jonbig04

to me that's the whole idea of a system. If you have a system then you won't have good or bad days....you either followed your rules, or you didn't. And if you know your system is profitable over whatever term, then who cares? You simply have to follow your rules, increase size, follow your rules, increase size and so on.

This is a little off topic but I hope Obama actually addresses the root of what caused this financial problem. I threw something together for my friends and family about what caused this crisis and attached it here. The first half of it is me explaining some things I'm sure you are all aware of, the 2nd part actually digs into the crisis. Crisis1.pdf

This thread and it's topic have never been far from my mind. I've been learning a lot in the past few months and I have drawn some conclusions. We all know that a trader needs both discipline and an "edge". But I still hold to my opinion that you really don't have to have much of an edge to make it as a successful trader, you just need to be completely disciplined. It's true that without any edge at all you will never amount to anything, but the simply fact is you don't NEED that much of an edge to be a successful trader. When I say successful, I mean a trader who can make a very good living trading, call it six figures a year. As far as I know, most traders don't do that. Don't get me wrong, my absolute end goal is to be able to read PA like a book and have impeccable discipline, but I maintain that this is an END goal. When I started this thread I scarcely knew any other traders. Now I know a lot of them. I've seen, with my own eyes, a trader make 7 figures in a day. I know traders who average well into six figures a week, I know traders who have never made a penny, and I know traders who average a hundred ES points a week on SIM, but can't make a dime cash. I know all kinds of traders! And its great because I can really take an objective step back and see where the problems are. The truth is very few hard working, PA based traders are making consistent good money trading. Despite the fact that they seem to know every kind of PA formation and can spot things that I could never see. To me its almost as if they are trading to learn PA, as opposed to making money. I'm learning to trade to make money. PA is just a vehicle on that road to profitability. It seems like a lot of traders are so bogged down because they are trying to "master" PA and its every aspect. Why? Why not just develop a system that makes, say 5 ES points a week, consistently week after week. Laugh if you want, but just do some basic arithmetic and if you slowly build your capital, you will find that soon 5 points a week trading hundreds of contracts can be pretty lucrative indeed. While its true a lot of traders fail because they are looking for a shortcut in indicators, and don't want to put together a system and are basically...lazy. I really tend not to focus on those because it seems to me a lot of hard working traders are out there making no money. And I really believe that's because they spend their time trying to master PA as a whole, instead of using PA to eek out a slight edge and then maintain complete discipline in order to heavily capitalize off of that edge. Sure I want to master PA too, but for right now I just want to make a couple hundred thousand a year from home and to do that, all I need is slight advantage and complete discipline. When we get there THEN we can start trying to quantify every nuance of PA. Maybe I'm wrong and all my peers are making six figures a year already, but I don't think so. If you aren't, yet you manage to make a few points a week consistently may I ask why? Just my $0.02.

This may be a little off topic, but a great way to test out a strategy, I think, is to use the replay function. When you're looking at a chart its very difficult to replicate what you see when the rest of the chart isn't there. Plus you can rewind or fast forward replay, or just sit there and watch it in normal time. It can be useful for testing or just getting more screen time. Just an observation.

Opening-Range strategy

I have been sort of resisting the pressure of trading with an OR strategy. But with the amount of points being made by seemingly everybody else, I have folded under the pressure and am now developing one of my own. Other people are making too many points for me to keep ignoring the obvious :missy:

I'm working on an OR strategy. Obviously OR based trading works well, but I have to be able to quantify and develop an ultra-specific system. Its somewhat difficult because now I have my main strategy too and I have to figure out what to do when they overlap. Not to mention that Im happy with my 30 point per week average of late, and I dont want to mess that up. I am just doing everything I can to maintain 20+ points per week. Anything beyond is just gravy. I doubt I'll have anything for a few days, but I am working on it. My goal for the next few months is first to show enough consistency for cash, then work my way up slowly until I can maintain 20 points per week w/ 5 cars cash. Obviously I have a lot of work to do, but I have no doubt that goal is reachable within a few months.

That's interesting. You may have more inherent discipline than me lol. I do think understanding your rules is important. What you say makes sense. Everyone is different and its interesting to see how people's thought patterns can be different yet yield the same conclusions. I also think that maybe I could be doing well on SIM without always following my rules. In fact, sometimes I feel like they hinder me. But doing well on SIM was never my goal. My goal is is to do well with size (if you want to call 10 cars size). I want my transition to cash to be...easy. I don't want to have some "cash demon". That was my motivation when I began SIM.

Thanks JBW. I have been trying to force myself into good disciplinary habits from day 1. I think its more important than anything. If you have a rule set you simply never break your rules. Sure your rules may suck and you may lose points because of them, but who cares? As your rules get better you will get better. But if you don't have that discipline you can't say that. Thats always been my philosophy. In "the disciplined trader" it says that a trader with only modest technical skills can succeed as a trader, but a trader with great technical skill and no discipline will never make it. I know everyone doesnt agree with that, but I think its more and more true every day. My goal isn't to be the best chartist. It isn't even to make the most points. My goal is to make money. A lot of money. As fast as possible. And ironically, to do that I cannot rush. Rushing into cash seems to be our first inclination, but I know that will only slow my progress. So I will do as much as possible to become better at reading PA, and to better my rules and to reinforce my discipline. I may be a 20-30 point per week piker, but if I can keep that up and maintain discipline while trading 1 live contract, 3 live contracts, 10 live contracts well I will be pretty stoked. Thats my take anyways.

No trades today so far, I'm looking for a long right now but I don't see a clear entry yet so I may miss/not take the trade. We'll see, but I thought I would get a head start on my log. This week I have adopted the attitude of taking only what the markets give me. I used to look for trades and try to outsmart the market. Now I look at it more like I'm simply taking what the market gives me, and only that much. I realize it may not mean much to everybody else, but for me it helps keep things in perspective and maintain discipline. I still would like to say that discipline is number 1. If you think about it, would you say that someone who only averages +2 ES points a week has a very good understanding of the market? Maybe you would, but I think a lot of people would consider that being a piker. The truth is that if you could maintain complete discipline and maintain that 2 point average while trading 50 contracts, who's the piker now? Not that you should AT ALL be lax on your study of PA, but the fact is that all of us want to make a living trading and as far as I'm concerned discipline is number 1 in that pursuit. Anyways +0 for today. Here's some stats for the week: 6 trades, 2 wins, 4 losses Accuracy 33% (again haha) total weekly points +29.25 net 3 cars (this week) total so far (2 weeks) +63.25 net 3 cars Avg per week (2 weeks) +31.5 net 3 cars I'm pretty stoked about the results so far. Of course, I have to keep it up though which is the tough part. All the advice is appreciated.

I believe atto is absolutely right in that mechanical targets ideally will never be as profitable as PA based exits. However that is assuming that you are disciplined enough and proficient enough at reading PA to make them that much more profitable. So as a piker, I have mechanical targets because I simply cannot read PA well enough yet and since my targets are set multiples of my stop I maintain a very favorable R/R which I think will always net me a favorable amount of points at the end of the week, albeit never as much as I could have with well placed PA based exits.

Wild day. I still believe discipline is the number 1 asset of any trader, by FAR. Today I had to take deep breaths and maintain my discipline. I wanted to enter, but I had to tell myself to WAIT. I had not yet seen what i was looking for. 3 times it looked like I had missed the move, but I told myself "If I miss it, I miss it". Discipline.Discipline. Discipline. Took a long this morning. Fumbled the entrance, but was was wrong anyway. 1st trade -3 -3 -3 Took a short around 12EST. Price went all the way down filled my first target and went all the way to +24 and THEN came all the way back up to -0.25...it hurt so bad. I wanted to cover. I wanted out. But I stayed the course and because my stop was protected I took 1 tick heat and price came all the way back down and a sold at EOD. Discipline. Discipline. 2nd trade +15. +22.5, +22.5 total +17AVG

Thanks Jasont. you make a good point. My strategy is one that, well the idea behind is that when I get stopped out, its because I am dead wrong. Ideally I enter at only important areas and if I take a stop its because im just 100% wrong. If that makes sense, of course thats the idea, I'm not saying thats always the case but thats the idea behind my whole strategy. However I will do exactly what you said and assess the heat on all my trades and I will post results. thanks fellas.

Right, so far 2.75 is max heat. One thing thats kind of been messing with my head is upon entering do I want to take 0 heat? Or do i want to catch the bottom of the move? It sounds stupid, but you can wait for the bottom to be in and take no heat, but then you're entry isn't as good. Or you can try to pin the bottom and get a better entry, but risk taking the heat. I am trying to do both. I would like to nail the bottom and take 1 tick heat. that's I know haha Thanks for your kind words, I only hope to keep improving.

Thanks for the advice! You are right, lower your targets and shrinking your stops can have a huge impact on your results. I decided to do it because so far my testing shows that reducing my stops actually won't affect my wins. Of my 4 point stop I never once used more than 2.75 points of it in a winning trade since I started this strategy. before even a 4 point stop wasn't big enough, but the fix wasn't in increasing my stop size, it was improving my entries. So basically I have been wasting points with that size of a stop. I hope to eventually have stops measured in ticks, but thats a ways off. Lowering that first target, should give me slightly more points, but really not very much. It actually happens too often that I missed my 18 point target just by a few points and came back to getting stopped out, however it also happens that I hit my first target, but not the last 2. But the former happens more often then the latter. My testing is pretty easy as I only take around 10 trades per week. The math doesn't take very long. I am going to to back and check though just to make sure, because you are 100% right.

Awesome post Atto. Make sense in every way.

Changed some things up. Stops are reduced to 3 points even. I will be trying out the 1 sec chart, instead of the 5. I've tested it and I think I can get better entries with it. I replayed my entries and most of them were improved, so we will see how it goes tomorrow. I want to get to the point where my stops are microscopic. 3 points should still be plenty of breathing room. First target is now 15, second is still 36 and third is still 54.

Didn't do well today. Took a long in the morning. This one hurt as it went +13 before stopping me out. I should have had a smaller stop and smaller target. 1st trade -3.25, -3.25, -3.25 Then thought I saw support in the PM. I was quickly stopped out and the market didnt see fit to give me a short entry. I have some things to work on, and tomorrow is another day 2nd trade -3.25, -3.25, -3.25 -6.5AVG for the day.

No replays tonight, I'm just going to take a break and watch the election stuff. Slacker I know. I will be back in full force. Still working a bit on entries. Exits are the next thing tackle. Im happy with the results so far, but a large part of me just thinks I'm getting lucky and that I will never place another profitable trade. Thats just my head though.

Such great info! Thanks, I will be following along in this thread!

Decent day. Took a short in the morning, great entry, I loved it. I was wrong though I got stopped out. No big deal. 1st trade -3.25, -3.25, 3.25 Took a long in the after noon, decent trade. 2nd trade +18, +21.75, +21.75 total= +18.75AVG Oh yea, I made my stops a bit smaller.

Boring ass day. Didn't take a single trade. Felt like it, got a bit restless, but there was nothing for me. Saw the long at the end of the day, but it didn't conform to my rules. Too bad, would have been a nice trade. Frustrating, but tomorrow is another day. +0

Nice post Atto. I had to read it a couple time. For the most part I agree 100%. Having a set target scale out system is not the most efficient exit strategy. Mine only exists as a multiples of my stop and keeps my R/R favorable. Today I should have exited and shorted at the end of the day. I wanted to, I just don't have a set of rules for it yet. Trust me, my brain is already formulating ideas that will eventually be an exit strategy. For now though I'm simply taking one step at a time. Precise entries are my goal, and when I feel like I am consistently entering precisely, then I will move on. May not be the best way, but I'm an analytical person. 1 step at a time, methodically. I do think, though, that moving your stop to BE can be really hurtful. I know at least in my own trading that I will almost never do that. too many times this week and in my replay/back testing moving my stop to BE would have cost me so much. To me it kind of defeats one of the reasons for having a stop. A stop should be in a strategic place, e.g. if your going long, under where you think support will be. This way not only are you less likely to get stopped out, but if you do there is a good chance that you just learned something about price. If it really is support then (providing your entry was good) you don't have much to worry about. If you get stopped, hopefully its because support is being broken, which tells you something about the price. If you move the stop to BE what have you learned? It's jst my opinion of course, but even today if I had moved my stop to BE it would have cost me, and I bet its true for previous days this week. Just my opinion though.

Indicators are THE DEVIL! haha

This week was a good week. 34 points surpasses my goal and that is a good thing, but consistency is what I'm after. That of course, takes time. The best thing about this week wasn't the points, its that I was hitting targets on trades that i would have been stopped out on because my entries, though far from perfect, were more precise than last week. Its nice to focus on one thing and see that area improve. Tuesday was a good day, but It should have been better. I need to execute the next trade completely independently of the last one. After I hit my +54 target on tuesday there was a chance for another long. I hesitated and my discipline broke down for maybe 10 seconds, until I woke up and realized that if there was a signal i had to take it, no matter what. It hard to say if I would have caught that long or not had I not hesitated, but my guess is that I would have. So i missed out on another +36AVG points. I won't make that mistake again. Then there was today, when my exits cost me a little. That wasn't a mistake though. Did it cost me point? Yes, but I followed my rules and THAT is more important. Rules are developed after hours and on the weekend. My job during the day is to simply follow them. Its a problem that will be addressed when the time comes. What to work on now. It's important that I keep working, harder than ever. There is no point in knowing what you need to fix, if you're not actively working to fix it. Entries are getting better, but still need to improve. On weds I entered badly and was stopped out before the move, costing me points. After that trade I entered to late and missed the boat on the trade, costing me points. If I can make my entries even more precise I can have smaller stops. Reducing my stop by 1 point would have had any adverse affects on me this week and would have saved me 7 points. I will backtest and see just how many times my 4 point stop saved me. I'm not going to tackle exits yet. But soon. This weeks stats Accuracy: 33%-right where my replay results said it would be 10 trades (2 a day AVG) +34 net on 3 cars.