my journal 2

[Yamato]

watching Tin Cup, golf like trading

Golf, shooting, pool, all sports where you have to aim have a lot in common with discretionary trading.

I was watching this:
http://en.wikipedia.org/wiki/Tin_Cup

It made me hold my breath so many times. I experience it in trading when I do things right, such as today. Same thing when playing pool. I am good at things that require great concentration, but I also get mad when I miss. I am also good at... like Kevin Costner, screwing things up when something doesn't go my way. The whole trick is in not giving up when something goes wrong and keep aiming and staying focused as much as possible. Also the trick is to stay focused when things have just gone your way in a big way. Same as in playing pool.

From:
http://www.script-o-rama.com/movie_scripts/t/tin-cup-script-transcript-costner.html

Roy 'Tin Cup' McAvoy: A man goes through what I have...he's supposed to learn something. I'm trying to figure out what I learned. You think I learned anything?
Dr. Molly Griswold: You learned a little discipline, some self-control.
Roy 'Tin Cup' McAvoy: I learned...you can't just listen to your heart, but also to your brain.

From:
http://www.imdb.com/title/tt0117918/quotes

Roy 'Tin Cup' McAvoy: Well, I tend to think of the golf swing as a poem.
Clint: Ooh, he's doing that poetry thing again.
Roy 'Tin Cup' McAvoy: The critical opening phrase of this poem will always be the grip. Which the hands unite to form a single unit by the simple overlap of the little finger. Lowly and slowly the clubhead is led back. Pulled into position not by the hands, but by the body which turns away from the target shifting weight to the right side without shifting balance. Tempo is everything; perfection unobtainable as the body coils down at the top of the swing. Theres a slight hesitation. A little nod to the gods.
Dr. Molly Griswold: A, a nod to the gods?
Roy 'Tin Cup' McAvoy: Yeah, to the gods. That he is fallible. That perfection is unobtainable.

I wish my trade became just like his golf swing, with clearly defined and constant characteristics. Like a "trade swing" (not related to "swing trade").

I must first learn to do it, then define it at the end, and even later automate it. Otherwise I will never be able to learn it.

I also have to remember that nod to the gods. Because otherwise I'll get mad when I'll miss, and I'll throw my whole game away. I must always remember that, despite all my efforts, I will sometimes miss.

 

[Yamato]

usual surgery starting in one hour

In about one hour I will be home and will perform my daily surgery on the 1-minute CL chart, to cut some profit out of it.

Yeah, because that's what it is. It's precisely like performing surgery, where you need the greatest precision, focus and stress or you will do damage.

I will practice on the paper trading account, and when I'll see some easy "chart surgery" coming up, I will move on the real account. I can't believe I am finally making it happen. If I make it happen today as well, then it will mean I really have something going.

Once again the three rules are as follows:

1) univocal entry and exit method.

2) paper trade and then take the best trades on the real account

3) I forgot what it was, but I will see the rules once I'll get home.

Oh, wait, I found it two posts ago:

halt trading if you show a negative balance for the day

So, basically, in case something goes wrong with the surgery, don't kill the patient.

I suppose the comparison ends there.

Trading is similar to all those activities where you have to aim and focus. Brute force will not help you. Quantity won't help you. Quality and precision is what you need.

Performing surgery on a chart, with a pair of scissors, would be easy. The thing is that you have to start cutting without knowing how the chart evolves, and you have to make your bet by knowing how charts have evolved in the past.

Some examples.

Typically, my favorite situation is overbought/oversold. Have I ever seen a market fall down for 10 straight 1-minute candles? And have i seen it fall down for 10 straight candles then turn around one candle then fall down another few candles? Rarely. All this knowledge helps me make trades, blindly.

 

[Yamato]

Method was great. I just didn't follow it. First time I screwed the rules it was ok. Second time so so. Third time... I think I'm going to blow out my account once again. It really sucks. I just cannot handle this thing. At least not yet.

I should stop with the real trades and do a lot of paper trading. A lot lot lot. I mean like months and months of it, until i almost go crazy. Eventually I might learn it.

 

[JRP2891]

Method was great. I just didn't follow it. First time it was ok. Second time so so. Third time I think I am blowing out my account once again. It really sucks. I just cannot handle this thing. At least not yet.

I should stop with the real trades and do a lot of paper trading.

Travis, you've demonstrated on here continually how well you know yourself, yet when this comes to attempting discretionary day trading, this enlightened view goes out of the window. I can only assume you're doing this to cause yourself problems and stress (which you miss) now your portfolio of systems are finally performing how you envisaged. Recognising you can't do something is an ability in itself which will free up more time in order to find out where you fit in the markets, and from the evidence and results presented, that's in automated system development and trading. What's wrong with that? Some of the largest traders in the world are in that category.

 

[Yamato]

Well, what you say sounds reasonable and every once in a while I give up and do it your way: just automated trading.

Other times I come back and try, also because i can't just keep my account idle, or IB might close it (they have a policy like that).

The money on my account is too little to do any balanced automated trading.

Then, there's the challenge. And I think: how can I not be able to do profitable discretionary trading after all these years of observing the markets? There's something in me that wants to succeed.

However, there might also be some compulsiveness and self-destruction. If it weren't for the investors investing in my systems with constance and regularity, right now I'd have an empty account and nothing else. They are like my life insurance. Should everything else fails, at least I now have something growing in that area.

I think also that the appeal of discretionary trading is that you make money with two clicks. Buy/Sell and Close. With two mouse clicks at the right time every day, I could support myself. It still has to happen though. But it's very very appealing.

 

[Yamato]

Ok, i did not blow it out completely.

Now a lot of paper trading is ahead of me. Starting right now. Hours and hours every day.

I can do it and will do it even on weekends on the edemo account.

 

[Yamato]

It's so boring that I don't know if I'll be able to stick to my plan.

Each time, every six months or so, I come up with a new discretionary method, get excited about it, follow it for a few days or weeks, until I give up, out of losses or out of boredom. The sniper system with one trade per day worked but i still quit because it was too boring.

Maybe I am more looking for excitement than for profit.

 

[Yamato]

Ok, JRP2891, I am giving up. You were right. This is not for me. Let's hope that soon I'll have enough money to trade my systems on my own account, so I will fight this huge boredom.

Reminds me of this song from my youth:

He sings how he wants a reckless life, full of trouble, at maximum speed. That's the same problem that affects me. I don't have that life, and I look for that in my trading.

...I want a life that doesn't care about anything, anything at all
I want a life where it's never late, and you never go to sleep
I want a life where... you never know what happens

I want a reckless life, like in the movies
I want an exaggerated life, like Steve McQueen's
I want a life where it's never late, and you never go to sleep
I want a life, I want it full of trouble...

http://en.wikipedia.org/wiki/Vasco_Rossi

 

[Yamato]

some stuff regarding movie love story

I found this interesting:
http://www.sweatpantserection.com/love-story-movie.html

...Erich Segal wrote the screenplay; he further capitalized upon Love Story's success by churning out a book of the same name shortly after the film hit it big. (One of the rare instances where a movie precedes the book). Rumors flew during the 2000 Presidential Election after Al Gore claimed that he and his (oh so lovely) wife, Tipper, were the inspiration for Segal's love-struck characters, Oliver and Jenny. Gore and Segal were friends during the years Gore attended Harvard and Segal was a visiting professor. As for another piece of trivial trivia, Al Gore's college roommate was none other than future actor extraordinaire, Tommy Lee Jones. Jones appeared (credited as Tom Lee Jones) in Love Story as Oliver's roommate. Coincidence? The plot thickens...

What's fascinating is the story about Tommy Lee Jones, who's always so ugly these days but was pretty good-looking, and was a student at Harvard:
http://en.wikipedia.org/wiki/Tommy_Lee_Jones

 

[JRP2891]

Profitable trading is boring Travis. Forget about the markets providing you excitement other than through literature and film (the latter is harder to find). You've designed your systems to make money, plain and simple...and anything which can detract (discretionary trading) from your bottom line, you have to stop doing, as we only have a small edge in trading at the best of times. I made an error of expanding my trading at the worst of times pre christmas, but quickly put an end to it once i realised what i was doing; which was the unprofitable creation of excitement for my mind.

 

[meanreversion]

Profitable trading is boring Travis. Forget about the markets providing you excitement other than through literature and film (the latter is harder to find). You've designed your systems to make money, plain and simple...and anything which can detract (discretionary trading) from your bottom line, you have to stop doing, as we only have a small edge in trading at the best of times. I made an error of expanding my trading at the worst of times pre christmas, but quickly put an end to it once i realised what i was doing; which was the unprofitable creation of excitement for my mind.

I've recently rediscovered my passion for chess. Have a look at www.chess.com

I'm stuck on a high 1300s rating, I know I should be mid 1400s and then I start to wonder if mild underachievement is the story of my life .. (or maybe everyone does this to themselves).

I don't do any "discretionary" trades, in the same way that I don't play the lottery, I don't go to casinos and I definitely do not bet on sports (even though I used to be a bit of a punter).

 

[JRP2891]

I've recently rediscovered my passion for chess. Have a look at www.chess.com

I'm stuck on a high 1300s rating, I know I should be mid 1400s and then I start to wonder if mild underachievement is the story of my life .. (or maybe everyone does this to themselves).

I don't do any "discretionary" trades, in the same way that I don't play the lottery, I don't go to casinos and I definitely do not bet on sports (even though I used to be a bit of a punter).

Thanks, i've never really played chess but i've always wanted to learn it.

I'd guess underachievement is linked to the ego's need to be right, or maybe we just haven't found something we want to excel at? Who knows...

I do the odd accumulator on a saturday, but only with loose change.

 

[Yamato]

Tough day at work. They sent this team of experts to make us more efficient, while there are other offices that go on coffee breaks all day long. So I am waging a war against these jerks who dared to think they can just show up in our department and get us to be more efficient. "Go bust someone else's balls, not ours. We're breaking our backs year after year", I should tell them. Instead I asked to take a day off for the date our meeting is scheduled, where everyone will have to dress up and make a presentation and that kind of crap. I told my boss "they better not ask me what i think of this or I will say it". And I told him "i am coming next thursday provided that no one will ask me what i think of all this crap, or I will start yelling at everyone that it's all bull**** and will make our whole group look bad". He promised no one would ask me what I think of this bull****. He also thinks it's all bull****.

Regarding the money, the trading and all that, I can tell you this: I have momentarily given up again. I can't handle it. Ever since i started trading in 1997, each time i try to do something, I end up losing money, month after month, year after year. Sometimes I quit for 3 months, then I try again... the only hope for me is to have a huge account, with a lot of money, and get to trade and baby sit all my systems (i would trade all those with sharpe ratio above 1) so I feel that I am doing something, I am not bored, and I feel I am having some part in this. Otherwise my life is too empty to sit and watch the markets without clicking buy and sell once in a while and blow out my small account periodically. I've lost all my savings since 1997, year after year. I have no savings. I've wasted 50k or more on this crappy activity of mine.

If I could get a gun a shoot a few people, and take the law into my own hands, I would be a happier person and I would not engage in this self-destructive discretionary trading. I would like to shoot all my neighbours, some people at work... some people in the street. This way I would really be serene and not need any discretionary trading in my life. But hell no, I have to be polite and well-mannered and not just avoid shooting people but even treat them kindly. And the consequence is obviously that since you can't fight your enemies, you fight yourself. Being able to use guns against others would make me a much healthier and happier person.

 

[Yamato]

weekly update

Here we go. In red the systems i want to add and in green the ones that we're trading. GBP_ID_5 is sucking badly but it still has not exceeded its max historical drawodown so we have to keep it.



There's really no reason why we should not add those three systems up there in the chart: CL_ON_3, NG_ID, GBP_ID_7. No margin problems and no drawdown problems.

I've got to talk to the investors as soon as we reach 15k. I don't want to make them feel like I am rushing them, but at 15k this would seem reasonable to me. Then we'll have 16 systems being traded and we'll be quite diversified.

This week sucked because we did not reach 12k even, due to GBP_ID_5 losing over 1000 dollars. Equity peaked at 12,100 yesterday, but then GBP_ID_5 hit us back with a -500 dollars at the end of the day.



The equity line is struggling with me, trying to make its way to the top despite my impatience. I keep on trying to sabotage this thing, too, like I did my own trading, and suffocate the little plant by watering it too much (adding systems). The investors are there to stop me and make sure the equity line grows instead of being suffocated.

I can't help it - my own unhappy life is what rushes me to rush things, and that is why I keep on falling back on my ass. I have this constant pressure from within myself to speed things up and get out of the office.

 

[Yamato]

thinking and thinking...

I keep on having nothing to do and I keep thinking.

All things considered, all I have to wait is one month, 30 days, until things really start taking off.

You see, within one month, I will have been allowed to add these 3 systems, mentioned above: CL_ON_3, NG_ID, GBP_ID_7.

With these three extra systems, the monthly profit will reach 5000 dollars (statistically it is 6600 per month, but I can't count on that).

With 5000 dollars of monthly profit, I will have a monthly income of about 600 euros.

If we add that to my regular salary, that totals almost 2000 euros. Considering they take from it about 200 euros for the payment of that debt I have (with the bank itself), I will have about 1700 euros left.

Paying cabs and medecines, I am left with 1000.

That means that I'll be able to set aside about 1000 per month, starting a month from now.

With that amount, I can repay my debt back in a few months or I could try to wire it to my own account and do automated trading on that one, too. But best if I don't do that, because the capital will be so low at the start that I'd try to help it with my own discretionary trading.

What matters is that i get into my stubborn head that things can be ok ONLY if I don't do any more discretionary trading.

Each time I do that, my account just keeps going into the ground.

So, if I am capable of letting 30 days go by without going crazy, then
1) my finances will be under control
2) i will start seeing things happen

Can't I just sleep and watch movies for the next 30 days?

 

[Yamato]

http://www.putlocker.com/file/1XT8OFPSCBDW8848#

 

[Yamato]

I've been wondering, just like in the movie above (Limitless), if I couldn't contact a mobster to borrow 100k and then pay him back later.

Actually I work at Compliance so I come across these people every day, at least as far as their names. I mean I really could easily get in touch with these people. Probably all their phone conversations are being recorded so I could get in trouble pretty quickly.

Other than this, borrowing money, which I can't do anyway because I don't trust myself without any outside monitoring, I have to wait more like 4 months until my financial worries will be gone. Yes, because in one month I still will not make enough money to not worry about spending it.

What can I find to spend four months entertained and which does not cost me anything? Such as discretionary trading would, which does not make it fit to be a pastime.

I took a bath. There were plumbing problems for months so I took my first baths in a year yesterday and today.

That is one activity which keeps me home, safe, and doesn't cost any money.

Then I watched two movies: Limitless and before that i watched Soldiers and Saints was it called, or similar. Actually i was in the bath while watching those movies.

Yes, i can stay in a bath for 5 hours and be ok with it. I also swim for 5 hours sometimes.

Yes, we could say "let's take it one day at a time" and that is what would happen anyway, by time going by. But what I am thinking is that I need a plan, so i could use this time to do something worthwhile.

I could write a book. Not a trading book, but a novel.

But the problem is that I used to want... it used to be my ambition but now i don't care about getting published anymore. Besides, I write here, which is like being published.

I asked the investors: look, the systems are working, get me a million to invest in my systems, and solve all my financial problems. But they said: three months of good performance is not long enough. That sucks. They also said that with investors come also worries, and people checking on you.

Yeah, so if we do it, we should get a whole million invested, or even 10 millions.

I feel the investors are not rushing things enough, but at the same time I acknowledge that before I met them I was losing money fast every month, and now I am making money slowly every month.

The investors were a good influence on my trading, by all means, but I still feel we should be doing things faster. Now that it's clear that my systems are good.

Of course other than borrowing money for myself, I cannot consider other solutions, because we're in this together now, and it would be problematic to split up or find other separate solutions, such as getting different funds. I would neither want them to leave and take my systems with them, nor would I want to get other investors on my own and split the profit with them, nor would I want to do it behind their back. And besides, finding new investors would be a pain, with all sorts of potential problematic implications. So the only way I could do this, without feeling dishonest and without creating trouble for myself, would be if I borrowed 30k from someone or a bank, and invested it all by myself.

The problem with this is that, as i said, I do not trust myself. I know which systems work, I know their drawdown, I know everything I need to do to make the 30k grow, but I don't know what I will do once that money is in my account and entirely within my control.

I could easily lose my temper in case of a big loss, try to make it back by doubling up, and lose the whole 30k. It already happened before and that is why I am currently paying back my debt of 10k to my bank and employer.

As Freddy Mercury sings, "I've paid my dues time after time" and I am paying my dues, but unlike him, I'm doing my sentence because I've commited a crime, which is compulsive gambling, revenge trading and all that.

Let's hope that the rest of the song will also come true:

 

[Yamato]

relaxation continues

I managed to sleep some hours in the afternoon. It's very unusual for me. Usually I am so tense all day long that I can't just fall asleep in front of the tv. Of course I have previously locked all doors so I can feel safe.

Still this didn't prevent the neighbour bitch from slamming her door and waking me up after about 2 hours.

I've talked to a friend from the bank. We rejoiced about my new success thanks to the investors, also, because, as we mentioned, while i was on my own i was only able to go up and down and more down, and blow out my account endlessly.

I've told him I will receive some money every month, and that this is great news - we both agreed - because i used to lose some money every month.

We've said how my dream of becoming a millionaire is not going to become true (not in the short term) and I've had to become more realistic and now the dream is just quitting my job soon.

He's quite stingy, and when I told him that I will make a few extra hundred euros a month thanks to this arrangement, he was impressed I am sure.

I mean - let's face it. One thing is to dream of millions and make nothing and another thing is to not dream and make hundreds. Tangible money is always impressive. I used to feed my mind and imagination with non-tangible potentially huge gains, and now I am almost unhappy seeing tangible limited money, but others, who were not having my same delusions, get more impressed by 500 euros that are constant and tangible than by the potential millions of dollars I've kept talking about for years. These few hundred euros will impress them much more than years of talking about millions.

It is just me who's not impressed, because I actually did believe in the millions I was talking about, so to me they were as tangible as real money being wired to me. I was almost leaning on the million I still had not actually made. That is partly what lead me to gambling, because let's say today I made 1000 dollars from my systems. Then if tomorrow I lost it, that would have been unacceptable to me, because I was already leaning with all my weight on the 100% per month I was expecting to make. So every 1000 dollars loss happening, and taking back the gains from the previous day, made me lose my balance and engage in gambling to make it back. That's how, instead of making money, I was losing money.

Just now I was think how I recently agreed with the investors that there's no need for outside funds nor to set up an investment fund. Well, let's think about this for a second. They said it would be a burden to get asked questions and to do all the paper work. I am not sure anymore. They said that if we invest a few hundred thousands we'd all be happy without the need for outside interference, and without being bothered by what is truly a pain in the ass.

Let me think about this.

I can see how it will be faster to be investing 200k than to get 10 millions from others by setting up a fund. But how much do I make per month with that kind of investment by them? About seven times as much as I'd be making now.

So... we're making... 4k per month, I'm making 500 euros per month... I'd be making 3500 euros per month: yes, plenty. And that happens only as long as we keep scaling up. Then, if we stop scaling up, I make twice as much. Then I can reinvest it in my own account, and then... as usual travelling fast with my imagination... then I can make an extra salary by reinvesting it on my own account. What can I do with 3500 euros per month? Plenty. Yes. Then let's not worry about it. We don't need other investors. But I have to convince them on scaling up as fast as possible, which I am already doing anyway.

I wish we could start tomorrow. With 200k, straight away.

 

[Yamato]

still awake

still awake at 3 am

i drank 20 cl. of prosecco and feel quite drunk, to my surprise

i am here enjoying my freedom, with the laptop on my lap

freedom to have free time, lots of it. no worries.

freedom from punctuation and other rules

 

[Yamato]

Our time is up, Neil. I believe we've made a breakthrough today.

http://www.putlocker.com/file/48GCQPBI3I4GSK44#

Spoiler alert: watch this clip below only until you have decided to watch the movie (link above), but not any longer or it will spoil it. If you haven't decided yet to watch the movie, you might as well watch the clip at least.

http://en.wikipedia.org/wiki/Running_with_Scissors_(film)#Soundtrack

http://en.wikipedia.org/wiki/Augusten_Burroughs

In many ways it reminds me this film:
http://en.wikipedia.org/wiki/Prozac_Nation_(film)

which, I also suggest you to watch:
http://www.letmewatchthis.ch/watch-11422-Prozac-Nation

Actually which is even better.