Let profits run.
Cutting losses? Piece of cake.
wtf is an "edge" i mean when i think of the word i think of a secret that no one else knows, you know kinda like a trade secret.
I'm not qualified to voice an opinion as i just started but isn't the #1 edge all traders need control over their emotions. I'm sure the profitable guys on here could show some net losing traders how to exactly do what they do and most wouldn't be able to reproduce profitable results.
Being able to take losses and using vast sums of money without having a heart attack.
I second the motion. Pulling the trigger was my biggest problem. I had real losses a couple years ago and it had been hard ever since. Getting over that was my greatest tribulation.
I learned to cut losses quickly & well after learning about support & resistance. Before that I was using tech. indicators which required large stops.
Letting profits run & not fearing that the trade MAY become a loser is a master skill...for me it was the last one.
Being profitable PRESUPPOSES you have an "edge," or an approach that produces positive expectancy & is consistent.
Me, myself and I
I had to master how to turn off that TV for good and don't listen to talking heads any more.
Myself: balancing patience and care with doing it.
Being able to recognise the difference between a meaningful move and normal market noise/chop.
is volume a big (the biggest?) part of the difference between a move and chop?
Cutten, how do you recognize that? I look for volume behind the moves, but are there other things to look for?
This has been so hard for me.
I have learned to cut losses very early.
But dang... it's so hard to let profits run...
A meaningful move on a daily chart is found too often.
Normal market noise/chop on a daily chart = some meaningful moves on an intraday chart (e.g. 5-min, 1-min).
Normal market noise/chop on a 1-min chart = some meaningful micromoves on a 42 tick chart.
In general: market noise/chop in a higher time-frame can be meaningful moves in a lower time-frame.
So... pick your trading time-frame and compare to the backdrop higher time-frame.
The password to the Fed's computer.
The simulator, hopefully.....
The hardest and last thing I had to do to become a "good" trader was to wait and be able to take small losses.....
All uphill from here...........LOL
I used to feel like I had to make trades often or I was being lazy... that lost me lots of $$$
Now on a flat day I am fine making no trade at all.
Make sure whoever's advice you buy on this forum, look to see how long they have been here, so you at least get an idea of how long they have been trading so you know if they know what they are talking about. Like if some guy who just registered on elite trader 6 months ago is telling you how he became profitable, dont trust it. If someone who registered in 2002 is telling you, he MIGHT be a bit more credible as he has withstood a good number of years with the market.
Now with that said...the last thing i learned was not to put a large chunk of your cash in 1 trade and NEVER use margin I dont care if your account is 2000 dollars or 2,000,000 dollars. If you feel like you HAVE to use margin, then you dont have the emotional ability to trade. If you cant be patient with your gains, then be prepared to lose it all.
IMO, the ONLY people that can use margin are the guys that have at least 250k in the bank and are trading 25k accounts. These are the guys that make a couple hundred K per year and are pulling cash out when they get their account to 100k or so.
This advice is easy to give, but hard to listen to. Chances are you will be like the rest of us who had to blow our accounts(or blow a substantial amount of money) to find out what works for us or what trains us the best.
Totally agree -- the fewer trades I make, the more profits I seem to have at the end of the month
Please clarify for the 'newbie' here on the forums at least.
Obviously using margin when you have no cash reserves for a margin call is nuts, but why not use it intra-day if you are a very active trader? More leverage controlled well can be a powerful boost. I understand overnighting and getting killed by interest on margin, I am talking only day trades...
What was the ***last*** thing you had to master before becoming profitable?
Reading and/or posting on www.elitetrader.com.
What was the ***last*** thing you had to master before becoming profitable?
The second to last thing.
Every dog has his day.
After spending 3 years going back and forth between WL and TS, finally found something I can committ my future, my clients future, and my children's future on. That's the hard part.
stop watching CNBC
I guess you said this to give yourself more credence. I was in college when you created your elitetrader account in 2005. Lol. I am profitable....been profitable for 2+ years now.
The idea that someone's registration date on Elitetrader should be used as a proxy for credibility is ridiculous. The idea that because someone signed up 4 years ago that they have been trading for all 4 years is even more ridiculous.
I didn't even read the rest of your post because your beginning logic was terrible.
Yeah, it's not good logic. Number of posts say more about the trader. How active they are in the forum.
I agree with that. That idea is funny.
I have been trading for years. But I only found out about ET less than a year ago.
On the other hand, someone had been on ET since 2002 might just mean he has been posting jibberish for years. LOL.
The last thing I had to master was getting myself out of the way of my systems.
The time to be creative isn't while trading. It's in preparation.
I was out of work for a year and felt like I had to trade every day. Since I went back to work, I started looking at several stocks I am familiar with, and basically traded on what I felt were over-reactions to to a particular event.
My strategy (simplified) was the lower a high quality stock like AAPL or CVX got, the more I would buy, but keeping with this thread, what I learned not to buy every dip. I found that dollar cost averaging as market panic became worse, I could just call it an investment if there was no immediate reversal.
If the stock turned around and there was a 15-20 percent gain over a couple of days, I took the money and ran. This is not scientific enough for technical traders, but so many stocks are trading in a range that I've done well by multiple buys and sells on CVX between the low and high 60's.
As far as I'm concerned, this is a difficult market that trades sideways, and the movements are artificial and many on low volume.
The guys that post jiberish usually run out of steam, patience and cash, Then they leave.
I have been here long enough to know the ones that post the truth and their dates are older than mine.
..and to the question that started this thread..not taking a profit too soon
fully automating and walking away
Amen! let the automation run on its own ... NO fiddling.
I remember in the early days being so very desperate to bank money (so I could 'feel' like I was making a living-) I'd blow out a great trade for a paltry $.25 gain and leave $4.75 of profit on the table.
Think about that...using money you dont have to make trades. Thats how you blow out.
And just because you dont hold overnight doesnt mean a stock wont go the wrong way severly in the middle of a session.
And ask any trader who daytrades if he ever held a position overnight. Most will say they have at least once because of a "sure" trade. (which of course turns out to not be so sure the next day)
But you know...maybe its just me. When i stopped using margin, i stopped losing money. (i mean i did other things too, but I feel like that was one of the things that was killing me.)
I dont care if people think I'm credible. I think there are alot of people on this board with better advice than me, but i think there are a hell of a lot more with worse advice. And since probably 90% of them leave after the first year or so on this board, it usually means they lost all their money. I'm the type who like to play odds in my favor. Odds are that someone who signed up a few months ago doesnt know what they are doing yet. Yes, its not a fact that EVERYONE whos registration date is 3 months old is a newbie trader, but the odds are that they are. Its like going to vegas and playing craps. I can tell you "dont bet the 12, its a 36 for 1 shot and its a bad bet." and you might say to me...That doesnt mean it wont hit (which is basically the same thing you just said to me about my logic) Over enough rolls ( or on elite trader, enough noob accounts) my logic will win in the end.
Sorry if i didnt explain myself to such an "Educated" trader so he could understand what i meant more easily.
Once I developed a solid strategy the hardest thing was to find the right instrument to trade.
How to take a loser......seems easy.....
There was no "last" thing. I was lucky and happened to get hooked up with good professionals willing to teach me how to get it done. In hindsight, what I learned was a few technical skills, how to organize myself and how to maintain a disciplined approach under stress.
First, I learned how to evaluate the premarket and establish a game plan for the open.
Second, I learned the importance of establishing a favorable postion on the open. I learned how to do that consistently.
Third, I learned how to monitor, evaluate and react (part of managing emotions) while managing my positions.
Once I learned to do this consistently I went from a losing game to B/E, and then to profitable in about a month.
finding a system that is profitable.
For me, it was learning to take a small loser. By that, I don't mean tight stops. Rather when I was in a trade that kept on oscillating between flat and two ticks in the money and wouldn't take off, I would close the trade.
But if I was in a trade that oscillated between flat and two ticks OUT of the money, I wouldn't close. Instead, I would sit and hope that it would either take off or let me out with one tick profit.
Of course, that trade would eventually break out the wrong way and instead of two ticks I would lose 2-3 points.
In other words, I was willing to risk ten dolllars to save one.
I mastered bating.
So you learned to swing a baseball bat to get profitable?
Or were you trying to be funny and just spelled baiting wrong in effect ruining the whole joke?
I'll take #2 for 1000.
Learned to average up and minimize my losses.
Learning patience, understanding myself, and confidence rebuild.
I would say size in relation to account balance is one of the biggest problems and to overcome it is a hurdle where most fail because unavoidably the way to consistently taking out money from the market takes its contribution. You can be the best chart reader and still lose money if you don't have the balls to hold onto proper planned trades. So how should you plan trades?
You will have losing trades and after your entry you will simply NEVER know for sure where the market is going though you have a good chance to end up taking when you are ready to give. Now that doesnt mean you should press the button whenever you like but when recognizing a setup that seems well known to you you must not hesitate to find out the consequences of taking it. With other words you must filter all good and bad out by yourself. Learning the breath of your chosen market is essential, letting winners run is essential, cutting losers is essential so I suggest to find one's risk tolerance first then cut the intended size into half whilst doubling the stop and you still play with the same figures. You must feel the pulse of the market in order to surf its waves profitably. Win a bit and lose a bit and when you have found your style you will see there are no more questions that anybody else could ever answer and then comes the time to reconsider size. Remember you have to go for consistency and not for $$ in the first place. Money comes later and will lose most of its importance as being a target anyway once you are able to take it.
After simplifying and meticulous trade tracking (3 min. candles/futures) to the point of having a defined entry point including a trailing stop (yes, I found them invaluable for me and my personality), I place the resting entry order and when it hits, I get up from the computer and move to the den sofa or leave the room, allowing the trade to work.
member commision and margin rates as well as profesional front end software
Good job explaining yourself to such an "Educated" trader. Lol. I have to admit that you're mostly right.
Still, I wouldn't allow the sign up date of the messenger to prevent me from receiving a good message. There are many people that can't trade at all that have some good ideas.
+ emotional awareness
Very well put. Emotional awareness is something you develop over time.
for me, the final piece was similar to what someone else here said...being able to recognize a move early on vs. chop. a close second was learning to accept a loss, dust myself off and wait for another valid set-up. i have never had much problem with letting winners run.
My addiction to porn and necromancy
A little bird told me something interesting....,
Weaker the edge, the more important psychology.
Better the edge, the less important psychology....
What was the ***last*** thing you had to master before becoming profitable?
The Last thing to master before becoming profitable (i.e. A)
= The First thing to start trading (i.e. B)
= Everything in between A and B
= Reward:Risk (i.e. Edge)
Everything besides trading.
I still have a problem that the fear of the loss of the gained profits. I know if the problem can't be resolved, I will never be a professional trader. I believe each trader will confront this. How should I do? I meaning the better method. Just force self to persist?
Let me give you a hint-
The truth is that some one who has been here 10 years can be just as full of sh-t as someone who has been here 10 minutes! Also, many here who sound knowledgable and polished are the most full of it!
Ultimately there is no substitute for clear thinking, so rely on your own judgement!
You jest of course, check out the moronic posts of many of the 4 figure + posters!
some traders might find it hard to believe, but i was profitable from day one of my live trading. i still am
BUT i had a psychological problem. in psychology it's known as the "profitable trader's inverse guilt-based inferiority complex."
it's a complicated phenomenon, but, in a nutshell, it's a strong feeling of guilt, every time you win, knowing that most other traders lose most of the time . . . thus, it is only logical that the more you win, the more guilty you feel . .. it has become almost unbearable, because i've always been very profitable . . .
but one day, you know, i just let go . . .. i just went ahead and unleashed my inner . . . you know . .. i let my winners run . ..
. . and never looked back . ..
You deserve to be todays winner!
Thank you for sharing.
Perhaps I could suggest something outside the square, say Philanthropy. I can highly recommend it as it has worked extremely well for me.
See no guilt or self absorbtion whatsoever!
Ahhh yes the philanthropic supertraders psychologically scarred from all the profits
ET.. where all the millionaires meet
do something good with the money you make, easy like that and there will be no more conscience conflict in your life;
I saw in another thread or maybe was even in this one that you claimed to hate winners, hmmm ...?
Everyone getting into trading pretty soon will figure out that the whole thing has much higher potential to destroy lifes than to heal or create measurable value. And I fully agree that it finally is a bad thing unless you give it a meaning and live it as a mission. Losers get what they are subconsciously looking for - punishment.
Winners went through that stage and are aware that they cannot build a bridge for those who actually have been funding them. A long lasting losing trader is somebody who has no respect and apreciation for money and therewith will systematically get seperated from everything he has until he subscribes to the point that he cannot just come, take and then leave. This is going to happen with as well as without your participation Ms G-V.
I am very sure that most here don't want to be traders without knowing it. They might want to become one but have no intention to stay. What keeps them moving and motivated is a fictive result. Like and love what you do and you can only grow.
At first you sounded suspiciously sceptical for someone on ET, but then I thought, nah it could never happen here!
Perish the thought.. I know all the trading superstars prefer to come in here and chat rather than lounge on their yachts in the Greek Isles sipping cocktails with supermodels
i agree, they seek pleasure in punishment. that's why they're looking for it, even if subconsciously
this means they must find a way to establish a stable association between a winning trade and punishment (pleasure)
be more disiplined: wait for trades to come to you. dont trade out of boredom, revenge, or chasing a market when the move is over.
Learn price before you learn indicators learn s/r, price patterns like wedges, triangles, ect. An indicator is just there to help confirm your belief on wether you should go long or not, but should not be used solely as a buy/sell signal alone.
Learn proper trade management Move stops up over time to reduce risk, and lock in profits. This is critical as a beginner.
stay in winners as long as possible this goes back to being disiplined, dont get bored, or impatient. Take profits over time, and by using effective stops, you'll be taken out when the time is up or trend is over.
dont cancel stops this was hard for me when i started out. Before the trade, I felt confident, but later got scared and took an early loss, in what would have been a nice winner. In other words Stick to your trading plan
The most significant barrier to profitability is the inability to sit on your hands. Letting winners ride, stops, etc., is all conversation.
"I used to feel like I had to make trades often or I was being lazy... that lost me lots of $$$
Now on a flat day I am fine making no trade at all.
Totally agree -- the fewer trades I make, the more profits I seem to have at the end of the month"
Funny there was a guy, Tom Smith I think, who posted that instead of trading in and out based on TA and systems, the key to success was to sit and watch for 1or 2 situations a year when a big move starts to happen and go in large with a tight stop. Did he get reamed by the "pros" here for making a big move based on observation and instinct instead of the usual in and out system trading that usually rely on numerous trades with small profits to try and beat the odds the way casinos do.
I agree with you absolutely. For me, I found that one of the big barriers to profitability is "managing yourself". Whilst you cannot control what the market is doing, in order to be sucessful, one must be able to control one's own reactions to the market's behaviour.
In order to master awareness, I recommend the audio version of The 4 Agreements by Don Miguel Ruiz.
1) Be impeccable with your word
2) Don't take anything personally
3) Don't make assumptions
4) Always do your best << most important. No risk, no reward.
Although you may certainly gain great ideas from other traders, only your own common sense will guide you to successful trading. Once you accept yourself, then you love yourself and give yourself everything you need. (Pay yourself first)
In fact, I would get the audio versions of the other 2 books, the Voice of Knowledge and the Mastery of Love. The 5th agreement there is no audio version yet.
With all this said, one thing I learned was to expiate or move to a location that was cheaper or was a better fit for my independent philosophy. Thailand, Singapore, Columbia come to mind, and I'm sure there are many other countries. You can live in a furnished studio with electric, air condition, and high speed internet for $100-150/mo. food for $40-100 a month. Plenty of fresh foods and you can still get many of your Western fixes as needed. And plus, as you move to new locations, you meet fresh minds from both locals and other foreigners to give you fresh ideas (either electronic trading or some other type of portable / profitable business). this will only further increase your awareness.
So in this way, you give your self time to practice your trading methodologies, still have a personal live without having to wonder if you must pay the rent next month vs trading.
Not a bad idea. Singapore, however, is not a cheap country to live in.
expiate- freudian slip? you must be guilty of some dastardly action.
Verb: Atone for (guilt or sin)
ps your post is +1
What was the ***last*** thing you had to master before becoming profitable?
That just because I am profitable today does not mean that I will be profitable tomorrow.
What I mean is that you have to keep yourself sharp at all times and remember that today I might be great with my entries and weak on my psychology.
Tomorrow my psychology will be razor sharp but my exits are weak.
The next day I might have a problem with blaming others for my mistakes.
If you ever fall into the trap of thinking you have this market thing mastered that is when you are about to be humbled.
Ill let you know when it happens.
What was the ***last*** thing you had to master before becoming profitable?
I had to master something quite different/new almost every ***Last*** time becoming profitable!
The spell check i messed up. I meant expatriate. or expat for short
Torseaton, I agree with you on this. However, I have only tried this in paper trades, by buying a large volume of shares and running for $0.10-0.50 profit. On paper it is working well for me; doing this with real money is, however, a whole different issue.
Have you traded on margin, in this fashion, and been successful?
cutting losses...cutting loses.
letting profits run.
emotions is the main thing. I'm always working on this. - read TRADING IN THE ZONE BY DOUGLAS
Here is my system:
if post date - registration date < 3 years
then don't waste time reading the trading related opinion.
(the most valuable info usually comes form people predating me)
How do I know the system is working? Occasionally I break my own rules, however 2- 3 sentences in I realize the mistake.
How did that saying go?
There are no old bad traders.
There are old traders and bold traders, but there are no old, bold traders
except the little known Warren Buffet and George Soros
when they are all moving together in one direction, all in agreement,then there is a large buy in or liquidation going on,testing supp/res on multiple markets and breaking,or all reversing,large tick moves,large up/down imbalance ,large moves in the leaders
The last thing was to stop wasting time on these chat boards.
Myself. Read "Trading in the Zone," by Mark Douglas, eat an <b>extremely</b> healthy diet and avoid sugar like it's arsenic, get plenty of sleep, plenty of exercise, and perhaps above all, learn to meditate. I've worked with many wanna-be traders over the years and very few will commit to doing all of these things, especially the meditation part. If you are willing start here:
If you follow these recommendations I can promise you it will be a life changing experience. If anyone is serious PM me because this is the tip of the iceberg.
So all the posters in this thread are big winners and their advice worth every second wasted on reading it?.
I wonder who pays for their wins.
I am not a big winner, I'm a consistent winner and I don't always beat the market. In fact, the market has beaten me the last two years but I crushed the market in 2008 and 2007. The only type of trader that will last is the one who realizes trading is a marathon, not a sprint. If you're looking for a get rich quick venture you'll be very disappointed. I've been through the highs and lows of trading and when I started working on myself, as noted above, it was a life changing event in a spiritual, physical, and profitable way. Take it for what it's worth. This is ET after all -- home of the pretenders.
Meaning exactly what?
Ah, close enough.
It seems my point was was missed by most.
Time for plan B:
1. Never trade through earnings.
2. Recognizing "hidden leverage". Stacking up option contracts like pyramid to end up losing everything at expiration is never a good idea. Never trade more than you can afford to deliver.
1. If you do not trade through earnings, or some other borrowed money to fund your trading account, what type of money do you suggest using?
2. Dollar cost averaging is always a "good" thing, in the sense that this is the ultimate goal of most traders anyway. I suppose there are different variations of stacking, martingale being the more extreme application of it. Much less extreme version can be used and you still get the results you need.
Fear has a tendency to distort the reality of risk. By taking no action at all, you get no reward either. So take the risk (and responsibility) and make trades. Using logics and a mathematical approach is much easier and scalable over time than chasing the opinions of others.
agree completely............longer you are in the game, the better your chances of success.
That is absurd. I have been here a while and I try to stay in the conversation but I am far from a pro. I am marginally profitable and realize that a guy could register today, write his first post and yet have been profitable in a major way for years.
You evaluate the substance and be wary of it all until you are sure. Hey ... even I have good idea from time to time!
Good thread! Just to give my two cents, the experienced trader who trained me years back realized I had talent and was good at trading but was letting my losers run. He had me go to the ATM machine one day, withdraw a few hundred and put it down in front of my trading station. He said every time a position goes against me and I close the position, take off the table whatever amount I am down and give it to him to hold for a month. This made me realize the real face value of money and how electronically your not thinking about it as much, but when it's taken away right in front of you cold hard cash...oh do you learn a thing or two.
After more than 3 years following earnings, I found that Earnings Report day (ER) is a pure gambling time. Too many times a good company with good earnings got its stock crushed and vice versa. Before every ER, I bet the news media have written two narratives, one praising version for up and one blaming version for down. Even if you guess right, you can still lose money. It is totally a money-sucking guessing game for traders.
On the second point, borrowed money will squeeze the time out of you. Time is the most precious asset in trading. With borrowed money (aka leverage) you will fear of getting margin-call or getting your options/contract expired. This is also how Forex brokers make most of their money. They force you to have a leverage, bet against you on the other side, and then force liquidate your asset on a dip.
If you want to stack, stack non-expiring assets like -good- stocks, provided you still have some cash in hand. Stacking expiring contracts or options is reckless.
Interestingly enough, i was thinking about forex when I responded. because of the smaller lot sizes available (10,000 - mini; 1,000 - micro; 100 - nano of the base currency). Stacking can work quite in your favor.
One day I blew my account out. I puked hard then went to bed the nausea was horrible. I had been consistently profitable but when I ramped up the share/lot size I couldn't handle the losses which before I was able to take. I tried revenge trading and breakeven trading due to the increased size. Literally and figuratively it was my turning point. Since that day I scaled back, followed the rules and GRADUALLY started adding back size. The quip about the heart attack is true. If I had been older I probably would have died from a cardiac arrest.
master myself. when I realized the market is uncontrollable under my capibility. but I know the only thing I can control is myself. control myself is not an easy task. I wrote rules after rules, I still frequently broken them. for example,
my first rule is: loss not exceeds 2% of my account per trade, daily5%. but still occusaionally I stroke the luck after I broke the rule, put my loss to 10% daily sometimes.
gradually those pains added up, I started to be very strict on my self. to that point, I felt trading is not that kind of hard thing to do, profit after profit is not a dream.
when talking about selfcontrol, the most hard thing is control the emotion. when my stop loss was token out becuase of whipsaws, I get angry. when I lost, I want my money back,the revenge thing comes out. when I missed a good setup, I feel frustrated. when I couldnot get the market, nomatter what I do, buy high wrong, buy dip wrong, sell high wrong, sell low wrong, trade after trade, I feel I was defeated. when I get luck after luck, I feel I figured the market out, smart, I become brave, then stumpled on a naive mistake again.
Find consistency. Put together a modest string of positive days. Document everything in a journal in terms of what it took to yield those positive results. Your mindset, your charting, your profit targets, your stop-loss levels, your position sizing.
The worm will turn for you when you can turn your consistency into a systematic approach that replicates those results.
Bone: Find consistency. Put together a modest string of positive days. Document everything in a journal in terms of what it took to yield those positive results. Your mindset, your charting, your profit targets, your stop-loss levels, your position sizing.
The worm will turn for you when you can turn your consistency into a systematic approach that replicates those results.
Excellent post. Unless you are very lucky, this is the only way that I know of anymore.
I may have to find someone to set up a similar arrangement The numbers on the screen may seem distant and far away at times, but it IS real money. Easy to forget that at times, especially when overtrading and racking up losers.
mine was not to be too mechanical. for years I worked the numbers and set up strict rules and trading strategies that were only waste of time and money but all those years of staring at quotes and charts for thousands of hours gave me a feel for the market and its flow. my only rule is to not risk anything that would affect my lifestyle and to trade my own style and not get influenced my what others do
I was the contrary. when I started to trade, I donot have rules. did things based on my common sense. yes, I was making money, I toke risks that I cannot bear, but through patient waiting, I ended up with unexpected gains. but somehow, I realized why I need go through the pain first, or if the market did not come back long time I may suffer and waste lots of time in waiting and experience emotional frustration/suffering, if I did the right way, I can make that money while I am not suffering the paper loss and enjoy the ride.
so I started to write rules to myself, and ask myself to go with the market way, try hard to figure out how to go with the market . when I can dance with the market, not step on its toes, I find my emotions of "missing the opportunity" "revenge""try hard to wait out toB/E".... are gone. so my methods become very mechanical. just if then. I have standard answers for any trade I did. where to get in, what conditions to define an exit. my wife laughed at me about those answers. she thought there is no standard answers for a trade. but I showed her, she immediately realize my point and
truly thought that is the way to define a trade's standard answer.
every day, I feel I am doing an exam. after the market closing, I can use my standard answer to verify my trades whether they are correctly executed, so I can improve my next trading. a loss if correctly executed, I give it a right check mark. a gain if not correctly executed, for example, get out before my signal says so, it is marked as an incorrect trade, will get minus scores.
only live in a structured enviroment, I feel I can control myself and I am confortable, and I am able to do what I should do.
my consistent proft comes from that point.
There is a key dynamic in this thread. It is to do with problem solving and so it interests me. It goes like this: "I set up detailed rules to manage my trading" or "All my rule making proved not good enough and so I trade according to my feel of the market". So are those similar alternatives or opposites?
Much that goes on in ET threads in the search of success or better success is also along those lines: "I have few or no rules for my trading" or "I have a plan and rules which I need to follow". What is going on?
The brain can obey complete rule based playing but there is a problem when the rules don't encompass all possible future outcomes. This leads to the alternative: "F**k this, I can do better playing according to my feel of the market". This will include what you've already learned about market patterns but also won't encompass all possible future outcomes and can lead back to what? Yes, a return to a rules based plan for trading.
What is it that I am doing? I am a rules based player.
I dropped methods that took me years to develop in favor of simpler methods that took me less than one week.
Now, I enter with the simple methods, and sometimes extend the trade when it coincides with the methods I learned in the beginning.
Best of both worlds... very easy management for 90% of my trades and the occasional big runner.
I realized that I was a risk manager and that my job was to provide liquidity and assume risk. In exchange for providing that service, I would be compensated.
If I did a poor job, I would not be compensated.
Master yourself, that's the last thing. Good post on doing that:
accepting small losses and scaling out of trades,
It wasn't the last thing, but it's something that can give you a huge boost in returns and turn a marginally-unprofitable strategy profitable or a profitable strategy more profitable: Identifying "false positive" trade signals, where everything looks exactly like a trade that typically turns out to be a winner for you, but there's one thing wrong with it that you hadn't considered before. If that one thing is something that you can systematically identify and eliminate trade signals because of, it will keep you out of a lot of losing trades.
I recently found something of this sort in my own method and was able to reduce the amount of points lost in losing trades by 40% this month, by avoiding 8 trades that would have been losers. I also avoided 3 winning trades, but that is a tradeoff I'm willing to make.
The trick is to be able to identify these trades without messing up your regular strategy. For me, the variable was something I hadn't been tracking, but once I started to track it, I noticed that in these losing trades, that variable tended to have an elevated value, so I turned it into a filter.
becoming a nobody
Reduce over-trading. Not to open another position until ALL open positions are green.
Green or out (and replaced).
Did avoiding those 8 losing trades compensate for the 3 avoided winners?
Good points,P TT
Havent stopped using leverage, but much , much more selective;
also using less leverage usually results in more time /profit in top trending trade/investments .
And using less leverage [or none]
is more fun.
But super selective leverage[not super leverage] is fun also.
With no leverage, 7 weks of upternding GLD, gold is fun...;
with leverage, 7 weeks of gold derivatives UPtrends is a good time to tighten up stops, even if if takes a trader out near all time hi. Bye
Lots of great ideas here. I agree with a lot said.
A big development for me was learning how to review properly, examine my system, psychology and implementation of that system. You are learning both at the screen and staring at your statement.
1) Know your system
Track all the statistics your prop report tells you, or you are ignoring your report card, and your homework assignments. Everyone will tell you to be process-driven not results-driven and the difference will start to show in these numbers first before your P&L. The numbers don't lie about your trader profile, and are invaluable to isolating your issues. Is your W/L under 2? You are not lettin em run my man.
2) Know your psychology
Understand your individual makeup, what suits you, and what mistakes you are given to. Don't repeat the mistakes. You'll have to keep track of the ones you're making, and try to understand what keep making that happen. Remember, losses aren't just a business expense to a Trader, they are a very real learning opportunity THAT YOU PAY FOR to develop your system, psychology and sense of the market (especially for the beginning trader). Stopped out according to the program? Good trade. Lesson not learned, history repeating itself? that is wasted money. Here's a list of my possible mistakes that I'm tracking (so I won't repeat them):
Holding on to a Loser
Adding to a Loser
TOO MUCH SIZE
Too Volatile for my style (including ETFs)
Trading during Announcements
Churning (not doing commission cost/benefit)
Trading on P&L
MUST Keep Original Stop
Trading with 1 HOUR Left - I'm terrible at the close
Should have sold SOME not All
1 Min Vision - noise on Charts
Poor Entries - Ignoring the range
Hit PT and Took None
DIDNT Stop at Daily PT
Of course I'll still get emotional. And with so many possible I'm still repeating mistakes but now I'm accountable and it's happening less and less.
All this is assuming you have a profitable, backtested paper-traded system to begin with, most of your mistakes will be psychological and related to the rules of your system.
It's all rules based. This is why computers are so good at doing this, and taking over the exchanges quickly. You gotta be like a computer. I have a sticky note: NO DECISIONS, the flowchart is there and you make no real decisions when in the heat of battle like a computer following the rules (setups that qualify perfectly, where's your stop, you gotta have an exit somewhere - you either stick to the plan or you don't). You want to have the same challenges as the algos, deal with psychogical influence in your calibration and preparations but not in the execution of your game plan. Both algo and discretionary traders have to develop and continually tune their systems, when you are doing that with live money you are taking on added risk and losses. Discretionary traders need to beware and use small size or demo accounts when trying to expand their opportunity set because even if you find a place to backtest it, the standard of software available to the retail community is not as robust. Say you're chart reading. Where do you go to backtest a chart pattern? That's tough, but crude info is out there. Getting a system with an edge is not that hard, but running it like an Iceman and watching yourself get shook out constantly in the beginning is.
You can only force yourself to persist with multiple trades IF you know you are a good trader. If that is the case, you have the confidence to know, that overall, you will come out on top.
However, in your case, you seem to have the fear of giving back what you made. That equates to lack of confidence in your trading ability. You have to decide weather this is due to you not being good enough to protect your gains or is your strategy not equipped to prevent your profits from being taken away.
You will have to decide this. However, if your gains are consistently positive, get rid of your P/L from you monitor and mind, and concentrate on the trade. It will work out just fine.
Good luck my friend
Most of what I trade today is automation but I still try to do discretionary trades. My discretionary trading has always been inconsistent in the past. The most significant barrier I have had and I still have is learning why I am really taking a discretionary trade. Too many discretionary trades for me over the years in hind sight have been spontaneous or impulsive. These trades were later rationalized away after the fact whether they made profits or losses. The reasons for these trades were easy to justify with excuses of what I did or didnÃ¢â¬â¢t do or I just blamed the markets.
So several years ago I changed and began to write down BEFORE a discretionary swing trade analysis of why I had to take a trade and what my expectations were. I also wrote in my log what I had to do during the trade to manage it. I could now do this since I had the time to write as a retiree.
Implementing this BEFORE method was pure hell. I used to love the spontaneity of trading. I found writing BEFORE a trade drove me nuts because I often talked myself out trades when the trade did not seem to exactly match my plan. Then from this I saw the mechanics of my set ups did not follow through the way I had written about. It was an eye opener.
So... I was forced to make changes to my plan with this BEFORE method. The rules got more complex or changed. With spontaneous trades I had just trailed the stop; but the BEFORE method revealed that I was not showing consistent results when I trailed the stop. SoÃ¢â¬Â¦I switched to fixed targets that changed the way I did trades. It was like being in a revolving door for awhile with changes to set ups and testing them. But a pattern emerged about what does and what does not work. It was Ã¢â¬Åthis is what I planned beforeÃ¢â¬Â and Ã¢â¬Åthis is what does and does not work after.Ã¢â¬Â
So in these last few years my discretionary swing trading has been mildly consistently profitable. Yes, I have had a lot of bumps along this in the road and have a long way to go.
But my conclusion as to why I am moving in the right direction is simple. I now believe that a big part of it is because the BEFORE method now makes me own my trades and forces me to see how I caused the problem; where prior to that the trade was just part of what happen in the market.
when I missed a setup, it seems to trigger me into doing impulsive trading. in one way, my subconcious is condemn myself to let a well thought trade go away, in another way, it seems to me"if I do not take my setup, I end up losing opportunity". so I found sometimes i still made those naive mistakes: broken my rules, did not follow proper trading procedure, jumped into a missed trade(for exaample, I plan to buy support, but it rallied off, obviously it already at the resistance, I jumped in without any thought) those kind of mistakes are very naive, in hindsight.
when I made a very naive mistake or broke my rules, it triggers me to do nothing. my subconcious may remind me "oh, do not make naive mistakes again", try to avoid naive mistakes. Do nothing of course creates "misss opportunity", just shit, go back to the first circle.
"do nothing" creates "do lot", "do lot" creates "do nothing".
sometimes I still traped myself into this cycle. i can see someday i did nothing, someday I did lots of trades. just like weight loss, I want weight loss, so I need diet, but at the mean time, after diet, I feel i want to eat more, so the binge. after the binge, i felt i did something wrong, need punish myself, so the diet, and this time diet harder, then next time binge even more. just holy shit
in trading, I still noticed myself to do discretionary trading too. in one time, I trade very small size, but it is a very good trade, so next time, i trade a very large size, but this time I am wrong; so back and forth...
For some reason I remember I saw this one not long ago: http://www.youtube.com/watch?v=k9QXY80OxS0&feature=related
Great advise in this thread.
Letting profits run, and overcoming fear of loss.
Every time I "improve" a system in this manner, I end up also hurting good trades, to the point where one wonders if the thing has become a Rube Goldberg machine.
It is nearly impossible to do correctly. What I have found is that if you have an edge, the best thing to do is instead of cutting trades taken by the simplest core of your system, is to just have a max loss where you turn off for the day.
This is the only thing that has been, over the long term, that sort of works.
Of course, the real best thing is to have many systems running at once that somehow are able to naturally counteract the weakness of all of them together.
Staying awake in front of the computer screens.
I found out that it's hard to make money I am falling asleep behind the wheel.
I had to un-learn most of what I picked up from Gurus. I actually traded my best during my first month, then went downhill. The natural edge I lost can be summed up in two words......
Soros is old and still bold.
So much for the no bold trader saying.
Very serious subject matters.
Profits have a magical ability to solve many problems including psychology.
Well, baseball and trading have a lot in common so I am not surprised that he mastered trading by mastering batting.
Buy a crystal ball on EBay and use it tell when there are trends and when there are no trends.
"What was the ***last*** thing you had to master before becoming profitable?"
AFAIK, Soros no longer trades. His family office does all the trading. Apparently it's pretty conservatively managed, no bold bets.
whose decision was it to buy spanish and italian bonds from mf global? it was seen as bold at the time.
Bold from the outsider's view, but maybe they knew ex-banker Draghi would "do whatever it takes."
how much did they buy?
edit: $2 billion
But they control, what $20 billion? So 10%? Not bad, but nothing like what Soros was doing in his swashbuckling days !
The hardest thing is not trading until you have an edge.
The second hardest thing is taking all signals, regardless of bad streaks, after you found an edge.
The third hardest thing is realizing before you give all profits back, that your edge no longer works.
The fourth one is finding a new one
really. bloomberg mentions soros a lot as if he is still trading.
i guess bloomberg is wrong. what a crappy news service.
i think i will get financial news from my local newspaper. better.
How would we actually know what a guy like Soros is doing? I believe he filed a Form 4 on Hrbal Life a few weeks back.
okay. what about carl icahn?
he is old right?
you seem a bit upset. paying too much for Bloomberg news ?
I had to learn this: don't buy when everybody buy and don't sell when everybody sell.. really hard to learn
What I had to learn was to be patient.
I am the kind of guy that normally needs to see quick results otherwise I either get bored or question myself and think that I did something wrong. So pursuing a way that was very rocky at the beginning but keeping going was a really hard task for me.
Now however, I see things much more relaxed and am confident in what I am doing.
BRILLIANT ! :eek:
Absoloutely. Soros may be bold as well just less public about it. Although if either one lost five billion today they would still be in great shape. Easier to be bold now compared to when they only had a few hundred million and were betting it all.
when I stop searching the holy grail.
when I start to realize the ideas I have are the grestest, the stargeties I use is the most useful.
I stop GNERALIZTION from my experience, when I know I can survive the game without need of polishing my skills.
I will not treat each trade individuallly. I treat trades collectively.
I will put this years' trades together or even next years trades (those I did not do) into my consideration.
not like a beginner chess player, aim toward killing locally, while not from the whole picture.
what I changed is my view/pholosopy of trading, on the surface,nothing changed. I still trade like before, but the results are totally different.
Common sense, this was the thing which was mostly needed for proper planning of the target. Stop having fantasy numbers on mind and be more reasonable enough while realizing the profits.
Learning how to lose small and gracefully with any emotion attached to the outcome.
Many good and interesting thoughts expressed yet the OP (and other newer traders) should understand that it is frequently not about the last thing or anything. Some of us had to learn the same damn lessons more than once and more than twice.
The earlier you can internalize what General George Patton said (at least in the movie!) the better off you are:
"I hate to retreat because I hate paying for the same damn real estate twice."
Once you learn "it", codify it and really make it yours. Don't pay for that RE (and we pay dearly for most every inch) and then revert back to your old habits. The right stuff is hard to find. Once you find a piece of it large or small hang on to it. You are solving a puzzle or, if you prefer, learning a language and you must not lose any pieces or forget any words or phrases.
My last piece was to remember to wait for very high quality trades and not execute the "almost". Quality in anything is scarce. If you are seeing a ton of trades there is a pretty fair chance that only a few will give you the hat trick.
For me the hat trick is:
1) A solid pedigree -- it originated in a place that you would expect a trade of its nature to come from;
2) it gives you a low or at least modest MAE;
3) it delivers a solid entry bar that shows you there is torque.
No matter how carefully you choose you are not going to get hat tricks all the time but you must expect a trade to deliver all three or you should pass. Setting the bar that high means that, in time, you can comfortably increase size. The ability to trade size based on consistency may not be heaven but it is not many blocks away.
Swan Noir, that's an outstanding post.
I cant agree enough, there are surprisingly few high quality trades offered. Developing the skill and mental patience to focus in on these situations and ignore the rest, makes a huge difference.
I find expanding the range of markets traded, helps expand frequency.
Clearly, adding markets gives you more frequency and, presumably, a better bottom line. I still have the capacity to confuse the "almost" and on some days the "less than almost" great trade with real quality. Increasingly, I compare what we do with a USDA inspector making the subtle (yet very real) distinctions between prime and choice. I miss the mark too often to introduce any additional complexity into my job.
I've focused exclusively on CL. I not only do not have any other charts on the screen, I don't have any in the software. I want to master CL; my premise is if I can recognize and execute those prime trades in CL without missing in too many that are choice and very few that are standard grade I'll in great shape.
The jury is still out.
You're not alone, in that I also miss the mark more than I'd like to.
It's very easy to get everything right apart from one component, which spoils the entire position.
Having said that, getting it wrong with meaningful money is the only way to truly learn, at least for me.
Paper trades and backtests have their place, but there's nothing quite like a slap around the chops for behavioural reinforcement. Especially when you were expecting a prize and a round of applause...
I don't know your trade frequency, but my initial layers of conditions to trade are based on weekly data.
The window for placing a trade is not open very often in any one market. So from my POV, expansion is a necessity.
But yes, it can add some confusion - especially when I get conflicting signals in related markets! It's a part of the puzzle I'm still working on..
I wish there was something half as effective as that slap but you are correct there isn't. We are wired to learn from the hot stove not the concept of it. Paper trading, as you say, has its place but can only take you so far.
I wake with virtually my entire net worth in dollars and by 14:30 I am once again back to cash. I do not carry any positions overnight or even past what I still consider RTH.
A hard thing to master is ignoring others, even great traders, and just listening to your plan reads.
listening is the easy part
Training you mind to act on them every single time is where 95% fail
Started doing things opposite to text book theory. Average down; take profits quick; over position size when I thought "this is it"; only buy when prices are cheap; only short when prices are high; don't use stops.
Forgot to add that I never control emotions. The controlled "master trader" oblivious to heavy losses is a lot of BS. When I take a heavy loss I decimate calculators and monitors. I have worked in a number of trading arcades and I have seen some of the best of them curse and swear to no end bashing their fists into the furniture in a rage.
you start out with one setup, and the hard part is sitting on hands for sometimes days ,without making a trade,til that setup presents itself,as you gain setups,there are more chances ,but the hard part is still sitting on hands,when you don't,you lose,so to stop losing,you have to realize how important that step is, especially now when the volatility rises and the moves are quicker
Your post really does scope and bound the conditions, circumstances and situations you have created for yourself to have to deal with. Everyone empathizes with your plight and viewpoint.
everyone should work thoroughl to define just where they are situated.
I. I know the system of the market. A system has a structure. I know the complete finite structure. The system conducts a process in the structure. I know the complete finite process. the process in the structure delivers the offer of the market as the market's operating results. I take the full offer of the market.
The standard of performance is to compare the full offer of the market to your "take". This is a multiple of the ATR.
2. My Alma Mater uses the motto "Knowledge and Thoroughness". As a scientist and engineer, I follow this admonition. I work in a routine that is a SOP. I work in parallel with the market in a timely manner. By annotating and logging, I always "know that I know". My performance is at 100% and in synch with the the market. Thus I take the full offer of the market. Your 19 items do not come up for me as I trade trend segments.
3. Building the bridge to Mastery. I studied "Knowledge and Thoroughness" to be able to percieve how to build the complete system. The trend concept was examined completely. Monitoring and analysis was a requirement.
The discovery of the events in a trend led me, directly, to discover that the events follow an order. As an engineer and scientist, it was easy to create a mechanism for knowing how to know the details of all of the n-1 and n events pairs.
Trends flow. Trends build themsleves event after event. By examining a flow of events it is possible to work back from the end of a tend to its beginning. by completing this deduction it is possible to "know I know" in real time as a trends build in real time.
Mastery comes from one engineering task. the task is doing work. Work is an engineering term that involves expending energy to accomplish a task.
My task was to build a complete spectrum of knowldege for the operation of the market system. This process, at first, is a manual process. At some point, it becomes an automatic process.
I notice no one who poasted in this thread has gotten to the automated part. since there is no experience, of this, then it may not be possible to understand either.
at some point the spectrum is framed and most of its components are consciously there. For you, you just have a formal list of 19 gaps in the spectrum. you also couch them as negative contexts. the mind does not store negatives it turns out.
I the expresssion: "don't fall down on the ice", the mind has only one picture. yes you can view it eeach time you read the quotes. you cannot change the picture stored in your mind.
I use a spectrum that is storable in the mind. I work in terms of space, shapes and shape movement. These are the three most powerful ingredients of the perception that comes from merging sensing and inference.
So building the manual part of the spectrum of the system of operation of market come first. As one sleeps, the unconscious and conscious are merged in this spectrum. when a goodly postrion is done, then the mind, at night while you sleep, begins to focus on the welding together of the weakest parts.
The mind then gives you a conscious wakeup call, daily, after this tipping point is reached. this call from the mind directs your interests to the answers to the question the mind is raising in a seemingly spontaneous manner.
Examine this from your history in another field. If you have had the experience, look particularly at the events of time with a noobie very naive partner in the world of relationships. Getting new ideas is this mind automation concept. A spectrum of ideas became long term organized memory. To fill in the gaps, is an automation mind job.
you post your status. You reveal the gaps that your mind is NOT taking care of. Why does not your mind work while you sleep to fill the gaps. It is trying its utmost. You may see spuratic progress occassionally. BUT .....
I feel most people can ID with you much more easily than they can ID with me. The spectrum of traders has a central mode where you post you are at. So your type uses stats to see if you are getting better or worse. You do not perform as yet as you say.
To become a master it is very important to avoid the 19 pitfalls you HAVE. this avoidance comes by working in a systemic context. Is there any possiblity that you can formalize item 1. under the true topic of the system of the market's operation? speaking statisitcally, probably not. Too bad.
jack, your post is off topic so i shall follow suit.
jack, you never went to college but pretend you did. you have read a ton of books. you posses a lot of knowledge. you were raised in a small town. you live in a small town. you have an inferiority complex. no offense intended. your posts beg such a response.
Limiting my losses, sticking to my stops.
I try to control my emotions during the trades because I know emotions are not good for trading and I can loose all my money if i can not control my emotions.
Stop listening to other people.
For me a master trader is someone who has learned to be completely detached from the outcome of each trade.
This is indeed the most difficult thing to do, that's why trading is such a difficult (but highly rewarding) business.
when I become a risk taker. I am not afraid of loss, neither afraid of missing opportunity.
I feel the market is at my finger tip, totally under my control. not feel like I was at the mercy of the market. when it goes against me, I still can thinks positively and sleep tight, since I know market does what it does, let it be.
I start to not glue my eye on each tich, quote, chart,...
whenether I do some nasty things, most will think, such as averaging down, no stop loss, all in no position size,... I just can do it. the market is actually the safest place in earth.
like really in the zone,feel great!
Not holding a loser and waiting for the game to come to you were the two hardest psychological barriers I've had to overcome in my trading journey spanning 5 years.
Still working on this, its hard time to keep the emotions under control when we are trading in the forex market.
perfectly executing my system without fail. Took me 1.5 years before I developed systems and processes to execute my system in markets without fail.
taking losses. controlling risk. stopped day trading and got a full time job. stopped chasing the silver bullet; there is no such thing.
trading can humble one quickly. psychologically as soon as you think you got it figured out and you have that feeling of euphoria, take a step back and reassess cause you are probably breaking some rules if you have any. be as systematic as possible, whatever it takes to get you to that point.
The one I could never master and thus don't trade anymore, full time. Emotional detachment from money.
I +1 your +1
You need an edge...pure and simple
not quite. you have to be able to hit the button.
If you can't hit the button then you do not have an edge...that's your natural defense mechanism preventing you from doing further damage to your account...usually one's fear of taking a trade is warranted because you don't have an edge and it would be wise to listen to it
that psychology mumbo jumbo is just that...crap....anyone that has ever had a good edge that just grinds out profits day after day don't encounter fear-based issues and know what I'm talking about..to the contrary you're itching to take the next trade
if you're always a nervous nellie before taking a trade then you need to re-examine your edge
You may have the edge and still have 15 losses in a row. Not "easy" to put the next trade on.
In my case itÂ´s the unbelievable, frustrating, staggering and deeply depressive ability to miss my exit prices for one tick in futures markets, a fifth of a decimal in Spot FX or a price unit in equity markets.
That lead to a so-called frustration-agression behavior throughout my trading career in which I destroyed countless laptops, computers, screens and mouses.
And before some smart a$$ comes up with the comment: why did you not change your exit prices and added a "buffer".
Result: I missed the buffer prices for a tick, too.
To be clear here: I am not talking about missing a couple of hundred bucks in profits. No, I missed millions in profits.
For quite some time, I thought itÂ´s all about a curse!
Maybe one day, I will write a book about my experiences. I think it will be a hell of a read.
Good luck to all "tick missers". You have my absolute sympathy!
I wouldn't consider a system that can have 15 losses in a row to be a good edge....with good being the operative word...It may make money but it's not a good edge. 99% of the people can't trade a a system like that...myself included
High-probability systems that grind profits most days don't have such long losing streaks unless they're taking hundreds of trades per day
Ya, but high probability systems can have one or two large losses that crush your profitability. The fear may not come in the form of taking a trade but instead a loss. Some of the best traders I know are the most nervous. If you don't have some fear of the market than you are going to get hit hard sometime in your life. You should always be afraid and humble to a degree.
It's called money management. Specifically you should be using dynamic position sizing: decrease size during losing streaks, increase size during winning streaks.
I believe acrary has covered this subject. Do a search.
We're talking psychology here, not money management.
The OP is open-ended. It didn't say to limit the responses to only psychological aspects.
Perhaps this thread should be relocated to the Trading forum. It wouldn't be the first thread to start off in the wrong forum.
using momentum as a guide, the more momentum in a move(large players in a panic, not enough paper for them all to profit,sometimes opposing large players) the higher chance of it blowing thru your target or turning before it, the slower a move,(large players in sinc and plenty of liquidity,retail patsy's) the better chance of an orderly touch of your target,in either case you have your closing order in before target,the slow move a few ticks, the fast move a few points
For one of my edges, I backtested the MM scheme you mention and it had bad resultz. It was better to increase size during drawdown or just keep it the same.
-not a Guru
All the math (e.g., the Kelly formulae) says to do it the way I posted.
And this guy apparently agrees:
False assumptions = GIGO, no matter how good the math
MM when proving out a new edge != MM with an established edge
fear of losing it all
I don't know what acrary has said but I do know there's hundreds of different ways to use position size management.
I've been using "dynamic" (different) position size for different types of price action scenarios very effectively for the past +15 years. The word "dynamic" to me implies I don't use the "exact same size" every trading day or every trade as if the markets (price action) never changes.
Markets are always changing and one size fits all via using the same position size is poor money management. I say money management because position size management is a sub-category under money management.
Therefore, when I mastered position size management...its probably the last big thing I had to master or its a tie between it and mastering stress (stress management) while trading and letting go of that stress when the trading day has completed. Simply, leave the stress at the office to prevent it from sabotaging the personal life.
one size does not fit all
trading is an art, not science.
people are mislead byindicators, TA,... they think in trading there is some science there.
they back tested, try to assign a probablity about an setup/event, if that setup's probability is greater than 50%, then they think they get an edge.
I was mislead by that too. since mybackground is artificial intelligence and software engineering.
this training hurt my trading, make me treat trading like science.
when I realized trading is an art, not science. I start to do trading very practically, or justfollow common sense. for example, buy low and sell high. treat each trade individually, my aim is win almost each time, not try to win statistically through a system.
of course, it is difficult to define what is low and high, all based on gut feeling.in another word, scientific way to describe high and low.
so I become a discretionary trader, all follow my gut feeling. I do not back test, I do not generalize, I get rid of the habit of writing journals.
view trading as an exploring activity, when I feel something worth trading, I do it. I do not view trading as a regular career type activity.
I raed through martin schwartz/jessie livermore's stuff many times. but I follow Martin's more, I donot think Jessise livemore's is good, he always make conclusions (that is not good).
BE PRACTICAL BE PRACTICAL is very critical, the only thingh matters to me is make money nomatter what strategy I use.
I donotcare about position size/trade management/setup/ideas, I am very practical, myonly aim is make money.
people come to trading often forget their goal:
to make money
not try to optimize a strategy
not try to develop a system
not try to find ways to control their emotions
not try to design rules which a trader can not follow
not try to write journals
if an idea/gutfeel works, apply it
proud of myself being a practical successful trader
I am still in the proces of searching a true intraday method suited to my personality ... some people might be interested in the thought process though: http://localsfoolsgold.blogspot.be/2013/11/weekend-update-in-search-of-personal.html
Buy some collocation. That will do it.
Knowing that all the strategies out there that you can have access to is fake.
I would say all strategies have periods when they work, and knowing that they have stopped working is a very hard thing to understand.
I was helping a friend who had sold a system to a lot of people and it lost for 10 consecutive days- too much for most people and I think it was abandoned-but it had worked for quite a while.
If a system worked all the time even giving a 51% edge it would be algo traded
Lot of the descriptions I have read I find to be quite basic, more like requirements to be a trader. In my case it was definitely upsizing.
If a strategy works in the summer but fails in the winter, it's probably worthless.
If someone wants to sell his strategies, they're probably worthless.
And all alongâ¦. I thought they taught how to add in grade school
Just funnin ya..., none of this basic - until....
to answer the question from OP, I'd say it was my emotion management. I didn't master them, I mastered my management of me & them & trading. ....great question for a thread, seriously, it looks long, I plan to go thru all of it.
Managing me.. by managing the risk appropriately and not taking trades because im bored impatient and risking to much because I have an opinion. It really became about managing me more than anything.
A lot of people drum it into you to cut your losses, which is a good thing, right? But If you’ve assessed a trade and calculated position size, stop, target and time do you really want to 2nd guess all that and cut it when it moves against you by less than your painstakingly calculated stop? And the inevitable ‘move to breakeven’. Why? Breakeven is rarely in my experience a valid stop level, so why put your stop there? Once your position is in profit and moving in your direction you recalculate your stop based on the same basis you did prior to initial entry. The number of times I cut a losing position while losses were small and that was a good move has been completely outnumbered by the number of times had I simply left my initial stop in place until the trade had developed into profit I would have been taking profits, not losses. I got this a long time ago, but it has stayed with my ever since as the turning point in my profitability.
Be greedy and pyramid aggressively.
... to make only one trade per day. Have the orders (open and stop close) put in, and not look back until the end of the session.
Or put differently: not modify any previously made decisions during the session.
Amen brother. Quite well done and spot on.
Same here. Took me a while to realize it. It's death by a thousand cuts. No risk, no reward.
Or they want $200,000 every time they make a million for you the day you make it.
Really depends on the risk threshold, some plp has more some has less.
I had to bump this Hall of Fame thread to put in my 2 cents.
The last thing that had to fall in place for me to becoming consistently profitable was: giving up attachment to outcome. Having no mental anguish over a loss knowing that it is one itty bitty trade only. When you can do this, you're trading will improve granted that you have an edge and you understand risk management.
I came to be shocked by how easy edges are to find. And how hard emotions are to master.
What this thread really needs is Handle123.
He's got the holy grail. Really, it's backtested so you know it's good. It's so good that he can afford a dozen traders to act as automatics to trade this automated system (so logic). And the job has perks... like free homes (after one year), attorneys on retainer, months off, paid vacations (to the Carib), all kids get free uni, birthday parties, XMAS presents for all the kids... did I mention limos? The only downside is the homes are filled with cams. Yeah, that and the 10Y contract. Dude makes Hershey appear sane.
Regime switching and properly determining when NOT to trade. I now generate annualized return in excess of 80% with Sharpe ratio of 2.0.
Have just started pyramiding my winning trades and I realized that I probably would
have done much, much better trading wise if I just piled on the winning trades? Losers
will still be there but, I have not been doing any pyramiding before and I now see how
pyramiding can dramatically improve my trading by leaps and bounds! Oh well, now I
Stopped looking for anything better than the obvious stuff (obvious from already gained experience). And got patience to wait for that only.
forgot to mention that he is battling some 20 yr disease ,guy is for real,they are out there,yourself an enigma on this looney tunes blog
You can't honestly read that post of his that I linked and believe a word of it. I sympathize with his health issues, but it has nothing to do with trading.
The trick was always to take it day by day, that's it.
You are so right ammo, I am looney, you get to an age where you just don't give a shit what people believe or not. I can finally say I like the man I have become by being the man I always wanted to be.
I have had a long life of being in hospitals, most of my closiest friends are doctors. I am a training hospitals' dream. Klinefelter syndrome, an extra copy of the X chromosome, so when folks say I have no balls, pretty much right, LOL. I have Sarcoidosis disease, https://www.nhlbi.nih.gov/health/health-topics/topics/sarc/
very fun, am to prone for cancer as runs heavy in my family, all the males on fathers' side are nut jobs including me, we seem to enjoy taking much risk in life and doing unusually activities. Fibromyalgeria syndrome, always sleepy, but it s a good excuse when I want to get away from some boring ass chatting bout his wife. I grew up in Chicago, Go Cubs, written on gravestone will be "Always Next Year" LOL. Jefferson Park, ahhh, days of penny candy and watching the big softball games and play without a mitt, damn that ball is hard right out of the box.
Three months from now I am relocating, I tried my hand at building a kit house, but thinking my skills a bit not so good, instructions said a six year old could do it, I included a picture, you all welcome to come over tell me what you think. So my new address is going to be the world. I am packing it in and just going to explore the world. Want to go to Singapore and meet up with Jim Rogers, I like his style of trading.
"What was the ***last*** thing you had to master before becoming profitable? "
You spend a lifetime to make methods and money management rules where you work at making "something" on each trade overall. Might not be much, but if you not losing, account has to go some direction up. The secret to trading well is after you have a well backtested method, you have to go the other way and become dumb. I am one of the dumbiest sons of bitches around, I do what the rules are and don't think, thinking loses money when doing a system of rules.
But most rather trade and lose money instead of working their asses off. They spend more time planning a vacation then learning to compete against the best, and I might add prettiest, not me but am sure drownpruf might be? grin
Here we go, something to break up the day.
You don't know Jack Schitt.
Who is Jack Schitt?
For some time many of us have wondered just who is Jack Schitt? We find ourselves at a loss when someone says, "You don't know Jack Schitt!" Well, thanks to my genealogy efforts, you can now respond in an intellectual way.
Jack Schitt is the only son of Awe Schitt.
Awe Schitt, the fertilizer magnate, married Miss O. Needeep They had one son, Jack.
In turn, Jack Schitt married Noe Schitt. The deeply religious couple produced six children: Holie Schitt, Giva Schitt, Fulla Schitt, Bull Schitt, and the twins Deap Schitt and Dip Schitt.
Against her parents' objections, Deap Schitt married her cousin Dumb Schitt, a high school dropout. After being married 15 years, Jack and Noe Schitt divorced.
Noe Schitt later married Ted Sherlock, and, because her kids were living with them, she wanted to keep her previous name. She was then known as Noe Schitt Sherlock.
Meanwhile, Dip Schitt married Loda Schitt, and they produced a son with a rather nervous disposition named Chick N. Schitt.
Two of the other six children, Fulla Schitt and Giva Schitt, were inseparable throughout childhood and subsequently married the Happens brothers in a dual ceremony.
The wedding announcement in the newspaper announced the Schitt-Happens nuptials.
The Schitt-Happens children were Dawg, Byrd, and Hoarse. Bull Schitt, the prodigal son, left home to tour the world. He recently returned from Italy with his new Italian bride, Pisa Schitt.
Now when someone says, "You don't know Jack Schitt," you can correct them.
I took some genetics in grad school. During the course we discussed Klinefelter's (Syndrome) at length. Up until the mid-70s there were no documented cases of men (with the syndrome) fathering children. AFAIK there still aren't any. You have kids (plural), correct?
There is no "last" thing. It's not like you do this one thing, the light switches on and it stays on forever. Far from it.
Thanks for the laugh, Handle.
Did you forget the nephew Buncha Schitt
being ok with the loss i just made, i always tried to cover it with the next trade even it was out of my strategy. That's why i'm coding to get my emotions out of the trading and leave it to intelligent robot
Definitely the fear of pulling the trigger, not surprised to see it's common.
As the OP said, there's no last thing you mastered. But you eventually learn from your mistakes and CHANGE for the better. And over time, you will make less and less of your dumb mistakes. Then you'll get steady profits though the big losses can always happen if you are not vigilant.
For the longest thing I was constantly countertrend trading. Not that counter trend does not work. It does work, but you gotta know when to countertrend and when to trade with the trend. That's the billion dollar question
But in some cases, it's obvious it's in a big trend. Today with ZW (wheat futures) it was moving so fast and downward.
For years and years, I was AFRAID of BIG POWERFUL TREND (either up or down). I was afraid of entering those kinds of trends. I like the steady up or steady downward trends better. I'm still somewhat afraid of the big trends too. But my secret to that fear is ENTERING in the big trend EARLY when it's not as violent in its movement! Like today I enter it just when it was about to move. And once it did its violent moves I just sat back and wait and enjoy the ride.
So as Brett Steenbarger, the trading psychologist suggested, to get rid of your bad habits you gotta find something good to replace it. You gotta accommodate yourself.
Earlier on in my trading days, I would constantly lose BIG TIME in these big trend days. I would always countetrend. Not even waiting for a bounce to get in. And worst yet, I would ADD to loser thinking it would go up. I've blown a few accounts that way in the beginning(small accounts). But of course, it would just go lower and lower and creating HUGE losses that would wipe out my meager gains during those early days. The same goes up POWERFUL uptrends. I would SHORT it and get RUN over by the herds!
But today, I saw the pattern and in my head and RECOGNIZED it to be one of the patterns that I used to get killed in. So, I went with the trend and SHORTED at almost the perfect spot. Good entry. check!
Then more importantly, I HELD ONTO my short position and rode it all the way down! That was the most cathartic experience. The pain of all those early days of ignorance, stupidity, poor risk management, etc. went away. I conquered one of my worst trading habits.
I FELT FREE! The money wasn't that much. But the feeling of conquering one of your worst trading habits was a feeling of elation.
But there's always MORE bad habits to change. So, good entry check. Holding onto winners. Check!
Exit. That's always hard. So, I know from spending thousands of hours of screentime during the early part of my losing trading career(not career since I no longer trade fulltime. But today I was on PTO and decided to get in a few hours of trading. hehe.) that it will go even lower from the DAILY chart.
But intraday, my daytrader instincts tell me to get out near "bottom" since there might be a small reversal or bounce coming up. But I said the daily chart looks so good.
So, I held on. It came back a little. Then continue to go down. Then started to really come back. That's when the tension between my intraday minute reading chart and my daily chart reading fighting against each other.
I had 10 POINTS on the ZW. I let it come back to 5pts and got out. Still a very good trade of 5 points.
But of course, after i exit it resumed it downtrend trend as my DAILY chart reading would say. ACK!!! Went down another 8 pts after I exit at the reversal.
So, that's the next area I need to work on: Protect open profits especially if I'm daytrading. When you are at your maximum gain intraday, then get out!
At the earliest sign of trend reversal get out even if the DAILY CHART is good and downward trend. Because I can't stand the heat when it reversed and I get out at a bad price even though I "know" it might resumed its downward trend but I want to bank something.
So, here are some ideas I need to work on getting better at my exits:
1) either believe your daily chart and hold on longer.
2) Learn to be more deft. Get out on the 1min chart. And RE-SHORT when it comes back up and start rolling down again.
3) Ultimate Goal: Cover at intraday lows (or highs when longs) and GO LONG again and then RESHORT. Aww.. Holy Grail. The reason I don't want to go re-long because years of failing at countertrending trying to catch a falling knife have led me to create rules against counter trend to protect myself. I still countertrend when the pattern is very sure.
I'm happy regardless. Overcoming one's bad trading habits is an amazing feeling.
I'm still working on my trading. I give myself 5-10yrs to get to a point where I would say I have succeed in this area. The reason I give myself such a long time is because I work fulltime in another profession. But everyday that I'm making progress is a good day. I'm not even concerned about how much I'm making from my small account trading. I want to get my trading habits to be consistent and correct.
I want to work out all the kinks in my trading. Then I can scale! Once you are consistent and know how to stay out of trouble and do the right things, the money will come easily.
Good luck my fellow traders!
It's a long journey but it's doable and achievable!
The other thing you have to master(actually probably the very 1st thing you should master) is CUT YOUR LOSSES!!!
Yesterday, I had a small backslide into countertrend trade. But I cut my losses fast so it was not much damages. But then I short at the lows and got whipsawed.
Another thing to master. Patience. Find the sweet spot to enter. For that to happen you gotta be patient.
"It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market." - Reminiscences of a Stock Operatr
He was talking about trend trading and holding onto your winners. Even when you are scalping you gotta be patient to get good entry and exit prices.
Whoever says entry is NOT important is pretty sloppy. Yes, I know exits are totally important and determine how much you lose(cut your losses or let them become big) and how much you make (let your winners run).
But in many market conditions, a good entry can be a life saver because with a good entry you don't have to sit through so much noise and heat. A lot of people can't sit through all that heat and get out at bad prices. Including myself
Both entries and exits are important.
What did I have to master?
The cause of all my problems before turning profitable? Was me.
Trading is a career that is full of seeming contradictions.
It's a great life. Freedom. Money.
But the emotional and psychological demands it can place on you can be very extreme for some folks. I honestly believe it's why you see so many people crash and burn, or become walking wrecks. At a certain point, and I see this all the time, a new person sometimes sits back and thinks: WHICH IS IT?
Their first introduction to the seeming contradiction is: Well, if it's a loss, cut it, and cut it quick. But naturally, you have to be willing to sit through some amount of drawdown.
Which progresses to ...
Well, if it's a winner, let it ride. But you can also take profits.
Which devolves to ...
Be humble and willing to learn ... but believe that you can do what other people literally commit suicide trying to learn and do. Believe that you are literally better than everyone else attempting this
Be consistent and don't drift ... but always be adaptable and seeking to improve
It's fascinating that so many in our species is even capable of doing this really.
But learning the nuances between those seeming contradictions? That's when I learned that the problem I was having in resolving such issues?
One big point that deserves more discussion is that once a trader has "become" profitable - staying profitable is not guaranteed by any means. The only certainty about markets is that they are in a constant state of change, and that most traders are frustrated and downright pissed off about that truth. "The good 'ole days" never last.
Staying profitable or at least preserving your capital until your trading system becomes viable again or better yet you have tweaked your system accordingly is an even better question to ask.
As mentioned in previous posts, from what I have seen the biggest challenge is to avoid sabotaging your own trading system and rules. Every good trader I have ever seen or taught has exceptional patience, discipline, and the ability to call bullshit on himself. Brutal powers of honest and critical introspection.
That's so well said I want to frame it.
Myself, I keep freakishly miticulous records. That in essence, becomes my trading log. Spreadsheets I go through each Friday evening, and I compile my numbers. Teaching helps improve me as well. The numbers, become my guide and I always credit reviewing and knowing those numbers, as to why my performance is as good as it is.
But a professional currency trader I know out in NY loves to stress it as the importance of a trading log. He always says his best friend in the world is his trading log. How you feel, and how you think about any trade, before you make it, then being able to review your log later, and do exactly what you said ...
Call yourself out when you need called out
What was the ***last*** thing you had to master before becoming profitable?
Inner demons. The learning curve is steep, but not unmanageable. But then you get into the psyche. So many years... I'm not sure I would do it again, quite honestly.
Actually, I am now really enjoying trading even more.
The "technical" side now looked like a picnic compared to the psychology/"spirituality".
But the psychology just makes me realise how much I can do that I never realised.
I look at in the same way. The earlier comment on "inner demons" was a good one, because trading will reveal them, and right quick. And we all have them.
But honestly ... I'm appreciative for what trading has done for me as a person. Trading profitably, means for me, that in many ways I have improved as a person.
I'm enjoying it as well. Mainly because I've grown up and accepted who i am. I am able to allow success to happen rather than constantly fighting with myself and trying to make every trade profitable. Now I'm able to let profit targets get hit, and let small gains turn into a stopped out trade without it really bothering me.
I think i was trying to be a rock star and trying to impress others way too much while trying to make up for past mistakes. Really quite childish, actually. Now i can just be me and go with the flow with a couple of strategies which fit my personality, while accepting the random distribution of wins and losses.
I guess i would do it again. Mainly because of how much I've learned about my self. But god, what a long long road. And I'm still on it. It just keeps getting a little straighter and a little less rough year after year.
This is really a good trading outcome.
I have to say that in trading, everything comes out.
the "what a long road" is not finished yet
I think, for many, there is no such "the last thing" to master before becoming a profitable trader because most failed traders were already wrong in the first place such as putting their expectations too high. anyway still enjoyed this thread discussion by ignoring the word "last".
Yoda was the last thing I had to master. I was not one of those traders who has trouble getting out of a trade--I had trouble getting in. Learning to plan the trade was important. But learning to trade the plan was crucial. I put Yoda up on my screen saver and on a refrigerator magnet:
DO, OR DO NOT. THERE IS NO 'TRY.'
IOW, trade what you said you were going to trade--what you know will work--whether you feel good about it or not. So often the trades that seem scariest (but fulfill my criteria) work out the best.
A good system, minimize the risk.
I'm sure I've posted on this thread before. Whatever I said, I was wrong. The last thing I learned before becoming successful did not happen a year ago when I likely posted whatever I thought it was... The last thing I learned before becoming successful was a positive explanatory style and it has been changing ALL areas of my life including trading, my job, marriage, hobbies, new careers, business ventures, friendships, and more.
I'll say it again..."A positive explanatory style." It's seriously the holy grail of psychology for trading and I found it in a book that has nothing to do with trading called "Learned Optimism" by Martin Seligman Ph.D. If you really knew how much the skill of learned optimism could change your whole life, it would be the only skill you try to learn for the next 3 months. Allow me to summarize...
Basically, how you explain good and bad events to yourself determines your actions. Certain actions are not possible when preceded by negative explanations of bad events. For example, a swing trader place a trade expecting to be in for two or three days. 10 minutes later he's out. It' lost. Twenty minutes later, he place another trade attempting to catch the same move and it loses. Half an hour later, he place another trade, once again, trying to catch the same move.
I feel most traders would not have even taken the second trade attempt, let alone the third, due to a negative internal explanation of what happened during the first one and what that means about themselves and their chances of being successful long term. But I became able to do that by first learning how to explain bad and good events to myself in a way that energizes my positive actions and limits fear and hesitation. Number 1 complaint among failing traders "can't follow my system." Right? So it makes sense that this would be the last skill I would learn before becoming successful.
Anyway, I would strongly endorse that book because of that one skill I learned that empowered me to execute my system with joy regardless of the outcome instead of dread and fear which grow with a bad outcome.
In fact it is quire relative term - last thing before becoming profitable. There is no true traders who get salary from forex, profits there wavers substancially. When you explore something new that put you on some dependable level of return you believe it is a new start, but after immediate losses you understand that your search for the "last thing" need to be started from a scratch.
Being scared to make the trade. What's really sad is that this was after I'd developed a system with a high win rate. I'd call the direction of a market but would be fearful of placing the trade, then surely enough, the market would move in my favor....and there I was left telling silly ass stories about how right I was without having any profit to show for it. This stems from my early trading days when I used to jump into positions haphazardly and would win small then end up losing big. That feeling still lingers to this day and it wasn't until I learned to trade in spite of that feeling that I began to make money.
"...I learned to trade in spite of that feeling that I began to make money."
If possible, can you please elaborate on how you were able to do this? I'm going through the same thing - call trades in r/t, but fearful of taking them.
Thanks in advance!
spending less time on chat boards
i stay in a trade till PROVEN wrong. that proof is different for each individual.
I can also add this to my list as well.
I still haven't fully mastered this because it still hits me from time to time, but I got through it by recalling all of the times I'd been right and missed out. After that, it was simply a matter of putting on the trade and walking away. I may not check on my position for another 24 hours.
I must have come to the right place as I'm dealing with this same situation.
I use to sit there for weeks and not put a trade on in fear of being wrong or loss just to watch it go in the direction I would have gone and sometime would have gone far enough to reach my weekly quota in one session.
I have found that being in action has started to cure or at least decrease the level of fear before entering a trade.
The biggest thing that I have had to overcome was not being so hard on myself, to treat myself like a friend instead of abusing myself mentally.
last thing, huh !!
I will tell you soon, hopefully.
Have to see first whether I am successful.
My massive all-in china position is now positive, but sh*t happens.
Still has to run a while to get out at target.
Will post then as a rich man.
that + rule of 72, meaning work 6 days a week @12 hours a day=72
Wisdom is profitable to direct
I thought I would share a current challenge I am facing which I need to work on. I don't think it is the last thing I will have to master as I don't view my trading like that, I don't think it can be 'solved' so to speak. There will always be things that need improvement or working on even when I am a 70 year old man placing a trade (quite a few decades away lol).
So my current challenge is a variation on a theme of not 'sticking to my plan'. Rather than not sticking to my plan through frustration of it not working or boredom (which have happened in the past!) this time I have not stuck to my plan due to over-confidence and feelings of invincibility. For some time now I have had a daily target of 10 ticks and daily stop loss of 15 ticks. During July I traded very well sticking to my plan religiously but what I found was the overconfidence/ego thing started to creep into my psyche. With hindsight I can look back now and realise it was happening slowly every day incrementally. I had a long streak of winning days, I am not going to say how many but it was long. Part of my plan was to shut down my trading platform once my daily target was done, the reason for this is I like to preserve mental energy for another day. Sometimes it takes me 30 mins to hit my daily target other times 4 hours. On Wednesday of this week I decided to continue trading past my +10 ticks daily target. My mindset at the time was, 'I have only been trading 90 minutes' I am leaving so many ticks on the table here, I will just take prime set ups and push for more ticks'. This was going off plan. I went on to make +20 ticks for the day, twice my daily target. Driving home I felt invincible, I started to think about sizing up next week and what I would spend the extra money on. With hindsight I can now see how this was a marker for what was to come.
Thursday - I was very tired, I had to be up at 5.30am to get the car to the garage, plus I had a minor argument with the wife the night before. So with hindsight my decision making abilities were not 100% even though I thought they were fine.
My first trade showed me a good profit of +6 ticks however for some reason I hesitated, I didn't take it and scratched it. Second trade at one point showed me +6 ticks, again I didn't take and ended up taking a -3 (!wtf!). At this point I am looking back in my journal and thinking, what the hell is going on I could have taken +5 on both these trades and have completed my daily target, platform shut down. But no. 3rd trade - great entry and I took a -4 loser, nothing wrong with this trade, just didn't pan out and I took the loser according to plan.
This is where in hindsight I got really pi55ed off with myself, I was riled and my decision making ability was impaired. i was -7 ticks on the day when I could have had my daily target complete. 4th trade was a good entry but I managed it badly and took a -5. I am now at -12 ticks for the day and pi55ed. With hindsight I should have shut down and ended there booking a -12 tick on the day. Coming off the back of a long streak of +10 tick days and a +20 tick day the day before a -12 tick day is fine in the grand scheme of things.
Then came trade number 5. I know I wasn't thinking straight as I cant even remember why I entered, my journal just says, 'poor entry', 'badly managed'. I ended up taking a -21 tick loser. wtf. wth. I finished the day on -33 ticks in absolute disgust. I had just wiped the majority of this weeks gains out.my daily stop loss of 15 ticks went out the window, why did I ignore this? ignore 15 why ignore 20 ticks. A 20 tick loss on the day would have been bad but not a disaster but -33 ticks wtf.
Friday - didn't trade as I had other commitments. Probably a good thing I took a little break given Thursday's performance.
Looking back the warning signs were there for me. Anyway this is my new challenge, how not to repeat this. lolol.
Profitable but still mastering things to improve the amount of profitable so will likely never stop mastering this biach!!
so far in right direction.
target not reached.
Elsewhere on the web...
Here I am at 1.00am Aussie east coast time trading the SP500,SP200 and FTSE100 Indexes and Options, I find indexes to be my low hanging fruit, if there is one thing that I have learnt it is that you are only as successful as your last trade. There is no final hurdle to profitability. Over the years I have encountered virtually every challenge posted on this forum. One key hurdle that dealt with most of these challenges was learning to accurately determine market strength/weakness, all I had to do was learn to understand market action/behaviour, this is where my confidence to do what needs to be done when it needs to be done comes from, I'm not talking about charting here, that is trying to predict which is futile. All I try to do is be part of the current moment, if the market is strong I buy, if the market is weak I sell, I only ever trade at the market. There is not one professional trader I know, myself included that can know if the next tick is a continuation of the trend or the first one of a reversal, trying to forecast the future is a fools errand, leave it up to the Gypsies with their crystal balls, your job is to trade what you see in front of you. Forget price levels, forget charts and indicators, it's all trying to predict the future. Because it is so hard to get a good price when right about the market I am overjoyed to get my trades on, the harder it is the better, don't be scared to pay more, if it is too easy/cheap then you have probably got it wrong in the short term at least. I never deliberately put a trade on when I think that I am wrong. Stop losses are just one more attempt to force your will on to the market, mr market couldn't give a stuff about your stops, your orders your positions, price levels or anything else for that matter. he does whatever he wants to do, you are wasting your time and money trying to influence him. The market must be your stop, when it no longer behaves the way it should for you to hold your position then and only then should you get out. Yes, I cop drawdowns, that is just part of trading, just as losses are no matter how well you are trading. Just make sure that you are not overtrading when the inevitable drawdowns and losses arrive, as they surely will, this I guarentee. You will continue to make mistakes as long as you trade, welcome to the real world, there is no way to protect yourself, just try to not repeat them too many times.lol Trust what I say," I make mistakes all the time yet continue to make consistent money in spite of this, nobody is so profficient that they can avoid this trading reality, so don't stress about it". I hope this helps.
every trade is a prediction, really.
The last trade that lost.., and the next one.., and the next one.., and the next one.., and the next one..., and even one after that
blocking et's ip address?
Hi Redneck, long time no see (5yrs), how have the trading gods been treating you.
Could Johno1 be the long lost 14th cousin of the Johno?????
Be still my astonished eyes
So long as I humbly bow before them
Never attempt to travel amongst…, rather (closely) behind - them
Dutifully pay the paltry pittance they demand.., immediately upon demand
They pretty much leave me to my work…, even generously reward my obedience
Welcome my long absent friend!!!!!!
How’s life – good I trust
You still doin what you do??
I’ve very much missed your thinking
Btw I must confess..., I’m guilty.., many times…, of plagiarizing you (always with utmost respect though)
Even have your words displayed prominently above my platform
Yes Red, I must confess, tis I. lol It's good to catch up with you again as well. It's so long since I last posted that I couldn't remember my password hence the new handle. Still working the ebb and flow of the markets, so far so good.lol Good to see you realize that flattery will get you everywhere.lol
One tactic I use for entries is to take on my position incrementally. Say 1/3 initinally so that I at least have some skin in the game. Then if the market goes my way I continue to load up, if on the other hand I'm looking at a drawdown I look for an opportunity to add a second 1/3 as close as I can to where I expect the extreme for the drawdown is "likely" to be (nobody knows with any certainty where this will be). If the drawdown continues to increase after this but the nature of the market remains the same I may or may not add the last 1/3 at my discreation, I may wait until the market is moving my way before fully loading up. Obviously if the nature of the market changes I will shut down the entire position and reset for the new trade, usually as I have indicated. Done correctly this takes a lot of stress out of the entry because it is no longer an all or nothing situation. You will be minimizing your drawdowns and losses whilst giving yourself the best opportunity to maximize profits, the best of both worlds. Trying to find "the" correct level to enter puts so much preasure on a trader it is little wonder so many people have trouble entering trades. Trying to pick "the turning point" is akin to playing darts with a blindfold on and expecting to hit the bullseye pretty well every time, how many people do you think would be willing to back the blindfolded player with cold hard cash. I have no doubt that I will be howled down about my comments, my answer is I trade successfully to make money I don't care whether or not I get the turning point right because my money is made by me having a trade on at the right time not by predicting things that cannot be known beforehand.
said in Psychology section of a trading forum.
Seeing how I posted in the psychology section..., and Johno replied to me in the same section
Appears we're on the same page... and all is right in the world
Now..., if by the off chance he had responded..., oh.., let's say..., in another section - how screwed up would that be
I'd be all confused
Like a lot of people have said, cut those losers. If you've been doing this awhile, and I mean at least a year, you probably get a "gut feeling."*
This gut feeling goes both ways. On the plus side, on some level I kind of "know" or at least believe I'm RIGHT. Like sure this is printing 5 cents lower than I thought it would but the premise hasn't changed and I don't think I'm WRONG and I think it will be worth it to hang on.
Often I'm too stringent and bail because I HATE "taking heat." And then I watch it go, smacking myself.
In these cases when I really feel it and the "heat" is honestly reasonable and something I can afford, I need to give my gut greater credit. (And maybe add some balls.)
Much more importantly:
On the downside, I'm sure we've all been there, when you enter your position and very quickly you just feel it. The back of your mind is going "Uh oh."
That is the first thing to work on. KILL that position -- with extreme prejudice.
Sit there and watch it work against you and watch that red number grow bigger until inevitably it hits your stop and cashes you out for the MAX you were willing to lose on it?
Yes it "might" go your way. Sometimes it will. But if you are trading on that -- fear of missing out in the least likely case vs fear of losing in the most likely case -- you have inverted a critical psychological aspect of trading.
Managing a winning position is fun. Dealing with the losers is not fun. Trading is still work. Do the work. Learn to deal with those losers and cut them ASAP.
*Everyone wants to have a gut feeling. You don't get it by being a "natural," you get it by hours and hours of work, review, and experience.
Funny that most of the posts here talk about overcoming this and that. For me, I could not make money until I obtained fear. But not fear of losses. Or fear of missing a trade. Or fear of mysterious market movers determined to take my nut. Naw, a much more primal fear, a fear of something inside of me.
I could explain it, but you won't get it until you have that fear. You need that fear to trade, but you cannot read it, you cannot learn it. You have to observe others behavior and fear those behaviors in yourself. You have to see other people doing crazy things, say "Damn, that's crazy!" then see that you yourself have engaged in crazy behavior. You *need* to see that you yourself are quite capable of being nuts! Only then can you begin to achieve the gestalt.
In a truly evil mode, I will name this fear, a fear of self delusion. Now that I have named it, the true sufferers will pffft and move on. Readers have the political forum to observe astonishing levels of self delusion, and to wonder "wow, those delusions are intense and extreme, yet unnoticed by the victims. " Which begs the ?, "just exactly which self delusions am I under the spell of?"
Stop selling winners too soon (still guilty of this).
Always strive to be under an accurate one - albeit good.., bad.., indifferent..., or even ugly
You are lucky to be into trading : the market will reflect back to you any self-delusions.
Regarding the politics P&R forum : actually some very honest people there.
*** bump ***
Anyone else qualified to answer this question, now that it's 2015?
For the longest time even though I finally computer back tested, had right stats, developed ongoing Trading Plan, had enough confidence in myself to keep doing it each day. Losing for many years in Futures taught brain well to identify losing trades first, it liked losing trades and I would always go into major anxiety attack when I started to get winning trades, so I think last or more like ongoing problems to overcome was confidence of myself and I am not trading by luck or wicked sting of profitable days, this actually took very long time to overcome. You either become the Roadrunner or the Coyote.
This is only the first step to become profitable
By losing 15000 dollars,i have learnt 15000 ways not to trade.
There were times when even Livermore was off his game, not necessarily because the market wasn't accommodating, but because he was in a funk. He was considered the best in his day, when his head was on right. So if a legendary trader can occasionally doubt himself and find himself out of the zone, then I imagine it can happen to lesser mortals as well.
Be receptive to any and all the information you can for a good period of time...this gives the trader brain a "base". Then be receptive to a point in time where you need to cut off the umbilical cord and "go live away from the herd"...listen to no one for a good amount of time...try to create a new analyses or put a major twist on conventional analyses! Be independent, creative, and truly think outside the box! This has been my path...FWIW!
It's looking like the last thing was FINALLY being able to enter with short term momo, rather than switching off due to too scared.
It's going up BOOM Long, ohhh it's no longer going up, Boom Exit.
Don't make it any harder!!
For me it was risk mgmt - it gave me a lot of confidence and so far has kept me profitable for 13 out of the last 14 years. It was like a Rocky film where in the big fight he is getting pounded by everything his opponent could throw at him and was still on his feet, he realizes he can win the fight because his defense is strong. Same with me when I got hip to risk mgmt.
The lines grizzlybull tried to sell me in PM
Fear and greed are emotions felt when you don’t have specific rules in place. Follow your rules, and the only way to have confidence in them is to test them. I had to master this.
Practicing risk management is essential to trading successfully. Some traders ignore this only to run into one loss after another.
For Stocks yes, for day trading I'm all in on every trade cause I can be, hard to manage that risk at all.
Good one; LOL. Unless Jim Rogers is on-- not real often. One market maker said , others get the news before i do[ better things to do]Great 2009 quote ;still up to date
Amen. The reason that is so important, even if [ IF]someone could hit 80% all the time , could still be wrong 20 month$ in a row. NOT saying that is the way it will work ;but it could work that way................................................................................................The turtle$ made plenty of money with a low[lower%%] hit rate. Good one Co- magnum
It's 2017. never forget that after deciding what position to open, it is also important to identifying the exit points in a trade, whether it is profitable or not.
You Said: Never forget that after deciding what position to open, it is also important to identifying the exit points in a trade, whether it is profitable or not.
Commentary: It’s an interesting quick point that you’re making here about identifying your exit after you enter. But I must question whether you were attempting to make a blanket statement across all the different types of trading. However, if this was indeed the case and your statement was for all types of trading, I must disagree with your statement. But as a long time student of the markets, I would be interested in learning about the line of reasoning that forms the basis of your point, because as opposed to your point, I learned:
“It should be a standard procedure that a daytrader always identify their precise exit point before they enter into a trade”.
Here are the reasonings that supports this statement:
1. In daytrading, if one enters the trade first, immediately after the entry, one has to mentally shift their "center of focus" to the determination of “what qualifies” as a loss in this particular trade, since they obviously haven’t already pre-planned a precise exit point. This selection of a loss point could be as a result of any number of arbitrary factors, and some factors may later be shown to have little to do with the actual trade at hand. This unwitting routine procedure introduces an element of "randomness" into ones trading routine. If they haven’t already pre-planned this exit point, one also has to wonder about the kind of criteria that was used to determine their overall Risk to Reward Ratio and Trade Expectancy.
2. Typically while daytrading, and especially in today’s markets, one may not have the time to think and decide about where they should exit in a running trade. This can cause confusion. And this potential “trade induced confusion” could result in freezing at the screen while attempting to make a decision and the adverse ever present possibility of opening the door to any number of trading “fears”, while at the same time in the act of trading.
3. Again, the consistent and routine use of an entry procedure such as this, due to frequent, abruptly, and instantaneous price spikes after entry, may have the unfortunate potential to subject the trader to change their focus from the execution of the trade, on to the object of their “fear”. Since fear is a stronger emotion than reason, and since they will be in the very act of reasoning, it is highly likely that their fears will dominant regarding the execution of the trade, and will percolate to the top of their consciousness. And this fear may become their center of focus as the most predominant “issue” in their mind, and not the execution of their trade.
4. In daytrading, since one should only be at the screen only when one is ready to execute. And anything that is in this routine, that is a matter of routine which forces the trader to have to, “Think While Trading”, has been proven to be hazardous to ones Account Equity. And obviously, with a constant and never ending concern over ones account equity, this is never an ideal state of mind for longevity in trading.
Again, out of a curiosity to learn, if your statement was in fact meant to cover all types of trading, I am interested the line of reasoning that forms the basis of your point in the daytrading arena.
Thank you very much KDASFTG.
I quite agree with everything you have written. “It should be a standard procedure that a day trader always identifies their precise exit point before they enter into a trade”. FX veterans understand this and have an exit strategy mapped out before they get into the trade. But the point of emphasis from my last post was that quite a number of traders, especially beginners, who fail to recognize their exit point is shocking. And you know problems arise when the market starts moving and the decision to exit is determined by the emotions of the trader rather than solid analysis.
RIGHT AS RAIN
Comagnum...do you have more of an edge than just the risk management aspect?
Comagnum...do you have more of an edge than just the risk management aspect?
Yea, I have my share of edges. But the edges in and by themselves are of little value without a strong defense - which is risk mgmt.
"And then at the end of the day, the most important thing is how good are you at risk control. Ninety-percent of any great trader is going to be the risk control."
Paul Tudor Jones (Self made billionaire, from floor runner to Forbes #125 wealthiest)
Agree...it takes both. When I figured out risk control, I quit losing money and made modest profits. As I discovered more effective edges over time...I made the journey from modest profitability to effectively making a living. So, in my opinion/experience...the big bucks are made with edge in timing entries to high probability of a "price run" and of course getting out before overstaying my welcome, but R:R isn't my first priority.
Most professional traders use leverage, or did when starting out.
As a matter of fact, not using leverage would be a huge mistake for many winning traders and hedge funds.
Leverage is one of a handful of reasons to join a prop firm.
Certain areas of trading can not be done as well without leverage, such as market on open orders or pair trading.
All of this said, improper risk management or lack of edge (sometimes both) are key reasons why traders blow up.
Longterm Capital used leverage that was not reasonable and blew up- even though they were quarterbacked by a room full of experienced people with IQ's above MENSA.
If one is unsure, it is better to error on the side of caution.
Part of winning is surviving the game durring adversity.
Most leave ET because, as you say, they lost all their money.
However, some leave when they become highly profitable. It is partly a time-efficiency thing and also they have developed a private network of other winners.
Elitetrader members are lucky when winners like Lescor and Xela post for years.
Thank you Xela for providing support and coaching to us small retail traders.
The OP's question will never get one to profitability.
As a possibility, ask a better question to get better answers to make better choices.
An alternative form of the question might be, "What did you focus upon that made a difference for you to improve at _______?"
The questions we ask ourselves control the focus of our thoughts which makes us feel a particular way and hold our body in a particular state. It's a loop that also works in reverse. If one changes their body's particular state, it changes the background of emotions as well as creates space to think differently.
It's the distinction between HAVE, DO, BE and BE, DO, HAVE.
Being is in the present moment. Most folks spend their present moments either in fear of the past repeating itself or in anxiety about a fantasy based future. Your current beingness frames the thoughts and emotions by which your actions arise.
To answer the question I infer you asking, for me it was annotating and logging bar-by-bar by hand after I got the above sorted out. For it was getting the above sorted out that led me to the correct answers I was seeking.
All in all, if whatever path leads to you trusting yourSelf more, than it is the right path.
Last sentence says its all. All big whales and sharks move the market to squeeze out leverage traders. And the more funds you borrow to enter the position the less is swing magnitude needed to eliminate you.
And my other point, in the spirit of understanding what is true, is that the majority of professional daytraders use leverage and they are smart to do so. Obvious reasons.
And, of course, as I think you are getting at, poor risk management with leverage has ruined many traders, especially new ones.
Can you help me with this?
1. Why is it smart for obvious reasons? Its not obvious to me.
2. How is leverage even used? If youre trading position size based on percentage of your account how is it good or bad?
To me it is a confusing term. If youre in for 2% or greater than your account size, then lets not beat about the bush - its not called 'leverage' its called 'stupid'. Im sure there are many people that regularly go more than that but IDGAF what others do, my only interest is not going too deep into drawdown when its my turn to take a string of losses.
"They have an edge and wish to magnify it, and yes, they must manage their risk."
Edge x volume is a key factor.
If a trader has a 30 000 account, as soon as they put more than 30, 000 in play they are on leverage. This is important to what I am saying.
In the beginning, learning but no edge, perhaps:
100 shares/ minimum positions.
Profitable trader, example situations:
Opening order traders, like Lescor, put over a million worth of orders out but not get filled on most.
Pair and deal/arb traders often put on numerous positions.
Position traders might put on multiple positions.
I do not know true scalpers any more (not saying there are not any), but to make things worth their time they may need larger size than their account.
Let's say someone traded only one position at a time and earned a penny a share; two pennies round trip. Say they have 30, 000 in their account and they buy 1000 shares of a 30 dollar stock.
Their expected "earn" would be only 20 dollars. On individual trades they may make more or less.
Well.. if this trader could make lots and lots of these $20-earn trades they would do well with no margin.
A person with very small money who wishes to make decent money must use leverage. A person with a lot of money may feel they do not want to tie up a large sum in a daytrading account.
If someone wants to tell me they make a huge amount per share traded (they have very special methods, perhaps) then of course no leverage is needed.
Or if they can do many, many short trades they can grow with no leverage.
If a winning trader wants to meaningfully grow their account with no leverage they must either
1 Have a huge edge (how hard is this?)
2 Do lots of volume on a smaller edge
3 Give up enormous amounts of time working for small amounts and save.
(#3 is not possible if one lives out of their account and is not optimal if one has a worthwhile edge)
4 Accept a risk of ruin higher than many would think.
Or.... a combination of the above.
There are rare times it is ok for an experienced winning trader to risk blowing out a small account because of the value of his time.
Examples: He has other ways to make meaningful money or has a large income.
(This mnd set can be dangerous and is often a front for crazy gambling)
Some winning traders who use margin are not really leveraged in the way many may think in that they have money and assets outside of their trading accounts that they are rationally willing to draw from.
As a side note: prop firms servicing licensed professional traders would not exist if they did not offer leverage.. or back traders as Shoenfeld once did.
Grantx, thank you for your question.
Thanks for explaining. Im a futures trader so anything to do with options or shares goes over my head. Way too complicated for me.
I can understand how noobz get smoked in forex because some of the leverage available there is simply outrageous but in the futures market there is a layer of protection albeit slim. You have to have the initial margin and on top of that an intraday margin in order to open a trade. For every contract you need to post the intraday margin so if you want to go large its quite difficult unless you have the money available in your account. I havent actually done a detailed comparison between futures and forex but I have seen brokers offering 400:1 leverage.
margin is only needed when people SELL options-and most people try to do that thinking they are clever -like the notorious 'Karen the super trader'. Options are complicated which is why I love them-we have a site but it's for the UK where retail options trading is about as welcome as cholera-we take money off the institutions as they trade badly. Optionsinvesting.co.uk wasalready in existence due to a guy who is now my trading buddy. It offers weekly trade ideas and some simple options education- but in the US you have EVERYTHING! We have nothing here, I learned the hard way. And I'm still here after 16 years. Enjoy the journey with whatever you trade
To reduce leverage.Boy have i seen for the first time, i was set years ago, but the leverage has always clouded my vision.
What was the ***last*** thing you had to master before becoming profitable?
Realizing that the 'last' thing I mastered will not be the last thing I'll master!!
If you change the way you look at things, the thing you look at changes.
Good points. Too much leverage also can be counterproductive., because of stats .Even if something works more than 77% of the time+ not many do well, long period of time- it can + has been wrong[unprofitable] several years in a row. It could even be wrong[unprofitable] 23 years in a row, out of 100 years, but usually not that horrible LOL
Some people never overcome their fascination with their handheld devices.