Hello, I would like to have some opinions from other traders who make money and have some statistics on their trading. I have been trading futures since 1998 for 2 years with about break even, stopped because my business took to much time and resumed 2003. I am trading at IB and I trade nearly everything but I make most money in Dax Future and I am worst in Stocks and Euro. I average 200 trades per month. Trading for me is only hobby, more like playing poker, I have only very little money in my IB account (compared to what I have available less than 5%) but recently it is becoming really a measurable part of my income. I did some programing on automatic trading systems but could not find an edge. So my trading decisions are purely based on my feelings and experience. I have absolut no trading plan or certain triggers I use to enter or exit a trade. I use NO hard stops. My opionion about hard stops is that they do never allow to get most out of a trade - why should I give up the opportunity to change my decision about target or stop through the trade ? I am absolutely convinced that at least in Dax you will be wiped out after some months if you use tight stops. ´They'll eat you alive. As a result of my trading-style I typically make 3-10 days in a row where I make money and then have a day with a big draw-down where I erase 70% of the former gains. However the good thing is that there is still a positive effect visible in my account. However I observed some really annoying things about my trading. I still have a hard time to switch my opinion. Once I think I know where the market is going I stick to that even if in hindsight its so easy to see I was dead wrong. I average down looser quite a lot. I nearly always trade against the main trend. I go short more often than long by a factor of 2 since I am a perma bear (yes, unfortunately that description nails it). I can't trade more size easily. I willl attach some logarmithic curve in the next post where you can see it gets flatter and flatter. This is partly because I have put out money from the account (appr. 1/2 of the current cize now) but mainly because I am feeling very uncomfortable trading really big sizes). The main question I am working on right now is wether I should leave everything the way it is (at least I am winning something) or should I increase my account size (by not withdrawing money any more) and try to improve myselve ((with riscing not to get any better but maybe get worse than now). By the way, the settled month end cash in IB is very noisy, the true equitity curve should be a little smoother. OK, so lets hear your opinion, are you in a similar situation ?
I'd recommend increasing your account size and learning the meaning of "risk management" the hard way. Been there, done that.
You said that you average down often. I consider averaging down to be a viable strategy only in the situation of long term investing in equites. Just my two cents, but if you are in a short-term trading scenario, you should usually avoid doing this. If you are wrong on your original bet, close out.
(1) Whatever visual cues you're using to initiate short-positions should be adaptable for initiating long-positions. That should go a long way towards curing you of being a perma-bear. (2) If you haven't done so already, develop some way of defining trend-continuation and trend-reversal. That should help you to stay with your profitable trades longer and to get out of losing trades sooner.