Really close to taking a 7k-8k loss in crude.. the only good thing is that over last couple days I've had 4k-5k in wins. This is a good experience for me because it shows that I need a better way to manage my risk either by hedging, options, or some way/some how to get market neutral. Well... this has been a very humbling lesson for me. I knew for me to hit 1%+ per day would require a lot risk.. This is a good lesson that I need better tools to help me manage my losses because I really can't lose if I don't take a big hit because I'm so consistently solid. I should have been more careful in crude.. I've lost about 20k trading crude on my account. The only reason it didn't show up was i made so much money in the other contracts. It makes me realize just because I can trade the ES doesn't mean I can trade another futures market. But I had plenty of opportunity to stop it.. I had +1k profits.. I could have took then when I lost that.. I could have taken a $400 loss.. then it grew pretty fast to a 5k loss but I had 1.5k in profits on the day. It would have only been 3.5k or 1-3 days of work Now the devil grown to 8k.. and I'm close to taking the hit. My stop is set but maybe a window will open for me tomorrow to get out. This has been a good lesson for me. when I'm trading my new style I don't have time to set the stops.. Its a good lesson on how great traders blow out their accounts. Had the trade went bad to begin with I'd probably got for small loser..
I took the loss but I made it back and more! Since I set a goal to do 1k per day, great things have happened. I'm hitting 1k+ per day. Although I don't define it as "per day" in every case: it is per sequence. I might make 3k on a day and still not make 1k by my estimates or I might lose 1k and still hit a 3k day, that's really a small point though. It just means when I sit down to trade my goal is to take out 1k from the market. Now I'm usually hitting 2k or 3k per day. But then I might take a 2k,3k, or even larger hit and so for me to average 1k per day then I have to do more then 1k per day.. hope it makes sense. I really think that working to trade prop helped me because during that time I was forcing myself to trade 24/7 with tight stops and if forced to trade 24/7 then I was break-even or losing. So, you know I was breaking even or losing. During that time, I made about 8 predictions and 8 of 8 came true. So I learned that I can't trade 24/7.. I mean I can't win if I force myself to trade. But on some of those days, I'd be up an insane amount and then give it back too. Now, what is important to understand that I have several working styles and methodologies to trading. I don't use just one. And, I have several that I considered proven. So, my losses in scalping didn't really hurt my confidence. It just kinda told me that -- that style of trading -- wasn't for me. But, I didn't stay with it long enough to PROVE to myself that it couldn't work which was something I wanted to do but the guy running it didn't seem serious about funding me and I was losing precious performance on my live record. But I gained something from that experience, it is hard for me to qualify exactly what it was but I learned to better understand the trades that were working for me. And, I don't use many specific trade setups but I learned that when I was confident, rested, and trading well that I continued to trade well until I started to lose. I recognized that when I started losing that I'd continue to lose for a while.. And, so some of those experiences have helped as well as my new focus on extreme performance have took me to perhaps a new level. Again, at this stage this level of performance is still somewhat experimental. As I have working methods that I confidence in and believe in and then I have methods that are showing promise but I'm cautious about feeling like I've got it. And, part of this is really a learning process for me to try take everything I done and turn out a superior performance. So, it's not just like "okay I've got it to make 1k per day". I'm actively thinking about it from a lot of angles and I'm experimenting with options, spreads, and thinking about risk management a lot more. The biggest with trying to hit these type is the risk. For me, there is no way that I can lose because I'm just too good. Sure, I know how it sounds but its the truth in my mind except the big loss. I can lose if I have to take a huge loss or don't take a loss. I chose futures going back because I liked the stories about futures and because they were simple and efficient. And provided 24/7 trading opportunity. But, the unlimited risk aspect is really something that I don't like because I'm not trying to hit home runs. I look at my record and I don't hit home runs. I don't need unlimited reward and unlimited risk. And, so I'm looking at options, futures spreads, and other ideas to help manage that risk beyond simple price and time based stops which have been my primary method. I run an analysis and most of my winning trades: I don't take any risk on. My average risk per trade is $200. I made +2.9k without taking probably more then $200 to $300 risk on any one trade today. You'd think you could just put a tight stop on that of a record and it'd work but it doesn't. It would erase about 40% of my profits because of 40% of my profits comes because I lose well and a tight stop would erase about 80%, really and probably since I take stop hits that my record would be even stronger perhaps by 20% or 30% maybe 40% if I hadn't taken those stop hits. To get that next level of performance, I feel hinges on my ability to control my risk in a way that minimally impacts my performance. Oh back to what I was saying is a lot of traders diversify and keep positions small but in futures that's not really an available option. So, that is why I'm experimenting with some vertical call spreads and other instruments to see if they do any better especially since I like to pick tops and bottoms. Futures seem more geared to trend following by design, and I don't do that. And even at that they are primarily for trend following in low volatility markets. I understand that the reasons behind that. I mean its for the hedgers but for me, I'm in the market 24 hours to 72 hours at max. So, it's like why would I want to take unlimited risk? And, it may be that using price stops in the futures market is the best way to trade. Many professionals have said just take your stops hits and forget options. But, you see I traded vertical spreads at nadex and in theory it was a great instrument for me but it wasn't efficient enough.. I actually took more realized on some of those trades at $30 per point then I did trading at 4 es contracts or $200 per point!! Hard to believe but that was due to the premiums, costs, etc. Now, on that futures trade I might have had $2,000 of risk that I was willing to take. I've read that some floor traders hedge using different contract months but I don't understand that.
This is not the path to success, but destruction and hell... When we profit from a trade, the truth is that we've shed some innocent trader's blood...
Coach: What's on your mind? Me: Well you know one thing that bothers me is these joker vendors. I've got an email in my inbox about a "trade off" between the various vendors. But its like for only 2 hours.. lol what in the world could anyone learn from that. I doubt that more 20% of the vendors would be more then marginally profitable if they opened their books. I'm not saying no vendor can trade but I truly believe that most of the "big name" ones can't trade or are not more then marginally profitable.. i.e barely profitable. Coach: I agree with your sentiments and yet how does that benefit your performance to focus on that? Me: It doesn't. You know I am interested in trading and so I think that part of is a legitimate interest in trading and kinda my own disappointment with these "rainbow merchants". And, if they can trade why don't they come out and demonstrate it.. you know don't and they won't. Let me be clear, that's not every vendor. There are some legit system vendors.. like Keith. But you know.. the ones I'm talking about sell basic indicators for $500. But, you're it doesn't benefit my performance. And that's what important. Coach: I feel great things about about to happen for you. I need to know if you any jealousy... any envy about your situation compared to say some other traders who have the capital to trade? Me: No!! They probably envy me!! They only have money. Money is cheap. Winning is worth more. Coach: Then I am sure that great things will happen in time. Keep your focus on your performance. Now, I wanted to ask about balance. What are you doing to keep your balance? Me: Okay.. balance. Balance. That's a good one. I guess it boils down to health. I'm doing to do what it takes to keep healthy. In terms of balance on the profits, again if I start to lose then I'm done. I'm out. That's part of it.. although if I'm trading "hedge style" then that's a bit more difficult to say that I'd be 'out' but if I'm sequential trading then I'm done. So, that's part of it. The other part is I have a goal and it hit then I know I can size less, experiment and try to learn. Coach: Trying to learn, that's critical. How are you learning from these experience will determine much of how much you gain. How are you learning? Me: Well I've categorized most of my trades. I reflect on them. I recognize that I might be doing something different or the next but it fits into existing category. I have my predictions, real-time targeting, blitz trading, system trading, hammers/hedges, and just speculative larks. So, I'm really thinking about you know what type trade did I make and what category does fit into.. So I know and become conscious of what I'm doing and that's great because then I can actually see what happened. Coach: And seeing what happened is going to be easier if you slow down the time. Me: Exactly. Control the time. Control the tempo. Replay. Rehearse. Coach: Well, keep focused. Keep on your goals. Learn what works or don't . Don't take anyone else word. You may find a combination that works great for you. It may be combination of options and futures. I means it obvious most people say go find something rare or not traded where there is an edge and you've found your greatest success yet on the most liquid, arbitraged, instrument in the world. That's something to keep in mind. But watch your size on experiments. Keep experimenting and keep trying to combine your read with measurable edges.
If you can make 3k only risking $200 at a time just fund your account with the 3k you have and start doing it. I think the big lesson you learned in your "prop" experience is that you are a breakeven/loser in real life but your insanity won't let you admit it to yourself. You claim to predict everything perfectly. You have enough to fund a small account. Yet you closed your real money account right before it was about to go negative overall. Your ridiculous ego doesn't allow you to trade because you don't want your delusions to be exposed. You've got the time to make all these papertrades but don't want to put money on the line. What a joke.
While it may sounds like a silly mater, it is pertinent. Well on the one hand, I've traded mostly on simulator but obviously I intend to trade with real money (and have taken some real money trades), and I'd guess that if someone were training to hurt someone that one should consider those consequences. There are several arguments including the fact that I do have some really great things planned for the money that I make. But, I've, also, a much more benign and satisfying answer to your quandary. You have to differentiate between systemic risk and non systemic risk. A poker game is a "pure" gambling situation even though a skilled player can win from the losing players: there was no "requirement" to play poker. However, the risk in the futures and stock markets already exist. So, a trader is not the same as even a professional gambler because a gambler is profiting from an artificial situation. A professional trader is profiting from risk that is already inherent in the market. Whether or not I traded, the market would have made the same moves. Now, I'm glad you brought it up because I'm sure it is just.
baggerlord: I said that TODAY I made 3k risking only about $200 per trade. I was prepared to risk up to $2500 before it would have started to bother me. You're absolutely right that if I could do this every day then I would trade my 5k account! Absolutely. I closed my real money account having made a profit. I closed it to focus on the prop experience. But, you're right I had went through a bad losing streak during that time frame. One thing I want to make clear is that I have different methods. Some of my methods I'm confident with and would risk my real money on without much hesitation or consideration. Some are more experimental and require an extreme level of performance. In my quest for performance, I am trying new methods that I feel are inappropriate for a small account and represent a higher then usual risk on a moderate sized account. These are the methods I'm currently working with. I do have a 5k futures account now that I am prepared to trade with my system. The only reason I haven't to date is because I don't have the margin to hold the ES overnight and haven't learned the program's order entry system. But, I might be able to trade the NQ. In fact, I tried to place a real money trade the last time my system triggered on the NQ... But, i wasn't sure how to place the stop. I have to learn how to place the orders before I risk it. If my options experiments are successful then that might be how I start... There is one other thing that does bother me about real money accounts which is the "messiness" of it. I mean that for me I have to be prepared mentally to trade and stay with it -- just making money off a single trade doesn't mean as much to me. This was why I forced myself to take every single trade during my real money phase. Funny thing is I'm convinced that my prop trading was worse because I had the DOM. I'm using a really basic web based entry system and do better. The DOM encouraged me to scalp too much. I wouldn't trade from a DOM if I were given 100k even! Though I know it is easier to place trades. I mean it sounds great and looks great but it didn't work for me.I'd rather bark an order then place it myself, I think. But I've too much skill in order execution now. This is another thing most of my trades are day trades but if I thought of myself as a day trader then I could never win! I'm not a day trader. If I thought myself a day trader then I could never win. If I thought myself a scalper then I could never scalp. So I'm not a scalper. Why? Because classifying myself using those terms would conjure up too many wrong ideas and beliefs -- ideas and beliefs that vendor spammers write about -- that have absolutely nothing to do with my success. If you want to become a day trader then set it firmly to your mind not to follow the path of anyone else. Set it firmly that day trading is no requirement and work instead to be a 24/7 opportunity finder and then if you are guided into day trading then maybe you have found something.
pattern43: One other point, let's say "but, you're taking advantage of the emotions of the crowd". Remember there are 2 sides to any crowd. So if I place a limit order to exit then I'm giving a trader a way out who maybe wants a way out. Now if I enter with a market order then I'm improving the other traders execution. A worthwhile point is that if I'm calling a top and let's say it did move the market then it might cause some traders to lose but also think too -- it would help some traders to win. ----- Honestly, I left a lot of money on the table today. I don't think I timed a short exit at the low even once. To be honest, my new style is focused on hitting what I'm 100% sure that I can get. This was a lesson I learned from my real money trading, actually. I would predict where price would go then I'd set my order a bit further out thinking that I had to get the unfair price to profit. Of course, often the market only went to my fair price. One thing I learned is that I really made most of my profits from being CONSISTENTLY right and not from hitting "big winners". I had a wrong impression that all of my wins came from "winning big" because they stuck in my mind but it wasn't true. There something else ironic too. I put on 1 corn and 1 soybean contract as a test just to see how much they would move, learn the point values, and market sessions. I'm down $500 on these trades. This is a small amount for my account size. But it feels like a huge amount because I know I didn't have any reason to place these trades other then just to learn the contracts.
I'm going to add a few observations about my this new methodology that I'm practicing and I think what is important is to understand that before I was training to trade a tiny account. Trading a tiny account has 2 somewhat ironic properties. The first property is that one is always leveraged to the maximum by default. The second property is even though one is leveraged to the maximum one is sized rather low. Let's back up: one is leveraged to maximum but unable to trade any size. This has important ramifications and implications. I mean on the one hand, one is always trading at maximum leverage and running "close to the metal" and at the same time one isn't making a ton of money and anything less then capturing the real deal isn't going be satisfying. This contrast to trading with both trading larger size and a larger account because one doesn't have to run quite as close to the metal and at the same time is pulling out a lot more profits. It is really a different way of thinking about things that changes ones entire outlook. Look at it this way, if you only have a few opportunities per year then those opportunities become really important. Before I try to capture the perfect market move. Now, I'm just trying to capture what I'm confident that I can get-- even sure that I can get. And, I'm seeing so many opportunities. I'm not even taking every opportunity. I could easily increase my profits by 50% by a few more opportunities but I don't want to lose balance. Discipline is very important when the winning comes so easy. This is why I set a profit goal and also have a plan to quit when I start to lose. The real difficulty is that sizing large doesn't leave much room for error. I think I may need an automatic stop loss on my trades. This is the thing too is that I don't feel any need to trade. I don't have any obligation even if I see an opportunity because I'm operating now under the psychology of abundance. The analogy was before I was a really good basketball player. I didn't play every single day (which was possible) but I'd be "in the game" for the entire game when a game came up. Now, I'm like I'll go on the court.. shoot a few throws. Walk off the court. Walk back on the court. Which player do you think would be easier to play against? Imagine trying to play a "game" against someone that just ups and walks off the court during the middle of the game just because he wants to rest!! I'm, also, able to change what a "throw" is worth. I can make a 3 pointer worth less then a 2 pointer!! Imagine the madness of playing against such a player. In fact, competition becomes meaningless. He's not even playing in the same world as you. For sure, there are times when the games are better. This is why I set my goal to do my best when I trade. Not every day. I like this new mindset but I need to see if I can obtain these results consistently.. still yet Also by my estimates, I'm not really even winning any more. Let's say before I was optimizing toward net profit which sounds really great. But, in reality I don't like it. Now, I'm optimizing toward risk/adjusted return per trade and winning %. Winning % is important for psychology. You get a hot hand and then you get the psychology then it builds on itself. Let me back up, optimizing toward risk/adjusted return per trade as an effective strategy depends on the number of trades. For example, I have 2 variations of a system. One optimized toward net profit and the other toward win % (and likely risk/adjust return per trade). If I'm in the market and trading then I can maximize toward risk/adjust return because I've so many opportunities. However, if I were only taking LIMITED # of opportunities then I might still decide to go with a higher risk/higher return goal.