This is what I find. Daytrading and working (even though I have the benefit of 5 hours time difference (UK)) puts intolerable demands on you over time. My judgment degrades after a month of working 16 hrs a day. Anyway, I too made money by position trading so I will go back to that for now. I don't feel bad just frustrated because I know that the only cause of making losses is not following my plan.
Many traders quit for the summer anyway. Take 3 months off, focus on improving your capital base and your knowledge base. Then come back in September. The market will be more favorable for daytrading and you will have reduced your stress level.
I started "SOES" trading in '97. I set more of a time limit than a capital limit (I wouldn't allow myself to loose too much). After several months, my $100,000 account was at $99,500, and I threw in the towel. I didn't feel that I could trade part time (I still don't think I could). I kept studying the market (while pursuing another project), and started trading full time again about a year ago. With the market developments over the last few years (mostly ECN's and IB's .01 per share), I was able to turn the corner. After I had been trading for a few months last fall, my wife asked me how much longer I was going to keep trying (in a somewhat frustrated manner). Not long after that I became profitable with a style that I am comfortable with. So, in my case, following my commitment and quitting when it was time without giving up worked out. When I returned, I finally succeeded (at least for a while). By the way, I found that trading with VERY small size for a few months seemed to teach me what I needed to know. Good luck.
Mike777, I can't speak for anyone but myself, and I can not tell you when to quite, but I do know that trading is the most subjective thing I have ever been involved in. It is easy for someone else to tell you what to do, but in the end it is what you do within yourself that counts. Things that I have had to overcome-- and I'm still working on it -- is pride, self control, admitting that I was wrong, looking at what I'm going to make instead of what I might lose. This I must say has been very difficult for me. I've been trading for approx. three years, and I have lost over 50,000. And, needless to say this has been very difficult for me to deal with. But, after saying that I must also say that I still love trading. I have a passion for the market. Wanting to be near the market but not wanting to lose more money caused me to migrate to paper trading, and that has really help a lot-- it's easier to lose when you don't have real money at risk. The good thing about this is that I've been able to get a better trading plan together. After several months of paper trading, I have a strategy that is working for me. It's not perfect, but I am having more winners than losers, and now that I'm back to trading with real money again, it feels good to make a trade and after analyzing it I am more concerned about how well the trade shaped up instead of running to the calculator to see how much I just made. No, I don't think anyone on this board can tell you what you should do. That is something you will have to decide for yourself. I think it can be best said by a quote that seems to fit me more than anything I've ever read: "There is nothing like losing all you have in the world for teaching you what not to do. And when you know what not to do in order not to lose money, you begin to learn what to do in order to win. Did you get that? You begin to learn!" ~ Reminiscences of a Stock Operator by Edwin Lefevre
I do not have quit point. I have a regroup point - a lack of funds to trade. I trade futures - if equity dips I find a lower margin commodity and trade back up. I have always been able do do that which I put mind to doing, and this is no different. Never, never, never give up!
This is a personal choice for you. You should be a bit troubled that you seek a direction on such a fundamental issue from outside sources a) you can continue persevering in trading arena (not with real money, study) and admit that your previous 'stop' condition was false b) you can follow your previous 'stop' condition if keeping your word is important to you (especially if you violated your rules before) a) or b) - YOUR choice
I would have to disagree with you there. You can, but within certain constraints. As long as you are 100% focused on trading WHILE you are trading you can. I know traders who just do the openings and the first hour and then go off to a full time job. This is particularly possible for you left coasters out there. You can be done before your co-workers at your regular job have woke up. But if you try to do both daytrading and your regular job at the same time, intermingling them, just go ahead and send me half your bucks now, stop trading, and keep the other half. Also enclose a note thanking me for how much I saved you.
Thanks for the reply. Just a small correction, I'm not seeking a direction from outside sources, I know what to do and I know why I got to where I did. My curiosity was how everyone else manages their break point, indeed if they even have one, so I'm using my example to throw open the discussion. It's really interesting to see all of the different responses and IMHO this thorny issue goes right to the heart of the matter. It is rarely discussed and yet it is a fundamental core of deciding to start trading and deciding when you will stop. Interestingly, you will never see anyone have an upside limit either. Could this be why so many big hitters wind up losing large amounts of their capital when they could have stopped at xx million and retired. Cheers Mike
the minimum amount for daytrade is about what the sec has ruled out...........25k...........below that, you've been loosing money during your learning period, it's time to make progress or you will be out soon............. only tools will cost you a least 3k per year..........without the hardware to be competitive.............. daytrade is not a casino game..........it's a job..................
I planned to allow myself to lose about $15k when I started. At the worst point I was down about $8k, but the first $5k I was down was the worst. I took a bit of a break there, regrouped, and proceeded to lose another $3k, but I felt much better about the way I lost the 3k than the 5k. After that I was able to turn things around. I think I would still use that $15k drawdown level again to at least take a serious break from trading, I doubt very much that I would quit though. (I feel I've come too far, I love it, I've made money, so I know it's possible - unless you can make over 1000 trades and still be called "lucky", as some would have you believe) When should a person just pack it in? I think it really depends on how badly you want something. If one's atitude coming into trading is, "yeah, I'll give it a shot, see if I can make a buck or two at it. If not, screw it" I would say that it's a good idea to quit at your original stop point. If someone is absolutely determined to make a success of trading, though, well, I can' t see why you would EVER give up. I've had some scary times trading, where I've questioned and doubted myself - hell, I still do! The thing is, in my mind - ie, psychologically - I've made it OK to fail. I've made it ok that even though I'll pour my heart and soul into the endeavour, I still might not "make it". And for me, that's just fine.