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1) time is 15.00 to 20.00 CET
1) it's your first discretionary trade today (you can't trade discretionary outside this system)
2) your entry and your take profit are >=10 ticks away from any pivot lines
3) you've looked at "correlated" chart (both 1 month and 15 minutes)
4) the 225-period ma is in favor by > 10 ticks
5) the 15-period ma gets crossed by price (in favor) after being on the other side >= 4 minutes
 

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I'm sorry for that - it was a snap response, which I should've edited out. (I did in fact clarify etc as you saw, however I should've edited that initial response out as it was a bit sharp.) My apologies again! :eek:

Yes, this has to with my problem also, because I take any "no" very personally, since my dad spent his lifetime telling me I was wrong. He does it with everyone. His sentences always start with "no, because...". So I've taken enough "no" (from him) for a lifetime, and I can't bear to hear any more "no".

I like the analogy, I'll see what I can come up with.

Remember, all I am asking for is a quick list of rifles that seem reasonable to you. And if they're good, I'll drop my gun and use what you suggest. It's got to be as simple as +/-5 handgun. Or +200 / -20 bazooka...
 
My only discretionary trade allowed for the day

For some reason the chart was changed (see previous picture for reference), and now it looks like my fast ma crossover never took place. Actually it took place, and I bought for cheaper than the crossover because I got lucky with the wide swinging happening in that precise minute. Then 20 minutes later I exited with about 20 ticks profit. Too bad I can't trade again today, because that was my rule. Now let's see if I'll follow this rule or not. With me, you can never be sure, after 12 years of gambling.

Here's the trades I made with my +/-20 ticks rifle so far (I've modified the rifle, and now do not allow more than 1 trade per day, and do not allow early exits anymore):

20091130: takeprofit
20091130: takeprofit
20091201: early exit with 1 tick profit
20091202: stoploss
20091203: takeprofit
20091204: early exit with 5 ticks loss
20091207: takeprofit

If in two months I'll have more than 40 kills out of 50 shots, I will start trading 2 contracts at a time. But always one shot per day. There's no point in suggesting to bet 2 contracts only if I am positive about the trade, because I shouldn't be taking a shot unless I am already positive that I'll hit the target (which does not rule out that I could miss).
 

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Right... what the hell am I gonna do for the rest of the day, plus tomorrow will be vacation here in Italy, so what do I do all day tomorrow? A sniper with just one bullet per day? That's right. I need to only have one bullet so I will value my shot. It's actually the most efficient way to increase your accuracy. You'll get to pick your target among plenty of opportunities, and have plenty of time to think before taking your shot. I believe the sniper analogy is the way to go.

You know what would happen if I had 3 bullets? I'd take three shots and miss one. And, after commissions, that would give me less than what I made with just one shot, because the win and the loss cancel each other, but I still have to cover their commissions.

And if I had 6 bullets? I would miss not two, but three. And that would mean zero profit. Actually negative because I'd have to cover all the commissions.

So now I'll go to watch another sniper movie. I've already watched these three:

Sniper
(not finished because I fell asleep)

Shooter
(pretty good, but a lot of fantasy: hollywood happy ending)

Enemy at the Gates
(too violent but the best because biographical)
 
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Right... what the hell am I gonna do for the rest of the day, plus tomorrow will be vacation here in Italy, so what do I do all day tomorrow? A sniper with just one bullet per day? That's right. I need to only have one bullet so I will value my shot. It's actually the most efficient way to increase your accuracy. You'll get to pick your target among plenty of opportunities, and have plenty of time to think before taking your shot. I believe the sniper analogy is the way to go.

You know what would happen if I had 3 bullets? I'd take three shots and miss one. And, after commissions, that would give me less than what I made with just one shot, because the win and the loss cancel each other, but I still have to cover their commissions.

And if I had 6 bullets? I would miss not two, but three. And that would mean zero profit. Actually negative because I'd have to cover all the commissions.

So now I'll go to watch another sniper movie. I've already watched these three:

Sniper
(not finished because I fell asleep)

Shooter
(pretty good, but a lot of fantasy: hollywood happy ending)

Enemy at the Gates
(too violent but the best because biographical)















'' Well, what I mean by that, sir, is... if you was to put me and this here sniper rifle anywhere up to and including one mile of Adolf Hitler with a clear line of sight, sir... pack your bags, fellas, war's over. Amen. ''
 
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Perfect example for my analogy: he shot too many times, gave away his position, and died. He got greedy and overtraded. He should have just shot 3 times and moved somewhere else. You see how after a few shots he starts missing more and more... because the excitement is getting to his head. Or maybe because he's in a movie and that's putting pressure on him. Never shoot at people while so many people are staring at you.

This analogy could also apply to me, in the sense that it might not be good for my concentration to keep trading live on my journal. But right now it's helping me much more than hurting me, because I care to show you that I'm being disciplined and that I'm only taking one shot per day, and according to the rules in my discretionary method. Hopefully, as they say, "one shot one kill" (look, someone else thought of this analogy). Once I'll have learned discipline thanks to this journal and its readers, I will stop posting. Maybe after the first 100 trades, in 5 months (hopefully I won't change my mind about one trade per day). Even if I'll be satisfied with just being disciplined, I am increasingly confident that I'll be profitable. Maybe not by much, but definitely profitable. And that would be already a miracle for me, considering that I've lost money each month of the past 12 years. If I'll be profitable, I will owe it to this journal and to its readers.

---

More on John Netto:
John Netto is President of One Shot - One Kill Trading. He is the author of "One Shot - One Kill Trading: Precision Trading through the Use of Technical Analysis" (McGraw-Hill, 2004). John has worked with buy-side firms, sell-side firms, and technology providers on more efficiently combining structure, strategy, and personnel to increase trading profits. John has presented on behalf of Eurex, The CME Group, The ICE, The ISE, Interactive Brokers, Thomson Reuters, Profit-Loss Forex Conferences, as well as appearing regularly on Forex TV, Fox Business Channel, The Money Show Video Network, and many other media outlets.

He has published numerous articles and lectured on topics ranging from "Dynamically Delta Hedging Your Option Portfolio", "Techniques and Methodologies for Equity Index Spread Trading", to the more qualitative issues as "The 10 Attributes of a Great Trader." Mr. Netto used his nine-year US Marine Corps career and travels to the Far East to learn to speak, read, and write Japanese and Chinese, helping him articulate his vision of trading to an international audience.

Here's a video on John Netto. Quite interesting. Each time I have the prejudice that all these people selling trading courses are scamsters, but I am starting to think it's an unfounded prejudice. I still don't understand why they bother to sell their courses if they know what they're talking about and therefore can make money from the markets. Or maybe they're teaching useful things, but can't make money with trading. Maybe like me: I'm still unprofitable but some things I say could be useful, and I've been writing on forums, thinking out loud, since 2001, when I was so far away from being profitable... but the difference is that I don't lie about my unprofitability and that I don't sell courses. But maybe this guy is an exception and not a scamster: in the video he talks about discipline, he was in the Marines... like Travis Bickle himself... he chose "one shot one kill" for his web site... maybe he knows his stuff... but I still don't understand why he has to go through the trouble of selling courses (I can't help it: it will always seem a contradiction to me that a person who can trade profitably sells trading courses).

 
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Remember, all I am asking for is a quick list of rifles that seem reasonable to you. And if they're good, I'll drop my gun and use what you suggest. It's got to be as simple as +/-5 handgun. Or +200 / -20 bazooka...

Hmm, I'm not sure I can pick values a simply as that. You need to consider the reward:risk ratio of the trades involved (the size of the game) as well as the conditions they're in (how far will they run, how close can you get to them etc.) If you're hunting on an open plain, the prey may run a lot further than if you're hunting it in a thicket of trees in the woods, for example.

Following the analogy: When you're hunting big game you use a big game rifle, which of course uses more expensive ammo. When you're hunting small game, you use lighter weaponry. When you want to take out a tank you might use a bazooka. So one must pick the right ammo/weapon depending on the prey you're stalking.

Let's firstly define the weapons based on the cost of the ammo (size of money risked/stop loss):
Handgun = 1% of account
Hunting rifle = 2% of account
Bazooka = 3% of acount

Now lets define the animals based on the reward they will give you when you get them:
Small game: Anything yielding better than 1:1 Reward:Risk up to 2.99:1 (say.)
Medium game: Anything between 3:1 and 5.99:1 Reward risk (say)
Large game: Anything larger than 6:1 (say)

Rules:
1.) You're only allowed to use your handgun for for small game.
2.) You're only allowed to use your Hunting rifle for medium game.
3.) You're only allowed to your your bazooka for Large game.

Note, the values are sucked out of my thumb so you would need to try them and adjust/tweak them as appropriate.

As for actual tick/pip/point distances -- again this will depend on the terrain. If you're in a wood you'll have lots of resistance/support close by. Your targets and stop losses will then be relatively close. In a more open terrain the distances will of neccesity be larger so both your stop distance and targets will likely be larger. But, in all cases the % risked over that distance should be as prescribed for the animal you're hunting, no more.

Hmm, I think we might be reacing the limits of this analogy... ;)
 
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Hmm, I'm not sure I can pick values a simply as that. You need to consider the reward:risk ratio of the trades involved (the size of the game) as well as the conditions they're in (how far will they run, how close can you get to them etc.) If you're hunting on an open plain, the prey may run a lot further than if you're hunting it in a thicket of trees in the woods, for example.

Following the analogy: When you're hunting big game you use a big game rifle, which of course uses more expensive ammo. When you're hunting small game, you use lighter weaponry. When you want to take out a tank you might use a bazooka. So one must pick the right ammo/weapon depending on the prey you're stalking.

Let's firstly define the weapons based on the cost of the ammo (size of money risked/stop loss):
Handgun = 1% of account
Hunting rifle = 2% of account
Bazooka = 3% of acount

Now lets define the animals based on the reward they will give you when you get them:
Small game: Anything yielding better than 1:1 Reward:Risk up to 2.99:1 (say.)
Medium game: Anything between 3:1 and 5.99:1 Reward risk (say)
Large game: Anything larger than 6:1 (say)

Rules:
1.) You're only allowed to use your handgun for for small game.
2.) You're only allowed to use your Hunting rifle for medium game.
3.) You're only allowed to your your bazooka for Large game.

Note, the values are sucked out of my thumb so you would need to try them and adjust/tweak them as appropriate.

As for actual tick/pip/point distances -- again this will depend on the terrain. If you're in a wood you'll have lots of resistance/support close by. Your targets and stop losses will then be relatively close. In a more open terrain the distances will of neccesity be larger so both your stop distance and targets will likely be larger. But, in all cases the % risked over that distance should be as prescribed for the animal you're hunting, no more.

Hmm, I think we might be reacing the limits of this analogy... ;)


Thanks for the information and opinions, and I apologize if I have been misleading by talking so much about my analogy. What I should have asked directly is this:

Right now I am using a 20 ticks takeprofit and stoploss: it seems to work in all types of days for me (you know what my system is, and that is part of the "rifle"). What do you think of it? Could you hit your targets with this rifle? What would you change about it? Stoploss or takeprofit? Would you rather use a trailing stop? Would you trade in an entirely different way? (I am not asking you to give me your trading system, but just to suggest improvements to mine).
 
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I say forget "risk/reward babble", and focus on accuracy, by using the SAME gun

All these movies I've been watching and some reading I did on snipers really made me understand that despite everyone talking about risk/reward and forgetting accuracy, the best thing to forget would be risk/reward. That's the least important thing. If we don't mention it, one can take for granted that risk/reward is 1 to 1, whereas accuracy is what has to be stressed out. You can develop accuracy by practice. Your 20 ticks bracket order is your gun. You get this gun as a newbie trader, then it's all up to you to worry about improving your accuracy. You should never change your gun or you won't get good at it. Also, you can paper trade all you want. This is what I should tell my friend who's just starting out, and what they should have told me to do from the start, but my friend is like me and he won't listen to anyone and wants to do it all by himself.

What screws everyone is that they keep on changing guns
If we gave a 20 ticks bracket order gun to anyone, even a child, they couldn't help but improve little at a time. At the beginning they might be at 50/50 or even worse, or even much worse. Then they'd reverse it... improve... improve... improve. There's no way you can't improve at this with practice. Anyone could become profitable after 500 shots (in paper trading). What screws everyone is that they keep on changing guns (and use guns that don't have stoplosses). If you're given a pretty good gun, even a standard one, you can definitely become profitable by practicing with it. Especially because a 20 ticks bracket order gun used to shoot BUY or SELL is like shooting an elephant that's 6 feet away from you: even by shooting randomly ahead of you, you have a 50% chance of hitting it.

So I say forget this "risk/reward babble", and focus on accuracy and on improving by always using the same gun. Anyone can become profitable (for free, with paper trading) within the first 500 shots fired, as long as they do not change gun.

You could hand them any gun, even a 5 ticks bracket order. And they would learn to become profitable with it. Maybe it is not the most proper gun, but they'll find a way to hit the target with it. Give them a 100 ticks bracket order gun, and they'll become totally different traders, and develop a totally different mindset: just do not allow them... or rather ask them how often they want to shoot and then pick the best gun for them. Then make them stick with it, and they'll become profitable. Want to shoot one a week? Give them a 100 ticks bracket order gun. Want to shoot once a day? 20 ticks bracket order gun. Want to shoot 20 times a day? Give them a 10 ticks bracket order gun.
 
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More on trading like a sniper...

After finding Netto's web site, called "One shot one kill", I got curious and did a search on google: "trader like a sniper".

I found some people who've had just my same idea, and I'll quote some interesting concepts (in bold the ones I can relate to the most), after providing the link:

http://traderfeed.blogspot.com/2008/05/trading-like-sniper-blending-aggression.html
I outlined how a trader's very achievement motivation can lead to "pressing": trying so hard to make trades happen that trading plans and rules are abandoned. This often happens when traders become frustrated with losses or slow markets and try to make up for the lack of results by sizing positions too aggressively or by taking too many positions. Traders press when they feel pressure, whether for profits, for action, or to achieve competitive advantage over other traders.

The result is a loss of self-control, as aggressiveness takes over and judgment takes a back seat. Successful trading may be discretionary or system-based, but it should always be rule-governed: controlled by basic considerations of risk management and opportunity. Indeed, this might be an apt definition of poor trading: when the need to trade overwhelms the need to preserve and add to capital.

One of my favorite posters in my office is of a military sniper in the field, peering out from ground cover. The caption beneath the picture reads, "The sniper's greatest weapon is a sharply honed intellect. He combines a mastery of stealth, situational awareness, ballistics and precision shooting skills into one of the most lethal weapon systems to ever strike fear into the enemy."

If the sniper became too aggressive and excessively bored with sitting in the field waiting for the right shot, he might leap from his cover and begin spraying the enemy with fire. Most of the shots would probably go wild, and the out-of-control sniper would quickly be located and mowed down.

No, the sniper waits for the ideal shot: "stealth" and "situational awareness" are essential tools of the trade. Being a sniper means combining aggression with exquisite self-control and judgment. It is controlled aggression.

Over the years, I've learned to trade like a sniper by not placing one trade after another in rapid succession. When a trade is concluded, I go flat and wait for a fresh setup. During the waiting time, I refresh my "situational awareness" (assessment of market conditions, my own condition), and return to my basic trading rules.

The idea is to trade only when I have an unobstructed view of the target. Everything else is waiting and preparing, staying low in a defensive posture. It's the time between those shots at the target that provide the self-control. It is difficult to press if you take the time to reassess, reload, and return to cover after an errant shot. With repetition, that reassessment and reloading become automatic: your default mode becomes one of self-control.

Plan. Trade. Reassess plan. Trade: It's a rhythm that combines the best of achievement motivation and aggression with the best of judgment and forethought. It's a beautiful feeling to plan one good trade, execute it to perfection, and then sit back and wait for the next opportunity. Any performance skill, honed and executed with precision, is a kind of work of art. I think the best snipers understand that.


http://traderfeed.blogspot.com/2008/04/perils-of-achievement-motivation-when.html
A deadly pattern among some of the best traders is to channel achievement motivation into trading *more*.

The best traders do have a strong achievement motivation and work quite hard at their craft. That achievement drive makes them hate losing. Their impulse is to go for the jugular; they want to not only achieve, but achieve *more*.

This drive can be a trader's greatest weakness, however. It can lead to stubborness in taking losses, leading to outsized losses. It can also lead to overtrading, as the driven trader attempts to *make* things happen. That is a particular recipe for disaster on slow, narrow days such as yesterday, when it's easy to get chopped up jumping aboard seeming trending moves.

The net result is that *pressing* to achieve can take the trader out of his or her game. It subverts risk management by leading the trader to trade too large, without careful attention to stop loss points. It also interferes with decision-making by leading the trader to take trades without an objective edge.


The link itself says it all in this case "sniper-training-the-cure-for-over-trading" (in red what applied to me):
http://www.thecrosshairstrader.com/2009/05/sniper-training-the-cure-for-over-trading/
One of the trader’s biggest psychological barriers to overcome is over trading. Of course, over trading is relative depending on the type of trader you are and the time frame(s) used to make trading decisions. However, if you have a well formulated trading plan, you will know from past experience when you are walking the line between planned trading and over trading.

Here are some of the symptoms of over trading:

1. not sticking to a plan or system
2. taking trades for no clear reason
3. taking on larger than normal positions
4. second guessing your system
5. jumping the gun (entering a trade in anticipation of an affirmative signal/pattern)
6. obligatory trading (if I am not in a trade, then I am not working)

The underlying cause of over trading is purely a lack of confidence either in yourself and/or your system. If you truly believe that your trading strategy provided X number of highly probable trades over X number of days, then why would you waste your energy (and capital) taking high risk, low probability trades? The answer: lack of confidence. The solution: think and train like a sniper.

According to the dictionary a sniper is a skilled military shooter detailed to spot and pick off enemy soldiers from a concealed place using long-range small arms. The word originates from the snipe, a game bird difficult for hunters to sneak up on.

Looking at just the statistics, more is not necessarily better when seeking to kill an enemy soldier on the battlefield. Here are the stats when looking at the ratio of bullets fired to enemies killed in several major wars:

WAR BULLETS FIRED TO KILL ONE ENEMY SOLDIER
WWII 25,000 TO 1
KOREA 50,000 TO 1
VIETNAM 200,000 TO 1

And the sniper’s stats: 1.3 bullets to kill an enemy soldier!

Charles Sasser, in his book ONE SHOT-ONE KILL, says of the sniper: “In stalking the enemy like big game hunters, these marksmen live out the philosophy that one accurate shot, one bullet costing a few cents, fired with deliberate surgical precision is more deadly and more effective against an enemy than a one thousand-pound bomb dropped indiscriminately” (2).

Let’s contrast, then, the symptoms of over trading as described above and the discipline of the sniper. According to the Sniper Training Field Manual No. 23-10, successful sniping is based on:

1. highly accurate rifle fire against enemy targets
2. the development of basic skills to a high degree of perfection
3. repetitiously practicing the basic skills until mastered
4. highly specialized training to ensure maximum effectiveness with minimum risks

Due to his detailed training for a specific task, the sniper is confident in his ability to perform his sole duty: to kill the enemy with one bullet under stressful conditions over and over again. Building confidence, then, is a product of consistent behavior and sustained success.

In like fashion the trader builds confidence by staying focused on a highly accurate rules based methodology via repetition. This methodology has proven to be highly successful when followed with a high degree of perfection, thereby, ensuring maximum return with minimum risks.

In other words, follow strict rules that provide a high probability of success and in so doing you will have the confidence to carry out your plan under various market conditions. The result will be a rising equity curve.

What's really interesting and surprising to me is that in all these 12 years, despite the fact that I am such an obsessive maniac and perfectionist, I never realized that I could apply myself obsessively, with the same gun, to learning how to take shots at a given market (the EUR for example). In 12 years by now I'd be getting a 90% accuracy. Instead of obsessively focusing on something, which is what I usually do with everything I do, in this case I made an unfortunate exception: I kept changing. I kept changing financial instruments (which was a good thing, because futures are the best), I kept changing methods, and I kept changing underlying markets. Why? Simple, because I wasn't making money. So I kept on changing guns trying to find the gun that would get me to hit the targets, whereas all I had to do is learn to use one gun. It wasn't the guns that were wrong: it was me who wasn't aiming properly. I was just shooting my bullets away (like the above quote: thousands of bullets wasted per target), without even taking the time to aim. Then I'd switch weapons. But most of all: I never did any free target practice with paper trading, which is available to anyone. It's unbelievable how stupid I was, given my habit of obsessively practicing one thing over and over again, and how I didn't do it in this field. To be forgiven, I must remind myself that in trading you know you're not making money, but you don't know what's wrong: no one will tell you "you're using the best gun in the world, so there's something wrong with you". So you keep on changing gun. As I said earlier: all you have to do is get a gun (bracket order of 20 ticks in both directions), and you just keep practicing and you can't help but get better - as long as markets are not random and they aren't. It's as simple as aiming at anything, or learning any musical instrument. At the beginning you'll get 50% accuracy, unless you have a tendency like me to go against the trend: in that case you'll get a 10% accuracy, but you'll immediately know you're doing the wrong thing. Then you'll immediately reverse your bet, and get a 90% accuracy or something like that. I don't know - maybe I am exaggerating, but you get my point. What one must not do is use a gun that doesn't have a stoploss. Say something like a take profit of 20 ticks, and stoploss unknown. How are you going to learn with that, if on your first mistake you're dead? That's like a gun exploding in your hands.

But one thing is true and it must be said: if you don't have the patience and you allow yourself to shoot without first focusing, you won't stay a good shot, and could get worse and unlearn things. The more you'll focus, the better shot you will be. I remember I was quite good at playing pool. But I played well depending on my mood. If I was upset (best if upset at the other player) and very serious, I played great because of the great effort and focus. If I was in an easygoing mood, I played awfully because I didn't care about winning. So I guess if I'll allow myself to shoot more than once a day, I'll focus less on the shot, no matter how good I'll get at shooting, and I could still miss and lose my ability to hit the target. But, with rules implemented, your aim can only worsen so much, because the rules you have in place already guarantee a certain degree of accuracy. I'd say my rules guarantee by themselves about 60% accuracy, but with my effort and focus I could be 80% accurate. I'll see in the coming days. For now I've noticed how I am being profitable for the first week of my trading life. And I also have a good feeling of non-recklessness when I trade.

More quotes... I found the book by that Charles Sasser:
http://www.amazon.com/exec/obidos/ASIN/0671682199/awoccomthewriterA/#noop

You can read it on amazon for free, by clicking on "(more)" so I took a snapshot of something I liked (in particular, "he never fired more than one shot a day..."):

70460d1260231219-my-journal-snap1.jpg
 

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Right now I am using a 20 ticks takeprofit and stoploss: it seems to work in all types of days for me (you know what my system is, and that is part of the "rifle"). What do you think of it? Could you hit your targets with this rifle? What would you change about it? Stoploss or takeprofit? Would you rather use a trailing stop? Would you trade in an entirely different way? (I am not asking you to give me your trading system, but just to suggest improvements to mine).

What I think is this: While it's good that it appears to work in all markets, I suspect it may not be optimal for all markets. Perhaps this is self-evident, perhaps it doesn't matter. What I was trying to allude to is that (perhaps only eventually) you learn to recognize when a trade is potentially a very profitable one (or if you have a mostly mechanical system, then the system tells you via its rules.) When you've identified a more profitable/high probability trade, it's then arguably worthwhile to use slightly bigger position sizing to maximise profits.

Maybe it's the case that if you stick to the sniper analogy that you don't even bother with the lower probability/profitable trades at all, and only shoot exceedingly sparingly at only the best targets with the highest reward:risk ratio's. The trouble is then you may end up trading *so* infrequently that your rate of progress (of capital accumulation) suffers possibly needlessly due to being needlessly uninvolved in the markets. This may be good to sleep at night (no bad thing), but it may not be ideal with respect to your account growth goals as you potentially end up sacrificing perfectly reasonable (but slightly less profitable) trades that would've kept your account ticking over and growing. But I think I see your point. For most traders (certainly myself), overtrading is the much larger problem than under trading.

The chief issue I have with a fixed 20 point stop is that it takes no account of the realities of the market you're trading. In some markets, 20 points may be too much while in others you'll get stopped out repeatedly with only a 20 point stop due to the massive moves. So generally speaking I would suggest that your stop position should be determined by the support/resistance areas in the first instance, more specifically you should at least aim to place your stop several points above/below the most recent major swing point high/low. Ideally also have a look at the daily Average True Range for whatever you're trading to get an idea how much extra breathing room to allow. Similar observations can be made about the take profit. For some securities, a fixed 20 point target may be optimistic while in others it may be needlessly conservative.

Having said all that, if the 20 point target works for you in your market with your system, then stick to it. I would however experiment with other values and/or make the actual values used dependent on e.g. the trading channel size and/or the ATR (Active True Range) and see if that improves your system's profitability.

It is interesting that you hold the opinion of the markets not being random, which is an opinion I strongly concur with. I've not (yet) read the book "A random walk down Wallstreet" or "Fooled by randomness" (though I intend to at some point so I don't misunderstand or misrepresent the author's points of view), but suffice it to say that right off the bat I don't agree with the apparent premise implied by the titles that the markets are *actually* random. I rather suspect such authors have limited or no knowledge of applied math and specifically chaotic systems and chaos theory (though as I say, I may be doing the authors an injustice as I've not read the books yet.) Basically I suspect it's probably closer to the truth to regard the markets as some sort of chaotic system, rather than a random system. I think the difference is very impportant.

The thing about chaotic systems is that while they may appear to be random (from certain points of view), the reality is that they are essentially the antithesis of randomness and are hence anything but random. Nevertheless, unfortunately chaotic systems are notoriously difficult to predict, although limited areas of predictability must and do exist. So hence my fundamental objection to accepting the notion that the markets are *actually* random -- if you believe the markets are truly random then you in fact deny/rob yourself of and edge in the markets, that of being able to use the (possibly limited) predictability that does nevertheless exist in the markets. Anyway, I'm probably now boring you to tears, so I'll stop thinking out loud now.
 
Thanks for your opinion, clear and detailed as usual. I didn't specify that I was talking about a 20 ticks bracket order on the EUR, because my system has always only been on the EUR. I am referring to the intraday discretionary system. You said correctly that my problem is overtrading (and not using a stoploss), so I can't afford to touch my bracket order because it's my safety net. If I start messing with it, tomorrow I might find myself with a loss of -2000 dollars. Regarding the professors writing brilliant books about random walk, ask me anything because I've recently read the whole introduction of the "non-random walk" treatise (such a brilliant book, with lots of citations). These guys studied years and, while the first guy took 10 years to prove they're random, they only took 5 years to prove they are not random... geniuses... plus I agree with them, because I also came up with evidence that they are not random, in my first 5 minutes of ever looking at a chart. Anyway, good stuff. I advise everyone to read the table of contents of the second book, but even the full title of the book will do, because it provides a good summary of it.
 
... I also came up with evidence that they are not random, in my first 5 minutes of ever looking at a chart...

Indeed. It also stands to reason that market's movements are due to actions by humans, and while humans may be irrational, they do *not* act randomly. Anyone always has a reason for entering or closing a trade etc. So even just from that point of view the markets *cannot* be just random, whatever else you might say about them.
 
Continuing the sniper analogy...

Here's a picture of my rifle, with a detail of its two triggers: "B"
buy.jpg

and "S".
sell.jpg

All I have to do is wait all day for my one shot, and then press either "B" or "S". One single shot will be fired and it will be a hit if it correctly forecasts a 20 ticks move in one direction before another 20 ticks move will be made in the opposite direction. I also attached the pictures of my three best shots so far: my first trade, on 20091130
20091130.jpg

my fifth trade,
20091203.jpg

and my last trade, yesterday.
20091207.jpg

All I need now is to learn an accuracy of 80%, and then I'll be able to increase my contracts to 2 contracts, and then, even without any automated systems, I could make a living from trading. Right now it's all so clear to me that I could teach anyone to be profitable (even faster than I'll teach myself) with one month of practice. All you need is to practice (paper trade) with the same gun (e.g.: see above) on the same market, until your accuracy is good enough that your real trading will be profitable. You must pick a gun that has a stoploss and stick with it.
 
In case anyone doesn't remember the details of my discretionary system (I've posted it many times before), which is part of the rifle I described above, here they are again:

PRO-TREND DISCRETIONARY SYSTEM
HOTKEYS
Set up hotkeys:
"B" for "buy 1 at market" with 20 ticks bracket order,
"S" for "sell 1 at market" with 20 ticks bracket order,
"C" for "close position".
----------------------
CHARTS
SET UP THESE CHARTS ON IB'S TWS:
1 MONTH TO 15 MINUTES OF ES, CL, GBP "line" mode
2 DAYS OF EUR.USD@IDEALPRO 15-minutes CANDLES WITH PIVOTS
4 HOURS OF EUR.USD@IDEALPRO 1-MINUTE CANDLES WITH 15-periods and 210-periods moving averages
----------------------
RULES
ENTRIES can be made if:
1) time is 15.00 to 20.00 CET
1) it's your first discretionary trade today (you can't trade discretionary outside this system)
2) your entry and your take profit are >=10 ticks away from any pivot lines
3) you've looked at "correlated" chart (both 1 month and 15 minutes)
4) the 225-period ma is in favor by > 10 ticks
5) the 15-period ma gets crossed by price (in favor) after being on the other side >= 4 minutes
EXITS
Bracket order of 20 ticks.


TRADES:
20091130: takeprofit
20091130: takeprofit
20091201: early exit with 1 tick profit
20091202: stoploss
20091203: takeprofit
20091204: early exit with 5 ticks loss
20091207: takeprofit
 
Why am I being so generous and posting all this stuff?

1) I don't know yet if it works: I've been changing it for months
2) I owe some of my improvements to the readers
3) I improve by writing here and thinking out loud

I think that, if this system were already 80% accurate and without any discretion needed by me, I would not be posting it, because I would feel it's too precious to share. That's why I said that, if, after 100 trades (in a few months), I'll see that I've learned enough (largely thanks to this journal, that forces me to work in front of everyone) and that my accuracy is good enough, I'll stop posting my improvements and trades, quit the journal, quit the job, and start swimming which was the original plan: quit my job and swim.

But my accuracy is part of the picture right now, and that accuracy gets developed by practice and discipline, and that's happening only because I am writing a journal and I have some readers. If I were on my own, I'd still be gambling all day long, and blowing out accounts every three months. So I am writing everything here partly out of gratitude to the readers for my past improvements, and partly out of continuing exploitation of the readers in order to make further improvements.

Anyone can see, by reading the first 3 months of this journal, how I've been trading until now: the opposite of a sniper. More like someone on a shooting rampage.

Once again: if I were all done with all improvements needed, and ready to go, I don't think I would be posting my system here. Definitely not: in fact, I didn't post my automated systems and that proves my point. Those are ready to go, finished, and I am not posting them nor sharing them with anyone. That's how I am: neither ungrateful nor generous. Nor dishonest. Or let's say that I am less dishonest than average. I wouldn't be selling systems that don't work. Given how I think, I can't understand people selling courses and even less trading systems. I can understand people explaining their ideas,to share and discuss them with others, on forums. But I don't understand anyone selling a "ready to go" trading system, since I wouldn't do it myself. I wouldn't do it for free because it's not fair. I wouldn't do it for money, because if it works, I don't need money, and if it doesn't work I won't be so dishonest as to get paid for it.
 
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So I am writing everything here partly out of gratitude to the readers for my past improvements, and partly out of continuing exploitation of the readers in order to make further improvements.

You don't have to see it as exploitation. There's nothing wrong with accepting help from those willing to give it. Trust me I wouldn't be here if I felt exploited. There's also nothing wrong with being generous of heart. I actually think you should give yourself a bit more credit - you come accross as a pretty generous guy.

For what it's worth, these discussions/your journal also helps me to better understand my own biases, the realities and pitfalls of trading and served to challenge some of my own views/perceptions surrounding trading and forced me more carefully examine and clarify/adjust others, all of which is very good. So, thank you. I'm actually tempted to start my own journal now, I'm pretty sure my discipline will improve as a result, having the full glare of public scrutiny on my trades etc... (the main reason I've not yet done so is pretty much laziness... :innocent: )
 
Each time I have the prejudice that all these people selling trading courses are scamsters, but I am starting to think it's an unfounded prejudice. I still don't understand why they bother to sell their courses if they know what they're talking about and therefore can make money from the markets.

Or maybe they get some genuine joy/satisfaction from teaching - many people do. And like I mentioned before, some people are just entrepeneurs at heart, they are able to do multiple things, so they do. Also not everyone is motivated solely by a big bank account. For many there are I submit, more important things in life than money. I've read that trading, once you're successful/profitable, can become immensely boring and repetitive, so it's not unrealistic that someone successful at trading would look for other challenging/satisfying endeavours, and it makes sense to further leverage their trading skills in helping others.
 
Yeah, partly you could be right... however, I don't see myself as generous, but as intelligently generous, I am generous when it's convenient for me: if it costs me almost nothing and it benefits the other person a lot, then it's convenient for me to help the other person, because I'll get a lot of gratitude in return (and that's like a potential favor in the future). Instead, if I have to do a lot of effort, then I won't be generous... so basically I am not that generous. For example, people ask to meet me for a pizza, and I say "meeting me won't change your life, it's too much effort for me, so not worth it". I always reject all... I am always sparing myself and my energies. "I"... "I"... "I"... this is one of the reasons I keep a journal, so I can talk about myself all I want.

Maybe you don't keep a journal because you actually mind talking about yourself. And you know that a journal with just a list of trades, without psychological introspection would be pretty empty. So it is not your laziness, but it is rather that I find pleasure in talking about myself so that's perfect for a journal, but you don't find any pleasure in doing so, so you'd have to make an effort to write about yourself - and that's why you talk of laziness, because you don't realize that I'd be making an effort in order to stop talking about myself.
 
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