Actually, the key to successful trading is a plan. Risk management is only part of that plan. Until he takes all of this seriously, whatever improvements he makes will most likely be the result of chance.
FWIW, some of my best trading came from when I had a live simulator running next to my real platform. I would trade the simulator most of the time, but there was always a trade or two that just looked way too good not to enter for real. So I would churn on the simulator and occasionally take selective trades with real money. The simulator helped keep me busy watching the market (so I stayed in tune and didn't start to zone out), yet kept me from churning up real commissions until it just felt right.
"It looks like", "Plan", mmmmm!!! If I have a plan when do I know that it gives me an edge? When do I know that the results are due to the plan and not a product of chance? Consistency? The market changes face constantly the plan has to be adaptive. When do I change the plan? When do I know that it stops to work and needs to be changed? How I protect my capital? Risk management and money management. I will never be sure what the market will do. I will always see it as âIt looks likeâ meaning âthe odds areâ¦â Itâs a tough game isnât it? Hamb
That you haven't answered any of these questions for yourself suggests the reason why you have yet to show a profit. You know your plan gives you an edge when you've tested it and found that the results it provides are better than chance. A desire for adaptability is not a rationalization for inconsistency. If your plan can't achieve consistent results, then it is an inadequate plan. As for when to change it, keep records. Determine if and when your ratio of wins to losses begins to deteriorate. You're doing what 9 out of 10 newbies to this site do, believing that a "real" trader is able to "feel" his way through the day. Either that or you search for the ultimate set-it-and-forget-it system. You spend no time trying to understand the market itself. Therefore, you have absolutely no control over what happens, yielding complete authority and control to others. The market never stops and never ends. There is no internal structure. It's up to you to impose a structure. If you don't, then you're just a cork floating on the ocean.
If your research tells you that you produce a profit of $xx per year or month and you trade your plan, then you should expect results similar to your plan. When your real time trades show the same characteristics of your back tested results. Characteristics could include: win/loss ratio, avg win/avg loss, # of trades per period, stop loss amounts, P/L, holding period per trade. If your plan gets you into 50 trades per month and at the end of the month you look at your statement and see that you traded anything that moved, then your results are a product of chance and not due to your plan. If you change your plan more often than 4 times a year, you don't have a plan with an edge. It is true that no one knows what the market will do, but you have the choice to take a $20 loss, $50 loss, $200 loss, or let it run against you for a $1000 loss. It's up to you. You're in control of your loss amount. Are you man enough to accept a small loss? It's only as hard as you make it.
Unfortunately, everyone, including you are projecting their own perceptions... >>Don't listen to most of the guys in ET... they have no idea giving textbook answers, too biased or just projecting their own problems in your shoes...<< Incidently, this quick blurb, which I agree with: >>"What is it" or "It is 'This' << is very similar to some text I just finished reading. To get the entire train of thought and fully over explained meaning of these words refer to Chapter 12 page 228 and onward of Trading Chaos by Bill Williams, it is entitled The EXPERT Trader, talking specifically about belief systems and reality. Powerful words. Powerful truths in what Williams is stating. best- momo
Try to lose and be offensive......see if this works.... No, seriously......trying, gambling...adrenlin....this do not figure into the picture. Hey you are surviving, this says a lot....these are tough markets to trade in. I think being defensive and with less trading and high probability set-ups you should eek out a living in 2004. Michael B.