Readers' Poll!

Have a look at the following six charts:

Three of them are derived from one set of data. The other three from another set of data. But how are the six divided?

Answers in the poll situated on the right-hand side of the blog! The result will be used in a blog post in the near future. :)

Day's Anatomy- 26th October 2012

Only the one scenario played today. Could have played it better by doing what I did in the first trade on the second, doubling the pip-count.

I always knew why volume drops off going into the weekend, but now I get to feel it firsthand. Nobody wants to mess things up going into the weekend! It appears even seasoned traders suffer from the Framing Effect.

UPDATE!

Two fingers to the Framing Effect! Statistically, doesn't mean a thing whether you make then lose just before the weekend/end-of-day etc etc or vice versa. It's all in your head!

Day's Anatomy-25th October 2012

I used to always lose on trend days.

They still aren't my strong point but I'm closing the gap in performance between trend days and range bound days.

As far as today is concerned, the first trade ended with a loss of 5 pips (in opportunity) and, from that point on, I followed the script. Like yesterday, loads of opportunity within the scope of the methodology.

I'm thoroughly enjoying building the consistency muscle!! The money is almost an afterthought...

Day's Anatomy- 24th October 2012

Was incredibly difficult to get in on the 1st trade after yesterday's cock up. Top marks for me for doing what was necessary!

Today saw lots of opportunity within the boundaries of this method, but I was absent for a good chunk of it. Took what I saw, managed it according to the guidelines. Good trading.

Day's Anatomy- 23rd October 2012

The market tested my patience....and won.

A couple of decent paper profits, then the break even result before the subsequent drop pissed me off quite badly. Trade 3 and 4 ruined the day when I treated 3 how I'd have liked to have treated trade 1. Again, TWoT...I should be using that kind of stop on both of these setups but I tried to run it  (3) based on the outcome of 1. 

Less said about trade 4 the better :)

What should have been a tgt/almost tgt day became a loser.

Day's Anatomy- 22nd October 2012

Could have waited a little longer before committing to the first trade but missed the fact that the resistance had just been pierced with seconds left for the change of bar. Had the opportunity to reverse/get out at a pip loss but not in my plan (I've found that giving myself the liberty of doing that causes more harm than good). Got trapped there.

Otherwise, followed along and did what PA suggested was the right thing to do at the time.

UPDATE!:One more trade taken...

Day's Anatomy- 19th October 2012

This is where the rubber meets the road. Can you do exactly as you did in forward tested SIM with a live account? So far, the answer for me is "no".

The more discretionary the approach, the harder it's going to be as you gained your results through choices that were more easily affected by your emotions. The solution is simple but not easy- relax and trade as you did before.

Monday did the most damage and was also the day where I deviated from the plan in an obvious way. Tuesday to Friday where good days in terms of following the story and taking action in terms of entries but didn't Mind The Gap, evident from a too frequent occurrence of b/e trades and Wednesday and Friday's suffocated wins which would have ended both days at target rather than 50% tgt and -50% tgt (i.e flat between the two days). Huge difference to the bottom line and the edge in general.

Got some work to do...

Day's Anatomy- 18th October 2012

Another day of just following along with two near misses, one shown near the end of the day, one not shown just after the first trade. Monday is the only big deviation from the plan and it shows in the difference between actual outcome and what could have been if all days were treated equally.

Just the one lone trade was responsible for triggering my stop order on the last trade. Fun stuff :)

Day's Anatomy- 17th October 2012

Can You Spot TWOT?

Most of the action occurred in the European morning before the US open. Then a bit of a choppy, 20-pip range.

Day's Anatomy- 16th October 2012- The Worst Of Three.

I'm happy with the way I traded today. No rule-bending or trade-skipping (within context..).

The idea of "The Worst Of Three" came about when I repeatedly noticed that when I tried to reason my way around two variables- let's call them A and B- I always ended up in 3rd place in terms of pips, with A and B taking turns for 1st and 2nd place.

TWOT relates to today's action because, sometimes I exit before the 23:00 CET forex break, other times I don't.

It just so happens that the two times (off the top of my head) that I've elected to leave trades through the break, I've suffered some adverse fills that have cost me a half R here and there...

This time I take it off and, after a 12 pip gap in my favour, it speeds off to target.

Whether I had always held or always exited I would have been better off fiscally. The worst of three...

(Not prepared for multiple R losses so no holding from now on!) 

Day's Anatomy- 15th October 2012

Last trade (with huge slippage considering my lot size) was a dead giveaway that we were going up. Had I have traded the two missed trades I'd have had the opportunity to take the last two longs and finish up to some degree or another.

Epic fail.

A bit more of this and I'll be forced to resolve these issues in SIM for a few weeks/months.

Day's Anatomy- 12th October 2012

Followed along much like yesterday except today ended up with some much needed profits. Note to self: The fear of losing money and/or being wrong must be outweighed by the fear of not following your proven plan.

Incidentally, for those who do not yet have a proven plan; It's far more valuable to lose money trading a plan that doesn't work rather than trading with no plan at all. Losing consistently beats losing randomly every time because you have a constant which can be tweaked to profitability. Trade randomly and you are trading with raw luck (or lack there of).

Day's Anatomy- 11th October 2012

Much better. Just the one slight deviation from the plan with the "miss" after the first trade. It's difficult (impossible?) to objectively define a "miss" versus a "skip/hesitate", being a discretionary approach. Too many shades of gray....

....if you're able to be honest with yourself, you'll reach a point where you can start to rely on your feelings as a strong indication of the truth.

Day's Anatomy- 10th October 2012

Complete breakdown today. Same themes as yesterday, except worse.

It's really not about the money. It's all about the difference between taking risks and accepting them. Doing the former without the latter is financial suicide...

Taking a stance in the face of conflicting market information- such as in the last trade- is a sure sign of my needing security outside of the strategy. I noticed it, but continued to trade what was. Pretty much fell prey to all the biases I mentioned on Monday!

I prefer to think of my trading in terms of distance from the absolute edge (i.e what was available from the method minus damaging thought patterns/behaviour).

Monday- No gap between performance and absolute edge. Still a marginal down day though.
Tuesday- Target-sized gap. (Target was obtainable a couple times over...I managed a hair under break even)
Wednesday- Huge gap. Again, target obtainable but finished 60% of the target under break even. Terrible.

The profitable days are always easily explained (namely, "follow the f***ing plan, despite what you feel!!").

Let's see if I can't get back to doing just that....

Day's Anatomy- 09th October 2012- Accepting Risk!

Today, I was that cyclist in the crowd...

Although the net result was better than yesterday's, I'm a hell of a lot happier about yesterday's self-management. Last night's decision to not put on the overnight trade had a knock on effect. I eventually got back on the horse but not before missing the two trades that would have brought me to target (I'm fine with the b/e trade, despite it going on to be a winner. Within the written plan's guidelines.)

A day I want to forget in a hurry!