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The Wizard of Oz Intuitive trading journal

  • #21
  • Sep 26, 2007 7:55am Sep 26, 2007 7:55am
long GBP/USD @ 0145 (buy stop), initial stop 0108

Added @ 0177
  • #22
  • Sep 26, 2007 10:10am Sep 26, 2007 10:10am
Quoting The Wizard of Oz
long GBP/USD @ 0145 (buy stop), initial stop 0108

Added @ 0177
Wasn't too impressed with this trade, but I must remember it's only a loss.

closed @ 0155 SAR - now short from 0155

-0.32R (12/37)
  • #23
  • Sep 26, 2007 7:45pm Sep 26, 2007 7:45pm
I must admit that it is quite difficult to remain detatched, but i must remember that this is just a numbers game.

It's still early days for me and I am still experimenting to a large degree. In time I hope to improve by getting better with my entries and stops. At the moment my aim is to enter where I think there is a high probability of hitting a decent run, and to manage the trade in such a way that I maximise the profit from those runs while cutting my losses as much as possible. My aim here is to get <1R average loss. I have seen that it only takes a few decent runs to cover all losses. I start with a small % position then add if my position agrees with the market - ie. I am in profit. Getting a 50% win will be the most challenging part and it may be that I just have to be more patient. Patient but not hesitant for the longer I wait for confirmation before entry the lower the profit potential of the high R trades. This is what I mean by high uncertainty. The trades that don;t look pretty at the time of entry but have a small enough risk that it doesn;t matter if i am wrong. These are the setups I am searching for, rather than the obvious entries that look so certain - with everything lining up for a "perfect" looking entry.

I may be wrong but this is my thinking.

Wiz.
  • #24
  • Sep 26, 2007 8:00pm Sep 26, 2007 8:00pm
Quoting The Wizard of Oz
These are the setups I am searching for, rather than the obvious entries that look so certain - with everything lining up for a "perfect" looking entry.

I may be wrong but this is my thinking.

Wiz.
I think you have a good point there. From my experience, the perfect looking setups are obvious to many traders and attract attention from many bears and bulls. Quite often there is a messy fight which takes out most of the tightly placed stops in both dirrections before the big move gets underway. I have the most success when I take profit from the middle portion of major moves rather than trying to hit the tops and bottoms.

I hope you don't mind me putting in my two cents here and there because it helps me to remind myself of things I need to be aware of too.
  • #25
  • Sep 26, 2007 8:04pm Sep 26, 2007 8:04pm
Wiz you know how I feel about you and really glad to see you marching forward(and am enjoying your outlook) and I certainly am enjoying you starting this journal

Best of luck

Mike
  • #26
  • Sep 26, 2007 9:31pm Sep 26, 2007 9:31pm
Quoting Micro-MiniMe
I think you have a good point there. From my experience, the perfect looking setups are obvious to many traders and attract attention from many bears and bulls. Quite often there is a messy fight which takes out most of the tightly placed stops in both dirrections before the big move gets underway. I have the most success when I take profit from the middle portion of major moves rather than trying to hit the tops and bottoms.

I hope you don't mind me putting in my two cents here and there because it helps me to remind myself of things I need to be aware of too.
Yes, these certainly tend to be the whipsaw areas. Tight stops and flexibility in direction in addition to working my winners should result in a positive overall expectancy.

I know it is generally safer to take out the middle part of a trend. perhaps I am jumping the gun a bit. We'll see. I am open to change.

By all means say what you like. That's one of the benefits of this journal.
  • #27
  • Sep 26, 2007 9:32pm Sep 26, 2007 9:32pm
Quoting mbqb11
Wiz you know how I feel about you and really glad to see you marching forward(and am enjoying your outlook) and I certainly am enjoying you starting this journal

Best of luck

Mike
Thanks for dropping by Mike. I always appreciate your input.

Wiz.
  • #28
  • Sep 27, 2007 6:58am Sep 27, 2007 6:58am
I've had a few more trades today. I'll update this shortly
  • #29
  • Edited 10:52pm Sep 27, 2007 6:36pm | Edited 10:52pm
OK. Here are my trades from yesterday.

1. long GBP/USD @ 2.0178, initial stop 0148 (30)
closed @ 0160 (18/30)
-0.6R

2. short GBP/USD @ 2.0160, initial stop 2.0180 (20)
closed @ 0180
-1R

3. long GBP/USD @ 2.0185, stop 0157 (28)
added @ 0199
closed @ 0241 (56+42)/28
+3.5R

All these trades were based on a trendline break. The first was the initial break. The second was what I thought was the beginning of a reversal. The third was a reentry after confirmation of the original break.

That third trade was a bit dissapointing as it was up +6R at one stage and I considered closing it.

So far a lot of losses but at least the profits are greater overall. (+2.67%)

I know there is room for improvement in my strategy. My main aim at the moment is just to take trades and not worry about the outcome - easier said than done. Hopefully this will help with my fear that keeps me from trading.

In the past I used to just set stops and limits and leave it at that. This actually gave me a lot of good trades. Now I am trying to develop intuition by focussing on the present moment and trying to see what price is telling me now. Price=information. the market is always right, and if I can make the most of my profits while cutting my losses then I should get somewhere in the long run.

I'm not sure if I'll stick with these 60min charts forever. It'd be nice to do the same thing on 4hr, dailies and weeklies but on more pairs. Something to think about and test.

Wiz.
  • #30
  • Oct 4, 2007 9:41am Oct 4, 2007 9:41am
I have not abandoned this journal. I will talk about it tomorrow. It's been a challenging few days. Remind me tomorrow.

Wiz.
  • #31
  • Oct 4, 2007 10:37am Oct 4, 2007 10:37am
Quoting The Wizard of Oz
That third trade was a bit dissapointing as it was up +6R at one stage and I considered closing it.
Wiz.
Had you set a specific Take Profit area, and if so how do you arrive at it?

Now I know some would suggest the old 'take partial profit' gambit but I'm not a fan of that.

You say you had a +6R profit opportunity at one time, and I'm interested to know why you didn't take it. If you had set a theoretical +7R target, and decided to hold on for the little bit of extra, maybe this is an area you need to focus on. If you're that close to where you thought price might get, then you see some resistance building why not take the money and wait for the market to show you where you can re-enter, if the move continues.

The realised profit on that one trade would have offset some of the losses. I'm not saying bail out JUST 'cos it's in profit, but analyse the reason why it stalled, and, more importantly, why you held on long enough to give nearly half your profit away.

Not criticising, you know me better than that, just trying to understand the thinking behind your decision.
  • #32
  • Oct 5, 2007 1:28am Oct 5, 2007 1:28am
Thanks Peter,

I actually had no profit target in mind but was using a discretionary trailing stop which i set a bit too wide. I had two high profit trades yesterday on Pound and Ozzie in which i took profits at a target in addition to trailing my stop.

My trades this week have been mostly losses with a few decent profits to make up for it. my edge ratio is pretty high but my %win is low. Something i need to improve. The way I handle the trailing stops may need some rethinking, as most of my trades would have been fine had i given them more room to move (ie. the small +R trades that turn into -R trades). The biggest difficulty is handling my positions during consolidation. I often get stuck with a string of small losses during this time - closing and reentering. On the other had when price finally moves the profits are very good. So if I change my stop loss strategy i may end up cutting those profits and taking larger losses. Still -1R but with a smaller position and subsequent smaller overall profits.

I am thinking that a lot of the problem may be the time frame. There is a lot of noise on the 60min and I have to sleep so end up missing trades.

I just have to keep working at it and trying to refine my technique. I know there is no such thing as perfection. i am just looking for 50% win and 2;1 edge ratio as a minimum.

I have not counted my losses for this week, nor my profits. Something I will do soon. I know there were a lot of losses, but when i think of the numbers game, it is possible to have quite a decent string of losses and still have a decent edge. So I really need to keep at it until I have a large enough sample size to draw some conclusions. in the past I would have given up on a strategy after 3 or 4 losses. Now I know that even a good system can have strings of losses. that's why i just have to keep going in spite of losses, even though they make me feel like crap.

Dale.

Quoting PeterFM
Had you set a specific Take Profit area, and if so how do you arrive at it?

Now I know some would suggest the old 'take partial profit' gambit but I'm not a fan of that.

You say you had a +6R profit opportunity at one time, and I'm interested to know why you didn't take it. If you had set a theoretical +7R target, and decided to hold on for the little bit of extra, maybe this is an area you need to focus on. If you're that close to where you thought price might get, then you see some resistance building why not take the money and wait for the market to show you where you can re-enter, if the move continues.

The realised profit on that one trade would have offset some of the losses. I'm not saying bail out JUST 'cos it's in profit, but analyse the reason why it stalled, and, more importantly, why you held on long enough to give nearly half your profit away.

Not criticising, you know me better than that, just trying to understand the thinking behind your decision.
  • #33
  • Last Post: Nov 26, 2007 9:02pm Nov 26, 2007 9:02pm
I decided against keeping an online journal of all my trades as I find it more of a distration than anything else. As I get more comfortable with managing my trades that may change.

As for an update. No I didn't blow my account and dissapear. My goal was and still is a hit rate of 50% and edge ratio of 2:1. I need a minumum of 50 trades in order to assess my progress. So far my live results are as follows:

Trades 43
Hit rate: 58.14%
Edge ratio: 1.71:1

My aim was and still is to achieve these levels by the end of December.

Wiz.
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