At what point do you throw in the towel?

[rnicoll]

Lets have some quick history. I started trading (okay, what I was doing was messing with the market, lets be honest) in 2000, managed to somehow end up with QXL (or some three letter acronym starting with Q...) just before they exploded due to a mixup and lept 130% straight up. Finally sold for a 60% profit, and... then proceeded to lose the lot over the next few months. Eventually decided I was far too nervous to be trading (over traded a lot), took a break.

Tried spreadbetting back in 2003. Make a list of newbie mistakes, and put a tick next to them all for me would ya? Lost £600 in the first afternoon, swore off the whole thing. Came back in 2005, made £30-40 in the end, but was still too nervous.

Started trading again April 2007. Made £400, lost £700, made £1100 for a grand total of £800 up by this time last month (on about £2k starting). Then it all went a bit awry. One bet went bad, happens. A second, bigger bet ricocheted off my stop loss; I was now down to £400 profit. Started clawing it slowly back, but keep making mistakes I should know better than to make, now.

Am now back to about £400 back, with £100 in losses in trades at the moment. I tried taking a week or two out to take a break, didn't really seem to help. Wondering if I should just give up and come back in September or something.

Thoughts? Is September a good time? Earlier? Later? Any other advice?

 

[black bear]

Your all over the place mate

Hi

One set up

one plan

trade it

then see how your doing in 3 months (paper trade)

good starting point imho, many more but that ones simple and you can build on it

T2W Day Trading & Forex Community

guy as a few articles and they are all worth a read imho

I would re-read your post throw in the towel :?:

You have to make a start 1st :?:


No one can fault the Boxers corner men or the Boxer himself for thowing in the towel. He as trained hard for the fight and is still coming up short in the big fight. He and his corner men have something to judge it on.........................................


Do you :?:

Andy

 

[JTrader]

COLDPLAY - FIX YOU LYRICS

When you try your best but you don't succeed
When you get what you want but not what you need
When you feel so tired but you can't sleep
Stuck in reverse.......

For me, if i'd ever have blown an account, I'd have thrown in the towel then & not risked doing the same again.

 

[JTrader]

If u don't have the self-discipline to use strict/structured money management techniques then perhaps trading is not for you.
Perhaps you get excited, a rush of blood to the head, adaopt a gamblers mind, and think to hell with it, I'm doubling up! (stakes)

IMO, without correct money management, and even with correct money management (sometimes) trading will be a bitter sweet symphony, and results will at best be inconsistent, and will not reflect the overall actual performance of your trades, as 1 loser (with reckless stake size) can wipe out a long list of consistent 1-2% capital risked winning trades. This unfortunately can leave the trader stuck between a rock and a hard place.

PS. Besides good money management rules, you also need a sound strategic methodology to succeed & be consistent in trading. Anything else, and sadly it likely to result in a case of another one bites the dust.

 

[rnicoll]

Hi

One set up

one plan

trade it

then see how your doing in 3 months (paper trade)

good starting point imho, many more but that ones simple and you can build on it

T2W Day Trading & Forex Community

guy as a few articles and they are all worth a read imho

I would re-read your post throw in the towel :?:

You have to make a start 1st :?:


No one can fault the Boxers corner men or the Boxer himself for thowing in the towel. He as trained hard for the fight and is still coming up short in the big fight. He and his corner men have something to judge it on.........................................


Do you :?:

Andy

Odd thing is, as soon as I try adding more indicators, trend lines, resistance/support lines, it all goes to hell. Bollinger band seems to be as helpful as it gets. That said, I think I have a nasty tendency to try catching daggers, and more indicators just gives me the confidence to do dumb things.

Paper trading is probably a fantastic plan. It never used to work too well for me because my biggest challenge was self discipline, but at least if I can show I can do it on paper, I know it's just a matter of practicing patience.

(Does also occur to say, I know the numbers I'm dealing with are tiny, but then that means I can cover losses out of my discretionary spending without it being a major issue)

 

[rnicoll]

IMO, without correct money management, and even with correct money management (sometimes) trading will be a bitter sweet symphony, and results will at best be inconsistent, and will not reflect the overall actual performance of your trades, as 1 loser (with reckless stake size) can wipe out a long list of consistent 1-2% capital rised winning trades. This unfortunately can leave the trader stuck between a rock and a hard place.

Yeah... I was feeling confident because I'd made £800, and figured it was time to start increasing my bet sizes. Except, instead of adding 10-20% or something, I decided 100-200% was good. Instant catastrophe, really...

 

[JTrader]

You keep mentioning indicators, perhaps they're part of the problem.
All an indicator does is give you signals based on mathematically calculated formulas - nothing to do with trend & S/R.
All an indicator does, and why many feel comfortable with them, is that they remove responsibility for decisionsmade, away from the person. That way, if things go tits up, the trader can at least say, well, it wasn't me, the indicator failed me. That way they can sidestep responsibility for their own failure, and just blame the indicator. So the indicator provides a psychological security blanket, but at the end of the day is just based on a random maths formula unrelated to what is happening on the chart.
Can't get no satisfaction? perhaps the indicators are also a big part of the problem.

 

[Trader333]

At what point do you throw in the towel?

The answer is a simple conditional formula:

Consistent Outgoings < Consistent Income = Quit


Paul

 

[FXSCALPER2]

You quit when you know you can't trade. You can't expect to go into a profession and take money from people who are better informed, more experienced and smarter than you are.

 

[JTrader]

The answer is a simple conditional formula:

Consistent Outgoings < Consistent Income = Quit


Paul

Thats definately one indicators formula that sits well with me. P/L doesn't lie if money management is disciplined/consistent. Just like in sport, the score, or a final league table doesn't lie.

 

[WinningTrade]

Thanks Andy! Trading plan doc really helped me.

Being a new trader I kept trading with monthly financial targets and boom I felt more miserable each day because I had less chance of reaching the target. Guess a slightly long term plan with success ratio than finance might help.

Would try .. Good luck to me!

I feel we all know when to throw the towel guess Learning to pull the trigger is the key!

 

[rnicoll]

The answer is a simple conditional formula:

Consistent Outgoings < Consistent Income = Quit

How do you define consistent? 3 months? 6 months? A year? Two years? I mean, I managed a profit over a year, which seemed fairly good as signs go, and now everything I do seems to swerve off the other way.

OTOH, that £100 loss from earlier is now a £50 loss with one trade closed for an £8 profit (trading small amounts with that one; should probably have paper traded it instead, to be honest).

I suppose really the point to throw it in is when you either can't afford to continue, or can't see how to get better. I have a consistent problem with closing profitable trades out too early, which means my profits aren't big enough to readily absorb my losses. I should probably trade smaller amounts until I get through that; that sound reasonable to everyone?

 

[fifty2aces]

How do you define consistent? 3 months? 6 months? A year? Two years? I mean, I managed a profit over a year, which seemed fairly good as signs go, and now everything I do seems to swerve off the other way.

OTOH, that £100 loss from earlier is now a £50 loss with one trade closed for an £8 profit (trading small amounts with that one; should probably have paper traded it instead, to be honest).

I suppose really the point to throw it in is when you either can't afford to continue, or can't see how to get better. I have a consistent problem with closing profitable trades out too early, which means my profits aren't big enough to readily absorb my losses. I should probably trade smaller amounts until I get through that; that sound reasonable to everyone?

Smaller accounts are not the solution yet - you need to learn how to trade, i.e. come up with a plan/strategy/system/whatever you want to call it, then test it by paper trading. When papertrading, treat that account as if it is real money - use proper money management, follow your rules etc.

Once you've papertraded consistently (meaning without breaking your rules) for a decent amount of time (depends on the timeframe you are trading, but probably at least a month), and if you are making a profit, then you can go live with a small account.

 

[shadowninja]

A simple question: are you sure you have a working system?

Have you tried demo trading it to prove it can work without all the psychological factors impacting your trading?

 

[rnicoll]

Smaller accounts are not the solution yet - you need to learn how to trade, i.e. come up with a plan/strategy/system/whatever you want to call it, then test it by paper trading. When papertrading, treat that account as if it is real money - use proper money management, follow your rules etc.

Once you've papertraded consistently (meaning without breaking your rules) for a decent amount of time (depends on the timeframe you are trading, but probably at least a month), and if you are making a profit, then you can go live with a small account.

Sounds like good advice. Hard to papertrade like it's real money (so, lack of confidence is my biggest problem when trading), but I'll give it a go.

Oh, made £26 today, in the end. Closed out my positions, and I'm going to go play with Excel now

 

[rnicoll]

A simple question: are you sure you have a working system?

Have you tried demo trading it to prove it can work without all the psychological factors impacting your trading?

Certainly, if I let positions close on their initially set stop/limit prices, I'd be in a LOT better position than I am currently.

 

[Rockhoundnz]

The problem with throwing in the towel is that it makes it quite hard to become a good trader once you throw the towel in...

Here's how long it took some smart and determined people to become profitable:

Linda Raschke - 3 years
John Carter - 4 years
Mark Fisher - 3 years
Hubert Senters - 2 years sitting by the side of an experienced trader before trading

 

[new_trader]

Smaller accounts are not the solution yet - you need to learn how to trade, i.e. come up with a plan/strategy/system/whatever you want to call it, then test it by paper trading. When papertrading, treat that account as if it is real money - use proper money management, follow your rules etc.

Once you've papertraded consistently (meaning without breaking your rules) for a decent amount of time (depends on the timeframe you are trading, but probably at least a month), and if you are making a profit, then you can go live with a small account.

Good advice, but I would say rather than set a time limit to the paper trading it's best to go by number of trades, that way time frame is sort of irrelevant. I think you should incorporate paper trading as part of your live trading. This way you experience what it's like to trade with a financial commitment. It’s a good idea to do 1 live trade for every 3 successful paper trades. This way, if you keep losing on your live trades you might be able to determine whether your methodology is sound and it’s just your emotion affecting your performance.

 

[RPEX]

You definately need to evaluate different strategies. I guess 'trading' in this sense of the use is definately short term. I'm like yourself, spreadbetting and highly leveraged spot fx bit me in the ****. I made a reasonable amount of cash from equities over a couple of years (easily outperforming the market, bank rates and property, and i managed to sleep well), but then lost the lot in September when covered warrants blew a hole in my account.

Today i made a loss and made a new rule: nop more scalping or flow trading because i will always lose so long as i am on the buy side of the spread (the foreseable future). However, that doesn't stop me from 'trading news event' where i think i stand a greater chance of taking small profits with greater certainty so long as i have access to the right news feeds.

On a different note. One school of thought suggests that the time to throw in the towel is when you're not having fun anymore! I guess it's different if you're trying to do this full time for a living (you guys must get really lonely), but i guess as long as you're only losing money which you can afford to lose, it's the price you pay for keeping your skin in the market, like a lot of retail investors playing small cap equities.

 

[rnicoll]

Today i made a loss and made a new rule: nop more scalping or flow trading because i will always lose so long as i am on the buy side of the spread (the foreseable future).

Good grief, you tried scalping? Even I consider that a bad idea, and most finance people I've met get this look of "Why don't you just try russian roulette, it'd be faster" if I mention spread betting!

On a different note. One school of thought suggests that the time to throw in the towel is when you're not having fun anymore! I guess it's different if you're trying to do this full time for a living (you guys must get really lonely), but i guess as long as you're only losing money which you can afford to lose, it's the price you pay for keeping your skin in the market, like a lot of retail investors playing small cap equities.

I think this is it, for me, yeah. When I can't afford to cover my losses out of my discretionary spend, or am not having fun with it, I should quit. Until then... well, I think mostly I need to be more comfortable just sitting on the side watching the market when I'm not sure what it's doing.

I've been pushing myself hard because I've been wanting to make a career out of trading, and I think that's mostly what's screwed it up for me. Too much pressure, not that experienced, BOOM. I'm thinking I might drop to 4/5 time at work, and use the added free time to help my trading to keep my income up, but still know that if it all goes wrong I've got enough money to be comfortably off...