Song : InsyaAllah

Stochastic

Not Funny

OK. 2 short stories.

As mentioned yesterday, I'm testing sideways setup in a supposed SIM mode. It got 2 ticks. When I saw the AT platform, the color was different. It was a LIVE mode ! !....I'm traded live actually .  Lucky.

I'm in sideways mood , so I switched to sideways chart. Use simple bracket to achieve target in the correct SIM mode this time. Once target achieved, the candle continue downhill. Flip to trendy chart--there it goes - loud and clear. . Too late to switch to LIVE mode...Wasted 80 ticks.Not so lucky this time.

Learned mistake. Now both sideway and trendy charts are side by side..no flipping when trading in session....

Stochastic

To test : flat waves between 20-80 zones inidicates  ranging mkt

Simple brackets & Stoch

Enough is enough.
I tossed out MACD for sideways market .
Why ? - Simply MACD is a variation of MA.
More important - it does not work in ranging mkt like yesterday. yesterday 2x, many2 yesterdays.

I put in Stoch Slow - but the setting need to be tweaked a little.
I have some experience with Stoch in TF Russell...
It is not a reliable indicator on its own.
So I put in 2 Stochs with diff setting.
Not enough.
This time I will use a new way of using stoch...with OHLC....
And only in fast frame, if it 2min charts, it will be fried.
So : 2 Stoch + OHLC + Trendlines + fast frame....

Too fast ?
Not to worry., My brain...
In ranging market like yesterday, the move is damn slow.
I will test it only for one day SIM then will go LIVE.
One day ?
I have thousand hours experience 'flying' those charts.

Of course, if the market in trend in this next session, my 'sideways plan' will be postponed.

Consumer Confidence Report + 2 others

CL moves slowly till 10.00am Consumer Confidence Report... still use Simple Bracket mode

Safety Rules

These are safety rules. Enough of trading rules that I don't follow :-)

1)  2 Type of tradings - trailing stops for trending  and simple bracket for sideways. Use Moving average to determine which is which. Line can be used to determine strength of structures...However, chart setup patterns are the same  : 'Stepping stones' (OHLC) and "Broken Dam SU1" (MA)

2) If I made mistake in LIVE trading , stop immediately and dont go to SIM and then back to LIVE. Try another day

3) Use printer

4) Calm the mind before trading

Mixed Moved

Yesterday was a mixed move.. I hope today was a clear tredn day

Probabilities

2 kind of set up: Chart and Mental

1. Chance of my chart pattern will be correct : 1/2 = 50%
2. Chance of my mental setup will be in correct mood :1/2 = 50%

Thus probabilities of my trading to be correct in a row : 1/2 x 1/2 = 1 / 4 = 25%

Missing in action

slow market....between the 2 arrows, may choose the one aligned with macd 0 ?

Song : I got a feelin'

Pullback trading

2 basic type of trading = breakout and pull back
SU1 is a breakout setup.

meanwhile Pullback is good strategy if the place is near OHLC or MA and the candle is wicked...I code this setup as  POMA2 as I tend to forgot

Bought printer HP F2400

I hope this printer will enhance my trading memory (which I severely lacked) - This printer will print 'my trading failures and successes' which a blog can't do. Then it will be used like "flash cards for kindergarten children"   :-) ....hmmm... blinking light ?? 

Oh hell, I need to buy the printing papers ...I told ya my memory  is not that good

************

I need a new wire (done)
I need to call technician (done)

I need to dismantle a single bed (done) and drill a hole for the ADSL cable (failed effort, the wall is too tough for the drill, so I have to use the window ..he he)
I need to relocate computer (done)
I need to buy another screen  (done)
I need a big poster of Hawaii :-) Changed  it to New York wall clock (done)
I need a colour printer to print charts and stick em on the wall ( I think the printer is very important -- traders, like other people... tend to forget)(DONE AT LAST)

Current chart setting - SU1 EXcluded

 My xp shows that its useful to record 'the chart' for future reference, even though it may not useful.

“Results! Why man, I have gotten a lot of results. I know several thousand things that won't work.” - Thomas Alva Edison

'trend is no longer your friend'

Now is September but CL market is 100% choppy.
Choppy is the trend now and this choppy trend is not your friend'
I used trendline and OHLC to detect trend but its nowhere to find and confirmed by choppy price movement.
An indicator - MACD - is added to my SU1 set up to test choppy water. Of course when the TRAIN is coming, the MACD is not needed.

Flexibility is necessary to remain in control.

The Ultimate Trading Secret

interesting article ...I will grow mullet to become a better trader ..my strength is in my hair...he he
during my childhood, I personally known a boy that surely down with a fever if he cuts his mullet

be a predator !

http://www.tradersnarrative.com/the-ultimate-trading-secret-280.html

Nothing at all

By now August reputation as choppy moth is intact. 

My SU1 not suitable for the current August market, not worth the risk, I will wait for Sweet September. In meantime, I need to empty my mind again to find another setup for August, I mean next August - probably in longer time frame ?

Fri 6

Set up formed in both charts .
However, 2 immediates hurdles that make entry in higher risk. The price proved to be choppy at hurdles points.

Thu 5

It seems August's reputation is  intact today

No setup, and volume is declining. Adios

Monday 2 Aug And Tues 3 Aug

Monday : Error no. 1 (refer to Error list at the right column)

Tuesday: No setup during 1st session

Today Wednesday : No trading

Bring it on

My Sim trading period is over, it is time to activate real trading mode, starts on 2 Aug 2010. August has the reputation of one of the worst month for trading ( and December is the other). . The exact date is 26/9/2010 - this blog is created 26/9/2009, but I decide to start real trade 1 month early for warming up. The  fasting month Ramadhan is coming in a week..I have no much time  for trading .... I will have only a few REAL trade ..  Hopefully the momentum is there to carry forward when August/Ramadhan is over.


Technical Specs:
Set Up: SU1 (alpha), C180 (beta)
Trading Code: CL only
Lot # : 1 only...yeah you read it rite...IF my SU1 so damn good, I can make money using half-lot...(to newbies like me:   this is suppose to be a joke. so please laugh....Ha ha)
Happy Hour : 1st session only 
Target trading frequency per week: 2 real trades
Monitors : 2 x 21.5" 
Trading platform: AT Infinity
Chart: Sierra

.... So CL, bring it on.

Wimpy Wednesday as usual.

Wednesdays are my day off , except  this Wednesday.

Choppy ride on CL - as 80% of all Wednesdays.
Lot of hurdles with no space to run.
Sim is green..
Lately I dont change my setup as frequent as before. May be that a good thing.

And I ask my broker to include ZSX0 into my trading platform. Just to test my CL theories on ZS.

Wed report - early hour choppy...signal from 1 minute only temporary with small profit.. take a rest on wednesday

A trader need to able to handle the truth

2nd monitor bought...

I should bought this lonngg time ago..its a Viewsonic Vx2233m . My 1st monitor is Benq TD2200HD

 ***********

I need a new wire (done)
I need to call technician (done)

I need to dismantle a single bed (done) and drill a hole for the ADSL cable (failed effort, the wall is too tough for the drill, so I have to use the window ..he he)
I need to relocate computer (done)
I need to buy another screen  (done)
I need a big poster of Hawaii :-) Oh no bikini, just palm trees at the beach
I need a colour printer to print charts and stick em on the wall ( I think the printer is very important -- traders, like other people... tend to forget)

Kickstart the Matrix

Weekly SIM Profit = 180

Actually i got more but I have discounted the sim profits as off record.
I'll wait till I get 300 weekly sim profit before real trading begins

If capital is 5000 , Weekly profit 300 will lead to...

		The Power Of Money Management
Starting Date	07/01/10
“Delta”	$5,000.00			i.e. increase # contracts after making	$5,000.00	per contract
Initial Capital	$5,000.00
Weekly Goal	$300.00	per contract
Money Management
Every	16.6666667	weeks increase the number of contracts
Phase	Phase Start Date	Contracts Traded	Profit/Week	Profit/Phase	Account Size (End of Phase)	Account Growth in %
1	07/01/10	1	$300.00	$5,000.00	$10,000.00	100.00%
2	10/25/10	2	$600.00	$10,000.00	$20,000.00	300.00%
3	02/19/11	3	$900.00	$15,000.00	$35,000.00	600.00%
4	06/16/11	4	$1,200.00	$20,000.00	$55,000.00	1000.00%
5	10/10/11	5	$1,500.00	$25,000.00	$80,000.00	1500.00%
6	02/04/12	6	$1,800.00	$30,000.00	$110,000.00	2100.00%
7	05/31/12	7	$2,100.00	$35,000.00	$145,000.00	2800.00%
8	09/24/12	8	$2,400.00	$40,000.00	$185,000.00	3600.00%

Uncertain Trading Mind With Certain Trading Rules( UTMWCTR)

Today I get this lesson of trading: It came in flash to my mind... To be a successful trader I must have ""Uncertain Trading Mind With Certain Trading Rules( UTMWCTR)"".
In other words - don't have opinion, let market dictates, don't chase the market etc

 Paradox is it ?


Quote from internet:

""Successful traders embrace uncertainty, they realize they don't need to know what will happen next. Basically they are rigid in their rules and flexible with their expectations.


One excellent article about this issue is written by Ziad , but of course you need a certain trading rules to begin. He wrote it to Michael Brenke.  http://brenketrading.blogspot.com/

***********************

Hi Michael,

I've been reading your blog for quite a while now but haven't commented yet. However, I feel I need to comment now.

If you don't mind I'm going to be very straight forward, and blunt even, but I hope you'll take it from a spirit of sincerity and genuine desire to help. It's going to be a long comment, so I'm going to break it up into 2 or 3 comments.

Here's the situation as I see it: For the last few months, and possibly much longer, you've just been spinning your wheels while thinking that you are getting somewhere. The reason for this is that you are going about learning how to trade in the wrong way, in my opinion. I say this because I've been trading much less than you, a little over 2 years now, and yet because of the way I went about learning and what I focused on, last year I netted $150k while nearly quintupling my account, without a single losing month, and while only risking a very small portion of my account on any single trade. Now there could be many reasons for the difference in performance, but I think one of the main reasons has to do with what you are focusing on and how you are going about the learning process.

To try to put it as succinctly as possible, in my view traders that are focusing all their attention on "set-ups" and finding out which combinations of indicators work are never going to become profitable. They are trying to follow the advice of trading books that say trading is simple and psychology is everything. So they search for set-ups that 'work', and that can take the guess work out of trading. They want to be "disciplined" and have simple rules that guide all their actions. But there's a few problems with this. Namely, while psychology is HUGE, it's not everything. And while trading is all about simple principles, actually having an edge is NOT simple. It's a myth that you can have a couple simple price or indicator set-ups and make money consistently if only you are disciplined. That's a load of crap. It keeps the dream alive for wannabe traders who never realize what it's truly about. Well let me tell you what it's truly about...

Trading is about being okay with ambiguity. It's about tolerating confusion. It's about sitting with discomfort and being at peace with it. It's about not having an exact script of when to trade or not to trade, or what's really a high odds trade, and being okay with that. It's about exceptions to the rules. It's about contradiction. It's about uncertainty.

And yet traders left and right want to make it simple. They want to reduce it to a few simple set-ups to trade with discipline. And yet the market is not simple. The market is all about uncertainty, and complexity, and ambiguity. Simple set-ups could never capture that, and they can never give you a true lasting edge.

So what's the solution? Is the problem in the simple set-ups themselves? No, it's in how they're being used. The bottom line is, every trader needs to learn to READ the markets. This means that simple rules will not do. There has to be a synthesis of different elements (whether they be price action, indicators, inter-market themes or whatever), and real-time interpretation must take place. It has to be all about CONTEXT. Once you can read the markets, and don't fool yourself it is a very complex process, then you can choose to employ "simple" set-ups to enter and exit. But the real work will be in interpreting the market to see when you should use which kind of set-up. Seeing a hammer or whatever near a support means nothing unless you've identified the broader picture and gotten a sense of the kind of tactics you should be using, and what the odds are for different scenarios unfolding.

Now I know you, and most traders do this to a certain extent, but your main focus is on the set-ups. It's not on reading the market from minute to minute, hour to hour, figuring out the odds of it doing this or doing that, adapting dynamically, and thinking of trade ideas from all your observation as the day unfolds. Rather, it's waiting for some simple set-up to pop up and then taking it.

Now is it easier emotionally to have clear set-ups to wait for and trade in this simple manner? Absolutely. But who said 'easy' would make you money. If I've learned anything, it's that the market rewards what is hard to do. It's hard to have ambiguity surrounding your market reads. It's hard being uncertain. It's hard dealing with competing and sometimes conflicting signs. And yet, this is what it's all about. You have to stop trying to avoid this by needing things to be clear cut. And is it hard to be disciplined when there's so much uncertainty about what is the right trade to make? Of course. But instead of trying to avoid the uncertainty by looking for simple set-ups, or some straight-forward method, train your mind to be able to deal with the uncertainty.

As for the learning process of how you go about doing this, it's all about being constantly engaged with the markets, trying to figure things out and learn from experience. For me, for instance, what I did was each and every day take notes in a journal all about market action and what I think it means, and how I should trade, and what is working and what's not. I didn't write a journal describing the trades I took, or what my emotions were during the day. It was all about market action. And it was all my perception and interpretation. Day after day, week after week, making mistakes, wrong calls, being clueless as to what was going on, not knowing how I should trade, not knowing if my views made sense or not, and yet I continued taking notes and learning. Then I would view charts and combinations of historical intraday charts, and I'd note certain behavior. For example, I'd study trend day after trend day and try to notice what they had in common and how I could have picked up on it in real time. Then I'd study range days. Then I'd study a price chart of the ES versus the Advance decline line and see what the relationship was across many different days. Then I'd do the same with the ES and TICK chart. And on and on. Over time, this gave me a feel for the markets, and a certain understanding of how certain days differ and many subtle signs and tells for each type of environment and context.

As for set-ups, I didn't use any predefined ones. I just formed trading ideas and then tried to get in at good trade locations. Even this, which is the art of execution, is quite complicated and not straight forward. I started realizing that in some environments it's best to wait for pullbacks, in others I need to get in at market or I'll be left in the dust. In some markets I can buy low and sell high, in other markets the opposite is in order. And so on.

I became consistently profitable in a timeframe of a few months by doing this. But of course before that I had read 30 or 40 books and so I had all the technical background. I had also worked a lot on my psychology and personal issues. But all of this was in conjunction with a method of learning and trading the markets that was mostly in opposition to what the general wisdom says about simple set-ups and exact rules.

Now of course you might say that everyone has their own style, some discretionary and some not. Absolutely. But even the purely mechanical traders are very adept at reading markets, and are aware of all of the complexity and ambiguity inherent in it. Their system might end up being simple, but it will come about through a very deep and complex understanding of markets. And usually this system will take the market environment (i.e. context) into account. It wont just be simple mindless set-ups.

In the end, all of what I am saying is meaningless unless you come to a personal realization. Take a look at your trading career thus far. Do you truly believe that if you just learn to focus and take all of your set-ups then your equity curve will reverse and you'll be a consistently profitable trader? Why would the world's top institutions spend millions and billions on R&D when a few simple set-ups could make them all of the money. This doesn't mean that to make money you need extremely complex mathematical models. Far from it. What it does mean is that you need extremely complex mental maps that take time and experience to develop, and that will never develop if you spend the whole trading day simply waiting for set-ups to materialize. That just won't cut it.

Right now your learning curve is stagnant because you're not truly studying the markets. Your day is wasted in waiting mode. It's not in observing and absorbing mode. Also, because you fear loss, you aren't willing to experiment. This means that you aren't making mistakes and failing regularly, which is what you need to do to learn quickly.

So to conclude, based on all of the above, my advice to you would be to stop trading and make a mental shift. Realize what you need to do to become successful, and it's definitely not staying on this endlessly unfruitful path being supported by the hope of future profits. You're just running in your place unless you change your focus and your learning method. And if you thought the journey was tough so far, you haven't seen anything yet. Get ready for uncertainty and ambiguity like you've never seen it before. But this shouldn't be scary. It should be exciting, because this is what trading is all about. This is why it's called an ART. And it truly becomes one when you change your focus and your learning process. Then everything, including success, becomes possible. And until then, it'll be a distant dream that keeps appearing to be so close and yet stays so far away.

So you need to re-align with a new thought system and then get on the simulator and trade. Take losses. Make mistakes. Be clueless. Don't be afraid of it. It's okay, that's the only way you'll progress. And trust me, progress you will.

Best of luck to you, and I wish you much success.

Ziad

CL CHART