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The first draft of the John Carter inspired trading plan is done. Combined with the first drafts of my General Rules and individual setups, there are currently 12 pages, made up of instructions, descriptions, a grading system, and physical exercises. There well may be more than 12 pages after I review and refine what I've got so far. It feels good to be so... thorough? I had thought that I had a trading plan before now, but the difference is basically night and day. What I had before were vague ideas without structure. Not anymore!
A huge parabolic rise-sized shoutout and thank you to @deaddog. I appreciate your advice and recommendations more than is socially acceptable to express.
Edit: The first revision of my General Rules and individual setups bumped up the total page count for the plan to 14.5 pages. I haven't gone over the Carter-like portion of the trading plan yet, but I plan to either this evening or tomorrow.
Hey, I read through your posts and appreciate that you are writing it down. I keep thinking I should do something similar but I could never be so concise. At best I will come up with a carefully curated list of books. So looking forward to your first draft.
We have a place in the foothills out in the desert where we park the Airstream during the winter. It is a winding road going up and down where much of the time you can't see what is coming. It is a great analogy for the market and trading systems. You have the general rules for operating your car and driving. You have the forecasting systems in the form of the highway warning signs and you have the need to deal with what actually happens. If you rely on the signs alone you will be suboptimal. You have to be able to read the road. But you can't see the road ahead so again sub optimal. Combine both skills and you will do OK.
If you haven't tried these free daily YouTubes give it a try, For the cure ahead highway signs I watch Futurestrader 71 before the open. This is a trading plan based on volume profile. After the close, Monday thru Thursday "Mack" posts a video of what happened using price action rules at the PriceActionTradingSystems.com (PATS) channel. This is classic tape reading, as in reading the road.
Personally I think Mack gets less credit than he should. Ask anyone with a strong southern accent and they will tell you people deduct 10 points from your IQ. Add in his everyday expressions and some will find he does not meet their stereotype of an expert. After reading "Market Mind Games:A Radical Psychology of Investing " by Denise Shull I came to fully appreciate what Mack teaches. Even more so his awareness of the mind traps new traders often get themselves into.
By the way, Shull brings recent scientific insights to the emotions of trading. The late Van Tharp and of course Mark Douglas got the ball rolling but knowledge moves forward. Their work was mostly done before the Nobel Prize in economics was awarded to an Israeli psychologist. Also she worked hard to make her book easier to read.
In regard to Algos you are right, when news is released they react instantly. But Michael Filighera (Elliot Wave daily free analysis on Youtube my overall road map) pointed out that they are programmed by people so they still have human biases. And that is the absolute core belief I have learned to accept about the market. It is human emotions and beliefs. Nothing has changed since Roman times except technology.
I like that analogy! Also, if you guys are in the desert, I bet that the sky looks amazing at night! Reading the road is what I've spent the most time on recently, and I believe I'm on the right track, although my trading results will have the final say, haha. I definitely don't want to be solely reliant on the signs. Scatter-brained backtesting has shown me how non-bueno that approach is.
I will look into each of those resources. Thank you very much for the recommendations! I've heard of Futurestrader71 and Mack before, but I've never looked into their content. I've experimented with volume profiles too, but not in a structured way that comes from actually knowing how to use the tool. So, basically like a kid trying to use a drill, but the kid's knowledge ends at how to use a hammer.
An easier-to-read book about trading psychology sounds right up my alley. I might read the book you mentioned in tandem with Douglas, if I can find a copy. Would be cool to compare their insights, especially given how much more recent Shull's book is.
Edit: Trying out one of Mack's videos on the YouTube. Love his accent. I grew up in the South and have recently been developing a deeper appreciation for my roots, minus the historical racism.
I totally get that. It's weird to think about people being the same hundreds of years ago as they are today. You can see it on old charts when you compare them to modern times. A while back I decided that I wanted to see if the patterns I was seeing on a day-to-day basis were patterns that happened in the past. I looked at the DJI on TradingView, but it got tricky once you got to 01/02/1970 because they only had HLC data. Then you get to 09/28/1928 and they only have closing prices. I like OHLC candlesticks, so this was a problem!
I ended up creating an "artist's interpretation" of the (what I thought of as) incomplete data, that way I could view the data on an OHLC chart. For the oldest portion of the data (05/27/1896-09/28/1928), I just assumed (artistic interpretation!) that the opening price would be yesterday's closing price. I doubt that prices were so orderly in real life though. It probably would have looked more like what a chart of a low liquidity security would look like today. The candles ended up looking like shadowless Renko bars. If nothing else, it was a fun project.
Anyway, sorry for that sidebar. Thank you for taking the time to read my journal and respond!
I'm not sure if I'll upload my trading plan yet because there's some deeply personal stuff in portions of it. It also currently stands at 19.75 pages, so it's a bit on the dense side! I might do a condensed version for this journal or a summary of each portion though.
I'm not sure if I'll be trading this week or not. I have most of my trading plan written up, but there are still some things that I want to nail down. I finished the rough drafts for the Carter trading plan, General Rules, and my current setups. I reviewed and refined each one twice and am satisfied enough with each to shelve them for now while I flesh out the rest. John Carter recommended having a grading system in place for your trades, so I decided to use a simple PASS/FAIL system, combined with a trade GAIN/LOSS and trade entry GAIN/LOSS system. Ultimately it boils down to:
Did I follow the instructions?
Yes = PASS
No = FAIL
In order to trade with the Live account, I'll have to have a prior weekly grade of B or higher. That equates to a minimum 83% success rate. Each week I'll add up the number of passes and failures and calculate the percentage of passes. 83% or higher? Good job! 82.9% or lower? "You've won a week-long, all-expenses-paid vacation for one to the luxurious, captivating, unfathomably pristine Isle of TRADING SIMULATION!" If I'm able to achieve a passing grade of B or higher for that week of SIM trading, then I can trade Live again the following week.
What I still have to refine is the Excel document that I'll be recording the PASS/FAIL and GAIN/LOSS information in. I'm also still working on the rules for increasing/decreasing my position size (first draft done, first review-and-refine halfway done). While I have enough of my plan in place to be able to trade, it just feels wrong to begin (again) without having the whole kit-and-kaboodle ready to go.
Cattywampus Ramblings
I restarted Carl Sagan's The Demon-Haunted World. I didn't get very far the first time I tried to read it, because it's incredibly depressing! But, it's depressing in a beautiful kind of way. I've also started reading Trading In The Zone by Mark Douglas and am still working my way through Wyckoff's old course. I'll also be looking into Market Mind Games by Denise Shull, as recommended by Trailer Guy.
Watched the moon rise over a mountain ridge in the distance and mingled with the neighbors. They're wonderful people! Good times.
I'm not gelling with this idea, although that could just be because I don't have an accurate grasp of the concept. Thinking that well-funded operators manipulate the market to essentially rip-off the retail crew just seems like a way to pass the responsibility from yourself onto an unseen enemy. "I fail because of market manipulation!" instead of "I fail because I don't know what I'm doing, or what I'm doing doesn't have a profitable edge, or I'm undisciplined."
I was listening to a podcast the other day about John D. Rockefeller, and he had some interesting things to say about excuses. I can't remember exactly what he said off the top of my head, and I can't find the quote on the Google, but the gist was "don't make excuses." There was more, but that's the ultra-condensed version, lol.
I remember watching a trader on YouTube a while back, who, after a few losing trades blamed the market makers for the trader's losses. I'm sure it was also due to external forces that this particular trader consistently doubled down whenever a trade showed a loss. I feel like we've all been there though. Losses hurt, and it's normal to look for something to blame, other than ourselves, for our discomfort. Normal, but not always helpful. I've found that it's much more beneficial to evaluate what I can personally do better moving forward, although admittedly, I'm certainly not perfect with this! I try though, and it at least helps most of the time when I make the effort.
I probably don't need to clarify, but just in case, I do think that there are situations where taking personal responsibility isn't the best course of action. If you're in an abusive relationship for instance, then your partner's decision to mistreat you is absolutely not your fault. Someone's decision to harm you is their decision. It's on them.
In general, though, aside for extreme situations like the above example, taking personal responsibility is a good thing. In my opinion anyway.
Anyway, if what I think I understand to be Wyckoff's idea of the Composite Man is correct (and it might not be), and it worked for him, then great! I'm personally more comfortable with thinking about the market as a neutral non-entity, a place, where a diverse group of people and algorithms meet up to transact. Not saying that that's the right way to look at it, or the only way. Just what helps me understand (or perhaps misunderstand) the market, yo.
I don't believe that is the idea, that you fail because the market is manipulated.
To start with you need to see what the stock market is. It is a place to market stocks, not unlike a food market or an automobile market. It was not developed for you to make money it was developed for the people who control it to make money.
Like any other business you have a product that you buy wholesale and sell retail. If you can buy for less than you sell you make a profit. If you believe in market cycles (accumulation, mark-up, distribution & markdown) you can see where the "Composite Man" might stay in business.
As a retail trader you want to get in during the mark-up cycle and get out during the distribution.
Not much difference than you buying fresh veggies at a farm and selling them to your nieghbor for a profit.
The market is not manipulated by the "Composite Man" it is how he does business. If you can figure out what he is doing you can make a profit also.
"The days when I keep my gratitude higher than my expectations, I have really good days" RW Hubbard
Sweet, glad I had it wrong. Thanks for clearing that up, and I appreciate the examples! I probably should have read a little more before jumping to conclusions. I'll go back over the section in his book where he talks about the Composite Man.
I have at least one more review-and-refine left for my position sizing rules. Initially, I was just going to scratch out a rough idea for this portion of my trading plan, since I currently only trade one contract. I realized however, that if my method has a legitimate edge, and I can exploit that edge in a disciplined manner, it's not unrealistic to think that I might reach an account balance that would warrant increasing one contract to two in a relatively short amount of time. At that point I'd have to stop trading and get my position sizing rules ready to be implemented, so it made sense to get it done now instead. So, yeah, that's on the to-do list for today.
I also need to go over my PASS/FAIL and GAIN/LOSS spreadsheet, as well as my new private trading journal template.
Next Thought:
Was looking forward to trying out Pikmin 4 with the wife, but the co-op mechanics are very different from Pikmin 3. In the latest game, Player 2 is basically a glorified rock thrower, which isn't quite the experience we were looking for, haha.
Next Thought:
I currently use Quantower through AMP Futures to trade the MES intraday. Quantower is cool, but it definitely has some issues. Sometimes data just won't load if you click "Reload Historical Data," which is, ya' know, a pain. Closing and then reopening Quantower usually helps, but it would be nice to not have to fool with that at all. I started out with NinjaTrader 8, but switched when I realized that a good chunk of NT8's premium features were available for free elsewhere. Not gonna' lie though, the smoothness of scrolling through charts on NT8 is quite noice, but it's annoying that you have to hold 'Ctrl' when you left-click if you want to move the chart around freely. Edit: I use an older version of NT8 though, so the 'Ctrl' requirement may not be a thing anymore.
While I don't use NT8 for intraday trading, I do still boot it up every now and then to try out auto strategy ideas. I usually just stick to testing out strats on the Daily timeframe. I try not to spend too much time messing with this kind of stuff though, because I tend to get sucked into it, and there's almost never anything of value to show for it afterward. It's fun though!
I use TradingView more often than NT8 as far as just browsing stocks, futures, etc. goes. I don't trade anything with TradingView though. It's just for window shopping.
Next Thought:
Can't stop watching Swamp People. I can't explain it. I'm not a hunter, and I've never been interested in hunting, but watching these people hunt big-a** alligators, even with the heavy editing that reality TV filters everything through, is entertaining as hell. A couple of the show's long-timers also hunted big-a** snakes in the Everglades in a spin-off show. What a time to be alive.
For now, it's done. There will be things that I continue to learn, and my plan will continue to evolve. It honestly doesn't matter though if I can't follow the rules. I'll find out if I can, starting tomorrow. I'm anticipating a less-than-perfect implementation initially, since I'll be trading within a much more structured framework than I'm used to. I'm going to do my best not to focus on the financial outcome of each trade, and instead focus on how well I executed each trade in relation to each setup's instructions. Pass, or Fail. Of course, if my method is horse s*** then that matters too, but if I can become disciplined and mechanical with how I trade, then I can apply that skillset to other trading methods, should mine turn out to be a mirage, or a hotel for flies.
Well, that was a very quick trading day. One of my rules is that I have to stop trading if I make two mistakes. Ironically, I didn't realize that I was making a series of mistakes until later on in the morning. Whoops. I also realized that there's going to be quite a bit more to learn and add to my plan. I was premature in thinking that I was done.
- Didn't enter out of fear when an entry signal formed, which turned the trade into a failure.
- Marked up an area that could have been okay to watch, but wasn't addressed in my rules, and as it turns out wasn't a great area to watch.
- Was confused and didn't take a minute to step back and calm down, which wasn't in my written rules, but will be moving forward.
- Didn't have my pattern instructions written up in a good way and printed out a hastily edited version to add to the plan.
General Thoughts, Things to Do, Etc.:
I had some chores to do this morning, so I got up earlier than I usually do, but I still ran short on time. I need to work on being more efficient, and perhaps getting up even earlier. I felt rushed, and jumped into a trade before taking the time to make sure that price was shaping up in an appropriate area (something I need to flesh out).
I need to add a rule about taking some time to calm down if I'm confused, and/or not thinking clearly.
I need to gather up all of the misc. rules in the Carter plan and transplant them into the "General Rules" section. I don't need to be flipping through s*** during the trading day hunting down this rule, or that rule. It all needs to be in one place.
I need to figure out which areas are worth looking at on the Primary timeframe, and which ones aren't.
I need to study past strongly trending days on the Primary timeframe, and then zoom in on those days with the Intermediate timeframe to see what the market was doing.
I need to write up a solid explanation of the patterns I look for, their exact entry criteria, and determine which ones need a lower timeframe refinement, and which ones can just be traded on whatever timeframe they form on.
Just in case there's confusion about the number of trades listed in the second picture vs what's listed in the spreadsheet, it was one trade with three entries.
Edit: Fees are also not shown. Also, I'm looking at my spreadsheet and it seems like PASS/FAIL (%) and Daily PASS/FAIL (%) are kind of redundant, so I'm gonna' scratch one of them moving forward.
Edit v2.00: I realized that I misremembered my two-mistake rule. It calls for the trading day to end if I make two setup-specific trading mistakes, not two general mistakes. Technically, I shouldn't have stopped trading when I did, at least according to my rules at the time. Truthfully, I was uncomfortable and didn't really want to be trading. I think it was a mixture of realizing that I'd forgotten to write out a critical part of my plan, feeling rushed and confused (because I was rushing myself), and general market fearfulness, some of which I acquired from trading Live and losing substantially in the past. Looking back, I 100% should have started trading in a SIM account, and only moved to Live trading when I knew what I was doing.
Thank you very much for the recommendations! I've heard of 
I'll find out if I can, starting tomorrow. I'm anticipating a less-than-perfect implementation initially, since I'll be trading within a much more structured framework than I'm used to. I'm going to do my best not to focus on the financial outcome of each trade, and instead focus on how well I executed each trade in relation to each setup's instructions. Pass, or Fail. Of course, if my method is horse s*** then that matters too, but if I can become disciplined and mechanical with how I trade, then I can apply that skillset to other trading methods, should mine turn out to be a mirage, or a hotel for flies.