swansjr

That's not the Watts System - but it's from Watts. It's a free PDF he hands out if you sign-up on his maillist. I've been studying the Watts for several months and have to say I'm very pleased with it. If anyone's interested I'm trading it live on this thread: Daybreak Trading.

Good luck. It's worth a try for the price, that's for sure.

Day 13 Two trades. Two winners. First the good news. Today was a rather picture perfect day in terms of entry. My first trade for the day was long and hit my target within seconds. This trade happened right near a "major" turning point so my next trade was on the short side. I had no problem with switching from long to short as I saw the market dynamic change. My short trade reached it's profit target rather quickly as well. Now for the bad news. Because I've been trading so poorly (see yesterday) I decided early on I was only going to trade one contract today. Ok, that kind of discretion is fine. However, what I failed to do was implement my "runner" rule. My original rules are to utilize a runner after I have a winning trade. I knew this when I was putting on my second trade. I repeated it to myself yet, instead I exited on my scalp parameter. My feeling during the live trade was something like this: I did not want this trade to turn into a loser or break even. I wanted my money! What would have happened if I kept on my runner like I originally planned? Well, notice the wonderful trend on the image below. See my entry? Nice, huh? But look at all that profit left on the table. Very unfortunate. Over $300 per contact was left on the table because I did not follow my rules 100%. I was sloppy on my entries Tuesday. Today my entries were spot-on but my exit rules were neglected. In either case I either lost money or lost potential profits. I'm clearly working-out the wrinkles in my trading psychology. On the bright side, I continue to grind out profit with this scalping method. I'm also doing much better with handling a loss. I'm stepping away from the screen when needed and I don't appear to be over trading. If anything, I'm being overly cautious and could easily take advantage of more opportunities. P&L: $198

I'm a member to his forums and he does NOT trade all those charts. He has hinted he only trades a few charts every day.

I think it’s a solid system. Great for scalping and capturing intermediate intraday trends. The potential for low risk entries and high R returns are very possible. I’m sure it’s like any other system – some people will find more value in it than others. However, Ryan Watts sells it for a very reasonable price and provides a trading room. I found Ryan Watts very helpful and people in the trading room friendly. I've purchased two other discretionary systems and I have to say, this system is the one that clicked with me. It's also the one I've ever made any money from. I’ve been studying Ryan’s technique for months so you do have to put effort into it. But again, that’s like anything. You can find other positive comments here. Hope that helps.

Day 12 Two losers in a row and I’m done for the day. This was a short session. I was in the market for only about 20 minutes before I totally screwed up. Today should have been an easy day as the market was trending. All timeframes were looking good, but what do I do? Make horrible entries and I start to get spooked. So I raised my stop way too soon. This took me out both times only to see the market move without me. If I had been a little more patient I would have done just fine. Traded horrible today. It’s tempting to continue trading but obviously my mind is not in the game and my rules dictate that I'm done. So be it! P&L ($124)

Day 11 The first day of the week I was getting conflicting signals on my different timeframes. Trading was tricky. I managed to get one trade it for a win. P&L: $82

Week 3 Summary Time to review the weekly resutlts which also happens to be a monthly review (my first monthly review). The image below is my bottom line for my thrid week and for the month. You may notice I adjusted my commission charges because I was not counting one half of the changes. So, now listed is a full round trip per contract. I should have noticed this sooner. Naturally this cuts into my profits and I may find myself bumping up a profit target to help offset this. Take a look at the bite commissions take - 30% of my gross profits! Runners would help to reduce this and so would trading from a higher timeframe. This is the cost of being a scalper! This was another week of me struggling to pull the trigger on all my setups. This has been a problem all month. Compunding my poor peformance this week was the fact I was unable to initiate an effective runner. I missed several opporutinites to have a runner and the ones I did have were all stoped out for a small profit. My runners is where the bulk of my money is made. No runners this week so, no great imporvement in my equity or system performance results. Below is a list of my trades since starting this post. What does the green highlighted trades mean? Well, those trades represent live trades. Yes, I traded live this week. I wanted to test myself with some real money on the line and so I dedicated three consecutuve days to trade. My first impressions are that trading live had little impact on emotions and I hope to keep it this way. My first live trade was a loser. But I managed to follow that with 3 consecutive winners. My plan is to continue to trade live until I see myself struggling to push my equity curve higher. If I bring my current “gains” (see below) down by 50% I’ll go back to simulated trading. Net P&L For May: $499

Week 3 Summary Here is the results through last week. Sorry, I don't have time to post charts.

Week 2 Summary Here is the latest results. Don't have time format them into something nice looking.

Day 10 Two Trades. One winner. One Loser. The EC market spent most of the evening and early morning climbing higher. I awoke to a tipsy looking chart, but entered on my first opportunity. Target hit. WOW! My first trade was not a loser. I immediately entered my second trade with two contracts and was promptly stopped out. Hummm…Naturally the market would push higher shortly after my stop out but I was a bit early in purchasing. These complex retraces within the trend often fool me. Anyway, so it goes. I decided to stop because today is the last trading day of the month and I had many lose ends to tie up in regards to record keeping and finances. More importantly, I was not feeling like risking any more time or money with EC this morning. So I spent my morning updating quicken and my spreadsheets. While I lost money today, I feel I actually traded better than yesterday. However, I know my mind was not in the game after that single loss today. Yet I'm happy I ended today with a small loss. Looking forward to reviewing my performance this weekend and trading next week. P&L: ($80)

Day 9 Four trades today. Three winners and one loser. Today started off with my first trade a loser. Now, this is getting downright silly. I mean really, it's not like I'm trying to pick a bad trade for my first trade of the day but once again, there it is. I've about reached the point where my first trade of the day will have a 1 tick stop. That way, I'll be taken out quickly with minimal damage so I can move on in confidence. Anyway… While most of my trades were in the black (or green!) my trading was not executed to my liking. First off, I did become distracted from my screen and missed a clean entry into a new leg-up which would have produced a nice runner. :crap: Instead I had to enter later in the trend and my runner was stopped out with a one tick profit. Now get this. Just before I was going to stop trading for the day the EC market came alive and the price action was fast and smooth. Bingo! Another setup and I entered. But what's this! Two contracts? I forgot to reset my input to a single contract and now I found myself on the fourth wave up with two contracts. Dumb. In my haste to correct the problem I accidentally deleted my stop. :doh: The market was now moving down. I clicked the "Close All" button. Close call but out with a nice scalp profit on the two contracts. Paying attention to the screen and to the details is key. Things like setting the correct number of contracts to buy needs to become automatic. I'm not there yet. Again, I feel one big skill set that separates the armatures from the pros is the fact pros make fewer mistakes. I made two mistakes today but came out ahead - this time. Mother market was in a forgiving mood today. Next time may be very different. Don't allow "next time" to happen. P&L: $198

Yes, it is very helpful to post here. Not only does it provide a learning opportunity when others comment but also, there is an element of responsibility for posting my trading summary. In short, posting here keeps me honest to myself and consistent in documenting my trades and emotions.

Thanks Pappo for the great words. I totally understand that fear is a natural emotion for novice traders and it’s not entirely bad. It becomes bad when you are unable to act when duty calls. Acknowledging my fear and moving on is what I’m trying to do when documenting my emotions and trades here. It’s part of my trading therapy. I really think this is helping. I do notice I take losses much better than 6-12 months ago. As for the confidence in my system, that will come with time. Like anything, you earn confidence by doing! Thanks again for taking the time to write a great post.

Day 8 Slight up day with three trades. Two winners. One loser. Today was a day of missed opportunities. The morning started off with a losing trade. This is typical for me. I brushed off the loss, or so I thought but again I was unable to pull the trigger at critical times as I found myself over analysing my signals. It's been several days since I've traded and I did not practice over the long Memorial weekend. Maybe this played a part in my inability to tack action. I don't know. The chart below shows great shorting opportunities that I missed after my first losing trade. The second chart shows were I entered long when it appeared the down trend was over. A double bottom formed (indicated by the horizontal line) and I saw a divergence on my MACD indicators (not shown). I decided to enter as price "wanted" to push higher. My entry was spot-on and my target was hit. After this successful trade my trading rules state I should next enter with two contracts. The first contract would have a hard target while the second contract would be a runner. The market provided an entry point (the first blue arrow around 7:25) and what did I do? I did not enter! The market provided a second entry (the second blue arrow) but I stood on the sidelines once again. This trade, if taken, would have developed into a nice runner. The market gave me another shot just before I was going to end for the day and I opened with two contracts - long (not shown). My first target was hit with little heat but my runner was taken out with a single tick of profit. I captured the top of the current move up. You snooze, you lose. Very poor trading :doh: today as I failed to pull the trigger. This is a weakness for me as I often over analyze my charts. On the positive side I know what I'm doing wrong and I know what I need to work on. Furthermore, I did recognize the reverse in trend and did not have a problem switching form short to long. It seems fear of losing money is stopping g me from executing my trading plan. I'm very risk adverse. P&L: $52

Well I'm no expert but if the order was rejected that means the program sent the order at the end-of-day. I'm not sure what the problem was.

Week 1 Summary Well, here are the results for the first week. Off to a good start. $810 profit trading a two-contract lot on 16 trades. Lets see how long this lasts. Oh, these spreadsheets say "net profit" but that's really "gross" since slippage and commissions are not included.

Early this week in the Clayburg forums someone stepped forward with the following system settings saying he has been doing will trading YM on an 89 tick chart. He claims April has been the best month while over the past two weeks the system has just been breaking even. I hope to monitor this with live market data and report on it. Other results of live market testing can be found on the ES market. Here are the settings for YM on an 89 tick chart:

Not too hot this week as the system was whipped around on the non trending days like Friday. Seems typical. The Universal needs trending markets. SYMBOL DATE TRADES NET PROFIT @ES 5/11/09 2 -$600 @ES 5/12/09 4 $1,588 @ES 5/13/09 2 $50 @ES 5/14/09 2 $650 @ES 5/15/09 2 $25 @ES 5/18/09 2 1187.5 @ES 5/19/09 2 -600 @ES 5/20/09 2 -600 @ES 5/21/09 4 50 @ES 5/22/09 2 -600 SUM 24 $1,150

Week 2 Summary Lets rate this one another C performance. I was unable to trade much this week and I know I missed opportunities because I was not focused. I'm happy I did not hurt my account but I could have done better. Over the weekend I hope to do some historical testing for practice. Next week is another shortened week, but I should have more screen time. P&L: $465

Those are all good points and highlight assumptions that are made with the TradeStation platform. For example, if price touches a target it is assumed filled.

Please post your live testing results in a few weeks. Would love to see them.

While the question may be "impossible" to answer in the strictest terms, it is useful. Just as “impossible” is the person in his late 20s spends time predicting his retirement nest-egg amount for age 62 (due to of all the unforeseen changes in your life, tax codes and whatever). Yet, such estimates are useful. The usefulness in this video comes in the regards to how most people perceive trading when they are first introduced to it. That is, you can make a lot of money quickly and the process of trading looks easy. Furthermore, while it may be "impossible" to answer for an individual person, given a population of traders we can draw some concludes. In short, most new traders do not become successful under a years time. A lot of work is needed. Probably more than most realizes at first glance. Adjust expectations accordingly.

Here is a short 4-minute interview that answers the question, "How long does it take to become a profitable trader?" I guess I have a few more years to go! Anyway, I found this interesting and it's probably a fair assessment. Trading is hard work. You better love doing it.

Due to other obligations I was hardly able to trade this week. Looks like I got one day in! I was really hoping to get more data point for my spreadsheet but that's life in the big city. I'll post a performance update this weekend.