Hi Nodoji, whilst I was never posting I've read ET for the past 6-7 years, including some of your posts/journal. I guess I'm writing this journal to keep me accountable when it comes to performance. If I feel I have to talk about my trading then it might stop me from doing something stupid. So if you want to ask some questions I'd be happy to discuss.
Easy come easy go. It's all cream on top for me. The fact I have a good day job is really important because I've traded full time before and it was a different mentality.
Ah, then you may have enjoyed that part of my journal back in late August 2008 where I wrote "I did not like STLD breaching $24 support level as that appeared to be a firm level and was one of my reasons for putting on the long calls Friday. Fortunately, these are Nov calls and have some room to work. Followed by this the next day: "STLD found a new lower support level of $23, then moved up through the day. I don't care for the fact that previous support has now become resistance, but I still believe in the profit potential of the trade between now and November." I wish some seasoned traders had screamed at me, "Get out! Get out now! Take the small loss. Trade what you see, not what you think!" Maybe I would've listened, maybe not. I had just a couple more days when the position hovered around break even and that was my last chance to take the small loss. The $18,000 loss I eventually realized caused some serious damage. Trading one's beliefs and having the phrase "room to work" dancing in one's brain are usually big red flags that offer a chance to exit a trade for a small loss.
I thought those who work in investment banking have to surrender their right to a personal retail trading account ???
The big losing trade is always a real risk, what strategies have you adopted to mitigate this? How has your trading been the last few years?
I don't work in Investment Banking, so there are no restrictions. I have thought about working in a markets role but I think I prefer to keep my passion for the markets and making it my day job might change that.
What's your collective average % profit margin per trade? and average holding period for each trade? (I want to get a quick glimpse of performance. I didn't thoroughly read each post or break it down on my own.)
Profit margin = as much as I think I can get! I take a mixture. A minority are shorter term scalps ie less than a day however most are from 1 day to a week. My longest trade has been 3 weeks. I know which category my trade will fit in to before entering. I adjust my size and widen my stops accordingly. Whilst I have a stop I don't necessarily have targets. I tend to get out where I may have taken an opposing trade. I try to trail as long as possible on my winning trades. Whilst I don't have statistics I think I'm probably more profitable on the >1 day trades. Probably because I give them more time to work and think about them longer than the scalps. When I'm trading well both timeframes work but I think I lose on scalps when not trading well.
I repeated this cycle after my $18K loss on STLD options. At some point my (informal) mentor here at ET recommended a book to me, Reading Price Charts Bar By Bar by Al Brooks. It was a dreadful book to read, but I kept spending time with it and gradually things I saw and experienced personally during my daily trading screen time started to resonate. I'd put on a trade that went 1 tick in my favor and immediately stopped me out for a loss, and I remember stuff I saw in Brooks' book about counter-trend traps. One day I decided to buy a new high in a strong trend using a buy stop. It felt so absolutely wrong I could hardly leave the order sitting there as price came up to it. But it worked, more often than not. Gradually over time, I learned that fading trends and strong trending moves is the hard way to make money. (I now know that it can work quite well under certain conditions and at certain price levels, but even that knowledge came from concepts learned about in Brooks' book.) Before Brooks I had some good ideas, but no idea about how the markets really worked and why. Brooks opened my eyes to the "why and how" of price behavior in highly liquid markets. I never again endured a loss like that because I learned about risk management. Learning to think in probabilities (Mark Douglas, The Disciplined Trader) was an absolute necessity as well because the best and most thoroughly tested trading plan in world is worthless without the ability to trade based on probabilities, instead of trading based on what you think, feel, and believe is going to happen.