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Zen & the Art of The Small Account


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Zen & the Art of The Small Account

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  #61 (permalink)
 Big Mike 
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Az,

Good job, so will you be re-doing the experiment now for another 30 days?

Mike

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  #62 (permalink)
 PandaWarrior 
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Big Mike View Post
Az,

Good job, so will you be re-doing the experiment now for another 30 days?

Mike


Actually, this is a good question. I did not post about it as I am undecided. The reason I am undecided is this, I actually had a great month doing this experiment. Good enough that I think I might be ready to go live. Not as a result of the amount in the account at the end of the month but based on the policies I developed to help me stay in the game: Had these been there and I was disciplined in them, I would have had a great month.....coulda, woulda, shoulda.....

For the record, I came up with five new policies after looking at all the trades:

They are:

1. Use two cars. My strategy works best with at least two. Take profit off at 4 ticks on the first one, I get this on almost every trade. Use a 20 tick target on the second as the default but adjust actual target based on S/R or other natural target. DB/DT, etc. Place new target 1-3 ticks inside that price.

2. Don't use a fixed stop....I know, you've been preaching this for quite a while now, but it took seeing the reason behind it for me to get it. Here is my new stop strategy, based on my entry criteria, enter with a 5 tick stop but actually place the stop at the point where the trade is no longer valid. On some entries, this is more than 5 ticks but the entry is a good one. On others, it will be 5 ticks or less. Go BE-4 on the second car once 1st car target is filled. Go BE+? once half the target is reached. Don't let a winner become a loser.

For instance, on this mornings 6E trade, I entered with a 5 tick stop, moved it to the correct location which was 8 ticks total, took 4 ticks off on the first contract, had a target of 18 ticks based on the natural support level, went BE-4 at 1st car target filled, then moved trailing stop to BE+2 when I had 9 ticks of profit on the second car, continued to move stop down 1 for 1 as prices neared my 18 tick target. I got a total of 15 ticks before prices reversed and stopped me out at 11 ticks on the second car. Total of 15 ticks or 7.5 per contract. It was a slow day or I would have done another trade. I was happy with this one and more important, executed perfectly.

3. Trail stop manually based on natural "trade over" location. No more fixed trail stops either.

4. Based on strength of my entry location this last month, I know most of the time within a trade or two if I am in the zone that day. So if I have a loser right away followed by another one, I probably don't have it that day. STOP TRADING. I call this my daily stop loss. Move to sim and practice, practice, practice.

5. Never trade past your daily profit goal.

So to answer the question. I will continue the experiment this week and reevaluate over the weekend. I think if I hit my profit goals this week, follow these policies well and end on a positive note, I will go live next week. Otherwise, I'll continue the experiment.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 Big Mike 
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Good job on the details, Az.

I'll give you one guess what my "vote" would be that you do... The hardest thing to do and the right thing to do are usually the same In this case, I think its harder to stay sim 30 more days and prove yourself there, and that is what I would like to see you do personally. Trading cash has its own set of challenges, you want to have everything rock solid in sim so you can fall back to it with complete confidence the foundation is proven. You will require that confidence in order to excel with cash.

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  #64 (permalink)
 PandaWarrior 
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Big Mike View Post
Good job on the details, Az.

I'll give you one guess what my "vote" would be that you do... The hardest thing to do and the right thing to do are usually the same In this case, I think its harder to stay sim 30 more days and prove yourself there, and that is what I would like to see you do personally. Trading cash has its own set of challenges, you want to have everything rock solid in sim so you can fall back to it with complete confidence the foundation is proven. You will require that confidence in order to excel with cash.

Mike

Yeah, I know, I knew you would say that even as I was writing it. I understand the logic and I agree with it. I am under no pressure to go live at the moment other than what I create myself. So at the moment, I have committed to one more week. I told my wife it would probably be two weeks. She is happy with that and that's what it will probably end up being. However, all that being said, I do want to be live in August. That is kinda my self imposed threshold for going live. In other words, if I can't get consistent in that amount of time, I will need to reconsider how I am trading and perhaps look for a different method/system. I don't think that is necessary though. I'm pretty confident I am on the right track.

But to be true to the spirit of the challenge, I should do another 30 days. Also being to true to the spirit of the challenge, I am being open with my struggle to go live or not.....so in that spirit, the answer will remain the same, we will see at the end of the week.

I'll talk it over with my trading partner and see what he says as well.....

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 aslan 
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aztrader9 View Post
4. Based on strength of my entry location this last month, I know most of the time within a trade or two if I am in the zone that day. So if I have a loser right away followed by another one, I probably don't have it that day. STOP TRADING. I call this my daily stop loss. Move to sim and practice, practice, practice.

If you go to sim to practice, I can not stress enough that you do NOT switch back to live. After those first two loses you know you need to stop, but guess what happens on the next two? Winners, and so you wade back in, and proceed to get killed again. If you stop, it might be better to stop and find something else to do. It is too easy to get into a mind set where you think you are ok now, and want to go get your loses back. Trust me, it does not work.

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  #66 (permalink)
 PandaWarrior 
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That is probably good advice. Just stop and come back tomorrow.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #67 (permalink)
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aslan View Post
If you go to sim to practice, I can not stress enough that you do NOT switch back to live. After those first two loses you know you need to stop, but guess what happens on the next two? Winners, and so you wade back in, and proceed to get killed again. If you stop, it might be better to stop and find something else to do. It is too easy to get into a mind set where you think you are ok now, and want to go get your loses back. Trust me, it does not work.

I can not agree with this more. If you are totally honest with yourself, you know when you are not following the rules as well as know when you are chasing, etc. If you don't see it, hope someone else does. This is why if you do decide to trade with others, it can not be a solitary endeavor. You need to defend your entires & understand when you have misidentified an edge. Snap entries will just cause emotional turmoil. It is usually a sign or fear or greed - not a well though-out entry.

I saw really good traders stop following their rules this week.

Once you start making mistakes, forget about even going to SIM. Step AWAY for a while. Completely reset.

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  #68 (permalink)
 PandaWarrior 
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Today was my best day ever trading discretionary and I missed almost all the big move down. I've decided to remain on sim until I am comfortable with trading two contracts. Even though I had a good day, I did have three stops. Yes I am trading a $1000 sim account with two contracts. The system works better that way.

I am trading a slightly new system now. I still want support and resistance but I am using VWAP and futures.io (formerly BMT)CMA much more.....I am still working on it though. Its not cut and dried in terms of exact entries or at least its not totally apparent to me yet. But it has been good to me so far and I'll keep using it....I hope to eliminate more indicators as time goes by.

So using this new method, I took nine trades, 2 more than I'd really like to do, but less than I've been taking. 6 winners and 3 losers. Only one of the losers was a big one, 8 ticks, that one hurt and I'm not sure I completely followed the rules in taking it. I still need to look at it closer.

Anyway, ended the day up $393.00 net of commissions. I've gotten a 50% return on the $1000 so far in two days!

We'll see what tomorrow brings.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 PandaWarrior 
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I took one trade today. It fit my set up perfectly. I had a 20 tick target, 2 contracts, one off at 4 ticks, stop to BE-4, hold on for the ride. Of course today was a good day to go for a ride, but you never know when you take the trade.

I moved my stop to BE+2 at 10 ticks, trailed it up 1 for 1, then began moving it up tighter once it got to 16 ticks, at one point, the distance between the stop and the target was only two ticks. I could just as easily gotten stopped out as had my target filled.

Good day today....I stopped trading at that point. Done for the day.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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Good trading, az.trading9. It would be a good discipline, one trade, one day, win or lose, you're done for the day!

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