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Going back to Demo

Posted: Wed May 26, 2010 2:00 pm
by Levendis
I recently made some decent money the other day from trading and I wasn't even leveraging. I thought I was becoming the glorious profitable trader.
Little did I realise that greed was knocking on the door. The greed of not accepting a small profit when price isn't really going further away from entry and letting that turn into a loser.

Breaking my trading plan which is actually well set-up however I was getting back into bad habits and THINKING of where price is going to go instead of following price.

I would turn into a nervous wreck as soon as a trade was being placed and any sort of whipsaw I would exit instead of leaving trade at least hit sl before the trade would go my way.

I'm weak money and still acting like the herd. I havn't blown an account of anything but I've lost enough to know if I don't do anything about this it will probably get worse.

The reason is because I made $600 in one day while following my plan etc. trading properly and not leveraging. The folowing week made trades left right and centre and slowly ate away from my profit and by friday night was back at the begining.


This made me highly emotional. Always looking for the next winner instead of waiting for the winner to show. I was also trying to get big profits instead of taking small ones.

The past 2 days I've been looking for the winner and leveraged. I was up yet didn't take profit or at least put SL to BE. My SL was super tight and surely price touched it and I lost some more $$.

Lost another $600 over the two days and now I've stopped as I'm not in the right mental state. I lost about 10% in 2 weeks. In my eyes that's not a profitable trader.

I'm going to Demo trade for a month and see how I go. I know that I'll come back more knowledgeable about myself since I believe it's my skills in patience and money management that are the keys to success.

Reading a chart is fairly simple in my opinion once you SEE how price behaves and once you get a feel of price. It's hard to explain but I'm sure some people here know what I'm talking about.

If I'm profitable in trading via the Demo account, then this will tell me what I'm missing when trading live and thus I can implement those skills into live trading.
Wish me luck fellers I know I can do this!

P.S - I don't use indicators. I use Tro_Dynamic Fibs SR for a dynamic S + R with Better Volume 1.4 and candlesticks. It's a nice little system I have however I need to trade without reservation, hesitation or fear...

Thanks for reading my long post
Nick

Posted: Wed May 26, 2010 6:17 pm
by SignalBender
Levendis,

You are doing the right thing. Get profitable in back-testing and live forward testing (demo account) before going live again. It will help your psychology and quail your emotional state.

You say you "don't use Indicators." Then you posted the very Indicator that you use? We all use Indicators. Whether we think we are Fundamental Traders or Technical Traders, we all use Indicators of some sort. We all use a "Box" to trade with. Some of the boxes being deployed out there are Gray in color, some are sparkling White, while others are Purple, Red, Green, Blue or Jet Black with multiple dimensions (like mine). But, no matter who you are as a Trader, you most definitely have some kind of logical requirement that must be fulfilled before entering or exiting any position in the market. Be definition, that is a "Box," because you have placed parameters (logical0 around your decision tree - and - we all have and use a decision tree in our trading, Fundamental or Technical.

It is very important to remove as much of the emotional charge out of trading as possible. Entire Nations have been thrust into War with other Nations, based mostly on emotion. Countless millions upon millions of valuable human life has been lost in unnecessary Wars, merely because of uncontrolled emotions. I've lost tons of cash due to emotion and I have years of very specialized training to deal with emotion - yet, I allowed it to overcome my decision making - on more than one occasion in the early years of my trading. Someone with my background and my psych training, should not get emotional over a trade - yet it did happen. So, do not beat yourself up over the emotional causality that lead to your losses in the market and know that people professional trained to handle their emotions, lose money in this business every day.

This is the major reason why I believe in introducing Systems Theory into my trading. A system can be large and complex with multiple dimensions of input and output, or it can be very straight forward procedure or set of logical parameters that lead to triggering a position into and out of the market. The point is not how complex you can make your system. The point is that you STICK to your system through Entry and Exit, without succumbing to the emotional g-force trying to pull you out of the cockpit of your trade. Once you commit to a well tested and well vetted system theory about how you will enter and exit the market, allow that theory to unfold as you did when you were testing it. Allow the positive results you obtained during your testing phase, to emerge in your live trading.

The psychological factors when live are not the same when testing. For this reason, I have always found it a very good idea, to put a sample version of real cash on the line while doing your advanced testing. That means opening up a tiny cash account strictly for the purposes of doing advanced, live testing. This is NOT for use with research testing as that kind of testing is not evolved enough - you don't yet have confidence in the system's theoretical model, to produce expected results on a consistent enough basis.

Only when you have pushed the model through enough research and testing cycles, should you begin Advanced Testing with real cash. Use as little cash as your Intermediary will allow, or get on a platform that will allow micro accounts and use it strictly for this purpose. Your brain will use a different set of neurons while trading with real cash, than it does when it "knows" that nothing of significance is on the line. Train your brain, is the name of the game at this level of testing. Training it to deal with the concept of loss while not allowing emotional triggers to surface that sabotage what might be perfectly good (but slow to develop) trades.

"Wish me luck fellers I know I can do this!"

Luck will have nothing to do with it. You are properly engaging in a process whereby opportunity collides with PREPARATION. Don't allow anybody tell you otherwise. YOU create your own "luck" by training yourself not to merely be in the right place at the right time, but in the right place at the right time AND with the right mental framework.

How many people won a multi-million lottery, only to be dead broke in 3 years or less! They were in the right store at the right time when they purchased that ticket. However, they never had the right mental tools or skills to handle the rapid increase in net worth. Now, they are filing for personal bankruptcy. Systematize your approach to the markets. Systematize your thought process about why you are in the markets. Compartmentalize your emotions by holding true to the results you saw in your well tested "Box." This alone, will put you ahead of where most Traders are today - regardless of the well tested system you deploy.

Hope this helps - good post!

Posted: Wed May 26, 2010 7:31 pm
by cosmoe1
SignalBender wrote:Levendis,

You are doing the right thing. Get profitable in back-testing and live forward testing (demo account) before going live again. It will help your psychology and quail your emotional state.

You say you "don't use Indicators." Then you posted the very Indicator that you use? We all use Indicators. Whether we think we are Fundamental Traders or Technical Traders, we all use Indicators of some sort. We all use a "Box" to trade with. Some of the boxes being deployed out there are Gray in color, some are sparkling White, while others are Purple, Red, Green, Blue or Jet Black with multiple dimensions (like mine). But, no matter who you are as a Trader, you most definitely have some kind of logical requirement that must be fulfilled before entering or exiting any position in the market. Be definition, that is a "Box," because you have placed parameters (logical0 around your decision tree - and - we all have and use a decision tree in our trading, Fundamental or Technical.

It is very important to remove as much of the emotional charge out of trading as possible. Entire Nations have been thrust into War with other Nations, based mostly on emotion. Countless millions upon millions of valuable human life has been lost in unnecessary Wars, merely because of uncontrolled emotions. I've lost tons of cash due to emotion and I have years of very specialized training to deal with emotion - yet, I allowed it to overcome my decision making - on more than one occasion in the early years of my trading. Someone with my background and my psych training, should not get emotional over a trade - yet it did happen. So, do not beat yourself up over the emotional causality that lead to your losses in the market and know that people professional trained to handle their emotions, lose money in this business every day.

This is the major reason why I believe in introducing Systems Theory into my trading. A system can be large and complex with multiple dimensions of input and output, or it can be very straight forward procedure or set of logical parameters that lead to triggering a position into and out of the market. The point is not how complex you can make your system. The point is that you STICK to your system through Entry and Exit, without succumbing to the emotional g-force trying to pull you out of the cockpit of your trade. Once you commit to a well tested and well vetted system theory about how you will enter and exit the market, allow that theory to unfold as you did when you were testing it. Allow the positive results you obtained during your testing phase, to emerge in your live trading.

The psychological factors when live are not the same when testing. For this reason, I have always found it a very good idea, to put a sample version of real cash on the line while doing your advanced testing. That means opening up a tiny cash account strictly for the purposes of doing advanced, live testing. This is NOT for use with research testing as that kind of testing is not evolved enough - you don't yet have confidence in the system's theoretical model, to produce expected results on a consistent enough basis.

Only when you have pushed the model through enough research and testing cycles, should you begin Advanced Testing with real cash. Use as little cash as your Intermediary will allow, or get on a platform that will allow micro accounts and use it strictly for this purpose. Your brain will use a different set of neurons while trading with real cash, than it does when it "knows" that nothing of significance is on the line. Train your brain, is the name of the game at this level of testing. Training it to deal with the concept of loss while not allowing emotional triggers to surface that sabotage what might be perfectly good (but slow to develop) trades.

"Wish me luck fellers I know I can do this!"

Luck will have nothing to do with it. You are properly engaging in a process whereby opportunity collides with PREPARATION. Don't allow anybody tell you otherwise. YOU create your own "luck" by training yourself not to merely be in the right place at the right time, but in the right place at the right time AND with the right mental framework.

How many people won a multi-million lottery, only to be dead broke in 3 years or less! They were in the right store at the right time when they purchased that ticket. However, they never had the right mental tools or skills to handle the rapid increase in net worth. Now, they are filing for personal bankruptcy. Systematize your approach to the markets. Systematize your thought process about why you are in the markets. Compartmentalize your emotions by holding true to the results you saw in your well tested "Box." This alone, will put you ahead of where most Traders are today - regardless of the well tested system you deploy.

Hope this helps - good post!
Hi Signalbender,

The problem I am having now is after losing for about 1 year, I found Tro's rat trade system and won just about every trade for the first week. Now into the 2nd week Im back to losing (getting stopped out.) I am finding myself not being able to pull the trigger on good set ups. Any suggestions on how to Train The Brain to get over this.

cosmoe1

Posted: Thu May 27, 2010 12:24 am
by SignalBender
Cosmoe,

I have no idea how you are using the TRO indicators. I will tell you the same thing I told people in TRO's thread over on T2W, that the fundamental methodology does work and has merit. However, as a Trader, there are four (4) giants that YOU and YOU alone are responsible for measuring and having good SA (Situational Awareness) about. They are as follows:


Timing
Direction
Magnitude
Probability


Failure to address any one of these giants, could result in an equal amount of failure. The one thing you should take note of right away, at a glance, is that all four (4) of these giants are related to each other - fairly closely, yet each of them has their own distinct purpose and function.

Timing. How do I time the market? Well, is Timing not a a derivative of Magnitude. Of course, it is.

Magnitude. What is it? A bare bones and very simplistic ATR calculation will tell you that. However, it will only tell you about one (1) aspect of Magnitude - the range or distance on average between the High and the Low for N periods. Is that enough information about Magnitude to fully understand it? No, of course not.

Direction. Seems easy, right. Well, not so fast - open up your mind and think on multiple levels and in multiple dimensions of both "time & space" and you will quickly see that Direction, while being relatively simple to conclude on the surface, is not all that "simple" underneath. Well, wait a minute, SignalBender. If I see the D1 moving Long, then the market is Long - period. Really? Well, what if D1 is pulling Long inside a well established W1 Short and underneath some level of basic retracement and just at the start of a brand new MN Short cycle? Is the market still "Long" then?

You say: Sure it is. It is Long for as long as Long continues on the D1. I say: What if you use that logic to enter a trade Long, not knowing the extent to which the D1 Long Magnitude is depleted? That's a blind Kitten looking to get scalped! Just asking for a butt whipping. I've taken MANY of these butt whippings in my early years, so trust me - I know what a Market Butt Whipping looks like. It hurts, big time - especially when you thought the market was "Long" just about the time it was turning "Short." This is why understanding Magnitude in multiple dimensions of "time and space" (different time-frames) means so much to you as a competent Trader with good SA.

Probability. What does it look like? Not what you first think it looks like - that's for sure! When most people think of Probability in Trading, they immediately think that it describes a pivot point in the market where "Price" will make a u-turn and begin "Trending" in the opposite direction. Probability as a Trader, however, holds far more meaning than that. As a Trader, Probability means: Residual Sustainability Factor. In other words, if the Trader enters the market "Here_1" looking for a move to "Here_2," then what does history consistently tell that Trader about the sustainability of that move (Here_1:Here_2), relative to all other indications being used by that Trader and for which the Trader has an equal amount of historical and empirical evidence about. Probability is therefore, the culmination of good Timing, Direction and Magnitude awareness, tested through many different market types and backed by empirical evidence.

I don't for one minute suggest that you trade precisely the way I do. However, plain ole horse sense tells me, that, if I am engaged in the art/science of figuring out what happens "next" in a market that can only move in only two (2) directions at a time, in multiple dimensions of time (many time-frames), then regardless of which trading methodology I deploy to turn a profit, I might want to know something about the fundamental mechanics of the framework within which I must make my entry and exit decisions. Absent an understanding of that framework, I'm a guesser, not a Trader.

Timing, Direction, Magnitude and Probability. The Universal framework that every single market with an Open, High, Low and Close adheres to, one way or another. First, measure the ATR. Then measure both the TCD-Long and the TCD-Short (see SignalBender thread). Get the average values of all three (3) Indicators as well as the Absolute values that make up the average. Plot the ATR (my Omega is a slight different calculation but this will do), TCD-Long and TCD-Short on a standard price chart in line format. This will show you the fundamental component structure of whatever market you apply these three (3) elements to: M1 through MN.

Study the chart and the price action that ensues. Note how "price" interacts with its own TCD-Long, TCD-Short and ATR absolute and average values. If done with eyes wide open you can see the WHY behind not just TRO's 1-2-3 method, but you will be able to see the WHY behind every single move the market makes (of course, in hindsight). The next task is for you to get comfortable with the idea that the market does have structure. Many people don't believe that - but those same people don't know anything about how TCDs work.

Now, there is another level of Delta based analysis called: Distinct Vega, StealthIndicators, Trajectory Ratio Indicators (precise "trend" indicators), Alpha-4 Indicators and Alpha-5 Indicators (the rest of the system is not for public consumption). I was going to discuss these Indicators as well, but I've already posted some that were never coded and posted on the forum, so I guess not. I won't post a formulation without getting the MQL.

So, for now, study what you've just been given on TCDs in conjunction with ATR (re-read the SignalBender thread - relevant portions) and note how much more predictable the market seems after you get the hang of it. Look at the TCD and ATR elements on all time-intervals, don't get hung-up on a single chart. Remember, the market is multi-dimensional. So, while you might not be able to makes heads or tails of TCDs on one chart, I can guarantee you that they are doing precisely what they are supposed to be doing on another chart. Look for relationships among the Indicators between time-intervals (very important). They are there, but you have to develop an eye for them - OR - you have to code Meta Indicators (in MQL) that detect synergies between the Primary TCD and Omega (ATR) Indicators in different time-intervals.

If you can code it yourself, go for it. If not, find somebody with an open mind who will. :) When you "get it," you will be able to predict WHEN the 1-2-3 method has the highest probability for working and when to stay away from it, in lieu of other/better opportunities in the market. But, well beyond just that, being adept at TCD analysis will give you insight into any other signal you might trade as well. Why? Because there is no price action outside of TCD - none. It is physically impossible.

It took me 7 years to perfect this. I would not be here now if it were not for the TCD. Get your Timing, Direction, Magnitude and Probability in check using fundamental TCD/Omega(ATR) framework and you will catapult your trading up to the next level. All your questions about "Where do I place my Stop," "Where do I place my Limit," "How do I gain confidence in pulling the trigger on a trade," will mostly be answered, after you develop an understanding of the above content.

You need to be able to articulate WHY you are entering or exiting a trade, Cosmoe1. Regardless of how simplistic or how complicated the trade decision tree might be. If you don't know WHY, then you are guessing. At that level, Vegas is a LOT more fun, they tell me.

Posted: Thu May 27, 2010 1:49 am
by cosmoe1
signal bender,
Thank You, much appreciated.

Cosmoe1

Posted: Thu May 27, 2010 4:28 am
by SignalBender
You are more than welcome. :)

Posted: Thu May 27, 2010 5:55 am
by Levendis
SingnalBlender, thanks for the long reply. I'm going to have to re-read what you said a couple times for it to properly sink in.
As with the indicators, in my eyes indicators are when indy a + b + c cross and that's a signal to buy or sell.
If support and resistance are indicators well I guess they're the indys that I use.
I used to watch bare charts with volume and still made money. Tro's indicator just gave me a better visual of S + R.

T-D-M-P

Posted: Thu May 27, 2010 6:17 am
by cosmoe1
SignalBender wrote:You are more than welcome. :)


Signalbender,

I think I'm starting to understand. I loaded Tro's TCD indi, Tro_Range indi, also a stochastic set at 6-5-4. I watched it for about 3 hours to see how it behaved. decided to take a buy on E/U and picked up 20 pips in less than 5 minutes. NICE.

thanks again,
cosmoe1

Posted: Thu May 27, 2010 6:20 am
by SignalBender
Levendis wrote:SingnalBlender, thanks for the long reply. I'm going to have to re-read what you said a couple times for it to properly sink in.


No doubt and no problem.

Levendis wrote:As with the indicators, in my eyes indicators are when indy a + b + c cross and that's a signal to buy or sell.


As long as there is empirical evidence to support that trigger, then yes. But, that solely depends on a researched conclusion, no doubt.

Levendis wrote:If support and resistance are indicators well I guess they're the indys that I use.


Support and Resistance great friends - until they get broken, then they stop being so friendly. Just like the "Trend." It is your greatest ally - right up until the moment it stops being "The Trend." At which point, it starts to become your worst nightmare.

Speaking of Support & Resistance and how easy it is to visualize. This is the way I see S&R. A no frills straight forward look into S&R. With this set-up, I always know where S&R is located and most importantly, WHY it is located there_1 as opposed to there_2.

S&R Digitally:
Image

S&R Graphically:
Image

S&R Polarity:
Image

With one glance, your Indicators should tell you all you need to know about their area of specialty on the market. Note the Venturi Effect at 4 Bars Ago (point #4 on the Graphic). The Green Circle dropped just below the bottom of the Support Bands. Price then moved about 300 pips north to the upper limit of the Resistance Bands. Note too, the change in the Wave Form of the Bands themselves through time from point 5 to point 1 (point 1 would have been the current Day). Note that after the Long move, this particular Indicator within the system is now screaming Short. That is because I am Delta based Trader and I look for opportunities for "Price" to repeat historical patterns for a duration of time long enough to extract some pips and then move on. I don't need a billion pips per trade. But, I do need very high levels of accuracy to a specified target.

These are a fraction of the tools that help me know WHY I am entering the market and WHY I am exiting the market. I try to maintaining good Situational Awareness and tools help me do that.

Cheers!

Posted: Thu May 27, 2010 6:32 am
by SignalBender
Re-read last post - I added more at the bottom.