Moving to TradeStation, too

Hi Mark,

Sorry to read about your tribulations. Hang in there.

I went to my mentor last week. Sam showed me Fibonacci and gap strategies. He showed me several stocks he thought would go down and a few bullish ones. I played several. I didn't play CMI (coulda made a bundle) and I did play GS and MRO. So far, they don't look good, especially after today's rally. I'm ahead in more spreads than I am behind in but GS and MRO have me in the red.

...

I sent a check to Interactive Brokers a day before I saw your post about TradeStation. I looked at the TS web site and liked it. IB returned my check because it had my old address. I felt so happy about the returned check that I knew I really wanted to try TS. Did you know there are third party plug-ins that you can use to automate your trading? All I would need is a computer and a Doberman. I would feed the dog and the dog would keep me from touching the computer. Anyway, I'll fund the account after my options expire on 11/17, if I have any cash left. -- GG

He who has injured thee was either stronger or weaker than thee.
If weaker, spare him; if stronger, spare thyself. --Seneca

GG, thank you for your support. I'm making a comeback from the recent emotional and trading lows. I just needed a little time to mourn. I can't afford any more mourning, so it's time to move on. That's over and aside from having an over-extended schedule, I'll be back in the markets soon enough (later this week for paper trading at least).

It seems like we'll be on the same timeline for funding our TradeStation accounts. I'm looking to TS to leverage my time a bit better. From my understanding you can program in automatic trading without 3rd party tools by simply using EasyLanguage. As a programmer, this should be fairly natural for me to write out my trading rules and then I won't mis-manage nor micro-manage my trades.

Of course the thought comes to mind that there is no "black-box" trading system that will work, which puzzles me a little, I must say. Since, logically, if you are strictly trading by your rules, you are essentially being your own black-box system. I imagine my entry rules will be pretty simple, but my exit rules will be a bit more interesting when I get around to programming them into TradeStation. It's all very interesting and I don't know exactly what to make of it. I'm most certainly going to be more involved in choosing which trades to enter, but even that will be honed down to a strict set of explicit rules that should be able to be described in TradeStation's EasyLanguage. It's a head-scratcher for now.

Aside from EasyLanguage, TradeStation's charts are top-notch and, along with a 22" ViewSonic widescreen display that I recently purchased, ought to save me some time in evaluating any given chart. Yes, that's right, I'm beginning my equipment upgrades with a rather large second flat-panel display. Eventually I'm sure I'll have about 4 or more displays working for me, but 2 will have to do for now.

Mark

Back to the Drawing Board

Although this week's trading has been better, I've been making mistakes and they're costing me money. I still have 4 open positions (long on USB, UARM, CVA and short on FDG) that could earn some money to offset the losses, but if you looked at my trading journal you'd think that I was addicted to giving the market my money. Granted, the bulk of the losses came last week primarily from bad entry strategy, but I'm still seeing flaws in the entry and management of my trades, so it's time I take a step back and test my trading rules in the sandbox again. This decision is primarily based on my failure to consistently apply my rules, not because I've incurred losses on the trades. Losses on trades are going to happen, but without consistently, flawlessly applying my trading rules, I have no way to know how successful my rules are and therefore I don't know how to systematically improve my results. The reason behind my failure to do so is because my trading rules are not explicit enough; they have too much gray area that's open to interpretation which makes it difficult to apply them. It's disappointing and I know you, my father and everyone who has helped me along the way are all interested in hearing of great success from me, but such is the current status of things. I'm implementing the following plan of action to get me back into live trades:

1. Finish my business plan.
• Includes my very specific, explicit trading rules. These are an adaptation of both Coach Rob's and Mentor Jordan teachings & thoughts on trading. It's an amalgamation of the two that I find appropriate for my risk tolerance, and burgeoning trading style.
2. Trade 25 flawless paper trades with 10 in a row flawless before going back to real money.
• Flawless only means I don't make any mistakes according to my trading rules.
• I will evaluate my rules after 25 trades to see what rule changes could net me a better return.
• If, after 25 flawless paper trades, I'm not seeing a net positive, I will apply some changes to my rules and retest on the next block of 25 trades and will repeat the process until I'm getting a net positive result.
3. Set up an account with TradeStation.
• TradeStation comes with very sophisticated tools for programming and evaluating rule-based trading including back-testing a strategy against up to 20 years of intra-day historical market data. I'm looking to TradeStation instead of Interactive Brokers because of these advanced features which should help with consistency and aid in reducing the time trading will require, making it more scalable and manageable on my time budget. I'm deciding to take this action now because it's the direction I'm planing to go, and while I'm tabling my money I may as well make the transition concurrently. TradeStation has great appeal to me because I'm a programmer and this sort of logical evaluation of a trade strategy based on my custom rules is pretty much a fantasy come true.

So there you have it. I'm putting myself back into the sandbox so I can play without further harming my account balance. You're probably thinking: Haven't you been paper trading and haven't you already seen success there? Answer: Yes, I have, but I made the mistake to not have more explicit trading rules and it was without the goal of flawless application of trade rules as I described above. I need to prove that I can consistently put in trades that follow my rules before I can go back into the market with real money. It's a bit of 2 steps forward 1 step back, but that's better than 1 step forward and 2 steps back. Who knows, maybe it is 2 steps backward, but they are much needed steps to take. Hang in there with me, it may take more time than I originally anticipated but I'm going to be a successful professional trader that will make a living trading the markets.