On this episode of Beaver Leaves It To The Achiever "Mom, is it okay if I go out and play with the market makers now?" "Alright son, but don't you lose too much money." "Okay mom. " . Silly Beaver. What an undisciplined airhead.
You make your own rules, so you get to change them too. But the danger is changing them "on the fly". If you find that your rules aren't working, then by all means re-evaluate them and change as needed. But not in mid stream. That will just put you into that "spiral". Discipline becomes a joke if you can't be faithful to yourself. Be creative. Look for the outlets and the influence. Just don't do it in the heat of battle. You are your own "chain of command" while trading. Don't disobey orders. Change tactics in times of peace (when flat, preferably when the market is closed, and after a lot of well reasoned brainstorming). Dan Quayle...wanted to grow up to be Yogi Berra. Just didn't have the cool! (or the looks)
At this point i do not depend on my trading profits to keep me living, i have a job that also involves the financial mkts, so i am constantly around it, and am learning new things from varius sources, but am using my own judgement as to what i feel is valuable, there is a lot of bs and i think one has to know what to filter out, what to try out and if it dont work toss it away and move onto something else. I do have certain set ups that i trade but no hardcore written rules, and i think that might be a big part of my problem as well. just like every little trader out there im trying to build up my act to proper levels to be able to trade successfuly, i guess 25k minimum sounds about right. i know smaller acts are being sucessfuly daytraded, and thats ok, but undercapitalization is a big negative for a trader in this mkt, especially with futures, so thats why sometimes i am afraid to take shots because i am trying so hard to build my act up. Its a loosing battle but there is still that small glimmer of hope, and it can be done, but its very hard. But i just dont see myself really giving up on it. As far as which stocks i trade? well, i used to swing trade and have made some money and lost money, basically searching charts for potential buys/shorts based on technicals and candlestick patterns. The problem there is i started getting bored with the trade if it didnt show gains in one or two days, i felt like i was missing out on potential profits elsewhere. And yes a lot of times i got out and the stock moved in my direction, that was frustrating, so i started looking at daytrading and have done ok, but then the 25k rule and i was done. i did sucessfully daytrade/swing trade options on the q's. But options weren;t my cup of tea, futures seemed like the answer. So i am currently watching and studying, i ahve taken a few shots here and there and made some and gave back some, so now im back to just watching and wanting to pull trigger when set up is present, but again - i'm playing with scared money. How do you deal with something like that? i dont depend on that money, i can loose it, but i dont want to obviously, i have lost enough from my previous experiences, and i really would like to saty in the game for as long as possible, thats why capital preservation is at the top of the list.
posted by rs7 "You are your own "chain of command" while trading. Don't disobey orders" I like this. From now on when I trade I will step outside myself and become a bootcamp sargent......."YOU SNIVELING PANSY! JUMP IN THAT TRADE!" "WHAT! YOU BROKE A RULE?! ON THE GROUND AND GIVE ME TWENTY!" *********************************************** "Adversity has the effect of eliciting talents, which in prosperous circumstances would have lain dormant." -Horace
Really, as hokey as it might sound, having a set of written rules, reading them every morning, and keeping them around and visible helped me a lot. The act of writing them - deriving them, honing them, printing them out - already helps confirm that you've thought things through, that you do have a plan and therefore a chance. The act of reading them reinforces them, and also reinforces your commitment to trading with discipline. Periods when I've neglected to read them have often also been periods of regression. I think that if you're trading from home, alone, anything that you can do to reinforce discipline and good work habits is probably worth considering. Beyond your trading rules, you need to have a plan that can and will succeed if properly executed. If it's clear, well-researched, well-tested, and well-understood, then you should be able to execute it with confidence.
Very nice, very true, very problematic. Finding the balance between disciplined quasi-robotic behavior and "free-flowing" creativity is critical. Though it's probably better when you're just beginning, to strive to trade like a machine, I do believe, and know from occasional if rarely sustained experience, that the best trading exploits and full realizes one's creative mind as well, in "real-time" as well as in reflection - it's what makes daytrading something like athletics and the performing arts.
I'm glad you posted this thread, Janko. I've been trading on and off for eight years and I'm still struggling. Long story...personal problems, etc., I've only been able to get really serious and focused the way I need to be just this year, and I'm still struggling as a break-even trader, and feeling like I'm just now getting ready to move into consistently positive territory. It seems like only the folks who are doing great ever talk about their performance on this board, and I often wonder where the 95% who lose money trading are, especially the ones who have been at it for a long time. (Actually, now that I think of it, there probably aren't too many struggling traders who've been around for any length of time because they all quit before they figure things out). I've also wondered on many occasions if I was cut out for this. What convinced me to keep going was that every time I stopped trading for any length of time, I felt like something was missing in my life and I needed to get back to it, even if most of my time was spent on the sidelines, watching the market and taking the occasional trade. I just have to trade. To me, surviving long enough to figure it out was the most important thing, so trading small and not throwing money at the markets when I wasn't yet ready seemed like the wise thing to do. I agree with the suggestions others have made for having a written plan and trading a single technique until you get comfortable with it. Also, what's helped me in the past (and currently) with trouble pulling the trigger and playing with scared money, is to come up with a very low risk, high probability scalping technique, where I'm only risking a couple of points and looking to make a couple of points of profit on one e-mini contract. Then, I forget about the money and just look at it as an exercise in following my plan and efficiently placing the orders. Doing this also gives me a statistically valid sample of trades to analyze so that I can come up with ideas to fine tune what I'm doing. It's also helping me to come up with new ideas for other techniques to develop (completely different types of trades), that I'm working on now. I think this is starting to happen because I'm not as stressed out as I used to be, because I'm not risking as much, and my mind is starting to work more creatively. Using resting orders has also helped me a lot. Once I decide to enter a trade, I'll place a stop order for entry and a limit order to take profits at the same time. As soon as my entry order is filled, I then place my protective stop. As soon as one is filled, I'll cancel the other (just don't forget)