This is the toughest post I have ever sat down to write. I am an absolute %*#$@~ idiot when it comes to managing risk. It's not that I take risky trades -- I simply don't deal with the relatively few trades that go wrong. Sometimes I watch them eviscerate my account instead of closing them and moving on. It's a cycle of many steps forward and one giant step back. I have tried and tried to work through this problem, with no lasting success. I know what to do, but I simply can't (or won't) do it. I've concluded my brain is simply not wired correctly for this particular aspect of trading (arguably, the one that matters most). Greed is the source of my pain and frustration. When I'm in a trade I let greed influence my decisions to a detrimental degree. Basically, I'm very good at making money, but I'm terrible at keeping it. I know trades are bad when the loss is still small, but I can't bring myself to take that small loss. I can't tolerate the cycle anymore, but I can't seem to break it. My proposed solution is to find a partner who has at least a basic understanding of the markets and order execution, and who might be struggling to find their own edge, but who has excellent self discipline and a healthy respect for risk. The basic idea of this relationship would be my calling trades (picking entry and exit levels), and the other person physically executing the trades and making sure the risk is managed appropriately (be that hard stop that I desperately need). Also, not managing order execution will improve my focus on the market. This person would be remote with communication by telephone. Obviously the personal chemistry would need to be right. I've looked at doing this same set up with my wife, but we don't work well together (despite a happy marriage). I have a regular day job, and I get up early -- 4:00a EST (GMT -5 hours) -- to trade futures on the DAX, bund, Euro, crude oil, and FTSE 100 until 7:00a or 7:30a. My trades generally last anywhere from a few seconds to several minutes. On the rare days I am around during regular US trading hours, I trade crude oil, DAX, ES, NQ, and occasionally the ZN or ZB. I'm an economist by training and a computer programmer by trade. I've been trading for five years, and I only trade futures. I have my own toolkit of custom indicators that I use to support my read on price action. My method of discretionary analysis is driven by looking at the market through a framework of supply and demand. How does volatility describe supply/demand? How do range and volume reflect supply/demand? I also rely heavily on my read of the energy in the market (keeping in mind that energy and direction are not always consistent). Despite the fact that I use some indicators, I essentially trade price action. The indicators I built are just shorthand helpers and record keepers for my method of analysis. I'm not looking for a total newbie to mentor. I'm looking for a mature, responsible person who can be a stable and reliable partner into the future. I'm a normal, middle-class guy with a wife, kids, a home, no criminal record and excellent credit -- I'm basically looking for someone similar (i.e, no teenagers, no ex-cons, no future-cons, no skid row types). To avoid complicated legal issues I would like this person to be a US citizen living in the US (I'm in Pennsylvania). I envision a partnership with mutual capital contributions and an equal sharing of profits/losses, but obviously there would be many specifics to work through to ensure we're both protected and treated fairly. I'm very confident that with the right person there will be plenty of profits to go around, and perhaps we can build a solid track record of low-risk profitability with which we could move into managing OPM at some future point. I'm very frustrated and somewhat ashamed to have reached the point where I feel an arrangement such as this is necessary for me to continue in the trading world. On the other hand, I know I have too much talent to walk away from trading. I'm cautiously optimistic that this is a viable solution. Please reply by PM if you're potentially interested, and we can set up a time to talk by telephone. If any of you have ever tried an arrangement such as this, or if you have any general, helpful suggestions, I would appreciate hearing from you in the thread or by PM. No trolls please -- I've already berated myself sufficiently about my shortcomings to cover all of the ET membership. Thank you. Regards,
Thanks for the suggestion, but please believe me that I have tried the simple solutions to this problem. I think my head is wired wrong -- greed trumps and I remove my stop.
Hopefully your post is not a joke. I wish I saw a post like this few years back when I was first exploring futures, it looks like this would have been great partnership. I am very much like you with middle class family, day job and early hour trading. I get up at 2:40am EST to trade DAX, I live in New York. At this stage, I would not be able to partner with some one because it will destruct me from trading. I trade intra day with high frequency. My first advice was to ask you about auto SL, but you obviously already tried it. The only advice I can give you is to look at stop loss as a fixed/variable necessary cost. When you run a business of letâs say selling widgets, you will have such costs as rent, utilities, insurance and merchandise. You can not get rid of these costs no matter what you do, they are actually a part of what you do and they contribute to your profits. That is what stops are for traders, nothing else. And the sooner you acknowledge and take them, the healthier your account will be. Regards, redduke
Give Adrienne Toghraie a call. Having a "partner" adds another dimension of complexity to the trading equation.
Your partner learns your trading strategy, and then says what do I need you for? Even if he/she was not of that mindset at the start, I would not be surprised to see it happen eventually.
When people say they are good at making money but bad at keeping it, it really means that they don't have a strategy that has a positve outcome in the first place. Placing stops / trailing stop / profit targets add very little to the actual expectancy of your strategy. If truely you were good at making money but bad at keeping it, then it would make sense to enter the trade on your demo account, and then once you have made some money on the trade then you enter the opposite direction on your live account.
Unfortunately, it's no joke. I've been around the board for a few years, and I hope most people know I'm a straight shooter. On a rational level I understand perfectly. It's really about self discipline and how I view risk. I've tried auto stops, but they distract me, I tend to move/remove them, and generally know trades are bad before a reasonable stop loss is hit (i.e., I should be exiting voluntarily or reversing before they're hit). I'm really just owning up to my realized limitations and trying to make the best of it. It's unbearable to continue repeating the same cycle -- I need to try something new. Hopefully, it will turn out to be a mutually beneficial arrangement if I can find the right person. Thanks, redduke. Regards,
I know exactly what you are talking about. My system calls for me to exit trades if they do not go my way right away but find myself unable to exit with even a 1 - 4 tick loss on the ER. I also find I'm very reluctant to take trades because I'm aware of this flaw and usually miss out on a lot of good trades. I'm still working on it myself, if I find any helpful ideas I'll be sure to pass them along. Godd Luck.