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Some rules are good. Some rules are not. There is no simple easy way to know which is which, except with a lot of experience learning what works and what doesn't. That is why I think that simply recording the info itself, the 'facts of the event', is the best way to proceed. Because that is the best way to learn what is truly happening, then you review that info and make changes as needed.
Speaking in generalities, I think a lot of people make money on sim very easily, and then completely lose their shirt in cash. Most of the reasons why can be said in a few words: psychology and the effects of psychology. They take a sim method that has been profitable for a long term, and they completely change it, butcher it, until it is unrecognizable because they experienced some losses in cash.
The truth is, those losses were most likely due to poor execution of the method, differing from what you would have done, and have been doing, in sim. But most people cannot see this. That starts them down the path of changing the method. Before long, they are completely off the path. They are lost.
What can you do about it? You have to trade cash the same as sim, and sim as same as cash. Easier said than done, right? But you have to position yourself to make it as 'easy' as possible. One failure a lot of people make is trading with scared money. It effects them mentally and they make decisions that they would not make on sim, thereby completely invaliding the sim results and method. They created a new method called "my old method, only with scared money". It won't have the same results.
The best way to deal with scared money is to lower your risk. Sometimes, futures are simply too expensive to get you into the comfort zone. You may be better of in equities, except than to day trade them you'll need 25k. If you don't have 25k, and futures are too risky, and you want to day trade, then you have few options. The worst option is to trade anyway and 'push' it or 'force' it, right? Better options are to sit and build more capital from your primary income, or perhaps accept that you cannot day trade, and instead look to do something else, like swing trade.
You could swing trade with less than 25k, and control your risk proportionately by just buying 1 share or 2 shares or whatever you need to do to get the risk in line.
What is important is not whether or not you make money when you go from sim to cash. What is important is how well you execute. You can always change your method later, after sound research and not impulsive decisions. You definitely should not change anything on your method more than once every 2 weeks, and really as you get more experience you probably won't change it more than once every six months, or even then.
The focus is on execution. Did you execute with cash the same as sim? If yes, then you have now moved much farther than most. Now you simply refine your method and money management.
So it's all about getting comfortable enough to trade cash. It needs to be in your comfort zone. One persons comfort zone may be $50 per trade, another persons may be $500 per trade, and anothers $5000 per trade. All that matters is what is comfortable for you. Once you get comfortable, you can start truly advancing your trading career. That is why many say sim can only take you so far, because cash is so vastly different. But the difference is usually mental, not actual physical difference (unless of course you are doing some HFT 1 tick scalp or something on sim, lol).
Your prompt response has made my evening/week. Thanks Mike!
Sooooo true to find and trade in one's comfort zone! I like PT/SL 4/6 combo and unfortunately it got hit very often when I sim-traded it. Will go for 6/8 (6R) and 10/13 (15R) now and let's see what may happen. I will certainly do my very best "not" to butcher the set ups .. haha ..
One more thing Beth , that I strongly believe in , is to stick to one timeframe for trade executions , I had experienced with 3 timeframes before , but found out that I needed one only to speak to me , i can only focus on finding setups on one chart only , not 2 or 3 , so if you have been experimenting most of the time with the 4 range bar chart why adding a tick chart ? these are 2 different types of charts one is based on ticks and the other one on ranges , the concepts are different and one cannot confirm the other .
I just want to shorten your learning path
I hope it helps , keep going you are almost there !
soumi
"Risk more than others think safe.
Dream more than others think practical.
Expect more than others think possible.
Care more than others think wise"
The following 2 users say Thank You to soumi71 for this post:
Thanks Soumi. Yes, tick and range charts cannot confirm each other - which I found out this morning!
I will stay with Range charts for trending/entry. 4 Range one does not work for me (got stopped out very often) and I am using 6- and 15-Range ones for these 2 weeks so that I may stay in a trade longer.
Initial Balance: 607.20 - 595.50 (11.70 points) Value Area as at 11:00 am: 606.30 - 602.10 - 599.90 (6.40 points)
Price opened @600.40
Today's High and Low as at 11:00 am: 607.20 - 595.50 (matching IB)
VPOCs: Top 608.10 and Bottom 593.80 Overnight High and Low: 602.10 and 594.80
The market did react to the Consumer Confidence news at 10:00 am while I was a "good" girl and SOH LOL!
No of Trades: 2 (1 winner and 1 loser)
No of Ticks: -7
Trade Recap:
1. SOH until 10:15 am, ie after the morning news were over.
2. Trade No 1 - I waited for the DMplus momentum indicator turned green before entry. Since I was late to the party, I used PT 5. I got lucky as the trade almost got stopped out.
3. Trade No 2 - I stayed in the trade as all indicators aligned with the Short. Unfortunately, SL got hit.
Goal Accomplished: I did 2 real trades even the daily result is pinky. I was thinking if I should consider a third trade (max). On a second thought, I better save some bullets for the coming days LOL!.
After months of research and sim-trading, I miss enjoying my new married life. I started the trading venture in March 2009 (within months after getting married/relocation) and have been studying/researching days/nights almost non-stop.
I've to admit that I'm a 1,000,000,...% workaholic and enjoy challenges. Yet I'm disappointed on my incompetence in developing the required confidence in myself to trade up to this point .. sigh .. My discontent has caused health issues (eg troubled nights and headache) + more important losing temper on myself.
A break is due and I will be a bookworm re-reading some of my favorite non-trading books .. spending more quality time with Nelson .. counting my blessings .. doing more exercises .. trying out a peanut butter cookie recipe for Nelson (he's been waiting for this for months) .. etc etc .. Believe you will understand.
Pause is good and I am going to be "stronger" both physically and mentally. Back to the Trading world next week.
Take care!
Beth
Good Trading is about Trading Right!
Want What the Market Wants!
Trade With the Trend!
The following 3 users say Thank You to wgreenie for this post:
I like PT/SL 4/6 combo and unfortunately it got hit very often when I sim-traded it. Will go for 6/8 (6R) and 10/13 (15R) now and let's see what may happen. I will certainly do my very best "not" to butcher the set ups .. haha ..
