Confessions of a loser who need to quit

you are not going to make money trading

this is the first thing you need to realize

read the others people posts to know what to do before thinking of trading again

 

How can people recommend a newbie to move from currencies to futures? This is even deadlier and he will lose his money even faster. No futures! And most of all NO intraday crap!

Newbies are regularly drawn into daytrading the market because they think they have more control over their money by watching every single tick. But yet they fail to understand that intraday price action is more random in nature than if you traded off a daily or weekly chart, ignoring the smaller time frames altogether. The market is a master in fooling the newbie trader who is not experienced enough to interpret price action accurately. "It's going up! No wait, damn, it's reversing? Oh, another loser! I knew the market was going to take my money!"

Stocks, ETF, CFD (if living outside US), Currencies (if you feel proficient enough). Focus on daily charts. Trade small. It is not as you say, pensionadmin, that stocks are only for the rich. This is a misconception. You simply scale down to match your portfolio size and risk a few $10 instead of hundreds.

 

Confession #8: I am grateful for all the help I have been getting. I am surprise that I am getting advices from so many successful traders here.

Confession #9: There are other two successful traders that I respect and they haven't post in this thread. The two traders contribute to the trading community by calling out BS on the so-call gurus. I greatly respect that. Given how they keep their trading strategies a secret, by them not posting in this thread, it confirm to me that I am heading at the right direction.

 

PA

Had another thought


Do you have every aspect of your trading documented – a trading plan

Do you document all your trades

Then

Do you compare the two to find disparities

Do you amend your trading plan accordingly


By process of elimination – you’ll get to what works – for you…


You must follow your trading plan rigorously – in other words – make second nature.


Regards

RN

 

Anyone who is not making money with this strong of a trend needs to take a step back.

Scale in and scale out is what works for me.

 

Pension Admin,

First I am going to tell it to you straight, as if I was talking to a friend in person in your position. Second, you probably won’t like it but I hope you at least consider this side of things. Many others have hinted at this, but I am going to come out and say it, as I would expect a friend of mine to do if I was in your position.

You aren’t confident because you are just gambling. Period. You have no real plan and haven’t learned much in 7 years of dabbling. Having random entries and no idea of your statistics reminds me of the saying, “the definition of insanity is doing the same things over and over and expecting different results.” Even if you stumbled upon a winning strategy, you wouldn’t know it because you don’t track your trades so you wouldn’t even know you were on the right track. As Aegis says, you need to know your win and loss percentage, and just as importantly, you average win and average loss. Once you have a positive expectancy trade setup, your job is to let the math work for you and put it into action as many times as possible. The more trades you take or the larger your sample size, the closer to certainty your results become. Let the math side work for you and you will have the confidence to follow your system because you know it is plausible. Any one trade doesn’t matter. What you care about is your positive expectancy tells you what will happen over the next 1000 trades or whatever, depending on you timeframe.

Pros know their setups backwards and forwards and will follow their trade setup rules, ALWAYS and with CONFIDENCE, because they know it is in their best interest to do so. As someone else says, good trading is boring because you have a contingency for just about every situation or event that could happen, and some that are improbable. Data feed, broker failure or internet failure occur? An inconvenience? Certainly. Not a big problem or time to panic because you already know what to do when those things happen, per your trading plan. Of course this assumes you actually have a detailed plan in the first place, which based on your posts you do not.

Face the facts. You don’t have a system. You may think you do but you don’t IMHO. If you continue to trade without a system and plan those who take this seriously will keep taking your money until you give up the ghost, which at this point is probably a good idea. Sorry.

Having said all that, you should be commended for at least trying to admit to yourself (which is why you posted in the first place probably) that you know you are just putting on a trade and hoping for the best, i.e. gambling. But if you are honest with yourself, you probably game to this conclusion a long time ago and are just now finally admitting it on some level to yourself. Most would continue to ignore the facts and go broke and then come to ET and say trading is impossible. There is no shame in moving on to other endeavors as trading is certainly not for everyone. It takes a truly confident person to say that however and just move on.

If you absolutely have to continue trading (not recommended), make sure you have a real method and plan in place that is thorough and complete before placing another live trade. That is were most get into trouble thinking they are not important. Trading is a lot of work and not as glamorous as it is portrayed. We sit in a semi-dark room with a bunch of screens changing colors and call it a career. Most can’t handle it. But I wouldn’t trade if for all the tea in China.

Someday I will learn to shorten my posts but there is a lot to say. No matter what you decide, best of luck in trading or whatever you decide to do. The truth, in my humble opinion, is rarely spoken these days. But it will set you free.

BM

 

+1

I pretty much agree with everything he said...

 

What's the difference between trading and gambling? It's a question I keep asking myself. I guess the difference lies in having a plan with a positive expectancy.

I do not have complete plan and I haven't been good at keeping track of all my trades, but I did take screen shots of most of my losers. I will review them and incorporate into my plan as "setups to avoid".

I will come up with some gyration and trend following setups with multiple time frames taken into consideration. I will then track each set up in terms of their winning percentage in each currency pairs.

I will then only trade those set up with more than 50% winning probability.

Hopefully this will be my final step in becoming a successful trader.

Thanks!

 

Thanks! I actually started a trading plan a week ago, but I haven't finish it yet. It consist of money management, reward-to-risk ratio, and entry strategy, but I think the entry section need more work. Also, I need to create a "setups to avoid" section so I wouldn't make the same mistake twice.

I am gonna reduce my trade size significantly to test out some entries.

Thanks!

 

Pension Admin,

You said, “I do not have complete plan and I haven't been good at keeping track of all my trades, but I did take screen shots of most of my losers. I will review them and incorporate into my plan as "setups to avoid".

I will come up with some gyration and trend following setups with multiple time frames taken into consideration. I will then track each set up in terms of their winning percentage in each currency pairs.”


First,

You are going about things backwards. Plotting and keeping every losing trade (which at this point is pretty much all of them probably) may sound great on the surface, but what you want to be doing is developing setups that have positive expectancies and NOT taking any other trades. In other words you will not have any questionable setups. Don’t take flyer trades. No trades to “see what happens.” More importantly, because you have not been tracking your trades in the past, you don’t know whether that trade that was a loser this time is not a net winner in the long run. Thus you don’t know if it really deserves to go in the “setups to avoid pile.” If you can’t find a real setup that works, why trade and waste your money to give yourself the appearance of success?

You said “I will then only trader those set ups with more than 50% winning probability.”

Again, you are missing the point and don’t seem to understand what expectancy means or how to use it. Look it up at google or on this site. The above sentence is not necessarily going to help you. Why? Just because a set up or potential set up has a greater than 50% winning probability, doesn’t make it a net, long term winner. It just means you win more trades than you lose on. For that statement to have any value, you must incorporate the size of the winning trade and the size of the losing trade into your thought process for the above to have any validity. Which is exactly what the trade setup’s expectancy tells you. Just because a trade has a 40% winning probability doesn’t necessarily mean it is a bad setup if the size of the winner 40% of the time is much larger than the amount you lose on the trade the 60% of the time you lose. Does this make sense to you? There is no combo that is perfect. But in general, the longer the timeframe, the larger the potential profit you must receive for taking the risk of longer market exposure to unforeseen market risks. You just have to develop strategies taking into account win/loss percentage and win size/lose size that you can live with. I hope you can understand the distinction I am pointing out here as well how these variables interact with each other.

Also, this is where the psychology comes into it. Not everyone can mentally handle being wrong 60% of the time/right 40% as in my above example (or whatever the setup percentage is). They might override the setup parameters if the 60% losing percentage gets to them. Once that happens they are gambling again by not following their setup parameters. So they would then need to develop strategies based on a higher winning percentage but with a lower expected profit (unless you can find both, LOL) for them to be able to mentally handle being wrong 20% of the time. These are questions that only each individual trader can answer as everyone’s psychological makeup is different.

There is no final step to becoming successful. The process never ends. NEVER forget that.

Good luck

BM