GeneTrash

Hi Everyone, It's been an few months since I last posted. I have been working very hard on a couple of systems and have a few questions some of the more experienced chaps could help me with. I have been developing two trading systems which I am looking to begin trading live on the ER2. I have back tested both systems one year back so far. (It is very time consuming as I prefer to do it manually.) The two systems have combined for ~+$4000 average a month using a two contract scale- in entry system. (Includes all fees/commissions, slippage is not an issue.) As of yet I have not had a losing month and the biggest draw-down period has been ~$1900. I have put a lot of work into the systems to minimize my initial trade risk, lowering the draw-down. I plan to back test to three-five years. My question is are these numbers poor, average, good, or great? The systems works on e-minis and the few commodities I have looked at, as the ideas are fairly simple. I have also made a effort to make the systems as robust as possible with minimal discretionary trade management needed. I believe live results should be close to those on paper. The systems are very easy to trade and require no emotion. The only thing that would change results would be sporadic trading. With your experience and such what is a good 1 contract/month P/L number to look at when building or evaluating a system? I have come across some numbers in my reading/surfing ($3000, $6000 and some crazy P/L on those pre-made mail-order systems, though I don't put any stock in those.) Should I be moving on to other ideas or trying to optimize more or should I continue back-testing what I have? This may sound like a dumb question to some but sometimes after all the hard work I can get discouraged if the data is not generating what feels like a ton of money haha. I know it's a newbie feeling to want to make lots of money right away but I realized I really didn't know what is good or bad as far as systems go. So what kind of numbers do your trade systems generate per month per contract? P.S. Keep in mind the R/R ratio and and win/lose percentage of the systems are good.

Haven't traded the last two days as the net at work hasn't been working properly. Gave me a chance to begin back testing a trade setup I am interested in.

Very low volume day today. Took too many unnecessary trades. Struggled again with trade management. My goal tomorrow is to stick with my targets and stops better and be more patient on the setups I take.

OAC, I debated staying on the simulator longer but just felt like I was getting a watered down experience. I am enjoying trading a lot more for the fact that it is real and am willing to step back on the sim if I lose this account. Besides, the greater the variety of markets I can experience now will help me in the future.

Hi Nick, I am charting the MP levels from the previous day(s). I am in the process of learning MP more in depth and at present do not take the type of day (normal day, trending day, neutral day etc) into account. Though I do try and note the levels at which the market finds value each day as well as overlapping levels. I try to review this list each morning to see if the market may potentially revert towards these areas. I find if I try and focus too much on one technique (MP, VSA etc) it overpowers everything else and I start to notice only things needed to make these tools work, rather than what the market is actually doing. I'm not sure if that makes sense haha but I know in time I can incorporate more in advanced portions of MP into my trading. In regards to the mechanical exits I think you are right. I wish I could trade another contract and scale out after 10 points as I had success on the sim doing that. I think I will be using 1 contract for a long while though haha and am starting to get a idea for target sizes per situation I trade in.

Overall a disappointing day. Bad trade management killed me. I think I should be taking profits quicker while I am still learning. I find myself looking for home runs and it's costing me... I was aware it would be a slow market as it's the day before a long weekend after a wild week. Taking small scalps would have been smart. I got to wrapped up in the potential breakthrough into yesterdays value area as you can see by some of the bad trades haha. I have to be more objective and analyze what the market is doing and not what I want it to do. My execution was poor as I had an issue with accidently trading 2 contracts instead of one. Tough to swallow going to the weekend but that the way she goes. Looking forward to Monday because I know the opportunities I missed will come around again. Have a great weekend everyone. Thanks for the input on yesterdays entry guys!

Hello all, My story: I have been sim trading for approx 6 months. The last few have been pretty serious and as of Monday March 17/08 I went LIVE!! I just felt I couldn't wait any longer as everyday with paper was lacking the real emotions of live trading. So I am started out with $5000 and will be trading one contract on the YM. I trade at work, and can get in as much screen time as safely possible while staying under the bosses radar My two month goal is to still have the $5000 and re-evaluate then. On Monday I placed 3 trades, all stopped out for a -30 point total. Tuesday I traded my first FED day haha and learned a lesson. :crap: I knew it wasn't a good idea to trade on FED days, but I believe mistakes are the greatest teacher. I was down $-364 at the end of the day. So starting Wednesday I had a account balance of roughly $4440. This will be the last I mention money as it is not the focus of this journal. You can follow along as I will attach my trade summary and a graph each day. From now on the maximum loss per day I will be allowing is 20 points, which is two trades as my stops are always 10 points. If I reach this I will close down the live software and start up my demo account. If I reach a profit of 100 points in a day I will close down and flatten everything, starting again tomorrow. I use OEC and will be adjusting my post formats as this journal evolves. Feel free to offer advice if things are un-clear or confusing. The purpose of this journal is to help others and create another level of accountability for myself. I hope to update it everyday I trade. Look for updates in the afternoon or late evening. This is the first account I have ever had and as of 6 months ago I had no experience in investing or trading. I look forward to your discussions.

Hey guys, I was reading about VSA this weekend and was fortunate enough to see what I think is a perfect example of it this morning. Let me know what you think. The YM had just broke through it's opening 15 minute max range which usually causes a spike in volume as the herd jumps on the sell off. As soon as I saw the 8:15 bar close I knew something was up. I recalled a quote I read last night from a nice article. "A properly trained trader understands instantly that when the bar closes in the middle like this, with massive volume, it signifies a transfer of ownership from the professionals to what VSA refers to as “weak holders,” traders that will soon be on the wrong side of the trade." http://www.sfomag.com/homefeaturedetail.asp?ID=363568822&MonthNameID=June&YearID=2006 Once the pros stopped accumulating there wasn't enough buying to continue the sell off and the the price had no option but to climb.

"Amateurs look at reward and pros consider risk." Now that is a big wakeup for me haha. :crap: My mindset is definitely geared towards reward first. I am glad I was introduced to this quote early. I like the idea of taking a break after 3 bad trades and analyzing why they failed. I think it will make we work at observing the market instead of just calling it quits and coming back the next day. I have also started to read the CBOT report on Market Profile and am realizing that my issue probably isn't as much my stops as it is my entry points. As I get better, my trade success hopefully will depend less on where my stop is and more on a good entry and a overall positive indication (volume, price, S/R etc.) Thanks again for the help guys. I think I've learned more in a day from this post than in weeks by myself. :doh:

That's for all the great feedback guys. I posted a prior message earlier but It didn't seem to show up. Definitely some good stuff to mull over.

Very true in regards to the multiple contracts. I spent one month paper trading 3 contracts, letting one contract run and taking profits with two. I had much better results with a lot less stress. If I am understanding the initial leverage requirements of the YM correctly, I could technically trade 3 contracts with a $10K account?? The risk of a margin call would be higher but I am not too concerned since I always have a hard stop in place when I make trades. As well each bad trade would be 1.5% loss to the account but like you say the difficulty difference between 30 points with 1 contract and 10 with 3 would be worth allowing that risk imo. Thanks for your help brownsfan.

Hey Everyone, So far I have been paper trading for 2 months. I am using Ninja Trader and a DTN.IQ feed to simulate live trading as best as possible. I am trying to make every mistake I can before I go live. My trades last anywhere from 1 min to a couple hours and I flatten everything before close. I trade 1 YM contract and am slowly creating system rules to compliment my strengths, but I am having trouble in a couple areas. I realize in the recent markets, stops have to be wider as fake outs are a lot more common. Per trade I have been risking a maximum of 0.5%. (10 ticks with 1 contract). Is this a lot to risk per trade for short term trades? I find on my best days I will make 3-8 trades average. Initially this worked fine but lately I am getting faked out a lot. This problem directly affects my next issue. My target daily profit is around 1.5% of my account (10K account) or $150 at this point. As my account increases and I become a better trader this dollar amount will scale up and I will trade more contracts. My problem is in regard to the maximum daily allowable loss limit. How much should I risk? Obviously I wouldn’t want to risk over 1.5% or I will be doomed to failure, but if I risk 1% that really only gives me 2 bad trades and I am done! If I get faked out twice in the early going it’s hard to sit back and watch for the rest of the day. Risking 2-3% would give me more breathing room as far as the number of losses I can take but realistically I don’t think I can make 5-6% reward consistently. ($500-600 with 1 YM contract!) Any advice would be great. I am hoping to start some back testing in the next couple of weeks which I believe will help. Gene.