The facts do speak for themselves. Illiquid is on the mark when he delinneates the opportunities that are there and that he finds them very sufficient for getting the job done. Turning to your comments in the last two paragraphs using the illiquid standard ( the other comments on poor market conditions are trivial once it is understood that money is being made), it is more than necessary for the thread starter to understand that when he looks at what he believed to be a plan, that he actually, in fact, did not have a plan. He was, more than anything, telling himself to flee what he was doing. No person starting out can ever give himself permission to trade what he thinks is a plan. Beginning traders can do no more than warm up drills to start with. In choosing the drills, there are about only three that are possible. These are all no risk drills as well. All that can be done to become a trader in the beginning is to learn how to have "experience". The experience gained is most valuable because it leads to knowledge and skills. Everyone starts out with no knowledge, no skills and no experience. Where do these three things come from? The thread starter did not have any of them and he cannot consider himself to have a plan. He is not capable of rationally assessing any plan either. If he were shown plans, he could not deal with any practical aspects of assessing much less using a plan. If you look at the names people give themselves it is very evident that the names do not relate to making money but usually relate to lack of knowledge, skills and experience. there are few exceptions and most are related to the fact that the name being used is one that came from learning the hard way. This person can best become a trader by doing drills. Three nice ones that do not cost much are: entering on brackets when heretofore very low volume dominated, doing wash trades, and holding in a market right after the open settles down and INCREASING volume has allowed a bracket entry. The midday is best for the first drill. Late morning and mid afternoon is best for the second drill. The second drill is also used for all exits if the bracket entries were held too long. The third drill, holding (specifically holding on increasing volume), is the most important of all. Knowledge gained from these drills is the key ingredient for all else. Brackets teach a person about who is in charge of entries: the market. Washes teach the knowledge that losing is not a necessity in trading. Holding on increasing volume gives a person the knowledge that people are what causes to market to move. Imagine the basic skill of setting brackets. One part becomes a point of entry and the other is an initial stop. How can a person who knows nothing put brackets in place. Placing orders where the market is not is a VERY good experience. You get to watch the market after you set the bracket. Your value decisions sit there and the market moves to one of them. It takes other trader's decisions to get the market to your decision value. Other smarter traders. You join the smart traders soon enough when your bracket is hit. Then begins drill number two. Learning to wash out after you have been taken into the market. this is not a drill for making money; it is a drill to learn that it is not necessary to lose money. If you do drill three for each bracket entry, you get to learn how increasing volume is required to keep a trend moving. You will learn to "see" and "hear" the market with the "holding" drill. Leaving when volume stops increasing is a nice event. It occurs well before any wash trade drill can be done. Skills show up using these three drills. Sharing roles (responsibilities) with the market comes with bracketing efforts. The washing skill is the most important emotional leavening skill you will ever acquire. It is so calming to know that you can always wash after an entry where the market has taken you into a trade as a consequence of price movement caused by smart traders. There is nothing wrong with entering the market a little later than the smart money. The holding skill is the money skill. Drive for pleasure putt for money. Holding is putting stuff. You watch the increasing volume move you from the Tee and down the fairway and onto the green. Then the volume increases come to an end and you putt. How close to or whether it goes in the hole is just a matter of doing the holding drill enough times. Holing out about 18 times a days works out just fine. Count the peaking volume situations for a day and see what I mean. bracket drill.........holding drill.......washing drill on lousy holds. It is very hard to do such drills. It is very good to do these drills. As you do them, you will notice that you no longer are plagued by the urge to flee after every entry. Oh use a chart and mark brackets on it just for laughs. Notice that no matter how poorly you do it the price does move through one side of the bracket and later a peaking volume occurs. Doing brackets properly is like choosing golf clubs for driving and making fairway shots. How hard is it to pull a club out of a bag anyway? Skip thinking up trading plans for quite a while. It is not a possibility for any beginner and never was. Discipline comes from a different place than beginners expect. You can't develop discipline until you know what you are doing. Drills impart disipline. Everyone should do a couple of washes every day. Some of them will make money you will find out. Thats just because you never get back to the wash price. Do a time out (only try for the wash for x minutes before you have to give up with a profit).
Uh, Jack, just a couple of caveats. Bracket breakouts from low volume are easy to test, and they, like, uh, don't WORK? And, uh, how do you explain that LOW volume consolidations after big runs often presage another big run? Uh, wasn't it YOU who talked about rockets? And, uh, Jack, please stop telling people they can "wash" without a loss. It ain't, uh, evident you should "wash" until you are in a loss position. It's like, uh, floor rotations try to shake you out? You talk about 1-2-3. Think about 1-2-3 ticks. Maybe even 4. Otherwise, a very good post. Except that you never mention oil. It's like, uh, we've transitioned from sperm oil to petroleum since you were a kid. Mike.
Neil, don't take this wrong, because you and I made amends I don't want to unmend (de-mend?) that but... I want to comment on something you said. "Hedge Funds have dramatically dampened volatility by adding significantly more two-sided flow into the game thereby creating natural bidders on downdrafts and sellers into rallies." Neil, c'mon, how can you say that??? Example: I was long cable at sometime between 4AM and 7AM ET when the GBP suddenly starting crashing - ending up 250-points lower - sucking my money down with it. Now, how can you say hedge funds reduce volatilily in that case? The tumble was due to the bombings, of course. The only come back you have would be to say, "If it were NOT for hedge funds, the crash would have been 4 or 5 cents!" I don't believe that, whatsoever. If anything, fast HF managers would have entered into short cable positions - driving the pound down maybe 1000+ points - but that didn't happen. In the cable case, HFs had zero volatility-creating OR volatility-reducing impact. fx
My hunch is too much size and risk. Being down 19 % in 3 weeks tells all about that. Start small and build size as you get better at it. Youll never make money doing what you do now as you will always take winners fast and let losses run. ORM
did you ever paper trade? either way, you should go and do this until you can accept the reality of the markets. keep reading douglas - several times. took me 4 reads before the book really sunk in, especially the last few chapters of the disciplined trader. all the best edit - also re-read grobs post a few times & do it. at the end of the day though, remember its only money. your health and happiness are way more important.
shut it illiquid. please keep your opinions to your self. if you start posting this type of informative truth then there will be a lot more successful traders about. that will not help either of us will it? we need their greed & fear to pay our bills. please keep your good ideas to your self. shhhhh!!
Recently, Illiquid has been going on these tirades of posting worthwhile comments in ET. This calls for a banning! Moderators, please do your duty and ban this troublemaker. Thank You, ElectricSavant
Lol, even if I had an actual clue as to what the markets are all about it wouldn't matter -- everything that a trader needs to know is already out there in countless variations. You could spell things out in black and white and it still won't help until he convinces himself with his own experiences and finds his own way. I'm just here to convince my own dumb ass, and maybe do a fraction of what I say -- is a fraction of a fraction enough in this business?