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cunparis

Dumping the Indicators & Loving Small Losses

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I recently started a series on my blog about the evolution of my trading, beginning with my trading using the eminiwatch method which consists of sine wave cycles on multiple timeframes. When I got rid of all that my results improved quite a bit but there was still one problem - the psychological issues!

 

I would do anything to avoid a loss. And that had to change. So I set out to change my thinking and my beliefs so that I can accept small losses and keep them small. It's not easy to do and I had a small relapse yesterday but overall I'm making a lot of progress.

 

I've been writing about all this and I'd love to get some feedback on it. I've been journaling it as I go and my results are improving daily. So I hope you will find it useful.

 

The series starts here: A look back on my journey - Part 1

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nice blog... thanks for sharing.

 

  \ said:
The videos at XXXX made so much sense and the moves seemed so obvious I just had to try it out. .... After several months of backtesting and forward testing on simulator I started trading the XXXX method with real money. The first two months were a good success, I was averaging over $200/day. And then I fell off my rocker. I’m still not sure exactly what happened...

 

 

you are not alone... this type of experience is being repeated all over the world everyday with brutal unforgiving consistency.

Edited by Tams

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  Kiwi said:
Not often I find myself agreeing 100% with Tams but I do this time. Nice blog. And nicely written too.

 

Hehe I thought the same thing.

 

I'm not sure if others are familiar with FuturesTrader71 and his "composite volume profile" but I just wrote a little about that. It's been helpful for me in my trading and maybe it'll be useful for others.

 

A look back on my journey – Part 6 – Volume Profiling » Trade With The Flow

 

Heck if you don't find it useful I'd love to discuss that too! :)

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You did well to dump the Emini-Watch junk. He shows you fancy charts but the lines appear well after the event, and the sine curve stuff is just junk. All very one dimensional. Not to mention the proprietor is not a man of integrity or professionalism, although he tries to pretend otherwise to the public. He has little interest in after sales support. He plasters his videos all over the net and is clearly just in it for the money to sell his products. Can't possibly imagine he makes much money at all from trading when his tools are so vague and blunt.

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  Adrian said:
You did well to dump the Emini-Watch junk. He shows you fancy charts but the lines appear well after the event, and the sine curve stuff is just junk. All very one dimensional. Not to mention the proprietor is not a man of integrity or professionalism, although he tries to pretend otherwise to the public. He has little interest in after sales support. He plasters his videos all over the net and is clearly just in it for the money to sell his products. Can't possibly imagine he makes much money at all from trading when his tools are so vague and blunt.

 

That was pretty harsh.

 

While I found that I could do better without the sine waves, I'm still using the idea of his Pro Am to detect professional activity. I'm still undecided about better momentum.

 

He's been helpful to me via email but one has to remember that he has over 4,000 subscribers so I imagine he gets a lot of email.

 

He's been trading professionally for 16 years so I don't doubt that he makes money but I'm not convinced it's with the sine waves. I think he has a good feel for the markets.

 

So I don't criticize him or his methods. I learned a lot about the markets & trading with his methods. It's just time to take the training wheels off and trade support & resistance.

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any oscillators will work...

it will tell you when to buy,

it will tell you when to sell.

 

alas only one third of the time it is in sync with the market.

one third of the time it is leading too far ahead,

and the other third of the time it is lagging too far behind.

 

no dumb marketer will show you a chart when the oscillator is not in sync.

 

such is the life of an indicator marketer.

Edited by Tams

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Some thoughts on my ES daytrades yesterday:

 

es-day-trade-list.png

 

1. I won only half my trades. But I ended positive. How? My winners were bigger than my losers. That’s really important for me.

2. While it wasn’t a good day, I got 2 pts trading one contract (trade 2 was actually two different setups that overlapped). If I can get 2 pts/day every day I’m all set. So the point here is one doesn’t have to get 10 pts to make a killing. Just 2 pts/day consistently.

3. Since I won half and lost half, those losers have a big impact. If I could have prevented one loser, I would have finished one pt higher for +3 pts which is 50% better. Yes, one single trade can impact my profit at the end of the day by 50%. And if I could have been on the right side instead of the wrong side, it would have made a difference of +2 pts which would have doubled my performance. Each trade is very important! The one time I read an email or surf the internet could be the time I miss something and lose.

4. On Trade #4 I didn’t like the action on the DOM and I cut it quickly. This allowed me to re-enter 2 minutes later 1.75 pts lower. Now it doesn’t always work out this way but this is the biggest argument for using tight stops, and if possible scratching a trade that’s not going well.

 

I hope you found that useful and as always, I welcome feedback.

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I finished my blog series which was the subject of the first post in this thread. Now that the journey to profitability is complete, I start a new journey to slowly increase my size so that my income goals can be met.

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  ericmoles said:
Cunparis, neither of the links in this thread worked for me. I'd like to check out your blog. -Eric

 

My hosting provider had a major hardware failure and my site has been down for 3 days now. It should be up again today. It sucks but that's what one gets when one pays $6/month for hosting a website. ;)

 

Also I must say that I've changed my use of stops a bit.. I don't use tight stops any more. I don't use hard stops actually, I just get out if it's not working. This has taken a lot of experience but I'm doing much better this way. I think tight stops are better if one can be profitable with it, but everyone has to find out what works for them.

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  cunparis said:
I finished my blog series which was the subject of the first post in this thread. Now that the journey to profitability is complete, I start a new journey to slowly increase my size so that my income goals can be met.

 

To update the thread I have recently started increasing my size. I now trade 2-4 contracts on bund & ES. Once this is more stable then I will increase it slowly (after each month of good results).

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  cunparis said:
That was pretty harsh.

 

While I found that I could do better without the sine waves, I'm still using the idea of his Pro Am to detect professional activity. I'm still undecided about better momentum.

 

He's been helpful to me via email but one has to remember that he has over 4,000 subscribers so I imagine he gets a lot of email.

 

He's been trading professionally for 16 years so I don't doubt that he makes money but I'm not convinced it's with the sine waves. I think he has a good feel for the markets.

 

So I don't criticize him or his methods. I learned a lot about the markets & trading with his methods. It's just time to take the training wheels off and trade support & resistance.

 

That is pretty harsh but I did find his Brian Heyliger endorsement a bit "shady". Brian Heyliger's site got "scam" written all over it. The fact Barry Taylor is endorsing him is not a good sign... I guess it is probably just another revenue stream for him besides selling his indicators.

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