The NASD A/D showed bearish divergence, so I was able to take advantage of that and get a short runner. Traded the first 3 hours. Pretty light volume so far this morning. Going to work now. The best thing to do right now is to look to fade volatility spikes, and when the fade doesn't work, try to get in the trend and ride it to the next volatility pop.
Anonymous wrote:
If your strategy is so good, why don't you simply trade it? As that other anonymous said, your "high probability" comes from taking small profits and letting losses run. I've "traded" that way myself in the past (and it took me a lot of time and effort to mend my ways) and had spectacular winning streaks of great consistency (the longest was 34 profitable trading days in a row), interrupted by devastating blowup days, so I know what I am talking about.
On normal days, you buy, it goes down a little, you buy more, it goes up a little, you sell some, and keep doing that. At the end of the day you've traded hundreds of contracts and made a fraction of a tick on each, but hey - you made money, so your "system" worked.
On blowup days, you do just the same, but it never goes up, so you just sit there and watch you losses get bigger and bigger. After you finally get out near the bottom, you claim that you traded against your "system", and that following your "system" would have actually made you money on that day - and you have all those profitable days to prove it.
That "How I Trade" section is actually quite good and what made me follow your blog in the first place - the problem is that it has very little to do with how you really trade. The money management rules you posted were also sensible, but you never followed them either.
Thanks for this comment. I don't know what is going to be the final nail in the coffin for me to start following my trade signals properly. It seems as though, when I have made a good months profit I become more relaxed, and I end up screwing up on one day. This is because I stop following my rules and let emotions take over. I never want to have a losing day, and that is my problem, I will fight to the end of the close to make back any losses, and this as you can see is where the pain comes. The added stress I put on myself to get back to breakeven impaires my judgement, and I never shut down the computer until the market closes. It is my failure to except a small loss, which amounts to me breaking my rules, letting emotions take over, and thus having huge blowup days. Now, if I implemented a strategy, where the computer would lock me out once I've hit a max loss for the day, these types of days may have been avoided; however, I have failed to use such a program and have suffered the consequences. I think it is now time to start using such a program, because I obviously can't control blowup days from occurring. If any of the readers have suggestions on what I should use, I'm open ears. I think buttontrader has a program like this.
I'm also looking forward to reading Dr.Steenbargers new entries over at TradersFeed, where he discusses when traders prefer action to emotion.
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