[Tradewinds]

The worst thing you can do is to try to make money trading. You will loose. Try to follow your trading plan. If your trading plan is profitable, and you follow it, you will make money. Here are 4 possibilities:

• Trading Plan Profitable, You Don't Follow It
• Trading Plan Profitable, You Do Follow It
• Trading Plan Not Profitable, You Don't Follow It
• Trading Plan Not Profitable, You Do Follow It

If your trading plan is profitable, and you don't follow it, you will probably loose money. If your trading plan is not profitable, and you don't follow it, you won't know whether it's your trading plan, or it was your fault. If your trading plan is not profitable, and you do follow it, then you will know for certain, that your trading plan is at fault.

The only usable results come from the two options when you do follow your trading plan. The best result is that your plan is profitable, you follow it, and you make money. The second best result is when your trading plan is not profitable, and you follow it. Then you know for sure, that it's the plan, and not you. If you don't follow the plan, then you know nothing except that you can't follow a plan.

[Cory2679]

haha...when I first read the title, I thought this was going to be one of those ET-style threads where the OP proclaimed that making money trading was in fact impossible (because he or she couldn't do it, of course). Glad to see that's not the case!

[Tradewinds]

Originally Posted by Cory2679 »

haha...when I first read the title, I thought this was going to be one of those ET-style threads where the OP proclaimed that making money trading was in fact impossible (because he or she couldn't do it, of course). Glad to see that's not the case!

Just trying to generate some controversy and traffic for Traders Laboratory.

[$5DAW]

Great topic TW
Even though the whole idea is to increase the equity in our trading accounts, I find myself walking a fine line between, trading to make money and trading my plan/system well.

If I stay focused on trading my system and adhering to my rules, profits always accumulate and my account equity is higher on Friday than it was on Monday. Your statements (bullets) IMO, are dead on. When I first started using a trading platform with a simulation option I was in heaven, but soon I learned the lesson you're describing. All my trades were being recorded under the same pre-programed strategy, and I was unable to decipher any meaningful data as to the profitability of my system. I had to separate my system strategy from my "seat of the pants" trades, only then could I tell if the (two) systems really worked. This may sound like common sense, but give a child a new toy and they'll run the batteries dead in one day, that's me.

If I'm trading my system and I hook in to my anticipated string of losing trades, I'm tempted to step over to "the dark side" and do a little revenge trading. At this point, I'm "Trying to Make Money" and find myself doing undisciplined and reckless things. This almost always has a negative effect on my equity curve. I say, "almost always" because sometimes "I get lucky" and pull my account back up. This, "getting lucky" creates a positive outcome to a negative, reckless behavior and (IMO) does much more harm than good.

Now, not all of my trades are system trades. If I ready myself for a day's trading and my "system's" signals just don't come, I often sharpen my knife and take a few scalps. But nowadays these scalp trades are recorded as another strategy and the data can be reviewed and utilized to assess my methods profitability, separate from my main trading system(s).

[Tradewinds]

Originally Posted by $5DAW »

This, "getting lucky" creates a positive outcome to a negative, reckless behavior and (IMO) does much more harm than good.

It's possible to make money, then after we made money, really have no conscious understanding of why it worked. The market may have been choppy, and we were in a contrary mood to do the opposite of whatever the market was doing. You can make money that way. But that would have been a combination of the traders mood matching market conditions.

So, as you state, there would have been a positive outcome for uncontrolled, moody and contrarian trading that day. The negative behavior gets rewarded. You feel good, the brain gets wired to do it some more.

[bobcollett]

Tradewind
I find your posts well thought out and knowledgeable
"Your trading plan is not profitable, you do follow it"
WHAT NOW??
bobc

[TheNegotiator]

Originally Posted by bobcollett »

Tradewind
I find your posts well thought out and knowledgeable
"Your trading plan is not profitable, you do follow it"
WHAT NOW??
bobc

Refine it or ditch it perhaps? Or did I miss your point? I think for me there is an added level here if you are self execution your system and not just running an algorithm. If you understand the system implicitly and why it makes money, there is fair reason to veto the entries and stand back. Of course there will be times that when you judge that risk has significantly elevated and in spite of an entry signal you don't trade, the market then proceeds to show you a big fat theoretical winner. But hey, who cares. Because honestly, the next time that situation comes around you'll take the trade and you'll have your arse handed to you.

[fxallday]

This is one of the threads that I have printed out! I really liked it a lot. Forex has many sides but trades have only 2: green or red. Most of the times I try to explain what has gone wrong and my position or my Zulutrade's Signal Provider turned against me. Green trades are kept intuitive on my memory in order to repeat them when the market "calls". This is the easy part of forex