"I need to finish profitable everyday. I cannot lose money. I need to stay above the water." These are all fear based elements and scared money is dead money. Have you ever read the book " The disciplined trader " If not I suggest you buy it. It really helped me with some basic concepts that we tend to overlook when trading.
Good advice Steve. We'll see if anyone picks up on the "learn to trade consistently " part before they try to "push harder".
Perhaps I should have bolded the CONSISTENTLY part because thats the most important. Once your core competency is down, you MUST push yourself. If you know how to extract good money out of the market, there is no reason why you shouldnt push the envelope. If you think about it, no matter how well you do, you could always do better
I agree, where you head is at, has everything to do with what direction you go in. So, riddle me this wise bunch... I seem to have arrived at a fork in the road, it is this: There is alot of trading literature out there, however basically it comes down to two diametrically opposed camps in regard to the following issue. In one camp you hear the standard fare, Step 1. Develope a robust trading idea with good entries, hopefully better exits. Now go ahead and trade it. Step 2. But, if things don't unfold properly, in other words you are experiencing drawdown, you need to start doing something which will in some way reduce or curtail your trading in the hopes that such action will "prevent" further losses. I find this type of advice frequently in trading manuals and courses. In the other camp, the one that stresses psychology you will hear some of the following: You can Never Know whether the next trade will be a winner a loser. Trying to avoid losses is futile. You must believe in the long term strength of your edge and practice it whenever you can, because you are being paid on a long series of trades not just a small sample of them. Richard Dennis, one of the Turtle founders, issued this famous question, referring to system trading. "You have just had your 19th losing trade in your S&P 500 System, The 20th entry signal occurs. Do you take the trade?"Of course Dennis would say you must take it, assuming you had the capacity. I hope this post is clear. The question relates to psychology because clearly a trader should not have one foot on the gas and the other on the brake, as the two opposing viewpoints suggest. Either you're going to trade your system or you aren't, there really is no way to fudge this question. Putting artificial limits (that probably cannot be shown to have any statistical validity) such as if you have X losses in a row you must stop trading your edge creates in one's mind a mixed message, assuming that one agrees with the camp that advises that proper psychology and hence consistency is the cornerstone of profitable trading, not a magic parameter set which composes a system. I recently asked a successful trader who daytrades, whether she had her own self imposed limit on total losses for the day, and she said rather simply, No. She did however use stops for each and every trade. And she took every valid trade entry that presented itself that she was able to take. Everything she said before that point could have come right out of Mark Douglas' Trading in The Zone. I think with so many important texts coming out recently in the field of trading psychology, many traders are actually conflicted in this area, and the funny thing is until the issue is settled in an intelligent way, the trigger finger of many traders will always be more shaky than it should be. All insights welcome, don't hold back....
We've lived a life of external mind control. The result of external thought control is that âassumptionâ has become a habit with us. Most of us go through life never noticing all the assumptions we make during a day. The same thing happens when we read a book, we'll assume we are on the same level as the author, but with a little research we will find ether the author is full of shit, or we are full of shit. One example is the word âedgeâ. There's as many assumptions as to what an edge is as there are traders. Yet how many have questioned the likes of Mark Douglas and his definition of edge? An edge is a statistical advantage? Thats all? I don't think so. The first thing an edge is, is a boundary, the second thing is an advantage. You don't gain an advantage until your performance within those boundaries becomes automatic, and your performance at the boundaries become intentional. A âjournalâ is another one traders assume they know the meaning and purpose. All of our assumptions are a huge disadvantage to us, that is stronger than our advantages. When we begin to notice our assumptions, we automatically start to weaken our disadvantages, and start to build our boundary edge. Generality's are another one that stalks traders, which feed assumptions. The other end of the spectrum is âether orâ or âblack and whiteâ type thinking and talking. We can remove Generality's and ether or's, by adding the words âexcept whenâ.
Day 3 I SUCK as a TRADER # of Disasters: 4 That million maybe farther than what I thought it would be. I had a decent day going, and I kept shorting the rally at the end. That wasn't the brightest thing to do. It was a 200+ pt intraday move. Unbelievable. Yeah, I lost money today after meeting my profit target early on. I suck as a trader, All I do is let my losers run f*cking wild. I give losers little room, little bit more room, and a bit more and the end result is I end up holding onto trades that I am not supposed to be holding onto. Its destined as though I am meant to baghold onto losers. I am a LOSAR.. not a trader.
It is my goal to make a million from trading before I turn thirty. Thats right around 4 more years. 4 years x 200 trading days per year = 800 trading days. $1,000,000 / 800 = +$1,250 a day. It isn't that unreachable as I thought. But, I got a long ways to go before I can be the trader that I can be.
Don't forget you'll need to make more than a million to make a million because of the taxes you'll need to pay over the next four years from the gains. From the sounds of your post, it doesn't seem like you have a strategy with exact rules to follow. Are you a discretionary trader?