Pine Scripters Network

Why do we keep coming back to trading? At least for me, I feel like I go through cycles. One cycle is full-on trading research. Then after a great run, somehow I lose interest (at my failures and lack of consistency) and it can fizzle out completely. This happened a couple years ago. I moved to a new city, got a brand new job and just dove deep into that job. I love my job.

But always in the back of my mind is trading. I started noticing these cycles, which can last months or years. I analyze these cycles of my behavior, and I can see that I'm learning a huge chunk in each one. Each cycle brings me more and more development. This current cycle has been 2 years of really no focus on trading. During that time, I've learned brand new skills. But I have always believed that trading is my destiny. I don't know how to explain that... just that as "the little guy" is means a lot to me to have this hope. I was barely scraping by there for awhile. But when I learned about the trading markets, I realized this is very powerful. And with electronic trading, now anyone can get involved. Don't have too much $$ to start with? No problem! Just open a micro account!

Knowing these cycles of my life, I've started taking advantage and steering better. For example, in that last cycle after I moved to a new city - I specifically steered my new career toward trading. I work in a technology field but I was not hired as a developer. But I started learning Python and now I've basically written a complete enterprise application. I did this super fast and I still consider myself a newb, but I feel very excited that I've confidently added this as a skill. The #1 reason I wanted to master Python is because I felt that this would be useful to me in trading automation. So that really motivated me to build awesome work projects that fill a need for my employer. I think my employer is kindof shocked that I went from 0 to the moon in less than a year. But this has given me the greatest confidence of all - I can visualize what I want and now I have confidence that I can make the computer do it. This is so powerful.

Anyway, believing in trading has given me great hope. I have seen it myself first hand ... the velocity of money flow into my account. Wow. Even though I trade very small, I understand the power here. All I have to master is consistency. Then I can honestly see how this becomes a source of income. I love my dayjob but I want the freedom to do whatever I want. So I see trading as the great equalizer... we CAN do this and many people are doing this! I don't hate my dayjob at all (I actually love it) but when I look at my life, I don't want to have it be this small. I want to travel and do great things without having to worry about money. Money is just a lubricant.

I don't think this is addiction. I just think that it could take care of me and my family for the rest of my life - so that's why I call it love. Sometimes I wonder if I'm not mature enough because it never stops being exciting to me. A lot of great traders say that it should be "boring" but I don't see it that way ever.

I just found this post again, and now it is November 20th of the same year, so 9 months later. I am still strongly focused on trading and I do not think I've reached any sort of peak in this energy. In fact I'm optimizing myself every day and my productivity has truly gone vertical. I'm still working fulltime for my day employer, but because of my new productivity increases, I've been able to dramatically stretch the amount of time I can devote to trading.

And I believe I have found one path to reach my target now: true consistency. I'm applying all of my concepts only to automated (algo) trading, and the main reason for that is because I suck as a discretionary trader. One reason I suck is because I cannot trade without focus. I work fulltime in an important role and mission and I also must have strong focus to be a high achiever (we literally save lives).

So I thought that maybe this means something. I think it means that I could combine my love for trading (the art of the game) + my new and growing skills for development to optimize my focus here. All I would need to do is write software that can perfectly execute my instructions, and then teach it how to be the best technical trader I know how.

This lead me down a path of studying different types of strategies. I determined that I need to study a particular type of strategy - only ones that can be 100% objective. I think the types that will work best are indicator- and price-action- based. This would then allow me to figure out how to translate rigid trading rules to code, and to ensure that the system rules overall follow proper trading styles. For example sometimes when working with automation, the computer will suggest parameters that give a sexy result - but which are un-achievable in the real world. So that is one contribution I make as a human trader.

But beyond this there is still at least one missing puzzle piece. Even though I have a strategy that looks good and performs well on a backtest - and even though my Pinescript may perform trading with exact perfection - it is still not enough. Now I need to add more inputs to further mold the bot. I like to think of it as the bot's "personality". So up to this point the bot is programmed with a known-well-performing strategy, and with all software automation working as expected. But without personality, the bot cannot have any sense of the current market disposition. I believe this is important because - for example - a particular market performance 7 years ago is probably not "super relevant" to the performance of today. It will be somewhat relevant, but it will not take into account any current events, for example.

I found some answers here and many of them came from unexpected places. For example I thought the strategy entry signal was super important. And it is - don't get me wrong. But what I wasn't focused on before is that - a MORE important aspect may be how you handle the trade AFTER it is opened. So I ended up spending a huge amount of energy on this portion. This is also where trader experience can contribute I believe. There are ways to steer a trade to profitability or loss regardless of how accurate the entry signal was. I do not claim that my method of finding these answers is proper, or that it is the only way. I just know that it generates objective metrics for me to judge it upon. And they look GREAT to me so far.

Keep in mind my focus is on consistency of performance. I don't try to define anything currently. I don't define what the stop "should" be nor the target. I instead listen to what the market wants to do. I've found that some pairs work excellent and others less so. But because I can grade and compare performance objectively, I let the market dictate to me what it wants to give. So my process will give me a menu of trading options. Sort of like "Nutrition Facts" on the side of a cereal box. I'll be in the store trying to decide which cereal is really good performing (I mean "tasty" for kids) yet has a balanced nutritional value in comparison to the next one. If I like the looks of the Risk:Reward proposed by the walkforward tests, then I may consider taking this bot for a spin.

I am using a mental concept that I call "staking" which is a method for creating baseline metrics that you can measure against. I think of the Forex market like the vast oceans. There are literally millions of opportunities to be profitable, so we only need to find one or a few ways to do it consistently. So above all else - consistency is my #1 priority. I want to find automatic consistency. Then I will look and decide "how profitable" it may be, if at all; I will decide if it's really worth the risk. I hope that it is, because I greatly enjoy building bots and I love the idea of this as a side gig that can grow.

I stake my strategies on a 10-year optimized backtest. Then I apply a rolling walkforward year of performance. I also take this one step forward by re-optimizing the rolling walkforward repeatedly to locate the best lookback period. I believe that the lookback period (for example, 5 months lookback + 1 month walkforward) represents the current market landscape. This is important and relevant information that should be incorporated into the bot's personality (I believe).

Because I'm staked on the 10-year performance, I only allow 2 degrees of freedom during the walkforward optimizations. So I've selected 1 parameter that impacts the entry logic, and 1 parameter that impacts the exit logic. Then I graph these optimizations against each other to find the best lookback period.

I am currently re-writing the next generation of my Pinescript bot and adding more rigor. I've also invested in my Pinescript skills by joining Matthews Mastery course and that is now strongly reflected in my latest work.

Oh and by the way... I did finally find something "boring". It is soooo boring that I have to keep reminding myself that I want the end result lol. The step of optimizing over and over takes forever. I know that the result at the very end is worth knowing. But it's very boring to go through that long process!

Beautiful post. Thank you. I feel your inquiry - having, at times, taken long stretches off of trading. But always come back to it.