Munchie "the noob" dude's Virgin Trading journal

[munchiedude]

hi all,

upon useful advice from counter_violet, i thought i'd start a thread for my trading journal here.

my strategy is simply to trade MACD crossover on 30 minute timeframe using MA(exponential) crossover fine tuned at the 5 min and 15 min TF. confirmation to be had with stocs.

r:r = 2:5. 10p/point.
stop loss moved to break even if 1.5R reached.(eg if stop loss 2pips, will move stop to break even if 3 pip in profit but of course thats too tight a stop, it will be more like stop loss 8pips, take profit 20 pips with stop loss moved to break even at 12pips)

instruments traded: eur/usd, ftse 100 index primarily until i get the hang of this!

not really sure what im doing here as i am a noob so i will just post my thinking,charts and entry/exits.

if there are any improvements/clarification that needs to be had above, please do let me know as i welcome constructive input and criticism as i fully appreciate that my trading "strategy" is a bit loose but i hoping experience and feedback could improve it!

obviously no trading today but tomorrow(monday i will start and post!)

thanks for reading!:smart:

 

[Hotch]

Good luck!

If you follow your rules, one of two things will happen.

1-you'll consistently profit over the next few months/years, showing you have an edge, then you can build up size etc etc.
2-you'll b/e or lose money over the next few months/years. In which case you know you want to change something, and can do some analysis and see what needs changing, and adapt.

Either way, you need to stick to the rules for a significant amount of time.

 

[munchiedude]

thanks hotch, im not sure if my strategy is robust enough and i guess only time will tell, im watching the mkts live now, waiting for my set up and will announce entr, exit points as they come in!

 

[rathcoole_exile]

MACD crossover confirmation to be had with stocs.

this is like deja vu, but I shall re-post for you the important message i recently posted for another newbie with similar plans:



no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no

your energy and enthusiasm are admirable, but your plans sucks my friend

 

[munchiedude]

this is like deja vu, but I shall re-post for you the important message i recently posted for another newbie with similar plans:



no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no

your energy and enthusiasm are admirable, but your plans sucks my friend

thanks rathbone, i didnt think that my plan was good anyhow and definitely not as robust as i think it should be. i using small funds and easily something i can afford to lose for the sake of experience and feedback. although perhaps it would be more helpful for a noob like to get an explanation as to why my plan "sucks" rather than state something that i already know? lol

any constructive criticism is welcome, as this is the whole point of this exercise..to find out why it "sucks" so i can improve :~)

 

[rathcoole_exile]

you already KNOW why it sucks, you don't need me to tell you

 

[JRP2891]

hi all,

upon useful advice from counter_violet, i thought i'd start a thread for my trading journal here.

my strategy is simply to trade MACD crossover on 30 minute timeframe using MA(exponential) crossover fine tuned at the 5 min and 15 min TF. confirmation to be had with stocs.

r:r = 2:5. 10p/point.
stop loss moved to break even if 1.5R reached.(eg if stop loss 2pips, will move stop to break even if 3 pip in profit but of course thats too tight a stop, it will be more like stop loss 8pips, take profit 20 pips with stop loss moved to break even at 12pips)

instruments traded: eur/usd, ftse 100 index primarily until i get the hang of this!

not really sure what im doing here as i am a noob so i will just post my thinking,charts and entry/exits.

if there are any improvements/clarification that needs to be had above, please do let me know as i welcome constructive input and criticism as i fully appreciate that my trading "strategy" is a bit loose but i hoping experience and feedback could improve it!

obviously no trading today but tomorrow(monday i will start and post!)

thanks for reading!:smart:

Good luck. The only way you'll find out whether something works or not, is by testing it out for yourself. Even if it's not profitable, you'll understand better what it takes to consistently execute a mechanical system. If this system doesn't perform as you'd like, then the skills you've learnt will serve you well for when you find a more robust methodology.

 

[munchiedude]

you already KNOW why it sucks, you don't need me to tell you

maybe to clarify the point, i know that its not robust enough but i dont think any noobie would have a hard cast all gun blazing trading plan otherwise we wouldnt be noob.

i know that it sucks possibly, but i dont know WHY it sucks, my only general feeling is that it is not as specific as it should be.

was hoping for some feedback/advice rather than simple negative statements or comments which doesnt further my understanding.

looking forward to any constructive input, but otherwise still watching for my setups!

 

[timsk]

any constructive criticism is welcome, as this is the whole point of this exercise..to find out why it "sucks" so i can improve :~)

Hi munchie,
I'm of the view that experience is the best teacher. So, even if r_e offers you an explanation as to why he thinks your plan 'sucks', I'd recommend paper trading it for a while anyway. Here's my reasoning. He might reply along the lines: 'you'll get whipsawed to death in rangebound markets'. You might have an intellectual understanding of what that means but, to really learn from it and adapt your strategy accordingly, you really need to experience it first hand.

It's a bit like driving, it's important to learn the Highway Code and know what all the pedals and levers in a car do - and when to use them etc. Ditto with the basics of trading. But, after that, you have to get behind the wheel and put theory into practice. And, when you do, you will make mistakes. Hopefully, the rules you've learnt will help to ensure that they are not serious ones. The same principle applies to trading. So, I recommend following through on your plan and reporting back here what your findings are. To ditch it or change it on the say so of others without trying it out first won't be especially educational for you.

One caveat: until you can prove to yourself that your plan has a positive expectancy, it might be wise to assume that it doesn't. In other words, it might be prudent to paper trade it first or, if you're really keen to put real money on the line - keep the amounts risked very small indeed - in case the losses turn out to be bigger than the profits.
Tim.

 

[Hotch]

you already KNOW why it sucks, you don't need me to tell you

...because it's not how you trade?

 

[rathcoole_exile]

well Munchie,

1. I can't define exactly why it sucks, i admit, other than THEY DON'T WORK.
All of these types of indicators are lagging, and simply arrive too late.
If you trade on short time-frames, you'll get chopped up.
And if you trade on longer ones, you'll miss most of the action before getting in, and will then lose most of your paper profits before getting out.
And having one naff indicator to confirm another, when both are pretty much deriving their data from the same source is ridiculous. If the rain is battering your window, do you need to step outside and get wet to confirm that it's raining ?

2.I tend to agree with Dionysus Toast that tape reading tells you the here and now, and is an appropriate method, with all indicators off the chart, for an experienced trader, if you need the urgency and adrenalin rush of trading on the edge of your seat.

3.However, my personal approach is to identify trigger points in advance, potential areas at which to take action.

this is beneficial in a couple of ways -
a) it's time-frame independent. either a trigger gets hit or it doesn't
b) it reduces the stress of chasing after every macd crossover etc, And when you're in the middle of the bell curve, frankly price can and does skit all over the place
c) you usually have plenty of time to work out your profit and loss exit strategies in advance, so it's a very rule-based, disciplined method, rather than constantly changing your exit points as your entries points float up and down
d) usually the triggers are so far from current price that price reaching there usually indicates a pending reversion to mean, so you're heading back to the larger chuck of the bell curve
e) it's easy to re-enter if you get stopped out

my advice would be to look at anything - a trend slope, a horizontal line, a round number, a 50-sma, ANYTHING, and decide IN ADVANCE what you'll likely do if&when price hits it. Work out your safety stops and work out how many times you're prepared to re-enter and get stopped out again before acknowledging that it's time to move on to another set-up.

If you think about it, that's what many of the old style pit traders did/do. they worked out the Pivot Points from yesterday's session and planned what to do when price struck there again.

Do me a favour, take a day or two to study Market Profile (MP), in particular the Value Areas (VA) and Point of Control
If you did nothing else but draw the MPVA POC
(or Daily Pivot Point, or your favourite lucky number, or your girlfriend's bra size)
on your chart and decide in advance to fade the first test,
you'd be so far ahead of the game, and way beyond most of the jokers on here.

Now, what I have written might be the biggest load of bollox in trading history, and i'll probably get shot down by a hundred wannabes, but it serves me well enough.

 

[rathcoole_exile]

...because it's not how you trade?

no.
because it's shyte

 

[Hotch]

well Munchie,

1. I can't define exactly why it sucks, i admit, other than THEY DON'T WORK.
All of these types of indicators are lagging, and simply arrive too late.
If you trade on short time-frames, you'll get chopped up.
And if you trade on longer ones, you'll miss most of the action before getting in, and will then lose most of your paper profits before getting out.
And having one naff indicator to confirm another, when both are pretty much deriving their data from the same source is ridiculous. If the rain is battering your window, do you need to step outside and get wet to confirm that it's raining ?

2.I tend to agree with Dionysus Toast that tape reading tells you the here and now, and is an appropriate method, with all indicators off the chart, for an experienced trader, if you need the urgency and adrenalin rush of trading on the edge of your seat.

3.However, my personal approach is to identify trigger points in advance, potential areas at which to take action.

this is beneficial in a couple of ways -
a) it's time-frame independent. either a trigger gets hit or it doesn't
b) it reduces the stress of chasing after every macd crossover etc, And when you're in the middle of the bell curve, frankly price can and does skit all over the place
c) you usually have plenty of time to work out your profit and loss exit strategies in advance, so it's a very rule-based, disciplined method, rather than constantly changing your exit points as your entries points float up and down
d) usually the triggers are so far from current price that price reaching there usually indicates a pending reversion to mean, so you're heading back to the larger chuck of the bell curve
e) it's easy to re-enter if you get stopped out

my advice would be to look at anything - a trend slope, a horizontal line, a round number, a 50-sma, ANYTHING, and decide IN ADVANCE what you'll likely do if&when price hits it. Work out your safety stops and work out how many times you're prepared to re-enter and get stopped out again before acknowledging that it's time to move on to another set-up.

If you think about it, that's what many of the old style pit traders did/do. they worked out the Pivot Points from yesterday's session and planned what to do when price struck there again.

Do me a favour, take a day or two to study Market Profile (MP), in particular the Value Areas (VA) and Point of Control
If you did nothing else but draw the MPVA POC
(or Daily Pivot Point, or your favourite lucky number, or your girlfriend's bra size)
on your chart and decide in advance to fade the first test,
you'd be so far ahead of the game, and way beyond most of the jokers on here.

Now, what I have written might be the biggest load of bollox in trading history, and i'll probably get shot down by a hundred wannabes, but it serves me well enough.

Yeah...indicators lag because they only look at what happened in the past, but looking on MP where price has been today is completely different

 

[munchiedude]

thanks jrp and timsk for your support and advice. it is certainly helpful for a bit of guidance and both your posts are constructive and useful, for that im grateful.

my risk capital is totally negligible and its far cheaper way of getting in screen time than to go for a trader course of which i do not have the free time to go through.

what i do not need is hand holding, but certainly willing to put in the hardwork and appreciate the guidance provided by more experienced members of T2W.

still looking for MACD crossover but no opportunities present on either the ftse 100 and eur/usd. seems to be a fairly steady bull today. will update as things change in that respect.

good analogy timsk, im keen to grow and modify strategy as the system develops over time and when the situation warrants it.

 

[rathcoole_exile]

Yeah...indicators lag because they only look at what happened in the past, but looking on MP where price has been today is completely different

i think you mean, "where price was yesterday"

if you're going to try to take the pyss, try to get the basics right at least

 

[munchiedude]

thanks rath for a much more constructive feedback and cheers for taking the time to write that post. there are plenty of useful things in there that can and will help when i do go back to the drawing board on my strategy which inevitably will.

i will do as you recommend and study MP and value areas this evening and have taken in the importance of knowing in advance important areas and my reactions to these.

as i have stated a strategy in my first post i will follow through with it as per timsk's suggestion, my reason? simply to garner experience, the money lost/gained is irrelevant at this stage cos it pittance. the experience gained and feedback from everyone is invaluable.

naturally i do not expect a simple MACD/ma crossover will be a consistent winner, seems far too simple and everyone would make money if it were this easy.

i am using stochastics to confirm a trend reversal as i understand that it is a leading indicator as opposed to the macd/ma which are lagging. correct me if i am incorrect in this.

once again, thanks for everyone's input so far. not identified a suitable setup yet, will update as it comes.

 

[Hotch]

i think you mean, "where price was yesterday"

if you're going to try to take the pyss, try to get the basics right at least

Basic MP range extensions require you to look at today's range. If I'd of put yesterday you would of just said that you only use MP on the current day.

Still, the point stands, and you don't actually have a valid argument bar ramblings.

 

[munchiedude]

eur/usd weakening, macd and stocs turning down, looking to eurusd to test recent sup 1.4211. will assess macd/stocs if it tests...

 

[rathcoole_exile]

it's "have" not "of"

 

[munchiedude]

looking to short if bar confirmed below 1.4200 (round number sup) with s/l @ 1.4211 (recent sup turned res with t/p level: 1.4172 and move to break even 1.4178.

thus: pending trade

entry: 1.4199
s/l: 1.4211
t/p: 1.4178
move to b/e: 1.4272.

all entries assume confirmation with macd/stox.