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The Profit on CNBC believes in People, Products and Process.....
And in this game, the product is the market we trade, the process is how we see the market, the decision making matrix we use and how we enter and exit the market.
The people is of course us....
As is usually the case, the people involved is more than likely the most broken piece of the puzzle, next is the process, it might or might not be broken....for this exercise we will assume the process is more or less good and valid. The product we will also assume is both acceptable and static, meaning we will not make changes to it.
With that in mind, it appears as we already knew the process and product are fine.....its the people (me) that cannot follow the process.
With that in mind, as a first step, I've brought in my wife to act as a process monitor. At the end of each trading session, I must give her a blow by blow account of how I did or did not follow the process. She is the only one to whom I really have accountability. I can journal here and in my blog but there is no accountability to anyone....and it appears I can use a health dose of this....
Secondly, there has been and will be an ongoing process of acceptance. Of surrender. I cannot control the market or what it does. I know this with my head....but my heart has not accepted it fully. Today I fully accept this fact....and tomorrow I will say it again. It will be an ongoing daily verbal acknowledgement of the reality of what IS, NOT what I want it to be.
Change does not happen without acknowledgement and acceptance of of what IS.....and as the people variable of the people+process+product formula, getting the people to accept the failure, the break down, the conflict that exists within them, that they are the problem......this is what IS.....instead of hoping for what might BE.....acceptance of what IS.
Once that is done, change can happen quickly and with what might be seen as a quantum leap forward.
I'm leaning toward making no changes in my tactics.....only just letting the market do what its gonna do....and bringing my wife into the process of course. Accepting the outcome as what was supposed to happen....let it flow....I suspect this is the correct but narrow way....it leads to success....I choose the narrow path.
It's gonna be a daily walking out of this acceptance and a daily acknowledgement of my inability to control the market or to force my will on it and a daily surrendering of my need for control. Its a step I'm willing to make....on faith.
Tomorrow I'll finalize tactics (if any changes are made), note any further thoughts or aha moments that come....for now, I'm at peace.
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
the point @Big Mike is trying to make is you have to trade the market, which is something you have never been willing to do. what you have done instead, is try to develop some kind of quasi-systematic trading approach whose top priority is to delineate and reduce risk and not optimize profitability. you spend more time analyzing your personal trading statistics than the market itself; because visible historical results, provides you with the perception of reliable expectations regarding trade frequency, win rate, profit expectancy, and drawdowns. while the apparent benefit may be a feeling of comfort and control, all it really provides is a set of unrealistic expectations and an improper area of focus.
at the very heart of being a trader is attitude. it is about being confident in oneself and one’s decisions; and confident, yet honest about one’s methodology. clearly, there is no right or wrong style for trading the markets — it is a highly personal decision and one that should be tailored for each individual’s personality, trading experience and objectives. nevertheless, it still has to be profitable and scalable. you obviously don't have confidence in your decisions, and are over-confident in your methodology. i think you know damn well that your strategy isn't all that it's cracked up to be. you're confusing some random streaks of winning trades as an affirmation of your approach, and are allowing yourself to be misled into thinking that your method is robust. a trading system that doesn't provide you with the information and confidence to stay in trades and add is anything but robust.
you are going to make some emotion driven mistakes along the way, but if you focus on how to trade the market, you'll know when trades are good, and you won't want to get out of them until they're not good anymore.
At least there's one thing thing right about this post, its about attitude....about being confident in oneself and in one's decision.....as well as honesty about methodology......and about one's personal shortcomings....
I mentioned Gary in the post not so he would see it and chime in but to be honest about where I'd heard the quote although I've seen that same quote many times in other places....so I'm sure he picked it up somewhere as well. As it turns out, he chose to chime in and I should have seen that coming. I rather thought he'd given up on me and wouldn't bother reading the post.....much less respond....oh well....
Before I leave off on this reply, a quick stat: My method which isn't all that its cracked up to be has been profitable since May of last year...there have been a few tweaks along the way.....simpler decision making for the most part, all the while achieving a win rate of less than 45% overall. In fact, I've had one losing month since then. One.....the point of the post in case anyone missed it, was this...the PnL would have been exponentially greater had I not interfered with said non robust method. Not as a result of some hindsight visual hocus pocus, but because of actual real life trades. Trades that worked without me because I exited prematurely because of pure emotion...and not because I lack confidence or because of a lack of robustness.
This is all I'm going to post about this. I'll post the combine results as promised but that's it.
One last thing, this is a bit hard for me because I'm not all that confrontational with people, especially with people that have taken time to speak to me on the phone...but I've decided to put Gary on the ignore list. I just don't like the tone and spirit of his posts. He's a good guy and I do think he wants to help (I might be wrong about this and he just wants to show off) but for some reason he can't help but be derogatory and negative on a personal level with traders....not just me but most traders he's tried to "help" have all experienced his bombastic approach. A number of them have PM'd me over the last few weeks and months wondering why he hasn't been banned for some of his posts.....and I have no easy answer for them....and since life's to short to have the negative input around you all the time, it's the ignore list at least for now...... another decision I have confidence in....
For all the of the thread readers, thanks for continuing to read and hit the thanks button.....I post almost exclusively in my own threads, although lately I've posted in a few other threads, I am still amazed that anyone reads my stuff much less thinks enough of it to hit the thanks button....
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
Another snippet from "Gambling Theory and Other Topics" by Mason Malmuth.
"Any competent statistician will tell you that one should first form a hypothesis and then collect data to either (statistically) confirm or reject the hypothesis. The way not to go is to collect data first and then look for patterns or trends to exploit. The reason that collecting data first is flawed is that with a large body of data, pseudo-patterns, which are logically flawed, will appear."
I think what he's saying here is that you could easily find "patterns" that *appear* to correlate with financial market performance within any body of historical data -- regardless of what type of data you examined.
Personally, I always buy (Boeing - BA) when it rains in both Cairo, Egypt and Cleveland, Oh -- on the same day - and there are more than 7 births to people named "Smith" in the greater Little Rock, Ak area.
I like following your journal. Because you're going through some of the same things I am.
One thing I don't get is this. You said you could do 20-30 ticks a day and be a "good" trader.
If you can do that consistently on a daily basis, how is that not being a great trader ?
Is it because you feel like great traders have to pick those 100+ tick moves often ? Trading with a positive expectancy over time and you could just add contracts and be golden
I think you're being too hard on yourself at times.
But one thing I can relate to is the "no management is the best management" approach.
I've seen many trades miss my stop by a tick then go full profit.Or miss my target by a tick, reverse back to almost hit the stop then go back up and hit the target.
You have a good journal, which is valuable to others because you are honest and you try to grapple with issues that everyone faces at one time or another. There's nothing more that could be asked for in a journal. So that's why people read it and say "Thanks."
I hope that your run-in does not sour you on posting your thoughts here, whenever you happen to feel like it. Lots of people appreciate and understand the struggles you are going through, and also recognize that you are actually very successful at your trading. Obviously, you want to do better, as anyone would. But that does not change the fact that you have a proven track record.
Thanks again for your contributions here.
Bob.
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PS: As to the famous, much-repeated quote, here is the original:
"Win or lose, everybody gets what they want out of the market. Some people seem to like to lose, so they win by losing money."
It's by Ed Seykota, quoted in Jack Schwager's Market Wizards. Reference here: Ed Seykota - Wikiquote
I think that people like to repeat that quote (without attribution) because it can mean about whatever they want it to mean (), usually without the part about winning by losing, which may make it too specific. It does make you think, though.... whatever it might mean.
(Seykota was an early pioneer in purely automated, computer-driven trend-following systems. He apparently made a lot of money at it. I don't see how that makes for deep psychological insights, especially about discretionary trading, but perhaps it does.... Ed Seykota - Wikipedia, the free encyclopedia )
Its not about the number of ticks, its about execution and sticking to the game plan....and yes, if the plan says 30 ticks then great but if it says 42 or 93 or whatever number, then not sticking to that is failing to execute like a professional. All professionals lose at some point but they usually win because they executed a game plan better than the opponent. That is what this is about. Being the best I can be within the context of my current skill level, account size, risk tolerance, etc.
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris