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Phil Lane wrote:
>>just to clarify, I was talking about a move in the SP of 20 to 100
"full" points.. i.e. if it goes from 1150.00 to 1250.00. This kind of
trade lasts anywhere from a couple days to several weeks or more. Not
sure if you'd call it a swing trade. Intermediate term? Something like
that.<<
tj sez: yep, a handle is one full point. sorry, if i lapse into pit
"speak" <g>
>>Also interesting are the comments about STRESS. Whoever you are,
it's a good bet that STRESS is directly proportional to the DOLLARS
you are
drawing down.<<
tj sez: if i get down early in the day, i might feel anxious. but my
confidence level remains high because i know i can dig myself out of
the hole by the close.
>>Playing a longer time frame, the point moves for and against you
will be LARGER, so all you have to do is trade proportionally SMALLER.
If you do so the stress should be the same, no?<<
tj sez: nope, not for me. i'd want to make it back in a day, so i'd
take more risks to get back to even. i'd probably need to attend a 12
step program for day traders if i ever wanted to position trade :))
>>All this aside, I'd love to trade faster. And take more advantage of
the short-term volatility. The problem is, I have no good way to
develop a good set of rules for daytrading. Can't find anything I can
put into an EL system that's successful over a range of contracts.
Maybe this or that procedure would work but unless I can backtest
something to determine the odds, how can I trade it? Trail and error
isn't the answer (I've tried).
TJ, you've been doing your thing for a long time so may I ask you a
question?. Basically, how did you figure out your rules for daytrading
in the first place? Did you piss away money trying out different
theories, as I used to do? Maybe I just didn't hit the right thing
soon enough! <<
tj sez: i don't know what to say other than that you've got to find
your own way. sure, i've pissed time and money away testing vendor and
my bullshit. my breakthrough came when i stepped back and looked at
the dynamics of price, time, and the pit. then i came to the
conclusion that it was damn near impossible to mechanically model the
stock indices to small time frames of a minute or less. but i like
trading off those time frames. so, i try to automate as large a part
of my decision making process as possible, but much remains
discretionary. i'm not saying that a 100% mechanical system based on 1
min or 5 min time frames can't be built, it's just that i can't build
it easily myself, nor would i believe in its long term success if i had.
first, i'll observe the behavior of a new indicator, or price pattern,
or "whatever" to see if it's valid or bunk rather than backtest or
paper trade it. then i'll trade single lots to get the "feel" and to
see if i'm comfortable with the new strategy. finally, i'll increase
my exposure should it pan out in real time testing.
TJ
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