Looking to Enhance Current *working* Trading Methodology

[DbPhoenix 42]

Very well, next time I have failing set up, I will post it.

 

As I suggested, it would be helpful if you were to post charts of successful trades as well, along with your reasons for why you believe they were successful.

[OAC 10]

The market is like a cameleon. The failure of a reversal pattern becomes a continuation pattern. Likewise, the failure of a continuation pattern becomes a reversal pattern. The moment of transition is the inflection point where your risk is at a minimum and your reward at its maximum. A reversal pattern trader is only half a trader. Didn't somebody said not to argue with the market ?

[waveslider 10]

I'm the one of the ones stopping you out of your reversal pattern (had to say it).

 

"For what is worth I have found the following to be useless.

 

* - Market Internals

* - Indicators or its respective divergence

* - Other e-mini correlation "

 

Inter-market relationships happen all the time and if you stick with one or a few, you get to know them pretty well.

 

If you trade ES, it is a good idea to watch the bond market - they are normally inversely correlated. Lately they have been out of step.

 

Personally I use the internals for the Russell 2000 because, obviously, there are 2000 stocks there, also because small caps are more sensitive to market environment.

 

Don't write off the internals (or anything for that matter - closed minds are like parachutes).

 

I suspect that the answer to your question lies in money management and trade management mostly. Maybe you don't take enough break even trades? They're my favorite.

[Susana 10]

It's not about being close minded, I've studied the markets and have traded for many years and have grown a very skeptical mindset when it comes to suggestions. Something along the lines of "not good" until proven otherwise. Still, that did not stop me from creating this thread and requesting for assistance. The decision to stick to reversal patterns was based on the fact that they turned my trading around and in the end, that is what matters the most, what makes money for me. I've learnt to be a very patient trader.

 

I studied extensively market correlation to bonds, other indices, indicator divergences, market internals and found zero edge. Electronic market these days are too efficient. In the end, as the person who taught me once said, it's all about the math and the long term expectancy of your setups. Risk small looking for ample reward and in my humble opinion the best case scenarios for that are confirmed reversal formations that form around potential key areas of support or resistance. Just looking to improve not debate. Trading is very personal and a huge portion of success lies in your psychology and ability to mentally withstand the market traps, in the end what works for me, might not work for you and vice versa.

Edited December 31, 2008 by Susana

[steve46 12]

Hello Susana

 

I noticed your thread and wanted to offer a comment. I think its clear that one can only put oneself in position to profit using the best possible tools and protocols. If you have done that, the rest is based on your individual skill and experience.

 

I trade the ES contract intraday. That means my maximum profit is derived from whatever range that contract provides on an intraday basis. That is basic. In order to decide how to proceed, over a period of years I analyzed the way that the S&P market "moves" on an intraday basis. What I found was that (for me) the best way to go was to trade from the open until lunch time (NY lunch time) and then to stop (unless I was in a trade). At the end of lunch hour, I come back and look to get back on a trade holding until the end of session. While it is true that "the trend is your friend", I would suggest that an experienced trader should abandon cliches and look instead to what proves most profitable. In order to do this, I regard each trading signal as a "profit center". I keep records of how each signal performs on a weekly, monthly and yearly basis. At the end of each quarter I analyze how each "profit center" is performing as well as how my trading system is performing in general. When a particular signal entry fails to perform as expected, I stop trading it. When a particular signal fails to provide a minimum average profit over time (depends on the signal) I stop trading it.

 

On the other side of this, I am always researching new signals to replace those that lose their edge. I paper trade those signals until I see that they have performed adequately over time, then I trade them live on a probational basis (90 days). If the new signal performs as expected I continue. If not, I stop.

 

For me, this is a business, so I approach it in that fashion. So far over a period of many years this has worked to my advantage.

 

I hope this gives you some new ideas to work with.

 

Best Regards

Steve

[waveslider 10]

Good answers - and I agree that you can't trade purely off of internals. They are to be used for confirmation.

You can't manipulate 2000 stocks at once, and that is why it is difficult to hide action in the internals - hence their value.

Here is a look at my internals page from yesterday. The afternoon rally was a dead give away, it put the cream on my month.

 

1st pane is A/D for the russell

2nd is ES

3rd is ES vs. $Rut

4th is adv volume vs. decl volume in russell

5th is russell tick

 

personally I made $ off of SPY calls on the fade at 12pm (pacific), also long positions in ES. You may want to investigate calls as a vehicle, I think as a reversal trader they would work well for you, but then again I don't have too much experience with options.

 

Notice how the a/d was breaking to new levels as the Es was hitting the bottom of the channel.

Positive volume was rising.

Russell outperforming.

Tick advancing.

[Susana 10]

Thank you for all your commentaries and suggestions.

 

I want to take this opportunity to wish you all a great new year full of life and happiness.

 

May God bless your families and your trading.

 

With much love,

 

Susana

[waveslider 10]

The level of maturity that women bring to the markets is much needed, Susana is a good example. It seems to me that many qualities innate to women are essential to trading, including intuition. Not arguing with the market either.

[OAC 10]

Do women like to go short as much as going long ? I just have a hunch( man's hunch) that they don't like to go short as much.

[Susana 10]

I don't have a preference, my only preference is to follow my trade plan.

 

Short or Long makes no difference to me as long as I begin the day with no bias outside of what was plotted on the charts.

[nyctrader 10]

Good to have you on this board, Susana. I enjoyed your postings last year over on the other site.

[brownsfan019 17]

Susana,

Nice entry parameters. Sounds like you got that part down really.

 

The enhancement you mention in your initial post would come down to profit targets IMO. Which is also the most difficult aspect of trading IMO as well.

 

I might have missed it, but did you discuss your exits? Entries are reversals and fairly straightforward, but how one exits a trade can be an entire discussion as well.