This is a discussion on my journal within the Trading Journals forums, part of the Reception category; Now i am only losing 90 dollars. At the same time, I am losing precious hours of sleep, which tomorrow ...
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|Nov 30, 2009, 11:37pm||#988|
Joined Mar 2003
Re: my journal
Now i am only losing 90 dollars. At the same time, I am losing precious hours of sleep, which tomorrow could cause me to be tired and lose money. But if I go to sleep while the trade is open, I might wake up with nightmares, so I might as well stay up a little bit longer. But if I was really rational, I'd just close the trade. And then I wouldn't have talked to my dad up to now, only to get more depressed.
|Nov 30, 2009, 11:40pm||#989|
Joined Mar 2003
Re: my journal
Ok. I have a feeling that I might get a lot of these 20 ticks trades right, and that I might teach some people to trade in the process of teaching myself not to gamble. Indeed. Because I do know enough about the markets to predict their direction with enough precision to make money, provided that I go with the trend. There you go again: since the trade has started to go well, all my depression is gone, and i am starting to get delusional again. Losing -2.50 now.
|Nov 30, 2009, 11:41pm||#990|
Joined Mar 2003
Re: my journal
|Nov 30, 2009, 11:48pm||#991|
Joined Mar 2003
Re: my journal
After all, it might be as simple as following the trend and doing the same things I was doing before. What did I do wrong for 12 years? I tried to pick tops and bottoms, and therefore went against the existing trend. So I recently decided that simply by following moving averages, I would not allow myself to go against the trend, and therefore do the opposite of what I've been doing for 12 years. And that's what made me throw my famous "overstretched system" in the trash.
But that won't stop me from being able to identify overbought / oversold in the short term, the breathing of the market, which I have learned to read in all these years. So I can still use a lot of things... that I've learned to read. It's as if for 12 years I tried to get a tan in rainy days in winter, and all of a sudden moving averages are making me do the same thing during sunny days in summer. It's going to be a lot easier for me, especially with all the training. But once again I may be just fantasizing because my position is doing well.
Mmh. That's good. My position got closed. So that's two good trades in one day, my first day as a non-gambler.
I certainly do not regret making this trade. And this is the proof that my father has no influence on the EUR. I don't know about the other markets.
What I was thinking was this, regarding that comparison about getting tan: it's as if for some wrong reason you are told that to walk best you have to carry ten kilos of weights attached to each of your shoes. Then you'll walk funny, but certainly, if you can... I don't know what I am talking about... bad comparisons... i am just very happy that everything went well.
Basically my point is that if you are told to shoot blindfolded and you keep on missing, and you even kill a few people by mistake, then one day they let you see and shoot, you're basically going to do very well. Yes, you wasted years and years, but you might have a better understanding of targets... once again bad example, but there's something right in all these examples.
What I mean is today these trades were quite easy for me. Just like for michelangelo who set the angel free from the stone by carving away what was unnecessary, I carved out all the bad habits and bad methods, after all these years of practice, and finally carved out enough to set profit free.
Can't sleep. Woke after sleeping for less than 4 hours. I had turned off the alarm but I still woke up at 7.33 AM CET.
"Self-destruction" for me is the compulsiveness I've felt throughout my life and the things it makes me do, like an engine that overheats and then blows up: not sleep, over-trade, over-write, over-talk, over-everything. This compulsiveness comes from an anxiety to overperform that my dad passed on to me (by telling me everything he told me ever since I was born), and this anxiety to overdo everything decreases to an acceptable level only when I am on vacation (but even then I go for marathon swimming). That's why I've always felt that in order to live decently, I'd have to quit my job and be on a permanent vacation.
NEW VERSION OF SYSTEM: SIMPLIFIED
Before answering wprins' post, here's another intuition I've had while sleeping about the system.
Why should I have two different charts with two different averages on different timeframes when I can have both averages on one chart? The 15-periods on the 15-minute charts is nothing but the 1-minute average 15*15=225-period average. This will give me one single very detailed chart on where price is with regards to moving averages, and one chart with pivots. It will save me a third chart needed to view the slow average with precision. So here's my new rules:
PRO-TREND DISCRETIONARY SYSTEM
Set up hotkeys: "B" for "buy 1 at market" with 20 ticks bracket order, "S" for "sell 1 at market" with 20 ticks bracket order, "C" for "close position".
SET UP THESE EUR.USD@IDEALPRO CHARTS ON IB'S TWS:
2 DAYS OF 15-minutes CANDLES WITH PIVOTS
4 HOURS OF 1-MINUTE CANDLES WITH 15-periods and 225-periods moving averages
discretionary ENTRIES can be made if:
1) you haven't lost over 250 dollars for the day (from discretionary trading)
2) the 225-period ma is in favor by at least 5 ticks
3) the 15-period ma gets crossed by price (in favor) after touching the other side >= 3 minutes
4) your entry and your take profit are >=10 ticks away from any pivot lines
Bracket order of 20 ticks. You can exit early if you wish, but not increase the distance of the stoploss.
Last edited by travis; Dec 1, 2009 at 7:08am.
|Dec 1, 2009, 2:18am||#992|
Joined Apr 2008
New reply, wahoo!
Actually I want to make something clear at this point. There was basically 2 issues at stake in my previous response to you: 1) A matter of principle, and 2) What one does in practice/ a matter of pragmatism.
1.)My arguments about NLP and trying to argue that being a good coach does not ipso facto require being a star trader is a matter of principle: You should always have an open mind and consider what someone presents to you on it's own merit. To do otherwise would possibly unnecessarily disadvantage oneself from a potential learning opportunty.
2.)As a matter of practice however I (like you) would highly prefer a real trader as a mentor/coach. For people not in the first instances traders, I would again prefer people who either nevertheless also trade, and who clearly has also made it their mission (and has the necessary skills) to research (e.g. using NLP for example) successful traders.
Also, I'm fully aware of the fact that in principle it's possible to make 100% (or more) a month using leverage (you can do this in spot FX as well) but my view has become that this is not sustainable and not safe. I've in the past (primarily on demo) managed to return like 400% one month, and a 100% another. The trouble is though, that this rate of return is generally speaking NOT sustainable or safe and sooner or later you get similarly hammered to the downside.
My apologies if this perception is incorrect and you know all this, but I get the feeling you don't fully realise the effects of risk and leverage on your trading. Let me explain and then you can tell me if you already know this and I'm off base.
1.) Your first job as trader is risk manager. If you don't look after the risk, any profits you make *will* eventually be lost!
2.) This means your first responsibility is that you need to trade in such a way that you are able to survive and be here to trade again another day and not only that, but be profitable again soon after a setback.
3.) Fact: At some point you *will* have a surprising/unexpected/unlikely run of losses (say 10 in a row), no matter how good on average/in general your system is. You need to account for this as something that *will* happen sooner or later and that you must be able to survive. This means your system/trading system/trading style will need to be able to bounce back from such an event. It means you system must basically never be able to get into a position that your loss is so great that your system cannot return itself to overall profitability in a short space of time.
4.) Fact: Recovering from such a "maximal negative excursion event" is harder the bigger the absolute % of loss in account equity is. You must therefore limit this maximal % loss/drawdown level to one from which recovery is easy. To wit:
% lost % gain needed to recover
5.) Obviously, the larger the loss, the harder it becomes to recover. Lose 50% of your account and you have to make 100% just to get back where you were! Lose 75% and you need to make 300% to recover! If you have 3 trades and each loses 50% of your account, you'll be left with 12.5% and will need to make nearly 700% to recover, and that's only 3 consecutive losses of 50%!
6.) On the other hand, if your worst case likely/expected loss can be limited to (say) 10%, then you only need 11.1% to recover, which is much easier than 100% needed if you lose 50%!
6.) The above then implies limits are needed on the size of your allowable losses. If your worst case expected series of consecutive losses are, say 10, and you want to limit such a run to, say, 10% of account equity, then it follows that you need to ensure that your trades sizes/stops are such that 10 successive trade losses will not exceed 10% of account equity. It follows that no single trade may risk loss of more than about 1% of account equity, for example. This is the only way you can ensure you'll be able to be in this game for the long haul and not blow up sooner or later!
5.) Now in reality, the actual maximal number of expected consecutive losses will vary based on trading system/strategy and market you trade. You will consequently have to do research to find out what the maximal number of consecutive losses actually seen for your trading strategy is in various markets to help you arrive a realistic estimate on this value for your trading system.
6.) Obviously the more margin you use/the larger your trade size, the closer your stops will have to be to comply with your % trade size limits determined above. But.... the closer you place your stops, the more likely it becomes that you will get stopped out due to market noise, so suddenly the win/loss rate of your system is affected and the maximal number of expected consecutive losses becomes bigger! This demonstrates that picking an arbitrary position size and then using allowable percentage loss per trade to place the stop is ass-backwards. You have to rather place your stops properly, based on your system, and such placement should **not** be affected by how much you're risking on the trade. Otherwise as explained, your risk management is going to interfere with your system's edge.
7.) So, the above 2 points them unavoidably implies that there's a limit to the the size of position you can **safely** trade. And that you need to determine position size based on your stop level, and not the other way round! In essence, you need to determine your stop position based on market realities/your system only (e.g. lower/higher than major recent swingpoint or whatnot) and *then* *only* determine position size to comply with both the stop level and maximum % risk per trade allowed.
8.) The above means you will only lose a predefined amount of account equity if you lose, and that this will only happen if the premise for the trade is proved false by an unexpected adverse market move, and not due to market noise hitting your stop due to it being too close for example. It means you will probably be able to survive and bounce back even from long losing streaks. It does however mean that you won't likely make massive amounts on single trades or (in practice) 100% per month or such and even if you do once or twice it's likely not sustainable, as such returns typically implies the type of position sizes and risk levels which would cause a blowout if even a modest losing streak is encountered.
Bottom line is, the numbers don't lie, so I'm a bit sceptical of very high return rates, because generally speaking they are hard to maintain and sustain for reasons I tried to explain above.
However, the trouble is it is also true that one can spend years and years trying to find and piece together all this free information and then learn from it, and effectively waste **a lot** of time in the process.
I hence argue and submit to you there comes a point where the time saved by reading a well written book where a lot of useful information has been put into one place, or paying someone else to help you is rather more valuable than the money you lose buying the book or getting the mentorship. Time is the one non-renewable resource we all have. When it's gone, it's gone. Your time should really be your most precious commodity. Therefore, if you can safe a lot of time by spending a little money, that is often money well spent.
To illustrate by example: It would for example be crazy for me to refuse to pay a doctor to prescribe me anti-biotics if I have an infection, on the basis that I have the capacity to discover this cure for myself (for free) and (in principle) produce it for myself for free.
Such an undertaking may take me years if not decades and for what? To reinvent what someone else has already done? No, the wise person will spend the few pounds and get a prescription from a doctor, and then spend some money to get the medicine. The cost/benefit ratio is out of this world! Your few pounds in effect buys the combined work and experience of doctors and scientists over many years and saves several decades of struggle of your own life, and furthermore costs you only only a few hours of your life and a few pounds in money terms.
I also want to just add that, for the purposes of learning, sometimes repetition is a very good thing. You may find it irritating, but generally speaking repetition is a good thing for learning, and as they say, patience is a virtue...
I'm a bit loathe to list what I consider to appear to be reasonable commerical trading authors and mentors, since in I've not yet actually tried any of the commerical offerings myself. Perhaps the best to say is:
1)Dirk Du Toit and Day Forex Capital, here: http://www.dayforex.com/df_home.asp?...extraining.htm
His e-book “Bird watching in Lion country” recounts his own history and take on forex trading. I've bought the e-book and am about halfway through reading it. I suspect you'll find it a bit wordy but it's interesting nonetheless. The other trader I told you about managed to win a trading competition after being mentored by Dirk. He's took profits out of his account recently after doubling it in a year, and restarted with $5000 AUD on 03/11. Currently back up by about 64% in one month which is excellent. See here: http://www2.oanda.com/cgi-bin/msgboa...50;p=13#000184
(Perhaps my 4% estimate is a bit conservative after all )
2)“Winners edge trading” : http://www.winnersedgetrading.com/
For the longest time this was totally free, however I see Casey Stubbs and 2 or 3 other traders have now launched a premium mentorship offering for a nominal amount per month. As I've not tried it I don't really have an opinion about it except to say that I generally have a favourable impression.
3)“Hard right edge”: http://www.hardrightedge.com/default.htm A great amount of very relevant and useful free stuff as well as a web based course + mentoring offer at not a lot of money ($189 - $249 depending on how long you join) as well as other packaged courses/books. http://www.hardrightedge.com/tw.htm
4)“Informed Trades”: http://www.informedtrades.com/f111/ Another great free site with huge amounts of resources. Read the “Why do you do it...?” question here: http://www.informedtrades.com/26958-why-do-you-do.html
You'll probably like the answers
5)Book authors: Brian Shannon, Alexander Elder, Van K. Tharp, Michael W. Covel, various others.
To anyone reading the above, please be very clear: My mentioning the sites above is not an endorsement or encouragement from me spend money with any of them. I am not affiliated with any of them in any way so please don't just go by my suggestion but do your own homework as well if you are considering spending money with them.
If I can however be a bit blunt – you really need to make a decision that you're going to stop being the victim here. Whatever wrong and bad things happened in your life was wrong and bad, but now you have a choice to make. You can keep blaming your father and your circumstances and the teachers and schools and universities and however else and keep living in the past, holding on to all these feelings of resentment and being hard done by whowever; Or you can decide to let them and all the bad experiences go. Forgive them all, forget it all. Be free of them and move forward. You're your own person today. The past is gone. Cut yourself loose from it, and stretch yourself out towards the future. I'm not saying it will be easy and it may not be entirely painless, but honestly, you're the only one suffering from all this history, and for what?
Furthermore, I don't think that your comments about my thinking and other people's thinking is an either/or question. I can value my own thinking while also valueing and considering other people's thinking. From experience I simply cannot agree that reading books is a waste of time. Some books perhaps yes. (But that's just par for the course, life's not perfect.)
I'd rather you didn't just rush off and joined the first/best forum or mentoring provider out there. If you're going to do that, try to find someone with suitable street cred.
"Most people don't lose because of what the market does but because of how they respond to the markets ... and how they handle losing trades." - From a review of "What I learned losing a Million Dollars" by Jim Paul and Brendan Moynihan.
Last edited by wprins; Dec 1, 2009 at 3:57am.
|Dec 1, 2009, 11:06am||#993|
Joined Mar 2003
Re: my journal
I've read your post (if we put our replies together, you've succeeded in making me read a whole book). Thanks for the infinite patience you've had in replying in detail to all the things I said, even taking time away from sleeping. I will reply shortly, because I don't have enough energy (nor things to say), even though you would deserve a longer reply. However, maybe we should try to keep our replies shorter for our health (so we both can sleep at night), because doing things perfectly on a forum (replying to a post, point by point) could hurt us in other areas, like not being able to sleep enough. Reasoning and arguing is important, but also sleeping is important.
What I will shortly say (you wouldn't want to spend another two hours replying to my reply anyway) is this: in my opinion, you're overestimating the usefulness of books, and not realizing how obsolete they have become in the age of internet. Books are way surpassed, their time is over. You don't read a book: you skim through a .pdf, using the search function to find what you need. You use wikipedia, youtube, you chat... books used to be the only tool people had to communicate things to distant people. Nowadays they're surpassed by much better instruments. Text and writing is useful as before, but since you can skim and search, you should do it: reading an entire book is not an efficient way to learn. It used to be necessary because books were written on paper. Not anymore and it should be avoided when possible, except of course when you are reading a novel for pleasure, but I am against that as well.
In my opinion, also, you're underestimating the power of my reasoning (not everyone's reasoning, just mine, because I am an intelligent person, not the case with the majority of people, who can keep on being told what to think by other people, and be sheep). Yes, by doing all by myself I risk reinventing the wheel and other things that are already explained in some book, but first of all I don't know which book that is, and second of all I don't where that book talks about what I need to know right now (for doing that reasearch, internet is much faster and more efficient, and that is what I do: and that is why browsing on the internet is superior to reading books). And third of all there's only a limited number of inventions that I need to make in order to become profitable at trading (please don't tell me the usual "but admittedly you suck at trading", because you'd be neglecting the automated systems that I've built). And I will be done faster with them by inventing them myself, or browsing the web, than by reading books. Yes, I've been an unprofitable discretionary trader for 12 years so far (but a profitable automated trader, and I haven't read a single book - except 2 excel manuals - to build those systems), but reading van tharp and all the other psycho-babble would not have sped up my process (as far as my discretionary trading).
The more you write, the more stupid you get, because when you teach you don't learn (you know it's true). That's why we should keep our posts short. And academics spend their whole life teaching and writing, and that's how they write books like "A Random Walk Down Wall Street", that are widely acclaimed, brilliant and wrong.
Last edited by travis; Dec 1, 2009 at 12:28pm.
|Dec 1, 2009, 12:49pm||#994|
Joined Mar 2003
Re: my journal
The capital has increased to almost 7k by now, and today some of my systems will be trading because some of them have drawdowns low enough to trade with such small capital (I've lowered the requirements as well).
Despite the fact that I am dead tired, I want to place one discretionary trade according to my system, also because after yesterday's two good trades (one good and one lucky), I might have one or two readers who'll come back and check if today I'll make it happen again.
After the first trade, I felt lucky and very tired. After making the second, and during, despite the fact it lasted much longer, I felt less stress, and once if ended, even though I was actually luckier than for the first one, I felt like I was good. I felt that my method was actually good, because, with such a bad timing (right before the close, when usually price reverses or stalls), it actually produced profit.
Returning to my talk about capital again, since today is only Tuesday and I have 4 days to go, I wouldn't be surprised at all if I were able to get back to 10k by Friday night. That would be an amazing thing for me, because just a few days ago I was at less than 5k and with this state of mind:
Last edited by travis; Dec 1, 2009 at 12:56pm.
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