Confessions of a loser who need to quit

Stop trading real money. You are doing real psychological damage. Strictly DEMO until profitable.

Lesson#2.

 

Pension Admin,

You said, “I totally understand that and I am a true believer in this. I think Mark Douglas has mentioned this in his book, but in finding the setups with the right combination of winning probability and average dollar winning to give a positive expectancy would be a difficult and confusing task for me.”

That last line is exactly where your biggest problem lies. You really believe that developing a winning strategy should be easy? With all due respect, if it is too difficult and confusing for you to want to develop real setups that work, why are you even trading? Why continue this quest for 7 years when you have to know on some level this is not for you? Trading is not easy to put all the pieces together and you are competing with some of the most motivated people in the world. Think of it this way. If your dream was to develop a new soft drink, would you go to Coke and ask to see the formula to help you develop your soft drink because it is too “difficult and confusing” to develop on your own? What do you think they would say?

Also, that winning setup alone is not enough to be successful. You also have to have the psychological makeup to not override that setup when it doesn’t work, have some money management parameters in place and so on. If you don’t have all the pieces in place, nothing will save you. It just determines how long you can survive and drag out the inevitable.

Do yourself a favor and move on. Trading is not the right fit for you IMHO. Find your passion and make it happen in another field. Not everyone who wants to play pro football makes it, no matter how hard they try. It is the same in trading. It may not seem like it, but we are trying to help you. Best of luck.

BM

 

Last confession: I accept the fact that I am horrible at trading. I will now only trade when there is a strong trend. This will be my very last attempt before I quit.

 

good post EXCEPT knowing your win and loss percentage means very little. Perhaps the most overrated of them all. Newbies focus on wining%. But this varies depending on your profit target, stop loss, panic, holding&hoping, and many other things.

For example, a 90% winner who averages $100 on their wins and $2000 on their losses is meaningless.

Considering the other stats, what matters much more than winning% is your PROFIT FACTOR or EXPECTANCY. And he spoke about expectancy, which is good.

A person who wins 25% of the time, but has a profit factor of 1.8, THAT means something (if they have put in enough trades).

 

"Last confession: I accept the fact that I am horrible at trading. I will now only trade when there is a strong trend. This will be my very last attempt before I quit."

You have the right personality to become a very successful trader given enough time and some guidance.

Please consider the following:
1. If you really are a horrible trader than you should not trade until you can change that. No "Horrible Trader" will be successful even in strong trends.
2. Do you have an edge that works most of the time? Are you able to execute your method efficiently and without second-guessing?
3. Knowing that no "Edge" will work 100% of the time you must also know under what circumstances your edge does not work to your advantage. Did you identify those exceptional circumstances and made rules of exceptions that help you avoid those losses?
4. If you do not have such edge than you should start over from scratch and re-think your approach to trading from the very beginning.
5. The markets can be traded successfully using a wide variety of methods. Find your method, examine it and know when it works and when it doesn't, trade on the simulator and hone your execution skills until you have faith in both your method and your ability to execute under pressure of live trading.
6. After 7 years you should know more than 90% of the "traders" on ET. Give it up now and lose all your time, effort and money or get very serious and methodical about your continued development.
7. Do not rely on responses you get on this forum. It is not in the interest of any ET member to help you to become a successful competitor in this field. Rely on your sharp mind and your hard work.

Best Wishes

 

That is not true.

Most beginners focus on exiting a trade with a profit way too much. This is because people want to take profits as soon as they see them and let losers run in hopes that they will return for a profit. Big losses with small gains will lead to nothing but failure.

Finding a low risk entry is key to successfully trading. Traders who are more concerned about what they can lose in a trade are in most instances, more successful than traders concerned with what they can make in a trade.

If you consistently focus on enter trades that have a max risk of 20 pips and a potential gain of 50+ pips you're going to be much more successful that someone entering trades with a 50 pip stop loss and taking profit after 20 pips. You let the winners run and cut the losers short.

 

Agreed. I see little proof that the exit is the more important. If you get in randomly, then you really have no edge, because you demonstrate that you do not know why you are taking a trade.

You should enter a trade when the market tells you to get in, and exit the trade when the market/(stoploss/profit target) tells you to get out.

 

Correct me if I am wrong, but isn't "let the winners run and cut the losers short" an EXIT strategy? Sounds to me like that's the most important part. Knowing when to exit a trade is the most important part of trading, not knowing where to enter. Entering at great risk/reward points is no good if you don't actually know how to cut your losses, or where to take your profits.

The truth is, you need both sides to make money - good entries and good exits. Most beginners start out concentrating on finding trades that have a high win % and/or good risk/reward. (That's the entry part.) Then they completely blow it by not honoring their stops or taking profits where appropriate. That's the exit part, which most people need to work on. I'm quite confident that what I said was correct.

 

To me, this sentence is the most insightful so far in the thread. There are many measurement ratios and statistics to evaluate a trading system, but to me, PF is the most important. If you have a high ratio, the other stats while fall into place.

My goal is to have a PF of 2.0

 

Do you mean PF of total trades after taking into consideration the win %? or PF stand alone of trades?

Is 2.0 the PF of all your trades or just the average of your individual trades?
J