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Journey aboard the Heart of Gold


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Journey aboard the Heart of Gold

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  #1 (permalink)
 MNSTrading 
Grand Rapids, Michigan
 
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Greetings and welcome! I have been a silent member of the community for many years, not doing nothing but working up a viable trading program. It has been long and difficult, with many twists, but I finally consider myself a real trader, able to make an actual living from the market. This is the story of how I got there.

When the 2008 housing crash came, I was working in medicine. Doctors who took insurance were largely unaffected by the crash. We just kept on submitting our claims and they kept paying them. I didnt know a long legged doji from a rickshaw man. My uncle had told me as a child that stocks go up and they go down, in my lifetime they had mostly gone up. I started to learn about stocks and fundamental analysis. I Decided I didn't have the patience for a lot of research and analysis so looked into technical analysis. I don't remember most of what I learned, but the most important part was that a price is slightly more likely to continue on it's current path than reverse. "That sounds simple and important" I remember thinking. I subscribed to a newsletter that attempted to chart cycles. The conclusion at the end always said something about "the price could go up or down" Thanks, could have just called my uncle.

I did learn what derivatives were. I was trading ETFs so I would buy the double or triple ETF to gain some leverage. I discovered they dont track so well. I don't remember how I came across futures, but remember wondering in awe how it was I could borrow a quarter million in contracts with $500 and a Ralph's card but had to put up my first born to get the same loan on a house. (I didn't have a first born so no house, still don't, but my dog is very nice.) I started with $10,000 and traded some ES contracts. I bought when they hit the end of the bollinger band and soon had $30,000. It took maybe 3 weeks. Then I started to lose and lose big. I had no idea about risk management or how to size positions. I was starting to get the idea that the market didn't care much about my bollinger bands. I learned about the existence of micro contracts and learned more about how markets moved without the huge risk. I had lost my day job so I got another one, then another, then another.

At the very beginning, I felt that there were elements of quantum physics that applied to markets, but I never saw any real evidence of that. I thought there had to be a kind of anti-Newtonian mathematics, an improbability drive, like the one detailed in Douglas Adam's marvelous sci-fi novel Hitchhiker's Guide to the Galaxy. The improbability drive powers the fastest spaceship in the galaxy, The Heart of Gold. The more improbable the occurrence, the faster the ship traveled. Without a strong background in math or physics, my options seemed limited in sussing out that direction, but I never gave up on the idea completely. So this is the story of my journey to create a market version of the improbability drive and the wondrously improbable route I took to get there. So read the disclaimer and follow along if you like.

(from the Hitchhiker's Guide) Side effects of using the Infinite Improbability Drive include temporary (and sometimes permanent), changes to the environment and morphological structure, hallucinations, and the calling into being of large marine mammals. Known effects have included the creation, and spontaneous upending, of a million-gallon vat of custard, marrying Michael Saunders, the transformation of a pair of guided nuclear missiles into a sperm whale and a bowl of petunias, redesigning the interior of the Heart of Gold, turning Ford Prefect into a penguin, causing Arthur Dent to temporarily lose three of his limbs, transforming the desert world of Kakrafoon into an incredibly habitable oasis during a Disaster Area concert, ridding the people of Kakrafoon of their telepathy during the same concert and allowing for the discovery of Magrathea by Zaphod Beeblebrox.


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  #2 (permalink)
 Sandpaddict 
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MNSTrading View Post
Greetings and welcome! I have been a silent member of the community for many years, not doing nothing but working up a viable trading program. It has been long and difficult, with many twists, but I finally consider myself a real trader, able to make an actual living from the market. This is the story of how I got there.

When the 2008 housing crash came, I was working in medicine. Doctors who took insurance were largely unaffected by the crash. We just kept on submitting our claims and they kept paying them. I didnt know a long legged doji from a rickshaw man. My uncle had told me as a child that stocks go up and they go down, in my lifetime they had mostly gone up. I started to learn about stocks and fundamental analysis. I Decided I didn't have the patience for a lot of research and analysis so looked into technical analysis. I don't remember most of what I learned, but the most important part was that a price is slightly more likely to continue on it's current path than reverse. "That sounds simple and important" I remember thinking. I subscribed to a newsletter that attempted to chart cycles. The conclusion at the end always said something about "the price could go up or down" Thanks, could have just called my uncle.

I did learn what derivatives were. I was trading ETFs so I would buy the double or triple ETF to gain some leverage. I discovered they dont track so well. I don't remember how I came across futures, but remember wondering in awe how it was I could borrow a quarter million in contracts with $500 and a Ralph's card but had to put up my first born to get the same loan on a house. (I didn't have a first born so no house, still don't, but my dog is very nice.) I started with $10,000 and traded some ES contracts. I bought when they hit the end of the bollinger band and soon had $30,000. It took maybe 3 weeks. Then I started to lose and lose big. I had no idea about risk management or how to size positions. I was starting to get the idea that the market didn't care much about my bollinger bands. I learned about the existence of micro contracts and learned more about how markets moved without the huge risk. I had lost my day job so I got another one, then another, then another.

At the very beginning, I felt that there were elements of quantum physics that applied to markets, but I never saw any real evidence of that. I thought there had to be a kind of anti-Newtonian mathematics, an improbability drive, like the one detailed in Douglas Adam's marvelous sci-fi novel Hitchhiker's Guide to the Galaxy. The improbability drive powers the fastest spaceship in the galaxy, The Heart of Gold. The more improbable the occurrence, the faster the ship traveled. Without a strong background in math or physics, my options seemed limited in sussing out that direction, but I never gave up on the idea completely. So this is the story of my journey to create a market version of the improbability drive and the wondrously improbable route I took to get there. So read the disclaimer and follow along if you like.

(from the Hitchhiker's Guide) Side effects of using the Infinite Improbability Drive include temporary (and sometimes permanent), changes to the environment and morphological structure, hallucinations, and the calling into being of large marine mammals. Known effects have included the creation, and spontaneous upending, of a million-gallon vat of custard, marrying Michael Saunders, the transformation of a pair of guided nuclear missiles into a sperm whale and a bowl of petunias, redesigning the interior of the Heart of Gold, turning Ford Prefect into a penguin, causing Arthur Dent to temporarily lose three of his limbs, transforming the desert world of Kakrafoon into an incredibly habitable oasis during a Disaster Area concert, ridding the people of Kakrafoon of their telepathy during the same concert and allowing for the discovery of Magrathea by Zaphod Beeblebrox.


I'm not sure the hell half that means but I'm aboard! Lol

I too started 6 years ago with 10,000 and trading leveraged ETFs (mostly the X3 goldminers). I ended up trading stocks, mirco stocks, penny stocks, forex, and finally onto futures where I've been ever since.

I have basically lost money the whole time but have finally found my grounding this year and am starting the slow grind flat to up.

Welcome and looking forward to reading your adventures.

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 AllSeeker 
Legendary Pratik_4Clover
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Your writing is very articulated and you sound like a very smart as well as well read individual. You should post more.

I fully support your intention to stay profitable, its nice community here. I hope I get to read more from you.

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  #4 (permalink)
 MNSTrading 
Grand Rapids, Michigan
 
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Monday mornings, how they have changed over the years. When I started in 2014, I had no idea what I was doing. I had just switched from ETF to futures and was now trying to do something with a contract worth 1/4 million dollars (or whatever an ES contract was at that time.) I was a lot like Mr. Magoo, oblivious but somehow untouched by the danger. As I said I tripled my money somehow in 3 weeks because the market at the time was ranging rather than trending. I would just buy at the bottom of the range and sell at the top, easy. When the market started to trend, my bollenger bands weren't worth a fig.

My job, at the time was as a construction accountant. Construction accounting is complex and interesting. Your financial picture varies by payments received, work completed, debts to subcontractors outstanding etc. I won't bore you with the details. We did remodeling, not new construction so you always went in with not enough information about the structure you were working on. When you found something new in the walls, you would negotiate a change order. One guy had 36 change orders, we had been in his house for a year and a half. Sometimes, on Fridays, he would get drunk and write us mean letters that began "Dear Assholes, you have been in my house for a year and a half now..." to be clear, the changes were his idea though, he was just indecisive.

The accounting didn't take a whole lot of time so I would trade ES or currencies, one time I decided to try oil. I just closed my eyes and bought a contract. Within 2 minutes I was up $1000 and sold it. I went in to the project manager and told him I had just made $1000 in 2 minutes. "I would say you're done for the day, no?"he replied. Mr. Magoo, that was me. So trading was going well somehow, but the business was in tatters. I was brought in because I had turned around another company and the owner thought maybe I could do it for his, but he was buried too deep. A lot of my day was just fielding calls from plumbers and masons telling them they could not get payed right at the moment. It was overwhelming and I quit. I had $30,000, I could just trade at home right?

So now on Mondays I get up and look at the 4 markets I like to trade. I still have a day job but it is remote. It doesn't take a whole lot of time. at around 8 AM, I sit at my desk, plug in my nixie tube clock and look at the markets. my charts look like this. The green is the sell line and the blue is your stop. In this case I am selling the Russell.

I have 30 minute candles with a simple momentum oscillator below. All I am looking for is what some people call head and shoulders patterns but I call fractals, five bars with the middle one highest. That is the direction I will attempt. It is a trend trader's technique. Entries are the worst you can get and exits are not great either, but it does insure you stay in the trend until the end, if you follow the rules. If you know who Bill Williams is you know the method, its very simple, though you can create complicated rules about it if you like. I don't like. But that is now, back in 2014 I was a long way to a peaceable relationship with the market. More next time.




boop

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 Sandpaddict 
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MNSTrading View Post
Monday mornings, how they have changed over the years. When I started in 2014, I had no idea what I was doing. I had just switched from ETF to futures and was now trying to do something with a contract worth 1/4 million dollars (or whatever an ES contract was at that time.) I was a lot like Mr. Magoo, oblivious but somehow untouched by the danger. As I said I tripled my money somehow in 3 weeks because the market at the time was ranging rather than trending. I would just buy at the bottom of the range and sell at the top, easy. When the market started to trend, my bollenger bands weren't worth a fig.

My job, at the time was as a construction accountant. Construction accounting is complex and interesting. Your financial picture varies by payments received, work completed, debts to subcontractors outstanding etc. I won't bore you with the details. We did remodeling, not new construction so you always went in with not enough information about the structure you were working on. When you found something new in the walls, you would negotiate a change order. One guy had 36 change orders, we had been in his house for a year and a half. Sometimes, on Fridays, he would get drunk and write us mean letters that began "Dear Assholes, you have been in my house for a year and a half now..." to be clear, the changes were his idea though, he was just indecisive.

The accounting didn't take a whole lot of time so I would trade ES or currencies, one time I decided to try oil. I just closed my eyes and bought a contract. Within 2 minutes I was up $1000 and sold it. I went in to the project manager and told him I had just made $1000 in 2 minutes. "I would say you're done for the day, no?"he replied. Mr. Magoo, that was me. So trading was going well somehow, but the business was in tatters. I was brought in because I had turned around another company and the owner thought maybe I could do it for his, but he was buried too deep. A lot of my day was just fielding calls from plumbers and masons telling them they could not get payed right at the moment. It was overwhelming and I quit. I had $30,000, I could just trade at home right?

So now on Mondays I get up and look at the 4 markets I like to trade. I still have a day job but it is remote. It doesn't take a whole lot of time. at around 8 AM, I sit at my desk, plug in my nixie tube clock and look at the markets. my charts look like this. The green is the sell line and the blue is your stop. In this case I am selling the Russell.
Attachment 312578
I have 30 minute candles with a simple momentum oscillator below. All I am looking for is what some people call head and shoulders patterns but I call fractals, five bars with the middle one highest. That is the direction I will attempt. It is a trend trader's technique. Entries are the worst you can get and exits are not great either, but it does insure you stay in the trend until the end, if you follow the rules. If you know who Bill Williams is you know the method, its very simple, though you can create complicated rules about it if you like. I don't like. But that is now, back in 2014 I was a long way to a peaceable relationship with the market. More next time.




boop

Ah man. I can tell this is going to be my favorite journal to read.

You are funny, articulate, and yet your points are driven clearly in story form.

Cant wait for next post.

Thank you

"Boop" (fkuff dad)

Lol

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  #6 (permalink)
 MNSTrading 
Grand Rapids, Michigan
 
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Starship Log date 2021, the recovery year.

I very sincerely hope it is the recovery years and I can see all of your faces live at some conference in Tulsa. You never know what they will call the time that you are living in. Later they will say it was the hippie years, or industrial revolution, but for us, it is just now. They throw open the market doors and we go in blind every day. throw out anything we thought we knew from last week, last night. Do people like coffee less this week? They liked it a lot last week but actually, yesterday is gone and future isn't here yet. We know nothing, how can we wrap our heads around an eight trillion person marketplace. We are just here to Bill Murray the Ned Flanders out of Monday. We are only one guy (or gal)

So here's a question for this galaxy of traders, what do you do after a win? Do you have a big steak? Do you smooch your dog a few more times? Do you do a jig like Bruce Willis at the end of that football movie? or do you get nervous that the other shoe is going to drop? What goes up must come down right? Mean reversion. I did well last month. More than ever before, but in the past I was a very other shoe kind of guy, I would immediately tighten up, when is the loss coming? My Trading gets more conservative and I miss out on massive opportunities. Why? Because the market is a living thing, like armadillos and flatworms. No? OK maybe no, but in very important ways, it behaves as such, particularly with regard to turbulence...



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 MNSTrading 
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Turn around Tuesday! That's what they call it right? Do you call it that? In actuality, there is no Tuesday in any market. Try and find one. There is a morning and afternoon session for sure, but to be successful, I had to stop thinking in terms of days. So for me, there are no up or down days.

Right now, all indexes look to be grinding lower right? So our brain naturally hypothesizes; "it has to go up from here" or "the bottom will fall out, it hasn't been this much down for a while" Success in this field means damaging the ego, saying to ourselves, "I don't care what you think, I'm sticking to the plan.

So if the market says down today, after the open, I will be short. If I am wrong, I will reverse once up is indicated. My position could last an hour or all day, its really not up to me. Trading this way I make money and stay calm. Which would you rather, make $30,000 per year with no worries, or $60k right on the edge of being institutionalized? It happened to my friend, he traded himself into the psych ward following the rabbit hole of "the price will come back, mean reversion"

Don't forget, the mean moves as well.

So turbulence (from last post). Turbulence is a natural result of natural processes. It is most obvious in stuff like wind and water. When you blow wind through a wind tunnel you get nice steady air up to a point, but when the pressure gets stronger the wind swirls and eddies, sometimes stops, like the eye of a hurricane. Markets do the same, we call it volatility, but you could just as easily call it turbulence. It is what I hope for in trend trading, the trouble is, once you find it its too late right? Did you see the move in gold last week? How can you catch it? Same way you catch fish I suppose, pick a spot and wait. Some spots are better than others, when it rains for example, fish are closer to the surface, maybe they think the raindrops are food, who knows. The key in fishing and trading is patience (for me) pick a spot and keep an eye out. Happy Trading Today Space Cowboys.


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 MNSTrading 
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So, the improbability drive, where to start? In a phrase, the improbability drive is powered up when the exceeedingly turbulent meets the astonishingly ordinary. As it says in the text created by the incomprable Douglas Adams,

"The principle of generating small amounts of finite improbability by simply hooking the logic circuits of a Bambleweeny 57 Sub-Meson Brain to an atomic vector plotter suspended in a strong Brownian Motion producer (say a nice hot cup of tea) were well understood."

So, easily adapted to a planet's economic engines right? The computers that currently power the worlds economy can't hope to attain to the level of a Bambleweeny 57 but a Stickerockacovitch 4X? Absolutely. (Guy in the back, you caught me, Stickerockacovitch only has 3 generations) In addition, even more powerful computers are being created in the effort to expand and maintain the internet, mine Crypto etc. The atomic vector plotter is your screen, this thing




You enter at point A on the improbable chance that you will get to point B. You travel along a seemingly random and often improbable path to your destination without any steering or speed control on your part. You can pick the radio songs at least, I like The Doors, "Waiting for the Sun" tell me in the comments, what do you listen to? Do you play an instrument? I am drums and ukelele

Now you can jump off at any point but there is no telling where you will end up or even if you can reach your destination at all. So that is improbability trading. You are already doing it BUT you think that you are controlling the journey with indicators, trendlines, candle recognition and bollenger bands (have I mentioned bollenger bands?)

Naw son, think again.



By the way the chart above was this morning's failed gold trade. the green line is the long entry and the blue line is the stop. I usually put my stops 2 fractals back but if I dont have the data I just go one sigma on a trade like this. As a trend trader, roughly half of my trades will fail, probably more.
I don't track wins and losses. Expectancy is what I track.

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 MNSTrading 
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This is oil. I am still in this trade.

oil



Since I use options primarily, I am stuck in the trade until 9:30 tomorrow morning. Is this a good idea? Isn't it trading blind?

Well what are the possibilities? If you use my risk management system each trade never exceeds 1.5% of your capital. I call the capital booty because sometimes I imagine I am a pirate raiding the trust funds of grandmas for scraps. Its true you know, there is actually some of grandma's hedge fund managers on the other side of that trade that believes the very opposite of me. It is a disagreement on value and an agreement on price. Its what make all this (gestures erratically) possible. Believe me, I'm the last person that wants to get a real job. So I try to do this shit right.

So 1.5 is at risk and to really screw me over there would have to be both a sharp move and a standard wave against me. If its just a sharp move it will most likely revert, if it's a wave, well waves go back and forth all the time. So I will do it for uncorrelated markets, one per. Otherwise I'm risking 3% with 2 trades, 4.5 with 3 etc. also keep in mind with options my trade time is very limited, why you ask? So I can sleep. Markets are not supposed to be open 23 hours a day. Just because they are doesn't mean I have to show up. Just because Facebook is there, I don't need to go see Becky's liposuction photos. Ew Becky, read the room.

So the moral of this post is, get some sleep, kiss your wife, walk the dog and always, always smell the petunias.


DpXyzikV4AExw-W

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 MNSTrading 
Grand Rapids, Michigan
 
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So here we are still in the oil trade, making money while I sleep (Is there anything better?)


oil2


You can see I have moved my stop up. This has the potential for one of those parabolic moves. Wife just told me people are hoarding gas, will have to look that up later. I dont watch news, at least not while trading. Did you know that when Kennedy was shot the market actually went up that day? It went down initially but then resumed it;s climb. No respect I tell ya. I will have to get out of coffee because it indicates down, coffee going nowhere fast for the moment anyway. We will see what happens with Russell and gold.

Happy Trading all. Remind me to tell you about exercise and saving your back later. You can't sit at a desk all day and expect your back to just bounce back.

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