Toward developing greater trading experience, it is very important that traders identify and resolve their trading problems. The stages for resolving a trading problem compromise of a few stages: Unaware to semi-aware. At this stage, we are not fully aware of the problem. Proper trade review and statistical tracking may help to identify problems. Awareness. … Continue reading Resolving Trading Problems

There is an entertaining story that George Foreman tells about his battle with Ali, and there was a point where Ali said, "Is that all you got?" and, at that moment, Foreman realized it was all that he had. I find when I trade too aggressively and miss my targets  or oversize trades that I … Continue reading Is that all you got?

Discretionary scalpers or very active day traders may find that they trade well when they get into the market flow. However, recently I learned there are some negative sides to flow states. In particular, there is a risk that the trader ends up executing in auto-pilot mode without considering the account risk or why they … Continue reading Risk of auto-pilot mode

Most system developers are aware of the Max Favorable Excursion and Max Adverse Excursion measures. These measures track the max profit and loss a trade experiences over its lifetime. However, a very useful metric that I'm unaware of being even tracked in most trading platforms is Max Favorable Consecutive Ticks (MFT) before Max Adverse Consecutive … Continue reading Basic system metric not even tracked? Max Consecutive Ticks FE before AE

Everybody wants to trade. Okay, that might not be true but a lot of people who watch the market want to trade. Some of us have even had a lot of success in the past when we worked really hard. But as time went on, some of us quit working really hard. And, we took … Continue reading Don’t focus on failure instead focus on what you are doing to succeed

In 2009, the SPX was around the 1100 mark. Today, the SPX is stands at 2738. In 2009, one ES contract was worth approximately $55,000 notional value. Today, one ES contract is worth approximately $136,000.  In 2009, a 2% move would work out to an approximate 22 point movement or $1,100 move. Today, the same … Continue reading Why the ES mini is no longer a mini contract and why your future losses may be much larger then your backtest suggest…

The DRY principle stands for "Do not repeat yourself". This axiom is commonly referenced in the practice of software engineering. However, it applies equally well for traders and system developers. A good trader will come up with many ideas for systems, ideas about ways of trading, and questions about market behavior. This creativity is important. … Continue reading DRY + Deep Dive Principles

A non-price based quantitative measure for evaluation of trading performance might be comparing how closely you enter or exit a position to a peak or valley and/or based on subsequent retracement. A discretionary trader or trading system that has a high peak/valley hit ratio in some markets reveals that the trader may be trading with … Continue reading Non profit based performance metric

Futures traders that trade "market open" markets often have a limited window of exceptional opportunity during the first few hours after the market opens. Strict day traders need to be careful opening positions near the close because, without ability to hold, there is a higher probability of being forced out of a trade. While overnight … Continue reading Decreasing performance anxiety