S&P Approaching Inflection Point? VI

BarroMetrics Views: S&P Approaching Inflection Point? VI

The short position at 1364 was stopped out on Friday at breakeven.

In this series of blogs, I have taken you from the beginning to the end of a trade. There is only one more step to show you by way of concluding the series.

At the conclusion of a trade, I did a ‘Trade Review’.

The first step is an objective assessment of my discipline: I rate the trade as follows:

  1. Entry and exit in accordance with Plan: 3 points
  2. Entry OR exit   in accordance with Plan: 1 point
  3. Entry and exit NOT in accordance with Plan: o points

The idea is to score 90% of available points. A number below 90% is sounding warning bells about my discipline. In this case, I’d rate my score with a ‘3’.

The next item for review: what, if anything, could I have done better? We need to be careful about hindsight bias. In this case, the entry was on of those rare events where the market never went against me. So, I could not have entered better.

The exit? Well, I did have around 40 points in my favour and ended with a breakeven trade. BUT given my method and view of the context, I would not have changed anything I did.

The final item is: did  I learn anything about myself or the markets? I’ll need to go through that today. But at this point, probably not.

6 thoughts on “S&P Approaching Inflection Point? VI”

  1. Thanks for your open sharing. Of the whole series, i like this .post the most. It is not about analysing correctly but all about trading well. And that means have we followed our rules? And doing a proper review.

  2. Hi Joshua

    Thank you for the comments.

    I’ll be sending an explanatory post to the Barros Swing Grads.

    Received quite a few questions from them about what the series meant. Will send out the post tomorrow or Wed.

  3. Hi Ray,
    For a discretionary system trader, if he discretionary chooses not to follow the system rules (like what were taught during HOS) e.g. because of the current Euro situation, how does he rate himself?

    Even if he follows the rules, but he does not make a discretionary judgement for every trade whether to follow the rules or not, he would score zero point?

  4. Hi Paul

    Actually I said ‘follow the plan’; not ‘follow the rules’. For a beginner i.e. someone who has not experienced consistent success, following the rules’ is the same as ‘following the plan’.

    More experienced traders will know when the rules can be ignored – simply because of their experience.

    So, for the experienced trader, not following the rules BUT following the plan will give him 3 points

  5. Hi Ray,
    Thanks for showing us how to apply what you teach and especially for the honesty of a live trade.

    Could you also please do a series on the EURUSD as this may possibly (note that I use your terminolgy)be a very turbulent week and a great time to apply your principles and learn how to survive. Thanks

  6. Hi Agnes

    Thanks for dropping by.

    I’ll have to ask for a raincheck on this one. I am not trading the EURUSD at the moment and need to catch up on a ton of work.

    Will look to accommodate you as soon as I can.

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