How much time did it take you to make 30%? How much time do you want to pass before you grow your equity up 30%? I mean, if you want to make a 70% annual return on your equity, which is extraordinary, you need to make 30% within 6 months! You must first set yourself realistic trading goals (that's the difficult part because you must know yourself, know how good you are) and second, you must adjust your trade size and style to your goals. If you fail to meet your goals - then you overestimated yourself and you must lower your goals... It's like driving on a highway - you first determine how fast you want to get where you want, and then drive with the appropriate speed. You don't want to drive faster than that, because it is excessive risk, and you don't want to drive slower than that, because you will miss your target. You want to have a smooth equity curve, it is your learning curve BTW
if the whole thing breaks down when you increase size, it could be because: 1) u got psychology issues 2) u dont really got a working method take this from a master papertrader
Thanks everyone for all the replies. But I feel this thread has drifted away from it's original spirit of relating some of YOUR experiences in getting over the hump; to focusing on how I can get over the hump. Not that I'm not appreciative, but I know it's something I have to work through myself. Although what clearly has become evident, is the role of ones own psychological make up and what a huge influence it is. So enough of my crap. If you got some real life experiences to share on this issue, fire away.
No matter what they say brooks, EVERONE has issues on this subject....Size kills in SIZE! Some times you just have to lose a little money to make alot of money!
OK, a "real" response, FWIW... We have found over the years that if we allow traders to stay too conservative for extended periods of time that they will invariably "blow it" when they make a jump in their size. We try to get traders up to a decent share size (2,000 on opening only orders, 1,000 up for intraday trading, etc.)...in a very short period of time. My bootcampers are executing 2,000 shares by the 8th week (provided they don't have any extreme emotional hang-ups). This way, when they move from 2,000 to 3,000 or so, it's no big deal. A trader who (for whatever reason) stays under 500 shares has no chance of ever making a living in this field (with the obvious exception of our program traders who trade 500 stocks or something similar). We have found that we are doing a trader a major dis-service if we don't "nudge" them up quickly, as their confidence builds...they build their own share size. Share size is the one single variable that we all have control over from sqare one, and we can vary it at will. ___good story coming, on topic_____ We had a guy in Chicago who traded in 2,000 share blocks.....he went to buy 2000 of Citigroup (I think it was), and he was only filled on 200 shares. The stock went up 1.50....and he simply watched it while he was trading his other stocks.....then the market sold off, and he simply let the stock go back down to unchanged and then to a loss. His comment: "oh well, it was only 200 shares, who cares?" ______________________________ I like my traders to trade a big enough size that they are totally focused on the screen, on the edge of their seat....but not too big that they "mess themselves" (insert your own terminology). So, much like breaking in a new car, only keep it running slow until the valves seat properly...then get used to running at the appropriate speed. Don
ES is for saps. Especially on a short time frame. Get another contract that your system might be comfortable with. That's my opinion.
Don-- I think your statements above holds a lot of truth. Thanks for sharing. ----------------------------------------------------- I can relate this to when I was working the "big iron" as an ironworker, if I may. We'd be on a story job pretty high up, which isn't too bad on the interior. But on the perimeter, there's only one way down if you make a mistake. As an apprentice I was responsible for "making up bolts" on the relatively safe working floor. Well they needed a point bolted up in a bad way so the raising gang could continue on with their operations. Of course it was on the second tier of the perimeter. Thankfully an oldtimer was there for me. He said: " Kid, two things--don't hesitate and don't stop (walking the iron)." in a nice calm voice. Now here's an old man 55+, telling me basically not be scared. Ha! I'll show him. Well the old geezer climbs the column straight up 25 feet (full work belt/no ladder/no safety harness used back then), saunters across the header beam on the perimeter, and plops down at our point, all without missing a beat or a step. Understand that we are 43 stories up! Ok, ok. I can do that. After all I'm 22 yrs old and primed. By the time I got to the top of the column, I was seriously laboring to breathe. He didn't say a word, but watched me out of the corner of his eye. Ok, time to stand up. FUCK ME! I was now profusely sweating and my mouth was completely dry. No fucking way can I do this and no fucking way can I not. I was stuck. Frozen solid! By now all eyes are on me, being an ironworker you are constantly being measured by your peers. Joe strolls back over the beam to me and says: "Kid, get up and follow me, now." With that he started back. Just let me tell you how hard it is to put your one foot in front of the other on the iron in that situation. Your back foot feels like it's glued down and made of lead. But because I didn't want to be left behind, I followed him. And made it. Walking iron is something you either do or don't. I was humbled, scared, and elated all at the same time. Later, on the ground, he comes to me and says: "Kid, sometimes you just gotta go." You know, I got no problems "just going" as a trader. But having somebody like Joe looking over my shoulder would be a comfort worth having every now and then. Edit: Thanks Banjo
A lot of great answers in this thread. I understand where you are coming from because I went through serious humps that sent me back down (and even lower). Almost everyday, I get carried away slightly but nowhere to the point of blowing my gains anymore. The size issue is a big one and I think the biggest mistake is to increase it too fast. I'm finding out it's better to suck it up and increase size in small increments, like 500 to 700, instead of 500 to 1000. Also, I think one needs to give quite some time before stepping up, increasing risk and expecting larger gains. Especially in this market. Discipline alone takes years to develop.
Hi Bronks, I understand what you are going through..I am in the same boat. But I know where I fail and what my problem is ,and I'm dealing with it now. Just want to ask you a question: You were following a plan when you traded with small sizes ,now that you increased your shares ,have you changed anything..just think about?! Drawdowns are bigger ,do you have a problem with that?No matter what the size is you need to stick to your original plans ,no changes have to be made. Hang in there!