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Welcome.

Gonna blow the cobwebs off this old thing I think this year. Been trying to set up a trade explorer but no luck as GFT don't offer Dealbook as an option yet and I'm not a fan of MT4 although I use an Interbank demo account for my charts.

Anyway been trying to systemize my trading as it's mostly been discretionary but I'm finding it quite difficult, to systemize

I'm from the skool of thought that if you do random things you will get random results so I kinda want to make things more routine to take some of the subjectivity out of it.

I begin live trading for this year next week so I have some work to do before then.

An old bud of mine showed me this once... It's quite a metaphor for becoming a profitable trader.

I'm studying Insurance at the moment and it's given me an idea for a medium - long term trading strategy.

The idea came from the basic principal that insurance through the pooling of funds and individuals limits incurred losses for the individual as the losses are spread over a number of other non loss individuals.

Portfolio theory is nothing new obviously but I've always likened it more to an investor strategy and the share market.

What I'm thinking is to apply my edge which usually runs at a win rate of 70 -80 % and apply it to a range of different markets and instruments at one time instead of all on one currency pair as I normally do.

Basically I'd just identify as many opportunities as I can at the start of a week, take on a slightly higher amount of risk and spread that risk accordingly over a number of different securities.

Modern portfolio theory calls for as many non correlated securities to be used as possible to enhancement effects of diversity but this is a long term risk eliminating strategy used by investors. I'm a trader.

The markets I watch are major indices, gold, oil, Eur, and Aud. In a full scale risk off environment these will all be heading short, in a medium risk off environment most will be headed down with safe haven pushing gold higher or steady (typically).

Sometimes correlations are simply out of whack. In the current market it's getting harder to predict the extent and severity of the constant risk on risk off switching and so this is my reasoning for spreading what would normally be 1 trade over a mix of market risk affected securities.

Going back to the insurance focus it's simply pooling together a number of securities so as to lessen the risk of non corralative forces such as sudden announcements in the Eur, or interventions of a particular currency or oil supply affects or safe haven preferences which are unpredictable. And in doing so decreasing the overall risk exposure and increasing the aggregate trade success.

Decreasing any risk will naturally decrease potential rewards but this can be compensated by increasing the account % that is exposed at any one time.

That's the idea anyway, I'm going to trial it on demo for a while and see how it goes.

I should add that the advantage of the edge I'll use for this type of strategy is that it's order and momentum based so by taking intraday prices based off daily timeframes it won't much matter what price I open my trades at on Monday... In theory of course.

Trade management and that sort of thing will be developed as time goes on.

I'm all for simplicity but this something I just wanna test out.

EDIT: When I say 70 -80 % win rate that's just going by results I achieved in the last year, I'm not going by some model I've run through an EA because I don't have a type of system that can be tested like that as it's kind of dictionary which is annoying for that reason.

Note to self: trying to systemize my normal trading has proven to be frigging hard. I might just stick with what's been working for now. If anyone has been there and done that and has any tips I'm all ears.

I find that a "system" type focus has me jumping when I normally wouldn't or acting on things I normally wouldn't. or looking for things I normally wouldn't look for. Nightmare.

It's hard also because I usually watch other markets to get a feel for what I should be doing, I just don't think that can be systemized, but I'm a believer, not giving up just yet.

This rings a bell, take a look at what I have been doing, Seventh Wave trading in Trading Journals.

I've thrown systems out of the window and just open trades based on trend, large round number s/r and 1 ma. The difference is that I open trades on many pairs at the same time and hold the good trades and close the bad ones.

This has worked well for me so far. I have messed around with different ideas in terms of when to take profit, whether to take profit on the whole basket or treat each trade individually, etc. After opening what would have been some awesome trades but closing them prematurely because a target basket equity was hit I have come to the conclusion that it makes a lot more sense just to open the trades in the way I was but hold all trades open and either take profit at the next s/r and/or trail the stop behind sensible levels (not too close).

I hope this info helps a little? Good luck.

Thanks for that... I do quite well trading a single currency but I was thinking if I could diversify a little bit I could increase the aggregate trade success by decreasing the risk and therefore allow a greater account % at risk at anyone time. So the basket doesn't give me any sort of edge but simply allows me to exploit my current edge a bit further. Thats the thinking anyway. I've had pron 1 million trading ideas before... maybe 3 have worked lol... So the odds aren't exactly with this one either but I'll give it a go.

Yeah round numbers are great... Most people think it's a psychological thing which in essense it is but the core reason round numbers work are becasue all the large parcels are written in them, Options, Futures, Enormous orders etc. Same way you don't buy a house for $500,333.50

Might check out your journal when I get a minute... More interested in systemsing the trade management. Entries/ directions/ timing/ stop placement/ lot sizing are perfecto. Just need to master a consistent way of taking profit/ adding to a trade etc. (Trade management).

Often I just wait for the orderflow to reverse against me on the small TF but using multiple time frames I can better judge which to hold and which to scalp and which to cut for a small loss etc. This is why its kind of hard to systemise because it's nothing I can kind of define.

Anyway will start a demo of this basket type trading next week and post results, at the same time will trade a single currency, I can then compare them to see if there is any major adcantages... Will trade twice the risk on the basket.

Sounds like you have a good plan, I'll pop in and see how you get on.

Hey Cindy,

Good luck in your quest for systemization, I tried to do this for years,
failed miserably....

My wife thought it was getting boring..lol

I Found the righteous path in the end though..... Discipline ( and vino)
and trained myself not to believe in random order..

be watching to see how you get on..................

Ja.

Good stuff J4, funny you mention discipline cause I just had a big chat to myself the other day and me and myself concluded discipline is my biggest issue. Not just in trading and so I am still developing a system around what I used to deem to be discretion. The thing is I take the discretionary type trades for a reason, I just need to somehow define those reasons in a set of repeatable rules.

Thanks

Cindy,

One of the keys IMHO to being successful in this game is Expectancy, its not heard to much because traders aren't to sure what there expectancy is....

I have been trading for what seems like an age...My account use to yo-yo
for years, good quarters bad quarters etc etc.....
Discipline, Discipline Discipline we hear this all the time, but how can we adhere to discipline if subconsciously our expectancy is not known.

Expectancy, if we are disciplined our win ratio over X amount of trades
will be ABC. (The more trades the better)
Expectancy that if we use Good Money Management, this will keep our Draw downs to expectant levels.......

Expectancy only comes after confidence is gained by analytical review,
analysing, optimizing our complete system, Over a period of time.
This period of time has to encompass as many different market environments as possible, for us to get the true perspective of our
EXPECTANCY....

We can optomize our trade plan, if our expectancy starts to be unexpected.


If you expect....... discipline, psychology etc etc is easier to handle.

The reality is this takes time, a long time, most new traders want to be
earning a living in 6 months using a £10,000 ( or less)account.
Once they get a massive reality check they disappear.....

There are a few good analytical websites out there, Ive used MYFXBOOK
from its inception, it tells you the cold hard truth.
It was the best thing in trading to happen to me...
Its where I "came out the other side".......

If You Need the link give me a shout.....

Sorry for the ramble.......................what did you expect : )

Ja

Seems as everyone's getting there record collection out....I thought I'D add this......Great for detoxing....



Ja

whats ur edge or is it a secret

What's yours?

Time to throw my "bit" into the ring.

I've always believed the unconscious has a lot more to do with our trading than we think.....?

http://www.bbc.co.uk/iplayer/episode...ut_of_Control/

So, Should we be training our unconscious ?

Do you mean subconscious? Will check the link later. Thanks