my journal

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wprins said:
Found this post on will power and self discipline and how to improve that, I thought the author's reflections were quite on point and useful. (Motivates me to really make effort to improve in that regard this year.)
Click to expand...

Awesome link.

Travis - you needed this holiday break. No trading and some thinking have made the most profound change yet.

Without wishing to lecture, it seems to me that you're mind has opened up enough to re-read your log. Go back and look at some comments others have written... I think you will appreciate what you have going.

dog4
 
Well, the way I see it is that I did benefit from readers such as wprins and weighbridge, and from the books they and others have advised me to read. Also it was helpful to read private messages from people worried about my compulsive gambling. Because I feel an incentive to become profitable, at least to do it for them. I felt bad for people worrying about my gambling.

But I think I got the most out of my own thinking and writing. To me this journal is like free psychoanalysis, and the readers are my psychiatrists. They don't talk, but they are listening, just like a shrink, except for free.

I am saying the biggest help came from myself, because, among the other things, it cannot be otherwise, since I usually do the opposite of what people try to make me do. So I'd go as far as saying that I've understood some important stuff, despite other people's advice. But I'll agree that some people have managed to get me to listen to them. Certainly not those writing short posts with a lot of "!!!" and "???" in them: whether or not they were trying to help me, they pissed me off quite a bit. I am giving the award for "most patient reader and writer" to wprins. I think I really tested his patience with a lot of objections, corrections, remarks, and he still didn't tell me to **** off, so I now listen to him, even though I'm still quite capable to decide by myself. If there's a mistake I'll never make is to follow some guru or someone talking on CNBC. I simply look at the charts, and listen to myself, even too much. Yeah, maybe this journal gave me a good opportunity to hear what others thought.

For example, Elder and Douglas benefited me (only because I was ready to read them and understand them), and I owe this to advice from readers who somehow, patiently, got me to read them. I already thanked me in previous posts.

(By the way, wprins: I changed the bracket order back to a risk/reward ratio of 1 to 2, with stoploss at 0.01%. I think it's best to train myself to some more accuracy, and also I don't want to have to take 400 dollars losses on the EUR, because that is a bit too much for me right now, psychologically).

But also many thanks to you and the others who tell me: we're following you and we see improvements. And: keep going, you're going in the right direction.

Thanks to everyone, even those trying to help me by writing "Stop doing this!!!!!" and "do you understand????", even though obviously I get pissed off each time I read their posts.
 
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I just saw clearly how differently I think when I am betting money and when I am paper trading.

I have an ongoing trade LONG on the EUR open since Friday. The GC also looks bullish, and I went LONG on it (to practice and see how good of an edge I have with my predictions).

Both open trades look as good, yet I have not considered closing my GC early, whereas I just caught myself wondering whether I should close my EUR early.

Why? Because when money is on the line, you get more insecure. I guess this talk could apply quite similarly to a surgeon, whose work decides the lives of others.

So, one more reason to do more paper trading: I guess if I'll get very confident with my paper trading, I will transfer that confidence into my real money trading. Otherwise, you might never be able to get the practice and develop the confidence needed to trust yourself and your edge.

This is a change: it wasn't until I started to think of this douglas' probability approach that I've really accepted the thought of paper trading. Until now, I've recommended it to everyone (only since this year, before I totally ignored the benefit of it), but haven't been able to do it myself. Why? Because deep inside, until now, I had always thought that all my future trades would be winners and that doing paper trading would mean wasting good opportunities. But if you think in terms of probability, your next ten trades will ALWAYS have 8 winners and 2 losers. If you think in terms of pride: you will have 10 winners out of 10, and paper trading will waste potential profits.

Probably that's not enough to explain it. On top of my pride-ridden approach to trading, there's my compulsive gambling and trading addiction, that demanded emotions and excitement. And you cannot get that out of trading if you are just paper trading.

Probably also other things that I am not realizing, as usual.
 
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Another fellow trader on twitter sent me this interesting link:


While I'm personally not that keen on using MA crosses as entry signals (because they lag), the overall gist of what this guy says is nevertheless very useful and is similar to what Bill Williams does with his "Alligator" for trend and price action analysis. (Interestingly enough Bill Williams also uses Fib numbers for his MA's, 3,5,8 etc.)

Hope that's interesting/helpful.
 
Don't miss this video below. High quality material.

http://www.tradingapples.com/sam-se...ding-exact-process-behind-movement-price.html

Oh yes! This is great: at minute 29, he says "who cares about volume". This guy I really like! Finally someone who's teaching and he's telling me that volume doesn't matter, and that I can just look at candles. I like to keep things simple.

For the rest, it's very high quality material. I love it! But I must say that I don't fully understand everything he's saying yet, or rather I understand it, I've eaten it all, but I still haven't digested it.

Here's the deal: I took in all he said, then looked at a chart and I have to say I think I can read it better, but if it was chinese to me before, now it's greek. I mean, I draw lines, etcetera, but I don't see prices react to the lines I drew. They do, but only partially.

Snap1.jpg

I mean, I've always been able to read charts without ever reading any books about it, but this guy seems trustworthy, very much so, and I feel that through his videos (sam seiden we're talking about) I will learn to read better. Let's say that if now with my bracket order I could have a 60% accuracy, after hearing and digesting (and further doing research on what he says) all of sam's videos, I could bring it up to 90%.

What I did learn, from this video by sam and the others by shoot, is that you should not follow moving averages nor wait for confirmation. Because yes you do gain in terms of confidence about the move, but what you gain in terms of confidence about the move you lose in ticks because you enter late. So if you enter earlier you could actually afford to be 5 ticks ahead or more by the time the crossover happens. But to enter early you have to know a whole lot about support and resistance levels, and all these mother ****ing lines can come from a bunch of different sources and timeframes, and that is what is pissing me off by how unclear it is (I want a clear list of all sources of support/resistance levels). So in summary, I have a feeling that people who enter at support and resistance trade differently from people who enter at moving averages crossovers. Yes, because these guys, seiden and shoot, said repeatedly that the "guys who know" (who take money from those who don't know) do not go long after the move has gone on for a while, and yet that's what happen when you enter with a moving average. So this leaves us with very few choices: they go long at support and at breaking of resistance, and viceversa (but I have a feeling seiden doesn't trade breakouts). So, support and resistance trading has pretty much nothing to do with moving averages. I've discovered this world of entering when a given price is reached a few months ago, when someone on this journal told me to give pivots a chance (I had always assumed they were bull****). That's when I understood the concept of entering against the current move simply because price reached a certain level. But now the next step for me is to listen to all of these seiden's videos and try to write down a list of all the possible sources of these support and resistance levels, such as: horizontal and diagonal trendlines (or range lines), pivot levels, same previous lines on different timeframes... it's a whole mess. I want things to be simple and all clear. I don't want anything at a subconscious level.

However, I am going to embrace seiden's methods, because I believe in him, and because i believe in support and resistance, and therefore it doesn't make any sense to go short ten ticks lower, when the moving average has been crossed. Not only this: it doesn't make sense to have to wait around all day, while I could just place a limit order and let it get executed while I am watching a movie.

With moving averages crossovers, you enter late, and you have to wait around to see the crossover take place. With horizontal support and resistance levels, all you have to do is spot it, insert your order and leave.

Maybe the reason i felt uncomfortable with them and felt that price had already to be going my way before I entered, is that I felt all the time "what if I am wrong?". I wanted that extra security of seeing price go my way for a bit before entering in that same direction. Well, but guess what: when you think in terms of probability you're not afraid of catching falling knives anymore (famous trading expression). Because you have your stoploss in place, and if you are wrong you just lose that money. You can actually afford to be wrong, when you have a stoploss.

Another good thing about using horizontal support and resistance levels is that you can make money every day, even in a range. Or also in an strong trend, because sooner or later they bounce. But you can also follow the trend with the breakout method.

Sniper system totally abolished. The only thing I am retaining from it are the correlations and the pivots and the bracket order. Basically everything except for the moving averages.
 
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My moves are on the hourly chart. Screw the 1 minute candlesticks. No point in spending the whole day going crazy over 1 minute candles. Hourly chart and multi-hour moves.

This is where I am at right now. I know I've been changing like some readers have pointed out, but so what.

Seiden and those videos were very useful in making me understand the meaning and importance of support and resistance. But other than that i am not going to watch them any more. They are all good but for intraday trading. With what I'm going to do, one or two trades per day, that last several hours, I won't need to study any more. Actually for my timeframe, what's more important is what time of the day it is: more important than support and resistance even. The edge is there. Now all I need is to use the stoploss, which is going to be wider, 0.3%, with takeprofit at 0.6%, but I can exit trades early when x hours have passed and its potential is exhausted.

I am done with the edge. I am done with the part of getting it right, I need to focus on what happens when I get it wrong.

I am also done with talking and talking and thinking out loud and discussing. Now I'll just focus on doing. I've been thinking and writing enough. I'll just come to write some more thoughts and most importantly to let you know if I finally figured it out and how my balance is reflecting that. Also, I'll come for the automated systems updates.
 
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This support and resistance talk is growing on me as the video above says. I am looking at charts in a different way. Rather than where it's going, I am looking now at where it will stop. In a sense it's the opposite of "the trend is your friend": but you can do this only if you master the understanding of support and resistance and have noticed, like i did, the impact of the time of the day. Support and resistance reasoning is actually good for me, because of my old preference for top and bottom picking. If I can do this right, it will allow me to resume my old awful habit of top and bottom picking, but in a profitable way. Seiden and the others are really growing on me and they're making a lot of sense. In other words, I am seeing that support and resistance do exist, are identifiable, and they're not just random lines drawn on a chart that work occasionally. Another important help I got it from a reader who, on msn, simply told me: "why would you exit arbitrarily? why not use pivots?". Knowing that he's profitable and he said that, I gave pivots another chance and found that they work (not just for exits but also for entries of course). Same applies to seiden and the others: knowing they're profitable, I gave their support/resistance talk a chance, and noticed that it is true.

As a matter of fact seiden talks about top and bottom picking in this video (minute 4:40):
http://www.tradingapples.com/sam-se...el_-quantifying-supply-resistance-demand.html

We absolutely want to pick tops and bottoms, when it's according to our rules...
Click to expand...

My logic didn't fail.
 
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