First, I spend ~2 years with stock trading (even intradeys) , more than 150 trades excecuted. Result: -25%. Without commision is: -2%. I have read many books, tested many own and others strategy by Amibroker. Papertrade by oanda.com. I cannot win What I can learned: 1. ATR and commision% relation is important when I enter to position. 2. breakout strategies are loser even with moneymanagment and volume filters. 3. simple gap up/down candle pattern strategies are good performers. With 60-70% winrate and 20-40% return on some (but not all) market. But I cannot follow that, because its need really ful time job. 4. indicators are losers. After that, I thought trading is not a craft, but an art. Craft can be learn, but art needs some speciality. So, I tried zulu trader. Rent 5-6 guys, and i got disappointing result after 1 month:~-10%. Because I never ever talked, see any people living from active trading for years, I getting to though it is impossible! Yes, of cours i know people living from trading result. But, THEY WAS ONE SUCCESFULL YEAR, AND THEY STOP TRADING AND INVEST TO REAL BUSSINES. OR GETTING TO SELL TRADING RELATED SERVICES. HUGE DIFFERENCE!. i JUST THINK THEY WERE LUCKY ONLY, NOT PROFFESSIONALS. So what do you think?
In this game you have to hang tough when everyone tells you to quit and you do that because you believe in yourself. If you have to ask on ET for help to decide if you should quit, can you work out what that means?
You didn't mention anywhere about risk management. How much is risked in your most speculative trade? (Something where the event, and the risk reward are highly geared in your favor) You're bread and butter trade (repeatable, consistent returns that you could live on or at least stabilize your cash flow until you come across a big winner)? How much is risked in very rare single events? .. etc... Take the % you would risk and ask yourself, what would my drawdown be given my historical trades.. and see, if I did this right, could I generate sufficient returns to: A: justify doing it for investment purposes B: justify doing it for speculative purposes C: possibly, doing it for a living with sufficient capital D: if the above A,B,C are true, after a few years, trade other peoples money. Until then, it a business plan is written that aligns the risks you take or plan to take with the capital you have and the returns you expect, then its just hope.
Not the how is important for your success in trading but the why. Only you can decide if your why is big enough so that you will find the 'how to' to do this. Two years is nothing in this field of expertise. Many people lose time by not seeing a professional or a mentor or by thinking that they will make money without proper education and/or capital. Doing brain surgery takes some years of learning before doing. You can not wake-up one day and say: I think there is big money in brain surgery, lets go to a hospital and seek some patients to operate on... Everybody understands that, that is impossible to do it in that manner. Yet smart people think traders are made that way... They wake-up one morning and they start trading. Nothing can be further from the truth. The good news is, that it is a skill that is learnable by every one. The bad news is that you will pay a price that probably is so high that most people are not willing to commit to.
1. find a consistent edge 2. be prepared for the day that edge stops working and STOP when it does 3. repeat #1 all strategies are fundamentally based on either following or fighting a trend, within the context of a certain time frame. The thing you are trading alternates over time between trending and channeling, so edges based on pure speculation stop working at some point also, if you trade frequently, fight HARD for the lowest commissions possible. this is huge. this fact is sometimes lost among all the search for the holy grail mentality
"If you have to ask on ET for help to decide if you should quit, can you work out what that means?" I m living from my job, not from trading. Trading is interesting to me, because: trends and analysis are similar to my job (engineer), quick response to trends are also similar to my job (engineer in chemical plant). I have 1-2 years of gambling experience with more than 1 years of winner games! The last 3-4 months I gave bacek every penny to the House with huge interest)). so, trading is intellectual and vibrating activity. Can be do anywhere and anytime. But, I spent too mutch time to find my winner strategies, I got nowhere, I spent 25% of my savings.
There is your answer. You think of trading that it is intellectual and a vibrating activity and you have a gambling background. You are not seeking for profits (wich is boring) but drama's and trill's (wich can only be acomplished with huge equity swings and losing money in the end.) I would advice you to stop untill you know yourself and how to fix this. Then you can spend time on finding an 'edge' or a winning strategie. Your strategies that you have now are winning strategies! But not in profits, but in what you are seeking for: vibrating activity that can be done anywhere and anytime. The only way to be successfull in all those criteria's, is losing money. Losing money is a vibrating activity that can be done anywhere, anytime...
I understand what you mean. But i point out, that i m not a spontenaus trader. I followed strategies. Mainly bolinger breakouts, and scaling up for trends. Sometimes I scalped against on a 1min or 5 min charts to support/resistance. I have stops and targets. But i m loosing on a longer track. I interested, i can build mechanical systems. I understand is important to monitor the system performance. and watch the time for replacing it for an other system. But, up until now, i not found any roboust (K factor above 1) system to based my money on it. I can see the market as a qantum space. The support-resistance (S/R) on given timeframes is like a quantum. The price is unpredictable within the S/R, but its sure, don t like to stay near to S/R lines, because its unstable, need to go back to its S/R box, or need to breakout to open up a new quantum space, a new S/R territory. Its all cam from the peple behavior, who position the valu of the goods according to tha recent trade values of that goods. This is true for anything (cars, houses, etc.) nobody want to pay more than the last recent (this is depent from the market participant activity timeframe) highs. Nobody want tp sell cheaper than the last recent lows. This is how S/R getting forms out on the charts. This is my view of MARKET works.
I think you are looking for answers in the wrong area. You are seeking answers in logic and reasons area of your intellect for creating a strategie that will give you profits. The problem with this is that you can not solve a problem with what you know and that you can not find an answer to your problem as long as you are 'seeing' all the solutions with your 'colored' experiences and believes about your self and the markets... This will be hard for you, because of your engineer background, but there is no simple solution like 1 + 1 = 2. Being a trader has to do with knowing your self and finding a true balance between what you know, see and believe... And then you can create a winning strategie around it...