my journal 2

This is a discussion on my journal 2 within the Trading Journals forums, part of the Reception category; No, seriously: I ****ed up with real money, as usual. My rule of one trade per day had worked so ...

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Old Mar 1, 2010, 6:17pm   #414
 
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re: my journal 2

travis started this thread No, seriously: I ****ed up with real money, as usual. My rule of one trade per day had worked so well, that I got confident and brought it up to 2 trades per day, which worked, and I brought it to 3 trades per day... and today I've lost everything I made in the past week.

Anyway, here I had made a summary and written these good principles which I need to follow for profitable trading (taking for granted that I have an edge):

Quote:
1) elimination of fixed costs by increasing timeframe and profit target
2) limited loss per trade (stoploss which is made possible by a limited leverage)
3) lower frequency of trading to avoid irrational decisions
4) longer monitoring of markets to pick only the best opportunities
Number one is taken care of by my edge, since my trades last hours.

Number two means stoploss, and that's my biggest problem.

Number three is another problem I have. I can't solve it by saying over and over again "one trade per day". It's just too little, and I can't handle it mentally, and I feel compelled to do more, and seize at least 2 opportunities.

Number four comes naturally by getting used to trading only twice a day.

So basically I simply have to get used to these rules and I'll be profitable:

Two trades per day with a stoploss (one at 3 PM CST according to my system, and one any time during the day).

It'll work if I follow the above sentence. I am sure about it. But the big problem is that I've not followed that rule until now. If I succeed, I feel compelled to trade more (out of euforia) until I lose. And when I lose I feel compelled to trade more (out of revenge) until I ultimately blow out my account.

Just one sentence is between me and profit: two trades per day with a stoploss. Will I ever do it?
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Old Mar 1, 2010, 6:58pm   #415
 
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we engage in irrational behaviours... because we want to break the rules

travis started this thread I was watching the news on tv, and I saw something about these kids getting their piercings. And I was thinking... how many irrational people hurting themselves for no apparent reason there are: all these people with piercings plus all those with tattoos. To me that's totally irrational.

But then I thought: what else do I do by making those two extra trades per day that cause me to be unprofitable? I do exactly the same as people who smoke, get pierced, get tattooed. I can't believe I so meticulously avoided getting hurt all my life physically (I even skipped school and now work sometimes when I didn't sleep properly), and have been hurting myself financially for so many years, even after finding out how to avoid it.

So maybe the answer to why I am hurting myself financially could be the same that these people would give you if you asked them: why are you getting your body pierced?

So I am going to look at those reasons and see if they apply to my financial piercing:
http://en.wikipedia.org/wiki/Body_pi...s_for_piercing

Quote:
Reasons for piercing vary greatly. Some people pierce for religious or spiritual reasons, while others pierce for self-expression, for aesthetic value, for sexual pleasure, to conform to their culture or to rebel against it.
1. religious: not applicable because I am atheist
2. spiritual: no idea what that means.
3. self-expression: getting closer, in that I enjoy trading.
4. aesthetic value: unlikely because I'd lose even if there was no one to tell.
5. sexual pleasure: not applicable.
6. conform to my culture: nope, because it's against it (my parents believe it's immoral).
7. rebel against it: it could be, because I always wanted to rebel against my parents and society, but maybe I'd rebel better by making money rather than by losing so this doesn't seem an explanation. But this could be an explanation for breaking my rules, rules that I create to be profitable. But I break them because I don't like rules.

Number seven seems to be an important point. I have experienced too many rules and restrictions by my parents as I was growning up, and now I can't ever say "no" to myself: as I mentioned earlier, I can't keep myself from smoking cigarettes, drinking beer, eating chocolates, if these things are within my reach. That's why I usually keep my refrigerator empty.

So maybe we've nailed it: my big problem in reaching profitability is that doing so requires discipline and rules, and I am allergic to rules, because I've been given too many rules as I was growing up.

Can we solve this allergy to rules? I'll think about it.

So basically, with this post, I've realized that I am similar to those "irrational" people getting pierced as a way to rebel and break the rules. I do the same when I don't follow the rules that lead to profitability, and it's because I share with them this dislike for rules. It's not irrational to want to break the rules. I have to abide by rules in every area of my life, and maybe trading is the only place where I can really do what I want, but if I do that, I lose money. I need to find other activities where to look for freedom.

This post also made me realize again (I had noticed it before) that it's because I want to break the rules that I go to work a few minutes late, that I like to leave a few minutes early, that I don't like to fall asleep exactly when I should (I enjoy going to bed "late")... all things against what I was taught insistently, relentlessly, by my harassing parents.

Last edited by travis; Mar 1, 2010 at 8:54pm.
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Old Mar 1, 2010, 9:08pm   #416
 
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2 daily trades with stoploss (one any time and one at 3 PM CST)

travis started this thread 2 daily trades with stoploss (one any time and one at 3 PM CST)
2 daily trades with stoploss (one any time and one at 3 PM CST)
2 daily trades with stoploss (one any time and one at 3 PM CST)
2 daily trades with stoploss (one any time and one at 3 PM CST)
...

Will i follow these healthy principles? There's no way around it. If I follow them I make money, and if I don't, I will lose money. It's ok to rebel against rules, but let's do it somewhere else. It's not like I get run over by cars just because my mom and dad always told me to be careful when I crossed the street.

It's not like I rebel against every single rule my parents taught me. I am not completely an anti-conformist. I dress normally for example. There's no point why I should hurt myself by breaking these trading rules. I am sick and tired of losing. These rules are just like saying "don't drive while you're drunk". After a couple of trades I get drunk, and I shouldn't trade any longer. Yes, I won't die, but my account will die as a consequence. Do I want that? Do I want to make money more than I want to break rules?

The automated systems keep getting better and better but I have no money to trade them.

Yes, I could take a loan and forget about discretionary trading, but my capital is not safe until I will learn to control myself. Because it's happened before that I blew out my 30k capital via discretionary trading. I must ensure that I am not out of control by the time I somehow get ahold of a big capital (whether I made it or it was a loan).
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Old Mar 1, 2010, 9:50pm   #417
 
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re: my journal 2

travis started this thread Even the chart game has taught me - if nothing else - this one thing: that I have a low trading tolerance, even when money is not on the line. I can pick good trades, but after about 20 trades I am like drunk and unable to trade properly any more. I can't trade discretionary and apply a set of rules or rather principles, because such rules are not univocal and my emotions keep getting in the way. I can keep them under control for the first 20 paper trades, and the first one real money trade. As a consequence I could make two sets of 20 paper trades per day, and I'd be profitable, and two (far apart) real trades per day. Anything more than that, and I lose control - regardless of whether it went well or bad. Actually if it goes badly I have an even lower tolerance.

By the way, as i write these deep thoughts, I still have fresh memories of blowing out my account again, which happened today. One trade wasn't well planned, it didn't go well, revenge trading with an even worse trade... lost all margin needed to trade. I already wired more money to my account. I must have blown out my account over 30 times by now, in these last 13 years (trading with real money since december 1997).
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Old Mar 1, 2010, 10:49pm   #418
Joined Feb 2010
re: my journal 2

you're just dying to go fully automated aren't you !

keep the learning with discretion, takes a while but soon your entries get better.
after that let the algorithm do the magic
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Old Mar 1, 2010, 10:51pm   #419
 
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re: my journal 2

travis started this thread I agree because, as i said, I can't go automated unless I first have full control of my actions. Even if I were fully automated, as happened before, I'd feel the temptation to interfere with my systems, and I would act on that temptation.

Secondly, I can't go automated anyway, since I have no capital. So, either way, I shouldn't and I can't go automated, unless I first manage to be profitable with discretionary trading. I still have months and months ahead of me of just discretionary trading, and unless I want that to be an endless nightmare (it's been lasting long enough already), i better start following my own rules: no more than two trades per day and always using a stoploss.

In the past 2 years, my systems made money each time and each time I wasted that money with my discretionary trading. Now I need my discretionary trading to return all the money it stole from my systems. It will be one side of my personality (compulsive) returning the money it stole from the other side (rational me). Hopefully it will be possible and I'll make it happen. Otherwise I will just keep on writing journals in here for the next few years.

Last edited by travis; Mar 1, 2010 at 10:58pm.
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Old Mar 1, 2010, 10:56pm   #420
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re: my journal 2

Quote:
Originally Posted by travis View Post
I agree because, as i said, I can't go automated unless I first have full control of my actions. Even if I were fully automated, as happened before, I'd feel the temptation to interfere with my systems, and I would act on that temptation.

Secondly, I can't go automated anyway, since I have no capital. So, either way, I shouldn't and I can't go automated, unless I first manage to be profitable with discretionary trading. I still have months and months ahead of me of just discretionary trading, and unless I want that to be an endless nightmare (it's been lasting long enough already), i better start following my own rules: no more than two trades per day and always using a stoploss.

In the past 2 years, my systems made money each time and each time I blew it with my discretionary trading. Now is the time I need my discretionary trading to return all the money it stole from my systems.
ok, what is the method of your discretionary trading?
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