i have been trading for over 15 years with my share of ups and downs. i have concluded that no one is smarter than the markets for any extended period of time. the key is to assume you really know nothing and just take low risk/hi reward trades with the assumption that the trade will fail and plan on how you will mitigate loss first and foremost. nothing is 100%. and i've seen too many smart guys lose everything on 1 trade after being up for 10 years because they thought they knew everything. in the end, it's a game of risk control. as traders get bigger, they put themselves in environments where they bang ho's with no protection or become targets to drive by shootings.
there are five causes of mistakes 1. do not know what to do:lack skills and knowledge and experience 2. know what to do, but do not follow through: no motivation to do it 3.erroreous judgement of the underlying reality: they wish, they have bias, they ignore. they can not see the world objectively. they see the world with filters or they can not see it from different angles 4. lack of attention or focus: sleep on a job. goof around to forget abou their true mission. that is why even vetern traders make mistakes with no stop loss and a disaster. even our control tower guys sleep 5. things out of our capibility or our control. believe in GOD. most people are not god's believer. they thought they can control or capable of anything. liar, self cheating. I believe in miracles since GOD is all mighty. .....Mark Douglas is a joke. belief in a joke becomes a joke yourself. the truth about the market is not psychology. the truth is most people ignore common senses, ignorant of science and lack of undersanding of the market. ....the truth is you are far from 'getting it'. that is illusion. first you do not know the IT, why you declare you are close to IT. after-fact chart analysis give you illusions you are close to "getting it", even a three years old can get it! can you see those unprinted bars and unprinted charts seconds ahead or minutes ahead or hours ahead, if you can, you get it. if not, then just illusions. ......know how to do it, does not mean you can judge the market correctly. no one can judge the market correctly everytime, plus most people have bias toward the market. they have many thoughts " it is too high", "it is too low"... they hold those beielf like true christian 's belief in jesus is god's son. if the market keep dropping, they keep buying, even they cut loss short every time, with discipline, it is a sure suicide mission! ....... there is no right system. no always no. just human being's illusions and hope and wish. if there are, then I program it into my computer, I just buy many computers and let them to do it. we come to the trdaing area, the first reason is: bet for profit. not serach a system. it will be fruitless. .......people will get what they focus on. we human beings's behaviors/actions come from our brain. whether our brain give out wrong commands or right commands, our body will follow! ......no one. winners keep winning, why quit? .....in the dictionary of a winner, there is no 'if', just ' i must be a winner'. if there is 'if', it said he is a loser.
I can vouch for this: setting stops too tight = running scared. You'll always get taken out and THEN the market will go your way. Knowing the right leeway is the "key" IMHO.
I am copying this from SMB capital blog. It may help some traders. Is it time to quit trading? Jan 7th, 2012 | By Bella | Category: Mike Bellafiore's (Bella's) Blogs Hey Bella, Iâm a longtime reader of the SMB blogs. Trading from a home office, I miss out on all of the trading floor banter that I had when I was starting out. It is good to âconnectâ with other traders, even if it is only virtual. I read your book One Good Trade, while I was on Christmas vacation and there was a passage that shot right through me. The hairs on the back of my neck stood up, so I felt compelled to write you. The quote was: âYou do not slip from trading successfully for five consecutive years to being unable to trade profitably anymore. That is, unless you get in your own way. But your skills are there. Now itâs time for you to compete.â Let me summarize my approximate net results: 2004: +$10k 2005: +$90k 2006: +$125k 2007: +$175k 2008: +$240k 2009: +$9k 2010: -$3k 2011: -$2k I applied to the SMB desk in late 2010 and interviewed with GMan & Steve, but was not selected for your desk. I had been hoping for a chance to get back on a trading floor. After that confidence-crusher I spent most of 2011 on the sidelines (I have a 2 & 3 year old which kind of forced my hand, day care being so expensive). So, to sum up, I was totally knocked flat on my butt. I have really been struggling with a confidence issue. This is why your quote struck me. Iâm not sure if it is all in my head or if I am just chasing past years. On a deep fundamental level, I KNOW that I didnât just get lucky in those years. As you say, I had some skills that allowed me to post those results. And yet now it feels so elusive. I canât help wondering if it all was luck. I guess my question, if there is one, is how do you KNOW there âis always an escapeâ? Maybe my head is just a basket case and I need to get it sorted out. I read once that when you get knocked out of the game, it is difficult to come back because it destroys your âmental & emotional capitalâ. Such intangibles are difficult, if not impossible to get back. I can identify as I most definitely feel like a failure. But how long is too long to sit and net scratch for an entire year? 1? 2? 3? It is getting old. Maybe I am a washed-up has-been. In some ways it would be much easier if I could point to a single blowup trade where I blew out my account. At least then I could walk away. But I didnât make a huge mistake. I didnât go down swinging. In some of the most volatile markets I kept my risk controlled and never blew up. Thatâs what makes it so hard for me to decide to walk away from trading, and why I havenât yet. How can I quit when I havenât struck out yet? I was patient and waited for the next pitch. Well, it seems I am still waiting, years later. Sorry to clog your inbox with my nonsense. But I felt compelled to write and I feel better for having done so. I really enjoyed your book. Bella If you have made money consistently from the market in the past you can make money now and ten years from now. Particularly you. And my argument is all about how you define skill. You do not slip from trading successfully for five consecutive years to being unable to trade profitably anymore. That is, unless you get in your own way. But your skills are there. Now itâs time for you to compete. One Good Trade The skills that I refer to in One Good Trade are not just the trading skills you developed. You have a more important skill. You have the personal skill of being able to be successful. This is a skill far superior to chart expertise or advanced tape reading. You did not start during the easiest of times to begin your career. 04 was not a great trading year. It was not 07 08 99 2000. Yet you found a way to succeed. With no trading skills you were able to learn how to build the skills to make money. This is extraordinary. You were the 5 percent. I have written often in the past that many are capable of becoming a successful trader. There is work to do that builds trading skill and if you do that work then you will find out how good you can be. The slogan of SMB Training is: How good can you be? Not: We will make you rich. This is a game of elite performance. Honestly very few will have a passion for trading to sustain the energy required to do the work necessary to play at the highest level. You are not a bad person, untalented, unintelligent, or lazy if you fail as a trader. It is just not your thing. Or better said- the trading you did, at that time of your life, at the place you did it at, was not your thing. Given your past results you should have made more in 09. This coincides with the best thing that could ever happen to you, your new child. But also a gift that brings more responsibility, less time to work on your game, and more pressure. Did you lose your passion? Have you made the adjustments necessary from this life change to continue your trading success? We teach our traders very differently than we did in 07 and 08. The momentum trading that was so effective in 07 and 08 is deemphasized. We ask our traders to create their own trading playbooks of set ups that make the most sense to them. We encourage SMB traders to expand their time frame and concentrate on trending stocks. Have you made adjustments to your trading as this new market rewards different set ups? It is up to you when to call it a career. And how you manage your family is not for this blogger from afar. Since your wrote to me, personally as someone recently married who hopes to have children, I would not be 3 years into being a father without making money- unless my wife and/or I were independently wealthy. Trading is not worth financial insecurity for your family. Having said all that, there is going to be a new path to being a sustaining, successful independent trader that is more than just the development as an intraday equity trader. The days of sit down and JUST learn to be a discretionary intraday equity trader are gone for almost all. This is still the best place to start your trading career for many reasons. This is still the best way to build your trading foundation. But this will not be the beginning and the end anymore for the new and developing trader. The trading world has changed. Itâs both harder and more opportunistic. I will write more about this in the coming months. Bella One Good Trade I often run into traders who are working full time and can not wait to QUIT their jobs and trade full time. Making money 4-6 months does not mean to quit job and become a full time trader. If one thinks he/she can be successful, my recommendation will be to apply for a job at prop. firm and see if you can make it. One , does not have to work for prop firm but selection process at most good firms is a pretty good indicator if one is ready or not. Another recommendation would be to have as much trading CAPITAL as possible, so one can trade without LEVERAGE .
Pension_Admin, I have quit 4 times. Confession #7 is realized, but I am a hopeless gambler that cannot quit for long. I feel if I do not play the lottery I will not win...this is why all of the accomplished traders here take my money. I have not lost my passion...but is my passion trading to be consistently profitable or to feel the rush? I hope this helps... ES
I have quite a few charts of profitable trades in forex with real money. So it is possible. The only problem for me with forex is there is a LOT of noise, and the accessibility of the market being that it is 24 hours was always a problem for me too. You could say I over traded, but in reality the forex market would give me signals for trades throughout the day that would just stop me out. Pure noise. My system is profitable in the long run but not enough so that is worth the time and effort to trade it.
These are incredible stats IMHO. What do they say ? One phrase: Strategies must adapt to new market "conditions". This guy is no dummy....he was making great money, and then "something" changed. I traded Pro back in 2004 and can confirm that was a shitfull year...choppy, trendless. I got out....and then look what happened: the next few years were GREAT !
he was making great money, and then "something" changed. I traded Pro back in 2004 and can confirm that was a crappy year...choppy, trendless. I got out....and then look what happened: the next few years were GREAT ........................................ the markets chop and then they do not. feeling the ebb and flow of the game in real time is a required skill. many apply, very few are chosen. s