as I haven't been paying as much attention to trendlines and patterns!

Yes, Fib's are a challenge, BUT, if you have a major (larger timeframe) FIB area with the Indi's saying let's rock-n-roll, then you have something. If I trade CL @ like 20x speed I am profitable every time w/ at least 3 points daily! No joke. Consistently, every single day. I take trendline bounces and 76% retracements and that is it. It is beautiful but also my MACD's have to say so as well. My issue is patience....

Funny how that reflects my real life...

I realize doing that trading like that does my bank account very little good though as in real life I will just click click click!!!

Maybe you moving stops says something like, "You don't like to lose..." or "You don't like to be seen as losing..." or "You can't accept defeat..." etc.. etc... (Please don't take offense, but something to think about or not)

Oh, and if you ever trade FOREX, ROUND NUMBERS ARE HUGE..... Because futures are just a fraction of that real pricing, then I think it gets all mucked up when trading them, etc...

No offense taken on the moving stops part. I am not sure I fully understand why it happens. Part of it is not wanting to be wrong, part is not wanting to take another loss...you know it really isn't a loss until the position is closed out, so if I just hold on a bit longer, it will come back...well, I will be happy if instead of a 20 tick loss, I take a 8 tick loss, but no if I have waited this long, maybe I will get to break even, oh no it is back down to 14 ticks, why didn't I get out at -10, well I have been down as much as 20 so really I can stand a bit more heat....shucks, it is now down 22, oh wait it is now only 17 down.......... That is what happens to me.

My account size is probably the driving factor. I try to set the initial stop to maintain a reasonable loss percentage of the account size, usually less than 1.5%. Big Mike has repeatedly stated that is not the most optimum way of setting stops; the stop should be placed where you know if price gets to, the trade is a clear failure (usually beyond a swing high or low). In my ideal world, that is where I want to get to, but until I can build the account size to the point my 1.5% stop is bigger than the swing points, I will keep doing it the way I am.

What I must change, is to accept the stop for what it is. It is the point I am out of the trade, no questions asked. Just get out. If I feel really strong about the trade, it only costs a commission to get back in.

I hope I did not offend you with my musings on Fibs and trendlines. I thoroughly enjoy your feed back.

I do know trendlines can indeed work. Fibs are probably a bit more of a self fulfilling prophecy based on traders around the world using them and expecting something to happen at those points. The issue I have with both of them is I find it hard to use them in real time. I trade off such small charts (no more than 15 minutes), that I find it very difficult to use them effectively. The best support and resistance lines, for me, come from looking at something like a daily chart and drawing swing highs/lows, reduce down to a 4 hour chart and add any additional swing highs/low, reduce down to a 1 hour chart and repeat, finally down to a 15 min and repeat. Then change the time frame to 5 minute and trade. You are using actual pivot points as support and resistance; places where real trading showed an imbalance of supply and demand instead of a mathematical calculation. Sometimes, no many times, I fail to mark those lines on the chart before I start trading. Silly me.

My focus is on:
1. Avoid the opening chop.
2. Honor stops
3. Ensure reward > risk on all trades
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  #399 (permalink)
 papa15 
Wake Forest, NC
 
Experience: Intermediate
Platform: Sierra Charts, Investor RT, Ninja Trader
Broker: VanKar
Trading: NQ
 
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Posts: 527 since Sep 2009
Thanks: 583 given, 1,246 received

Using the 3 bar set up as the starting point for an entry, adding that for a long the price on the last bar must close above the moving average and the ergodic must be above its signal line, I marked up the attached chart showing potential entries. Using a 12 tick target and 15 tick stop, the total would have been very profitable.

I like this chart. It uses range bars instead of normal candlesticks, so easier to tell where to make entries. This particular chart was 8 range, but could have been 10 or 12 range just as easily. Only one moving average versus the previous 2. Only 1 ergodic versus previous 2. Only 1 chart versus 2. It is getting much closer to something I can wrap my mind around and focus on....

For info, I still limit the number of trades. I am currently using 4 as the number, so I would not take all the trades annotated on the chart.

My focus is on:
1. Avoid the opening chop.
2. Honor stops
3. Ensure reward > risk on all trades
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  #400 (permalink)
 tderrick 
Nashville, Tennessee
 
Experience: Intermediate
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papa15 View Post
Using the 3 bar set up as the starting point for an entry, adding that for a long the price on the last bar must close above the moving average and the ergodic must be above its signal line, I marked up the attached chart showing potential entries. Using a 12 tick target and 15 tick stop, the total would have been very profitable.

I like this chart. It uses range bars instead of normal candlesticks, so easier to tell where to make entries. This particular chart was 8 range, but could have been 10 or 12 range just as easily. Only one moving average versus the previous 2. Only 1 ergodic versus previous 2. Only 1 chart versus 2. It is getting much closer to something I can wrap my mind around and focus on....

For info, I still limit the number of trades. I am currently using 4 as the number, so I would not take all the trades annotated on the chart.


Yes... yes... you are coming over from the dark side, enjoy....


AJ
Nashville, Tennessee


"Life On The Edge of SR"
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