A year in. Lessons Learnt, Fingers Burnt

This is a discussion on A year in. Lessons Learnt, Fingers Burnt within the First Steps forums, part of the Reception category; Originally Posted by medic I've been live trading a year now and though it worth sharing some of the highs ...

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Old Jul 23, 2012, 10:37pm   #15
 
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Joined Feb 2012
Re: A year in. Lessons Learnt, Fingers Burnt

Quote:
Originally Posted by medic View Post
I've been live trading a year now and though it worth sharing some of the highs and lows of my journey.

I got into trading after my daughter was born. I'd taken 3 months off work and decided I could solely focus on day/swing trading with the 100K I had in savings.
Being in a technical profession (also have a PhD in math) my style was indicator/rule based and to that end I watched every trading seminar, read every blog and learned about all the technical tools I could over the first month.
I went live placing 10K-50K trades on stocks I'd researched and charts I or others had liked. Sometimes I'd stay in the trade a long time (I still hold my first stock bought), but mostly I'd be out before the close not wanted to suffer opening bell shock.

I entered stops until i got level 2 access when on too many occasions saw the action move right in to take my stop before rebounding away. After that paranoia had me write my stops down and then manually exit trades that reached them.

I kept a trading journal and kept account of my P/L, plus did a nightly debrief on how (and why) the day had gone.

On a good day I'd make 500 bucks, on a bad day I'd lose 1000. The nightly tally showed I was slowly getting poorer and over time was not getting better.

It got to a point where I'd spend couple hours researching my picks then enter trades in the opposite direction as I came to understand the market was not behaving to any of the indicators or patterns I'd learned from any of the hundreds of Guru trainings I'd been through.

About 6 months in I came to realize that even with my account size intra-day was too hard to play, so my time frames move to weeks then months. I finally entered a trade that I was convinced about which went against me for 5 months. I'd decided to stay long in the stock regardless as I was that sure. The stock blew through any rational limit I would have set and I decided to wait for it to recover. I eventually sold for a 40% loss through fear that the company would go bankrupt.

At one point in the year I was 15% up. I'm out now (apart from my first stock) for a total loss of 15%.

I've never really failed at anything and have been very humbled by the experience. Learning so much in a short time about trading and then failing to make it work has left me with the feeling that knowledge, a strict trading plan, and the willingness to put in full time hours really offer no guarantee of preserving capital let alone make a healthy living.

Respect to those that make it work. For a time I was one of you but for now I'm poorer and out.
another thought mate if you are trading US stocks. How much commission are you paying to trade 1000 shares? Most newbies pay way too much. If you are trading 1m shares per month $3 per 1000 would be a good rate through a prop firm, 500k per month $4 per 1000 would be a good rate.

this is all assuming you are trading US stocks....

just a thought as some people get destroyed by higher commissions which can really add up.
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Old Jul 24, 2012, 4:11am   #16
Joined Apr 2009
Re: A year in. Lessons Learnt, Fingers Burnt

Hi, I swear all you need to do is take all indicators off your charts. Plot support and resistance using a 4 hour chart and then only trade at those levels. Buy support, sell resistance. If you get stopped out wait for a retest of the support or resistance that was broken to be retested and reverse your direction. The day it clicked with me (6 years before I became profitable every week) was when I completely embraced the idea that I have no idea if the market will go up or down. I do not care. Every time you analyse the market you are interested in, plan a trade that is a buy, and plan a trade that is a sell. This way you will never get married to the idea of wanting to be either long or short. By not having a bias you will always be with the flow of the market. You will never be fighting it.
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Thanks! The following members like this post: tomorton , the hare , Chris Howard
Old Jul 24, 2012, 7:48am   #17
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Re: A year in. Lessons Learnt, Fingers Burnt

Quote:
Originally Posted by medic View Post
I've been live trading a year now and though it worth sharing some of the highs and lows of my journey.

I got into trading after my daughter was born. I'd taken 3 months off work and decided I could solely focus on day/swing trading with the 100K I had in savings.
Being in a technical profession (also have a PhD in math) my style was indicator/rule based and to that end I watched every trading seminar, read every blog and learned about all the technical tools I could over the first month.
I went live placing 10K-50K trades on stocks I'd researched and charts I or others had liked. Sometimes I'd stay in the trade a long time (I still hold my first stock bought), but mostly I'd be out before the close not wanted to suffer opening bell shock.

I entered stops until i got level 2 access when on too many occasions saw the action move right in to take my stop before rebounding away. After that paranoia had me write my stops down and then manually exit trades that reached them.

I kept a trading journal and kept account of my P/L, plus did a nightly debrief on how (and why) the day had gone.

On a good day I'd make 500 bucks, on a bad day I'd lose 1000. The nightly tally showed I was slowly getting poorer and over time was not getting better.

It got to a point where I'd spend couple hours researching my picks then enter trades in the opposite direction as I came to understand the market was not behaving to any of the indicators or patterns I'd learned from any of the hundreds of Guru trainings I'd been through.

About 6 months in I came to realize that even with my account size intra-day was too hard to play, so my time frames move to weeks then months. I finally entered a trade that I was convinced about which went against me for 5 months. I'd decided to stay long in the stock regardless as I was that sure. The stock blew through any rational limit I would have set and I decided to wait for it to recover. I eventually sold for a 40% loss through fear that the company would go bankrupt.

At one point in the year I was 15% up. I'm out now (apart from my first stock) for a total loss of 15%.

I've never really failed at anything and have been very humbled by the experience. Learning so much in a short time about trading and then failing to make it work has left me with the feeling that knowledge, a strict trading plan, and the willingness to put in full time hours really offer no guarantee of preserving capital let alone make a healthy living.

Respect to those that make it work. For a time I was one of you but for now I'm poorer and out.

hey Mate

best post for a long time at T2w and I hope something a lot of newbies will read and learn from - especially from someone so qualified in numeric science

Trading is a brutal brutal world and not as (easy)as the winning sh*te peddled by vendors and brokers who should be made to be more realistic in their marketing like Cigarette manufacturers.perhaps even post the true % winners/losers they are delivering.....

keep going.......and find your path .........personally i feel that profitability is there in Trading .....but naturally the volume of trades needed to make a decent living requires the hunting of lower TF's where we are told more difficulties lie

Perhaps as a second stream of income but personally I will never trade full time relying on it to pay my bills...

like poetry.........

respect
N
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Old Jul 24, 2012, 7:52am   #18
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Re: A year in. Lessons Learnt, Fingers Burnt

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Originally Posted by pboyles View Post
Try selling poetry, its more profitable according to The Guardian.

The £100 challenge | Money | The Observer
The man stood on the trading Deck....
His finger on the trigger

The Dow pushed high

He pressed the Buy

and retraced down the river ........

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Old Jul 24, 2012, 8:54am   #19
 
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Re: A year in. Lessons Learnt, Fingers Burnt

very nice post i am learning alot thankyou.
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Old Jul 24, 2012, 12:45pm   #20
Joined Feb 2002
Re: A year in. Lessons Learnt, Fingers Burnt

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Originally Posted by sweatyslouch View Post
Hi, I swear all you need to do is take all indicators off your charts. Plot support and resistance using a 4 hour chart and then only trade at those levels. Buy support, sell resistance. If you get stopped out wait for a retest of the support or resistance that was broken to be retested and reverse your direction. The day it clicked with me (6 years before I became profitable every week) was when I completely embraced the idea that I have no idea if the market will go up or down. I do not care. Every time you analyse the market you are interested in, plan a trade that is a buy, and plan a trade that is a sell. This way you will never get married to the idea of wanting to be either long or short. By not having a bias you will always be with the flow of the market. You will never be fighting it.

Could be as near the Holy Grail as we get: the implication being that there is no Holy Grail. If there was a Holy Grail, it would effectively give the user artificial power within / over the market, when maybe what we need less force used, to bend with the market more readily, to embvrace the riskl, not try to eliminate it with layered indicators, not to fight against the market, but to surf its power.
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Old Jul 24, 2012, 2:38pm   #21
Joined Apr 2009
Re: A year in. Lessons Learnt, Fingers Burnt

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Originally Posted by tomorton View Post
Could be as near the Holy Grail as we get: the implication being that there is no Holy Grail. If there was a Holy Grail, it would effectively give the user artificial power within / over the market, when maybe what we need less force used, to bend with the market more readily, to embvrace the riskl, not try to eliminate it with layered indicators, not to fight against the market, but to surf its power.
I must say that you have put it beautifully. On lord flash heart thread I just posted a live trade that illustrates what I am talking about. Chart images are included. It seriously is such a liberating feeling when you genuinely have no need to decide if you think markets are going up or down. either way is perfectly acceptable.
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