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brownsfan019

Knowing Your System Works and then Doing It. Easier Said Than Done.

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In this post, I explained to the OP that following your system when things are not looking good is easier said than done sometimes and thought I'd explain further.

 

Today (Dec 12) was one of those days where if I told you the end result of my P&L you might say, nice day.

 

Ending P&L: $779.89/ct after commissions

Not the greatest, but acceptable.

 

Now, allow me to take you through how this day progressed and you can see why it's easier said than done to follow your system 100% and not lose faith.

 

I am currently focusing on 3 markets to trade - ES, EC/6E and ZN. The main reason being that I am trying to be more particular in my setups and instead of forcing on the ES only, I find it easier to be patient using 3 markets.

ES trades for Dec 12:

+1.25, -2.25, -2, -2, -1.5, -1.75, -1.5, +5.75 = -4.00 on Day

 

EC trades for Dec 12:

-13, -12, +26, -9, -9, +6, +36 = +25 on Day

 

ZN trades for Dec 12:

+21, -4, +19, +10 = +46 on Day

As you can see, not the easiest path to get from point A to point B. We know that the shortest distance between 2 points is a straight line and while it's much easier having a day where you start at 0.00 to +1,000 with no losses, that's not entirely realistic IMO.

 

But if you were to look at starting at 0.00 and ending at $779.89, it'd be hard to argue that was a bad day.

 

I posted this b/c in the other thread the OP is showing some solid faith in his system and following it. Once you know that your system makes money, then it's a little easier to do this. Of course you need to get there, but once there, you can do it.

 

In the end this business is first about knowing that your system makes money over time and then doing it while minimizing emotional impact. I still get frustrated at times but days like today remind me of how important it is to keep doing it. I had no idea going into the day that the ES would be so rough today. I had no idea that the EC would make money, but only after a few losses. And I had no idea that the ZN would be like taking candy from a baby. And I have no idea what tomorrow will hold. I just have the faith that I can do the job and follow the plan. As soon as I stray from that, then I am subject to P&L fluctuations not planned for.

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continued from other thread:

 

Thats so true. I have faith in my system and thats what matters. So I had some bad luck, shit happens. It's frustrating...I'm not going to lie, but at the end when i'm done throwing things and cursing, I just laugh because I know my system. I saw a post on here one time about how its impossible to maintain the correct mindset and discipline if your rules aren't working or are flawed. In my journal I noted that I thought that the BEST time to stick to your rules is when all hell is breaking loose. That's when discipline matters the most. Thanks for your example.

 

For me, I have taken 7 trades this week and 6 have been stopped. Thats the worst its ever been, but because I followed my rules I am only down -2.25NQ. Also, 2 of those trades we're just barely stopped before the big move in my direction. That hardly ever happens, let alone 2 times in a row. But because I followed my rules I know that either one of those would have sent me WELL into the green. To me it's almost like flipping a coin. It's 50/50, but you might get heads 4 times in a row, the trick is to follow your rules so that your losses will be limited when that happens. Six losers in a row cost be 18 points, but the other week I had 2 winners in a row that netted me 50 points. Keep the R/R favorable by just following your rules!

 

I think trading your rules helps you trust it. I trust my system because I have traded it live for a while now. I've back-tested too, but for me that doesn't compare. My faith in my rules comes from the fact that they have given me 6 goal-meeting, profitable weeks in a row. The discipline demon tries to come in and get me to not take a set up, or to exit a trade early, but now I have ammunition against him because the past weeks have shown me that following these rules are what work.

 

I agree 100%. Follow your rules when they work. Follow them when they don't work. If you want to break them that's fine...just don't expect consistency. A lot of rule breakers out there....I would venture a guess that the vast majority of traders break their rules...say, I dont know...95% of them?;)

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It's not easy, but once you have convinced yourself that you have a good way to trade, you then have to follow it. Of course getting to that point is not easy, but once there, you have to believe in the work that you've done up to that point.

 

Today's trading was much easier on the stomach and the result was a little better than yesterday. The key today was a lot less trades (esp on the ES) and a smoother equity curve. All 3 markets contributed about the same to the P&L.

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...following your system when things are not looking good is easier said than done sometimes...

 

So true! EUR/USD action kept me on the sidelines first week of december. The fear of continuing sideway action made me miss the entire last weeks rally. I hope taking action will become easier as experience grows.

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