Thursday, March 12, 2009

Day 4 Pisses Me Off

Basically, I don't know what happened this morning but I entered an order that should've filled (my buy limit was 25.25 and it traded 25.00) but the DOM froze and the market depth was stuck below the trading price. Real weird shit. I tried to capture a picture of it but by the time I saved the image it had refreshed and was pulling up to the price in this image.

Long story short due to no fault of mine I missed out on a textbook +5 point profit. Only fair that I would take the next signal for a -2 point loss. Then in the afternoon I caught +1.5 on a move up and reversed out into a valid double top that stopped me out for -2.75 to end the day battered and bruised and net -162.50. Even with my win this morning I just feel like this "edge" is pretty thin. I mean the fact that my account is bleeding lower proves something. I shouldn't have to catch EVERYTHING to make money each day. If that's the case, then maybe the edge really isn't adequate.

But like everything in this path i'm on just when i'm down and out I have an inspired idea that spurs me on. Straight up though, i'm going to sim this on the NQ/ES starting tomorrow through next week and see how it goes. Stan from was right, and I need to take a step back, get my shit together and then make a go of it rather than decay my equity further. I thought my method that I was using was simple... I took that version of simple and put it on a diet. Hell maybe not even a diet... I basically cut its appendages off and performed a ritualistic decapitation on its ass. I tend to over engineer things and let them get too complicated. So i'm going to try a new idea out that seems to look promising and see how that goes.

I feel the entries are much more crisp, can be taken with much less risk, in more probable spots, more of the time and unlike what i've been doing they aren't guessing at a momentum shift that could occur - they are jumping in AT the momentum shift as it occurs. I have roughed a basic rules set around it and am doing backtesting for the remainder of the afternoon and then going into simming on the EURUSD, EURJPY, GBPUSD, and USDJPY into the night to see how it holds up.

Heres the trades from this morning using this new idea (there were no trades in the P.M. on either chart - which is better than losing money like I did!!!). Nothing too exciting but nice crisp entries, decent profits and almost NO waiting and hoping for the price to do what I want it to do. Because price should already be doing what I want it to do before I get in.

Its nothing complicated or interpretive. Basic entries into momentum breaks and holding it until the momentum dies off. But let me tell you something... If I missed one of these trades or wasn't filled due to a DOM error guess what? I had 3 more opportunities that all made money. That really isn't something I can say about my current method. If I miss the winner i'm basically f**ked for the day. I don't want to trade with those odds. I'm human and I need a method that's robust enough to allow me to miss something but still make money the next time around.

I'm not discouraged by this revelation. Rather i'm going to embrace it and hopefully let it push me in the direction i've needed to be going towards.


Michael said...

Matt, I may have already said this,if I did, well I'll say it again. I don't care what your method is, there are going to be ideal market conditions when that method will look like the holly grail, and other conditions when it will crap out on you. You tested the shit out of what your doing now and it worked (at least that's what you posted,the market this week IS different than it was last week. My new setups formed 17 times last week and only 4 times this week. The whole rhythm of the market is different this week, and apparently it's not conducive to your system either. Maybe I'm wrong and you have a sub par system that you didn't test well enough, only you will know the answer to that, but my bet is that you just haven't identified under what conditions the system works best.

I'll argue with anyone on this point, aside from scalping, there is NO SYSTEM that works consistently under all market conditions! They will either produce a good win rate under one condition and high failure rate when things change, or like my system, they'll produce lots of trades then suddenly very few for short or even long periods of time.

It will be well worth your time to figure out when the system works and when it has a higher failure rate. Not to discourage making any changes, who knows you may come up with something far better, but I guarantee you that what ever you come up with will also go through periods where it won't work as well as you hoped.

Good luck!

Stan said...

My DOM in TS was doing the exact same thing yesterday. It drives me nuts - you can never tell if it's on your end or Tradestation's.

I really think you should just hop on the sim like you are planning. You will look back and thank yourself. Set a profit target that you want to reach and force yourself to stay on the sim until you reach it. That will prove to yourself that you are ready to trade live again. If you can't reach a small milestone on the sim, you definitely won't be able to do it with your own cash.

Just be patient and you'll get there. Not that I've arrived yet myself but my sim experience really helped me so hopefully it can do the same for you!


E-Mini Player said...

Good call on switching to Sim for a few days. The markets will always be there!

E-Mini Player said...

Btw, I've said this before, Trade Station sucks for order execution. You guys should really consider Infinity Futures; order goes direct to Globex and you have the safety net of being able to get a hold of your broker at a moment's notice. Matt, I know you're not ready to make the switch yet, but Stan, you should definitely consider it. Commissions will also lower and the AT platform is simple but awesome for futures trading. Email me if any of you are interested, and I'll connect you to my broker.

Michael said...

Matt, One more thing...

Tradestation is a great charting platform, the best, it's not a great futures trading platform.

I highly recommend looking at Infinity.

Stan said...

you guys must work for infinity! what do you get for your referrals? :) TS is awesome for charting, reporting, back-testing, scanning, etc. I like having it all under one roof but yes, order entry can get a bit clumsy at times. I only pay $4.70 commissions and the rate scales down as you hit volume...I am currently now paying $4.30 because I trade frequently.

Michael said...

Unfortunately no kick back for me... I could use one though. ;)

Anonymous said...

I think trading in sim is the way to go, I lost money all last week and as my trading plan states, "whenever I lose $500.00 in less than 2 weeks I trade sim until I have achieved a win rate above 65% with more than 20 sample trades and at least 1 week of simulated trading". Just stick to your plan, you have determination and you work like crazy, and that's how you make it in this game. Best of luck to you and your trading.