I was literally up all night last night back-testing my methods as I made some more refinements after looking at the weeks results. Didn't turn in until after 5am,...now that's the way to party on a Friday night! Haha.

The time spent went quickly, which is a key difference between working on something you're interested in versus doing something you're not.

Back testing is time consuming since once I test my new methods on current data and charts, I have to try it on older data/charts to see if there is consistency. If they fail on the past, then current success is suspect.

Since my trading isn't automated, that means I have to "simulate" real time trading by covering up the chart data on the right, and slowly stepping through it, making decisions with the smaller data set, then seeing if my decisions are correct or not.

To be successful in any field, if not blessed with "connections" or wealth, you have to be willing to put in the massive amount of time to iron out the rough spots. It is the trademark of most entrepreneurs.

The thing is, time spent doesn't feel like work. You know how you feel playing a video game where you spend hours trying to solve a certain puzzle or level? That's what it feels like.

Of course my ultimate goal is to master the markets so that I can spend my evenings in a more, um, conventional fashion.

Great week on paper as I recorded big gains. I say "on paper" since in the nature of hedging, you have both positive and negative positions, so paper gains or losses may not directly reflect the true gains or losses made to the account. It's a relative value between the two positions. So while I did make gains this week, my paper gains  show a higher value. I'll have to properly trade the opposite position to lock all the paper trade gains in.

That's the interesting thing about hedging. A couple of days my trades had net negative adjustments on paper, but were positive in increasing my account value as I adjusted my long/short positions. Even so, it's strange seeing negative trades as a good thing. Trading both long/short shifts my focus to being net long or short instead of the individual trade.

The focus this week has been on implementing the new strategies and insights I've acquired the past month. The biggest challenge is trading real-time on the right end on the chart. The complete chart you see at the end of the day may look easy enough to figure out the market directions, but it's another thing when you are doing it real time price bar by price bar. It's the equivalent to driving on a road where the road is being formed right in front of you as you go, and you try to anticipate were the road is heading so you stay on it.

It's a lot like the old school video game, Night Driver:

Now imagine trying to play that game with only 2 or 3 light posts mapping the way instead of a whole road of them- that's similar to day trading. That shows why many find day trading to be quite difficult.

There's a slight learning curve in recognizing new signals in a real-time environment versus end of day charts, but I'm making good progress.

Trading results this week confirm the great potential in my new methods. Two days this week I had generated sizable profits rather quickly, before giving a portion back due to misreading some signals. That's the exciting part - any mistakes made were not due to my system, but due to missed signals I didn't pick up in time. Practice makes perfect and I'm getting familiar and refining my techniques each day.

The one drawback is I now have to chart watch, as in pay much more attention to all the markets smaller movements instead of just the bigger ones.  A main positive benefit is I can now successfully trade much smaller moves in the market which provides more trading opportunities.