P/L for the week: -13k on 336k shares 0, 0, +6, 0, -19 Two mini-blowups in two weeks, not quite a record for me but still plain ugly. Over the years I've found that mentally these things just turn when they turn, the more you struggle with it the worse off you are, like quicksand. But here are some notes to myself I stumbled across while sorting through some old files, entitled "MISTAKES I ALWAYS MAKE" (pardon the caps, just cut and pasting): This was written in 2006, after a few years of trading edge-less in index, currency, and metal futures. I realized this weekend how deep the roots of my trading (and personal) flaws go, despite now having an edge in a completely different market and time frame. Bones once broken were never properly reset, so to speak, and old habits from edge-less trading resurface again and again until they overpower any edge I have, thereby worsening the cycle. Acting out of frustration and discipline are both muscles that grow or atrophy in accordance with how hard you work them -- therefore the first step in turning the tide is always the most difficult. Am I a broken record here . . . or just plain broken?
04-25-10 12:05 PM P/L for the week: -13k on 336k shares 0, 0, +6, 0, -19 Two mini-blowups in two weeks, not quite a record for me but still plain ugly. Over the years I've found that mentally these things just turn when they turn, the more you struggle with it the worse off you are, like quicksand. But here are some notes to myself I stumbled across while sorting through some old files, entitled "MISTAKES I ALWAYS MAKE" (pardon the caps, just cut and pasting): -------------------------------------------------------------------------------- * CANCELLING STOPS, USUALLY WITH AN EXCUSE OF A WIDE SPREAD OR HESITANT PRICE ACTION * LEAVING A POSITION WITH NO STOP, EVEN HOLDING OVERNIGHTS * LETTING THE FIRST SMALL MISTAKE SERVE AS AN EXCUSE TO THROW AWAY ALL THE RULES * LETTING ANY LOSS FEEL LIKE IT'S TAKING AWAY FROM PREVIOUS GOOD TRADE * DOUBLING UP/MAXING OUT POSITION SIZE/USING HIGH LEVERAGE MARKETS JUST TO "GET IT BACK FASTER"; RELYING ON LUCK AND VOLATILITY TO "FIX" THINGS, INSTEAD OF JUST CONTINUING TO TRADE PROPERLY * NOT BEING ABLE TO JUST SHUT DOWN FOR THE DAY WITH LOSSES, AS IF THE PAIN WAS "UNBEARABLE" * BEING COMPLETELY OBSSESSED WITH ACCOUNT EQUITY AND DAILY P/L * PUSHING TRADES JUST FOR SOMETHING TO DO, INSTEAD OF WAITING FOR THE RIGHT OPPORTUNITY TO COME -------------------------------------------------------------------------------- This was written in 2006, after a few years of trading edge-less in index, currency, and metal futures. I realized this weekend how deep the roots of my trading (and personal) flaws go, despite now having an edge in a completely different market and time frame. Bones once broken were never properly reset, so to speak, and old habits from edge-less trading resurface again and again until they overpower any edge I have, thereby worsening the cycle. Acting out of frustration and discipline are both muscles that grow or atrophy in accordance with how hard you work them -- therefore the first step in turning the tide is always the most difficult. Am I a broken record here . . . or just plain broken? Great thread- Honest introspection, and awesome posts- inspiring me to try to take my little pt trading account and actually try to kick it up notches higher- Our accounts differ by exponential factors $$$ wise-And in the trading hours , skills, and styles.... Way out of my league here, but there are similarities that traders at all levels experience. But in reading this thread, I,m compelled to ask: Are you self-sabotaging yourself by repeating those 2006 mistakes still today? and why would you? I think Tharp suggests we make our own barriers for success- and at what level. Was last week's one day 14k loss and this week's -19k day something that got way out of what it should have , because you didn't do what you know you should? Did you ignore or not set stops, break your rules etc? Overleverage a position? Or did you adhere to your rules and get caught in a shift/market swing ? i.e.- good trade because the rules were followed. The fact that you included those 2006 "mistakes" in your post suggests they are still a factor in adding to the losers. I can see I also share many of these mistakes. If so, why not make new rules -- Castor oil for 2006 Mistakes - Possible suggestions: #1-stops in place Cannot cancel stops - can only raise Sell 1/2 the position of a winning trade at the close, and stops in place for the open. If you're going to break the rules, you are trading emotionally and should not trade today- tighten all open stops. Trade what the chart is saying...Doubling up to make it back is gambling- unless supported by price. Trade the markets you know, at a volatility where you usually succeed. Stay within your Risk/reward guidelines. The day closed a loser- but it's in the past- You did what you were supposed to do, and you will succeed when you adhere to your rules. Don't think about the account value daily- That's $$$ getting in the way of trading the way you know you should. Trade the chart, Pushing trades/boredom to make them happen is believing you're psychic- If you gotta do it, addiction, make it a small amount , add on if it goes your way-scratch the itch, but not with a straight razor. Do you review charts of your trades? If you were to post a chart of your major losing trades and look back, what would it tell you? Had you followed your rules, what would the losses have been? As I said, you trade in a league I can only aspire to , and I hope I could someday achieve your level of success. Thanks for the thread, and the great posters sharing all they have. I look forward to learning from this thread in the future- Success will be yours! SD
Large losses can occur with certain styles of trading. The question to ask yourself is: Did I take a large loss because I had an opinion about what price would eventually do and I averaged into a trade in which price never complied until I had to bail, or did I take a large loss because the price action indication a move and I went in too large and with way too wide a stop, and price turned the other way quickly? Strong bias is a destroyer of accounts. I've been there and lost a large chunk of my account as a result. You can be fundamentally absolutely spot on in your analyses, and get totally shredded by price action that refuses to comply with the fundamentals. It would helpful if you could post charts of your best and worst trades of the week. It helped me to do that with my journal; I could go back and remind myself of what was working and what wasn't.
Ask yourself why did I have 2 mini blow ups in two weeks? It does sound like you got away from your trading plan for some reason other wise you wouldn't consider them blow ups but rather part of the plan that will work out eventually. Whatever it was you did, find a way to stop doing it. You are the only person who can do that.
Neither my friend â only human â like us all⦠Just working through some stuff every trader has faced â or will RN
Reading what I wrote a few years ago, it sounded like I could have written it yesterday. The first 14k loss was mostly a matter of losing patience; I had a string of flat or give-back days and just felt like I couldn't get any traction, then just tried to push too hard. The second blow-up was a combination of factors; keeping a couple innocent shorts overnight on wednesday led me to a bearish bias thursday; I ended up giving back a near 5-figure day to close even by the end of the after hours. Friday was revenge/frustration trading, taking on far too large a wrong position in an illiquid stock -- ie, gambling with volatility to "get it back". So I watched my losses grow larger and larger even as a number of great setups went past me. I definitely cannot blame anything on the markets -- this week's conditions were optimal for what I look for, and knowing that I was blowing it probably added fuel to the fire. It was just a number of knee-jerk reactions on my part to being unable to keep a good day intact, one leading to the next and snowballing. What I'm realizing now is that despite having an edge, it's never stayed in focus as the one and only priority in my trading, the way it should. Success was always a way for me to afford doing more of the wrong things. It's just a poor foundation upon which any edge would falter.
"I definitely cannot blame anything on the markets -- this week's conditions were optimal for what I look for, and knowing that I was blowing it probably added fuel to the fire. It was just a number of knee-jerk reactions on my part to being unable to keep a good day intact, one leading to the next and snowballing. What I'm realizing now is that despite having an edge, it's never stayed in focus as the one and only priority in my trading, the way it should. Success was always a way for me to afford doing more of the wrong things. It's just a poor foundation upon which any edge would falter." Illiquid: You take responsibility, and don't make excuses, . and you have knowlege of what is occurring , and also that it's detrimental as it happens. It would seem there is more underlying the behavior that you recognize is likely a negative. Maybe it is just manifested in your trading, but trading is very likely not the source. Just the result. Just the tangible representation. But let's consider the here and now. "Success was always a way for me to afford doing more of the wrong things. " That works as long as the cash flow allows limited siphoning off an uptrending account. Got a suggestion: It will sound way off the wall but consider: Why not think outside the box? Step back a notch or two- There are a number of suggestions other posts have offered.: Other traders recognize your skill and accomplishments. They are Troubled by your present possible lack of confidence and possible inability to get right back on top of your game- The honest self-analysis you've expressed they find disconcerting- At your level, most expect they would believe they would be on top of their game. Or hope so. You elected to share with others that this level is not necessarily "success" . You recognize that you are still dealing with some long-term trading issues that are common to most traders. Surprize- you're human. This may be a short-term hiccup in your trading, as you work through this level. The question becomes, are you capable and willing to move yourself higher, and if not- what is preventing you? There can be a lot of psyche 101 - I expect you know all of it and then some - but your posts express dissatisfaction with your lack of self discipline and doing things that are impulsive and emotional. You see yourself as actually having prospered in spite of yourself and self-indulgences. I don't think you give yourself enough credit for what you do right.... I suggest on't take any time off- Instead , Do some role playing- Shift your focus from yourself. Try it as an exercise for a few days: Take it off your shoulders. For 1 Week perhaps.. Instead of you making the trades, for the next week, Mentor me. -SD You personally back-off, and guide me to make yor trades. I won't mind the responsibility- it won't be my account-it's yours. After you LOL- Take yourself out of the Trader Role and Now consider YOU become my teacher. Let me make your trades with your guidance! Yes, I'm now going to be trading your account! For the next week. and the next week only - After that, you'll have to mail me a commission check weekly! LOL You can teach me for the next week, and teach me right- You can teach me discretion, teach me to stay with my discipline . Tomorrow, Pre-market, I've come to your house, You are not going to make any trades , but will oversee me making trades on your behalf. I'm sitting in your chair,- Thanks for the Opportunity BTW!!!! I'll be trading your account, and I hope I'll learn quick and not cost you alot. After we have coffee and a Crispy Creme donoughnut , you let me sit in your chair , and we wait for the market to open. You will look over my shoulder, explain and guide my trades. You aren't allowed to make any trades until you explain them to me,. No, I'm not Stalking LOL but I'm talking Role Playing as a possibly valuable exercise- It requires you to be able to be both imaginative, and disciplined, as I am not actually going to be there- I'll be on a construction project we're starting here in Durham NC. You're the Teacher. I'm there in corpus absentia (sp)..... .But when your hand reaches out to click that mouse, consider it to be mine and you are looking over my shoulder. I want to learn , and learn right, and am depending on you. Give me the right guidance. .... teach me to become a smart and profitable trader. Tomorrow, Intraday, I'll wonder how I'm doing, and what you are able to teach a slow and somewhat older mediocre trader about disciple, -am I following your rules ? - and when to put more on and when to back off. I've got to balance Risk with reward, and not got knocked back too much. Haven't got that many years to recoup. So instead of trading for yourself this next week, trade to teach me how it should be done- I'm not trying to get rich,(yet) just to learn to trade with consistency and work my edge towards that end. I'm betting you can teach me how it's done properly. At least my persona .... I would expect if your focus became that of "I will teach for 1 week" - you would modify some of your trading, and focus on the essential elements that you recognize that give you an edge when properly applied. So , I am willing to be your guineau pig - abstentia novice trader- Should you accept my application, I would like you to critique my learning curve over the next week. Thanks , and best wishes to your continued success! SD
SD Damn interesting concept â We would be more apt to protect another than we would ourselves I donât know â but I really like your thought process⦠Weâll see what Illiquid thinks Kudos To You Sir RN
Illiquid.. just came across this thread, I guess the title never made me open it before.. need something more catchy to grab readers attention. when someone starts a journal it can be inspiring to see a millionaire in the making but even more so to witness the zen like calmness for 2 months of straight losses. i dont dare to assume anything about your finances, for all I know you could be a part time high stakes poker player and 40k is just pocket change. have you come out of larger drawdowns? do you feel any grandslams/ no hitter around the corner?
Basically just traded stupidly trying to get back a certain number, not isolating trades on their own merit which usually means not taking good profits and even watching them go negative out of frustration. Bias did hurt me initially but the rest was just failure of discipline and throwing up my arms in surrender.