Do you have an "edge" in your trading?

robster970 said:
I'm not entirely sure I agree Bramble as the post suggests a reflection on the path you should have taken rather than the one you did. Armed with this information, would you really have taken a different course?
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That's a good point. I don't know. And there's no way I ever could.

Rather takes away the sense of any of us trying to advise anybody else on anything at all really, doesn't it.

Not only do we not know what we know, we don't know how we came to know what we do think we know.
 
TheBramble said:
That's a good point. I don't know. And there's no way I ever could.

Rather takes away the sense of any of us trying to advise anybody else on anything at all really, doesn't it.

Not only do we not know what we know, we don't know how we came to know what we do think we know.
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I agree. It does seem to be absolutely futile to try and explain the essence of it all without it sounding either (a) banal or (b) the popular wisdom reguritated.

There are plenty of posts on this site that are incredibly well written, articulate, enlightening and informative that can help people on their journey. What they require is that the reader has sufficient context to understand the meaning.
 
TheBramble said:
Imagine a downward plunging equity curve and how much good news it’s going to take to turn it around.
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This is why T2W and posts such as yours are so damaging.

I suggest you do the following. Take a coin, and flip it. If its heads buy something, if its tails, sell something, dont set a stop, and dont set a target. Then get out of the house for a few hours, have a few beers, and make a few new friends

When you come back close the trade.

Do that for 6 months.

After 6 months, you'll have made some new friends, had a few laughs, and lost some cash. Now, plot your equity curve, calculate the size of your average win, your average loss, and your win rate.

Now ask yourself these 3 basic questions.

a) how much would I need to increase my win rate by to turn this losing system into a profitable system
b) how much would I need to increase the size of my average win by to turn this losing system into a profitable system
c) how much would I need to reduce the size of my average loss by to turn this losing system intop a profitable system.

I know most wont do this, but the answer to all the above is NOT A LOT

Increasing these by NOT A LOT isnt that hard really.

I despair
 
Sounds good. Bet you feel great after that lot.

Do you run?
Its easily the best way of losing weight. You dont have to be Linford or Paula just at your own pace
 
robster970 said:
I'm not entirely sure I agree Bramble as the post suggests a reflection on the path you should have taken rather than the one you did. Armed with this information, would you really have taken a different course?

Even imparting wisdom of this kind to others is likely to be lost on them because of context.

Journalling is a good vehicle for forcing you to assimilate in a coherent sense what has just happened - this might be psych, set-up, whatever. The more you understand and become enlightened, the less value it will ultimately provide in this sense. The value of why I journal has changed dependent on my needs. Now it's about consolidating screen-time. 12 months ago it was about why I impulse trade. I'm sure in 12 months time it may be different again.

Horses for courses.
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IMO trading is about getting the three M's right: Method, Money and Mind.

You need a good Method to have an edge. You can still make money if you don't, but you are relying on luck.

You need the right Money Management to make sure whatever happens you can still turn up tomorrow. Dead simple really.

The last one, Mind, is what keeping a journal is for. The last part of my trading day is writing in my journal in a "stream of consciousness" style about whatever I like. All I do is review how the day went and how I feel about it... I don't go back through my journal and look for patterns or whatever, that's not how I use it. Writing in my journal is a cathartic process, it feels good to get it "out in the open", I can draw a line under it all and look forward to the next day.
 
the hare said:
This is why T2W and posts such as yours are so damaging.

I suggest you do the following. Take a coin, and flip it. If its heads buy something, if its tails, sell something, dont set a stop, and dont set a target. Then get out of the house for a few hours, have a few beers, and make a few new friends

When you come back close the trade.

Do that for 6 months.

After 6 months, you'll have made some new friends, had a few laughs, and lost some cash. Now, plot your equity curve, calculate the size of your average win, your average loss, and your win rate.

Now ask yourself these 3 basic questions.

a) how much would I need to increase my win rate by to turn this losing system into a profitable system
b) how much would I need to increase the size of my average win by to turn this losing system into a profitable system
c) how much would I need to reduce the size of my average loss by to turn this losing system intop a profitable system.

I know most wont do this, but the answer to all the above is NOT A LOT

Increasing these by NOT A LOT isnt that hard really.

I despair
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I'm stunned.

Although I know you're one of the Monkeymen, I did at least think you had a reasonable grasp of the mechanics of trading.

I'm taking the opportunity of quoting it in full on the basis you may realise (or be informed) of your gaff and pull it.

Ignoring the puerile hypothetical situation you suggest, which is quite redundant to your argument anyway, let me address the only issue of substance you provide which that 3 point list.

Say you’ve taken 1000 trades and 10% of them have been winners with a Aw:Al of 1:1.5.
Your equity curve is in a nosedive.

a) Increase win rate from 10% to 10.1% . That’s NOT A LOT.
b) Increase size of average win, well, let’s increase that from a Aw:Al of 1:1.5 to a Aw:Al of 1:1.4. THAT NOT A LOT. I’m losing less on each trade, on average now.
c) Reduce Average Loss from (well, I’ve covered that by using a ration of Aw:Al). So, as you suggest NOT A LOT.


“NOT A LOT”….LOL

Your equity curve is still in a nosedive, slightly shallower, but it hasn’t turned around.

You haven’t even got a clue of the basics.

Let me throw a couple of your comments right back at you:-

This is why T2W and posts such as yours are so damaging. I despair.
 
TheBramble said:
Say you’ve taken 1000 trades and 10% of them have been winners with a Aw:Al of 1:1.5.
Your equity curve is in a nosedive.
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Every post you make reveals more and more of your ignorance. 10% winners, from a random entry, no stop and no target. :LOL:

You really are as clueless as I thought.
 
JtheD said:
Sounds good. Bet you feel great after that lot.

Do you run?
Its easily the best way of losing weight. You dont have to be Linford or Paula just at your own pace
Click to expand...

Yeah , running up hills is part of it .
Its good for my health .
 
the hare said:
Every post you make reveals more and more of your ignorance. 10% winners, from a random entry, no stop and no target. :LOL:

You really are as clueless as I thought.
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Who said anything about random entry, no target and no stop? That was your wet dream.

You're not a patch on Bertie. He could convincingly (most of the time) back his way out of any losing argument without giving any impression of retreating. There you go, bounding off across the field like your namesake - terrified! LOL

If you want to engage with me an anything in future, do your research and make sure it's worthwhile or I'm just going to ignore it.

If I don't respond, you'll know you're still posting crap.
 
TheBramble said:
I’m obviously in the minority here thinking trading journals and trading performance statistics are a complete waste of time.

I didn’t always of course. Back then I was told they were the secret to success. But no matter how hard I obsessed over the journal and however much time I spent on it, my trading method didn’t actually alter that much for the better. What little time I could spend trading, as maintaining and enhancing that journal was a top priority.

Same with performance statistics. Got almost OCD with them and created legions of spreadsheets to compile, assess and compare my various trading ratios and data. What with these and the journal, my trading had to move full-time, although the trading itself was still taking a back seat to this vital administrative endeavour.

Then I noticed that even as I changed my trading systems, for the better, it took an awful long time for the accumulated crap trades that preceded them to allow the performance to show the improvement themselves. Imagine a downward plunging equity curve and how much good news it’s going to take to turn it around. Downright discouraging. So I started re-engineering my performance data from a more recent point in time. Bit like Lloyds drawing a line under ‘Titanic’; and starting again.

When I looked back over my journal I realised I’d been concentrating on the wrong things, and had spent a lot of time noting down and annotating the notes about the wrong things. It was a fine journal though. I even considered having it bound. Giving up on it seemed almost sacrilegious, especially after all the effort.

Eventually though, I realised I had used these devices as a diversion to avoid recognising that what I was doing was not working. And neither the performance stats nor the journal were going to make it better. So I stopped. Got rid of it all and concentrated on my core business, which is trading, not journaling my trading and not monitoring the stats of my trading.

You are better off simply staring at a screen, discouraged, unhappy, bone weary and on the point of giving up, than you are thinking you’re making some form of progress by diligently writing up your journal or compiling your stats. You will eventually gain more of an insight through the former than you ever will through the latter.
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Spot on.

Too much navel gazing only makes you an expert on your own navel.
Richard
 
Relax Bramble !

In my opinion - a journal was a very positive experience. It certainly enforced discipline and put a stop to me arsing around. It goes hand in hand with a trading plan. My journal is added to every day. I can't imagine how I'd be setting sensible stop losses without knowing how much on average my winners go against me.

In terms of staring at a screen. I wouldn't have liked to do that without having some idea what to look for.

Horses for courses.

DT
 
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Mr. Charts said:
Spot on.

Too much navel gazing only makes you an expert on your own navel.
Richard
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Not necessarily a bad thing, as the most likely part of a trading system to fail is the trader.

At the perceived level of trading competence of most of the posters (including myself), some introspection is warranted.
 
I didn't say it was a bad thing, I said, "too much" !
Moderation in all things.
Over analysis leads to paralysis.
Can't think of any more trite phrases :)
 
Pete, yes, I post every trade elsewhere on the web and when I make an error I'm hard on myself and try never to make the same mistake again, but then I move on.
It's certainly not useless, but I don't want to miss the next trade because I've spent too long analysing.
Maybe I can just analyse quickly having traded for so many years.
I do think Tony's suggestion that analysis should be kept in proportion is correct.
I never said it was useless, merely that I agreed it shouldn't be overdone :)
Richard
 
Mr. Charts said:
Pete, yes, I post every trade elsewhere on the web and when I make an error I'm hard on myself and try never to make the same mistake again, but then I move on.
It's certainly not useless, but I don't want to miss the next trade because I've spent too long analysing.
Maybe I can just analyse quickly having traded for so many years.
I do think Tony's suggestion that analysis should be kept in proportion is correct.
I never said it was useless, merely that I agreed it shouldn't be overdone :)
Richard
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Well... perhaps I got a different meaning from...

TheBramble said:
I’m obviously in the minority here thinking trading journals and trading performance statistics are a complete waste of time.
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My journal takes 5-10 mins pre market, a few mins during each trade and another 5 mins when I finish (which basically involves giving myself a huge back pat).

Mines a bit like yours - I actually set up my own internet forum. A lonely place with just 1 member but a great format for a journal. Plus no-one disagrees with me there...
 
DionysusToast said:
I actually set up my own internet forum. A lonely place with just 1 member but a great format for a journal. Plus no-one disagrees with me there...
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We've all got/done the journal, kept it or binned it...but a forum of one? Noooo...
 
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