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darthtrader

Trading Practice

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Steenbarger makes an interesting point in Enhancing Trader Performance from the way athletes train for a game. He basically brings up the fact that athletes will train at more extreme/harder levels in practice than actually during the match/game. Then during a game its more just a mental game and the mechanics of what needs to be done are automatic.

I think it might be an interesting discussion on brainstorming ideas for trading practice. Obviously this would need to be done in a simulator, Ninja is pretty ideal though for this considering you can record a market for the day, play it back and the paper trader is extremely realistic(plus its free if you have a datafeed for it).

 

My first thought would to record a correlated market to one you do trade and then play it back at 2X the speed. I'm sure over time this would help out the speed of your pattern recognition a great deal. I'm not sure if there is software that can do this though.

 

Another thought is to record a correlated market to one you trade, then early in the opening range, put on a paper trade but you have to stay in for a set amount of time that you set before you enter the trade for a much longer time frame than what you normally hold for. Once your in you can only use the reverse botton on the dom. I would think this would be nice practice as far as price action goes. Even if you have some bias from knowing where price went overall from real trading it should still have some value.

 

anyone else have any ideas?

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Here's my take on the use of speed in trading practice. The biggest problem a trader has is patience. By speeding up the replay mode, it's fine, when the real trade comes in, he needs patience to let the market play itself out. Markets can come in fast and slow. So speed is not a deciding factor to improve performance. Worst, you wait and can't wait you exit, then re-enter again, exit again, leading to overtrading.

 

One thing something might work is using the maximum noise and distractions level possible and practice trading in that environment. Like being on a trading floor. Like having a CNBC on, squawk box on, news tickers going by, baby screaming in the background, heavy metal music (or muzak for those who hate them) on, etc. If you can handle these types of distractions and headaches, you're ahead of the crowd on that.

 

Another one is to do drills. Like back in school when we all had to do fire drills. If the internet or software goes berserk and you have an open position, what do you do?! Where do you exit? What's the next step to take control again?

 

I think drills are the best way to achieve automatic and become subconscious acts. Drill entries only, then exits only, then holding, then put them all together for the final drilling. This should be an good way to get in your head once and for all.

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Ahh great idea torero with distractions.

Here is a good one for that, Computer Alarm Clock

http://www.download.com/Computer-Alarm-Clock/3000-2350_4-10368563.html

 

I use this as my alarm clock on the computer in my bedroom. The kookoo sound has to be the most annoying thing i've ever heard in my life.

 

Good point on patience. Have to come up with something for that.

I had a terrible morning and went and tried the reverse only for a half hour. 32 trades, 25% win/loss and -$600. :)

I think this one has promise, especially for me as I'm still at the newb stage of being too concerned with my winning % more so than my pnl.

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Another way to take the idea is to trade on simulator many more contracts than you normally would. Try to act as if it's real money and see if you can handle the situation. Then, when you trade your normal size, it should feel a tad easier.

 

It's a similar mentality to a workout idea - do a few reps at a very heavy weight and then set your weight to where you want it to be for the actual set. In theory, the normal weight may feel lighter than usual b/c you just lifted a heavy load.

 

Same premise here - 'lift' a heavy load and then go to your normal load when it counts.

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