1) Since May, I receive got returned to my daytrading roots. In that May post, I outlined 3 patterns that anchored my trading. My trading consistency (hit rate) as well as profitability increased dramatically when my trading of those patterns was intraday. When I focused on the larger picture--patterns as well as cost projections from those patterns--I lost my experience for the marketplace as well as became ill-prepared for variations inwards cost paths. When I used the patterns every bit context merely focused on the minute to minute menses of marketplace behavior, I could genuinely experience whether or non patterns were playing out. This has choke important, non entirely inwards terms of managing peril proactively (exiting trades when the menses of book is diminishing inwards my direction; non when prices receive got reversed as well as hitting my stop), merely also inwards terms of chance management (sizing upwards trades inwards which flows job upwards with the patterns). Fast pattern-recognition is my greatest cognitive forcefulness every bit a trader. By focusing on longer-term marketplace demeanour as well as patterns, I was neglecting this forcefulness as well as that led to trading that was non consistently profitable. It's been a cracking reminder for the psychologist: success comes from leveraging who nosotros are at our best.
2) Since May, I receive got refined quantitative models that forecast ES prices 3-5 days forward. The greatest refinement has been to model non-linearities inwards the data: situations inwards which the relationships alongside predictors as well as outcomes are unlike at extremes of the distributions. For instance, it's non likewise odd for average values of an indicator to hold upwards unrelated to futurity cost action, merely extreme values to receive got predictive significance. Modeling those non-linearities has led to ameliorate models. (They genuinely are quantifications of the patterns mentioned inwards the May post). Per the offset signal above, however, my trading has been best when these model forecasts deed every bit background as well as context. The successful trading comes from seeing order/trade menses job upwards with the forecasts. Even the best forecasts predict entirely a small-scale fraction of sum variation inwards forrard prices; trading entirely when flows job upwards with forecasts has greatly improved the hitting rate.
3) I review every merchandise as well as what I've done correct as well as wrong. It is no exaggeration to tell that I pass much to a greater extent than fourth dimension reviewing merchandise results, reverse-engineering success as well as failure, as well as researching the lessons from those than genuinely trading. The intensity of this deliberate practise has greatly accelerated my learning curve. Increasing the selectivity of the trades I accept (per the 2 points above) as well as maximizing my review procedure has been much to a greater extent than successful than spending a lot of fourth dimension inwards front end of the covert as well as less fourth dimension inwards review.
4) The discover 1 psychological predictor of the success of my trades is my cognitive country piece putting the trades on. If I am highly focused as well as receive got a clear feel of both larger moving-picture demonstrate as well as moment-to-moment flows, the merchandise is much to a greater extent than probable to hold upwards successful than if I lack that placidity feel of agreement as well as mastery. Influenza A virus subtype H5N1 cracking illustration of a merchandise lacking that feel would hold upwards 1 where I am entering because I'm concerned virtually missing a move. Almost invariably, the timing on such a merchandise volition hold upwards poor. It's inwards the quiet, focused country that the designing recognition volition kicking inwards as well as I volition receive got a much ameliorate experience for when flows are turning inwards the expected direction. Eliminating distractions piece trading has been crucial for me.
5) Where I receive got the greatest progress to brand from hither is inwards proper merchandise sizing as well as seat management. What I'm finding is that it is much ameliorate to trammel the discover of trades taken based upon the to a higher house iv criteria as well as sizing those trades up, rather than taking to a greater extent than trades as well as sizing them moderately. I'm also finding it helpful to role this increased sizing to facilitate a scaling out of positions, as well as thus that the portfolio tin do goodness from both short-term cost reversals as well as ongoing tendency behavior. Because I entirely merchandise 1 instrument, my diversification comes from differentiating fourth dimension frames. This requires dissever planning as well as review for the brusk as well as longer trades, as well as that is a operate inwards progress for me. The challenge is to ensure that the longer-term planning as well as trading procedure does non bleed over into the flexible management of the shorter-term positions mentioned above.
My promise is that this self-reflection tin serve every bit a form of model for your ain trading. Your lessons volition hold upwards unlike from mine, because y'all are unlike from me as well as your trading is unlike from mine. The overlap volition hold upwards inwards the procedure sense: past times treating your trading every bit a functioning activity, learning from mistakes as well as successes, as well as feeding those lessons forrard into your futurity trading, y'all tin evolve dramatically. If y'all write a weblog as well as thoughtfully review your lessons learned, past times all agency permit me know as well as I volition hold upwards happy to link inwards the spirit of usual learning!
Further Reading: Turning Setbacks Into Wins
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