JB3...Wow, you have nailed exactly what I went through from August July 08 to Nov. 08, now I'm getting back on track....wonder where I'm heading to next.
Thanks for such an informative post, JB3. I think you hit the nail on the head there, as someone already said.
Gubinec, yes very hard to make money within your first year simply because you need to see DATA print ad nauseam before you can truly find correlations that you feel comfortable taking advantage of (and that work!). Sure as a noob you'll catch a few weeks were it seems incredibly easy to make money and...BAM...the market switches gears and you'll give it all back and then some. It happens to EVERYONE. The true players learn from these subtleties and adjust the next time around. Seriously man, expect 1-2 years MINIMUM before seeing any profits that are consistent (daytrading perspective). If you are going to get into the trading trenches everyday, its going to take 1000's of hours of screen time and a full force effort as you go. I've been doing this ~ 10 yrs now.
A lot of great and very honest posts here! When you are sick to your stomach choking down the tears in your eyes while watching the market wipe out the last dollars from your account then you will finaly understand what all these guys were talking about in their war stories. You'll be sweating blood before you start consistently taking money from the markets. But don't let this spoil the dream that brought you here. The feeling that a lot of money is just within your reach is intoxicating. This feeling will keep you at this game for a long time even after you no longer believe in Eldorado. I am not trying to scare you but maybe it will prepare you for the reality and the first fall won't be that hard. Try not to be too hard on yourself. Welcome and Enjoy the ride. Good luck!
I traded at a retail firm, MBTrading. Started off back in the days when commissions ran $25 each way. My original plan was to buy when Cheetah said to buy and sell when Cheetah said to sell. That did not work out too well for me, I started off with $25,000 and turned that into about $17,000 in 6 months. So then I had a very smart plan, which was to sell when Cheetah said buy and buy when Cheetah said sell. On the surface it seemed like pure genius, at least to me, but it turned out to be more like <b>J</b>ENIUS coz following that plan I turned my $17,000 into a quick $10,000 in about 45 days. Lucky for me at that point I sanity started to come back into my life. I stopped dreaming about the house on the hill, the fast cars and the hot chicks and started to worry about simple stuff...like not going broke and just sticking around to be able to trade the next day. That was kind of a point where I learned, the hard way, that there is not really an easy button to success in trading (or anything else in life for that matter) and that I was actually going to have to WORK at it. So, I really dug in and studied technical analysis. Luckily at that time the market was trending pretty well..so I was able to focus on simple bullflag patterns in uptrends. Just basic 1-2-3 pullbacks with a narrow range day, then buy the breakout...that was actually the first setup for me that was profitable. Then what I did was I worked with that setup. I looked for it each night using TC2000 and wrote down all the potential setups I liked. I built my account back up. Once I'd built my account back up and started to profit a little bit I started to look for another setup I could use. Basically what Id do is say..Ok I can risk $100 on this 1-2-3 narrow range pullback and it was my bread and butter thing. Then I'd say..ok I'm going to work on learning this other gap setup..but I dont know it as well..so I can risk $50 (not including commissions) on it. This way I'd be able to support myself with my "good" setup while I worked on the next one. Then the gap setup starts to work..so now I risk $100 on the gap setup and the 1-2-3 setup..and I start looking to find another setup that works for me. I go to these wide range day rebound (oops) setups and started out again...risk $50 and develop my feel for that setup until I'm doing very well with it. I basically was able to take those three setups and bring my account up to just under $200,000. I basically built myself up like that. Hope that helps. Brandon
Very good post. I marvel at those people who can go through this cycle in a matter of months. It took me more years than I'd care to admit to get my footing.
Simulator and real money are two different worlds. You're not battling emotions yet. Also, you're not dealing with execution & slippage. Other than that, either you have an edge or you don't. It takes time to develop & hone an edge. There are very few, if any, inefficiencies & tricks left to exploit nowdays, at least in US equities.
As a paper trader you read about fear and greed and may understand it from an academic level. I went in thinking that trading was like an analytical exercise. I never truly understood the impact of emotions until I had real money on the line. It is easy to get overconfident. You can be smart, analytical, able to recognize patterns, well read, and have followed markets for years - but when money matters your emotions can really screw with you. If you have emotional issues - it will probably show up in trading. Needing to be right, anger, how do you handle frustration, etc.