Last week, in my weekly trade review – Plans and focus for 2017, I laid out my overall goals for the year. Primary this is to become more systematic in my trading.
I traded Monday, and I quickly realised I cannot have both systems in my head. The ongoing rebuild of my system into a systematic progress and my current one which is primary discretionary.
I have made a decision to stop trading until I have finished my rebuild.
Let me be clear, this rebuild is not about throwing out my current edge. It is about 2 things
1) Understanding my context read better, and how I can systematic use this to improve my targets.
2) Turning my triggers into a more black and white means of entering. This is to reduce the amount of decisions needed to be made per trade.
How am I approaching this?
I have split my context reads into areas. For example, Trending and Balance, these are then split into sub sections.
For example, Trending with expectancy to go into balance / pullback.
For a while now, I have been using the OODA decision loop to help me make decisions. Which I simplified to DADA
Hypothesis – Collect Data on the Hypo, Analysis, Decision and Act and repeat.
Which is good model for analysing stats and trade reviews.
But over Christmas, I read Streetlights and Shadows: Searching for the Keys to Adaptive Decision Making by Gary A. Klein.
Which is a good book, but it did not tell me anything new. But if you are into improving your decision making then it is interesting book.
But one section discussing the decision-making loop, and that the studies found that experienced people tend to use a different model called Recognition Primed Decision Model.
I think this model fits in well with trying to incorporate my context read into a more usual model for targets and areas to fade. So, I have altered this to fit my needs with regard to reading context whilst remaining flexible.
||Trend Rots are >= STD DEV
||Counter Trend Rots are <= STD DEV
||Increasing or equal Vol/Delta on Trend Rots
||Not at HTF Area of Interest
||No Change in character in last rot in either Vol/Delta/PA
||HTF ROT < STD DEV
||To make new extreme
||Buy Pullback to AOI with Target HTF AOI
||How I enter the market.
||Where my stop is.
||What is my TM.
Obviously, the actions change for each play. But I stick to this model until the clues or expectancies start to be violated which then gives me more clues to my other context models. Which I then switch to.
The primary use is to give me better targets, for my entries, and whilst seeming more rigid, gives me more flexibility and takes the focus off the individual levels.
I am also working on my stats, to make them into more useable pieces of information. Whether they are for scalps for gap closes and open drive, or whether they indicate where a likely target / bottom / top should be for the session.
What has helped with the Stats on the Bund at least, has been splitting the sessions into European and US. As the nature of these individual sub sessions can be very different.
I have been working on how to express my discretionary triggers into a more black and white format. This is, not surprising, hard and slow going. But I am making progress. Does not help that I am new to coding in RTL in RT Investor. So, I make a lot of mistakes and it will take me at least another week to get on top of this.
It is not that my triggers are that complicated. Just how do I express something that was very much discretionary into something that is black and white but adaptive enough to be a realistic trigger. But I am making progress and in turn this is teaching more about my triggers than I knew previously.
For example, One of the order flow triggers I have been using which indicates a possible fade entry. Once coded and tested also shows that it certainly is not a fade entry when price breaks out of a range. Instead of a sign of weakness it becomes a sign of strength.
But all in all, very interesting time.
Looking forward to putting it all together and getting back to trading.