Trader X

So which one came first? The correct answer is the chicken, but forget that for a moment. In my quest to follow my systems I've come across the whole concept of faith being greater than fear to follow a system. Now the question is the classic chicken and egg question. Which comes first... Faith in the system or following the system.

In order to follow the system you need faith in the system to follow it. It is very hard to follow it without faith... but without faith you won't follow. Which comes first? Neither. For me it was a very gradual increase in both. I would follow it a little and it would work and then I wouldn't follow it and bad trades happen. It was a process of gaining confidence to follow it more and more and as I did I build more faith that the system worked which allowed me to follow it more consistantly and with less emotions involved. There was a process for me that I can clearly see. I didn't see it as it was happening but now I can see it and I find this very valuable for me as I develop other systems. I will need to know how to trade them successfully. Here are my steps that I took.

1.Develop system with edge.
2.Backtest to establish that edge does exits
3.Trade it with smallest contracts size possible and be aware of your TEA.
4.When you screw up stop trading and review your mistakes.
5.Trade small size again and stop when making mistakes.
5.Keep reviewing daily.

Eventually you will make fewer mechanical mistakes, which cause emotional mistakes of not following system. The fewer mechanical mistake, and by cause and effect the fewer emotional mistakes, will allow you to start making money. Once that happens you will build even more faith and it's just a circle from there. It will continually build to a very high Q number. I'm currently 90+%

The review of each trade daily... or as soon as you make mistakes, is the key issue here. With out that review you will never know what you should have done and what the outcome would have been. The more you review and see that if you had just followed the plan it would have been a + outcome, over time, in money, confidence, and performance. It is a vicious circle and the only way to climb out is to review your system and how well you trade it.

If the system doesn't make money you can always change it to one that does. If your system does make money and you don't follow it then you have no one to blame but yourself!

Trader X

Only traded consistantly for a few hours last week... not even 2 days worth. Everyone in the house is sick and sleep time has been a premium! Now that the kids are feeling better the parents are getting it! Just wonderful! LOL

Still... last week was a + week and I followed the rules.

Today was also a big + day and followed rules again. It is becoming second nature to just do what I'm suppose to be doing. I've been trading this for about 2 months now when you take out the holiday breaks and sick weeks! That is about 40 days give or take for me to get this ingrained into my brain. Granted... I'm a little slower than most. Why I'm in mensa is still a mystery to me. As a side note, I really think being of high IQ is not a good thing for a trader as it really doesn't take IQ to just follow the freaking rules now does it! All of this leads me to an interesting question that I'm going to post right now about the chicken and the egg. You will already have read it by now since it will be listed first.

Trader X

I worked with a trader for a few months that really set the stage for me to get to the next level. Summary of what I learned.

Create a system that has a repeatable visual event. Stay in the flow of expectancy.

The repeatable aspect is simply this. If means that your system has the same triggers over and over and over. You must remove the variability of subjective trading. If you can't do that you don't stand a chance. You can't backtest something that isn't repeatable. Simple but that isn't all.

Once you do have a repeatable visual event that has been backtested to create a positive expectancy, you must not introduce any variability of NOT following the system. Just backtest the hell out of it and then follow it. If you don't then you are removing yourself from that flow of expectancy that you have created. This is where having more faith than fear comes in. I am hungry and need to eat so more on this later!

Trader X

OK... I may not be quite done yet but it was a great week. I made 4 perfect days out of 5! I had to pay the price of going through a drawdown last night and today of 3 losing trades in a row. Staying the flow of expectancy I gladly pushed the button for the 4th trade and made some back. It was a profitable week. Not a great one but most importantly I followed my rules and built more faith the the system keeps on pluggin away! 4 days out of 5 means I can take the next step. Either another market or to increase size. After a month in a half with improving numbers on Q every week it is time to reward myself.

Trader X

No trades today. followed rules so a perfect day. I'm 2:3 this week! I did wake up a little late due to some late night backtesting and missed one long trade that would have hit both tgts. Not complaining because you can't work 24/7. Just nice to know that system worked well even if I wasn't working! LOL

Started backtesting a long bond system and also looking at Corn. will require some work!

Trader X

Today was a great day. No mistakes at all. perfect trading and profits to boot... although profits are a byproduct and not the main objective. Three trades and all perfect execution.

Now yesterday was a different story. I had 2 trades before the announcement that were perfect. Announcement was OK to. Problem came after the announcement around 930 I think. I had been trading for 3 hours or so and was getting tired. I went to take a break. Just after I leave the market breaks out and I wasn't there to take the trade. It was a nice trade. I came back and waited for next trade as I should. Of course after a big move we hit congestion again and I was stopped out taking away my earlier profits. I got mad at the market and entered 2 trades off a different chart to try to make it back quickly. 2 mistakes and a further loss of profits. Now if I had just stayed with my main chart I would have had just one stop and more profitable trades ahead. But I got antsy started taking signal from a "faster" chart. Now... I had been trading the faster chart that would have been OK and profitable as well. But the two mixed together are not a good plan. The efforts to improve entry and exits by using two different time frames just causes more chop in a choppy market. It DOES NOT improve results!

I stopped and re-evaluated. I took the next 2 trades as per plan on my main chart and made back the losses as the system does make money if I just leave it alone and follow it! I climbed back to break even for the day and also hit my stop trading time.

I should have been up few ticks but ended up just breakeven.

After evaluating the day, I turned off the other chart with the other time frame.

Last week I traded 4 days and 2 were perfect (no mistakes, and profitable to boot) and 2 I made mistakes. This week I am batting 1 and 1. I would like to end at 4 perfect and one bad. If I can do that then I will start looking at another market as well as increasing size. I am only trading about 1 trade an hour. When the battle heats up I can always shut down the other market. I'm looking at the bonds, or grains. I hope to backtest this week so I can start looking at the charts in real time before trading.

Trader X

PS.... I can't tell you how much better it is to finally, after 6 years, make consistant profits. Much better than being on the other side of things!

So far pretty boring... 630am was the first trade. Hit T1 and stopped on runner. 736am is second trade. Still waiting to hit t1 or get stopped on whole thing. Not looking very good atm but following rules as I should be. It occurs to me that I don't need to be getting up at 5something in the AM as it is usually chop until closer to 730. It will be nice to get 3 more hours of sleep!

While I'm non-emotionally waiting for this trade to take direction I'm going to review some of TFM concepts.
Desire
Clarity
Purpose
Commitment
Order
Self Discipline
Self Reliance
Awareness
Focus
The Now
Perception
Sixth Sense
Truth
Choice
Surrender
Trust
Willingness
Power
Non Resistance
Non Attachment
Forgiveness
Fearlessness
Love
Humility
Selflessness
Gratitude
Cheerfulness
Freedom!

Things for me to continue to work on. Purpose,Awareness,Forgiveness,Gratitude.

Forgiveness and Gratitude are big ones for me... trying to live in that state of bliss which is achieved by forgiveness and gratitude.

Trader X

The year of EPIC. Week 1.

The year of epic is this year and it means that I take my daytrading specifically to a new level of perfection. I have been profitable with other types of trading for years but daytrading has befuddeled me. Not anymore. I have cracked the mental issues.. and there were many I am sad to say. Not saying there won't be more but I finally fee as though I am to the point to understanding the CORE issues that have been holding me back and concouring those issues!

When I look at my mistakes from Tues and today... it should have been more like $2500 but I traded Tues and Wed without mistakes. Mistakes today were mostly from announcement and me getting greedy! Still... I will take $1000 and be VERY happy.

I pulled $2500 out of market for Dec. Already $1000 for Jan with a lot more time ahead and better trading habits. I know I will double my Dec results with ease.

I'm batting about 50% Q (quality or efficiency from perfect trading) Dec was only about 25% Q so I am making huge strides forward. Most of the issues were just me finding a system I believe in and was able to psychologically trade... it had to fit me. This stupidly simple system fits me very well.... not sure what says about me but.... I'll take stupid if it makes $$$$$$$$$

I have been doing a lot of work with another trader. We talk a few times a week for accountability. We really hit home on something yesterday that has defined in one word the reason why we have both struggled and have both made huge strides in becoming profitable.

Courage.

Let me define it as I use it. I am a huge WWII buff... and have watched and read volumes on it. Band of Brothers is reviewed annually if not more. That's very hard with kids! One thing you will hear repeatedly by those Hero's and Hero's by classic definition when asked weren't you scared when you ran across the field to get so an so and drag him back to the fox hole, or weren't you scared when you rushed the machine gun nest to take them out, or weren't you scared when you etc..... You get the point. What is ALWAYS the same answer? It's this: "Hell yeah I was scared! But I had to do what I did because it was the right thing to do and I was suppose to do it in SPITE of the FEAR."

After 3 losing trades in a row how scared am I to take the 4th... the one that makes it all back and then some? Heck yeah I'm scared... but I have been taking those trades more and more because my backtesting says that if I don't then I lose money. Tell me something I don't know! I'm scared to take the 3rd winning trade in a row because I know the loser is out there. Hell I'm scared just put on a trade period! OK, well not that scared but you get the point. The more I trade this system the more I own it and I am willing to take the next trade to stay in that stream of reproducible flow of profits (a different entry in itself). The more I trade it the more I know how it acts under any and all conditions. The more I trade it the more FAITH I have that it does make $ over time. Steve nailed this concept about faith.

He says to me one day that he always thought that the fear would go away and that great traders don't feel the fear. I told him the story that great traders still feel the fear, but still trade the system anyway. The fear doesn't go away... at least not completely. Then he comes back to me weeks later and says to me...."I think I understand that the fear doesn't go away, but as your faith grows it becomes larger than fear and allows you to trade the system as it grows even if the fear doesn't go away!" I had never thought of it that way but he is right. He NAILED it! FAITH overcomes fear.

Courage in life: Doing what you know is right despite the consequences and having the faith to do it anyway.

Courage in trading: Following your plan despite the consequences and having the faith to do it anyway.

If there is ONE reason for me performing better, THIS is it. Courage.