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RT's,
My excel trade tracking software charts my equity with a line graph. I've
found that I've unconsciously produced chart patterns. For example I had
equity peak at what created a double top. When I saw the double top form I
remember thinking to myself, "Great this is a double top" and sure enough I
went through a multiweek drawdown. I built back up to triple top area and
"knew" I was ready to breakout to new highs and that's what happened.
I haven't figured out if it's helpful or harmful to look at my equity chart.
All I do know is that my equity has created familiar patterns. The
question I need to answer is, "Are these chart patterns natural or self
fulfilled unconsciously?".
The things I do think are helpful are my trading stats: % winning trades to
losing trades; average $ & point win to loss ratio; % of trades long vs
short; % of winning trades that are long and short;
Howard
>From: Brian Keith Voiles <admagic@xxxxxxxx>
>Reply-To: realtraders@xxxxxxxxxxxxxxx
>To: realtraders@xxxxxxxxxxxxxxx
>Subject: [RT] Charting Equity -- Example
>Date: Sun, 06 May 2001 18:07:30 -0600
>
>Dear Experienced RealTraders,
>
>Is this a good way to chart my equity? If so, am I to assume that once my
>account
>balance gets near $25,000 I should consider myself "overbought" and I
>therefore need to
>become more cautious?
>
>These are my actual results over the last month... you can see I
>had a pretty big "draw-down" on April 24th and 25th... the 2 days following
>a nice run
>up in equity.
>
>Should I chart each trade? This is a chart of daily results... but I'm
>thinking that charting
>each trade would be more valuable.
>
>Should I add a 20-period Moving Average, stochastics, RSI, etc... all to
>help me know
>when I'm most likely to hit some losses?
>
>Should I read a book to learn how to do this correctly?... if so what book
>is recommended?
>Thank you for your valued input... I know I have a lot to learn.
>
>Warmly,
>Brian Voiles
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