Successful Trading and Compounding

Discussion in 'Journals' started by gmst, Jul 31, 2011.

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  1. gmst

    gmst

    Hello,

    Thanks for your suggestion. Can you pls explain what you mean by its a 'season' for the british pound ? Are you referring to some kind of seasonality pattern ? Also, what does GBP has to do with the labor day holiday ? Why do you think its set to take off?

    Thank for your interest in this bizarre journal, btw.
     
    #21     Sep 4, 2011
  2. gmst

    gmst

    I stated few goals in my first few pages of starting this journal. Time to review their position after more than a month of trading:

    1. Actual DD of 82% - Plan was of max DD of 40% in 10 years. FAIL.

    2. Account below 2000$ for 6 days - its almost like having another blowup. I claimed I will never have another blow-up. ALMOST FAIL.

    3. I had hoped to be careful about my risk and be disciplined. FAIL.

    All in all, this shows my complete failure in following my plan. It also proves how undisciplined I have been.

    I am going to work for next few days on building up a portfolio of strategies AND to fine-tune an enhanced version of my current strategy, which should reduce DD and increase profitability.
     
    #22     Sep 4, 2011
  3. Lucias

    Lucias

    GMST, I didn't read everything you wrote but honestly if you have developed the real skills of trading or a working system then it would be hard to actually even "get" your level of failure. Not impossible but it would be very difficult for me to fail like you have. I mean that it would just be hard for me to do.

    So, the question you need to ask yourself is why is it so easy for you to fail?

    I'm going to tell you the reasons why and it is not going to be pretty because there are only a few reasons that one could experience your level of failure, I mean you've attained a hard to replicate level of failure:

    A. You never developed the ability and skills required to read the market and make better then chance decisions.
    B. Your systems by chance or by design were poorly modeled and also did not work. I've built really poor systems myself but they worked. Guess you got unlucky.
    C. You have a psychological, pathological problem with gambling that makes it essentially impossible for you to have success in this field.
    D. Overconfidence, unrealistic goals. You've read too much of the BS peddled at EliteTrader or by trading vendors and have shot for the moon. In my opinion, if you shoot for more then 30% annualized return then you are shooting high. Shooting for 30% consistently is, by quantitative measures, outside of most people reach.

    So which is it? You need to take do a deep introspection. Given your level of failure, you should be shooting for like 25% annual returns. But you can't do that because your account is too tiny. You see you have to completely reorganize your patterns to become successful. You have to rethink what you think of as successful as being a successful trader.


     
    #23     Sep 4, 2011
  4. gmst

    gmst

    Lucias thanks for your comments. I agree with most of the things you have written. My thoughts are in line below.

    I honestly don't know. For ES surely, I don't have any ability. But for FX, I think my past experience of working while discipline suggest I am better than random in my decisions.

    .....My systems are very good and my modelling is top-notch. I will easily outperform 20% of currently NFA registered CTAs in USA as far as modelling risk and trading system development is concerned. Believe me on this :)

    .....Yes, I think you hit the nail on its head here. I am not serious about conserving money - this has been my experience as far as trading is concerned. However in real life, I save every dollar that I can. I need to work on this - I hope implementing some strict rules and trading under someone's direction or fulling automating is the answer.


    ......With fixed fractional leverage, I can easily make 600-800% at least for first 2-3 yrs - if I only trade my system and thiat is important!!! No question about it.

    ..................I think I need to bring in more automation and take a job for next 2 yrs and run this system as such. That should be the answer I guess. Anyways thanks for your pointers.
     
    #24     Sep 4, 2011
  5. Lucias

    Lucias

    I'm, also, going to give you some deep insight. You are operating from a mindset so far from the successful mindset that wow you're going to do a complete 360.

    You're talking discipline.. haha. You're talking rules. You're talking about this or that.

    I'll share an experience. When I first on the simulator, I made a rule that I wouldn't trade after hours because I knew that I didn't do well scalping and if I were just placing trades at the open and close then I wouldn't be scalping. Okay.. well the market one night dropped a huge amount. I had predicted it would drop but it dropped after hours. And, it hit the level that I predicted it would go too. I bought and then I dumped for a small loss.

    Right after this experience, I said I wasn't disciplined. I broke my rules. I was basically a mess. I was pathetic. The market rallied. The trade was brilliant.

    What was my mistake? My mistake was that I was wrongly oriented. I was oriented toward rules, toward beliefs, toward myself. I wasn't oriented toward winning.. I wasn't oriented toward the market. This experience led to my development of several key concepts such as Principles Over Rules. I realized that the market was too dynamic to approach with absolutes. Absolute rules.

    Another good example, I have a principle, subject to revision, against doubling down. During the flash crash, I did make some trades that made a huge return. I wasn't focused on my beliefs or rules or things of that nature. I had re-oriented myself to focus on making the best decisions. The best trades.

    Be disciplined on your position sizing. Be disciplined with risk. But, for trading decisions when you say you have a problem discipline then I have a problem that because people are rational, mostly, and they overall they don't tend to do things they know will hurt them. Okay, so if you're doing things that hurt you then I'm going to assume that your real problem is more likely uncertainty.. ignorance.. fear.. doubt. But not discipline... let's get real. And maybe those fears, uncertainties, and doubts make a bit of sense. Point is, if you really believed your system unfailing then you would never have a problem with doing what you need to do. Do you think you'd have problem picking a $100 bill off the floor? Not unless you have a pathological problem and if you have one, i.e gambling, then you know it is going to be really difficult to win. If that's your problem then you maybe should let someone trade your system for you.

    Introspect everything. Don't assume that either a stingy or that a cavalier attitude toward money is appropriate for trading. As Barry Greenstein wrote in his book, "Ace on the River" you may not make a good poker player if you know the value of a dollar.

    I'm going to give you a really key and brilliant insight. This insight is so brilliant that I actually wasn't even going to share it. The insight is that I'm fat (I am doing something about it, I'm on a vegetarian/Paleo diet now) but still the point is that I'm fat. I'm not fat because I'm undisciplined. If I knew everyday how much I needed to eat and workout without a doubt to lose weight then I'd always either be flat or lose weight. I got fat and I'm fat because I don't know where that line is, and I like to eat. I was ignorant about how much I was eating. If I knew the exact number I'd always be disciplined.. I was an optimist.. I was ignorant. But I wasn't undisciplined nor lazy. Maybe, I had a problem with making good eating decisions under conditions of uncertainty, sure you could argue that. Bottom line is that I don't know the number. If I knew where the line was then I wouldn't have any problem.
     
    #25     Sep 4, 2011
  6. Nothing to do with Labor Day,it just tends to rise during autumn.Besides it also looks like it set up for a bounce first,then it more likely goes higher,technically speaking.Just try to catch this bounce and the keep buying on dips.
     
    #26     Sep 4, 2011

  7. this is EXTREMELY bad, what ur insights tell me, is u are not facing reality, a successful trader must be successful in almost everything.
    what ur insight tells me if you can't fix a simple problem such as weight loss, it means you are over valueing yourself by **a lot**.

    A successful person, keeps on refining everything he does.

    <b>To put it bluntly, you want to be successful, make sure its everything. You just can't be a successful trader while being a fatass.
    </b>

    you have a lot to work on yourself, be persistant, work on improving a small thing one at a time, espically that weight loss shit, thats without a question the easiest problem a man can ever have. Always stay real to oneself, be as close to reality as possible.
     
    #27     Sep 4, 2011
  8. Lucias

    Lucias

    Well.. my point was that if I had the data, the number, that told me exactly what I needed to do to meet a negative equilibrium that it wouldn't be any problem. I would not be undisciplined if I weren't oblivious and uninformed. It is just like most serious health issues are able to develop because the person is not aware of the health issue. They don't have the data: they're oblivious. The corollary and relevance to trading is that trading is always about making good decisions under conditions of uncertainty.

    If you can get the number.. if you can give the number to everyone then you can in one instant solve the obesity epidemic permanently. This has the potential to be a billion dollar idea.

    Because I don't have the number, I'm working at it from the other way. I'm eating foods that are high in nutrients and low in calories. The answer came to me in the form of the Paleo (vegetarian) diet for me.

    That was the lightbulb but I want to explain why! Dr. Steenbarger often wrote about a problem vs solution centric focus.

    Well, there is one guy going around and lambasting sugar, whatever his name is. Okay, I like sweet things though. He pointed out that High Fructose Corn Syrup is in everything including breads.

    But, what he didn't offer was an answer. I started trying to eliminate sugar and bought some bread without sugar in it. I had to throw it away.
    I didn't have the solution. I only had the problem. You see?

    The solution comes in the form of the Paleo diet which focused on good tasting and nutrient dense foods that naturally eliminate the bad stuff.

    It is just like the people who say limit calories. Limit calories is not the solution but the problem for those of us who like to eat. The solution is eat whole and nutrient dense foods.

    There is much more to be said on this but I don't want to hog this guys' thread.. Good luck with your trading!


     
    #28     Sep 4, 2011
  9. letme quickly tell u what to do. u must do everythuing on the list.

    1. eat less bread. limit rice and grains to only before workin out
    2. workout and lift very heavy weights w 5 reps each 8 sets. everyy other day. work up to 2.5x ur bodyweight . i mean it. dont do no five lb weights
    3. cardio everday 15@ mins. run as fast as possible. goal 8min mile.
    4. if u not workin out after eatin. eliminate all carbs from the meal. only vegetables and meat and pottoes aka good starch
    5. stop drinkin anything sugary aka coke completely. water and non sugared drinks such as iced lemon tea is ur friend.

    what to eat=@anything u can find as a caveman w ur bare hands u can eat. corn syrup??no. green beans. yes. flour. no. brown rice. yes only bfore workout. any vegetables. yes. steakl yes.

    do this all. u'll lose weight immediately. miss a step and u still be what u are. someone who complains all day.
     
    #29     Sep 5, 2011
  10. full stop with the brit so far.it seems it`s not the right time to buy.it may go down further..
     
    #30     Sep 5, 2011
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