I'd say you need to second guess yourself. I've done the same thing. Chase the thing. Gotta get in. They're making money. But if you wanted to short, then you've gotta wait for it. You gotta ask yourself ... "should I be doing this (take the trade) ?" No. Gotta hold back.
A few years ago I was just trading S&P 500 futures, when E-mini just came out. At one point in a funk, a flat directionless summer market, I did a little test. I sized down a little for the test, and traded the complete opposite of everything I saw that day. I was scalping at the time so I had 11 directional trades. I was floored at the end of the day to see that I made money on 10 of the 11 trades. Now I have been trading for a long time. At big banks for most of it. Specialized situations but was always tied to the intra-day one way or another. I was totally bummed out by this. I thought I suck, every move they did the opposite of what I thought. After much pondering I came to the conclussion that all traders were seeing what I saw at those times. When we all went the same way (this day I went opposite though) we all tried to get out or got stopped together. This little exercize changed the way I think during the day. I don't just go opposite, but I try to reason what the herd is going to do and how they might react and how they might all be wrong or stuck the same way at once. I wrote this just as food for thought. But, one of the best long bond traders I ever met, when the 30 yr. Bond was king 15 yrs ago or so, told me he liked to take the other side of everybody elses trade. When a big economic # came out, he made sure he wasn't the same way as everybody else. Hang in there I say, the answer may be right in front of you and you just don't see it yet, one day it might just click.
Sir for whatever this means coming from a redneck This is GREAT..... Only thing - to get here - I believe one must get out of their own way first - (which I also believe is what the OP is struggling with) Thank You Sir Redneck
I'm reading Alan Farley's "The Master Swing Trader" and he is all over the fading the crowd. This stuff is really starting to click for me. I think I'm even beginning to grasp proper risk management!
Thanks for the kind words guys. Almost before every trade since then this crosses my mind, is everyone else thinking this, should I actually fade it. A real test for me is using actual dollars, only way to really tell if data comes back as accurate, at least for me. Risk management is still #1 priority and makes a trader successful, but I have gotten some great entries like this. My short term inspiration at the time though I have to tell you, was a Seinfeld episode I saw the night before. George goes completely opposite of everything he would 'normally' do. He goes up to a beautiful woman in the coffee shop and says; "I'm fat, bald, unemployed and live with my parents." as he walks away assuming rejection, she asks him if he wants to have dinner together that night. Good luck trading!
great post. it reminds of a book, "The Art of the Trade", where the author says he finally became consistent after he focused on losing trades and just doing the opposite. he claimed that he "studied the loser set-ups" and then trained himself to do the opposite. it's an interesting book, a lot of zen like concepts that i personally find helpful. the author is pretty arrogant and full of himself (not very zen like) and he claims he had to get a ghost writer for the book becasue if his floor trading buddies saw the book they would know he was talking about them. he goes on to show how he "reasons what the losers in the mrket are doing and then i just take the opposite side". an example he gave was in corn futures.....he says he he can find where the the majority of stops are by the following: "the avg losing trader will wait to exit a position until the loss is somewhere between 60% to equal of the initiating margin required". "
Wow this this thread hits home for me. 60K lost over two years. Lost my job last August and thought.. well finally I can clear my head and maybe if I'm focused on trading full time I'll do ok. Nope, just lost the money faster. On a margin call yesterday, put in the last of my savings account. (hey.. at least if I get another, there is no more savings, I'll have to take what money is left because I won't be able to day trade). Unemployment ends in two weeks.. not much left in checking. Having serious panic attacks. Only have a two-year college degree so I won't be getting a job anytime soon. Just makes me wonder.. what is so obvious to a few that I still don't get. I try trend trading, counter trend trading, swinging, holding until trend is broken, scalping.. Definitely there is something wrong with me, directly. I do know people who make money almost every day. Anyway.. feel your pain guys. Wish you the best. I'm betting I'll be done within a week or two. Or it's going to be one amazing turn-around. Not counting on the latter.
Been there. You have one or both of the following problems: 1. Poor memory for patterns and what they indicate 2. Poor risk management Check out my journal for a detailed account of my losses and gradual recovery to trading for a living: http://www.elitetrader.com/vb/showthread.php?s=&threadid=132626&perpage=6&pagenumber=1