Best Thread £10k wipeout

[neotrdr]

Everyone in any endeavor experiences set backs. Some small, some crushing. There is no shame in walking away but there is no folly in getting up dusting off and pursuing your goals with renewed focus.

Lack of risk / money management, leveraged trading before you are consistent and the dream of easy money is the bane of every trader. I also went through great pain, recovered, stalled and have become more consistent. 3 things that helped me were
1 - A print out and notation of all my worst and best trade charts from entry to exit with an accompanying index, VIX and US$ charts. And once the emotion had settled studying and restudying why I entered, exited (too early or late) why I added (down or up).
2 - Maintaining and refining a written trading plan. A concise write up with chart examples of of my set-ups, entry and exits
3 - Written risk management rules that are reviewed and refined and notes of why I failed to follow them.
I still keep a excel trading journal but only for tracking my equity curve. The charts with notes and the other 2 items above have helped me immensely.

Also stop looking for trading junk food, the holly grail and beware as you already should realize of predators who want to sell you something or make a point. By that same token be smart not clever. Study TA review your trading performance until you are comfortabel and see what works for you. This may sound like bogus zen BS but in the end you will see it makes sense.

Its analogous to when I was young and set my goal to run a sub-3hr marathon. I could already run a sub-36m 10K, my original goal was to do a sub-3hr marathon in 1-1/2 yrs, it took me almost 3. And without a specific training program, progression and fitness progress monitoring that fit me I would not have been able to do it.

A plan, refinement of the plan, patience and progression with persistence and courage are key.
And of course if the market is telling you are wrong, you are wrong! Take the first loss and quickly. As a minimum reduce your position by 1/2. If it was indeed a fake out you can always put it back on.


Best,

Neotrdr

 

[meanreversion]

I think there are two books which should be compulsory reading for anyone looking to trade. "Market Wizards" by Jack Schwager and "Trade your Way to Financial Freedom" by Van Tharp. Before committing a single penny to the market, invest £50 in these two books and think things through. If nothing else, they will bring a sense of perspective to the endeavour.

 

[Jumpinjack]

I think there are two books which should be compulsory reading for anyone looking to trade. "Market Wizards" by Jack Schwager and "Trade your Way to Financial Freedom" by Van Tharp. Before committing a single penny to the market, invest £50 in these two books and think things through. If nothing else, they will bring a sense of perspective to the endeavour.

Van Tharp is not a trader and does not trade! Big difference between those who can succeeed at trading and those who succeed at selling their ideas about trading.
If anything read Jesse Livermore, he at least did longer term investing which is where the money is at! Dan Zanger is alo good at Chartpattern.com - Free Technical Stock Chart Analysis

 

[meanreversion]

Ah yes, pretty much all the Market Wizards recommended the Livermore book, I need to get that one. I guess my point really is that a bit of background reading could help immeasurably. There aren't many professions (if any at all) where you would simply commit money without any prior training or research and hope for the best.. however that seems to be the approach of most people to trading.

 

[Jumpinjack]

Ah yes, pretty much all the Market Wizards recommended the Livermore book, I need to get that one. I guess my point really is that a bit of background reading could help immeasurably. There aren't many professions (if any at all) where you would simply commit money without any prior training or research and hope for the best.. however that seems to be the approach of most people to trading.

Yes, of course. It is the only profession where you can see that the 50/50 is moving all the time and that when you make money during your first attempts you believe even more that the financial markets are your mountain of gold! Little thought is given to the fact that most profis including banks, institutes etc, have been investing for years and still make very careful and planned risk/reward decisions when placing capital into the markets even if they can`t get out when the markets turn against them!!!!

 

[meanreversion]

ah, do i get to be a "Junior Member" after I've finished being a "Rookie"? I can't wait...

 

[Jumpinjack]

ah, do i get to be a "Junior Member" after I've finished being a "Rookie"? I can't wait...

It won`t make you a better trader though...!

 

[disi]

I think there are two books which should be compulsory reading for anyone looking to trade. "Market Wizards" by Jack Schwager and "Trade your Way to Financial Freedom" by Van Tharp. Before committing a single penny to the market, invest £50 in these two books and think things through. If nothing else, they will bring a sense of perspective to the endeavour.

That is good piece of books. However I am pretty sure that 99% of people who read them will keep doing thigs wrong It's not about knowledge...it's about using it!

 

[meanreversion]

I'm interested to know what kind of people log onto this website. Are the vast majority punters with 10-20k they are dabbling with part time? Is there a section of fulltime professional traders (that's what I do). I guess also a section of newbies as well?

 

[Masquerade]

I'm interested to know what kind of people log onto this website. Are the vast majority punters with 10-20k they are dabbling with part time? Is there a section of fulltime professional traders (that's what I do). I guess also a section of newbies as well?

Vast majority are people who have either lost and given up/trade with small amounts or are trying to learn. Then some locals and full time institutional guys and then a silent section of private traders who will often keep fairly quiet on here. I can assure you the vast majority of people on here won't be dabbling with 10-20k accounts.

 

[meanreversion]

Focus less on what you think the market is going to do, and more on what happens to your money. If you start with £2,000, the very most you should ever risk or lose on a single trade is £100. Any more than that, you stand to be wiped out. So for GBP/USD, as an example, you might sell at 1.6225 with a s/l at 1.6255, so do not bet more than £3 a point. Even that is quite aggressive, better off to start in very small and once you can prove to yourself you are successful, then increase size. OR you could just bet it all on one trade and double/lose your money.

 

[Jumpinjack]

QUOTE=Hammersnut;823584]Well i'm a newbie and just getting into the whole forex thing.
Just learning as much as i can about the markets and i have a demo account and saving some cash around 2K for when i actually start trading. I have been looking at the markets for about 5 years now and understand the charts and ema lines/trends etc and going through the babypips website. I am also looking to maybe attend one of John Bartletts events.

I'm thinking the more i know before i get stuck in the better!!????:smart:[/QUOTE][/I]

Paper trade for six months. Look at how others to charts and create strategies. Find a style that suits your investment requirements, i.e., daily, hourly strategies etc watch, learn and adapt it to fit your own character! Forex Street. The Foreign Exchange Market has a lot of charts, three that I look at very often are:

EUR/USD & DXY break key trendlines

EURGBP Weekly Technical Chart

Corporate sector holds key to recovery

They are consistent, they have charts that make sense to me.

Be aware though FX Street, and other sites, has a lot or rubbish, people just trying to sell you a system for 29 dollars a month!!!

 

[The_Man]

Almost all successful traders begin by losing. I'm convinced that successful traders are just otherwise ordinary people who refused to give up and believe that trading wasn't for them. I'm trying to get started in trading and losing can make you feel like you have a gambling problem. It's a very steep learning curve but if you want to win I don't think you should give up.

 

[fernanj]

Almost all successful traders begin by losing. I'm convinced that successful traders are just otherwise ordinary people who refused to give up and believe that trading wasn't for them. I'm trying to get started in trading and losing can make you feel like you have a gambling problem. It's a very steep learning curve but if you want to win I don't think you should give up.

Man - sorry to dissapoint you, the defination of "successful" in trading is you "loose less" than when you started out, in other words successful traders have loosing trades too.:-0

However to be a "successful trader ", you must learn to let your winners run and never terminate them prematurely as some new traders do... (I am guilty of this too) in other words if you take your profits too quick then this is a guranteed way of going broke.

Take a peek at the stop loss order article on my web site

All the best
Joe
Stock Market Trading, a Powerful Profiting Strategy

 

[reversal king]

A very expensive mistake ADVFN...some people will come back from that and try again while others will throw in the towel. Im not gonna tell you what to do except unless you are trading with some form of strategy and/or methodology, well you will get hurt again and again. Not sure if you have read the book Trader Vic by Victro Speranadeo, well he basically states that to get good at something, the easiest and fastest method is to find someone who is good at what they do and copy what they do until you become completely comfortable with it yourself and are able to adapt the methods to your liking.

Also just to make you aware, I dnt trade with stops either (and neither do any of the traders i know) but I do know where my entry and exit will be and follow the discipline the execute as planned, so if a trade goes against me although I dnt have a stop, I know where to get out and do so if my levels get hit.

Here is a website that really helped my trading, it might do the same for you. Welcome to Futurescomsignals

Let me know how you get on.

 

[Masquerade]

Also just to make you aware, I dnt trade with stops either (and neither do any of the traders i know) but I do know where my entry and exit will be and follow the discipline the execute as planned, so if a trade goes against me although I dnt have a stop, I know where to get out and do so if my levels get hit.

Quick question: If you know where you will get out ie. You say "at price x, i'm getting out regardless" Why would you not just automate that. I understand a lot of traders don't use stops because they allow themselves to use discretion and see how the market reacts. But if you say "Price X I close my position" you may as well reduce your liability and use a stop unless what you said got lost in translation.

 

[reversal king]

Quick question: If you know where you will get out ie. You say "at price x, i'm getting out regardless" Why would you not just automate that. I understand a lot of traders don't use stops because they allow themselves to use discretion and see how the market reacts. But if you say "Price X I close my position" you may as well reduce your liability and use a stop unless what you said got lost in translation.

Well that answer to your question is: I dnt trade exact prices, I trade price levels or within a certain price band. So where as you could have a stop in place, the price hits your stop and you're out only to find that your were right about the move in the first place. Obviously if price breaches the area of importance and heads in the other direction I get out. Also there is that aspect of trading with larger amounts of cash and brokers seeking out your stops. Also I would just like to point out that I was taught to trade by a VERY PROFITABLE trader with an account size of over $50 Million and this is his methods. It took a bit of getting used to at the beginning but I could not do it any different now.

 

[Masquerade]

Well that answer to your question is: I dnt trade exact prices, I trade price levels or within a certain price band. So where as you could have a stop in place, the price hits your stop and you're out only to find that your were right about the move in the first place. Obviously if price breaches the area of importance and heads in the other direction I get out. Also there is that aspect of trading with larger amounts of cash and brokers seeking out your stops. Also I would just like to point out that I was taught to trade by a VERY PROFITABLE trader with an account size of over $50 Million and this is his methods. It took a bit of getting used to at the beginning but I could not do it any different now.

Ok, that's fair enough. I just got the impression exit was a specific point from what you originally stated.

 

[reversal king]

Ok, that's fair enough. I just got the impression exit was a specific point from what you originally stated.

Also just want to mention that entry is based on the same methods as exit. So I wont enter a trade because of a specific price but rather how price reacts around that level.
:smart:

 

[spy74]

i remember when i first started, i doubled my account trading FX with in 4 months taking positions, which in retrospect, were far too large for my account size, but getting very lucky with my calls. i did not use stops at all. i then proceeded to lose all my gains by stubbornly sticking to a losing position and finally cut it once my account was back to break even. after spending some time licking my wounds, convinced i would be right eventually, i took the same view as before, but limited my risk by spending all my remaining $$ on option premium - and lost every cent i spent - ouch! i learned a very expensive lesson that not only do you have to have trading plan for entries & exits, but you also need a money management plan for how to allocate your capital to a trade, and when to cut your losses, AND you have to stick to them both. if not, there is a high likelihood you will lose every cent, one way or another!