tag:blogger.com,1999:blog-90228358134588882302024-03-12T23:41:33.627-04:00A Robot Trader Becomes HumanFormerly "Trading In A Futures Contest - 2012" - My trading journey - a mechanical trader trying to make a discretionary approach succeed.Kevin Daveyhttp://www.blogger.com/profile/01005422837926052871noreply@blogger.comBlogger132125tag:blogger.com,1999:blog-9022835813458888230.post-51304757493515821842013-07-05T07:04:00.003-04:002013-07-05T07:04:37.899-04:00Blog Hiatus<span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;">Since the start of 2013, I've been incredibly busy developing new systems.</span><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;">Unfortunately, of the 5 new systems I developed (2 of which I am currently trading live), all are mechanical, rule based systems (nothing discretionary).</span><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;">Plus, with my work on the horizon (webinars at Big Mike Trading and a couple of other places, in addition to a bunch of my own webinars), I won't be rolling out a discretionary system anytime soon.</span><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;">BUT, I am still learning a new method. Maybe in a few months, maybe a year (who knows?), I'll be ready to trade it.</span><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;">So, with that I am going to retire this blog, at least for the time being.</span><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><b style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;">In the meantime, if you want to keep tabs on some of my real time trading, just click here: <a href="http://kjtrading-new.autotradenow.com/" style="color: #29aae1;">http://kjtrading-new.autotradenow.com/</a></b><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><b style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;"><span style="color: blue;">If you have liked reading what I have to say, please put your name on my mailing list at <a href="http://www.kjtradingsystems.com/" style="color: #015782; text-decoration: none;">www.kjtradingsystems.com</a>. That way, you'll be informed about all the upcoming webinars, etc.</span></b><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;">Also, I will be giving away 1 or 2 free systems in the next few months, but you'll only hear about it if you are on my list.</span><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;">Thanks, and Happy Trading!</span>Kevin Daveyhttp://www.blogger.com/profile/04236816654726712466noreply@blogger.comtag:blogger.com,1999:blog-9022835813458888230.post-83728052131745219302013-01-23T13:56:00.002-05:002013-07-05T07:04:54.359-04:00Where I Am AtI apologize that I haven't been keeping this blog going, but I have been busy with many trading related activities.<br />
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A couple of things that may interest you...<br />
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1. I will be giving a 30 minute webinar next week on Jan 30: <a href="http://tradersexclusive.com/educational_webinars_for_traders/">http://tradersexclusive.com/educational_webinars_for_traders/</a><br />
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2. For some reason, a lot of people have been inquiring about my one on one mentoring. I only have 1 or 2 spots left: <a href="http://www.kjtradingsystems.com/id124.html">http://www.kjtradingsystems.com/id124.html</a><br />
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3. I will be presenting in March at Big Mike Trading. I'll be giving away the code to a complete crude oil system (now I just have to develop it!).<br />
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But as a full time trader, of course most of my time is spent creating new systems. Here is what I am working on:<br />
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1. I completed a Point and Figure based system for the Euro. Completely rule based / mechanical. It went into incubation beginning of January. $2500 profit this month per contract.<br />
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2. I just wrapped up development on an intraday ES system. Completely rule based / mechanical. I may offer this one to the public via subscription.<br />
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3. My discretionary system is still transforming into a mechanical strategy. It will probably be on the Euro, will be very aggressive in money management, and I may trade it in the World Cup contest. I hope to have this ready soon.<br />
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So, I know some of you were hoping for a complete discretionary system from me. As it stands right now, I am not so sure that will happen. It really depends on how #3 above goes.<br />
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Thanks!<br />
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<br />Kevin Daveyhttp://www.blogger.com/profile/04236816654726712466noreply@blogger.com3tag:blogger.com,1999:blog-9022835813458888230.post-53685959883133702502013-01-11T15:27:00.001-05:002013-07-05T07:05:03.286-04:00Quick Update2 weeks into the new year, and I have not gotten very far with my discretionary system. Seems like everytime I work on it, it transforms from a discretionary approach to a mechanical approach.<br />
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On the positive side, I have created a couple of new mechanical systems that I have in incubation.<br />
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On the negative, a discretionary system is proving to be somewhat elusive.<br />
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The work continues, though!Kevin Daveyhttp://www.blogger.com/profile/04236816654726712466noreply@blogger.com0tag:blogger.com,1999:blog-9022835813458888230.post-57217398998154486762012-12-15T09:07:00.000-05:002012-12-15T14:32:45.310-05:00Update - Discretionary System<b><span style="font-family: Verdana, sans-serif;">If you've been following this blog since the beginning, you know that is has changed a bit over time:</span></b><br />
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<span style="font-family: Verdana, sans-serif;">The blog started out as a journal of performance for a mechanical system that I was trading in the World Cup Trading competition.</span><br />
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<span style="font-family: Verdana, sans-serif;">And then my corrupt broker PFG folded in July, taking most of my account with them. And the idea for my blog!</span><br />
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<span style="font-family: Verdana, sans-serif;">A few months ago, I decided to document my development of a discretionary system - my historical weak point in trading.</span><br />
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<span style="font-family: Verdana, sans-serif;">Along the way, I tried to provide useful information, such as my 15 part "Trading Process" series. Or my free webinars (here is upcoming one on Monday Dec 17th: <i>"Trading Plan For 2013" </i>on Dec 17, 2012 8:30 PM EST at: <a href="https://attendee.gotowebinar.com/register/2901032090057478144">https://attendee.gotowebinar.com/register/2901032090057478144</a>)</span><br />
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<b><span style="font-family: Verdana, sans-serif;">So, as of mid-December, here is where I stand:</span></b><br />
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<span style="font-family: Verdana, sans-serif;">I don't have a discretionary system for 6E (Euro currency) ready to go yet, but I have a couple of pretty good, but separate, ideas in development. With some dedication in early January, I may have something ready to go in late Jan or Feb 2013.</span><br />
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<span style="font-family: Verdana, sans-serif;">I have a little chunk of money allocated for this new system. I may or may not enter it in the World Cup competition. I may or may not post it on Collective2.com, where a third party tracks some of my other strategies (here is just one: <a href="http://www.collective2.com/cgi-perl/system71417784">http://www.collective2.com/cgi-perl/system71417784</a>).</span><br />
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<span style="font-family: Verdana, sans-serif;">My question for you, dear reader, is where do you want this blog to go. Some options:</span><br />
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<span style="font-family: Verdana, sans-serif;"><span style="color: blue;"><b>A.</b> </span> I can continue discussing my discretionary system development, and then actually trade it.</span><br />
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<span style="font-family: Verdana, sans-serif;"><b><span style="color: blue;">B. </span></b>I can talk about trading in general.</span><br />
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<span style="font-family: Verdana, sans-serif;"><span style="color: blue;"><b>C. </b></span> I can talk about <u>any</u> system I enter in a contest, which may also be point A above.</span><br />
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<span style="font-family: Verdana, sans-serif;"><span style="color: blue;"><b>D. </b></span> I can talk about other systems I currently trade (full disclosure: some of these I also offer for sale, some I do not).</span><br />
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<span style="font-family: Verdana, sans-serif;"><span style="color: blue;"><b>E. </b></span>None of the above.</span><br />
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<span style="font-family: Verdana, sans-serif;">I want to keep this blog informative and relevant. I know so far it has been, since it was nominated for Best Trading Blog of 2012 (please vote below).</span><br />
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<span style="color: red; font-family: Verdana, sans-serif; font-size: large;"><b>So, if you get a chance, please leave a comment, and tell me what you'd like to see in this blog. I'm listening!</b></span><br />
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<span style="font-family: Verdana, sans-serif;">I am honored that my blog, "A Robot Trader Becomes Human," has been nominated as "Best Trading Blog of 2012" by the good folks at TraderPlanet.com.</span></div>
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<span style="font-family: Verdana, sans-serif;">If you like my blog at <a data-cke-saved-href="http://2012tradingcontest.blogspot.com" href="http://2012tradingcontest.blogspot.com/" style="color: #015782; text-decoration: initial;">http://2012tradingcontest.blogspot.com</a>, please vote!</span></div>
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<strong><span style="font-family: Verdana, sans-serif;">A Robot Trader Becomes Human</span></strong></div>
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<span style="font-family: Verdana, sans-serif;">Vote here: <a data-cke-saved-href="http://www.traderplanet.com/l/2Kc" href="http://www.traderplanet.com/l/2Kc" style="color: #015782; text-decoration: initial;">http://www.traderplanet.com/l/2Kc</a></span></div>
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<br />Kevin Daveyhttp://www.blogger.com/profile/01005422837926052871noreply@blogger.com13tag:blogger.com,1999:blog-9022835813458888230.post-15316899588970573092012-12-13T22:04:00.001-05:002012-12-13T22:04:12.953-05:00Winner Winner Chicken Dinner!<span style="font-family: Verdana, sans-serif;">We have a winner in our Trading Platform Survey. E-mail address ny11***@yahoo.com was the winner of a copy of my Congress ES Trading System. Congratulations to him or her, and thanks to everyone who contributed.</span><br />
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<span style="font-family: Verdana, sans-serif;">Here are the results, of approximately 150 surveys:</span><br />
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<b><span style="font-family: Verdana, sans-serif;">What trading platform do you use?</span></b><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEify1ojNVlCi7UTlDLJUvAK9UcYphPMvQbvEtOeUtiXRxVvp4xiUC4HWuulxQ4O7vZG9-xc62B_BTSYvUWJaED3rgWrGh-hOxY2OFHHoJa053iAIy5MRSesuNYuqDGAXLxK7Op1SHB7Edk1/s1600/Capture.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Verdana, sans-serif;"><img border="0" height="335" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEify1ojNVlCi7UTlDLJUvAK9UcYphPMvQbvEtOeUtiXRxVvp4xiUC4HWuulxQ4O7vZG9-xc62B_BTSYvUWJaED3rgWrGh-hOxY2OFHHoJa053iAIy5MRSesuNYuqDGAXLxK7Op1SHB7Edk1/s400/Capture.JPG" width="400" /></span></a></div>
<span style="font-family: Verdana, sans-serif;">I was surprised that 7% use no software at all! Pencil and paper folk?</span><br />
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<span style="font-family: Verdana, sans-serif;">About 55% of platform users described themselves as being at a beginner or intermediate proficiency level, and 45% were advanced or expert.</span><br />
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<span style="font-family: Verdana, sans-serif;">51% of respondents have not bought any type of indicator or trading system in the past year. A Do-It-Yourself crowd!!</span><br />
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<span style="font-family: Verdana, sans-serif;">For the 49% who had bought a system/indicator, vendor reputation was far and away the most important criteria.</span><br />
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<span style="font-family: Verdana, sans-serif;">Not surprisingly, most (>70%) system/indicator buyers thought it was "extremely important" that the package they buy be in their platform language.</span><br />
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<span style="font-family: Verdana, sans-serif;">Finally, 85% of people were neutral to very satisfied with what they purchased. Only 15% of people were dissatisfied.</span><br />
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<span style="font-family: Verdana, sans-serif;">THANKS again for participating!</span><br />
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<span style="font-family: Verdana, sans-serif;">I am honored that my blog, "A Robot Trader Becomes Human," has been nominated as "Best Trading Blog of 2012" by the good folks at TraderPlanet.com.</span></div>
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<span style="font-family: Verdana, sans-serif;">If you like my blog at <a data-cke-saved-href="http://2012tradingcontest.blogspot.com" href="http://2012tradingcontest.blogspot.com/" style="color: #015782; text-decoration: initial;">http://2012tradingcontest.blogspot.com</a>, please vote!</span></div>
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<strong><span style="font-family: Verdana, sans-serif;">A Robot Trader Becomes Human</span></strong></div>
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<span style="font-family: Verdana, sans-serif;">Vote here: <a data-cke-saved-href="http://www.traderplanet.com/l/2Kc" href="http://www.traderplanet.com/l/2Kc" style="color: #015782; text-decoration: initial;">http://www.traderplanet.com/l/2Kc</a></span></div>
Kevin Daveyhttp://www.blogger.com/profile/01005422837926052871noreply@blogger.com0tag:blogger.com,1999:blog-9022835813458888230.post-38556430661174800012012-12-09T00:43:00.001-05:002012-12-09T00:43:02.520-05:00New Survey<br />
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I am giving away a free copy of my Congress ES Trading System, valued at $149, to one lucky winner who answers a short 6 question survey.</div>
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You can read about my Congress ES Trading System here: <a data-cke-saved-href="http://www.kjtradingsystems.com/congress.html" href="http://www.kjtradingsystems.com/congress.html">http://www.kjtradingsystems.com/congress.html</a></div>
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Of course, I will share results with everyone on this blog.</div>
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Please click here to take the survey:</div>
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<a data-cke-saved-href="http://www.surveymonkey.com/s/GKVJ9X9" href="http://www.surveymonkey.com/s/GKVJ9X9">http://www.surveymonkey.com/s/GKVJ9X9</a></div>
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Thanks in advance!</div>
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Kevin</div>
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Only one entry per e-mail address allowed.<br /></div>
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I am honored that my blog, "A Robot Trader Becomes Human," has been nominated as "Best Trading Blog of 2012" by the good folks at TraderPlanet.com.</div>
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If you like my blog at <a data-cke-saved-href="http://2012tradingcontest.blogspot.com" href="http://2012tradingcontest.blogspot.com/">http://2012tradingcontest.blogspot.com</a>, please vote!</div>
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<strong>A Robot Trader Becomes Human</strong></div>
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Vote here: <a data-cke-saved-href="http://www.traderplanet.com/l/2Kc" href="http://www.traderplanet.com/l/2Kc">http://www.traderplanet.com/l/2Kc</a></div>
Kevin Daveyhttp://www.blogger.com/profile/01005422837926052871noreply@blogger.com0tag:blogger.com,1999:blog-9022835813458888230.post-77211679919697394082012-12-07T09:10:00.004-05:002012-12-07T09:10:32.828-05:00Survey - Final Results<span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;">*********************************************************************</span><br /><span style="background-color: white; color: #333333; font-family: Verdana, sans-serif; font-size: 13px; line-height: 18px;"><b>I am honored that this blog, "A Robot Trader Becomes Human," has been nominated as "Best Trading Blog of 2012" by the good folks at TraderPlanet.com.<br /><br />If you like my blog, please vote!<br /><br /><span style="color: blue;">A Robot Trader Becomes Human</span></b></span><br />
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<b><span style="color: blue;"><span style="font-family: Verdana, sans-serif;">Vote here: <a href="http://www.blogger.com/goog_1110677129" style="color: #015782; text-decoration: initial;"> </a><span style="background-color: #f4f4f4; line-height: 19.5px;"><a href="http://www.traderplanet.com/l/2Kc" style="color: #015782; text-decoration: initial;">http://www.traderplanet.com/l/2Kc</a></span></span></span></b></div>
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<b><span style="color: blue;"><span style="font-family: Verdana, sans-serif;">********************************************************************</span></span></b></div>
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<b><span style="color: blue;"><span style="font-family: Verdana, sans-serif;">********************************************************************</span></span></b></div>
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<span style="font-family: Verdana, sans-serif;">So, what "takeaways" can we glean from this survey? Here are a few:</span></div>
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<span style="font-family: Verdana, sans-serif;"><b>Pure mechanical traders are more profitable than hybrid traders, who are more profitable than pure discretionary traders.</b></span></div>
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<span style="font-family: Verdana, sans-serif;"><b><br /></b></span></div>
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<span style="font-family: Verdana, sans-serif;"><b>Traders who backtest their idea for more than 1 year tend to be more profitable than those who do not.</b></span></div>
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<span style="font-family: Verdana, sans-serif;"><b><br /></b></span></div>
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<span style="font-family: Verdana, sans-serif;"><b>Trading is TOUGH. You are more likely to lose than you are to win.</b></span></div>
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<span style="font-family: Verdana, sans-serif;">Thanks to everyone who participated!</span></div>
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Kevin Daveyhttp://www.blogger.com/profile/01005422837926052871noreply@blogger.com1tag:blogger.com,1999:blog-9022835813458888230.post-43378053507896441532012-12-05T09:14:00.000-05:002012-12-05T09:14:40.872-05:00Survey Results - Mechanical TradersTaken as a group, people who identify themselves as 100% mechanical traders are more profitable than either pure discretionary or hybrid traders.<br />
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Only 27% of pure discretionary traders reported that they were profitable the last 3 years. The number jumps to 43% for hybrid traders, and then jumps again to 55% for mechanical traders.<br />
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So, according to this survey, you are twice as likely to be profitable if you are 100% mechanical, as opposed to 100% discretionary.<br />
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The other interesting point here is that mechanical traders who backtest for more than 1 year tend to be more profitable. Not surprising to me, but hopefully it is enlightening to those traders out there who feel long backtests are pointless.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqrIBPVN1_ADrXt4iKAY8ZU3jbhm-U0-76xAmNd96wYiJi2t9mLKzIsBkEz3hjXhr4yz8h6kq1EDm9X89ZoR16mj1PS_wAVLdNm-t7WwgZ7WwgQLqYbmtegyC_9fQQ4PTAacggeCaWB2FH/s1600/Capture.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqrIBPVN1_ADrXt4iKAY8ZU3jbhm-U0-76xAmNd96wYiJi2t9mLKzIsBkEz3hjXhr4yz8h6kq1EDm9X89ZoR16mj1PS_wAVLdNm-t7WwgZ7WwgQLqYbmtegyC_9fQQ4PTAacggeCaWB2FH/s400/Capture.JPG" width="400" /></a></div>
<br />Kevin Daveyhttp://www.blogger.com/profile/01005422837926052871noreply@blogger.com2tag:blogger.com,1999:blog-9022835813458888230.post-48649196450028036502012-12-04T09:07:00.002-05:002012-12-04T09:07:54.954-05:00Survey Results - Hybrid TradersFor people who identified themselves as "hybrid" traders - that is, they use a mix of discretionary and mechanical methods, the survey shows the following:<br />
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Most hybrid traders lose<br />
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Hybrid traders who backtest for longer periods of time have a higher chance of success<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgj2cg_xpfNBEQIJV78Dwr01b-fHHFVwYk_N6uEjgb8U4qaf8G90KxEnmlRLz8kP493HYsKY9zKgl9mRbpQpPI6X0APaUtx3Ha4-l9cSQ7XfpXauAbRizF0Q9S2dbqO9bDaDjBFPfIctBuH/s1600/Capture.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="213" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgj2cg_xpfNBEQIJV78Dwr01b-fHHFVwYk_N6uEjgb8U4qaf8G90KxEnmlRLz8kP493HYsKY9zKgl9mRbpQpPI6X0APaUtx3Ha4-l9cSQ7XfpXauAbRizF0Q9S2dbqO9bDaDjBFPfIctBuH/s400/Capture.JPG" width="400" /></a></div>
<br />Kevin Daveyhttp://www.blogger.com/profile/01005422837926052871noreply@blogger.com2tag:blogger.com,1999:blog-9022835813458888230.post-21313630725742126112012-12-03T09:09:00.002-05:002012-12-03T09:09:57.420-05:00Survey Results - Discretionary TradersOf the people who identified themselves as discretionary traders, most perform backtests less than 1 year duration. Could this be why most are losing money?<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjO6na6ESZxl6OEfS3trRz_g40kbZqTN_g35wagN10HfA_Tg8Hz-GH_rNUNtn8muDlMLaXHk6hi-h3RKI8gFWaGEkhPQafxKsJWx5vPKkKRqYAh5jjtF010vyF2ungl8HMuFwJhgcGw6jLS/s1600/Capture.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="317" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjO6na6ESZxl6OEfS3trRz_g40kbZqTN_g35wagN10HfA_Tg8Hz-GH_rNUNtn8muDlMLaXHk6hi-h3RKI8gFWaGEkhPQafxKsJWx5vPKkKRqYAh5jjtF010vyF2ungl8HMuFwJhgcGw6jLS/s400/Capture.JPG" width="400" /></a></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh7kpVuNJn0MEfy8PgU8oIrR-a8YBQrnp-esFLOJngqovpa34_kOaGoAC3jIa3D9rOsSr-I8_kwLyVrVBMQrkLX0Y0wz2r2DAC3dZkavqVnaGmYq6r1dpWJBslz-u5pvd0kLmO9mgEJpmwz/s1600/Capture1.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="316" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh7kpVuNJn0MEfy8PgU8oIrR-a8YBQrnp-esFLOJngqovpa34_kOaGoAC3jIa3D9rOsSr-I8_kwLyVrVBMQrkLX0Y0wz2r2DAC3dZkavqVnaGmYq6r1dpWJBslz-u5pvd0kLmO9mgEJpmwz/s400/Capture1.JPG" width="400" /></a></div>
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<span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;">*********************************************************************</span><br />
<br />
<span style="font-family: Verdana, sans-serif;"><br style="background-color: white; color: #333333; font-size: 13px; line-height: 18px;" /><b><span style="background-color: white; color: #333333; line-height: 18px;">I am honored that this blog, "A Robot Trader Becomes Human," has been nominated as "Best Trading Blog of 2012" by the good folks at TraderPlanet.com.</span><br style="background-color: white; color: #333333; line-height: 18px;" /><br style="background-color: white; color: #333333; line-height: 18px;" /><span style="background-color: white; color: #333333; line-height: 18px;">If you like my blog, please vote!</span><br style="background-color: white; color: #333333; line-height: 18px;" /><br style="background-color: white; color: #333333; line-height: 18px;" /><span style="background-color: white; color: #333333; line-height: 18px;"><span style="color: blue;">A Robot Trader Becomes Human</span></span></b></span><br />
<div style="background-color: white; color: #333333; line-height: 18px;">
<b><span style="color: blue;"><span style="font-family: Verdana, sans-serif;">Vote here: <a href="http://www.blogger.com/goog_1110677129" style="color: #015782; text-decoration: initial;"> </a><span style="background-color: #f4f4f4; line-height: 19.5px;"><a href="http://www.traderplanet.com/l/2Kc" style="color: #015782; text-decoration: initial;">http://www.traderplanet.com/l/2Kc</a></span></span></span></b><br />
<div>
<b><span style="color: blue;"><span style="font-family: Verdana, sans-serif;"><br /></span></span></b></div>
</div>
Kevin Daveyhttp://www.blogger.com/profile/01005422837926052871noreply@blogger.com1tag:blogger.com,1999:blog-9022835813458888230.post-26838542218982863782012-11-29T09:49:00.002-05:002012-12-03T09:06:41.636-05:00Survey Results - Part 1Thanks to everyone who participated in my survey. The next 2 or 3 posts will present the results. Hopefully, knowing the results of a large group of people will give you some guidance into what is "best."<br />
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As a reminder, here were the questions:<br />
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<div class="hdr" style="background-color: #e6ecc0; border-bottom-color: rgb(153, 153, 153); border-bottom-style: solid; border-bottom-width: 1px; font-size: 14px; font-weight: bold; margin: 1px 1px 0px; padding: 10px 8px;">
<span class="notranslate">1. What kind of trader would you consider yourself?</span></div>
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<div class="hdr" style="background-color: #e6ecc0; border-bottom-color: rgb(153, 153, 153); border-bottom-style: solid; border-bottom-width: 1px; font-size: 14px; font-weight: bold; margin: 1px 1px 0px; padding: 10px 8px;">
<span class="notranslate">2. Do you perform historical testing before trading a strategy with real money?</span></div>
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<div class="hdr" style="background-color: #e6ecc0; border-bottom-color: rgb(153, 153, 153); border-bottom-style: solid; border-bottom-width: 1px; font-size: 14px; font-weight: bold; margin: 1px 1px 0px; padding: 10px 8px;">
<span class="notranslate">3. For the past 3 years, how would you describe your real money trading results?</span></div>
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Here are the results:<br />
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<span style="background-color: #e6ecc0; color: #333333; font-family: Arial, Helvetica, sans-serif; font-size: 14px; font-weight: bold;">1. What kind of trader would you consider yourself?</span><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiODsotLnOVvT_3az_4ZcZZ8n6de5Y843KmIdmFMOBAT-pRAeewk8Tb2bymLMOFXmnwLbvEvrsLEkif5QkgcY1obAIV8tjwQNjF2AwmKpN1HCcdzajYrvSK72Eu26f2xJOdU3wbLEr2taed/s1600/Capture1.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="295" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiODsotLnOVvT_3az_4ZcZZ8n6de5Y843KmIdmFMOBAT-pRAeewk8Tb2bymLMOFXmnwLbvEvrsLEkif5QkgcY1obAIV8tjwQNjF2AwmKpN1HCcdzajYrvSK72Eu26f2xJOdU3wbLEr2taed/s400/Capture1.JPG" width="400" /></a></div>
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<span style="background-color: #e6ecc0; color: #333333; font-family: Arial, Helvetica, sans-serif; font-size: 14px; font-weight: bold;">2. Do you perform historical testing before trading a strategy with real money?</span><br />
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjzSn_xSYTT5CDZ68JQpIP0pMTiZbN5V5KWd9chejUy1Te3vNwLRabHUyXgh6Cqreg3TVekfKQm7Lnp5ahdBytw8bPXW8z63EVZj3K7voYuaYbA0H3f10qsoxBn5z0cAZke79qgGu20jAUV/s1600/Capture2.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="296" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjzSn_xSYTT5CDZ68JQpIP0pMTiZbN5V5KWd9chejUy1Te3vNwLRabHUyXgh6Cqreg3TVekfKQm7Lnp5ahdBytw8bPXW8z63EVZj3K7voYuaYbA0H3f10qsoxBn5z0cAZke79qgGu20jAUV/s400/Capture2.JPG" width="400" /></a></div>
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<span style="background-color: #e6ecc0; color: #333333; font-family: Arial, Helvetica, sans-serif; font-size: 14px; font-weight: bold;">3. For the past 3 years, how would you describe your real money trading results?</span><br />
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEivO6bufmz23pDZKp8Uc7DdlOlGj18_Vilj0h8-cMvGk6Sj539YvBHwF5g-pcbRBAM1s-Ffonw6sNxXV4dyvzIET9nPNRr5a-A5XMh7tbSog6r6gp1uI_0icQ7BOvojulU4jkkN94JpQnV9/s1600/Capture3.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="295" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEivO6bufmz23pDZKp8Uc7DdlOlGj18_Vilj0h8-cMvGk6Sj539YvBHwF5g-pcbRBAM1s-Ffonw6sNxXV4dyvzIET9nPNRr5a-A5XMh7tbSog6r6gp1uI_0icQ7BOvojulU4jkkN94JpQnV9/s400/Capture3.JPG" width="400" /></a></div>
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In the next post, I'll dig a bit deeper and try to find out answers to questions like:<br />
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"What type of trader is more likely to be profitable?"<br />
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"Does backtesting length influence future profits?"<br />
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Etc.<br />
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STAY TUNED!!<br />
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<span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;">************************************************************************</span><br />
<span style="font-family: Verdana, sans-serif;"><br style="background-color: white; color: #333333; font-size: 13px; line-height: 18px;" /><b><span style="background-color: white; color: #333333; line-height: 18px;">I am honored that this blog, "A Robot Trader Becomes Human," has been nominated as "Best Trading Blog of 2012" by the good folks at TraderPlanet.com.</span><br style="background-color: white; color: #333333; line-height: 18px;" /><br style="background-color: white; color: #333333; line-height: 18px;" /><span style="background-color: white; color: #333333; line-height: 18px;">If you like my blog, please vote!</span><br style="background-color: white; color: #333333; line-height: 18px;" /><br style="background-color: white; color: #333333; line-height: 18px;" /><span style="background-color: white; color: #333333; line-height: 18px;"><span style="color: blue;">A Robot Trader Becomes Human</span></span></b></span><br />
<div style="background-color: white; color: #333333; line-height: 18px;">
<b><span style="color: blue;"><span style="font-family: Verdana, sans-serif;">Vote here: <a href="http://www.blogger.com/goog_1110677129" style="color: #015782; text-decoration: initial;"> </a><span style="background-color: #f4f4f4; line-height: 19.5px;"><a href="http://www.traderplanet.com/l/2Kc" style="color: #015782; text-decoration: initial;">http://www.traderplanet.com/l/2Kc</a></span></span></span></b></div>
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<br />Kevin Daveyhttp://www.blogger.com/profile/01005422837926052871noreply@blogger.com0tag:blogger.com,1999:blog-9022835813458888230.post-85199516259448469962012-11-26T12:23:00.002-05:002012-11-26T12:23:35.049-05:00Survey Still Open<span style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: x-small;"><span style="line-height: 18px;">I still have the 3 question survey open. The link is below, and I will share the results with everyone.</span></span><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><a href="http://www.surveymonkey.com/s/QP9QVN2" style="background-color: white; color: #015782; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px; text-decoration: initial;">http://www.surveymonkey.com/s/QP9QVN2</a><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;">Thanks in advance!</span><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;">************************************************************************</span><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;">I am honored that this blog, "A Robot Trader Becomes Human," has been nominated as "Best Trading Blog of 2012" by the good folks at TraderPlanet.com.</span><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;">If you like my blog, please vote!</span><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><b style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;"><span style="color: blue; font-family: Times, 'Times New Roman', serif;">A Robot Trader Becomes Human</span></b><br />
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<b><span style="color: blue;"><span style="font-family: Times, 'Times New Roman', serif;">Vote here: <a href="http://www.blogger.com/goog_1110677129" style="color: #015782; text-decoration: initial;"> </a></span><span style="background-color: #f4f4f4; font-family: Times, 'Times New Roman', serif; line-height: 19.5px;"><a href="http://www.traderplanet.com/l/2Kc" style="color: #015782; text-decoration: initial;">http://www.traderplanet.com/l/2Kc</a></span></span></b></div>
Kevin Daveyhttp://www.blogger.com/profile/01005422837926052871noreply@blogger.com0tag:blogger.com,1999:blog-9022835813458888230.post-982992460987544572012-11-19T22:53:00.000-05:002012-11-19T22:53:43.957-05:00Discretionary Trading - UpdateI am still testing and evaluating possible techniques to trade, so I have not gone "live" yet. I am struggling with a couple of things right now:<br />
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1. How much historical testing should I do?<br />
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2. How much discretion should I build into the system?<br />
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I have thought a lot about these topics, but I still don't have solid answers to these questions.<br />
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I suspect I am not alone in this regard. So, I have created a survey for all readers. It is simple, anonymous and only 3 questions long. I will share results in a week or so with everyone who takes the survey. I think it will be a big help to all of us.<br />
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<a href="http://www.surveymonkey.com/s/QP9QVN2">http://www.surveymonkey.com/s/QP9QVN2</a><br />
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Thanks in advance!<br />
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************************************************************************<br />
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I am honored that this blog, "A Robot Trader Becomes Human," has been nominated as "Best Trading Blog of 2012" by the good folks at TraderPlanet.com.<br />
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If you like my blog, please vote!<br />
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<b style="line-height: 18px;"><span style="color: blue; font-family: Times, Times New Roman, serif;">A Robot Trader Becomes Human</span></b><br />
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<b><span style="color: blue;"><span style="font-family: Times, 'Times New Roman', serif;">Vote here: <a href="http://www.blogger.com/goog_1110677129"> </a></span><span style="background-color: #f4f4f4; font-family: Times, 'Times New Roman', serif; line-height: 19.5px;"><a href="http://www.traderplanet.com/l/2Kc">http://www.traderplanet.com/l/2Kc</a></span></span></b></div>
Kevin Daveyhttp://www.blogger.com/profile/01005422837926052871noreply@blogger.com1tag:blogger.com,1999:blog-9022835813458888230.post-61127811850516529432012-11-16T14:02:00.001-05:002012-11-16T15:03:09.344-05:00Award Finalist - Please Vote For This Blog!This blog has been honored with a nomination by TraderPlanet.com for the Best Trading Blog of 2012.<br />
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If you've enjoyed this blog, from my contest account discussion to trading process steps to my current journey into discretionary trading, please vote for me below.</div>
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Your votes will encourage me to continue to provide quality information to you!</div>
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Thanks!</div>
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Kevin</div>
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<b><span style="color: #38761d; font-size: x-large;">A Robot Trader Becomes Human</span></b></div>
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<span style="font-size: x-large;">Vote here: <span style="background-color: #f4f4f4; color: #333333; line-height: 19.5px;"><a href="http://www.traderplanet.com/l/2Kc">http://www.traderplanet.com/l/2Kc</a></span></span></div>
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Kevin Daveyhttp://www.blogger.com/profile/01005422837926052871noreply@blogger.com0tag:blogger.com,1999:blog-9022835813458888230.post-67967596599138045482012-11-11T20:18:00.000-05:002012-11-11T20:23:30.073-05:00Whoops - Sorry!As you may know, I have fairly regular free webinars on trading. I try to announce them on this blog. Unfortunately, my last one, "Unorthodox Entries," I neglected to inform blog readers about.<br />
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Good news is that I recorded it, so if you want to listen to it, just shoot me an e-mail. I will immediately respond with the link for you. kdavey @ kjtradingsystems.com<br />
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*******************************************************************<br />
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Now for my discretionary system...<br />
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I gave up on the Forex broker I was going to use, as I could not trust their charting platform. I got my deposit back over the weekend. The odd thing was I was actually a bit worried about getting it back - that's how "spooked" I am about this whole industry since the MFG and PFG scandals. <br />
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As far as a new forex broker, I am now looking at Euro futures, not Forex. This is a major switch. I trust the data better, don't have to worry about dealing desks, and it is more regulated (although being more regulated, I'll admit, did not help me with PFG!). But the position sizing will be tougher (which means, I'll have to risk more to get the same return), and I'll probably pay more in transaction costs. Pros and cons to each market.<br />
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I am still looking at entries for this system. I don't know if it is good or bad, but I seem to be turning this project into a mechanical system - one that can be automated. I'm not sure that is where I want to go - it certainly is not where I planned to go - but I am keeping an open mind.<br />
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Maybe I am evolving this way because historically I much more successful at mechanical trading (for example: my World Cup contest accts, my Trender, SFE and Congress ES systems on my website) than I am at discretionary trading. That is not to say that I am a "bad" discretionary trader, but I was not a consistent earner with such a method, not necessarily a net loser. To me, that is "bad."<br />
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So, we'll see where this journey takes us! Kevin Daveyhttp://www.blogger.com/profile/01005422837926052871noreply@blogger.com0tag:blogger.com,1999:blog-9022835813458888230.post-20479918136598095492012-11-06T09:21:00.000-05:002012-11-06T09:22:14.292-05:00Houston, We Have A ProblemWell, it seems like I cannot get this strategy off the ground and trading real money...<br />
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My latest problem is on 1 minute bars, with the proprietary platform of my forex broker. If I use their MT4 interface, everything is fine. If I use their proprietary platform, and shut it down and turn it back on, I get different looking 1 minute bars. See below:<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhbyLQVG6QeodenXvUCpJLzOSE2dLd0noLcK_bMUIZ1yFCHEhtjjHcBUS_ns_yrw2ZP3IXnc41IGYA4GJF4KJ_yNzhSZK6TZpE20-w9bwYnHrhKJIVmf2Pqg74xqgw0R88q2PzTHbDljZ2u/s1600/differences.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhbyLQVG6QeodenXvUCpJLzOSE2dLd0noLcK_bMUIZ1yFCHEhtjjHcBUS_ns_yrw2ZP3IXnc41IGYA4GJF4KJ_yNzhSZK6TZpE20-w9bwYnHrhKJIVmf2Pqg74xqgw0R88q2PzTHbDljZ2u/s400/differences.jpg" width="208" /></a></div>
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Since I did my backtesting with this platform, I consider ALL RESULTS INVALID.<br />
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So, I have multiple options at this point:<br />
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1. Just keep going with the incorrect proprietary platform, realizing that my live results will probably not match my backtest, due to the charting issue above<br />
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2. Use my broker's MT4 platform (which has a terrible order entry window, although I could change it if I learned MT4 programming). I'd redo the backtest in this platform<br />
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3. Go to a different Forex broker, but likely pay higher spreads. Redo backtest.<br />
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4. Use the Euro futures instead, although this means that some of my position sizing (using micro and mini Forex lots, in addition to regular size lots) will be invalid. Redo backtest, although I could likely program most of what I am doing.<br />
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5. Chuck the whole project, move on to something else.<br />
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I am going to evaluate each option, and come to a decision soon. Until then, no paper trading, and no real money trading. VERY disappointing!<br />
<br />Kevin Daveyhttp://www.blogger.com/profile/01005422837926052871noreply@blogger.com0tag:blogger.com,1999:blog-9022835813458888230.post-30806814464319432292012-11-04T22:33:00.000-05:002012-11-04T22:33:18.915-05:00Getting CloserOK, I am getting closer to trading live. Here's an update...<br />
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As I mentioned before, at least some of my trading strategy is based on Bob Volman's Forex Price Action Scalping book. He uses a 70 tick chart. I am not, because:<br />
1. The tick count for my broker's platform depends on the first bar in memory, which is different each time. So, trying to backtest it yields unreliable results - sometimes a signal will trigger, but if tick count is off a little bit, sometimes it won't.<br />
2. Tick count in Forex mean different things to different brokers, AND probably will not match up well. I want a method that is broker agnostic.<br />
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So, I will be using a 1 minute chart. Then, I should be able to pick just about any broker, should the need arise. Plus, I really do not like the platform of my current broker, so I may move soon (I do like their spreads, though).<br />
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I am still at 2 unique entries, and 50/50 entries (meaning, for example, 10 pip profit or 10 pip stop). Of course, those aren;t really 50/50 entries once you factor in the spread.<br />
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Volman also advocates using market orders to enter. I may do this, but I am also looking at limit and stop entries, to get more consistent fills. I think entering at market all the time will cost me money.<br />
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SO, the plan is to trade sim for a few more days, and maybe go live mid week.<br />
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I still owe you a post on how I'll track my performance, and that will be coming soon...Kevin Daveyhttp://www.blogger.com/profile/01005422837926052871noreply@blogger.com0tag:blogger.com,1999:blog-9022835813458888230.post-83721429059590775802012-11-02T15:28:00.000-04:002012-11-02T15:28:24.291-04:00Still Working out DetailsI am still working out some details on my new discretionary system. I think I am on the right track, and I may start live on Monday.<br />
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So, be sure to check back Monday afternoon/evening!<br />
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<br />Kevin Daveyhttp://www.blogger.com/profile/01005422837926052871noreply@blogger.com0tag:blogger.com,1999:blog-9022835813458888230.post-68403491339191704262012-10-30T20:31:00.001-04:002012-10-31T15:07:12.841-04:00Live Trading - POSTPONED!As I mentioned earlier, I am using a 70 tick chart for my charts. I assumed that the tick count started at the beginning of the session each day. With the platform I am using, that is apparently NOT the case.<br />
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I noticed this because of end of session, I print a screenshot of my entries and exits. When I went back to the platform (and closing and opening it), I discovered completely different looking charts. It looks like the start point for counting is not session start. Maybe it is the first bar in memory. I don't know.<br />
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What does this mean?<br />
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Well, for starters, it means that all the backtesting I did is worthless. So, I have to go back and do it again. This time I will use 30 second bars, or 1 or 2 minute bars.<br />
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<b>Bottom Line: </b> I am not ready to trade this live, until I re-evaluate things. Maybe the beginning of next week. I am in a hurry to trade live, but not in a hurry to lose money!<br />
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<br />Kevin Daveyhttp://www.blogger.com/profile/01005422837926052871noreply@blogger.com2tag:blogger.com,1999:blog-9022835813458888230.post-84544791615495138962012-10-29T19:13:00.005-04:002012-10-29T19:13:52.028-04:00My Entries and ExitsI will talk about "Tracking My Progress" in the next post...<br />
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OK, so I am on track for starting live trading Thursday. After spending some time this weekend working on things, I have settled on 2 basic entries, and 1 simple exit.<br />
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Earlier, I had mentioned that I was using the book by Volman** to guide my discretionary trading with this system. After working through the book, though, I now will be using a very, very small portion of his book, at least initially.<br />
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<b>Here are my entry and exit rules, and other assorted info...</b><br />
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<b><span style="color: blue;">1. </span></b>Volman's** Second Break entry. BUT, I have modified it. I have specific criteria for when it applies, and even then, the signal could be in either direction, depending on the shape of the pattern. My technique is unique and unorthodox, and I probably will not be sharing any more about it.<br />
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<span style="color: blue;"><b>2. </b></span> Entry 2 is based on a specific chart pattern. It occurs multiple times per day, usually a couple of times between 9-11 AM. The trick is that once the pattern is established, it can go long or short depending on the shape. Again, unique and unorthodox.<br />
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Because I think my edge is in the entries, I probably will not be showing exact details on it. I may show the bar of entry, and direction - we will see.<br />
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<span style="color: blue;"><b>3. </b></span> I will take entries in sequential order. If, for example, Signal 1 triggers a long, and 3 bars later, signal 2 triggers a short, I will reverse to a net short position. If I am long, and another long signal comes along, I'll just ignore that second signal.<br />
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<span style="color: blue;"><b>4. </b></span>Profit target always 10 pips. Stop Loss always 10 pips. No changing or moving of either one. Exit at end of day, if neither is hit.<br />
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<span style="color: blue;"><b>5. </b></span>Trade from 9-11 AM ET. But, I won't neglect an entry at 8:58 AM, or 11:04 AM, if I am at my trading station.<br />
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<span style="color: blue;"><b>6. </b></span> Usually, these 2 entries will have about 4 trades per day total. My goal is to extract 5 pips per day. In backtest and real time simulation, I have averaged about 13 pips per day. But, backtests and sim testing is always better than real life, right?<br />
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<span style="color: blue;"><b>7. </b></span> Doing the math, with 4 trades per day, and aiming for 5 pips per day, if I average 56% winning trades, I will achieve my goal. I think I can get to 60-65% winning trades, which would mean 8-12 pips per day. 50% wins or less, and I am a net loser. <br />
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<span style="color: blue;"><b>8.</b></span> I have not included slippage in item #7 calculations. Also, with the spread, a totally random strategy should win about 45% or so. So, I have to do a lot better than random!)<br />
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** The book "Forex Price Action Scalping - by Bob Volman"Kevin Daveyhttp://www.blogger.com/profile/01005422837926052871noreply@blogger.com2tag:blogger.com,1999:blog-9022835813458888230.post-43611222315687709032012-10-26T10:44:00.001-04:002012-10-26T10:44:49.450-04:00My Goals and Objectives<br />
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My overall goal with this discretionary method is for 5 pips per day. Eventually, I'd like to get 10+ pips per day. Of course, I have no illusions that I'll get that 5 pip average right off the bat.<br />
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To get this, I am willing to risk 50% of my initial capital.<br />
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With the position sizing I intend to use, where the percent risked will vary from 1 to 3 percent per trade (details to follow soon), this will provide a nice income stream.<br />
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As stated earlier, though, to get there I want to first have a profitable week span on the simulator.<br />
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Week 1 was terrible.<br />
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Week 2 was much better, very close to breakeven, but still negative. The last 3 days were the best, after I incorporated a new entry technique.<br />
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So, if the first 3 days of next week plus the last 3 days of this week are positive, I will start live trading on November 1, 2012.<br />
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Next post: How I will track my progress in this blog. (Spoiler: I'll be tracking avg pips per day, percent risked and error rate).<br />
Kevin Daveyhttp://www.blogger.com/profile/01005422837926052871noreply@blogger.com4tag:blogger.com,1999:blog-9022835813458888230.post-3071826857897846362012-10-25T09:33:00.003-04:002012-10-25T09:33:49.364-04:003 More Reasons Why I Fail at Discretionary Trading<span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;">Last time I told you about how I was going to overcome 2 reasons I have failed at discretionary trading. Here are 3 more reasons, and how I plan to defeat those.</span><br />
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<b style="background-color: white; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;"><span style="color: blue;">The reasons I fail:</span></b><br />
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<b style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;">Overtrading/Revenge trading </b><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;">- sometimes in discretionary trading, sometimes everything looks like a signal. Worse yet, sometimes I'd force signals to get back lost money</span><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><b style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;">Too Many indicators/rules</b><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;"> - Confusion reigns supreme, when the charts get complicated</span><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;" /><b style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;">Not Practicing Enough</b><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;"> - Many people don't practice at all!</span><br />
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<span style="background-color: white; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;"><b><span style="color: blue;">My plan for overcoming these obstacles:</span></b></span><br />
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<span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;"><b>1. </b>I have a set list of approximately a half dozen setups. The potential trade HAS to be meet one of the setups. This will take mental discipline, and I might resort to step 2 to ensure I am not overeager to trade at the start of the day. I may or may not be sharing these setups later on.</span><br />
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<span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;"><b>2. </b> At the beginning of the day, I am usually amped up a bit, and excited to trade. Many times, I notice that I "see" setups that aren't even there! So, I will track my first trades of the day. If they look to be particularly bad, I might do one or two crazy things:</span><br />
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<span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;"> <b> A.</b> If I have enough indication that I am doing things backwards with the day's first trade, I might just take the opposite of the intended signal.</span><br />
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<span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;"> <b> B.</b> If I notice that I constantly take first trade signals that are not there, I might just take a random (coin flip) entry, and manage the exit. This might take away that "first trade of the day" excitement.</span><br />
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<span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;"> I'll be the first to admit that these options are pretty wacky, and I don't want to use them. But realize what I am doing - I have identified a specific weak spot in my trading, and therefore developed a plan to overcome the weakness. That is the takeaway lesson here.</span><br />
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<span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;"><b>3.</b> I am only going to be trading from 9 AM - 11 AM each morning. That will leave me time for all the other trading activities I do (writing, developing mechanical systems, consulting, etc). In that 2 hour period, I'm guessing 5 trades should be my maximum. So, to prevent overtrading, I'll never take more than 5 trades in one day. I think most days will be even less.</span><br />
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<span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;"><b>4.</b> I estimate I should hit 50% wins. So, the odds of getting 3 losers in a row is 12.5%, or about 1 day every 2 weeks. Since "revenge" trading usually hits after a string of losses, I will shut down for the day after 3 consecutive losses.</span><br />
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<span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;"><b>5. </b> For indicators, I'll just use candlesticks, and an EMA line. I may also have a few pattern detectors programmed in, but for the most part I'll keep it very simple. Simple is usually best.</span><br />
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<span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;"><b>6.</b> Every night, I will practice, either looking through days trades, old charts or by studying reference material.</span><br />
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<span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;">Next time, I'll write about my specific goals and objectives.</span><br />
<span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;"> </span>Kevin Daveyhttp://www.blogger.com/profile/01005422837926052871noreply@blogger.com0tag:blogger.com,1999:blog-9022835813458888230.post-35374353318189111482012-10-23T09:24:00.000-04:002012-10-23T09:26:27.996-04:00Overcome Backtests, and Emotions<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">2 of the biggest reasons I think I have historically struggled at discretionary systems are:</span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><span style="color: blue;"><b style="background-color: white; line-height: 18px;">No backtesting possible </b><span style="background-color: white; line-height: 18px;">- makes it hard to have confidence in trading a new method</span></span></span><br />
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<span style="color: #333333;"><span style="line-height: 18px;">Here's why these are a problem (for me), and how I will get around them.</span></span></span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif; line-height: 18px;"><span style="color: red;"><b><u>Backtesting</u></b> </span><span style="color: #333333;">- I cheat on discretionary backtests. I go through trades, and invent reasons that I would not have taken certain losing trades. So, I end up historical results that will never occur in real time.</span></span><br />
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<span style="color: #333333;"><span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif; line-height: 18px;">The good thing is I know I do this. I suspect most people who do this do not even realize it! Trading books are notorious for this. How come you only see examples of when a setup worked? Wouldn't it be more appropriate to show some of the same setups that lost? </span></span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><span style="line-height: 18px;"><span style="color: red;"><b><u>Emotions</u></b></span><span style="color: #333333;"> - In the heat of trading with real money, I sometimes let emotions get the best of me. I make trades I should not, and trade differently that I do if I am doing historical testing, or even trading on a simulator.</span></span></span><br />
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<span style="background-color: white; color: #333333; line-height: 18px;">So, here is my plan for minimizing the impact of these 2 roadblocks to discretionary trading...</span></span><br />
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<span style="background-color: white; color: #333333; font-family: Helvetica Neue, Arial, Helvetica, sans-serif; line-height: 18px;"><b>1. </b>I am not going to do a traditional backtest at all. My method is based on a trading book, with some other setups added in. I will make the assumption that these reference sources have given me solid ideas to work with. I may be totally wrong on that. We will see.</span><br />
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<span style="background-color: white; color: #333333; font-family: Helvetica Neue, Arial, Helvetica, sans-serif; line-height: 18px;"><b>2. </b> I am going to test the method, in real time, using a realistic simulator. If you don't know what a "realistic" simulator is, or for example the difference between a simulator and an emulator, I HIGHLY recommend you take the time to find out. Working with an unrealistic simulator can be worse than random guessing.</span><br />
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<span style="background-color: white; color: #333333; font-family: Helvetica Neue, Arial, Helvetica, sans-serif; line-height: 18px;"><b>3. </b> Once I have 1 week of profitable simulator testing, I will jump to live trading. I realize this is really quick. (By the way, my first week on sim was REALLY bad, so it may be a while!).</span><br />
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<span style="background-color: white; color: #333333; font-family: Helvetica Neue, Arial, Helvetica, sans-serif; line-height: 18px;"><b>4. </b>With real money, I am starting out with an amount that I consider insignificant. If the money doesn't matter, then my emotions should be in check. If this doesn't work, and I still notice emotions clouding my judgment, maybe money isn't the issue. In that case, I'll have to do more self examination.</span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><span style="background-color: white; color: #333333; line-height: 18px;"><b>5. </b>Since this will be "on the job" training and testing, I will start with risking 1% of equity per trade. On days I make money, I'll bump it up by 0.1%. On days I lose, I'll drop by the same. There will be some limits to this, but the idea is that until I get consistently profitable, I won't be risking much.</span></span><br />
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<span style="background-color: white; color: #333333; line-height: 18px;">There might be some other </span><span style="background-color: white; color: #333333; line-height: 18px;">things I do, but I think this is a good start to overcoming the lack of backtest, and minimizing emotions.</span></span><br />
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<span style="background-color: white; color: #333333; line-height: 18px;">Comments and questions are always encouraged!</span></span><br />
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<span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18px;"><br /></span>Kevin Daveyhttp://www.blogger.com/profile/01005422837926052871noreply@blogger.com4tag:blogger.com,1999:blog-9022835813458888230.post-56424026000081445252012-10-21T21:12:00.000-04:002012-10-21T21:12:04.249-04:00Why I Think Most People (Including Myself) Fail at Discretionary TradingIf you've read through this blog, or found my history on the Internet, you'll know I'm a much better mechanical/systems trader than a discretionary one. I suspect there are a lot of people like me (or at least people who fail at discretionary trading).<br />
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Here are the main reason why I think I have failed at discretionary trading:<br />
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<b>No backtesting possible </b>- makes it hard to have confidence in trading a new method<br />
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<b>Emotions</b> - decision making under stress is always tough<br />
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<b>Overtrading/Revenge trading </b>- sometimes in discretionary trading, sometimes everything looks like a signal. Worse yet, sometimes I'd force signals to get back lost money<br />
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<b>Too Many indicators/rules</b> - Confusion reigns supreme, when the charts get complicated<br />
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<b>Not Practicing Enough</b> - Many people don't practice at all - they just start trading!<br />
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The good news for me is that I have a plan to overcome all of these issues. I'll be presenting them in the next few blog posts.<br />
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Thinking ahead, I hope to give all readers a good process for developing and trading a discretionary trading. I may or may not reveal exact details of how I am trading (and honestly, it probably would not matter if I did), but I think knowing the steps to take will help everyone.<br />
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Next time, I'll probably talk about the first few steps.<br />
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<b><span style="color: blue;">By the way, if you are looking for a blog with lots of good info, MBA Gearhead's Blog is the place to go: <a href="http://mbagearhead.blogspot.com/">http://mbagearhead.blogspot.com/</a> It is one one the few blogs I follow, mainly because his experience is so similar to that of most traders.</span></b><br />
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Kevin Daveyhttp://www.blogger.com/profile/01005422837926052871noreply@blogger.com7tag:blogger.com,1999:blog-9022835813458888230.post-89309558718136673712012-10-18T09:26:00.000-04:002012-10-18T21:57:57.653-04:00Why?<br />
<b><span style="color: blue;">Why in the world would a successful mechanical trader try a discretionary approach?</span></b><br />
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Throughout my 20+ years of trading part time, and now full time, I have had much more success with mechanical systems than discretionary ones. Hopefully that is pretty obvious to anyone who has read my bio. Winning 3 World Cup Trading trophies, all with mechanical systems, should convince you of my ability to create successful mechanical systems. I guess at heart I am just a numbers guy, and creating rigid rules appeals to me most.<br />
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But, there are things about mechanical systems I just hate:<br />
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<b>First,</b> once you turn a mechanical system on, you basically lose all control. And since most of my systems run for days or weeks, the day to day variation sometimes gets emotionally overwhelming. I resist the temptation to interfere, but it is always there. <br />
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<b>Second</b>, in the back of my mind I always wonder if/when a mechanical system will stop working. <br />
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<b>Third, </b>sometimes mechanical systems take trades that make me think "what did the strategy just do?!?" Many times - but not always - these trades turn out to be losers.<br />
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<b>Finally,</b> I've always had limited success in creating a day trading system with mechanical rules. Maybe it is the way I test, maybe it is the market, but since my goal is a day trading system, I need to look beyond mechanical type systems. <br />
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<span style="color: red;"><b>There is definitely a challenge here that motivates me: "Can I become a great discretionary trader?"</b></span><br />
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So, I added that all these reasons up, and concluded that a day trading, discretionary approach is what I should be looking at.<br />
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The problem is that throughout my trading career, I have very limited success with discretionary trading...<br />
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<span style="color: blue;"><b>Next post: Why I Think Most People (Including Myself) Fail at Discretionary Trading</b></span>Kevin Daveyhttp://www.blogger.com/profile/01005422837926052871noreply@blogger.com0