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You have made lot of progress in a very short period of time, it took me good 2 years to reach where you have in just couple of months from the day I started to trade with lot of interest.
My 2c here is that make sure you keep track of changes you are going through, both mentally as well as your learning. Traders generally experience cycle of periods, down periods-dull periods-good periods-boom periods in both learning as well as earning.
When you start keeping record with all honesty (Charts+Trades+critique of what you did right and what you didn't) you will keep yourself away from going into dull or lower periods.
Also, people already said this, but avoid 1M TF as of now, it can be quite scary, 5/10/15 is generally good to test out different things. Also, make sure you are testing in same markets you plan to trade, one of the biggest miscalculations one can do when going places is make strategy for one market and then use it to trade other, not all strategies work in all markets, there are very minute detailing involved, curve fitting can be also very serious problem in testing periods, it takes time to learn and gain experience.
Little side note, you seem to have great potential in field, but don't ignore psychological aspect, mental conditioning is 80% of your trading ability till you go fully auto.
Thanks for the awesome feedback man - really appreciate it. And I HOPE that it wasn’t just a fluke - haha. The real question I guess is whether or not I can replicate these results, but time will tell.
And yeah, I was trading like garbage on the 1m charts. I’m trading 75 tick charts now, depending on the volume. If it’s really crazy I’ll switch to 125 or 250, but I’m also keeping an eye on the 15/30min charts / volume profile while I use the 75 tick to place my orders.
And couldn’t agree more with the stats. Fortunately, I found the awesome trade analyzer feature that TradeStation has, that cranks out all your numbers for you; I just sent off a check to ninjatrader last week though, so hopefully they have something similar.
Thanks again man. And will definitely take note of the mental aspect as well. I know, from experience, that I tend to pull my trades a little too soon, so trying to get better about stop placement, and sitting tight through pullbacks etc... it’s tough business!
Yes, one only has sweaty palms when real money is on line.
Funny thing about this is that the more you know about market risks it is likely that more you are afraid of things going wrong.
One major difference between me when I started and me now is notably my willingness to trade, when I started out I would "trade anything", without a single care in the world. I was lucky that I was at least smart enough to not play with futures at that time, but I did get my hands burned in options. Lessons learned, after that I had to set rules for number of trades per session, position sizing and very rigid rules of entry and SL, exits are still all over the place but its work in progress. These things other ppl can't teach or you can't learn from others, because it will be part of your own personality. Hence the added importance to psychology.
Well, I know I've been pretty sparse with my posts lately, but with good reason; if you read my last post, you saw that I had a killer day, and made a 73% win percentage. As I feared, however, I couldn't reproduce the results. Over the long term, it all came down to some core factors - overtrading being my #1, followed by poor money management (trying to win back losses - a cardinal sin of trading), and trading flat markets (or in my case, having difficulty identifying proper trends).
Although it was a sizable investment, I figured that - in the long term - it was better to invest in proper education, than continue, indefinitely, to lose money. Thus, I decided to pick up some of the materials that TopDog Trading had to offer, as their style has definitely appealed to me, for its concise, and calculated way about it.
There are a few things that definitely hit home to me, after breaking into the course materials. For one - I was probably getting 10% or less of the value, from my indicators. Although I'd been using the Stochastic and MACD for FOREVER, they pretty much did nothing for my overall strategy. Now, I am getting REALLY good at reading divergences, and using the Stochastic to TIME my entries (selling from the 80/buying from the 20), and the MACD to measure market momentum. I got rid of the histogram entirely on the MACD, and set the MACD-line as a histogram instead, with the signal remaining as a solid line. Both indicators are set pretty damn fast as well.
Concurrently, I am regularly counting the number of waves into a trend, and no longer trade a trend after its hit the 3rd wave (at which point, I start looking for reversals). Fortunately, whereas before, I had NO real rules set for myself, and no solid strategy either. Now, I have an extremely precise, concrete set of rules for myself, and have found myself PASSING on many more trades, reducing my losses and creating more room for profit.
I've only been trading with this new strategy for about a week, but am definitely seeing results. Last week was mostly just getting the ball rolling, but I traded the Asian session tonight, and had a 50% win percentage, with my avg. winner being more than 2x my avg loss.
First, I'm on NT now, as you can see. Secondly, you can see how my MACD is set - the MACD line is the bars/histogram, and the signal line is the solid blue line. I use the MACD line to measure short term momentum (I don't take trades with the MACD not going in my direction) and the signal line measuring long term momentum. As per the stochastic, I have %K in green dashes, and %D as the solid blue line. These are what are helping me to time my entries. Lastly, i'm only taking trends in the direction of the 50MA, unless its a reversal trade, where I will enter as soon as it crosses back over the 50MA, presuming all my other indicators are in alignment. Lastly, I have all of these same factors on ANOTHER chart, whose timeframe is 3:1 what this chart is; I try to confirm (w/ regard to the stoch. and MACD) that I'm getting the same signals on THAT chart as well, i.e. the stochastic from both charts at a cycle high/low, and the MACD pointing in the same direction.
Anyway, its a process, but like I said, I am very glad to have invested more in education. At this point, seems like its worth every penny. Looking back, I feel like I was bumbling around in the dark, trying to find a light switch, but now that I have a solid strategy, clear rules for money management, and a significantly better understanding of how to read price action, I feel invigorated, and confident for the future. I'll be trading on SIM for the time being, until I have REALLY harnessed this strategy, and can trade it with my "eyes closed", but I've got no qualms about it.
Hey guys - I know I've been pretty inactive for a while. TBH, I have't had much to write about, seeing as - for the majority - I've been backtesting the new strategies. Although I've spent the majority of my Futures trading career scalping, I have found that I have been incredibly successful trading on longer timeframes. When I was trading stocks, which I was quite successful at - for a beginner - I was always trading longer timeframes. I'd hold at least a few days, and I found that it was a lot easier to manage, particularly for someone with a full time job. Concurrently, it was always super solid when everything hit, and you allowed your winners to run.
I basically have two different accounts I'm SIM trading with (and two different strategies!). On my computer, I'm scalping on NT, and I've been swing trading on my phone, using TradeStation. Although I didn't really have the opportunity to trade much last week (health has been kinda gnarly), I was up over 1500 last week, trading on the 30min timeframe, on my phone. Granted, that doesn't mean much, when you have a massive, imaginary account, but of all the trades I made last week, I think I got stopped out on one, and had probably 6-7 winners. I remember Bulkowski saying that "the longer the timeframe, the more meaningful the chart pattern." This seems to hold true with regard to the entries I've been making, in that, the longer the timeframe, the more potent my indicators/conclusions (and by extension, my trades) become!
I've found that, given my schedule, this may be a more ideal way of trading, rather than killing myself, doing 14hrs in front of a computer monitor, 5 days a week. I love high frequency trading, but I love money more (hah), and if this is going to be the more profitable method for me (and it has the added benefit of allowing me to be less hands-on, and less stressed about positions) fuck it - I'm down!
Anyway, we will see how things continue, over the next few weeks. Maybe once I get my SIM account over 20k, I'll switch. As of now, I started at 10k, and am around 12.6k right now. I'm probably being overly cautious, but I'd like to have everything down to muscle memory, so I can be totally robotic about my entries.
Thanks for reading! Hope everyone is doing well. Will hopefully have some screens for you guys this week ^^
Just wanted to say, I'm glad to hear you have managed to figure out timeframe suitable for you. Although my words are not that important around here as I'm quite new too but I don't think this forum minds lack of posts as long as the ones you are making are progressive towards your goal, and you are doing quite well on that front. I wish you good luck.
Well, after backtesting in SIM for the last few weeks, I have finally started to transition back into live trading. It was important to me to spend a good deal of time practicing the strategies I’ve been adapting, getting used to checking a multitude of factors before entering; the first 2 days in incurred small losses, however, I added Order Flow back into my strategy, in addition to the other elements I’ve been using (such as using the stochastic as a cycle indicator, MACD as momentum, and using 2 different charts @ a 3:1 ratio, insuring I have my triggers active on both timeframes).
I’m using MZPack - an order flow suite that has been phenomenal so far. It’s really nice being able to see order imbalances/absorption happening, and also identify when traders are becoming trapped.
This morning, I only took a handful of trades (5 I think?) but had a 100% win percentage, pulling around a 9% gain compared to my total account size.
I was pretty anxious on some of them, I was trading larger contracts, relative to my account size (NQ, 6E) which has greater risk, and was mostly scalping. There was one trade that I wish I had held a little longer, but once I start regaining my confidence, I won’t tilt so hard once I put on a big position.
Also, I found a great group of guys on Facebook that I have started a conglomerate of sorts with. Each of us is responsible for watching a certain sector of the market (I.e. one on equities, one on energies, currencies, grains etc...). We have a discord, where most of us have been hanging out and sharing important levels throughout the day, and we are meeting once a week (either Saturday or Sunday) after the COT report comes out, to inform each other on the market. If anyone else is interested, please let me know! One of the guys in the group is a hedge fund manager (trades 100 lots of ES lol), and his student is with us as well, so there’s already pretty good camaraderie.
Anywho, it’s nice to feel like I’m progressing again, and have a strategy I can fall back on, with clear rules, and from which the results are easily measured.
Thanks again for reading! Hope to begin posting again regularly, now that I have something valuable to share, hah.
A phenomenal excerpt from a trading psychology book by Randee Howell really to internalize the concept of how our beliefs (outlook) create our experience.
He compared the market to a vast ocean, and we (as traders) are but a single fisherman, in a very small boat. When the ocean delivers, we harvest, and when it doesn’t, we stress. This ocean does not judge - it simply is; but when we’re not catching any fish, if we focus on scarcity, it leaves us blind to other possibilities. Fear itself becomes a self fulfilling prophecy.
That’s why it’s important to remain calm, and ground oneself, through breathing and awareness, so when the ocean does not provide what we are seeking, we do not blind ourselves to other possibilities that might come from the apparent chop.
This is a valuable life-lesson as well, in that, when life doesn’t give us what we want, we don’t sabotage ourselves with a scarcity-mindset, for even the roughest seas might grant us the greatest profits.
-Concept taken from Randee Howell’s book on trading psychology.
So, I'm continuing to read Randee Howell's book on trading psychology, and it has brought a lot of my issues to bear. When I first started trading futures (migrated from stocks/options/crypto), I pretty much blew up my account. I was trading too big for my position size, would enter on FOMO, and pull good trades before they had time to mature, or not hold them long enough.
I have to say, I am really proud of myself for having the guts to get back into the market, despite my "recency syndrome" that has created a sort of mental block, in my trading. Fortunately, the mindset I'm bringing to trading has a great deal of self-awareness, comparatively. Since reading the book, I have learned to use breathwork when entering/holding a position, which helps to balance out my emotions. Prior to that, I noticed that my heart would start racing quite a bit, when I put risk-on, and that tilting, so to speak, caused a great deal of my problems. I would jump in and out of positions way too much, cut trades before they matured, or close out at breakeven if they showed any weakness. It was clear that my trading method would not allow me to "hold" through a drawdown, setting stops too tight, and hesitating too great a time before entering a trade. I was also guilty of FOMO, and trying to chase the market at times.
On the technical side, I've been very fortunate to have a great trading group on discord, and a solid set of rules to govern my decisions. I'm still using the stochastic to find the cycle low/highs, and the MACD as a momentum indicator. I'm also taking trend trades off the 2nd and 3rd waves, and finding reversals when I see a momentum shift on the MACD. Lastly, I'm using MZPack, on Ninjatrader, to help me find Big Trades, follow delta, and support/resistance levels marked by multiple levels of order imbalance.
Anywho, like I said, I'm really, really proud of myself, for having the courage to face the market again. I spent a great deal of time trading on SIM, and honestly, I am not sure if it helped. Although it helped me to practice my trading method, so much of my issues revolves around my mental game. Like Randee Howell says - you trade your beliefs, not your method, and your beliefs are ultimately reflected by your emotions, which - in my case - was governed a great deal by fear; that fear became the cornerstone of my trading practices, and the work that I am doing greatly helps me to control it.
With that, the mind that I am bringing to trading is a lot different than the one I had before. I feel more comfortable putting risk on, and I'm not constantly jumping in and out of trades all the time. I feel more comfortable letting a trade move against me, and am not constantly exiting them to cease the discomfort. Like I said, I'm really proud of myself, and feel that - ultimately - this will continue to have a positive effect on my trading performance.
Edit: Just ended my day. 75% win percentage, with my winners just over 1.5x my losers! Couldn’t be happier.
It is definitely a journey, isn't it? Whether coincidental or not, I seem to have become better at trading since I started meditating on a regular basis. Sounds kind of "woo-woo", but I now find it much easier to sit and watch the chart, not feeling the need to trade unless I see the proper setup occuring. If I happen to not find a trade, I still find the chart study interesting and am able to get up and walk away from the computer without feeling frustrated. I know that as my trading becomes more consistent all I will need to do is increase contracts, not necessarily trade more often. I haven't read the book you reference yet, but plan to do so soon.
I recently went back to the methods you shared with me and have (at least temporarily) removed big trades, profiles, depth and footprints from my charts. I had too much going on! Since then I am doing much better. As I get this system committed to "mental muscle memory", I will once again look at those tools one by one as I do think they provide valuable insights to the markets.
It's been a good journey so far and I'm looking forward to seeing both of us become more successful!
Mike
NW Trader
There is no path to happiness. Happiness is the path.
