Why did you fail at trading ?

Discussion in 'Risk Management' started by traitor786, Jan 28, 2013.

In the face of new ideas or information what Is the best thing to do ?

  1. Ignore long (new data) term info

    3 vote(s)
    27.3%
  2. Take in to account new data

    4 vote(s)
    36.4%
  3. Stop and rebuild

    2 vote(s)
    18.2%
  4. Make a system with quick exits as soon as weakness is seen

    0 vote(s)
    0.0%
  5. Worry not about effecting your "stats" and follow your hart.

    2 vote(s)
    18.2%
  1. I hate that I can justify why I failed ! It just means that I know the problem. So I will ask myself this more often.

    Today's answer is:

    Sometimes its better to loose money and keep your stats valid, instead of randomly adding new sources of data.

    CASE 1:

    Often a new source of information is brought to us. Say we are trading mining stocks in a typical day trading fashion. All of a sudden gold spikes to 5000 $ What does this mean for your trading? In many ways this is comparable to looking at 1 min or tick chart and one day peaking at the daily chart.. It is new information.

    Example 2:
    You trade the 5 min chart, maybe looking at the 1 min and hourly where all information can be inter-related. One day you step back and glance at the daily chart (multi-year data), It is screaming to go the opposite way of your intra day.

    Possible solutions:

    1. Ignore the long term daily information and take on bad trades. To keep consistency in your system

    2. Not trade? Meaning that you do not always follow your system and your results are "fitted " at times?

    3. Stop building your short term system and work on a long term system

    4. Change from day trading to swing trading (There will be no longer time frame data as historical data may be lacking.

    6. Stop every thing and try to build short term systems that are good in different long term situations

    7. shorten trade and manage it live so as soon as a trend line is broken get out as to avoid the long term turn around.


    Emotional need (The problem)
    -----------------

    Keep trading.

    Emotional responces:
    -----------------------

    A. Change short term trades to long term trades and change their target and stop loss based on new long term data. (adjust your trades after they have been made) sacrificing non clear entry (see C)

    B. Babysit each trade and as soon as one thing is off exit.
    Seems lazy, But managing each trade and exiting quickly can mean more trades and profit can be more. It seems to be the basis of day trading.

    C. Reject the idea of stats and do what one wants to do.
    Problem with this is saying that a system is good means that it has been seen to be good. This IS a stat. It may not be back tested or optimised. But, one has seen it work. (Buy whenever the door knocks, after a few weeks you will decide based on stats if it is a good system.)

    Thought
    -----------
    If stopping trading leads to a lose of attention, trading must continue but in a proper way that one can gauge how the trading is doing.

    Ignoring the new information (daily chart) means that you will always ignore it , this is consistent. One may loose a few more trades around key places but eventually short term charts will see the new direction.

    While doing this, we should look to see if there is something that can be done to add the long term view. Once a new clear system is made we can switch (all new trades p/l should go to a new set of data)

    My conclusion
    ---------------

    Make sure my strategy exits as soon as weakness is shown instead of at a particular price.

    Try to see if I can simultaneously hold on to 2 different buys and have them recorded in different places. If so, I can place baby sat trades and long term trades based on long term time frames.

    Note:
    I tend to day trade, but all my long term calls seem to be profitable I have records of this need to monetize this consistency
     
  2. Answer:

    Unable to decide if I should use charts with day and night data.

    CASE 2
    _______

    Keeping an eye on volume seems to be helpful. Looking and day and night price moves together seems not be helpful. (considering most my trades have been at night)

    Volume changes are easy to see when the night and day volume are separate (omitting night time trading)

    Having 2 charts of each time frame is not acceptable.

    Solutions:
    1. use one or the other
    2. ________________

    Emotional needs
    I want both,

    Thought
    I need a solution

    Conclusion
    Any ideas ?
     
  3. Answer

    Failed cause I switch from one to the other without adjusting my strategy


    CASE 3
    ______

    switching from day to swing trading can be done, but there should be clear rules and results kept separate. If exit is not based on price alone but rather a break of a trend line or volume changes. One needs to manage the trade. But with Fees small quick trades suffer from a huge expense.

    Emotional needs.
    Swing trading slows growth and a bad system can take years to learn. Day trading allows one to get an idea of consistency (in a certain type of market at least).

    Solutions:
    ________


    1 Do both keeping separate logs for each
    2. Find a way to exit automatically based on a trend line being broken and don't use volume to exit.
    3. Give one up

    Thoughts
    _______
    1 Exiting based on trend lines alone and not volume can be done. Volume can be used in conjunction with trend lines for entry only.

    2 To do both together I would have to see is being long 100 shares long term and shorting 100 for short term will lead to owning no stock.
    (I think once I was short on mt4 and pressed buy instead of cover. This gave me 2 opposite positions meaning I may be able to separate the trades)

    3 It will be hard to get a system that covers based on trend lines breaks. Even if one is found it will always be questionably reliable

    4 An automated trend line break exit would some times make me exit when I can see that a certain low probability case of a true break out is showing. The system will exit me based on a bad break out (this could be good for the beginning where I do not have a rule that defines a bad break out.

    5. Some times we can see price reverse very fast. Though it stays in the trend line it can still be a loss.


    Conclusion
    _________

    Short term trading should be babysat. Long term trading should be based on price targets and stop losses until I can find a way to open and close a position based on something else instead of price alone. Maybe range trade support and resistance levels long term only.
     
  4. The Title to the thread is incorrect.

    It should read Why did "I" fail at trading.

    Answering your own questions in the third person and coming to a conclusion is a bit odd.
     
  5. emg

    emg

  6. Odd is not being in the 90%
     
  7. emg

    emg



    Then, don't give up and keep reloading your account or accounts. chase your dream and



    RELOAD
     
  8. I forgot this thread ! it was a good one.... any one remember where I was ?
     
  9. "loose" means to "turn something loose" as in "I opened the gate and loosed the cows"... "lose" means to "not have possession of anymore"..

    just sayin'
     
  10. I am not totally fail at trading . I am a looser of many times. My reason for loss is some weakness in risk management and market analysis. When I put an order it goes to loss . I hardly save my trade . Some times I get good profit too from trading . I will recover this weakness soon.
     
    #10     Jun 27, 2013