Two things transformed my trading: 1) I limited what I traded. First I limited my instruments to 4 stocks (AAPL, AMZN, POT and X), and I was dabbling in futures. I then limited the stocks to 3, then 2, and I was preparing to make a transition to futures. I now trade a single futures contract and trading life has never been easier. 2) I learned how to trade with the trend using the power of price action. Without knowing the specific details of your trades, here are the issues I sense with your approach base on your stories; correct me if I'm wrong: "i'm watching AAPL and see that it established a pattern. i waited patiently until it formed an obvious pattern." By the time a pattern becomes obvious, those who trade it are, in the words of Mark Fisher ("The Logical Trader"), the retail bus people. They're ripe for getting picked off by the professionals. You learn to recognize potential setups early and trade them early; you learn to take advantage of the "traps" as the pattern becomes obvious, or wait for a new fresh pattern signal. "i will buy the bottom of the channel and sell near the top..i buy the bottom with a stop and then bamm!!! it drops under the channel so i stop my self out--DISCIPLINE." That's good discipline, but it indicates the channel has become too obvious and you need to wait for more clarity. Did you buy/sell the bottom/top of the channel in the direction of the prevailing trend (the larger trend, not necessarily the trend line of the channel) or against the trend, or both? Did you use stop orders to let price itself sweep you in the direction of price off the top/bottom of the channel, or did you assume the S/R levels of the channel would hold and use limit orders to buy/sell there? "i even widened my stop but to no avail..those damn candlestick tails!" This is a common reaction to getting whipsawed and the end result is almost always larger losses and often a bout of revenge trading. "i am in a good stock as it formed a nice consolidation pattern,i think its about to make a sharp move higher but i have in a tight stop in case it moves the other way..DISCIPLINE...WTF ! the volume has stopped,it ai'nt moving.. whats going on. shit, the stock is halted..someone leaked out earnings and it looks like its bad. i have 1200 shares of a $65 stock and its scheduled to re open in a half hour. ok,they are bidding at 53, down 12 points." If you day trade stocks long enough, this will eventually happen. Since these events are rare and your size on the trade is only risking 13% of your account should the stock drop to $0, it's one of those "sh*t happens" moments. It seems this kind of thing is more common in small cap stocks. "i am watching a stock and its in a daily uptrend and everytime it hits the daily high it reverses slightly and hugs that resistance. i know its gonna break but DISCIPLINE says to wait til it actually does." Breakouts should not dip much below/above the breakout level (if at all). If you place a stop order just outside previous S/R to play a breakout in a defined trend, your stop loss should be small and if there's no conviction on the break, you can get out for a very small loss or break even trade. If price breaks out weakly and reverses back through the breakout level, it's often a sign of a reversal or deep pullback in a mature trend (a trend of 2 large legs, or 3-5 smaller legs). Even when I traded high-priced AAPL, I'd never be down more than $100 or so on full-size trade (600 shares) if a breakout failed. "the market drops 400 points for the day and i am up 200 bucks." This leads me to believe that you do not understand how to trade in the direction of a trend. Trend-following is where the easy money is. When you learn how to do it properly, as a day trader you will win in a "Spectacular Fashion." You'll just win!
For some, trading is the right business, for others it's not. Same thing goes for all businesses. Gotta find the right fit for you, that's all.
You have to understand that individuals like yourself NoDoji, myself and others that profit daily from the markets upset marketsurfer because it was something he failed at. His ego won't allow him to accept that someone can do something he can't do.
NY_Hood, I feel your pain. I was a successful position trader (by this I mean holding a position anywhere from days to months) and so I thought I could trade any style. I decided to daytrade and take advantage of the high leverage of prop firms. I did this for almost a year and a half and lost everything. This experience taught me that I do not have the right psychological makeup for daytrading. The reasons were that I did not have that fine balance between aversion and comfort to risk. It is essential to be a successful day trader and few people possess it. I simply needed the money too badly and felt the pain of every loss. I was not removed enough. However, this doesn't mean I have no hope as a trader. In fact, I have become a very good trader as a position trader. My point is simply that you need to find a style appropriate to your mindset/psychological makeup that takes advantage of your strengths and minimizes your weaknesses. Experiment with different time frames, positons sizes, etc. Find your style and you will succeed. Best of luck!
Great post HFS......shows that people can evaluate their strengths and weaknesses and make the right decisions for them and not spend all their time blaming trading in general. I am not surprised you made it as a position trader. Nice work
I guess it's human nature to resist something that doesn't align with your experiences. Poor guy, sounds like he got burned badly. It's a wonder, though, why him (and others) spend so much time on a website that has to do with trading?
I hope you figured out discretionary technical analysis doesn't work. In your third example you keep buying "breakouts". Funny thing is nobody can define what a breakout it. And when they do, it's in hindsight and in certain charts. In real-time most people will fall victim to fakeouts. You need hard rules and algorithms to clearly define what a breakout is, and only know then whether it provides an edge.
Nah, if you learn to read price action you can anticipate a real breakout and spot one that doesn't have anything really behind it. Just takes a lot of experience, you need to closely watch the mkt trade for quite some time to gain the insight needed to spot each scenario. I really don't think one can do it with charts alone but that's just my opinion.
Wow, now he finally clarifies that "discretionary technical analysis" doesn't work. Nothing discretionary works consistently.