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Maybe this was the day today that will turn my leading trend towards its progression again.
Very unusual cash-open price-action. Kinda felt like "they are putting it higher today"
Very important trade. Had to take a huge 20 point risk, but since I've fortunately written down what to do in such a case, I took it without hesitation.
Then dropped and took an eternety to come back up. Exactly that amount of time and type of price action that could lead to closing it out as a loser prematurely and then watching it taking off from the sidelines.
Maybe this is the leg that will finally start an uptrend. Pretty curious about how Thursday and Friday will behave.
Start slumping down the gutter again.
"Tapping into the accumulated pain and anger of the past". Losing, losing and losing!
At least Earl Grey, Mr. Frank Sinatra and a cheap cigar are brighten my mood up a bit.
Malcolm Gladwell says it takes about 10,000 hours to get good at what you're doing. If there's some truth to that, at least I'm already over halfway there.
When I discovered trading, I was unemployed. I was more or less fired because I started to do things my way and refused to go along with things that made no sense, and everybody just did them because somebody else said they have to do it without questioning anything.
I then took a job delivering newspapers 7 nights a week while learning about the market. The job was crap and payment was a joke, but at least I could mostly work on my own terms and wasn't surrounded by people constantly forcing their shit on me.
I then sold my V8, signal-flare-red '66 Mustang and my Jeep for getting capital and go into trading full-time.
I've read well over 50 books about trading and the market, and am going through all the biographies. Carnegie, Vanderbilt, Gould, Dan'l Drew, Livermore, Baruch, I know 'em all!
I've quit most of my friendships and am currently walking away from my family. No partying, no drinking, I'm not interested in that anymore! Trying to drag me down with your little, subtle mean comments and gestures? Im not taking that anymore!
You have to pay the price in life anyways. If you want to or not. But I'm choosing the price I pay on my terms and the day where things start to turn around will come. I'm just praying that I'll manage to get this thing together before I start to run out of money and have to go to work some job again.
Yesterday my old supervisor called me and asked if I need work. Most of the phone call, he was complaining how much worse things got since I left.
One fine day my friends, I'll be in an office somewhere in Manhattan on the 50th floor, will stand by the window, watch the city lights, will puff on my $100 cigar while listening to Sinatra and will think back to today!
A possible solution for my "Which direction am I suposed to trade" problem, would be handing that decision over to a SMA.
I kinda have quit trying to use indicators, but I also have to say that I saw them way too much as a holy-grail type of thing the last time I've occupied myself with them.
SMA up, I go long, SMA down, I go short.
But I'm intending to still stick to going long in my live-trades and backtest the SMA thing and look if that can work out.
This loss was the tipping point. Now I know it better, but in the past I'll have started to slip off again at this point. Probably start looking for another market or an entirely different strategy.
Didn't really care about another loss anymore and just entered. Seems to move up a bit now, but better to not expect much!
Of course it crapped back down...
Win: +0.75P
"Thou hast been faithful over a few things, I will make thee ruler over many things"
Done for the week! Not going to make a complete fool out of myself! Shut down the platform before I get angry!
Better go and buy a frustration-pizza!
Quickly tested through the previous days if I had traded into the SMA's direction. Though still a lot of losing, it would have been profitable.
I have traded against the trend and it starts to annoy me. Today's cash open would have been a perfect short, but because of "sticking to my system" as it is now, I once again had to grab into the falling knife, even though everything in myself screamed to not do it!
I'm cutting my losses and letting my winners run, that's how I'm trying to do it and I think if I'm trading into the right direction there's an edge in how I handle my stops and my entries.
Next step is testing 6 months back, always taking the same signals as I did, but into the direction the SMA points.
If that works out, I look if maybe it's better to not trade the European session at all and if there's higher significance in wider-span reversal bars and if I should leave the very small ones alone.
If it still looks good, I intend to test another 1 1/2 years back. If there's still the same edge, I'll start to trade it live and as I'm getting more familiar with it and especially with going short, I work out a plan how I'm going to size slowly up!
And THAT'S IT!!! I'm already so sick of always looking for a "better way to trade". I just want to settle down, trade my system and live with all the flaws and the "not being the holy grail" part of it!
Seems I'm just not able to get a higher than around 35% winrate and I have to live with that!
Takes way longer than I expected. Took me almost the entire day to get just one week done. But I gotta do that very meticulously.
I'm trying to keep calm, but if the results stay just close to this week I've tested today and the week I just skimmed over yesterday, I think have found what I was looking for!
What gives me a good outlook is, that the last 5 trades here on Friday really tell a lot. First two nice wins and then 3 losses that pulverize them and the day ends red. That's because this day is a major trend-change day. So there's really nothing to do against that, which is one of the "psychological difficulties" of this system. I know I can handle such situations by now, but for a lot of people that would likely screw over their entire weekend.
Interesting is also, and I will look very closely on that, that the European session seems to be crap for my method. It looks so calm and nice, wheareas the U.S. session kinda feels scary and the candles move in very wide spans that require wide risk-levels, but that seems to be an illusion.
In the European-session I would have lost every single trade, whereas in the U.S. it's almost 50/50.
So the next days will be very interesting and I can't wait to get through with the testing and see the complete results.
From the End of March until mid-April we were in a very nice extended-run-environment. I'm very curious how it behaves there.
First week of March 2021
"Thou hast been faithful over a few things, I will make thee ruler over many things"
Finished 4 weeks of testing. Results could be probably better.
Kind of the same old story: Being thrilled, testing further, getting dampend down again.
Conclusions I've drawn so far:
a) The European session doesn't make sense. Anyways I can't maintain trading 13 hours per day forever, and most of the time, it's just so narrow range chopping around and I know it's just one month, that says
nothing in the grand scheme of things, but these losses just suck!
Since the testing really takes way more time than I thought, I think I'm better off, just focusing on the U.S.-Session.
It's still this "I have to work a lot (trade a lot) to make money"- way of thinking, that's probably counterproductive in the market.
b) When inside-bars occur, I've always put my stop one step back to give it more room, assuming the inside-bars are the choppy pullback in the lower timeframe. But just by feeling, I get stopped out almost everytime
anyways, which costs me everytime it occurs a few ticks or even points, that mount up over time. So I have an eye on this, if that is really the case as I go on.
Maybe this was just one of the worse months, or are my expectations still so way off?!
I mean risking 20 points at a trade at times and then end off with 18 points after the month, not even subtracted commission and slippage? That's no good. No,no!
March 2021
"Thou hast been faithful over a few things, I will make thee ruler over many things"
Through with two months testing and it's basically breakeven. It's always the same old song with these indicators. They lag behind.
The interesting thing is, I exactly recall the 21st and the 23rd of April. Those were days were the market shoot straight up, from open to close and I caught both trends. Each about 35points. I thought "Now I really have figured it out" back then. Oh boy, how little I knew....
On the 21st, I had to go constantly short in my test and on the 23rd, I caught just the last little bit.
It's such a weird thing. Sometimes I think, either you think you can trade, or you think you can't trade, you're right....
A few weeks ago I read an interesting thought:
There are basically 2 types of goals, managable ones and unmanagable ones.
An example for a managable goal would be chopping wood. You chop and chop and the more and the harder you work, the more you get done. What you put in, you get out.
Then there are the unmanagable ones. An example would be falling asleep. You can't force it, and actually the harder you try, the less likely it will become that you fall asleep. The only thing you can do is creating favorable conditions. Having a fresh bed, putting on relaxing music, opening the window or closing it, whatever you prefer, but the rest isn't up to you. It's not in your power.
He compared making money in the market with the latter one.
I wonder who would be the better trader: A mathematician or a philosopher?
"Thou hast been faithful over a few things, I will make thee ruler over many things"
Thought about the situation and my trading again, and once more I'll try a new approach. It isn't really new, it's more a combination of everything I've tried so far.
I know some of my strengths and weaknesses and general thought patterns about the market so far.
Strengths are: - Cutting losses and taking a high number of losses and still being able to take the next trade, if size is my shoesize - Once in the trade, letting winners run, even if the pull back at times decreases the paper gain, feels comfortable for me - Patience. When in the trade and also when waiting for a signal. No tendency to take dumb trades because of boredom
Weaknesses are: - I can't take profits. Every trade I take, I hope for the monster-gain and if I exit the trade and it still runs further in my direction, I get upset - Too fast price action and being stopped out to quick time-wise - Having to take too much trades. I tend to get lost and 5-7 trades per day make me loose touch with the actual money I loose and it's less of learning-cost, but more just wasted money
Looking at these, I conclude that trading trends is the right thing for me
Thought pattern is, that I'm systematic in my approach, but discretionary in my view of the market.
Every type of trading that could possibly be automated won't work for me. Such as what I tested, someone who knows how to program could do that testing in the blink of an eye and automate the strategy effortless. Hence I don't expect to find any edge in that area.
I'm not a programmer and don't intend to learn it, because it's just not my thing and what I like doing.
I rather print out charts on paper or draw Point & Figure charts and understand the market from that perspectiv, than seeing it from the quant-perspective.
For me the market moves in trends and I don't even really want to "respect the single candle". I see it as continious movements of trends, kinda like waves in the sea or the leaves of a tree moving in the wind.
So I'll separate the market in 3 trends.
- The secondary trend (best be seen on the 60min chart)
- The tertiary trend (10min chart)
- The 4th trend (5min chart)
I'll do it similar to my prom-queen stock trades, but on a different time-prespective.
I think in my prom-queens the major problem was, taking too much inferior quality trades, and not separating the trends in the correct way.
In my 1000Tr/100Tr trades, when I caught a trend, it went pretty well, but my entries were to random and had nothing stable replicable.
So my new approach is taking the best out of these two previous methods and try to cut out the bad parts out.
I look on the secondary trend just to be informed of what it does, but it doesn't influence my trade-decision.
The tertiary trend has to go into a clear direction defined by higher highs and higher lows ore the reverse.
The 4th trend I'll trade.
I wait for a pullback in the tertiary trend and then watch the 4th trend and will enter into the first breakout in tertiary trend direction and trail my stop after like I always did.
And I'll be very picky and ONLY TAKE SUCH TRADES. And this will mean a low trade frequency and if I wait for hours and it just doesn't set up in the correct way, I won't take a trade.
The exact frequency I'll figure out over time. I also start to observe Crudeoil and maybe start to trade it too, but first I'll focus on the MES and will see if there will arise ambiguities and how it works.
On the theoretical study side, I'll go through Robert Rhea's Dow Theory book and also through Hamilton's Stock Market Barometer.
After I'm through with them, I'll stick my nose into Elliot Waves.
Market Analysis
MES
Secondary Trend
The uptrend is clearly broken with a "radical break" and we're in a non-trend phase right now.
Falls below 4300, I'll consider it a valid downtrend
Goes up 4540 again, the uptrend continues.
But not really of my interest, since it doesn't influence my trade decisions.
Tertiary Trend
We were in a downtrend, but are in the process of breaking it evolutionary to the upside right now. I don't consider it yet broken, since I want to see it clear above 4395, but if that breaks significantly, it is in a valid uptrend. In this case I'll wait for a pullback and then go long.
4th trend
A bit unclear right now. Waiting over night how it develops
I'll definitely need to get more familiar with oil, but I consider that an uptrend
Tertiary trend
This downtrend was radically broken to the upside, which put it in a non-trend phase, which means trading prohibited in this phase
Will probably take 3 or 4 days before it shows into a clear direction again, but likely to the upside I guess
4th trend
Nice uptrend, exactly the way I want to see it when trading it!
"Thou hast been faithful over a few things, I will make thee ruler over many things"
Made a new high here today. Progression and regression seem to be clear at this point
Teritary trend
Here it gets interesting if that pullback is to see as in the red trend or the blue trend. If I look on the downtrend to the right, it would have the same length as pullbacks there, but if I set it into relation to the progression arm that breaks the downtrend, it is not significant enough,
4th trend
That larger pullback is kinda between the two trends. Probably one of the imperfections of the market. But the longer I look at it, I at least would say, that it doesn't belong to the red trend, which means this leading trend is still in a non-trend phase.
Future will tell if there will come a severe pullback and how the chart looks then.
"Thou hast been faithful over a few things, I will make thee ruler over many things"
No trade. I have a good idea what I'm looking for, and I won't make a trade until I see that constellation!
Started to dig into my first Dow-Theory book. But it's not technical at all. Expected it to be different, but is nevertheless an interesting read.
The answers I'm looking for I think I'll find in Elliot Waves.
MES
Secondary trend
I hoped for a way larger pullback in the red trend. If it should make no new high, and drops next week to the ariund 50% mark, maybe I won't count that as a red-trend pullback. Or better to say, ignore that spike it did today.
I gotta see what it looks like then and can hopefully determine if it "looks right"
4th trend
It's a bit of a problem determining exactly which trend is which still. Sometimes they kinda merge together and as volatility increases or decreases, they alter as well.
It's likely not that exact of a science. It comes down to having to deal with and accept the imperfection of the market again.
If my idea works, I'll get used that.
Crudeoil
Secondary trend
For now I'll wait if it does a larger pullback, but ideally not drop below 71.60 for determining how exactly I see it, and if I count that questionable pullback as belonging to the red trend
4th trend
I recall having heard somewhere of the different forms like steepness and duration and so on the regression and progression arms at different stages in the trend they can have.
That's what I hope to find in Elliot Waves! Seems Dow Theory is more like this "basic trading principle", maybe even just plainly saying that there are such things as trends in wich price moves, that I think I've already grasped for most of the part. Also I think it looks more one the real big picture like when a bull-market begins and ends.
"Thou hast been faithful over a few things, I will make thee ruler over many things"
Finished reading "The Stock Market Barometer" by William P. Hamilton today.
The barometer basically is the Dow Theory. Hamilton was a financial journalist and later editor of the Wall Street Journal. His book is basically the first one that puts Dow's observings that were first just piece by piece published in the Wall Street Journal into bookform.
I thought it to be a partly technical book with some illustrations, but it's not. Like I understand it, Dow was the first one who observed and documented, that markets move in trends. It seems that people, before that didn't really paid attention to the nature of price movements and saw it more as random fluctuations.
So from the technical side, there's not much new to learn, but it has a lot of stock-market-wisdom in it.
It reminded me of William Worthington Fowler's "Twenty Years of Inside Life on Wall Street" in the way it is written. It was written in 1922 and in it there appear some of the players back from the late 1800's/early 1900's like Livermore, Gould or James R. Keene whom the author apparently didn't really like. A bit of railroad talk, copper talk and steel talk. Also the San Fran earthquake gets mentioned.
If I remember it correctly form Reminiscences, Livermore kinda saw the earthquake coming and I honestly do think that this is possible.
Also it emphasizes the difference between speculation as a legitimate business that requires as much work as any other business, and just pure gambling.
I like the era around the Gilded Age up until around WW1, so it was a good read to bring the mood a bit back into those glorious times.
"Thou hast been faithful over a few things, I will make thee ruler over many things"
