I Am So Lost!

BF1

Member
97 0
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

Active member
103 0
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

Established member
916 15
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

Moderator
8,655 981
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

Member
97 0
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

Member
97 0
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

Member
97 0
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

Experienced member
1,535 6
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.
 

Rognvald

Established member
916 15
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.
 

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DaveT

Well-known member
434 6
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

Member
97 0
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?
 

Rognvald

Established member
916 15
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
 
 
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