I've been trading from home since January and after a successful 6 months I have hit a brick wall. Everything I do at the moment goes against me instantly. I now feel under pressure when I trade (almost too scared totrade in fact). Should I step back and take some time off ??
alpha_monkey
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maj said:
Don't worry too much mate, you're not alone.
Bear in mind these are summer markets - light volumes, indifferent direction, limited newsflow and erratic price action. As I'm sure you're are aware... If I were trading for myself I'd seriously consider taking both July and August off every year.
From the Economist:
"In the first six months of this year, most funds were flat or slightly positive: the CSFB/Tremont investible hedge-fund index is up a touch over 1% so far this year. April and May were two of the worst months for years. Many in the industry find that disturbing, given that almost nothing nasty happened in the markets. “It's all doomed in one way or another,” says one hedge-fund manager."
http://economist.com/finance/displayStory.cfm?story_id=2925920
You should definitely stop trading and walk away. Then, when you are less stressed and more composed, spend a few days – or however long it takes – to recheck your trading method, that is to say, your rules for entering and exiting a position. If you haven’t got a method, in my humble opinion don’t begin trading again until you do. You can also check your records and analyse each trade to see why it went wrong. Maybe a pattern will emerge.
If you are position trading (holding a long or a short position for a few days) you should look to see whether your tried and tested method really only works well in a trending market, say, but that the market(s) you are currently trading happen to be going sideways, as most of the major indices have been of late.
But which markets are you trading? Equities, equity indices, FX, commodities, interest rates etc? Are you day-trading, position trading, scalping? And are you using shares, CFDs, futures, options or spreadbets? I’m sure t2w members could volunteer their opinions on the particular markets which might offer you some guidance in your analysis.
And as Oatman says, we all hit bad patches from time to time. I’m in the middle of one right now simply because the particular markets I trade are faffing around going sideways whereas my methodologies work best when they are in a trend. Until such time as they break out of their range I’m virtually a spectator, and a very frustrated one at that.
If you are position trading (holding a long or a short position for a few days) you should look to see whether your tried and tested method really only works well in a trending market, say, but that the market(s) you are currently trading happen to be going sideways, as most of the major indices have been of late.
But which markets are you trading? Equities, equity indices, FX, commodities, interest rates etc? Are you day-trading, position trading, scalping? And are you using shares, CFDs, futures, options or spreadbets? I’m sure t2w members could volunteer their opinions on the particular markets which might offer you some guidance in your analysis.
And as Oatman says, we all hit bad patches from time to time. I’m in the middle of one right now simply because the particular markets I trade are faffing around going sideways whereas my methodologies work best when they are in a trend. Until such time as they break out of their range I’m virtually a spectator, and a very frustrated one at that.
succesful trading is a continuous learning process - because profit opportunities in markets move in cycles
so take a step back and work out if your trading method is correct for the current market cycle - if so - carry on since all methods consist of having more winners than losers, and if your method is right, you will just get back to making profits - if that does not happen - try to develop a method that takes advantage of the current cycle, or wait until the cycle is right for your current method
so take a step back and work out if your trading method is correct for the current market cycle - if so - carry on since all methods consist of having more winners than losers, and if your method is right, you will just get back to making profits - if that does not happen - try to develop a method that takes advantage of the current cycle, or wait until the cycle is right for your current method
Yep agree with all - markets move from expansion to contraction - if you try and trade breakouts in the conraction phrase you will be as frustrated as someobne who buys/sells support/resistance in breakout expansion markets. In this business you make money by not losing money. Sometimes it's really not you its the market, or as others have pointed the market may be wrong for your style. Think of your capital as a fishing boat that it took you years of saving to acquire. When the fish are running you go out onto the dangerous sea because that is how you make your money, but if they are not, you would not risk getting caught in a storm and risking a difficult to replace boat for a few sprats. Go to the beach or potter around inshore in a rowing boat for now if you must. Some days I just look at the ATR/bar length, the range, and do something elses (like posting on web boards) because its a pointless chop shop.
minx
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mokwit said:
Haha, love the fishing boat story
Last year I took august off and went travelling and had a brilliant time, when I got back my ffriends who traded for the month lost more money than I spent on my vacation and were all stressed and wound up.......lesson learnt and taking next month off again.....
TWI
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When things start getting rough I think it is best to cut down your position size to something that you are totally comfortable with. For example I normally trade 50+lot clip size in STIRS, when I feel under confident I cut this to 10-15lots and the stress is so much less then, but the game is the same, it just stops me making stress related decisions..Soon I get back to 50+lot with confidence restored. Even if you go to 1 lot, it doesn't matter, but not sure leaving the market all together is the best solution, you need to stay "on the horse" so to speak because just going away when your confidence is shot can I believe have a magnifying effect in some people.
Also a great time to spend working of overall methodology and reinforce discipline. Write down your rules and if you can test them on historic data to boost your confidence that they work. I have done hardly any trading for the past week since the markets have been very quiet, but I learnt an awful lot in that time about a couple of system ideas I had been mulling around for weeks.
I do take some great holidays but these are generally organised not around my trading success or lack of but just periodically during the year. They generally involve doing fairly extreme things that prevent me even thinking about the markets.
Also I try not to log-on to the markets at home after I close my office for the day. I actually made a conscious decision not to have charting software installed at home. Needless to say this probably contributes to the fact that I am still happily married
It is not how these things occur but how we react to them when they inevitably do, that determine whether we as individuals are going to survive or not.
Good Luck, I am sure you will get through it,
Also a great time to spend working of overall methodology and reinforce discipline. Write down your rules and if you can test them on historic data to boost your confidence that they work. I have done hardly any trading for the past week since the markets have been very quiet, but I learnt an awful lot in that time about a couple of system ideas I had been mulling around for weeks.
I do take some great holidays but these are generally organised not around my trading success or lack of but just periodically during the year. They generally involve doing fairly extreme things that prevent me even thinking about the markets.
Also I try not to log-on to the markets at home after I close my office for the day. I actually made a conscious decision not to have charting software installed at home. Needless to say this probably contributes to the fact that I am still happily married
It is not how these things occur but how we react to them when they inevitably do, that determine whether we as individuals are going to survive or not.
Good Luck, I am sure you will get through it,
Maj: Definitely take a break from trading. Get some quality time to yourself and dont even think or look at trading. When you come back than look at the trades you did and see if there are any obvious mistakes,errorrs etc. Only analyse after the break.
It happens to all of us and this is one of the symptoms of overtrading -we all have scars to prove it.
rgds
zarif
It happens to all of us and this is one of the symptoms of overtrading -we all have scars to prove it.
rgds
zarif
Trader333
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I am going to give a different suggestion to others here and that is to try and determine why your trading has suddenly gone wrong. The reason for this is that you could take a break then come back and have the same problem. Start by looking at your methodolgy and try and see if, when it worked well, there were particular reasons as to why. Then look at your own psychology, has something happened that is causing you to trade in a different way now to when you were successful ?
The issue is that there are any number of reaons why you may be having problems at the moment. In my view identifying them is crucial for you so that you can address them and so enabling improvements in your future performance which I know is easier said than done.
Paul
The issue is that there are any number of reaons why you may be having problems at the moment. In my view identifying them is crucial for you so that you can address them and so enabling improvements in your future performance which I know is easier said than done.
Paul
Salty Gibbon
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With the market " tightening up" why not just tighten up your trade entry requirements.
Stocks are still subject to intraday trends although less marked at the moment.
I have basically increased the strictness of my entry criteria and accepted that I will make smaller profits for the time being.
Seems to work.
Stocks are still subject to intraday trends although less marked at the moment.
I have basically increased the strictness of my entry criteria and accepted that I will make smaller profits for the time being.
Seems to work.
Mr. Charts
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If you have been trading successfully for six months and are now not getting anywhere then there are two possibilities:
a) It's you
b) It's the market
You must see if you are doing anything different - if you are, correct it. You should have kept a log anyway so you can identify what you are doing now and how it differs.
Otherwise it's the market. I can only speak about the US and that is a slow grind. I hear FX and other instruments are suffering lower ATR and poor follow through too, with trends hard to find in thin summer markets.
So, if you are essentially a swing trader, learn how to scalp then you have added a methodology which will serve you well in these current markets.
Personally I have a hybrid strategy which enables me to scalp and also allows such trades to turn into swings if the move develops far enough.
I don't believe in walking away for more than one day. This business is about application, determination and perseverance - it's about overcoming difficulties and succeeding in all conditions.
Richard
a) It's you
b) It's the market
You must see if you are doing anything different - if you are, correct it. You should have kept a log anyway so you can identify what you are doing now and how it differs.
Otherwise it's the market. I can only speak about the US and that is a slow grind. I hear FX and other instruments are suffering lower ATR and poor follow through too, with trends hard to find in thin summer markets.
So, if you are essentially a swing trader, learn how to scalp then you have added a methodology which will serve you well in these current markets.
Personally I have a hybrid strategy which enables me to scalp and also allows such trades to turn into swings if the move develops far enough.
I don't believe in walking away for more than one day. This business is about application, determination and perseverance - it's about overcoming difficulties and succeeding in all conditions.
Richard
Salty Gibbon
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Totally agree Richard. I have been hard at this business for 13 months now without a break. Even at weekends and public holidays I pore over charts, tweak and re-test my methods etc., and I do not intend to take a break until I am satisifed with my methods, my trading behaviour and I am profitable on a daily basis.
I reckon I am nearly there now. Hope so cos I need to give up the night job - it's knackering me !!!
TheBramble
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Richard, you're the first pro trader I've ever known, read about, spoken to etc. to take that position.Mr. Charts said:
I can't think of any that haven't suggested, no, recommended taking a break if you're into a losing spell.
While I admire the grit and determination you follow in your trading approach, isn't it a possibility that unless Maj can step back and examine what's going wrong, specifically, he'll continue to do whatever it is that he doesn't want to be doing?
You can't as easily analyse your trading while you're trading as when you're not.
Mr. Charts
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Tony,
I did say,"You must see if you are doing anything different - if you are, correct it. You should have kept a log anyway so you can identify what you are doing now and how it differs."
I hear what you say about others' opinions, but I have always gone my own way in life and done what works for me irrespective of anyone else. When I trade I do so in solitude, no chat rooms, no distractions, above all no opinions from anyone else.
I only trade my high probability methods so my hit rate is very high. This means it is very unusual for me to start a day's trading with two losses. When that does happen I walk away - for one day only. Why? Because it's either me or the market that's not behaving properly and I do not choose to trade if that situation obtains. Certainly the following day I always feel strong and rested and IN CONTROL because I have gone with the flow.
I have never had two losing days in a row so the situation doesn't arise. No, I know that sounds unlikely and I don't give a damn if I get flamed for saying that. I am simply answering your question and being factual.
I'll tell you something else you might find unusual or unlikely: if I have a headache or flu whatever, I still trade - and succeed - why? Probably because I'm in a different world when I trade and I forget my own silly problems - oh yes, and I LIKE surmounting obstacles and difficulties.
Salty, it is good to see you on the same road ;-)
Richard
I did say,"You must see if you are doing anything different - if you are, correct it. You should have kept a log anyway so you can identify what you are doing now and how it differs."
I hear what you say about others' opinions, but I have always gone my own way in life and done what works for me irrespective of anyone else. When I trade I do so in solitude, no chat rooms, no distractions, above all no opinions from anyone else.
I only trade my high probability methods so my hit rate is very high. This means it is very unusual for me to start a day's trading with two losses. When that does happen I walk away - for one day only. Why? Because it's either me or the market that's not behaving properly and I do not choose to trade if that situation obtains. Certainly the following day I always feel strong and rested and IN CONTROL because I have gone with the flow.
I have never had two losing days in a row so the situation doesn't arise. No, I know that sounds unlikely and I don't give a damn if I get flamed for saying that. I am simply answering your question and being factual.
I'll tell you something else you might find unusual or unlikely: if I have a headache or flu whatever, I still trade - and succeed - why? Probably because I'm in a different world when I trade and I forget my own silly problems - oh yes, and I LIKE surmounting obstacles and difficulties.
Salty, it is good to see you on the same road ;-)
Richard
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cut back to minimum size and dont stop trading until you figure out whats going wrong and then make it right - take a break if you want when you get back to being profitiable at the orginal size - all that is happening is that you are been given a chance to learn - dont lose it!
SvenFoster
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Full time trading is a job like any other and like all jobs you need to get out of the office and have a break once in a while. The hours can suck and staring at screen intensively for hours on end can mess with your head.
Everones different and some can't bear to be away from the screen but most long termers suggest keeping records, taking holidays and walking away or reducing risk when things go wrong.
When you meet your targets for the day, pat yourself on the back, turn off your monitor, go for a swim/cycle/anything but get out of the house/office.
6mths of sucess suggest you've got an edge but confidence is key as well as a fresh head.
Take a short break, evaluate, move on.
go on... ...do it.
Everones different and some can't bear to be away from the screen but most long termers suggest keeping records, taking holidays and walking away or reducing risk when things go wrong.
When you meet your targets for the day, pat yourself on the back, turn off your monitor, go for a swim/cycle/anything but get out of the house/office.
6mths of sucess suggest you've got an edge but confidence is key as well as a fresh head.
Take a short break, evaluate, move on.
go on... ...do it.
Salty Gibbon
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Agree.
CONFIDENCE and PATIENCE are 2 key attributes which are required in bucketloads.
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