Brother, Its the leverage. You really shouldn't be trading such big size. The smaller the size and less significant the loss.. the easier it will be to follow a system. I had a friend that started trading an ES contract and was scared shitless whenever he took a loss.. and never ended up following his game plan for this reason. He had a $7,000 account and each loss was $100 and the gain was $300. Thats %1.5 of account per loss.. 3 losses.. woops his account is down %4.5. Then he started to trade another instrument with much smaller size.. $25 loss and $75 gain. What a huge difference it made. He ended up following his rules and turned out to be a good trader. He really didn't mind taking $25 losses.. so it was easy for him to take the loss. $100 loss was big for him.. he was young and can not afford it. THe point is.. you should not be trading the ES or NQ.. you really should not be day trading at all. Your best bet probably would be swing trade very small right now given the $5k in your account. When you get more $.. like $50k then you should be daytrading or playing the ES. Remember one thing... the only way to follow a trading system or plan.. is to take your losses so small that it doesn't even have the slightest effect. Obviously, this is not the case with the ES or NQ... ( and don't try to tighten your stops.. because you will die from a thousand cuts). Remember ES is around $45k a contract. %10 drawdown and you are finished. ---MIKE
Aphie, Please, promise me (us) that if you lost 15K on that 40K, you'll stop trading and get a job untill you get another 15K. ok? please, promise me that. I don't want to be negative, but it's not if, but when you will lose it. The journey is long, and 15K is a very small fare one has to pay. It's ok to lose your money, but please, don't lose your family's money. I don't want to put you down, I don't want to make any jokes, I just want to speak my mind. Cheers!!
I have a decent job and I still attend college. I'm doing this because it is something that I'd like to put my heart into and learn and evolve. I agree with you that a lot of people on ET don't have anything of value to offer, but as you can see in this journal, a lot of people do have something valuable to offer. I will have to work at this for some time until I find my edge and then exploit it. The market has always been a passion of mine. The first time I watched MSFT on level II, I was just taken back by the beauty of a free market. We see all these bids and asks and they are coming from all over the world -- from the offices in Chicago and New York and from a farm house in Iowa that has DSL. To me, the market is an apex of art, science and chaos. It is beautiful to watch and a real bitch to trade with emotionless execution.
You wouldn't by any chance have taught economics at UMBC, would you? Are you that same professor that was teaching efficient market theory and driving a 1990 Honda Civic? Let's see your account statements, oh great one.
I thought you already found your edge with your sophisticated program that was backtested, forward tested, and paper traded on the simulator? You rebuffed everyone's advice about what the system can and cannot do and insisted that you had a positive edge after slippage and commissions. My question is why aren't you trading that system??
Honda? You gotta be kidding me. I haven't driven a rice burner since the early '80's. But I did just take delivery of a X5. Any time. Next time you are on the West Coast come by the office and say hi to the boyz and me. I run a Hedge Fund in Santa Barbara. We're on State Street about 6 blocks off the Ocean. Oh, except January is no good, I'll be in New Zealand for the month. Regards, Dr. Zhivodka BTW: Here is some sincere advice. You sound like a good enough kid, forget this daytrading experiment. Get your ASS onto to one of the exchanges while you're still young. Go to the AMEX option floor or one the Chicago pits and grunt around and hustle and learn on someone else's dime. You'll be amazed at the opportunities that open up for you. If it doesn't work out you can always come back and be retail.
Alpphonso- This is the best advice youve heard just yet. Well after youve lost your first 5g's for your sake, you follow these ideas and your chances go much higher