It sounds like your getting to where you need to be, albiet you are still losing money. IMHO you are probably overtrading, prop shops thrive on the noobs that scalp and churn out high rates. My suggestions. Cut the basket down as far as possible. Eliminate the stocks you are least comfortable with that have a high corellation. The idea is mastering a few. CONSTANTLY MONITOR THE REWARD TO RISK RATIO OF A TRADE. be selective and patient, do not chase. You identified that you do not do well when you chase so eliminate that behavior. Evaluate your current deal with your prop, even if you are getting training if your method is scalping then you need great rates. Develop, execute, follow, and keep of a journal of your written business/trading plan.
I'm guessing no. Looking at this curve, I'd say its likely he's getting destroyed by the bid-ask spread by continually entering and exiting trades at the market frequently throughout the day. IE, we're flipping around between 6s and 7s, buy 7 for the breakout, puke 6s.....rise, lather reapeat. The one time he gets to sell 8s doesnt make up for the 3 times he puked 6s. If thats the case, he needs to be more selective about what prices he's willing to enter the market at, and probably needs to pre-define his loss criteria to allow the trade to weather the random noise which will move the trade against him.
The only advice I can give you is: 1. Specialize in a sector (you seem to be doing this already); 2. Run correlations between your stocks and the indices they follow (GS, for example, has a .95 correlation with the DOW and S&P). Doing this will help you know when to get in and out; 3. Trade stocks that have nice ATRâs; 4. Read The Logical Trader and mark the Opening Range of each day. You can pretty much ignore the pivots, but def note the Opening Range (OR).
I can only give advise that works for me, it may not work for Itrade, but my advise is to get Stan Weinstein's book and read it a couple of times and even if you fully understand it it will take a couple of years to fully grasp its approach and how good it is. You'll also find that as you grow, you'll come up with your own ideas and it will be those ideas that ultimately make you money over the long run, not someone else's. But I also second another person's advise to trade just one stock. By doing that (don't trade your entire account balance, just a fraction) you'll get a better picture of important levels and hone your eye. If your prop shop frowns down on that approach then leave them.
I completely agree .. a plan to follow will do wonders. It will prevent you from entering the market for no reason, and teach you to be disciplined. Even with a written plan, i still find it hard to follow at times, when the market takes off and I just missed my signal by a few ticks. Will you be disciplined to wait for your next signal or will you chase? Also what may help is to have a daily drawdown limit, example by percentage or number of losers for the day. For me 2 consecutive losers and I'm done for the day. I know not everyone will agree to this, but sometimes the market will just be out of sync, these are the days you just want to stand aside. Your trading capital is your lifeblood you need to protect it. Jesse Livermore "Remember this: When you are doing nothing those speculators who feel they must trade day in and day out are laying the foundation for your next venture. You will reap the benefits from their mistakes."
I'm just curious...not challenging you here. On what basis are you being trained in this particular strategy you're following with a mentor? Have you been presented with profit/loss figures for the strategy, assuming that it has been traded by your mentor or members of the firm?
Thanks for all the responses so far. Since my "awakening", I made some drastic changes to my trading approach. Since one of the major causes of loss I incurred during the my brief career as a trader was due to overtrading, I put a limit of 7 trades per day to remedy that. This will force me to wait for the most highly probable setups i'm aware of. If it wasn't for John Carter's book, I wouldn't have known what a setup is! I've also decided to focus on just two stocks, the SPY and USO. I personally found that looking at more than 5 stocks in this stage of my trading career was just too much to bear. I put a stop loss of $50 a day to help me stay in the game long enough to understand how to make money on a consistent basis. This stop loss level will eventually increase as I obtain more money into my account. I made a new money management scheme that I'll post soon after this post. Anyways, I'll try to answer all the questions after I post my new money management scheme.