Jaronimo

I would not get caught up with the percentage right. Whats 60% right today may be 70% right next month, and 40% right the month after that. Things change and go through cycles. The edge that you gave up because it was 35% right could have huge profitability if used with the correct money management. While the edge that is 80% right may only pay out a few tics. Go for the whole package, percentage correct is only 1 aspect of it.

Thats a great post, and so true. I think its pretty funny how many people focus on "edge" or "mindset" and think they have what they need. The reality is there is no single thing you can do in trading that will make you successful. Its a package deal. You need the whole package to become and stay successful long term in this business. The other thing I think is funny is how people talk about how one thing is more important than the other. Not true in my opinion. Your Formula 1 example is a great, good driver, bad car, still equals loser. You gotta have the whole package. I think there are two types of people, those that focus on what they are good at, and those that focus on what they are bad at. I personally focus on the mental aspect of the trading, because seeing an edge has always been easy for me, but I struggled with the mental/discipline aspect of trading for a while. So thats the part that I must stay ever vigilant with. It sucks to blow out a weeks worth of profits just because you veered from your system and thought you could out-think the market. I have done that in the past, now I have a rule to keep that from happening. I have a post-it note next to my screen that says "Never try something new while the market is open" (I believe I got that gem from a Bill Eng book). What that means to me is if that revolutionary idea pops up during trading, write it down and check it out later to see if its valid. Something that simple has saved me tons of money. Enough here, I am getting off topic.

Why? Good luck with that. You will never know why something happens. Those 2,000 NQ contracts that were just sold, were they a fund manager with a negative bias on the NQ? Another fund manager that is taking profits because his target was reached? Or maybe its 2,000 individual traders going short 1 contract because they watched Cramer on MSNBC and he said go short? Or maybe he said go long and they are fading him? You also have to keep in mind that for every one of those 2,000 contracts sold short, there is someone who is buying them. There is always someone on the other side of every trade. Usually someone with the exact opposite view of the current market conditions. Why does that happen? How can two people with the same information (supposedly the same information) have two completely different views of the current conditions? The markets are not rational. People do some looking, form a quick opinion, and then justify that opinion with other facts. You see what you want to see. You will never figure out why the market does what it does. You can get an understanding of the overall market and understand what it will do in certain circumstances, but why is a different story. The market has emotion and greed mixed up in there and when that happens people do irrational things. Even highly paid traders and fund managers fall prey to emotions and greed. How can you possibly know what they are doing and why? I can't figure out why my wife does what she does, how can I figure out the markets, when I don't know 99.999% of the people trading there? You would think I could figure out the wife, after all we have been together more than a decade and she does not have a job other than staying home to take care of the kids, and I have not left the house to work or go to an office for almost 18 years. We spend an incredible amount of time together. I know what she will do most of the time, but I don't have a clue why. I say don't worry about why. Although thats just my opinion and I could be wrong. ps: as far as automation goes, in theory it should be easy. In practice it is hard as hell. You need to write it out as if you were explaining it to a 3 year old kid who knows nothing. You may think something is very simple because you understand it, but when you try to explain it with absolute clarity you run into problems. Then you have to convert it into another language that the computer understands. How easy would it be to convert this paragraph into understandable Mandarin Chinese? Its usually possible, but it will take some effort. These boards are filled with people that took years to automate their trades successfully. Then there are others that gave up after a few years and stick to manual execution. Don't let my thoughts discourage you from doing it, just use them as an understanding that it may not be as simple as it seems.

The market is impossible to conquer. My opinion is that if you try to conquer it you will fail. I don't try to conquer it, I try to jump on for the ride. Much easier to do. You don't conquer a mountain, you look for the easy path and walk to the top. As far as intuition goes, I am not sure I agree with that word. For me its more like perception. Hard to explain but you know it when it happens. Its like driving a car, without consciously looking and thinking I usually always know when the driver in the next car, out of my line of sight is swerving into my lane. How? I don't know. I think after so many hours of "wheel time" I perceive things that are going on. Maybe I see them unconsciously? Or hear them, or feel them? I don't know how, I just know. A good example is kids, for those parents out there. They can be playing in the other room, but you can unconsciously perceive when they did something wrong. Even when you are not paying attention. I can't explain whats different, but my mind can perceive the change. Ever meet someone for the first time and instantly think "theres something wrong with this guy"??? Only to be proven right later? How did your mind perceive that so fast with so little information? Or should I say, so little information that you were aware of consciously? The markets are similar. I can't always explain what is happening, but that does not stop me from making money off of the situation. Its very subtle, but you just take the trade. If it works, great, if not you close it out and wait for the next one. If you are at the point of being frustrated and feel its impossible, you need to step away from it for a while. I walk away from things when I get frustrated and usually later the answer comes to me. Thats how my mind works, the harder I try to figure something out the harder it gets for me to figure it out. But if I walk away, the answer usually seems to find me later.

I think writing it down is one of the most important steps in clarifying what it is you are actually trying to accomplish. If you are not writing it down, you are probably doing it a little different every time. Writing it down forces you to clarify what you are actually doing. I have had more than a few processes that I thought were brilliant, then upon writing them down I realized I may be an idiot. I would never try to get a system my wife could follow. because she won't. End of story. But I do try to explain what I do to my kids. Just explaining things to people is the same as writing it down, it forces you to be clear about what you are doing. And when they ask questions it forces you to be even clearer. Thats how you know you are on the right track, because you can stand up to the hardest questions and scrutiny and it does not fall apart.

I do my pre-market filtering in the morning. I look to see what the overnight markets did. I scan through the futures markets to try to get a feel for whats happening. I look at trendlines and relative strength and weakness to get a feel for whats going on. Is it a strong trend or weak trend? What news is coming out today? I look to see the support and resistance levels and how close we are to levels that were defended with high volume. I then figure a basic reward to risk level and also try to set exact numbers where I know if we hit them I am wrong. For the past few months the only markets I trade are the NQ and Euro. I have a large spreadsheet for premarket checks, but I find I do not use it as much anymore. I just want to get a "feel" for whats going on. It seems to me that even with the checklist it only gives a "feel" anyway and does not seem to be more accurate than what I am currently doing.

I use TS and have not had any problems at all. ( and I better not have just jinxed myself by stating that fact ) I have used the simulator, its seems to work great too. I cannot comment on how good the platform would be for scalping, I just don't need to trade that much with my edge. I looked back and the most trades I have ever done in a single day was 13. But I was trying something, so that accounted for more trades than usual. I also do not trade all day. Usually from about 7:30am EST to about 11:30am. So I cannot comment on problems that may happen at lunch or near the close. I also trade in two separate accounts on different PCs and neither has had any issues. Maybe I am just lucky?