Late Night Revelation

For the past few weeks I have been staying away from over analyzing charts all night. It has helped to clear my mind and take a more relaxed approach to things. Tonight after reading the "By Age 23" blog, I was inspired to look at price action and how it related to my system.

So yes, here I am again. It's late and I am analyzing charts, but it may have just paid off in a big way. While I did not use his method, I quite quickly found a complicated bar sequence that had a winning edge with and without my systems support. So instead of freaking out, I walked away and watched some tv. I came back and yet again found another simpler bar sequence that really seems to have an edge where my system gives NO SIGNAL at all. This means more high % signals.

So this merits backtesting, live testing and interest for a few reasons.

1. It involves oscillations in price only and not an indicator. All indicators lag and lie.
2. It occurs over and over long and short all day (sparingly).
3. With Quotetracker, my charting platform, I could conceivably write a paintbar to alert me every time this exact sequence occurs. This would allow for less intense focus looking for the pattern manually.
4. The pattern could be expressed in such a way that it could potentially be automated.

Yes, a money machine. Actual ATM trading.

Stay tuned. If it looks promising, if I can't find it's flaws, I may temporarily suspend tracking "the system" and post results for the "ATM". It's late for me here, it's early to get overly excited, but it was worth this post for sure.

Friday: Back on the Horse +$637.80

Base System: 43W-11L=54T= 79.6% Sub System: 11W-2L=13T = 84.6%

I blew Ninjatrader up. Because of that massive loss the program stopped letting me trade. Margin call! I loaded Bracket Trader back up and paid dearly for it. I must have closed out 5 trades accidentally while trying to add a contract or move a stop!

A hard fought total on a nice day with a slightly higher number of signals than lately.
I did stretch some stops, but I also managed to kill off some losers quickly. Why is so hard to take a stop when I know the probabilities are with me?

Example: I trade the system near perfectly...
43 winners totaling 43 points (very conservative targets)
11 Losers at a full stop of 2 = 22+ add some slippage etc +4
43-26= 17 points

It is easy to armchair quarterback any system at days end, but I just cannot always take that stop when I know I need to. It's a game of patience, persistence but most importantly discipline. The hardest game on the planet that rarely gets easier no matter how long you do it. Hey, it sounds a lot like work.

Chart of the day shows a great short signal and a really awful long signal in the lunchtime zone.

Thursday: Lose your home in one day

Base System: 28W-7L=35T= 80%
Sub System: 7W-1L=8T= 80%

Annoyed with work and generally feeling crazy I was leaving trades open with 100-200 contracts. I never got back to the screens either and was stopped out at some point for a -$110,000 loss.

The system did ok as usual, but I was reckless bored and away from the screens.

No chart today.

Interesting Realization

Months ago I added an indicator that has been generating decent signals that have been included in the "base systems" numbers since then. More recently I was using another indicator (let's call it A) to confirm the base systems signals. Although I see it has been generating its own signals, I do not always take them.

Tonight I stripped my charts down to nothing but indicator A and it looks really interesting. Very few losing trades in the last few days. The really nice thing about it is the clarity in this simple setup.

I just may take a few days sometime soon and let it rip with this setup only. The base system is great, but this has a clarity all unto it's own that is worth some live testing.

Additionally, I am reading a good book called "Market Masters" by Jake Bernstein. So far it is really driving home to me the fact that the trader is what makes something work and not the system. It explains why I am having such varied results with something that seems to reliable.

He has used his background in psychology to succeed in the markets. It's a fairly old book and who knows if any of these guys ever made money in the markets, but it really making some good points.

Update: Watching the indicator Friday was good. It wins more than loses, but can give many back to back signals and some that even signal 4x but fail. This indicator will stay in place, but I am going to concentrate for now on the "ATM" method discovered June 5th. See June 5th blog.

Wednesday: 82.6% +$373.20 So So

Base System: 19W-4L=23T=82.6%
Sub System: 7W-1L=8T=87.5%

Not too much time spent today watching the markets. I was lucky enough to catch some nice moves early. I stuck myself in a losing trade because I had to be away from the screen. I let that one come back even, but it raised my average time in market quite a bit. Closed up the day with a nice long.
Chart of the day shows an early trade I was actually in. Nice signal, decent move up.

Tuesday: 90.3% +$203.00 Couda Dun Betta

Base System: 28W-3L=31T = 90.3%
Sub System: 10W-2L=12T = 83.3%

I did not have much time to watch the market today. When I did see a trade, I really tried to keep the stops tight. I was disciplined today compared to lately, which is good. The total is positive, but it took too many trades to get there.

Chart of the day shows a nice long and some bad data or charting from my package.
I hope to continue to use tighter stops ans honor the stops. I am trying to trade more "real".

Monday: 87.5% - Slop-O-Matic: +$178.60

Base System: 21W-3L=24T= 87.5%
Sub System: 9W-1L=10T= 90%

Although I had the time, I was sloppy and impatient. My attention was often taken up by other things during a trade or I missed signals due to other things going on. This positive total was a terrible result considering number of contracts traded and fees paid. Scratch day!

Chart of the day shows a really nice smooth long signal, I often get a nice signal around noon for some reason.