wow, that graph says it all, including how it really is for most traders, no matter how much the hype, talk and otherwise.... another thing, is how many traders, whether private equity, hedge funds or otherwise give it all back.... this ain't no simple industry or job
Hi Neke, I'm glad that you ended up positive, you're still keeping a really good average lately and hey, as long as you don't incur in huge losses you know that the good and double good weeks are going to be there. Do you have a cut-off trading point where if you lose x amount for the day, week, etc. you stop trading for a while? Also, do you trail stops or otherwise how do manage your open profit trades? If I recall it right, in the last few weeks you beat yourself up for taking profits on positions that later skyrocketed, do you think this "remorse" had an effect on letting a 3k profit turn into a 5k loss, or was it more a matter of not being able to properly monitor the trade (I understand that you work full time). Looking forward to see you hit those 10% up weeks again. Best trading, Jorge
Thanks. Yes, the key is staying off those big avoidable losers. It is quite acceptable to once a while suffer a big loss on set-ups you know have potentials for big gains (with the occasional big loss). The really hurtful onces are those you could see right after you entered it that you are looking for just a tiny reward for the big risk you are exposing yourself to, but refuse to get out when it turns against you just because you want to come out even: add to it by increasing size, until the loss becomes way out of proportion to the gain you were hoping for in the first place. This is what I mean (the prices mentioned are fictitious): you see FSLR sell off from say 294 to 254 over a three day period. At the time you want to place a trade, it is at 254 and collapsing; you know the trend is down, and if you could short it, in the next 5-minutes you could make a 1-point gain. You get fixated on the 1-pt gain (maybe that is what is required to make your daily profit trading target), and ignore the real risk it is oversold and could rebound sharply later. So you short at 254, it probably comes to 253.50 and starts bouncing back: 254, 255, 256. You know it is a losing trade now and you should probably get out, but instead short some more at 256 to reduce your average cost. Eventually after it has risen to 270, you now throw in the towel, closing your short at a whopping loss. What is the reason? Basing your entry on a 5-minute quick profit timeframe, while allowing your loss to run for one-day amidst an inability to accept a small loss. Yes it happens to me! I have pondered what the cut-off trading point would do. Also, if I stop trading, how much time is enough to heal the bruised mentality? I do not have an answer yet. Yes, I have seen little losses trigger further bigger losing trades just because of the psychological need to recover, but normally, it stops once I realise what I did, and that does not have to take a day or a week. In the last week for example, if I had stopped trading on thursday I could have been down more than 10K for the week. Little did I know some opportunities would present themselves on friday to go positive. So I would rather train myself to regain my soberliness fast, rather than putting a daily or weekly cut-off (assuming I would stick to them!). Seeing 3K profit turn into a 5K loss falls more in line with the illustration in my first paragraph (looking for pennies while exposing my pounds): it was failure to accept I was wrong going into the trade (which I felt right after entering!).
What are you talking about. The guy is up 37.7% for the year. That's no small change. Yes, a long way to go to 1,000%, but still good.
Do you think a -40% drawdown would be a problem, since immediately after that you will need a much higher leverage hence risk, providing you'll be still allowed to trade the same level of volume in the month after -40% drawdown?
The leverage (relative to account size) remains the same. The 40% draw-down is just an expectation I have when playing at the optimum for all the strategies. It could be more, it could be less in practice. So far though, I haven't played at the optimum, since I think still need to get my acts together before scaling up.
I just think that say for two months, scenario A of having 50% and 50% per month individually, against scenario B of having -100% and 200% per month would produce completely different results. Both have average 50% per month performance, but after -100% downdown you must use extremely high leverage to keep on trading.