Time to review....
Went through this entire thread in the night.... interesting...
Almost 2 years since I started this thread. And what have I learnt in the 2 years? All stuff that is already on this thread, stress on MM, win-loss ratio, importance of backtest, compounding, etc. But what have I really learnt, in a way that I have incorporated into my trading. Zilch, nothing, nada, koLi Motte (other than the 1000 ways to lose, that is)
From February, I started posting live trades... http://www.traderji.com/members-discussion-forums/97492-live-notes.html
... flipped back and forth between Mechanical and Discretionary trading. Nothing worked for me.
What did I learn (in a way that I will incorporate into my trading)? This is what I have incorporated into my trading in May.
1. Mechanical trading
- if I am not doing better in discretionary, then why expend the mental effort? To be fair, I think I could have done better in discretionary, when I look at the chart at the EOD
. Maybe, my mental makeup is not right for discretionary trading... yet. (Or is it that my mental makeup is not right for any kind of trading?)
2. Keeping losses small
- That way I get to survive longer if the system is a sinking one. (Error in my ways... I have still not backtested the system I am trading). Since I have not backtested, I do not have the faintest idea of the probable win-loss ratio, so small losses is my straw for the moment.
3. Slow trailing
- It's only the initial SL that is small. Trailing to lock profits happens very slowly, to reduce premature exits from big moves.
- Have not really tried target based exits during all these years of trading... current targets at 7x to 15x the SL, and are usually not achieved.
5. Fewer trades
- Trading 0-5 trades per day. Usually, 1 or 2. If I miss a good move, so be it. If I get into a good move, ride it.
- Getting in with the biggest position that I can afford... tight SL's make that possible.
And so, the usual words to end such a post... "Let's see how it works out"