reminiscence of(yet) a (novice)trader

[Splitlink]

my money will be safe on the isle of caymen!
well i was due a blow out and it happened yesterday.last 6 months ive been getting away with scalping back from losses of up to -300 numerous times.but yesterday i was short euro and it just kept going up.i was margin called and finally stopped out for -500.it was a relief.it shot up another 100 points in seconds after that(4 positions,that would have been another -400)
so the lesson is,only keep in your account what you are willing to blow.especially if you are like me and cant bring yourself to close out a losing trade in the hope it might come back.
so 1 of my fail safes worked-only have money in account which you are willing to forego.
2nd fail safe-my stop point,i ignored!
now will bring in a 3rd fail safe.will look at using a stop loss again.its frustratingly annoying to keep being stopped out but perhaps that is the best way forward to stop such blow outs.and with a proper strategy and edge in place perhaps you have to learn to accept winning 55% of the time and just inching forward rather than trying to make leaps and bounds.

Well, I only keep my account at a moderate level but I am, at least, in the happy position of being able to draw some out, every so often. A couple of years ago I took some out for Christmas and, in the New Year, had such an appalling run of losses that I was forced to put some money back in. I must say, though, that I do not trade like you, the losses of hundreds of points would have sent me packing years ago.

It is easy for us to criticise but it is even worse to encourage you to keep trying.

Good luck to you, whatever you do.

 

[aag100]

You still haven't learnt self discipline, have you ?

You know what to do but don't do it !!

Have you thought another profession might suit your ambitions better ?

Can't think of one off-hand other than dog walking ?

:cheesy:

i thought i could make the rules and break them all cos i am the best.
i learned that my broker does close you out but still took me over my limit by 50 points.i shall get onto them about that.
i had 4 positions euro short coming up to the 13.30 news and closed 2 for a small gain.net i was down by about 5 points and didnt want to close out all of them.i normally like to be out before news(as ive mentioned before) but last few months ive been watching and there usually hasnt been much movement so i dropped my guard and thought id risk it.and after that it hardly gave me a chance to get out.
once again- the essence of discipline is that there are no exceptions.
i'll be back stronger.

 

[aag100]

Well, I only keep my account at a moderate level but I am, at least, in the happy position of being able to draw some out, every so often. A couple of years ago I took some out for Christmas and, in the New Year, had such an appalling run of losses that I was forced to put some money back in. I must say, though, that I do not trade like you, the losses of hundreds of points would have sent me packing years ago.

It is easy for us to criticise but it is even worse to encourage you to keep trying.

Good luck to you, whatever you do.

im not giving up just yet.
the lesson to be learned here is keep taking your profits out of the account.its easy enough to transfer funds again and gives you time to pause for thought.
i think its been another watershed moment.

 

[aag100]

Well, that's why it's called a stop - you're supposed to stop! I know, I've been there, man. I know it's a cliche, but if you keep getting stopped out, maybe look at your system again. Like I've noticed with a lot of systems I've developed, a system that generates a lot of trades, that you filter is a bad system, because often you'll filter out good trades and chase bad ones and make up for it by making bigger or looser stops. Rather have a system that generates few trades with very few filters and tighter stops. Just my experience.

a stop is just hard to accept.but that comes with experience and a few battle scars.
i should really know better by now and will for the next time.

 

[aag100]

so i thought i might try paper trading for the rest of the year and test some new strategies.
but i know i cant trust myself.

 

[WklyOptions]

you are focusing on the wrong things...please THINK it through carefully

so i thought i might try paper trading for the rest of the year and test some new strategies.
but i know i cant trust myself.

Hi, aag100,

I know trading can be quite frustrating and emotionally draining!

However - I've stated to you in the past - you are trading without a written Trading Plan.

You seem to imply you are an "intuitive trader". Let me just say - the brokerage firms of stocks, options, FX, binary brokers - are littered with individual traders' blown out accounts! Many that claimed "intuitive" and/or "discretionary" trading was their trading method(s).

But this is not grounded/reality-based trading. It is trading on seeing what happened to your trading account's P/L - and then you generate internal emotions - and then you ACT on these emotions in the next trade or two "thinking" and "believing" you have solved the trading problem(s) that caused losses.

One of the key problem(s) - this emotional-based thinking and trading is EXTREMELY quick and nearly instantaneous! The trader is NOT AWARE that he/she has already been "trapped" by the emotional vibrations/energy within. :idea: Then back to trading on the basis of "wish, hope, and pray" - which are excellent life principles - but not really all that great for trading profitably!

aag100 - if you cannot - or even worse, WILL NOT - reward yourself by adopting a positive edge (back-tested and forward-tested and randomized tested) written Trading Plan, you will have a high adverse probability of landing back to where you are now! :whistling

Trading profitably on a consistent basis is a very simple process to execute repeatedly. The tough part is to focus, commit, and measure trading performance against a written Trading Plan and written Checklists of procedures and standards!

I've been retired from being Risk Mgr for a Single Family Office trading room for over 10+ yrs! But - when I was still actively involved there, 100% of the traders, interns, clerks - were never allowed "intuitive" or "discretionary" trading. It was allowed during planning, briefing, and debriefing meetings/sessions. But NOT during active trading and management of open campaigns!

And - our institutional trading colleagues over at other hedge funds, etc., also had the same similar priorities. Discretion, intuition, were excellent traits for research, planning, back-tests, etc. But NOT for active trade management.

aag100 - as long as you are looking for the ideal "stop loss" formulation, or the ideal "entry" point, etc. - you will not be able to seriously grow your account and achieve long-term profitability as a multiple-lot trader.

Sorry for the negative comments and "prediction" above - PLEASE - it is NOT meant as a reference to your character or persona! :!:

My comments are meant to strongly push/move/stimulate/"gouge" you into making the correct sequence of ordered procedures and actions/movements that you MUST develop to succeed long-term in trading and grow your account(s).

Winning traders are focused on campaigns! Simple and direct - nothing more. What is the final P/L after a series of 20-30 closed perfectly executed trading campaigns? What errors from the Plan were observed? Root causes? Adjustments and error-prevention? Etc. Winning traders THINK and CONTEMPLATE from a much broader but organized SYSTEMATIC perspective.

What happens if I am planning to trade a 200-lot campaign? Here is a good Pull-Back zone per Trading Plan criteria - I will put in my first Entry of 30-40 lots. Hmmm - price going against the expected/desired trend direction. Wow! Another excellent Key Support zone with Confluence - time to add the next 40-lots.

Of course - the lots being entered are also fully hedged with options insurance puts (for example if trading long stock campaign).

See what is happening here, aag100? The campaign trader is NOT overly concerned about being right or wrong over a stop-loss price point! The campaign trader is more focused about protecting lots with limited-loss insurance, then overlaying several ideal entry zones, etc.

And - it the campaign is moving in the winning trend direction - then the campaign trader can add the next 40-lot group at the ideal entry zone(s) as defined in the written Trading Plan.

The above scenario is written out for you to consider and study and THINK.

Trading and winning and consistent profitability is all about deep focus, thinking, research, commitment, and flawless execution. It is NOT about picking the correct entry or stop-loss price point precisely. :idea: :clap:

Understand aag100? I hope you can "see" and internalize what I am trying to communicate here.

Good luck - I really do wish 100% that you find the satisfaction, grounding, centered, fun trading pathway soon! But please - not by being intuitive! At least not until you have demonstrated long-term systematic trading success - then you can learn to trust your intuitive insights as being real and beneficial for you.

Best regards,

WklyOptions

 

[aag100]

Hi, aag100,

I know trading can be quite frustrating and emotionally draining!

However - I've stated to you in the past - you are trading without a written Trading Plan.

You seem to imply you are an "intuitive trader". Let me just say - the brokerage firms of stocks, options, FX, binary brokers - are littered with individual traders' blown out accounts! Many that claimed "intuitive" and/or "discretionary" trading was their trading method(s).

But this is not grounded/reality-based trading. It is trading on seeing what happened to your trading account's P/L - and then you generate internal emotions - and then you ACT on these emotions in the next trade or two "thinking" and "believing" you have solved the trading problem(s) that caused losses.

One of the key problem(s) - this emotional-based thinking and trading is EXTREMELY quick and nearly instantaneous! The trader is NOT AWARE that he/she has already been "trapped" by the emotional vibrations/energy within. :idea: Then back to trading on the basis of "wish, hope, and pray" - which are excellent life principles - but not really all that great for trading profitably!

aag100 - if you cannot - or even worse, WILL NOT - reward yourself by adopting a positive edge (back-tested and forward-tested and randomized tested) written Trading Plan, you will have a high adverse probability of landing back to where you are now! :whistling

Trading profitably on a consistent basis is a very simple process to execute repeatedly. The tough part is to focus, commit, and measure trading performance against a written Trading Plan and written Checklists of procedures and standards!

I've been retired from being Risk Mgr for a Single Family Office trading room for over 10+ yrs! But - when I was still actively involved there, 100% of the traders, interns, clerks - were never allowed "intuitive" or "discretionary" trading. It was allowed during planning, briefing, and debriefing meetings/sessions. But NOT during active trading and management of open campaigns!

And - our institutional trading colleagues over at other hedge funds, etc., also had the same similar priorities. Discretion, intuition, were excellent traits for research, planning, back-tests, etc. But NOT for active trade management.

aag100 - as long as you are looking for the ideal "stop loss" formulation, or the ideal "entry" point, etc. - you will not be able to seriously grow your account and achieve long-term profitability as a multiple-lot trader.

Sorry for the negative comments and "prediction" above - PLEASE - it is NOT meant as a reference to your character or persona! :!:

My comments are meant to strongly push/move/stimulate/"gouge" you into making the correct sequence of ordered procedures and actions/movements that you MUST develop to succeed long-term in trading and grow your account(s).

Winning traders are focused on campaigns! Simple and direct - nothing more. What is the final P/L after a series of 20-30 closed perfectly executed trading campaigns? What errors from the Plan were observed? Root causes? Adjustments and error-prevention? Etc. Winning traders THINK and CONTEMPLATE from a much broader but organized SYSTEMATIC perspective.

What happens if I am planning to trade a 200-lot campaign? Here is a good Pull-Back zone per Trading Plan criteria - I will put in my first Entry of 30-40 lots. Hmmm - price going against the expected/desired trend direction. Wow! Another excellent Key Support zone with Confluence - time to add the next 40-lots.

Of course - the lots being entered are also fully hedged with options insurance puts (for example if trading long stock campaign).

See what is happening here, aag100? The campaign trader is NOT overly concerned about being right or wrong over a stop-loss price point! The campaign trader is more focused about protecting lots with limited-loss insurance, then overlaying several ideal entry zones, etc.

And - it the campaign is moving in the winning trend direction - then the campaign trader can add the next 40-lot group at the ideal entry zone(s) as defined in the written Trading Plan.

The above scenario is written out for you to consider and study and THINK.

Trading and winning and consistent profitability is all about deep focus, thinking, research, commitment, and flawless execution. It is NOT about picking the correct entry or stop-loss price point precisely. :idea: :clap:

Understand aag100? I hope you can "see" and internalize what I am trying to communicate here.

Good luck - I really do wish 100% that you find the satisfaction, grounding, centered, fun trading pathway soon! But please - not by being intuitive! At least not until you have demonstrated long-term systematic trading success - then you can learn to trust your intuitive insights as being real and beneficial for you.

Best regards,

WklyOptions

im in complete agreement with you.
i just once again went against my rules through poor discipline.1)i traded through news 2)i didnt cut.
the funny thing is i even saw that the bigger time frames 10/15min were not quite set for my short but i pulled the trigger on the 3min thinking why wait, and scalp a few points.
and the other funny thing is,last few months ive been using 5mins.just last couple of weeks i dropped to 3min.
as you say 'internalise'.i believe in that too.most aspects i have.this stop issue is the final one.infact im going to write it down in big letters somewhere where i can see it staring at me when im trading.
as im sure ive said before,winning back 20 is easier than winning back 50,winning back 50 is easier than winning back 100.what was i thinking letting it go to -500!
i need to better control my emotion and learn to walk away after a few losses and come back the next day.
i know i can beat it and i will.

 

[aag100]

one good thing is the pain only lasted 3hrs. i didnt have to endure the agony(loss of sleep,poor diet,lack of exercise,stress,anger,frustration and all the rest of it) for weeks as in an earlier situation.

 

[sethmo]

Ja, I'd rather take a 10 point sprung stop kick in the nuts, than a hope-it-will-bounce-back 100 point shot in the head any time.

I guess that's why I'm more drawn to a more mechanical system. I know when it stops me out of a trade, it's for a good reason, the very reason I set that stop there in the first place. I set my stops so future me doesn't second-guess present me, and when I'm in the battle, I can thank past me for being so sensible when I see a stop triggered and the price dive

 

[aag100]

so ive just been looking at the markets today and had a few realisations
1)i dont want to risk too much(say 10/20 points.the fewer the better so say 10 points)
2)the bigger the time frame,the bigger the risk required and the longer the need to hold a position.and theres nothing worse than being up 10 points one minute and then down 20 the next. because of this im drawn back to the lower time frames 1/3/5min.
so looking at the 1min i see a short entry but looking at the 3 and 5 min,they are still showing the market going up.so i dont take it and the market drops 10 points,missing out.or the 3/5 min have a short bias but on the 1min the market could go up 20/30 points.FRUSTRATION AFTER FRUSTRATION.
This draws me to the conclusion that i should just focus on one time frame and stick to it like glue.And then enter according to the bias on that but then also be prepared to cut loss(after loss if need be).so now ive eliminated big account blow outs but theres still the frustration of losing.
so you will tell me to have better RR.now how does that come about.why should the market give me 3 and only take 1(for instance)
........too many thoughts after a confidence blow.good thing its the weekend.

 

[rinchen]

aag100,

I had fun reading your long thread, however, as a new trader, I feel little discouraged now that there are not a lot of chances to make in the market. given that you still struggle after being in the market for so long. what I found going through your post is that you are executing your trades more intuitively than sticking to your plan of cutting losses short, etc.

what advice do you have for a new trader to make in the market?

 

[aag100]

aag100,

I had fun reading your long thread, however, as a new trader, I feel little discouraged now that there are not a lot of chances to make in the market. given that you still struggle after being in the market for so long. what I found going through your post is that you are executing your trades more intuitively than sticking to your plan of cutting losses short, etc.

what advice do you have for a new trader to make in the market?

ive been trading 4 years and on the cusp of breaking through.im of atleast average intelligence so perhaps someone smarter could do it quicker.but 4 yrs is not a long time.from what ive seen,im sure i could make better calls than people with 10/15 yrs of experience.my set backs have been my own doing.i just need to discipline myself more and follow my own rules.
ive taken the knocks all by myself ,someone with a mentor could do it sooner.
my advice to a new trader would be to use some of my rules(forward royalties).
learn the basics.develop a strategy.paper trade that strategy for a month,a few months,may be even a year or two.dont be in a rush to make a fortune,if you do you will sooner lose a fortune.
someone once told me i should try paper trading.my response was thats like picking lottery numbers but not actually buying the ticket.i still havent been able to sit down for a whole day and do that but i might,maybe even for the rest of the year and focus on my mind and other things like having a proper sleeping pattern/exercise regimen/diet.
this is a long topic
this process will break you down many times and you have to rebuild yourself.
you could get a regular job where you would get atleast the minimum wage.how would you feel if you spent the whole day and not only made nothing but on top of that paid the market that wage.
and as a newbie i would think what on earth is a strategy.simply,bring up a chart,watch the price,throw on some indicators and see how it behaves around them.
so go slow,dead slow ahead.dont be in a rush.

 

[rinchen]

ive been trading 4 years and on the cusp of breaking through.im of atleast average intelligence so perhaps someone smarter could do it quicker.but 4 yrs is not a long time.from what ive seen,im sure i could make better calls than people with 10/15 yrs of experience.my set backs have been my own doing.i just need to discipline myself more and follow my own rules.
ive taken the knocks all by myself ,someone with a mentor could do it sooner.
my advice to a new trader would be to use some of my rules(forward royalties).
learn the basics.develop a strategy.paper trade that strategy for a month,a few months,may be even a year or two.dont be in a rush to make a fortune,if you do you will sooner lose a fortune.
someone once told me i should try paper trading.my response was thats like picking lottery numbers but not actually buying the ticket.i still havent been able to sit down for a whole day and do that but i might,maybe even for the rest of the year and focus on my mind and other things like having a proper sleeping pattern/exercise regimen/diet.
this is a long topic
this process will break you down many times and you have to rebuild yourself.
you could get a regular job where you would get atleast the minimum wage.how would you feel if you spent the whole day and not only made nothing but on top of that paid the market that wage.
and as a newbie i would think what on earth is a strategy.simply,bring up a chart,watch the price,throw on some indicators and see how it behaves around them.
so go slow,dead slow ahead.dont be in a rush.

Thanks for the advice.

I have a full time job and I am not quitting the job any time soon as it pays well and I like what I do too. So, I am planning to focus on swing trading and I think I got most of the basics and how market works down. I wrote down some of the rules, dos and dons, risk and money management, which I am going to follow religiously as I start trading live. Like you I also feel like paper trading doesn't have the same effect as when you have you hard earned real money on the line. So initially, I am going to start with small position size and if my rules work and as my capital grows I am going to start increasing my position size.

However, I am still trying to find the best way to find stocks in play. If you have experience in trading stocks, what criteria do you use in stock screener to find the stock in play (where everyone is playing)?

 

[aag100]

Thanks for the advice.

I have a full time job and I am not quitting the job any time soon as it pays well and I like what I do too. So, I am planning to focus on swing trading and I think I got most of the basics and how market works down. I wrote down some of the rules, dos and dons, risk and money management, which I am going to follow religiously as I start trading live. Like you I also feel like paper trading doesn't have the same effect as when you have you hard earned real money on the line. So initially, I am going to start with small position size and if my rules work and as my capital grows I am going to start increasing my position size.

However, I am still trying to find the best way to find stocks in play. If you have experience in trading stocks, what criteria do you use in stock screener to find the stock in play (where everyone is playing)?

might be an idea to religiously paper trade a time and then move onto small stakes.
stocks is not my game,mainly because of the big spreads.lowest i found was 6 points and some go up to may be 40 odd.although i have traded them after big moves.i prefer 1/2 points spread on indices/forex.
some brokers show the biggest movers of the day.

 

[Splitlink]

might be an idea to religiously paper trade a time and then move onto small stakes.
stocks is not my game,mainly because of the big spreads.lowest i found was 6 points and some go up to may be 40 odd.although i have traded them after big moves.i prefer 1/2 points spread on indices/forex.
some brokers show the biggest movers of the day.

When I trade something new I trade 50 pence per point. I find it better than paper trading, you can't kid yourself when there is money on the line, even if it is only a small amount. I, too, prefer index trading for spread reasons.

Aag, just to make you feel that you are not by yourself, I am trying something new on Monday on day trading, which I have never satisfactorily mastered. I have tried swing trading for longer periods, but find it a bit pedestrian for my character.

Dammit! With the years that I have spent trying this, I should be rich by now!

 

[aag100]

When I trade something new I trade 50 pence per point. I find it better than paper trading, you can't kid yourself when there is money on the line, even if it is only a small amount. I, too, prefer index trading for spread reasons.

Aag, just to make you feel that you are not by yourself, I am trying something new on Monday on day trading, which I have never satisfactorily mastered. I have tried swing trading for longer periods, but find it a bit pedestrian for my character.

Dammit! With the years that I have spent trying this, I should be rich by now!

i was under the wrong impression.
i thought as i got better,blow outs were not going to happen.now i realise they will happen.our job is to mitigate it.and perhaps i made a start in that direction by taking out winnings and keeping my account minimum.
now just to further mitigate it and learn when to close out and walk away when having a bad day.
also need to be more disciplined.so much so that demo and live trading is (almost)indistinguishable.a zen like state of mind i know!

 

[itspossible]

^aag i will have a good look through the thread in due course.Can i ask you what your starting capital was and how much you risked on each trade please...............cheers

 

[aag100]

^aag i will have a good look through the thread in due course.Can i ask you what your starting capital was and how much you risked on each trade please...............cheers

i have a credit account of £500 which i top up or withdraw from.this time around i was playing at £1pp(luckily)

 

[rinchen]

i have a credit account of £500 which i top up or withdraw from.this time around i was playing at £1pp(luckily)

How are you able to trade with just 500 and make money? My calculation shows if you have not more than 50K, there is not much chance to make money.

 

[aag100]

How are you able to trade with just 500 and make money? My calculation shows if you have not more than 50K, there is not much chance to make money.

i would like to see this calculation.and if correct i'll put in 50k to my account.