ajhunter

Great stuff everyone. ScottB's post resonates strongly: You can get away with weak discipline some of the time -- when you have a feel for the market -- but when market conditions change and you don't have robust discipline than you don't have a system and the facade is up. Thanks

Thanks to All, Tradewinds -- Yes when I am struggling I am not patiently looking for value but rather wanting to be in the market but nevertheless swimming against the current all day. Tams -- I'm going to take the bicycle analogy to heart. To be a proficient -- mature -- trader means that you simply don't respond in the fashion that I occasionally do. Time to grow up. Reminds me of one my favorite Posts on TL concerning the how to avoid trading the Chop. Response:"Don't do it". Siuya --I've never thought of that. If I'm feeling off and fighting my better judgement I should just my modest loss and then trade "badly" on the Simulator account. At the end of the day I'm sure I'll be glad I did. Interesting.

The title describes my trading experience. I currently seem to trade well for a month or two, making a set amount of money each day, and then one day I'll break all my rules -- take out stops, double-up losers, only counter-trend trade, completely refuse to be wrong -- and lose the equity that I had made. This has to be psychological! I personally think that I have a version of "fear of losing" combined with "overconfidence for my skill level". When I have traded well I begin to gain confidence and thereby loosen my adherence to my rules. Instead of taking my early morning loss on what I clearly recognize as a bad trade, I presume that I can simply trade my way out of this "difficulty." Good Luck. Why would today be any different than yesterday or any of the other days and weeks that I have made my monetary goal? That's what I seem to be telling myself as I fight the trend, and then fight some more, and some more... and why not a curtain call as well. Well that may be part of the problem right there -- misconstruing trading well with a monetary goal? Looks like I have to do a lot of investigating of my beliefs. Just wondering if anyone has any techniques to avoid this mistake? Or, if anyone has overcome this problem? I guess in time the pain will become too great and I'll learn not to break my rules.

Thanks Statsign, seeing the code expanded as you have done is very helpful. I appreciate the work. ajhunter

The weighted average formula divides wtd sum by cumulative weight, where the weighted sum is generated by adding up different prices over the course of the relevant time period and multiplying them by the length (day in the period) associated with them. JTHMA appears to be essentially a weighted average of other weighted averages -- specifically two weighted averages that have two different periods (length and halvedlength). Here's where I'm confused. Weighted average for (price, length) requires a different price for each period included in the length -- So if I have a length of 5, I need a price for each of those five values of length. However the JTHMA formula just gives me one price (the real number, representing Value1-Value2), despite the fact that it has a length greater than 1. Many thanks for any light you can shed on this!

I would like to generate an indicator telling me when at what closing price would be required to change the direction of a Hull moving average. I am currently do not understand the Hull moving average function and am therefore unable to do the math/coding. Value1 = 2 * WAverage(price, halvedLength); Value2 = WAverage(price, length); Value3 = WAverage((Value1 - Value2), sqrRootLength); jtHMA = Value3; I understand and can calculate value1 and value2 but I have no idea what a weighted average of the difference between the two actually is. I read value3 as being a weighted average of an integer over the squareroot of a period. But a weighted average of an integer makes no sense . Some elucidation would be greatly appreciated.

Hi folks -- Very interesting thread. Just a quick note about how I've made the leap and a few things I've done that may be different / useful... I didn't start out part time, took the full time plunge about a year and a half ago. Made the typical early mistakes for about six months -- trading way too many shares, no real strategies, lots of impulse trades, etc. One little trick that helped me early on when I was wildly overtrading... I decided I'd only give myself three trades a day, and when I was done with those three, that was it, I was done for the day. I actually wrote out little paper trade "slips" that I would cross off and hand over to my wife (who also works from home) to help keep me accountable. That really helped me stay focused on looking for high probability setups, because it felt terrible to have wasted three trades early on junky impulse trades, only to force myself to sit on my hands and watch better set ups go by later in the day without being able to trade them! As I went along, I noticed that I traded better when I just focused on getting to know one or two stocks day after day, coming to really understand their character and how they move. I actually selected those one or two based on their daily range, as I didn't want something that moved so much it would churn me up in the process. I started out with a stock with a really small range (40 cents a day!), just trading 100-200 shares, and then when that got too boring to bear, I moved to a stock with a range of around 80 cents a day. My goal at the time was to capture about 1/3rd of that range. Again, small potatoes money wise, but my goal wasn't to make lots of money, but to learn how to be consistent, knowing I could increase the shares later. Now, as I am more consistently profitable, Im something of a trading oddity, as I still only basically follow three retail stocks, and I have a goal of making just 3 or 4 trades a day. Someday I'll switch over to the YM, but I don't think I'm ready quite yet. Even though I didn't have much of a background in this, I always knew I had the aptitude, in the sense that I'm a very disciplined and patient person. What's amazing is that even though I am disciplined and patient at times to the point of robotic, still, there are many times when I haven't been disciplined and patient *enough* for the market! I have been much more consistent and profitable for the past six months or so, so I agree with those earlier in this thread who have talked about a minimum 12 to 24 month timeline. Its been a huge help that we have plenty of savings, my wife works to cover the bulk of our expenses, etc. I agree with Soultrader that trading with a very small account (or with essentially all of one's savings) would be a huge psychological burden. Right now, the hardest thing for me is a strange little psychology issue. Prior to this I was a graduate student for many years, essentially making / living on $50 a day. Now that I am getting to be more successful, it feels strange to be actually making something like a "normal" (really quite low for most "normal" people, in fact) wage. An interesting thing I experienced earlier, was I had this psychological threshold -- I would be up a few thousand dollars, and then hit some glass ceiling in my head, and promptly lose it all if not more. This happened three or four times. Finally, I started taking my profits out of my account every week, so that psychologically I would start each week fresh, rather than at this glass ceiling, and strangely that has helped quite a bit -- the ceiling isn't an issue any more, because my mind no longer knows where it is! Also, one other thing that my wife said that helped take some pressure off. She reminded me that if I was looking to learn any other profession that would ultimately pay me well -- become a doctor, or a lawyer, for example -- that is something people study for three to ten years, and they PAY 50,000 to 200,000 dollars to learn those skills. That was a big help, in remembering that basically trading losses in your first several years are literally the cost of your education -- the key is to try to get your education as cheaply as possible! Hope some of this helps -- man, its been quite a ride, and I know I'm still have so far to go -- I feel like I'm a second grade trader (which is an improvement from Pre-K, but a long way from senior year!) Andrew

Hey James -- Just got around to reading this post, and it is a tricky issue you present... My immediate thought was to wonder whether having a friend watching might have had more of an impact than you realized. Do you think you would have made the same decision to get out had he not been there? I know for myself I don't trade as well when my wife comes in and watches, because my fear of a trade turning against me increases when someone else is there. I've recently read JC's book, and am working on staying in trades for longer, so I know how hard it can sometimes be! Ultimately though I certainly also agree with torero about being happy you got the profitable trade you did!

Hi Folks -- I've been a member since February and have been trading full time (stocks) for a year and a half . I've found this site to be a great resource -- the technical trading forum has been really helpful... Soultrader's tape reading thread is one I refer to often -- it is rare to find a discussion that focuses just on price and volume rather than on a whole mess of indicators. This site is a supportive and generous community with some highly knowledgeable traders. I like the fact that its a place where people come to learn and improve, not to gloat or insult! Now that I think about it, I've been profitable since around February, so that may be saying something good about what I've learned here! I want this to be a lifetime career, so I've started slowly, just trading a hundred shares at first and gradually increasing as I've gotten better. One thing that's helped me is having daily goals but not any weekly or longer term goals. I found that with weekly goals, if I was down one day, a weekly goal encouraged bad habits as I would try to "make it up" the next day and wind up breaking my trading rules. With daily goals, the slate is wiped clean in my mind each day. Sometimes I think trading is 100% managing your own psychology. It looks like a lot of people here trade the futures (and YM in particular), and that's got me intrigued but I know I'm not quite there yet. Fortunately I have a supportive wife who's encouraged me to go at my own pace, and that helps take the pressure off. As for me, I'm a Canadian, living in the New York State Fingerlake region, and I love the days when I can be done by 12 and out working on my property the rest of the day! Trading is the closest thing I've found to the freedom I had as a grad student! Now that've I've made my first post, hopefully this will prompt me to communicate more, but thanks Soultrader for running providing such a great resource!

Glad to see the article. It's coming at the right time as I definitely have trouble holding on to a position. My entries are quite good, I just never believe price will extend as far as it does. Dedicated all of September to working on my exits. Love the site. Has definitely improved my trading.