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For P & L statement posters only!

Discussion in 'Personal Trade Journals' started by Matt Doolittle, Mar 22, 2009.

  1. Matt Doolittle

    Matt Doolittle Recruit

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    The purpose of this thread is not to be offensive. This thread is designed for people who are sick of hearing about hypothetical money and want advice from people who
    are not afraid to post their P & L statements.No offense to the people who choose not to for what ever reason.

    My partner and I have always tried to figure out what the taboo is. I mean if you take off your account number and name what harm could it do. I think it is important to beginners to see that it is possible to profit. I have seen some threads here where its actually being debated. Of course its possible! We put a man on the moon.Which do you think is harder.

    So this thread is dedicated to people that want to share what they learned and post their P & L statements. For the purpose of giving hope to those who really want this but are struggleing. If you dont like the way this is being presented their are 5000 other threads you can talk about how many pips you made without having to prove it. So long you will be sorely missed.

    So here goes this is our modest account we have been trading for a year. We are up approximately 100%. But it is a small account with approimately 60,000 in it and yes it is a real money account.

    copy paste this link into your URL
    http://docs.google.com/gview?a=v&att...on/pdf&pli=1


    SUMMARY and PURPOSE

    The primary purpose of our method and strategy is to place high probable trades that produce profits consistently. Many systems and strategies are meant to do the same yet few “systems” actually produce any kind of consistency or long term profits. There are a few key points that we focus on to carry out our plan and give us an edge is this highly
    volatile market. They are:
    1. Base the trade (s) on longer term S/R levels to get out of the “noise” that is produced by only looking at the shorter time frames
    2. Be patient on entries and trade pull backs to the S/R level to ensure a good
    stop placement and probability for more profit
    3. Take fewer trades in the same pair and look for other opportunities on other pairs
    4. Consistently take profits by scaling out of positions and moving stops up
    5. Be aware of fundamental trends
    6. Consider average true range and time of day as a factor in trade decisions
    7. Use Fibonacci to confirm areas of S/R and use as additional confirmation
    8. Be aware of longer term trend lines as S/R and change of direction
    9. Be aware of daily, weekly, monthly and yearly highs and lows
    10. Use good risk control ( the most important factor) by finding the appropriate level
    of risk we can accept. Usually this is between .5 to 1.5 percent of account equity
    depending on entry and stop placement

    METHODOLOGY

    Our trading methods are based mainly on S/R levels. We take into major consideration the importance of key price points such as daily/weekly highs and lows and major turning points in the pair that are identifiable. Finding the key price that buyers and sellers are struggling with is paramount in our strategy. This takes practice and much time with chart analysis but can become simple after a while. Once a certain price has been identified as a possible buy or sell, we look for reasons for taking the trade. By waiting on longer term charts to reach major S/R levels, we trade less on the pair, but the odds of profitability are much higher. When these levels are combined with fibs, trend lines and price patterns, we go to shorter time frames to identify exact entry. Many times this type of approach will enable the trade to be in profit immediately where we can take a portion of the trade out of the market. Of course, this does not happen every trade, but does happen quite often. When you are able to take a portion out of your trade, it takes much of the emotion out of your decisions and now you can lock in your trade to ensure a profit. This approach can be looked at as “chipping” away at this market, but over time will produce consistency and guard against major draw downs that so many trader suffer periodically with their “system”. At a certain price, the market participants will either move it through and then take it beyond that level or it will be rejected and fail to go through. Our job is to use our tools to decide which of these is taking place and trade accordingly. When we see consolidation in the market on longer time frames, we are aware that the market is probably awaiting some fundamental news event. This can produce a very good longer term trade if we can catch a hint of the direction. Many times


    this will occur as a price level rejection or commitment. Some times it happens before the announcement and other times after. We can only anticipate the direction based on price reaction but do not pretend to know how far price will travel in such an event. That’s why we take profits and let remaining positions sizes “run”. Some times this will produce nice profits but in this market the volatility can also stop us out on our remainder before continuing its direction. That’s just part of the trading game.



    DIFFERENCES FROM OTHER “SYSTEMS”

    Our primary difference from other trading systems or strategies is our mental approach to the market before we place a trade. Most systems rely on predicting market moves and will have a target or price expectation and stay in the trade with 100% of position size until that target is reached. We do not pretend nor try to know which direction the market is going. Of course, in the short term you do have to anticipate that a price level will hold or give way. By using our tools we try to get an “edge” and use price behavior to determine whether it is going to commit to the level or not. By placing probabilities in our favor, we will place a trade anticipating the move, but realize that the market can and will do anything, therefore we do not predict the overall move, or predict a certain price level before taking our profits. We base our profit “targets” on previous S/R areas that the market has had trouble before and will more than likely have trouble there again and scale out at those levels. For instance, if we place a short trade on the GBP/USD at 1.4580 and there has been a strong resistance on the day, and days prior at 1.4550, the chances of a bounce using 1.4550 now as support is very strong, at least in the short term. We will consider this and realize that we should be taking some profits at this level to assure that we make money on our trade.

    Other systems also use different indicators to determine their trade placement. Although some can have success, we feel that indicators can create conflict in trade decisions so we rarely use them to make trading decisions. MACD divergence is one thing we will consider, but our decisions are mainly based on price activity (strength or weakness) at the level we are looking at.

    Predicting market movements may feed one’s ego, but it will usually not feed the account with profits. We would rather focus on percentages booked rather than feeling good about predicting a certain direction and gloating in the fact that our “guess” was right. If one has a crystal ball then maybe they can predict the market, otherwise we would suggest that trades be placed at historical trouble spots of S/R and take profits as the market decides to give them The key is accepting that the market decides the direction, not us, therefore after we are in the market, we can only take profits as the market renders them.

    Its hard for me to fathom that anyone is making money using these 5 min scalping systems for any period of time Or the thousands of other systems based on indicators. But I would to see the P & L statement of anyone who is making them work consistently.






    KEEPING EMOTIONS CONTAINED

    We feel the biggest thing to consider in trading any instrument is to keep the emotions to a minimum. This cannot be done when using high leverage to try and achieve dramatic returns. If one is looking for a system to achieve 100% per month then our methods would not suit them. To try and achieve such a high return would require excessive amounts of risk and produce very high draw downs. This is not only a detriment to the capital but to the mental capacity a trader has. By risking much smaller amounts, the emotions are held in check and trading becomes boring many times. This is good for us, but is not what most traders are looking to find, therefore they will keep chasing the internet sites, trying to find the holy grail in a system that gives them profits and the emotional charge that they love to feel. This is gambling, not trading. We pride ourselves in adhering to our risk rules and this enables us to usually show profits at the end of the month.


    GOALS

    Our goals are simply to make a profit from the market consistently. As simple as this may sound, very few actually do it. Knowing how to apply our technical knowledge is paramount to our success but not the only part of it. If we do our homework and our chart analysis properly, consider the factors of the fundamental trends, and keep our mental state in check, we will achieve the consistency we look for.

    STEPS IN SEARCHING FOR A TRADE
    Look at monthly, weekly, daily and 4 hour charts to determine major levels of S/R
    Go to 1 hour chart to determine latest trend/direction

    Draw fibs from major swings to determine if there are any patterns developing
    or possible areas of convergence with S/R
    4. If we have broken a major S/R level, scale to smaller time scale and wait for
    pullback to go with direction of trend
    5. If we are still in the middle of noise look for more confirmation at possible trade
    levels such as trend lines or fib extensions
    6. Be aware of news before placing a trade
    7. Determine amount of risk and amount we are willing to lose before we place the
    trade, being aware that we can lose this trade as well as profit from it
    8. Keep in mind closings on longer time frames to see if we have committed past a
    major price level or we have rejected one


    I hope this has given hope to someone. I dont want this thread to be just about us.I would like to see others post their system and P & L statements. If you have any questions that arent are ready answered in this post you can email me. But if they are I probably wont answer.

    Mattdoolittle747@gmail.com
     

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