I agree with ddefina. The problem isn't stocks or options or futures or size or whatever. The problem, assuming that you're defining support and resistance correctly and that your system backtests and tracks well, is your fear of loss. That's causing you to cut your profits short. Until you've addressed that, your situation probably won't change. --Db
If all else fails, try the George Castanza approach. You'll recall he was a looser character on Seinfeld. One time, realizing he always made the wrong decision, he decided to always do the opposite. He seemingly made all the wrong choices during a job interview with the New York Yankees - but got the job! So as for your trading, if you're only doing 5 trades a day, commissions and slippage can't be a big problem. Yet you are consistently loosing. So do the opposite (at least on paper), and see if you don't start pulling in a couple of hundred dollars a day instead.
That's a big enough account to trade mini's. Have you ever tried the technique of always getting stopped out (or limit on goal exits), no market exits? It may help you let those trades run a little. Put in a bracket trade, and walk away if you have to. Its better to stay in front of the screen so you can move the stop as needed though. Trailing stops can work too, but they aren't based on market structure so I don't like em. Jay
Db, you and ddefina are absolutely right. I cut my profits short. I'll take stops as large as 5 ES points (although my typical loser is -2 or -3 points), but when I have a 0.50 or 0.75 point gain dangling in front of me like a carrot in front of a rabbit, I snap it up...only to watch it later go all the way to my intended target more often than not. This is even what I do when my system is not telling me to exit the position yet. Also, I freak out when there is a reaction. I do not weather retracements well. Even on days where I have 4 out of 5 winners, I often end up negative because my winners are small and my one loss is too big. It's a purely psychological issue for me. My system works well, averaging 3.75 ES points per day in backtesting (and I also got similar results during one full month of real-time paper trading...I took December off--no real $$--to paper trade my system). Thanks for your responses I'm thinking about making an appointment with a psychologist. Even if it's not a trading psychologist, I think a lot of the same issues that pertain to everyday life also pertain to the trading arena. Specifically, I need help controlling my fear response.
Why don't you post an annotated chart showing a day or two's trades? Without the charts my guess is that you are a counter trend trader. You PL ratio is typical of someone trying to attempt that- essentially being on the wrong side of the market with wide stops.
I was papertrading for a while. My strategy worked in December, then starting this January it was no good anymore, because market started going in one direction during the daily trading session, instead of bouncing up and down all day. I observed that it almost does not matter what strategy you have at this point in time. It seems to me that just entering at random level somwhere in the middle of trading range is better then waiting for bottom/buy or resistance sell. Like today, I sold ES at what I thought was the high of the day, and it just kept on going by 12 more points up. Scalping for .5-1 point does not seem too hard, especially this morning. The bottom line is that in near term if we are going to war ES could drop to 800, if not it will bounce back to 900, because economy seems to be picking up. So if you are willing to hold on, you can make a profit (wishful thinking ). Anyway, I still believe it is a matter of luck if you want to shave off a lot of points in one gulp.
Corrallus- sounds like you need to force yourself to stick to your TARGETS. if you can set mechanical stops, try setting them and then stepping away from your desk..even if you just stand up and do some stretches or something while you watch the action...having your hand away from the mouse/keyboard might keep you from exiting too early... as far as the account size goes....if you have a series 7 or are willing to sit for it..maybe you might consider joining a pro firm. You can get good leverage , don't have to worry about Pattern Day trader rules, and get to learn new strategies(at the place I'm with anyway). If you want any info feel free to PM me. Good luck. Stick with the plan. uptik2000
Here's a chart from today. Notice how the first trade could have been a killer if I hadn't gotten stopped out.
I found it impossible to adress my own psychology. My only obstacle to success was me. Thank goodness I was directed to a way to remove me from the equation. It is not as "exciting" but the income compensates for the lack of excitement. If ever you are about to "give up" send me PM. Best of luck
Based on the chart, it looks to me as if you have the patience of a scalper but are trying to swing for the fences. Perhaps you should be looking for a style more suitable to your temperament. PS, if you email GD2KNO above, he/she will probably just direct you to his/her guru site. Ignore it.