neke, do you feel you have to trade,the title of thread suggests this,you can sit back and take fewer trades with better setups,bigger profits,less losses,and when your suspicions about the markets or stocks upcoming move is confirmed ,you can add with trailing stops..this is the first week of summer like volume and lack of daily rotation from openng highs and lows,we may be in for another 6 out of the next 12 weeks of same action,if you do sitback and wait for better setups, it will give you time to reflect on your trading and the way the market is trading and give you a chance to get in synch
Neke, take it from me. My trading hasnt been great this year..in fact its been below my expectations, so what did I do? I stopped trading and just sat on the positions I have. Currently holding FCX, and C. No point in digging a deeper ditch, I might as well hold on to something I think will do well long term, and sit on my hands. Find something you like, and hold on, it might help you climb out of your hole, at least partially. - kon
I just took a look at classifying the trades and summarizing for automated and discretionary trades. I looked at the period from 2/20/2010 (after the initial drop in my account to 230K) to today (6/12/2010) with a balance of about 243K. Over that period of three-and-half months, the number of automated trades is 294 resulting in a gain of 73K, while the number of discretionary trades is 159 resulting in a loss of 60K. So while not spectacular (about +31% return) the automated trades have definitely been Ok. Yes I have considered doing nothing but auto-trading, but afterwards I have always felt I would be leaving an awful lot of opportunities if I gave up on discretionary trading - no amount of automation can discover and leverage on those opportunities. Bolstering this conviction is the realisation that I have made BIG money in years past using mostly my discretion (>150% 2007, > 450% 2008, > 50% 2009) so it is going to be a tough decision. On the plus side, I would have more time for research on improving my automated strategies, and time for regular work. One big handicap I have with my discretionary trades is that when the opportunities are not there, instead of staying away, I am trying hard to create them, and using excessive leverage, and that has been most damaging. This year there hasn't been that many great opportunities (yes some in May, but I missed a lot of them anyway). So yes, I am still considering whether to throw in the towel for good on discretionary trades.
I do not use TA as such. My gut feel was that the move on the upside was over-extended, and was due for some retracement in the timeframe I have chosen (yes I know some laugh at that, but it is a profitable strategy!). Of course going after it the way I did not respecting position size was detrimental.
The autotrading has been in a choppy market. No Reason to think it will continue, if that's the market it's suited for.
you dumbfounded me with your comments of having 30% in 3 and a half months is not spectacular. In my book that"s an 145% return on an annual basis ... 99% of the traders on ET would commit a murder for anything likewise. You would have beaten yourself almost every year with that kind of return even when your discretionary trading was at your best. More so you would probably sleep better The conclusion seems obvious to me: go with automation and stop the discretionary trading. Perfection creates ulcers those kind of results are allready more than outstanding.
Neke, why didn't it work? Was it just a matter of right or wrong? Or was it something related to the underlying mechanics of the market that made losing this type of leveraged trade much more easier? What could we learn from this lesson? PA