really need help with my trading (many aspects)

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Old Mar 9, 2018, 5:37pm   #1
Joined Jul 2014
really need help with my trading (many aspects)

I've been trading for around 3 years now. I spent a lot of time learning how to read fundamentals and TA and was profitable at stockpicking over the first 12-18 months.

I then started to spreadbet (stocks, FX, indices, commodities) and did OK over a period of 2 years but ultimately lost money when my risk management and discipline slipped. I have tried trading crypto this year, mostly taking short positions which has worked out great, however, I just blew 50% of my account in one trade taking a margin long position and failing to get out when it went against me. The trade was too big and I entered with no plan other than I had been waiting for a dip to hit a target buy price. A very very stupid mistake.

I am now fully in cash and wondering wdf to do to get my trading together. I feel that at this stage I should have found my niche, something that I can at least grind out a small profit at. I have a long-term goal of being able to trade full-time but first I need to be profitable!

Can anybody give advice? Has anyone lost money over 3 years but then managed to turn it around? I am not afraid of hard work and study and I am ultra-competitive, I do not like to give up.

I see two options for me,

1) Try something new from the ground up, reading and watching a lot of videos while trading small or even paper trading. I would like to try trading options at some point.

2) I have enjoyed trading crypto and have had good success apart from my recent blow-out. I clearly need to address my lack of planning and discipline so I am thinking that I could just get back into crypto with a more clearly defined plan for each trade.

Any advice for a losing trader will be very much appreciated.
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Old Mar 9, 2018, 8:24pm   #2
 
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Originally Posted by breaktwister View Post
I've been trading for around 3 years now. I spent a lot of time learning how to read fundamentals and TA and was profitable at stockpicking over the first 12-18 months.

I then started to spreadbet (stocks, FX, indices, commodities) and did OK over a period of 2 years but ultimately lost money when my risk management and discipline slipped. I have tried trading crypto this year, mostly taking short positions which has worked out great, however, I just blew 50% of my account in one trade taking a margin long position and failing to get out when it went against me. The trade was too big and I entered with no plan other than I had been waiting for a dip to hit a target buy price. A very very stupid mistake.

I am now fully in cash and wondering wdf to do to get my trading together. I feel that at this stage I should have found my niche, something that I can at least grind out a small profit at. I have a long-term goal of being able to trade full-time but first I need to be profitable!

Can anybody give advice? Has anyone lost money over 3 years but then managed to turn it around? I am not afraid of hard work and study and I am ultra-competitive, I do not like to give up.

I see two options for me,

1) Try something new from the ground up, reading and watching a lot of videos while trading small or even paper trading. I would like to try trading options at some point.

2) I have enjoyed trading crypto and have had good success apart from my recent blow-out. I clearly need to address my lack of planning and discipline so I am thinking that I could just get back into crypto with a more clearly defined plan for each trade.

Any advice for a losing trader will be very much appreciated.
Forget about crypto, go back to where you were profitable 2 years ago, write dawn your trading plan and backtest it for few market cycles, if does indeed works you are all set, if not try something else, but do not trade live until you have iron clad back tested trading plan...
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Count de Money number 1 trading rule: EDUCATE YOURSELF!

Before you trade even single penny on the stock market, please spend the time and educate yourself by back testing different trading strategies and ideas - go to eBay and search for "historical stock market data", you can buy 20 years of data for less than $100 - that's all you need to start.
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Old Mar 9, 2018, 9:38pm   #3
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breaktwister started this thread Hi quantt, I assume by your username that you are into automated trading? I have to say that I have never backtested a strategy, I picked stocks mainly on fundamentals with TA as a secondary check. Surely the markets change too often for backtesting to be of real value?

When you say "market cycles" do you mean from recession to recession?
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Old Mar 9, 2018, 10:05pm   #4
 
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Originally Posted by breaktwister View Post
Hi quantt, I assume by your username that you are into automated trading? I have to say that I have never backtested a strategy, I picked stocks mainly on fundamentals with TA as a secondary check. Surely the markets change too often for backtesting to be of real value?

When you say "market cycles" do you mean from recession to recession?
Yep, I am 100% systematic/automated and yes I mean recession to recession...
Market never changes from my point of view and back testing works for me personally...

Even with the fundamentals you must have a system and I would find some way to test it, so I know if it works in the long run or not, before pitting real money on the line...
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"If you don't find a way to make money while you sleep, you will work until you die." Warren Buffett, CEO of Berkshire Hathaway.

Count de Money number 1 trading rule: EDUCATE YOURSELF!

Before you trade even single penny on the stock market, please spend the time and educate yourself by back testing different trading strategies and ideas - go to eBay and search for "historical stock market data", you can buy 20 years of data for less than $100 - that's all you need to start.
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Old Mar 9, 2018, 10:14pm   #5
 
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Quote:
Originally Posted by breaktwister View Post
Hi quantt, I assume by your username that you are into automated trading? I have to say that I have never backtested a strategy, I picked stocks mainly on fundamentals with TA as a secondary check. Surely the markets change too often for backtesting to be of real value?

When you say "market cycles" do you mean from recession to recession?
I concur with Quantt, backtesting is fundamental. If you feel like giving stock picking again but for longer term let me know
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Old Mar 9, 2018, 10:38pm   #6
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I concur with Quantt, backtesting is fundamental. If you feel like giving stock picking again but for longer term let me know
what kinda backtesting to you do mate?
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Old Mar 10, 2018, 12:27am   #7
 
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what kinda backtesting to you do mate?
How do you mean, what kind?
I’ve backtested loads of various conditions, over various timeframes going back to the 90s. using all different types of indicators both standard, proprietary and ones created by myself. I’ve tested breakouts, trending, mean reverting, cyclical, patterns,
on different charting methods candles, renko, point and figure. Using multiple timeframe confirmations, sector rotations. Literally anything I can think of. Neural networks, hive technology, astral projections
If I could think of something, I tested it. Mainly for one chief reason. I trust nobody unless I can verify it myself.
It doesn’t take long, so long as you can code it.
When I came up with something half decent such as relatively good percentage hit rate I’d then go through and put it through the sausage machine. Never optimising just going through the years.
Then improving the results using filters, even good coding will bring up unwanted trade entries. Using stand alone trade by trade and then portfolio backtest simulating a real account with position sizing and equity risk.

Once I’m happy with the results I’d put money on it to make sure it wasn’t luck. You could never do this without automating the backtest process.
Like I say, personally, backtesting is key and saves time in getting you to be comfortable with a strategy to know that the dips in equity is expected, that 10 losing trades in a row can happen. It’s very hard to have confidence in a strategy without giving up and thinking of starting again unless you can prove it. Even 70% hit rates will have numerous losses on the trot.
It’s a numbers game in the end

Anyway hope that answers your question. Feel free to ask if you do have any
These days I still code anything that looks interesting, and just for fun to see if you can make it just that bit better.

Last edited by malaguti; Mar 10, 2018 at 12:36am.
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Old Mar 10, 2018, 12:54am   #8
Joined May 2012
You clearly know what your problem is because you outlined them.

Quote:
Originally Posted by breaktwister View Post
I then started to spreadbet (stocks, FX, indices, commodities) and did OK over a period of 2 years but ultimately lost money when my risk management and discipline slipped.
Quote:
Originally Posted by breaktwister View Post
I have tried trading crypto this year, mostly taking short positions which has worked out great, however, I just blew 50% of my account in one trade taking a margin long position and failing to get out when it went against me. The trade was too big and I entered with no plan other than I had been waiting for a dip to hit a target buy price. A very very stupid mistake.
..... and you know what the solution is because again you outline it.

Quote:
Originally Posted by breaktwister View Post
I clearly need to address my lack of planning and discipline
The problem then is not over choice of instrument or methodology but one of discipline and risk management. The obvious question is why aren't you dealing with the issues you clearly have identified? If you are finding it difficult to deal with the issues identified, the reason is because it is a trade psychological issue and not a methodolgy issue. If my assessment is incorrect then ignore what I have just said.
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Old Mar 10, 2018, 1:59am   #9
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breaktwister started this thread
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You clearly know what your problem is because you outlined them.
I guess so! I suppose my question now is what are some techniques for discipline?
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Old Mar 10, 2018, 2:00am   #10
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breaktwister started this thread Quannt and Malaguti, where do I start with backtesting? I have basic coding skills.
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Old Mar 10, 2018, 2:59am   #11
Joined May 2012
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I guess so! I suppose my question now is what are some techniques for discipline?
Your issue if I understand it correctly is not a lack of discipline but that discipline broke down at some point. You would need to identify your stressors and reflect on the emotional drivers that caused the break down in discipline. Typically they are emotional experiences. For example, the oversized crypto position could be a fear of missing out on a trade opportunity and when the trade turned against you the loss prospect became an oversized loss aversion issue. Usually one emotionally driven trade mistake cascade into a series of problems which may end up in a total breakdown of your trading process and trade discipline. The key is not allowing the initial emotionally driven mistake to happen and subsequently when it gets out of control to hijack your trading process. The first step is to reflect on those events, identify the issues and to develop awareness on how your emotions come into your system when trading.
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Old Mar 10, 2018, 11:15am   #12
Joined Oct 2015
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Originally Posted by malaguti View Post
How do you mean, what kind?
I’ve backtested loads of various conditions, over various timeframes going back to the 90s. using all different types of indicators both standard, proprietary and ones created by myself. I’ve tested breakouts, trending, mean reverting, cyclical, patterns,
on different charting methods candles, renko, point and figure. Using multiple timeframe confirmations, sector rotations. Literally anything I can think of. Neural networks, hive technology, astral projections
If I could think of something, I tested it. Mainly for one chief reason. I trust nobody unless I can verify it myself.
It doesn’t take long, so long as you can code it.
When I came up with something half decent such as relatively good percentage hit rate I’d then go through and put it through the sausage machine. Never optimising just going through the years.
Then improving the results using filters, even good coding will bring up unwanted trade entries. Using stand alone trade by trade and then portfolio backtest simulating a real account with position sizing and equity risk.

Once I’m happy with the results I’d put money on it to make sure it wasn’t luck. You could never do this without automating the backtest process.
Like I say, personally, backtesting is key and saves time in getting you to be comfortable with a strategy to know that the dips in equity is expected, that 10 losing trades in a row can happen. It’s very hard to have confidence in a strategy without giving up and thinking of starting again unless you can prove it. Even 70% hit rates will have numerous losses on the trot.
It’s a numbers game in the end

Anyway hope that answers your question. Feel free to ask if you do have any
These days I still code anything that looks interesting, and just for fun to see if you can make it just that bit better.
thanks for the insight into your testing, it sounds very thorough. yes that does answer my question!

when i said "what kind of" it was to clarify if you mean only from price data or is there any fundamentals research too. also ive known backtest to be used loosely and to mean eyeballing the chart

Quote:
Originally Posted by Brumby View Post
Your issue if I understand it correctly is not a lack of discipline but that discipline broke down at some point. You would need to identify your stressors and reflect on the emotional drivers that caused the break down in discipline. Typically they are emotional experiences. For example, the oversized crypto position could be a fear of missing out on a trade opportunity and when the trade turned against you the loss prospect became an oversized loss aversion issue. Usually one emotionally driven trade mistake cascade into a series of problems which may end up in a total breakdown of your trading process and trade discipline. The key is not allowing the initial emotionally driven mistake to happen and subsequently when it gets out of control to hijack your trading process. The first step is to reflect on those events, identify the issues and to develop awareness on how your emotions come into your system when trading.
brumby makes a good analysis as you seem to have done well, up to a point, in implementing your strategies but something about your routine is not quite right for you psychologically and it led to the inevitable breakdown. In addition to that if you have a strategy that is creating too many losses that could be exacerbating the issue as well

Last edited by Kaeso; Mar 10, 2018 at 5:04pm.
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Old Mar 10, 2018, 2:32pm   #13
 
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Originally Posted by breaktwister View Post
Quannt and Malaguti, where do I start with backtesting? I have basic coding skills.
Get data, as far back as you can... you can start testing manually, with excel file to "record" your back trades, but it will take forever, so start learning python, it's a easy (even tough a bit ugly in terms of syntax) language and you can automate everything with it...
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"If you don't find a way to make money while you sleep, you will work until you die." Warren Buffett, CEO of Berkshire Hathaway.

Count de Money number 1 trading rule: EDUCATE YOURSELF!

Before you trade even single penny on the stock market, please spend the time and educate yourself by back testing different trading strategies and ideas - go to eBay and search for "historical stock market data", you can buy 20 years of data for less than $100 - that's all you need to start.
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Old Mar 11, 2018, 8:58am   #14
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Donít give up but get smarter with research

No one goes from zero to hero in leas than 3-5 years in this game ...the same as a doctor or any professional vocation they needs years and years of training

Read widely and adapt your approach to suit your personality ...you will find your edge if you are committed enough

The reason so many fail in trading is lack of commitment .....they donít want it enough as they are not passionate enough about becoming a trader

You have to really want it ......thatís why simfew succeed .....but the ones that succeed are very well rewarded ....and deserve every penny

Good luck
Neil
NVP

Ps if you need inspiration I suggest reading market wizards or even listen to the podcast series
Chat with traders ......all good stuff and you will hear how so many great traders all start out losing money !....but by grinding it out they succeed over many years
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Old Mar 11, 2018, 10:42pm   #15
 
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What is going on in your head when discipline goes out the window? You need to address this because the best system in the world is going to fail if you can't stick to it.
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