don't feel bad, same thing happened to me. I increased size just before incorrectly assuming the qe3 move (I thought it was already priced in.) 20% loss in less than ten minutes the good thing is, I built the account up to where it was large enough to increase size and since that disaster I have built it back up to about where it was I don't stray very far from what got me here, but no doubt about it, I have hit some very hard bumps in the road. I aint loyal to my positions, but I am very loyal to my techniques. Almost nothing you can think of when you are of sound mind and body can wipe you out if you just stick with it consistently. The road to ruin is when you keep abandoning a strategy at the depths of drawdown and piick a new good looker (at a reduced account size.)
Seriously consider this quote for a while, gmst. Dressing up in suit and trying to take things seriously are fine, but I don`t think it is the core of your problem. To me, it simply seems like you lack the proper methodology and trading plan. If you had, you could be trading in your boxer shorts. How would you characterize your current plan? Model? Approach? Can you explain it to us? Could you give it to someone else to trade? Are you trading from the seat of your pants or do you have an actual plan? Is it written? How are your signals generated? Is it largely discretionary? If you trade with live money next week, I`m confident that you will lose. The exact same thing happened to me earlier. Learn from my mistakes. Taking a loss of the magnitude you just did does something with you whether you like it or not and it will affect how you trade. Regards, LF
Hi LF and Phoenix trading, Wanted to reply after giving it some thought. Good points all around. I have a plan, I have found it hardest to stick to it in the heat of the moment. And as I am discovering, dressing up nicely (not really a suit, just a Tee and Jeans and definitely not boxers) is helpful. Another thing that really helps is setting up an office kind of atmosphere for home traders - helps in bringing in seriousness. Every trading desk in every bank has a well structured methodology (either options trading-delta hedgin or systematic trading) and traders there do stick to the plan. Because they are not working in isolation and if they do not stick to plan, they will get transferred to IT/risk department or in worst case will be fired. This is a critical difference when someone is working from his home as an independent. Its important to remember that trading is a very independent business compared to most other businesses where you have to deal with people everyday. In the individual isolation, its pretty easy to miss-execute well-made plans. Not sure how else can I explain it better. I think Prince of the Pits book puts a great emphasis on these things especially for independent traders.
Breakeven week. Anyways, I traded this week - shortened by Sandy. Made money on Wednesday and Thursday and lost on Friday to finish the week at breakeven. I largely sticked to my plan and as a result my trading was very controlled this week. I got a new 20 inch monitor, so now my work space has 14 inch laptop + 20 inch monitor. Really helps. I have around 5 ideas to test on the ES market - just some little little market tendencies that experience suggests could be useful. I plan to test these out over the weekend. Also, will write out a step-by-step procedure to follow before taking any trade - like checking for multiple conflicting set-ups, ranking them, putting in size in the calculator and then pulling in the trigger. Basic stuff, but very important and should help in following the plan.
I lost some dollars today due to over-enthusiasm. It appeared that a set-up was getting formed and I entered the trade to pre-empt the set-up, thinking I will get a better price and my win amount will improve. In the end the setup never came, and I ended up losing dollars. So, it can be said that I experienced this quote today in some sense. I was definitely excited at that time and was thinking of the dollars that I will make if that trade had proven successful. I am sure my heartbeat would have been faster then. Maybe continually monitoring the pulse rate and displaying it as a graph on the computer with a line showing over-bought level will be a good tool to flash a warning that trading could be close to becoming uncontrolled as a trader might be close to losing his balance.
Greetings G, I believe that you missed the essential message from LF and PT. If you are going to be relying on external forces (i.e. other traders and such) and their presence, to provide you with internal control (i.e. discipline and consistency), your premise is very sadly mistaken, and in grave error. Discipline and consistency are âinternal states of mindâ. These are facts. They are states of mind that have at their core, certain âways of thinkingâ about the market, and what is subsequently done in the market, as a direct result of that thinking. It is these âthinking methodologiesâ that allow professionals to consistently and successfully navigate market waters on a daily basis. They think and act differently then the average trader. This game is played inside of your head. The market just transmits ticks! It is up to your own thinking to turn these ticks into a "Pattern Probability Game" that you can win, most of the time. This is a âway of thinkingâ about the market. These actions are not driven by some external forces, neither are they driven solely on technical analysis. And this âway of thinkingâ is where you need to expend your valuable time and resources to explore and study, and not on useless externalities. In the mind of the trading professional, these thinking methodologies have been honed and developed into sets of mental skills. These skill sets allow the trader to effectively operate with internal control. Contrary to popular belief, it is this internal control that allows a trader to successfully operate in the market environment. At present, you have just recently survived a head on collision with the marketâs reality. And most unfortunately, it is simply just a matter of time before you will inevitably create another head on collision. This is a given my friend, and not a question of âifâ it may happen. The consistency you seek is in your head as a way of thinking and being. It is expressed in the market as a âconsciousâ act of will, not happenstance brought on by some external forces. You bring your âconsistencyâ to the market, you donât get consistency from the market. You bring your âdisciplineâ to the market, you donât get discipline from the market. You can change your external environment, as well as your clothes as often as you like, but it will not, and can not change your downward spiraling circumstances. You must change on the inside, before it can be expressed and reflected on the outside. Please think about this for your own personal sake, and close out your real money account before it happens again. At the rate you are going, the only thing you will accomplish right now, is to transfer the remainder of your account, to those in the market who already know, understand, and OWN these principles of successful and profitable trading. This my friend, is the real "Secret of the Markets" that you seek and desire. KDASFTG
Sorry, my bad. I was referring to Phantom of the pits. http://www.elitetrader.com/vb/attachment.php?s=&postid=2367882
The market doesn't deserve to give you a damn nickel. It doesn't give a damn that you dropped over 80K and over 3 years of your life. You're insane. The definition of insanity is doing the same things over and over again expecting the same results. LOL! You lost 50% your first week! You haven't learned anything! You don't deserve anything! You're no different from a gambling fiend asking for money from their friends and family to support their habit. You really should be ashamed of yourself. You are a sick delusional individual that really should get some help. Thank the heavens there are people like you trading. I feel sorry for your friends and family.