Another year gone & still not profitable

[advfntrader]

well 2010 is gone and I am reviewing my trading. I demo traded for the first 6 months of the year as I had to get my losses under control and develop a strategy, things were going well and every month showed good profits.

so then I opened a micro account and started live trading, the first month was excellent, I doubled the account....but I knew that I was lucky as I must have been over-leveraged. then the next week I lost the lot trying to short Gold, somehow I let the loss run and then I turned to "hope" hoping it would drop. It went to $1350 and I thought "it must pullback" so I added another short ....game over

Account almost wiped out, I added more funds, again determined not to let losses run I tripled the account over the next 2 months, this IS IT I thought, I have got this now....then somehow I ended up in a DOW short, a massive 200 point spike and I didn't close it out...I thought "its OK as I have tonnes of margin now as I am only micro lots" so I added...doubled down. Well I ended up in the short for 6 weeks hoping it would come good.....= wiped out again.

My main issue is I keep running losses, I just cannot seem to get it into my THICK SKULL that I need to cut them.

also adding to a losing trade....it is JUST STUPID

so for 2011 my new rules are...

1. Never ever add to losing trade
2. Cut loss at set % or amount of pips

at least I can see clearly now that money management is my problem, right ? - but why can't it SINK IN ???!

 

[meanreversion]

Very honest post, I hope the replies aren't too stomach churningly sanctimonious ..

 

[advfntrader]

I should mention that the money lost is not important, I moved to 10p a point to get things under control, I knew that I didn't want to stop trading and I also knew that demo wasn't right for me.

thinking about it, adding to the losers is daft as it increases the leverage and risk / reward changes. I really think if I can cut these 2 things out I am getting there....

 

[shadowninja]

When you did these interesting stunts, were you still following your strategy? Does your strategy involve averaging down/up? You need to stick to your strategy or go back to demo. Why are you not sticking to your strategy?

Look on the bright side - you could have thought you were really good and put up £10k only to average down and lose everything... so be glad it happened while you were doing 10p/pip.

 

[DionysusToast]

and...

Do you have your strategy written down? Do you read it before you sit down to trade?

 

[Hotch]

As above, if you followed your strategy then obviously it was flawed, if you didn't then not following it was your problem (and it could still be flawed).

Nothing to do but get on with it

 

[Splitlink]

I should mention that the money lost is not important, I moved to 10p a point to get things under control, I knew that I didn't want to stop trading and I also knew that demo wasn't right for me.

thinking about it, adding to the losers is daft as it increases the leverage and risk / reward changes. I really think if I can cut these 2 things out I am getting there....

Adding to losses is daft because of what you said but. most of all, because you are backing a loser. We all do that but not many of us add and the wise ones get out. That's an ego thing in not wanting to be wrong and you need to shake it off.

Meanrevision is right, most of us sound sanctimonious but what else can we do? This is very much a one man show and we have to face our weaknesses. I have a lot but I have learnt one thing. Although I can pick losers, I refuse to let them run.

What instrument are you trading, over what period do you expect to have the trade open, and what stops do you have on that?

 

[tommog]

Look on the positive. The things that let you down are both factors that you can control. Discipline and money management. You can work on this

 

[bbmac]

Great post by the OP.....Re letting winners run and cutting losers, The author of the Book Reminiscences of a Stock Operator (about Jesse Livermore,) Edwin Lefevre suggests that the principal reason most find trading so hard to master is that when we as human beings are naturally geared to hope, in trading we need to go against that and fear instead (ie cut the losers. ) Conversely when we are naturally geared to fear (that they won't run,) we should in trading instead, hope (and let the winners run.)

Of course a run of losers inhibits your chances of allowing the winners to run, fearing another loss, but although related to the point, that's a different story, well coverered on this board and other places.

G/L

 

[tomorton]

Very honest advfntrader, and I hope it will encourage others to see the crisis they are approaching but are so far denying.

This is 80% at least a psychological game. The object is not to know what the market will do - it is to know what you will do.

 

[advfntrader]

to answer your questions, NO - I did not follow the system, the system does not say add to losing trades and has strict stop out points based on daily and 4 hr candles....why didn't I take the hit.... because I was convinced that the market would turn and thats why I added and didn't stop out. I need to get to the bottom of why I keep doing this...

 

[davidh1819]

, the first month was excellent, I doubled the account

I think that is your biggest problem. Your positions are far to large and I do not blame you for running losses if you have far to much at stake. Lower the sizes of your positions set a stop loss then you will find that losses are a minor nusiance not a disaster. Anyone doubling an account in 1 month is bound to fall as fast as they gained. that's my opinion anyway

 

[Chartsy]

well at least you can say that your losses were from lack of control as opposed to your actual method (?)

 

[scose-no-doubt]

I'm in a very similar position to you, mate
The advice I've found most helpful is that I need to decide whether I'm trying to trade or I want to be right.
When I think like that it gives sometimes gives me the slap in the face I need to cut losers.

 

[davidh1819]

A Book called "Trading in the Zone by Mark Douglas" can realy help with many issues raised here in regards to disciplined trading. If I never had read Trading in the Zone I probably would have given up on trading by now it changed my whole perspective of how to look at the market. I could not recommend it more.

 

[new_trader]

I need to decide whether I'm trying to trade or I want to be right.

I'm curious, what did you decide?

 

[Splitlink]

to answer your questions, NO - I did not follow the system, the system does not say add to losing trades and has strict stop out points based on daily and 4 hr candles....why didn't I take the hit.... because I was convinced that the market would turn and thats why I added and didn't stop out. I need to get to the bottom of why I keep doing this...

It looks as if you are a contrarian. Picking the tops is a bitch. Have a look at

http://www.trade2win.com/boards/trading-journals/111942-surfing-wave-big-break.html

http://www.trade2win.com/boards/first-steps/105646-revisiting-price-action.html

Plenty of good charts in them

 

[scose-no-doubt]

I decided I want to be right and took the little money I had out of the SB account. I've moved back to demo and when I get spare time I'm attempting to develop an approach that that requires less opinion or is more structured... early days so I'm still not sure which

 

[barjon]

to answer your questions, NO - I did not follow the system, the system does not say add to losing trades and has strict stop out points based on daily and 4 hr candles....why didn't I take the hit.... because I was convinced that the market would turn and thats why I added and didn't stop out. I need to get to the bottom of why I keep doing this...

at,

Well I guess none of the answers will be news to you because you clearly know what your problem is. It's stubbornly backing your opinion rather than the evidence before your eyes - reversing the mantra trade what you see, not what you think.

What to do about it? I dunno, maybe an additional New Year's resolution - opinions OUT, evidence IN - may help you focus on the evidence unfolding before your eyes.

cheers

jon

 

[Ross Spur]

The simple answer (possibly) is always to set a sensible stop when a trade is opened and never widen it. Even if you aren't profitable initially, at least your account will never show these wild fluctuations.