When you blow out like that it means you either a) have poorly defined stop loss criteria based on your system. b) You're letting your losers run in hopes it becomes a winner. This is a mental issue that you need to get rid of asap before you blow out again. With a proper system blow outs should never occur.
I would recommend creating an Excel model showing the expectancy and the equity curve of your trades in the long run. Review that everyday should provide enough motivation to stick to your plan. PA
Some very good points made here already by some good traders. It's very rare to find constructive criticism on ET, if I were you I would heed the advise given on this thread very carefully.
I can honestly say that I am right there with you innovest_11. I have been paper trading for 16 months, finally made the decision to move to real funds in late sept. I am intraday trading trends and counter trends for a 10min - 2hr typical position hold time. My system is not bullet-proof, but I have confidence in my insights and I like discretionary trading. My first 12 days of trading were great. Every day profitable. I was up 15% in those twelve days, based off over approx 200 trades. My winning trade ratio was 70%+. Then Oct 10 - the first of several 'killer volatility' days. I lost almost all my profits that day. Then last week Monday, I lost only 1/5 what I did on the 10th, traded Tue, lost $50 (and had a big smile). And Wed, Thu and Fri all turned profits. I walked away last week feeling proud that I had pulled myself back from the ledge using focus and self-discipline. I was at nearly break even from my starting egg, but I was moving in the right direction again. Monday and Tue this week were nominally positive days. Then Wed/Thu/and today - more bad, bad days. I have lost another chunk as big as my Oct 10/13 losses and I am now 15% down in my account from opening. A couple thoughts here: - I know that I am doing the wrong things, that I turn up my risk to 'recover' my losses - and that this is soooo very wrong. But that is not the bulk of my losses this week. - One thing I have realized is that I am giving my gains back to the market too easily. So many times, I have been way, way up for the day, then managed quickly work my way back to neutral, then a loss. As Ed Seykota said, "Everybody gets what they want out of the market". Well, I was considering my profit as "play money", thinking "that I am fine as long as I am not negative", and that is just what I got from the market. In days like these, you need your profits to stay ahead. Which leads me to my next comment.... - I don't like making excuses. And my losses this month are nobodys fault but mine. But.......I believe that this market is incredibly difficult to turn a profit in. I know some traders are profitable this month, but I believe that even the most very skilled and experienced traders are finding these highly volatile days to be very tough for trading. I have to think swing traders are getting killed. Position traders may do OK in the long run if they have very, very liberal stops. And my intraday trading style of trending and counter trending does not work as seamlessly as it was when I was turning a profit earlier this month. The channels are not holding, the trends are not holding, we have huge bars and huge wicks and I believe only the most short term traders scalping the market are consistently turning a profit this month. Please correct my assumptions here. I would appreciate any guidance. I now see (as mentioned earlier in this post) that mastering trading is mostly about risk and money mgmt, and less about your setups. Q: I am thinking of moving back to paper trading for a while until this volatility dies down. Good idea? To trading success, jtraderj
The biggest power one has as a trader in the market is that we can cut our losses short and let our winners run. When we do the opposite this power becomes a boomerang and ends up hurting us badly. TV