Thoughts about strategy development and testing aspects
As planned, I did some thinking on the frustrations I have from the slow progress of the testing and strategy development. I made some notes on that – I won’t share those details on the blog here though. The crux of it is that I have to put my head down and work hard – this does not mean working weekends and long hours, but it means I have to be more productive and focused when I do the testing. I will give things another shot – just testing in the way that I have been – but simply attempt to be more focused.
So I did try and go through more testing today (on 2013 Oil data) – I didn’t get very far at all. As soon as I started monitoring the live markets, the progress on the testing basically screeched to a halt. This led me to being somewhat frustrated at the end of the day, because I felt like I got nothing done (plus I had a losing day on the markets). It’s frustrating and I am not sure what to do. I am reluctant to focus more on live trading and forget about testing – simply because I do want to build confidence. One idea I had was that I would alternate weeks of 100% live trading (and monitor more than than 3 instruments) with weeks of 100% testing. That would allow me to focus on 1 task at a time. I need to knock out more testing trades.
Added: I think this is a good idea. I will live trade all of next week. Not bother with any testing. In the following week (which is a 4-day one and includes NFP on a Wednesday) I will only test, and not do any live trades. On Monday I will look out for 2-3 additional instruments to trade during the week – based on volatility, spread and current market conditions – most likely they will all be currency pairs. Next week will also contain two 3hr trading sessions on either TY or ES. It’s important that i do the Psych Assessment at the end of each day. Given that I will probably be putting on more trades, and some new instruments, I will lower the risk per trade to £50 (from the current £100).
Trading was somewhat frustrating today. I didn’t quite get on the whole position on some winning trades, and then did some (with the benefit of hindsight) bad position management. This applied specifically to my first trade of the DAX where, after perfectly (luckily) picking out T1, I decided to hold onto half of the position and tightened the stop to just below the critical 12000 level. A great case of Murphy’s law – price retraced to where I had placed the tightened stop, a few points past it, before resuming upwards. I guess it was a bit of bad luck, but sticking to the original plan would have made me more money. There’s no point filling this blog post with whining! But it was a bit of a shite day today.
On the upside I managed to have a quick catch-up with Mr France and talk about his trading, and I had some good banter with the EMA-driven trading colleague.
I feel more and more that I am just behind on everything – the testing, the documentation, the psychology study – am I setting my benchmark and goals too high? As I say it is so often – trading is damn hard endavour – but so are all businesses. However, I am steadfast in my decision to stop doing trading stuff on the weekends! So all these things can wait till Monday!
I ended up doing 5 trades, and still managed to miss some valid setups.
It’s 6.30pm on Friday – I have been in the office for 11 hours already – I choose NOT to do it. I cannot think of any huge psych issues that I have encountered today.
Not a great week. I took 9 trades and lost 2.2R. Oh well. Since re-commencing live trading in late January I have done 64 trades and have lost just over 3R – this implies a negative of around 5% – which basically equates to the average transaction costs that I am incurring on my trades. So I am basically scratch-trading. There isn’t really a huge disparity between instruments. Lost 1.5R on Cable, gained 1.9R on the DAX and lost 3.4R on Oil. Continuation trades (44 trades, gain of 1.4R) do better than reversal trades (20 trades, loss of 4.3R).