Seven Habits of Ineffective Traders Ken Wolff (the original Yahoo URL has expired but the article is reproduced in several other URL: http://www.traderslaboratory.com/forums/f30/seven-habits-of-ineffective-traders-3801.html#post35438 )
Be honest with yourself. In your heart, do you think you're a compulsive gambler? Do you know the signs of compulsive gambling according the Gamblers Anonymous? If you think you may have a gambling problem, seek professional help and do your best to stop trading before you go broke. Om mani padme hum.
Eight years and still at it? Far better than average, for sure. Most fail long before that. Good luck in whatever you choose to do.
^^^trader28 100% guarantee I pwn this kid everytime my pattern recognition skils are rock solid, which make me a great trader As far as OP goes, dude haven't you lost enough: your life savings, 2 girlfriends, your family's respect. If 8 years of suffering isn't enough then maybe it'll take 16 years of losses, and bankruptcy, and homelessness to wake you up. You're obviously not sick and tired of losing, otherwise you would stop it already - either by quiting or by developing a rock solid discipline on a real edge.
When did you switch to constant range bars? You haven't told us anything about your psychological self-analysis. Obviously if you've been losing for 8 years, at some point you stopped and analyzed your trades and saw what you were doing wrong. What happened next? I am sorry to say it, but the reason you should probably stop is not the one most guys here are citing - that you don't have what it takes. The real reason is that some part of you knows what you're doing wrong and yet you're unable to stop doing it. That's the definition of addiction - you know you're doing something that you don't want to be doing, but you try to stop and can't. If you were to ask 'but what am I addicted to?' I would say that human behaviour can be really strange sometimes. I know this is hard for you to believe, but you may in fact be addicted to losing. There will be a number of guys here who say that's a stupid idea, but I have seen tons of people who are addicted to doing things which undermine their own chances of success. Not in trading but in other areas. It's common. I have no doubt it happens in the trading world.
This is it! Once you are in the game you must be brutally honest with yourself, find an edge +NEVER, EVER Give up! You ARE past the point of no return!!! I would, however, take a job to get the pressure off.. then look for an edge you can exploit consistently. You must stay in the game, because the game is changing every day now.. otherwise you will lose touch. Mh
The argument about the similarities between gambling and trading are many. I am not sure if I am "gambler" or not. The only gambling that I have ever done was sports gambling in the early eighties. I gambled very large amounts particularly considering what I had to risk. I churned an awful lot of money and I was not profitable but I did not lose much if any either. I learned an awful lot. The only reason I quit was that my bookie retired, and I did not like or trust who were my alternatives after he left town. <p>My point is this, sports gambling more than any other type of gambling translates to trading because it too is about taking positions. In sports gambling, you are usually rewarded for being contrarian as you are in trading, that is if you are not a pack or momentum player. <p>I trade equities by the way, I have never traded anything else, and I know nothing about trading anything else.<p>My advice to you, is that you may be making mistakes that are related to gambling as much as trading.<p>I will list a few things that I learned not to do from what I learned about gambling.<p>Do not be addicted to the "action". An advantage for daytraders is they do not have to be in the market and they can pick their spots. I hardly ever trade the last two hours of the day any more. Time on trade is a very important consideration for a daytrader. I am never a very happy camper if I sit on a trade too long. <p>Defend your profits. Gamblers and very bad ones at that, have this idea that when they make a profit, they take more risk because they are playing with the "house's money". I do the opposite, I tend to take more risk early in the day with "my own money" before I have any profits. As the day goes on, I defend those profits by spending less time on trade and which may cut my opportunities to make more, but also tends to ensure that I end the day profitable. <p>Trade the same amount of shares all the time. I some times break this rule by scaling up with a profitable position. But what I learned in gambling if you do not do the same units consistently, you are betting against yourself in a sense. You should and need to have the same of amount of confidence on every trade, if you do not you really are gambling.<p>THE BIGGEST GAMBLING TRAP is the get even trap. I do not use stops on trades, but I have a pre-determined cumulative loss amount for the day, if and when I reach that amount, I quit for the day. When I gambled the losing gamblers got taken to the cleaners on Monday Night Football, they would try to get even for the week on that one game. You can read the boards here on ET, and you hear of the same type of behavior. Attempts to get even often result in digging a much bigger hole than the original hole one was trying to get out of. <p>There are traders who are profitable without focusing on winning percentage of trades. But in my opinion that is the most important thing to being a profitable trader. If you have a winning percentage, then you should be profitable. The same was true in sports gambling. Unfortunately, human nature often causes people to fall into the same traps again and again. Gamblers are prone to extreme feelings of guilt when they lose. That is why winning percentage is so important. I do not like to ever lose, but I do not feel guilty if I do. I have traded for a living for ten years, my records of winning trades and records of profitability, keep me grounded when I have a losing day.<p>I cannot give you any advice on what your direction should be. But if those close to you view you as a gambler, then you need to understand that your failure may be that not of daytrader but that of a gambler.
Jasper, Do you feel that you really understand why you have lost money so far? Do you have rules that you break or do you follow your rules and still lose money or is your trading discretionary without rules? I believe that the principals of successful trading are 1) trade with the trend 2) ride winners 3) cut losers. (credit to Ed Seykota, tradingtribe.com) You need to have a consistent method by which to identify the trend. The method I use is this : I trade the NDX and if the 20 period EMA on a 5min chart is slanted up, I call that an uptrend, if it is slanted down I call that a downtrend. This may not be the best way to identify the trend but it has been working well for me. Of course if the market is moving sideways this does not work. But if there is a big move you end up on the right side.