The Moment it all Clicked

[banjo597 3]

So I've been practice simulation trading for 9 months now, 5 months TOS and 4 months DAS. and from what it seems is that it seems that the less I knew back then, the better I was doing. I can honestly say that I worked hard and thought I was doing good on trading, I then created a Journal in August so I can keep track on how i'm doing and it turns out that I only had 7 out of 18 days positive, and 4 of those 7 green days I had a green on the net  P/L. now the question I have is that when did you finally realized how it works and how to have positive turn outs.  I've been trying for months to figure it out what i been doing wrong. I don't know what to look for and would like your input to see if I can figure out what I'm doing wrong.

[KurtLoeblich 101]

I think it's safe to say that there will be a lot of various "ah ha" moments as to when it all came together but for me personally, it was recognizing that I'm not very good at momentum trading, and when I changed my course and started focusing on trend trading.   I know that, psychologically, I have a very difficult time exiting positions (winners or losers) so I had to develop a strategy that MATCHED that personality.  With that in mind, it was going back, reviewing both my winners and losers, studying the charts, and putting everything together that I had learned up to that point together.  I think it's very easy as a day trader to become very focused on one key element of trading (strategies, chart patterns, level2/tape, volume, support and resistance, etc) but it's once you put it all together that it all starts to make sense and things start to turn around.  

[banjo597 3]

44 minutes ago, KurtLoeblich said:

I think it's safe to say that there will be a lot of various "ah ha" moments as to when it all came together but for me personally, it was recognizing that I'm not very good at momentum trading, and when I changed my course and started focusing on trend trading.   I know that, psychologically, I have a very difficult time exiting positions (winners or losers) so I had to develop a strategy that MATCHED that personality.  With that in mind, it was going back, reviewing both my winners and losers, studying the charts, and putting everything together that I had learned up to that point together.  I think it's very easy as a day trader to become very focused on one key element of trading (strategies, chart patterns, level2/tape, volume, support and resistance, etc) but it's once you put it all together that it all starts to make sense and things start to turn around.  

Thanks for the idea. I thought i had one of those moments in august when i had 4 days in a row green days. but then it seem like it was just a lucky 4 days because i haven't been able to be that consistent since then.

[BBT Member 001 27]

1 hour ago, KurtLoeblich said:

I think it's safe to say that there will be a lot of various "ah ha" moments as to when it all came together but for me personally, it was recognizing that I'm not very good at momentum trading, and when I changed my course and started focusing on trend trading.   I know that, psychologically, I have a very difficult time exiting positions (winners or losers) so I had to develop a strategy that MATCHED that personality.  With that in mind, it was going back, reviewing both my winners and losers, studying the charts, and putting everything together that I had learned up to that point together.  I think it's very easy as a day trader to become very focused on one key element of trading (strategies, chart patterns, level2/tape, volume, support and resistance, etc) but it's once you put it all together that it all starts to make sense and things start to turn around.  

Hi Kurt, 

What is your definition of momentum trading vs trend trading. I'm a bit confused as it seems they are both trading with the trend.

Thanks

[KurtLoeblich 101]

1 hour ago, banjo597 said:

Thanks for the idea. I thought i had one of those moments in august when i had 4 days in a row green days. but then it seem like it was just a lucky 4 days because i haven't been able to be that consistent since then.

Yeah -- 4 days just isnt enough. You need to test strategies for a considerable amount of time before you can determine it gives you an edge in the overall market. For myself, it was 3 months in SIM and then another 3 months live before I realized that I kind of "had it".  Keep in mind, even by using someone else's strategies, you'll always need to test them and see if they are successful for YOU. 

[KurtLoeblich 101]

48 minutes ago, marcelperez said:

Hi Kurt, 

What is your definition of momentum trading vs trend trading. I'm a bit confused as it seems they are both trading with the trend.

Thanks

Momentum trading is trading breakouts/breakdowns and exiting your position as soon as the immediate momentum subsides. Trend trading is longer term trading -- I look to catch as much of the move as possible. A momentum trader rarely holds through pullbacks, and will exit the entire position with the idea that once the pullback ends they might take another stab. They are basically looking to catch the move when volume is flooding in.  Momentum traders will often trade countertrend moves on the longer time frame. It's like Andrew says - he can be long a stock and Brian can be short, but as long as they both manage their risk properly, they both can be winners!

[BBT Member 001 27]

23 hours ago, KurtLoeblich said:

Momentum trading is trading breakouts/breakdowns and exiting your position as soon as the immediate momentum subsides. Trend trading is longer term trading -- I look to catch as much of the move as possible. A momentum trader rarely holds through pullbacks, and will exit the entire position with the idea that once the pullback ends they might take another stab. They are basically looking to catch the move when volume is flooding in.  Momentum traders will often trade countertrend moves on the longer time frame. It's like Andrew says - he can be long a stock and Brian can be short, but as long as they both manage their risk properly, they both can be winners!

Thanks

[Skye 28]

This is a great question. I had the same experience of doing well early and then having more problems later. I am a very curious person and I am a trier. Once I know something can be done I will never give up. This sounds great for trading right? It is, but also it means that I just keep trying things when I should give up and focus on one thing! So I tried opening range brakes, I tried reversals, I tried momentum trading, I tried trend trading, I tried scalping, I tried it all! I tried going live after 6 months in the simulator and it was a total disaster. I reacted emotionally after a big loss and tried to make all my money back on the next trade and lost twice as much. So I went back into the simulator and then I tried going live again a few months later and it was better but still not good. Then I mostly traded in the sim and sometimes when things were going well I did some live trades but I knew that I wasn't there yet. I finally got to the point where I had come full circle. I had tried all the different things I was going to try and I was starting to look back at what had worked best for me and came up with what I really wanted to stick to.

For me it was a matter of keeping things very simple and doing very few trades. I decided to do one five-minute ORB. No trading in the first 5 minutes! Had to wait for that first 5-minute candle that close and then look for an entry. Then I would do one VWAP break, usually after 9:45 or so, and only enter on volume. I would not do any trading after 10 am. Working this plan really helped me in a few ways. First, if I had a down day it would be a small down day. Things can only go so badly when you just do two trades. Also, this kept the fees down. So once I could do that consistently and I was getting decent results and, most importantly, it just felt like a normal thing everyday, I went live again and have been live since then. 

That point of going live was after a year and a half of trading the open before my job of running my small business every day so it took a while! I track my 10 and 20 day averages, focusing on R multiples not money, increasing my risk when my 20 day average is above .5R and now sometimes do another one or two trades and sometimes trade a bit after 10am.

So anyway, finally deciding on two simple trades to focus on was what did it for me. And doing just one ORB and then waiting for a volume entry on the 2 min. chart for a VWAP break kept me from making entries based on reactions instead of rules. 

Edited December 7, 2019 by Skye