I'm sorry about your drawdown. Just my attempt at some constructive intervention. I've had the same problem in my trading for some time live. I've gotten to the point where I don't scale-in more than once as often. But I still have problems accepting a stop loss. Big Mike posted a link on my journal to a webinar "case" that Futurestrader71 did to help intervene for a trader in crisis loss. Hope it's helpful.

Crosswind trading journal FuturesTrader71 | Trader Analysis 2011-09-01 ( Thanks for this link. Just a comment about it. I watched and listened to it. The poor person lost all his account until there was 1k left. So he lost $30k in two days he said. I don't think it adds up …

I also did a summary of what I heard in the webinar. Does this mean scaling-in/averaging-in/leveraging-in/adding contracts (i.e. it's all the same thing isn't it?) never works as a CP strategy? I don't know for sure. As of now, I've gone completely back to sim or not even sim at all for almost a week. I don't know if next week I should do live or stay on sim since I broke my weekly loss limit plan by more than twice already. I sure did break my daily loss limit plan in a terrible way.

I don't know for sure what the solution is. I would think the cp traders know how they beat this psychological/money block. Whether it meant never averaging-in, or bigger stop losses, or adherence to a daily loss limit. Maybe getting used to stopouts as long as it follows a plan. Or what Futurestrader71 mentioned as an exercise: practice "scratching-out" and paying the broker ~$5 per scratchout. I don't know for sure, just mulling over some ideas to try to help beat this thing.

Sobering

Why does Peter Gabriel keep coming to mind?

Peter Gabriel - Shock The Monkey - YouTube

Contemplated the Monkey. The Lizard Brain.
Goal today was to not move a stop wider and not to add contracts.
That will be part of my rule set moving forward.
Accomplished today. 1 down.

Also a circuit breaker - stop trading if/when daily loss exceeds $200.

I did tighten stop appropriately when trade not moving well, and raised target and stop when trade was moving well.

17 Trades and $27.50. Not stellar. But successful in my book as I accomplished my new risk rules.

I'm anticipating a trade still working about 50/50, but with the new 4/6 T/SL ATM that is not a winning proposition. My trades following all the rules (no anticipation) are working 60 to 100% of the time. Need to build on that. @madelynnjohnson makes a good point that I was trying to do, use the ATM and set and forget. Widening my SL to 6 seems too large with a Target of 4 - i like the idea of a RR ratio of 1 to 1. Note the small spreadsheet to the right of my results. 70% success rate with a 4/6 nets $75. At first I scoffed, but its better than I did today. The turtle wins. I think I am going to do some more testing on a TS ATM, to get away from the 6 SL as quick as possible.

More on Risk Control - @Cloudy turned me on to an "intervention" by @FuturesTrader71 that rang true in many parts. futuretraders71's risk webinar a month or so ago first mentioned me and my monkey. it is great stuff. I think I'll buy the seminar 3. The action points gleaned so far is including a circuit breaker in the risk plan - for me, stop trading if/when daily loss exceeds $200. Weekly loss $500. More about detailed plans in another post. Here's today's results.

Patrick,

I have a possible suggestion for you.

Looking at your chart, most of the price action during your trading time consisted of EMA crossovers (or pretty darn close to a cross) and trending with three phases. When you are trading identify in your mind using these two categories ( 1. crossover, 2. trending phase) what price is doing. If you use these two categories to enter a trade it nails it in your head. You know that in order for a trend to start happening there has to be an EMA crossover. Track your EMA crossovers and determine on average how many candles you usually get before the crossover reverses. From my experience on a 4 range you usually get 3 to 4 candles. If it is a crossover then enter the trade with a higher profit target. Let's say on average 3 candles - that 12 ticks. I would set my profit target at 6 - perhaps 7 or 8 with experience and let it ride. If you are looking at a trending phase on a 4 range on average I would say you are going to get 2 1/2 candles before price reverses. That's 8 ticks - so go in with 5 ticks and let it run. By expanding your profit target and customizing your profit target before you enter the trade, you will get a little more profit and not feel the need to "play" with the DOM moving profit targets. And never mess with your stop loss when you see the trade moving against you. Not even a couple of tick hoping that the trade will go again in your favor. I tried that when I first started trading and 9 times out of 10 it backfired on me!!

Also, put in a trailing stop for the crossovers that will ensure you get at least 1 point should price reverse unexpectedly or be ready to hit the "eject" button if you notice that price is hovering around a certain level and does the "back and forth" thing within a two tick range. You have a 50/50 chance of guessing the correct direction. Do not using a trailing stop with trades in a trend.

You have to internalize this: I am only getting a piece of price action. I can't capture the whole thing AND THAT'S OKAY. I'M NOT SUPPOSED TO CAPTURE THE WHOLE THING.

Also, in my humble opinion, you are overtrading and taking trades that are sticky to start with. I think the crossovers are your bread and butter trade. You have them identified. By expanding your profit target on these trades you will feel less likely to try to double dip the crossover and get into trouble. Also, I wonder what your stats would be if you restricted your trades to only crossover (or very close to a crossover) and only the first trade after that in the trend. This means that you would pass on the rest of the trend because of high risk. What I'm finding that works for me is identifying the parameters of which trades WILL work. There are many trades out there. What I have to choose is what WORKS. Don't get me wrong........I still don't have all the answers and I never will. We are in a high probability game and we want to stack the deck in our favor. You have a setup that works and works well. Build upon that and develope a bit of tunnel vision.

By the way, posting to your journal is continuing education for me. I receive reinforcement by crystalizing my analysis and thoughts. Thanks for letting me do that.

Madelynn

Madelynn, @madelynnjohnson

Your input is invaluable. I've understood what I am doing, much better, with your observations. Could you expound on a couple comments above though, and/or how I might set them up in an ATM strategy.

1) You suggest "I would set my profit target at 6 - perhaps 7 or 8 with experience and let it ride." and again "That's 8 ticks - so go in with 5 ticks and let it run" Using an ATM, how do I set it for a profit target and let it ride too? Or do you use a mental target and stop?

2) You suggest "put in a trailing stop for the crossovers that will ensure you get at least 1 point should price reverse unexpectedly" I think I would set that up as a breakeven plus 1 to be triggered at ? (how many) ticks profit? But it's not really a trailing stop, or is it, in terms of the ATM strategies?

If you could address those two items above I'd be very grateful.

For your, my, and anyone else's edification, here is how I have been trading.
1) Use an ATM with a hard wired 6 stop (was 4) and a 4 target. (I find the DOM is too easy (quick) for me to manipulate (especially when I was on TradeStation, so I use Chartrader/ATM's/Line Dragging. Slower, but more deliberate.
2) Waiting for a 5EMA/11EMA cross and background color change, to signal me to "get ready"
3) When all 5 MA's in the right top corner are matching the background color, I push a button.
4) I use Buy Bid or Sell Ask buttons on the Chart Trader (to get in one tick below Market usually)
5) If it is only slowly going to 2 or 3 ticks, or even hits 4 but does not fill, I manually move my stop up to BE.
6) If it's moving quickly towards 4 ticks, or I hear the rising ADX alert ding (giving me confidence), I'll push my target and stop equally, manually.
7) If it's headed to the 6 stop fairly quickly, it usually gets there, and I take it. (Not moving it wider - new behavior)
8) If it's still moving up after first profit taking, yes these are lower probability, but I will usually wait for a retirement and the 5 MA's to meet the color thresholds, and enter again the same way. Sometimes I just jump on the train.

I like the ATM to keep me from fidgeting myself into a loss. Any tips along the line of a better ATM setup is appreciated. I posted my BE+1 TS after 3, several posts back, but have not been using it with just one contract, should I be? Is that a good one?

Thanks in advance to anyone that wants to jump in.

Patrick

Hi Patrick,

Thanks so much for your appreciation. As always these are just suggestions based on my experience and a lot of time in front of charts and thinking. It's up to you to sift them and decide what you want to incorporate and what you want to throw out.

First, I would not use Chart Trader. The way it is set up invites "messing" with the trade. It will get you into big trouble. It is also more difficult to manage trades using it. Entering trades with it is more difficult.

Let's concentrate on crossover trades first. (In this category I will also include those trade where the 5 just barely misses a cross but acts like a crossover trade. Will talk about these later.) Crossover trades are the ones that will be your bread and butter trades. I especially like the ones that are a true cross because in order for price to penetrate the 20 or the 13 it has to have momentum behind it. You can see this by the fact that the slope of the EMA turns blue at 45 degrees. The slope would not be there if there was wimpy momentum. Think of it this way.......the penetration of the 13 (which is what I would recommend) by the 5 at a 45 degree angle usually indicates that there is a price reversal in the making. Today's chart demonstrates that several times.

Okay, as stated in my previous post - we know on average on a four range chart (because we have spent a good deal of time observing these kinds of crossovers and know approximately how many candles will form after the crossover ) we have a very good chance of 6 ticks and probably 7 or 8. So let's say that we are going to go for 6 ticks. I'm just taking this as an example. You may want to start with 6. I do not use break even. I like to keep things very simple - less mistakes and confusion. In the ATM strategy parameters I have my stop loss at 8 (I can live with this number based on market observations, however, I have my finger on the close ("eject") buttom if I start seeing 6 ticks in the red. Create a stop strategy. Within the Stop strategy, Auto breakeven is at 0 for both fields; Auto trail is as follows: 1 step circle is blue (1 step strategy), stop loss is 2, frequency is 1 and profit trigger is 6. This means that your stop stragegy will kick into play when you have reached 6 ticks in profit. When this happens your stop will move to 4 ticks and with each subsequent positive tick the stop will move up 1 tick. This is fairly restrictive but a good way to go. As you become more experienced you can play around with this.

So within the ATM strategy parameter square on the DOM you will have quantity, stop loss (8), profit target (put a number larger than used in your stop strategy - like 10), stop strategy (discussed above). The stop loss number of 8 and the profit target of 10 become moot when the stop strategy is initiated.

All of this is done ahead of time before you even think about entering a trade. Enter your trade on the next free space above or below (short/long) the printed price on the DOM ladder. Be sure that you have the safety on so that it asks you if you really want to enter this trade with so many contracts and at that price.

This is getting rather long so let me send it and I will continue in another post.

Madelynn

madelynnjohnson 

Hi Patrick, First, I would not use Chart Trader. The way it is set up invites "messing" with the trade. It will get you into big trouble. It is also more difficult to manage trades using it. Entering trades with it is more difficult.

That's funny. I'm using the Chart Trader for the same reasons you state to use the DOM. With the DOM, I was always messing with the trade. Moving stops, targets, and chasing; more easily. Chart Trader makes it harder for me to do that.

I'll build the ATM Strategy and play with it on replay. Thank you!!!

Well, Patrick,

You know the old saying..............what's good for the goose might not be good for the gander.

Try the DOM again and think of it like a bot that you program and then don't touch.

I really do think it will help. Anyway try it and see.

Madelynn

madelynnjohnson 

Let's concentrate on crossover trades first. (In this category I will also include those trade where the 5 just barely misses a cross but acts like a crossover trade. Will talk about these later.) ... Think of it this way.......the penetration of the 13 (which is what I would recommend) by the 5 at a 45 degree angle usually indicates that there is a price reversal in the making. Today's chart demonstrates that several times.

Madelynn:

+1 on your commentary being invaluable. I've already done a cut and paste of your wisdom to add to my handwritten trading journal. Thank you.

I might have missed it, but don't see the 5 on Patrick's charts. Might you be thinking of Perry's former setup? Also, I read on these threads that you trade or traded this system but prefered an older template than the one currently being used. I would love to see those charts if you don't mind posting.

Thanks again.

Cold and a Sore Throat

Watched a little while. Tried the 8 tick stop ATM in the AM chop, on SIM, not sure I'm ready for 8 ticks.

Something I have been doing is adding horizontal lines for prev day's ohlc and the overnite high and low. I do it manually instead of with any indicator, as I like to see/feel the lines in the sand. I do use the Constant lines indie with the CME link EUR / USD for the ohlc, and then just plain old horizontal lines for the overnite levels.

It was an interesting Inside Day today. After making new overnite highs and lows, it hugged yesterdays open all morning, sank to yesterday's close, rose to yesterday's high and sitting on yesterday's open again.