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Well I've managed to loose money everyway that I think a trader can. Now I understand risk to reward and win/ loss ratios. I understand the value of back testing a set signal and the meaning of statistical probability. So here I sit to be honest with my system, myself and you. I do this because I realize that consistency leads to profitability. I do this because chasing trades kills my risk to reward. And there will always be another trade that comes along shortly. This is all very easy to say. But when it comes time to wait, well that's a different story. But I've realized I don't want to do this for the fun or the adrenaline rush. I do this because I want to learn a skill that can provide income regardless of what is happening in life.
My setup is pretty simple. I have a scalper indicator on a 10 range chart of on the NQ with a 12 range VisualEMA with a 6 period look back as a filter. Limit entry 2 tics from the POC of the signal candle. I WILL ONLY TAKE TRADES THAT MATCH MY FILTER. (That was more to remind myself). 0840 to 1500 CST. 40 tic target with an 8 tic stop loss. At 20 tics MFE I (Ninjatrader) will move my stop to breakeven to reduce risk as fast as possible. That is a 5 to 1 reward to risk. So theoretically, I only have to hit target 20% of the time to breakeven not including commissions. My back testing shows that this setup has about a 50% win to loss ratio. This does make the same assumptions that most back testing does. Chief among them is that I can sit at this computer the same amount of time each day that I back tested and that I don't miss trades. It is very trade intensive. I would also like to track some measure of under what conditions this setup is successful with each instrument as a I add them. Perhaps a ratio of implied volatility to historical volatility broken into low, medium, and high. Then compare wins to losses under the different conditions. This maybe a possibly way to gauge which of my tested instruments I should be trading under certain conditions. Just an idea for down the road. But, I have to get down the road first. So lets get started.....
Jason,
AKA Futuresnoob (Hopefully not so Noob anymore)
Why don't you automate your strategy and let it run on sim
you will quickly get a feeling of where it goes
I have seen many traders, pretending to have a profitable strategy, while they lack a decent period, back test on the strategy, with hind-sight it is not realistic to qualify the trades, you either need to manually execute consistently and that is it, or you automate it and it runs unattended... The rest is conversation..
I would love to automate this strategy and let it run in SIM. Then if satisfied let it run the same with a live account. Ofcourse, I would monitor it. I There is only one problem. I don't know the first thing about computer programming. My computer skills go about as far as the Advanced Trade management setup in Ninjatrader. I tried the strategy wizard... the wizard left me in OZ. So for now I either pay someone to set this up for me or learn some self discipline.
Well @rleplae was right. Only a computer can be there to take all the trades. And after putting a strategy on that I found here on the forums in SIM mode and watching it run, to see how they work, I am now certain I need to find a coder to code this. Even if it doesn't work right a way it will be a starting point. I have found this journey of trading is many journeys to collect piece to a map that shows to the path to being consistent and profitable.
I've tried looking for coders On that forum but it looks like a ghost town. I asked one that I believe is well respected here but he isn't taking on that type of project until the beginning of the New Year. Does anybody have some suggestions for reputable coder to use?
I apologize @DavidHP . Life sometimes gets in the way of good intentions, hence why an automated trading system is probably so appealing to so many traders. Well that and it removes their own impulses to get in their own way of successful trading. Which brings me to trading. Thursday was awesome from a standpoint of trading my rules with no mistakes. The market even presented me with a fair deal of money which may or may not have been a result of my good trading from a rules standpoint. Mark Douglas, Rest in Peace, would have been proud. Then there was Friday. I head over to The Beans (Soybeans), which I haven't traded in some time, and threw on a short. Because of an occurrence of a tested signal? No. I read on MRCI that it was time to sell the November Beans. Full loss. I then got up walked away and reset. I came back to the Nasdaq where I have been trading lately took good trades to end up only down $100 on the day. The moral is that there is a reason we work so hard trying to determine probabilities and all we have to do is get out of our own way.
As for the automated system I have run into an ethics hurdle. The scalper I use is a commercial product I bought that I do not own the rights to So I cannot ethically use the code in my strategy without permission from the coder. I have reached out to him and will wait to hear back. He is working on an auto trader as well so he may not be to inclined to grant me permission. He did say would look at adding a filter to give the choice of only taking trades that matches a trend in his autotrader.
I made a few trading errors this week. The first was when I exited an automated strategy which I started only to see how they work, Ninja defaulted me back to no stop loss and I was not on the correct instrument. I caught the stop setting but missed that i was in gold and not the NQ. A 15 tick stop in gold is a bit heavier than NQ. Must learn to slow down and down my pre-trade routine even when staring in the middle of the day. After that I made great rules based trades. My account is loving it. I have found that even though I cannot be there for every occurrence of my signal when I trade the rules it gives me consistency which leads me to profitability.
