I Am So Lost!

[BF1]

I don`t know whether I am coming or going. Having just lost a substantial amount of money, it dawned on me that I am not a trader, but a gambler.

My style was nothing more than the equivalent of picking a horse out of a hat and hoping for the best.

The good thing is that it has woken me up and in order for me to continue I MUST change. And what a difficult task that is in its self. My problems have been a lack of discipline in cutting losses, taking profits too soon, no stop losses, no system whatsoever, too emotional etc. etc.

The odds are so stacked against every trader that it is obvious to me that in order to succeed I have to be so much better than the rest.

But where to begin? Its like a massive jigsaw inside my head and I don`t know where to begin to assemble the pieces. Where do I get a system from? How do I know what indicators to use and when?

If anyone has experienced the above (Im sure some of you have) please would you be kind enough to tell me how you changed and where you sought the information required to trade successfully from?

Has anyone any experience of trading with a proven trader and did it prove helpful? If so, can anyone recommend a trader that coaches would be traders?

Thanks for any help/guidance.

 

[splasher]

It may help (if you want to disclose it) what your trades were that caused the loss, why you entered them, what your timeframes were and why you exited them.
I have found it very helpful to review losses and learn from them and this board is a good sounding board (harsh but fair)
As often said it is an expensive business to learn but the lessons may as well be worthwhile to help you in the future.

Splash

 

[Rognvald]

BF1.

All the information you need is available from this site, on the internet and in books if you are prepared to read from a map and systematically work at it. You seem to know what you should be doing but are not doing it.

Take a break and come back to it when your head is clear and your anger has subsided a little and tackle the issues u have raised in your post one by one. If u don't find what u need on a point then come back and ask for help. As u present it it is difficult to know where to start.

Ifu feel a street plan or GPS accuracy is necessary and feel sure this will give u the fix you need in exchange for quite a lot of money then get yourself a coach. It should be easy to find one here.

I am not in a position to make a recommendation as I haven't used one.

 

[Trader333]

Based on what you have said, it is not a system that you need to address but your own psychology. It is often said that success in trading is 80% psychological and only 20% technique.

So even if someone was to give you an approach that is profitable it would not address the fact that you would take profit too early and let losses run.

A good book is The Disciplined Trader by Mark Douglas which is a bit heavy but he does provide exercises that help address the very things you are having problems with so maybe worth a try.


Paul

 

[BF1]

Splasher,

The most recent, and biggest loss, was a long spreadbet on the Dow just 2 days before the Madrid bombings.

Of course, the Dow along with other markets just tumbled and before knew it I was 10K down.

I kept it open because I hoped (not a good system for trading) that it would bounce back up, and when it did bounce a little bit, I waited for it to bounce more, which it didnt.

Of course, the nearer it got to the 10,000 level, the more in my mind was the prospect of it tumbling to the 9600 mark.

Eventually I pulled the plug.

 

[BF1]

Rognvald,

I raised the point about systems as I would find it easier to follow pre-defined plan as opposedto working off instincts. This is why I wondered if there is such a system that exists that I could work with.

I don`t want a black box type as such, as I would still like to make some decisions myself. I am curious to know where traders start to establish there own systems as it seems to me to be a mine field out there with different strategies etc.

Trader333`s remarks on the psychological aspect do hit home with me, as I understand the difficulty now in accepting when you`re wrong!

 

[BF1]

Splasher,

The most recent, and biggest loss, was a long spreadbet on the Dow just 2 days before the Madrid bombings.

Of course, the Dow along with other markets just tumbled and before knew it I was 10K down.

I kept it open because I hoped (not a good system for trading) that it would bounce back up, and when it did bounce a little bit, I waited for it to bounce more, which it didnt.

Of course, the nearer it got to the 10,000 level, the more in my mind was the prospect of it tumbling to the 9600 mark.

Eventually I pulled the plug.

 

[Salty Gibbon]

BF1 - it is a very long process. I started out about 9 months ago and I have gradually pieced together various parts of the trading jigsaw puzzle from books, a bit of formal training, this site, discussion with other traders etc etc...

I now have what I call my system which works pretty well on paper.

However, as you are aware, what works on paper does not necessarily work when you trade for real using your hard-earned money.

Pyschology plays a massive part in trading as does discipline, concentration, focus etc.

You have to look inside yourself and really see what you are made of. I have discovered what kind of a person I really am through trading and I have had to make enforced changes to the way I behave in order to stand a chance at trading success.

It is not easy at all and it is a question ( imho ) of accumulating knowledge and hands-on live practice and experience over a long period of time.

If you persist, you will eventually end up with a unique methodology which may or may not be your personal grail.

Try and stick to it. It is a hell of a long journey, not much fun but you do get to see what hell is like.

 

[Salty Gibbon]

And by the way, it helps to be just a little bit mad !!

 

[Rognvald]

BF1
Here is an example of a trading plan. It is not mine and I can't say whether it has been implented successfully but it should give you some pointers in starting to prepare your own.

I am tempted to remove this lest I be accused of advertising for Omnitrader but with that caveat I think u will see some of the things u should be looking for in formulating a detailed plan. There are a number of issues missing but it is a start.

 

[DaveT]

BF1 -

I believe you have just graduated from naive beginner to POTENTIAL serious trader!

And for so many that graduation UNFORTUNATELY costs them their wad!

Briefly, I'll outline the steps I took after that early, inexperienced 'bad spell' :

1) TAKE 6 MONTHS OUT FROM REAL TRADING. CONSIDER VERY CAREFULLY IF THIS BUSINESS IS FOR YOU.

2) MAP OUT AN EDUCATION PLAN - tell yourself you HAVE to learn and do the homework. Put the Hours in. Pour over those books, buy those courses, study those charts. (SEE BELOW)

3) PAPER TRADE WHIST COMPLETING THE 6-MONTH EDUCATION. DOCUMENT ALL TRADES. ANALYSE YOUR PAPER PERFORMANCE.

4) WRITE A FULL, COMPREHENSIVE BUSINESS PLAN - (I did mine on MS-WORD, printed and compiled as good as a Venture Capitalist would demand) . Include a mission statement, methodology, equipment,applications,risk management, financuial projections.

Write down your STREGTHS, WEAKNESSES, OPPORTUNITIES, THREATS (S.W.O.T)

Plan out a complete ACCOUNTING AND REPORTING SCHEDULE.

5) DEFINE YOUR TRADING PLAN - How you will use Technical Analysis (ie which patterns, indicatiors, entry,exit rules, etc). How will you use fundamental/new information?

6) WHEN YOU HAVE READ 2-3 BOOKS MINIMUM, ( One should be about trader psychology), and WORKED THROUGH AT LEAST 2 CD-ROM Courses (see below), AND PAPER-TRADED FOR 6 MONTHS, You can (assuming you have the capital ready) begin to trade again for real.

7) STICK TO YOUR PLANS WHILE TRADING - LEARN DISCIPLINE.
always have strict risk amnagement rules/STOP-LOSS SYSTEM.
DOCUMENT YOUR TRADES IN A NEAT, FORMAL LEDGER.



How do you learn to do all this I've mentioned? READ<,WATCH AND LEARN. Then Practise.

Here are the books and courses I went through. I refer to them regularly:

BOOKS:

1) HOW TECHNICAL ANALYSIS WORKS, by Bruce Kamich.
2) THE 21 IRREFUTABLE TRUTHS OF TRADING by John Haydn. ( good one for trader psychology)

CD-ROM INTERACTIVE COURSES:

1) PRING'S INTO. TO TECHNICAL ANALYSIS by Martin Pring.
2) TECHNiCAL ANALYSIS 1 AND 2 (see T2W store)


Finally, (excuse the length of this post), always remeber that you never stop learning. plan continuous education. Read more books. Buy more courses.

If all this sounds daunting, do'nt worry. If you are REALLY determined to become a good trader, you will ultimatley relish the challenge ahead.

Good Luck. Hope this helps.

 

[BF1]

Salty

So what did you start looking at first? What sort of information did you research?

I find it confusing with all the different indicators like Fibonacci, Elliot Wave, MACD - the list is endless! Is there a common set of indicators that have proven to work consistently?

 

[DaveT]

PS -

As someone once said - PROFITS DO NOT MAKE THE TRADER STUDIOUS. LOSSES DO!

 

[Trader333]

BF1,

Check your private messages.


Paul

 

[Rognvald]

BF1 Get RD Edwards and J Magee Technical Analysis of Stock Patterns
and
John J Murphy Technical Analysis of the Financial Markets

read both again and again.

They can both be obtained cheaply as good 2nd hand copies ether from amazon or abe books

Best wishes

 

[BF1]

Thanks DaveT & Rognvald and all others that have posted so far. It certainly has given me plenty to explore.

I was under no illusions that trading was an easy way to make money. One saying that sticks in mind is "Trading is a hard way to make easy money"!

Thanks
Barry

 

[schoe]

Forget indicators, learn support, resistance, stop placement and money management when to reverse and when not to trade at all,ie recognising sideways price action. Start learning simple patterns such as consolidations which nearly always continue in the direction of the trend and give you a chance to put in fairly tight stops,see todays Euro/USD on fifteen min chart for a good example.

 

[Trader333]

Is there a common set of indicators that have proven to work consistently?

Understanding the relationship between Price and Volume patterns.


Paul

 

[samuelhogg]

I am glad I am not the only one, BF1 I am in the same boat! Any trade I make the price goes in the opposite direction that I want it to, but it makes me more determined to get it right next time. I am just trying to read as much as I can before I start trading again, any recommendations for money management books? Very tempted to make an appointment to see Naz.
Samuel

 

[Trader777]

Forced Awareness

Hi BF1,

Been there and have the TShirt to prove it, but lost my shirt!

I call it Forced Awareness.....where the pain of loss just forces you to have insight into your mind, method, and money management deficiencies.I am a professional trader for a firm and the price I paid to get here would put most sane people off and back to 9-5pm land.

But if you have the fortitude...read on.

I am sure you have read some of the classics and that is a great start. I am an aquaintance of Mark Douglas and know he no longer mentor's trainees- be wary of those who claim to be wizards or great teachers. Most of the truly great trainers are down to earth guys who understand the struggle.There are a few books of merit I recommend apart from Mark's.

"Dancing with Lions" - by Trader X. An American also a friend of MD. A great book but you will need to order it from USA. Tells of his journey through losing it all then becoming a disciplined trader and doing very well to day. His boat didnt even sink during the recent hurricanes!

"Trading for a Living" - Alex Elder...easy to get hold of and addressess a number of pertinent issues.

"Financial Risk Taking" by Mike Elvin - a trader and psychologist who developed a whole sytem of learning with a workbook in the back to check off your progress .

But reading is only the beginning......get to know professional traders and find out how they got there. Then halve your postions, then halve them again until your exposure is very, very small. Then find a mentor...there are alot of nutters out there and Elvin's book describes a few to be wary of.

Having said that , I wish you every success and a safe journey. Its your personal journey and the price you pay is a personal thing.

But one rule above all.........ALWAYS USE STOPS....never trade without them


Trader777

I don`t know whether I am coming or going. Having just lost a substantial amount of money, it dawned on me that I am not a trader, but a gambler.

My style was nothing more than the equivalent of picking a horse out of a hat and hoping for the best.

The good thing is that it has woken me up and in order for me to continue I MUST change. And what a difficult task that is in its self. My problems have been a lack of discipline in cutting losses, taking profits too soon, no stop losses, no system whatsoever, too emotional etc. etc.

The odds are so stacked against every trader that it is obvious to me that in order to succeed I have to be so much better than the rest.

But where to begin? Its like a massive jigsaw inside my head and I don`t know where to begin to assemble the pieces. Where do I get a system from? How do I know what indicators to use and when?

If anyone has experienced the above (Im sure some of you have) please would you be kind enough to tell me how you changed and where you sought the information required to trade successfully from?

Has anyone any experience of trading with a proven trader and did it prove helpful? If so, can anyone recommend a trader that coaches would be traders?

Thanks for any help/guidance.