Inspiring

[sinoks]

Hi there Jai,

I have to say i am really impressed with the clarity in which you dissect what trading is about.
I am at the beginning of my 'trading career' (which would involve a big move from my broking and research business I am in at the moment). and I have already made quite a few the mistakes in the book (at least I hope I have), and have started to really educate myself. Problem is there are so many self proclaimed guru's out there that it is very difficult to see what's what.
The way you lay it out is really clear, but from what I have experienced so far and from what others are saying also very very difficult to implement. Just keeping a good trading record I find a challenge.
Now my questions: my system is predominantly momentum based (macd and DMI) and results in testing have been decent. Although I never know exactly beforehand when the system will turn: i.e. fully planning the trade is impossible with my approach. I use solid stops and trailing exits, to which I adhere, but as you say, it can be quite nerve recking to follow a trade when you do not know when it will complete.
Could you give any hint as to how this could be overcome, or is it a matter of studying and muddling further to find a good target/exit strategy.
Maybe a volume component should be included I really don't know....

And keep up the inspirational posts!!!!!!

[Jai Ramoutar]

Re: Inspiring

Glad you enjoy the posts. You’re at a very important stage in your development, and education is of paramount importance, however, the market will give you an ongoing education J. I agree, there’s a great wealth of information out there, and it can be very difficult to make sense of it all. The key is finding the “holy grail” or “guru” that resides within US. It seems like you’re definitely on the right rack, and one of your talents is the willingness to learn.

Yes…implementing the plan. That by far is one of the biggest challenges. As far as keeping a diary goes, it’s tough to remember and sometimes painful to do. But I can assure you that it’s a great part of your education, and if you can your post-trade analysis in a diary it will be very valuable to you. The vantage point of hindsight helps reveal oversights. If there were tape recorder nearby when I did this, you would hear…”What in the world was I thinking? Why did I do that?” etc, etc. Believe me post-trade analysis and diary entries are well worth the time and effort.

I don’t use MACD or DMI in my analysis, not to say that they do or don’t work, they just don’t work for me. I’ve found over the years that whenever I use too many indicators I got confused easily and came across many contradictive results. I have a relatively simple way of looking at the charts, which is to say, I melded my indicators and methodologies to

Like you, I use momentum analysis. To me the formula for momentum = volume X urgency. The value and rate of change in price moving averages are lagging indicators, yet they are quite valuable. I have found that the study of volume and it’s bias produces more attractive setups that yield better results.

I recommend that you re-review your strategies, and look for ways to predetermine entry. One of the most important elements of the trade is the entry. When I have a predetermined entry, stop and target for the trade, I can determine the risk and reward ratio.

I strongly believe that if you add volume analysis to your scanning, you will be very pleased with the results.

Thanks for the post, sinoks. I’m glad you enjoy the posts here. I look forward to chatting with you again!

Originally posted by sinoks
Hi there Jai,

I have to say i am really impressed with the clarity in which you dissect what trading is about.
I am at the beginning of my 'trading career' (which would involve a big move from my broking and research business I am in at the moment). and I have already made quite a few the mistakes in the book (at least I hope I have), and have started to really educate myself. Problem is there are so many self proclaimed guru's out there that it is very difficult to see what's what.
The way you lay it out is really clear, but from what I have experienced so far and from what others are saying also very very difficult to implement. Just keeping a good trading record I find a challenge.
Now my questions: my system is predominantly momentum based (macd and DMI) and results in testing have been decent. Although I never know exactly beforehand when the system will turn: i.e. fully planning the trade is impossible with my approach. I use solid stops and trailing exits, to which I adhere, but as you say, it can be quite nerve recking to follow a trade when you do not know when it will complete.
Could you give any hint as to how this could be overcome, or is it a matter of studying and muddling further to find a good target/exit strategy.
Maybe a volume component should be included I really don't know....

And keep up the inspirational posts!!!!!!