Trading Update

Quickly sharing the things I have been working on & thinking about on the trading front over the past working week.

Spent a good chunk of the working week on my trading.

Executed a bunch of trades on the DAX and US30 indices on 1/5/15/60 minute timeframes.  Created some simple indicator with EasyLanguage code in TradeStation to identify specific conditions on the DAX on the basis of Stochastics, price and exponential moving averages.

Focused on spotting good entry levels – worried less about stop setting, target setting and position management.  Will get to that later, and using TradeStation back-testing and optimizing for that will be more efficient in any case.

Also doing some practice spotting and trading the setups using ForexTester3.

Incorporating simple support/resistance and multiple timeframe analysis.

Paying less attention to the news feeds and more attention on the technicals.

Focusing on just 1-2 markets – both are equity indices – do they “behave more nicely” than FX rates?

Thinking about whether psychology is overrated in trading & the need to create a validated edge is underrated – particularly in the space for independent retail traders.

Having another side project on the go helps to alleviate pressure on the trading – though I am still pushing very hard to make progress with it.  The side project does have a good amount of overlap with trading in any case.

Finally, since there has been less to read on my blog in recent weeks, here are a couple of links to articles that might be a good read for you:

Trade safe & happy weekend!


This entry was posted in Financial Markets 101, Testing. Bookmark the permalink.

5 Responses to Trading Update

  1. “Thinking about whether psychology is overrated in trading & the need to create a validated edge is underrated – particularly in the space for independent retail traders.”

    Obviously finding a validated edge comes first, and is vitally important, but then i need the psychology/emotional control/discipline to trade the edge i have found.

    The reason is the long losing periods that even a good edge will have.
    In a casino i could make 100+ bets a day.
    As a retail trader it takes me several months to get 100 good trading signals.
    So even if i have a good edge i can still suffer a drawdown that lasts several months. That is when psychology becomes really important to me.
    If i never had losing days/weeks/months then psychology would be less important.

    But personally after 15 years of backtesting i have yet to find a good edge that does not have losing months or even losing quarters.

    Yes i can ‘curve fit’ methods together so as to have very few or no losing months in my backtesting.

    But i have found that if i want my backtesting to be realistic and reflect forward trading results then i will have to accept many losing months and even losing quarters when testing.

    Perhaps others have found a system with no losing months (i mean in years of actual trading, not just backtesting), to me that would be a ‘Holy Grail’ system of trading and in that case psychology would be overrated. And Trading would be more like a job where you get paid every month.

    Liked by 1 person

  2. David says:

    Options are the best way to avoid the psychology trap as you don’t have to be right,you have to be smart. Too many entrants to trading think they can just get direction right. You can’t, so why try? With a massive account you can survive-which is how the big institutions are still in business. For us retail traders there is no stream of income from the dumb money. After posting some 68 trades on based on a fixed entry point, it is clear that options give you an edge-I’m a terrible trader, but I still make money.Win rate is >85%.Drawdowns are tiny. Exit is far more important than entry-and break even? That’s a losing trade, like being a plumber fixing a boiler for free( as if!) Enjoy-but have another look at options….just sayin’

    Liked by 2 people

    • David,
      ‘Im a terrible trader’, i read the same thing on your blog as well recently.
      Why do you say this if you have a win rate >85% and the drawdowns are ‘tiny’. It sounds like cognitive dissonance on your part. Don’t your actual account results match what you are claiming (ie. 85% w/r and tiny drawdowns)? By saying ‘i’m a terrible trader’ it gives me the impression that in reality your method of trading isn’t as good as you claim. As why would anyone struggle with method of trading that has such excellent performance stats?

      Liked by 1 person

      • David says:

        I am forced to take those trades using Friday’s prices to enter the trade-my own trading, I hesitate,and fail to obey the rules-lack of discipline mostly,and fear

        Liked by 1 person

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