Yes, this has turned into a great thread! I think we will all learn a lot more from the analysis of psychology than from looking at a plot of RSI ....... Cash pot, risk %'s ultimate aims and all those things are different for every one. This is where the group get together thing will benefit everyone. You just have to find what you are comfortable with above all else. FTSE's happy with a couple of hundred quid a week ( for now) , Helen is happy seeing her Captal increase, I'm happy just learning..... I just trade when I feel in the mood.
I watched an interesting program tonight with Professor Winston in it. It was about psychology of winning and losing. Nothing to do with trading, as such, although there was a bit at the end about Leeson. Basically there were a couple of relative points.
1. The fear of losing, and actually losing, wipes out any thoughts/possibility of being able to win........
2. If you think your opponent ( the market) is stronger than you, you will play your stakes down.
How true!.
So what can we do?
Eradicate the fear of losing. This must equate to rigid stop loss implementation such that it becomes just an unemotional exit. The cardinal sin here is to sit it out in the hope that it will come good. Well, maybe it will once in a while , but in the meantime you just get in deeper and deeper. The deeper you get in , the harder is is to get out. Make that an exponential relationship for good measure! Losing has to become nothing more that a wasted trade. If it makes you sweat, your stop is too long.
Your opponent is strong, very strong. There is no doubt about that. You have to believe in yourself that you can,over time be better than your opponent. Treat the situation as not a once only match, but a series of games. Like golf( I hate golf). You may lose a few holes, but at the end of the day, you have 18 to play. If you can win just 1 more than your opponent, you will win the match. Simplistic , I know, but that's how you should look at it.Get it into your mind that at the end of the day, you will lose some. You will win some too. Just make sure that the ones you lose are insignificant and the ones you win are good. I'm convinced that with any reasonable stategy,so long as you kill the losers swiftly and without fear, the winners will look after themselves.
Then and only then, can you set about optimising your winners, knowing no fear.
Forget about whether RSI should be 14 or 17, or MACD should be whatever, concentrate on your money management.
As for position size, the fear is equal for all. If you are betting 0.1% or whatever, it matters not if you pot is 1k or 100K. If 1k is all you have, then losing a substantial part of it brings about the same amount of misery as the guy who loses a substantial part of his 100K...... Better take the suggestion made earlier- put away some of your pot and avoid wipeout. There's no point in bragging about having 100K to trade with if you lose 25k of it. The guy who has 1k can be wiped out 25 times before he loses the same amount of money.... Hopefully , by that time, he would have learnt his lesson, become a better trader and be on his way to some serious capital growth.
These are just my thoughts and won't apply to everyone, We're all different and can handle the psychology in different ways.What does apply to everyone is the importance of loss management.
1. The fear of losing, and actually losing, wipes out any thoughts/possibility of being able to win........
2. If you think your opponent ( the market) is stronger than you, you will play your stakes down.
How true!.
So what can we do?
Eradicate the fear of losing. This must equate to rigid stop loss implementation such that it becomes just an unemotional exit. The cardinal sin here is to sit it out in the hope that it will come good. Well, maybe it will once in a while , but in the meantime you just get in deeper and deeper. The deeper you get in , the harder is is to get out. Make that an exponential relationship for good measure! Losing has to become nothing more that a wasted trade. If it makes you sweat, your stop is too long.
Your opponent is strong, very strong. There is no doubt about that. You have to believe in yourself that you can,over time be better than your opponent. Treat the situation as not a once only match, but a series of games. Like golf( I hate golf). You may lose a few holes, but at the end of the day, you have 18 to play. If you can win just 1 more than your opponent, you will win the match. Simplistic , I know, but that's how you should look at it.Get it into your mind that at the end of the day, you will lose some. You will win some too. Just make sure that the ones you lose are insignificant and the ones you win are good. I'm convinced that with any reasonable stategy,so long as you kill the losers swiftly and without fear, the winners will look after themselves.
Then and only then, can you set about optimising your winners, knowing no fear.
Forget about whether RSI should be 14 or 17, or MACD should be whatever, concentrate on your money management.
As for position size, the fear is equal for all. If you are betting 0.1% or whatever, it matters not if you pot is 1k or 100K. If 1k is all you have, then losing a substantial part of it brings about the same amount of misery as the guy who loses a substantial part of his 100K...... Better take the suggestion made earlier- put away some of your pot and avoid wipeout. There's no point in bragging about having 100K to trade with if you lose 25k of it. The guy who has 1k can be wiped out 25 times before he loses the same amount of money.... Hopefully , by that time, he would have learnt his lesson, become a better trader and be on his way to some serious capital growth.
These are just my thoughts and won't apply to everyone, We're all different and can handle the psychology in different ways.What does apply to everyone is the importance of loss management.
ChartMan, on the subject of psychology in trading your golf comment reminded me of an interview I read with a top trader somewhere who said that the best books on the subject of psychology in trading were books on sports psychology.
She suggested that trading was much like playing a tennis match in that just like a top player will put everything into the point they are playing regardless of whether they are winning or losing the match, a trader must concentrate only on the trade in hand. One must forget about the last trade, whether it was a winner or a loser means nothing, the next trade is everything, and as soon as it's done, it too means nothing.
H.
She suggested that trading was much like playing a tennis match in that just like a top player will put everything into the point they are playing regardless of whether they are winning or losing the match, a trader must concentrate only on the trade in hand. One must forget about the last trade, whether it was a winner or a loser means nothing, the next trade is everything, and as soon as it's done, it too means nothing.
H.
Chartman -
Afraid I have to disagree with you when you say 'position size, the fear is equal for all. If you are betting 0.1% or whatever, it matters not if your pot is 1k or 100K'.
Ideally of course there should be no fear in the first place but given that even the greatest can suffer from bouts of fear that fear WILL be greater as your pot and position size increase UNLESS you have previously recognised this and prepared yourself mentally/psychologically. As I wrote previously, if a long-time one-lot trader suddenly gets the capital to trade 10 lots it is extremely unlikely that he will be psychologically prepared for the much larger absolute gains/loses even though he would be trading the same system as he did previously. This can only lead to mental stress.
Futures traders who are carefully building up their position size from 1 lot have the greatest obstacle to cross. The next increment up from 1 lot is 2lots, a whole 100% increase! In one step you have to prepare yourself for double the usual loses/gains than you are used to.
But definitely start small, small, small .......when you start out you want to be the worst trader you ever will be. Knowing that, you want to keep your powder dry for when you REALLY know something! (I think 'sifts2win' had this problem)
Afraid I have to disagree with you when you say 'position size, the fear is equal for all. If you are betting 0.1% or whatever, it matters not if your pot is 1k or 100K'.
Ideally of course there should be no fear in the first place but given that even the greatest can suffer from bouts of fear that fear WILL be greater as your pot and position size increase UNLESS you have previously recognised this and prepared yourself mentally/psychologically. As I wrote previously, if a long-time one-lot trader suddenly gets the capital to trade 10 lots it is extremely unlikely that he will be psychologically prepared for the much larger absolute gains/loses even though he would be trading the same system as he did previously. This can only lead to mental stress.
Futures traders who are carefully building up their position size from 1 lot have the greatest obstacle to cross. The next increment up from 1 lot is 2lots, a whole 100% increase! In one step you have to prepare yourself for double the usual loses/gains than you are used to.
But definitely start small, small, small .......when you start out you want to be the worst trader you ever will be. Knowing that, you want to keep your powder dry for when you REALLY know something! (I think 'sifts2win' had this problem)
Henry-
Quote: 'There's also a certain comfort from being able to see other people having a bad day when you are'.
Yep, what's that saying?: "There's nothing that could have cheered me up more than seeing that someone else is more miserable than me".
But there is a danger of wallowing in communal self-pity and negativity. Perhaps there should be more communal back-slapping and confidence building. You want to be hanging out more with the winners!
There are plenty of computer/machine trading systems out there that anyone can buy, or of course you can develop your own. A lot of commercial money is also traded 'automatically by computers'. Jack Schwager, I believe, runs a fund or two that is totally automated. There are of course downsides:
the markets are always evolving, what was true yesterday may not be valid today.
You must have absolute faith in the system, what is the likelihood of that for some 'black-box' system you bought for a few hundred quid? and you must resist the temptation to second-guess the system.
Automated systems by their own-nature become predictable so can be 'traded against'.
Any great automated system is doomed by its own success.
And so on - there are books on the subject!
Quote: 'There's also a certain comfort from being able to see other people having a bad day when you are'.
Yep, what's that saying?: "There's nothing that could have cheered me up more than seeing that someone else is more miserable than me".
But there is a danger of wallowing in communal self-pity and negativity. Perhaps there should be more communal back-slapping and confidence building. You want to be hanging out more with the winners!
There are plenty of computer/machine trading systems out there that anyone can buy, or of course you can develop your own. A lot of commercial money is also traded 'automatically by computers'. Jack Schwager, I believe, runs a fund or two that is totally automated. There are of course downsides:
the markets are always evolving, what was true yesterday may not be valid today.
You must have absolute faith in the system, what is the likelihood of that for some 'black-box' system you bought for a few hundred quid? and you must resist the temptation to second-guess the system.
Automated systems by their own-nature become predictable so can be 'traded against'.
Any great automated system is doomed by its own success.
And so on - there are books on the subject!
Helenqu
I am a little confused
It's great that you know what you want, "knowing what you want is half way to getting what you want". So for you, virtually any profit at the end of the year would be better than having the money sit in the bank/building society.
But then you say 'it's a job to me, I have never seen it as a way of making lots of money'. Surely 'job' should be replaced by 'serious hobby'. Otherwise what else is the 'job' of a trader except to make money, it's definately not a vocation or a charity (although the way some people trade......)
But for FTSE-B (which this thread was initially supposed to be about) he wants to make a career/living out of trading from virtually scratch. Maybe he really does have zero living expenses and will continue to do so for many years, so that any profits are pure 'luxury' money or to make the 'pot' bigger. But even if this is true he is being unrealistic about his expectations of making 350% /yr (sorry FTSE-B). AND already he wants to manage other peoples money and train other traders!!?? Sorry but 100% visually-impared person leading other 100% visually-impared people comes to mind.........(apologies if I'm sounding rude, don't mean to be).
I am a little confused
It's great that you know what you want, "knowing what you want is half way to getting what you want". So for you, virtually any profit at the end of the year would be better than having the money sit in the bank/building society.
But then you say 'it's a job to me, I have never seen it as a way of making lots of money'. Surely 'job' should be replaced by 'serious hobby'. Otherwise what else is the 'job' of a trader except to make money, it's definately not a vocation or a charity (although the way some people trade......)
But for FTSE-B (which this thread was initially supposed to be about) he wants to make a career/living out of trading from virtually scratch. Maybe he really does have zero living expenses and will continue to do so for many years, so that any profits are pure 'luxury' money or to make the 'pot' bigger. But even if this is true he is being unrealistic about his expectations of making 350% /yr (sorry FTSE-B). AND already he wants to manage other peoples money and train other traders!!?? Sorry but 100% visually-impared person leading other 100% visually-impared people comes to mind.........(apologies if I'm sounding rude, don't mean to be).
Hi folks,
Very thought provoking stuff. Would like to publicly thank Helen for all her postings and links which I've now read and found very interesting.
One for hjk, hate to admit this but I was good at investing in growth stocks and the profits from sensible long term investments gave me the funds and time to 'learn' about short term trading which I thought meant faster bucks and the ticket to the stars.
Seeing Helen happy with 7 points profit is completely alien to me. The spread is 8 pts with FS !
Long term buy and hold made me a lot of money and I believed like FTSEB that I was going to be the next Larry Williams. BUT it was boring. So on reflection I'd rather lose money trading systems that are instant, dangerously volatile and that I'm not very experienced in or good at than making money.
Oo er !
Very thought provoking stuff. Would like to publicly thank Helen for all her postings and links which I've now read and found very interesting.
One for hjk, hate to admit this but I was good at investing in growth stocks and the profits from sensible long term investments gave me the funds and time to 'learn' about short term trading which I thought meant faster bucks and the ticket to the stars.
Seeing Helen happy with 7 points profit is completely alien to me. The spread is 8 pts with FS !
Long term buy and hold made me a lot of money and I believed like FTSEB that I was going to be the next Larry Williams. BUT it was boring. So on reflection I'd rather lose money trading systems that are instant, dangerously volatile and that I'm not very experienced in or good at than making money.
Oo er !
whitetiger
Newbie
- Messages
- 5
- Likes
- 0
sifts2win
Excellent, your loss is my gain.
WT
Excellent, your loss is my gain.
WT
FTSE Beater
Experienced member
- Messages
- 1,518
- Likes
- 6
Hi Chartman
I have to say that is possibly the best (and truest) thing you have ever wrote , but you still have a lot to learn about loving golf
Hi Hjk
I was wondering if you are a full-time trader Hjk (if you've already answered this then sorry), and I was wondering what sort of win/loss ratio you have and average win versus average loss, if you don't mind sharing it.
I have to say that is possibly the best (and truest) thing you have ever wrote
, but you still have a lot to learn about loving golf Hi Hjk
I have to defend myself and say it won't be for a while yet
I was wondering if you are a full-time trader Hjk (if you've already answered this then sorry), and I was wondering what sort of win/loss ratio you have and average win versus average loss, if you don't mind sharing it.
whitetiger
Newbie
- Messages
- 5
- Likes
- 0
s2w,
probably not that long, just until you run out of money!
probably not that long, just until you run out of money!
whitetiger
Newbie
- Messages
- 5
- Likes
- 0
Chartman,
Not sniping its just a lesson that us traders are at war with each other. It is a zero sum game. A degree of sporting aggression of wanting to beat the other traders is what is needed sometimes too spur people on to greater heights. Sometimes too MUCH technical, intellectual and mathamatical emphasis is applied and gets in the way of making money and becoming in tune with the markets. Its what i've found to be true in the industry anyway!
Not sniping its just a lesson that us traders are at war with each other. It is a zero sum game. A degree of sporting aggression of wanting to beat the other traders is what is needed sometimes too spur people on to greater heights. Sometimes too MUCH technical, intellectual and mathamatical emphasis is applied and gets in the way of making money and becoming in tune with the markets. Its what i've found to be true in the industry anyway!
FTSE Beater -
Yes i trade full time, have been trading one way or another for just over 11 years. 95% of my trading is on the FTSE future. Depending on my mood/the mood of the market/any convictions I may or may not have, I trade it in a variety of ways from scalping for a half tick in a second or two through to holding an underlying postion for days. On an average day I do 300-400 contracts (150 - 200 round turns) - can be double that. When scapling/day-trading like that it is hard to make calcualtions about win-loss ratio, but I guess around 70:30, the main thing is that the 'p&l' bar stays green and doesn't turn red!
Average win/loss? Because my position size can vary so enormously (and often) and I scale in and out and in and reverse out etc I couldn't begin to break down where any 'one position' begins, where it ends and where the next begins again. But as I've written before that doesn't really matter as long as you are trading properly, doing the right thing, cutting positions that go against you, letting winners run etc.
Does that answer your question? Let me know if not.
It is great to have ambition as you obviously do, but dreams are for kids.
Yes i trade full time, have been trading one way or another for just over 11 years. 95% of my trading is on the FTSE future. Depending on my mood/the mood of the market/any convictions I may or may not have, I trade it in a variety of ways from scalping for a half tick in a second or two through to holding an underlying postion for days. On an average day I do 300-400 contracts (150 - 200 round turns) - can be double that. When scapling/day-trading like that it is hard to make calcualtions about win-loss ratio, but I guess around 70:30, the main thing is that the 'p&l' bar stays green and doesn't turn red!
Average win/loss? Because my position size can vary so enormously (and often) and I scale in and out and in and reverse out etc I couldn't begin to break down where any 'one position' begins, where it ends and where the next begins again. But as I've written before that doesn't really matter as long as you are trading properly, doing the right thing, cutting positions that go against you, letting winners run etc.
Does that answer your question? Let me know if not.
It is great to have ambition as you obviously do, but dreams are for kids.
Hi hjk,
Just to clarify. When I said it was a job I meant I do it to the best of my ability and I apply myself to it. It's not some sort of fantasy dream ticket to fortune, it's a very practical response to the situation I find myself in.
Don't get me wrong, I'm deadly serious about my trading. I want to be the best but that won't happen overnight.
Just to clarify. When I said it was a job I meant I do it to the best of my ability and I apply myself to it. It's not some sort of fantasy dream ticket to fortune, it's a very practical response to the situation I find myself in.
Don't get me wrong, I'm deadly serious about my trading. I want to be the best but that won't happen overnight.
Morning everyone,
Looks like its all petering out now, just like real life, nothing interesting left to say so lets start arguing. There are obviously huge egos out there which is not what we want is it ? You can almost tell how old/how much experience people have just by listening to the things they say, can't you!
We can all learn so much from each other and I'm really amazed by the amount of work and information people like Helen and Chartman and Naz are prepared to share with us all. Each has their own style and there are gifts there for us all. Although WT has a point surely we don't trade with a picture in our minds of mugging each other. Perhaps he would like to share some of his trading strategys with us too ?
Helen,
liked the 2610 pivot you posted yesterday, all new to me but anyone who shorted on the break made a packet and the 2504 became resistance too on the break. Liked what I saw but don't think this is the maket for sb's, must look at opening a futures account when funds allow.
Hjk - 300-400 contracts !! So you know a bit about risk/reward then ? FTSEB are you listening ?
Have a great day everyone.
Looks like its all petering out now, just like real life, nothing interesting left to say so lets start arguing. There are obviously huge egos out there which is not what we want is it ? You can almost tell how old/how much experience people have just by listening to the things they say, can't you!
We can all learn so much from each other and I'm really amazed by the amount of work and information people like Helen and Chartman and Naz are prepared to share with us all. Each has their own style and there are gifts there for us all. Although WT has a point surely we don't trade with a picture in our minds of mugging each other. Perhaps he would like to share some of his trading strategys with us too ?
Helen,
liked the 2610 pivot you posted yesterday, all new to me but anyone who shorted on the break made a packet and the 2504 became resistance too on the break. Liked what I saw but don't think this is the maket for sb's, must look at opening a futures account when funds allow.
Hjk - 300-400 contracts !! So you know a bit about risk/reward then ? FTSEB are you listening ?
Have a great day everyone.
whitetiger
Newbie
- Messages
- 5
- Likes
- 0
s2w
From 1982 too 1990 I was in charge of selecting and intial training of floor traders for several large merchant banks. In that time I saw many diffirent facets of character, the ones who would make it, the ones who would scrape by, the ones who would fail and the ones who would excel and become great. I was lucky enough to have half a dozen really great floor traders in my time at one particular bank. They had one trait common to all, that was a controlled degree of aggression. A competitive streak to be the best. In social circles or polite company you would have never known, but in the money markets they were sharp and mercernary with an inate ability to read the markets and take money off the ill informed.
I think mugging other traders is a strong way of putting it, but its nearer to the truth than you would think!
WT
From 1982 too 1990 I was in charge of selecting and intial training of floor traders for several large merchant banks. In that time I saw many diffirent facets of character, the ones who would make it, the ones who would scrape by, the ones who would fail and the ones who would excel and become great. I was lucky enough to have half a dozen really great floor traders in my time at one particular bank. They had one trait common to all, that was a controlled degree of aggression. A competitive streak to be the best. In social circles or polite company you would have never known, but in the money markets they were sharp and mercernary with an inate ability to read the markets and take money off the ill informed.
I think mugging other traders is a strong way of putting it, but its nearer to the truth than you would think!
WT
