Daily Trade Review Process

[tech/a]

Not sure exactly where you're going with this Tech/A...? Are you saying that professional traders don't review thier trades to try and improve? They just "know" how to trade? So they've always known how to trade?

Perhaps you could expand a little?

CanOz
Still taking in what you posted TH....thanks for taking the time to post that.

No I'm saying I and those I know as profitable don't use a logging review process.
Those who are on " L " plates can and do.

Sure you'll look at various aspects of current markets but thats all part of knowing.
Like slowing down your driving when it rains or changing to wet weather tyres.
You know how to drive----

Practice practice practice (refer T/H reply above ) will increase your " knowledge " and once you understand
The results of all this practice it's like riding a bike---you never forget.
but if you " don't get it " you'll look at every new theory that appears.
Read every new book, attend seminars, ask if this or that method makes you a buck.

You see it EVERYDAY on this forum.

 

[waza1960]

Great Posts Tech/A & TH
Any newbie starting to discretionary trade should imprint the last half dozen posts in their brain.
Best and most succinct advise I have seen but it doesn't sell books

 

[boofis]

What you can do is after the sim phase (which you have done) is start very small so at least the $ outcome will not hurt you. Then its a matter of concentrating on taking the 2-3 setups and exits you think work(from simming) over and over until you have proven to yourself YOU ARE PROFITABLE. Magic, all of a sudden mild nerves are just a small part of the game. Nerves are a symptoms not a cause. By all means manage them but to rid yourself of them you must cure the cause - 3 months of profitable trading (or even just near breakeven) will do it. Trust me.

Great post. I will put in my experience re. starting small $ value by saying it is of utmost importance. After simming I had the youthful arrogance to 'know' I was profitable so went hard out with the position sizes relative to account and had some ridiculous pnl swings which inevitably took the focus off of trading to "oh fark I've lost/made so much money".
Do it CanOz we're all barracking for you mate!

 

[CanOz]

Interesting, last night I ended my CL session -25 ticks. After reviewing my trades the day before, I tried to hold on to winners longer ad also move my stops to BE sooner. We'll it was a different animal last night, as a result I lost two 12 tick winners, just to recall a couple.

I will be reviewing them this morning again, I need to do this review and quite frankly, I can't imagine any intraday traders not doing some kind of trade review when at the stage I'm at....

On a positive note, the two or three setups I use work well. I've just gotto get better or faster at deciding when to move to BE, take profit etc....I know right now that trading more cars would have helped the PL, but taking the heat with more on is harder, so I know it's not the answer.

There are two many trades in my result that shouldn't be there and need to be weeded out too.

Lots of work to do.

Thanks folks....also for the PMs.

CanOz

 

[Trembling Hand]

There are two many trades in my result that shouldn't be there and need to be weeded out too.

To my thinking this is one of the most powerful post i have EVER read. It relates directly to the crap trading IMO.

I like these loser threads because they get the closest to the right approach.

Risk by its very definition is being exposed to a possible negative outcome.

You can’t be successful if you don’t take on risk.

You can only do two things to control risk.

1) Take risk on when it’s priced favourably. (according to your strategy)

2) Managing the negative outcomes.

Do these two things and you will have a positive expectancy - All that remains is to be exposed to risk for long enough for any negative randomness to be overcome by your expectancy and you have a plan to win.

Lots of people talk about an edge but I suspect some don’t actually understand what it is – Its whatever address 1) above. Generally there’s not much to do with an edge after you have worked yours out except, scan/wait until your criteria is met, and then take a position.

After nailing down 1) The real work of being in the market is 2) managing negative outcomes (the positive takes care of itself) and that means being immersed in your mistakes. I know personally that I spend so much time concentrating on managing negative outcomes that it generally comes some what as a shock when the big picture is tallied up – all of which that leads me to the clip below which sums it all up for me.

Very relevant to intraday trading where you can get caught up in the price action and take less than idea trades.

 

[CanOz]

You can only do two things to control risk.

1) Take risk on when it’s priced favourably. (according to your strategy)

2) Managing the negative outcomes.

Do these two things and you will have a positive expectancy - All that remains is to be exposed to risk for long enough for any negative randomness to be overcome by your expectancy and you have a plan to win.

Yeah....in the past i would become too discouraged by that " noise " and give up, not giving my method time to overcome the noise and realize that i can be profitable. That first crest is tough one...

 

[tech/a]

I don't know about everyone else

But I place a stop at as fast as I can
B/E (Mentally) if trading the FTSE/DAX then concentrate on getting the most out of that trade.
If stopped at B/E or small slippage I'm not fussed.

Similar when Portfolio trading.
Once I have a fixed B/E stop its just a matter of catching as much of the move as you can.

I look for momentum and get on.
Get off when it hiccups.

 

[CanOz]

I don't know about everyone else

But I place a stop at as fast as I can
B/E (Mentally) if trading the FTSE/DAX then concentrate on getting the most out of that trade.
If stopped at B/E or small slippage I'm not fussed.

Similar when Portfolio trading.
Once I have a fixed B/E stop its just a matter of catching as much of the move as you can.

I look for momentum and get on.
Get off when it hiccups.

I use hot keys to enter because I'm not entering where there is little trade, I'm entering where there is a hundred orders pounding the quantity on bid and its just sitting there being eroded until it finally gives way and market drops 15 ticks faster than your eyes can see. My stop is a protective stop 15 ticks away from the inside bid/ask...If the offers start getting swept then I'm out....

Sometimes its easier, six or seven ice bergs at a level just soaking up hundreds of cars....i sell 1 car and place a stop 2 ticks above the bergs, they finally stop buying and the price drops five ticks and I'm out.

Sometimes you can tell some big dick wants to take out the bergs, so he just pounds them non stop, then i'll place a limit order one tick above and wait for the berg owner to puke up his big position and the price to run 7 ticks.

The stops are just for comfort, i can't use them all the time, i need to get out when I'm wrong, when the reason for taking the trade has been proven invalid and before i get smashed for 5 ticks of slippage as 500 other stop orders bail out.

Sound familiar? CL trades very similar to the DAX by the way....you might like it, and at $10 / tick it better value.

the reason i'm trying to perfect this, is that after i build a little cushion, say one or two 4 car full stops, then i can take a nice leisurely swing trade....

CanOz

 

[Trembling Hand]

the reason i'm trying to perfect this, is that after i build a little cushion, say one or two 4 car full stops, then i can take a nice leisurely swing trade....

CanOz

Something to maybe revisit after a month or a bad patch as you clearly have a plan but,

Is this approach not arsed about and in fact dealing with your head rather than the current market? My preference is to always start to trade the market not my P& L.

If I dig a huge hole (often!) or the market is unlikely to be going anywhere then I take little bites but if I start overly worrying about the next 3 trades and take little scalps to charm the doubts I tend to trade what I want rather than whats on offer. Normally taking a little trade getting a winner and then being left with no position stepping in front of momentum........ all day!

 

[CanOz]

Something to maybe revisit after a month or a bad patch as you clearly have a plan but,

Is this approach not arsed about and in fact dealing with your head rather than the current market? My preference is to always start to trade the market not my P& L.

If I dig a huge hole (often!) or the market is unlikely to be going anywhere then I take little bites but if I start overly worrying about the next 3 trades and take little scalps to charm the doubts I tend to trade what I want rather than whats on offer. Normally taking a little trade getting a winner and then being left with no position stepping in front of momentum........ all day!

Absolutely, this is something that I've been mulling over today, fine to scalp if that's all there is, but if the stops runs etc., are running on to the next solid level then i have to adapt to that or i'm leaving too much on the table, trade after trade.

 

[CanOz]

For some of the guys that PM'd me, as well as those interested...here's a classic setup in lazy arvo trading on CL...

Just above my entry you can see three little triangles. Those are the iceberg markers. Sometimes if the berg is big enough nothing can make him give up, he'll just sit there. This time there were 500 cars traded there at three attempts.

So i waited for buyers to jump in and pus hthe price up, thinking i could jump on board...nothing happened...so i placed a limit order for 2 cars under the bergs by a couple of ticks...boom! Down she went....now that berg must have some cars to unwind, so i won't let go until the trade looks bullish again...or hits my measured move target.

CanOz

 

[CanOz]

my measured move was 66, i grabbed my profit after the last big push down...got filled at 68, it bottomed at 65.

i had a crack at a long, but then realized that it was likely going to bust, so i bailed and got the limit under...

CL, after the equities open in the US moves too fast for me to compute these types of trades. Last night i traded too late into that. During the European session its not too bad, more my speed.

 

[kid hustlr]

Really great thread.

I've been doing this each day, after each trade I just write a couple of quick notes to myself, even if its as simple as

- 'got long the curve in an ok spot, perhaps needed to be more patient and back the paper behind me'

or

- 'legged in really well but was way to quick to take profits, I scratched the 3's and effectively paid up when I should have just managed the other leg, I would have made another half tick.'

or

- 'traded the data like a moron today. I had no PLAN and was effectively clicking buttons'

As T/H said patterns do emerge overtime. I think I'm to conservative even when I'm in a profitable trade.

Ah the learning process....

GL Can I'll read this thread each day.

 

[boofis]

Hey Kid H how's your progress going mate?!

 

[CanOz]

Well, after focusing on my one or two little setups today as TH suggested, I've had a profitable day on CL.

I had a couple of stellar trades, and lots of losers....

Here's my stats:

total trades12
Wins - 3
Loser - 9

(points)
Avg, Trade = .02
Avg. Win Trade = .2
Avg. Loser Trade = -.04

Largest winner = .30
Largest loser = -.11

Ratio avg./Avg. loss = 4.65
Profit factor 1.55

total profit .215 points

a couple of trades had two cars, they were so much easier to trade after the initial heat...All in - Scale out

CanOz

 

[skc]

CanOz,

Thought I'd drop in quickly since you mentioned my review thread from almost the last millenium. I was quite a beginner back then (and still am) so I wrote down everything to both review my own thinking and get feedback from others. In terms of actual benefits of the review process... I'd say worth it for about 20 trades, then it gets old quickly. If something takes too much time and effort yet it doesn't show obvious and direct benefits, it's easy to quickly lose interest in doing it.

There are 2 (group of) things I do these days...

1. Keeping track of trading stats in moving average terms. E.g. what's my win%, win/loss over last 40 trades? Has that significantly changed from what I'd expect? I'd only dive a bit deeper if there was any cause for concerns. And really for the most part - you know what caused it before you need to dive in.

2. Have a short list of things I know I need to work on. Like TH says - they jump out at you after not many trades... (so detailed trade-by-trade review has very quickly diminishing returns). And these things are probably the same ones you are working on. Need to enter full size with more conviction early, let profit run, plan ahead of upcoming events etc...

Absolutely, this is something that I've been mulling over today, fine to scalp if that's all there is, but if the stops runs etc., are running on to the next solid level then i have to adapt to that or i'm leaving too much on the table, trade after trade.

Scalping is a different skill set to catching runs. I'd say only really experienced traders can switch between the two without great difficulty. As you are still just begining I'd suggest be happy with doing just one thing good first. You can add more tools to your belt later on. Yes that means there'd be days when the market runs 200 pts and you've just scalped 8 of them. But one thing at a time...

- 'traded the data like a moron today. I had no PLAN and was effectively clicking buttons'

Lol . You summed up my last CPI Wednesday to perfection.

 

[burglar]

I had no PLAN and was effectively clicking buttons'

I would put a post-it on my screen!

 

[waza1960]

If something takes too much time and effort yet it doesn't show obvious and direct benefits, it's easy to quickly lose interest in doing it.

+1.......... I think that while a detailed trade review process seems a good idea.
Is it not just another psychological crutch?
Does it not just cause you to overthink the process?
I think it would be better to trade one setup and concentrate on the Stats such as entry & exit efficiency/ R:R etc
Only review the trades where you know you didn't follow the setup and if your like me you'll know exactly which ones they are cause they'll stick out like Dog's b*lls.

You don't need a process which will cause you to question your approach IMO. Better to do that with lots of trades using the stats to guide you.

 

[kid hustlr]

Boofis,

It's a battle but Im still here.

---

I think arguing the types of notes or analysis one performs is arguing semantics a little bit. At the early stage surely you are better off taking a whole bunch of notes, then as the set ups which you like and work become clearer your notes are going to become less 'airy fairy' and more statistical based.

At the end of the day you are trying to manage every part of every trade as well as possible.

 

[pavilion103]

I don't see the need for daily review. It would just make me not want to turn on the computer each night!

I simply log on and adjust my stops and do a quick scan for new prospects. Doesn't take long at all. That's how I want it to be.

As posters above, I simply review my stats and that gives me an indication of what I'm doing right and wrong. I save all my trading charts too. After a couple of months I'll do a brief review of my trades then all at once.