Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
I have been trading full time for about 4 years and I don't normally post my stuff on forums but there seems to be a genuine attempt here to help traders so in that spirit let me add my 10 cents.
The holy grail is in fact a Holy Trinity;
1. Positive Expectancy - read Van tharp if you don't know what this is. Search these forums.
2. Position Sizing & good money management
3. Excellent Journal keeping
Please note the system you use is almost irrelevant. ( that will upset a lot of people)
I attach a very simplified version of my journal to make a couple of points.
First - I pay very little attention to $$ - its no good making 4 out of 5 good trades if you lose all the profit and more on the fifth. $$ are really only ever useful at the eod when you tot up.
Risk/Reward ratio is CRUCIAL to success.
Hence you must record Risk multiples - if you don't know about R read Van Tharps book.
Keep your stats right up to speed - I spend an hour per day simply updating my spreadsheet - which now consists of over 3500 trades.
this body of information will tell you everything about your signals and your psychology. It will also reveal new patterns to trade in my experience.
It's boring, it's tedious but the better my records the better my trading. Here is one example.
If I KNOW that a Signal No 1 has a 55% win rate with an average expectancy of 1.75R how difficult is it to keep to the trading rules I designed. It's not a backtested performance algorithm but real (or sim) trades done by YOU the trader - you own the figures.
Thank you for the post; I can't agree more with how important the journal and tracking statistics of your trades. It took me a while longer than it should have for the journal I created here, but the spreadsheet with statistics has been around a while. There are a few others which shared their ideas on this as well.
Looks interesting Mindset...appreciate the input! Here's a short little interview with Dr. Tharp for folks that haven't heard of him. Dr. Tharp Interview
Hi...Thanks. A few of the comments that stuck with me.
1."It’s really simple (trading). You find stocks (or futures) that are going up in as close to a smooth, straight line as possible. When you find them you buy them. And when they stop going up, you sell them. It’s that simple; and good trading really is that simple."
2. (for stops) "Just use a 25% drop in price for stocks or a 3 times volatility stop for futures." (for exits) "Trail the 25% stop (recalculating it every time your stock (or contract) makes a new high) or trail a 3 times volatility stop."
3. (position sizing) "Risk ½% of your equity per position if you are a beginner or 1% if you know you are making money."
4. "Buy what’s going up. Sell what’s going down. Risk about 1% per position. It’s not that hard."
In addition to keeping raw stats of your trades I also find aan app called snagit really useful to capture the trade at setup, entry and exit. ( I have no relationship with snagit other than as a user). I have it setup so that this process all happens with one hotkey.
If you then put a link into your spreadsheet you can review successful and unsuccesful trades with both analytical and visual input.
It also makes reviewing large nos of trades so much easier. eg the whole week
Yup, excellent - I recommend Jing only because it's a bit simpler, to my "students" who ask me for help etc, and they have to document screen shots of their entries and exits. Jing is handy mainly for very quick uploads of videos, which I do very often for users on the forum, but I also use SnagIt pro and it's a fantastic tool if you need to mark up a chart.
BTW, I just re-read your original post, and wanted to say bravo once again, I hope more people will listen and follow your advice.
Not used to all these compliments - you will make me
I hadn't heard of Jing but as it's free and made by the same co as snagit looks great value!
As boring as it is I have found record keeping to be an invaluable source of refining trade entries and trade management.
Once you have seen something a hundred times you tend to think yep that is an edge!
