I’m Not Perfect, But My Signals Are

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March 10, 2009

I called this market pop when I posted on March 8th. I didn’t catch it though in my account. Why? I don’t know. I feel like its my last hurdle before moving up a belt in trading martial arts.

Do you follow what your signals tell you? What do you do to prepare mentally to follow your own calls? No signals are perfect and always contain losses. How do you deal with the losses?

I’m very inconsistent with following my own signals/calls with actual money. Other signals that I follow/created, which I’ve never posted, have been short since last year and I’ve missed most of it. From what I’ve observed, the best traders are the ones that are able to execute their trade and sit in it until it develops. Good traders are ahead of the market.

From the same observations, I have learned that I’m often ahead of the market, but I don’t let the trade develop in my favor. What do you do in this situation when the trade hasn’t gone your way initially, to stay mentally focused?

fas

I’ll do an add on to this, with more charts, but they all look like this one.


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  • mk

    Im new to your blog, was curious if you have a post detailing what software you use to create this screens and indicators.

  • Sia

    If you really believe in your signals, backtest them and automate them. Problem solved. Tradestation does this for cheap. Your indicator seems very much like a momentum indicator, which has its positives and negatives. I bet you can produce similar signals with a simple if MA(x) > MA(y) buy, else sell strategy.

  • http://www.stockrake.com StockRake

    I tried tradestation years ago. Was complicated for me at the time, but maybe now not so difficult.

    These short term charts I haven't backtested, but all my longer term is backtested back to the 70s and the results are very good, I just have trouble acting on those signals in real time + positioning correctly for the change in signal.

    An example might be:
    Turn 1: Make 15%
    Turn 2: Lose 10% <– this loss throws off the next trade and so on.
    Turn 3: Would have made 50%, but because of being thrown into a non-believer mode from the last trade.
    Turn 4: Lose 4% (Have to accept the losses of any system, so lets assume this is going to be a loss due to the last trade being so good.)
    Turn 5: Gain 25%, but maybe catching it late and only getting 10% of it.

    I don't know if this makes sense or not.

  • http://www.stockrake.com StockRake

    I forgot to say also that you are correct it is more momentum based. I've traded short term instead of intermediate term, due to mostly missing the short side even though that is what everything I have was saying to do since September of last year.

    A trend change will clean the slate.

  • Sia

    If you really believe in your signals, backtest them and automate them. Problem solved. Tradestation does this for cheap. Your indicator seems very much like a momentum indicator, which has its positives and negatives. I bet you can produce similar signals with a simple if MA(x) > MA(y) buy, else sell strategy.

  • http://www.stockrake.com StockRake

    I tried tradestation years ago. Was complicated for me at the time, but maybe now not so difficult.

    These short term charts I haven't backtested, but all my longer term is backtested back to the 70s and the results are very good, I just have trouble acting on those signals in real time + positioning correctly for the change in signal.

    An example might be:
    Turn 1: Make 15%
    Turn 2: Lose 10% <– this loss throws off the next trade and so on.
    Turn 3: Would have made 50%, but because of being thrown into a non-believer mode from the last trade.
    Turn 4: Lose 4% (Have to accept the losses of any system, so lets assume this is going to be a loss due to the last trade being so good.)
    Turn 5: Gain 25%, but maybe catching it late and only getting 10% of it.

    I don't know if this makes sense or not.

  • http://www.stockrake.com StockRake

    I forgot to say also that you are correct it is more momentum based. I've traded short term instead of intermediate term, due to mostly missing the short side even though that is what everything I have was saying to do since September of last year.

    A trend change will clean the slate.