I have been trading on and off for 7 years. Over those 7 years, I have slowly learning and unlearning what trading is about. Confession #1: I read the book by Mark Douglas and I believe in what he mentioned in his book. Confession: #2: I am close to "getting it" because I now see through all the BS guru's make. Confession #3: I have a sound money management system, reward-to-risk ratio, and am highly disciplined in my stop and exit, but it never made me a profitable trader. Confession #4: I have once again come to the point where I found the right system, but I no longer have the confidence in myself and in the system. Confession #5: I started this system on Tuesday and I have 3 trades open. I keep thinking that they will all be losers. Confession #6: I wonder how many traders have came to the stage that I am in, and quit because they couldn't be profitable even with a disciplines, good money management and a good trading system. Confession #7: This is likely my last attempt because if I fail, I would not know what my system is missing. Thanks! PA
you sound like a clever man who has everything to be a profitable trader except a winning strategy. If so, you're part of a large crowd, and your problem can easily be fixed. All the best, Alex
1) Deep down, you probably never really believed that you could succeed and were focused too much on "eventual" failure and leaving yourself escape routes for what you ultimately expected to happen. Because of that, you were never fully-invested, balls-to-the-wall, assholes & elbows, all in, entire liquid networth in your trading account, committed to the task. 2) Trading can be a form of "entertainment" for you as long as it doesn't get too "expensive".
Do you see the inherent problem here? You are not confident in a system, yet you are using it to trade real money... are you nuts? Go on a simulator and trade your system until you ARE confident. Simulators are for testing strategies and gaining confidence in a system. Live accounts are for implementing a system that you already know works, and that you have high confidence in. You will know this is the case when you don't post any more confessions on this site. Then, and ONLY then, should you trade real money with it. I highly doubt that these things are all true in your case. If you have a profitable system, good money management, and good discipline, you will be profitable. If you're not, one of these 3 things is missing in some respect. Nothing is stopping you from trading on a sim until you get it. I spent 8 months on a sim before I daytraded one penny of real money. If I had been stupid enough to trade real cash before I was 100% ready, I would have lost tens of thousands of dollars for absolutely nothing. Stop trading real money until you are certain of yourself and your system. That is by far the best advice you are going to get.
I am glad I am heading at the right direction and it is good to know that my problem can easily be fixed. So, what kind of strategy are you referring to? Entry strategy? PA
Money is made on exits, not entries. Most beginners concentrate on the entry strategy and give hardly any thought to exit conditions on their trades. Deciding when and where to get out (both with stops and profitable trades) is the key to winning.
Yep, I never fully-invested my entire liquid net worth in trading. I invest a minimal amount until I have a proven winning strategy.
I set my stop-loss and exit right when I make my entry, but I guess my exit could sometime be too far off. I should look at the price action to determine if my exit is reasonable. (not gonna use the word "probable", because I don't know the probability)
That's the trick. My stop loss is always different for each trade. It's never above a certain amount, but often times might be less depending on circumstances. I also don't have profit targets, more just an idea of where price might get to... but when it gets there, I use price action to exit the trade or keep holding. That's the trick to maximizing your trades.
As I just mentionned in a private message to another ET member, things are very simple in trading: %win x Avg Win > %losers x avg Loss = profit It really IS as simple as that equation. Can you write down a trading strategy that you have thoroughly tested (by hand or with the help or a computer, whatever) that will show you a profit after say 1000 trades? yes? --> are you positive it's wining in the long run? Yes again? trade it! Don't focus too much on psycho. No? --> Well, keep looking for the strategy that fits you. Price action and horizontal S/R zones are a good way to (re)start