Best Thread Why You Are Failing - and What You Need to Do

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TheBramble

Legendary member
8,395 1,169
The winning system you take from demo to live, is unlikely to be the system you end up trading successfully – if you end up trading successfully at all.

While there is a great deal of difference between trading demo funds and real funds and while there are ways to mitigate the problems you will encounter en route, you will likely find after your first set of failed trades that you’ll lose faith with your ‘winning system’ and try all number of on-the-fly fixes, new systems, signals and indicators to make up for and take your mind off your failures and prove, if only to yourself, you’re a ‘good trader’.

The thing is, the probabilities are that you’re not a good trader and that you’re far more likely to join the large percentage that fail, one or more times, before giving up for good.

If you’re lucky, you’ll find your level, hit your stride, find your metre – whatever metaphor you want to use – and it’ll click into place. You’ll no longer dread the start of a new trading day – you’ll look forward to it. You’ll no longer feel relaxed and calm only when NOT in a trade and stressed and anxious when you are. You’ll find you’re no longer looking for excuses NOT to place that trade (make a cup of tea, make a phone call, walk the dog, go for a run) – you’ll know exactly when and if to place it. You’ll no longer start to tense when your position moves against you – you’ll smile and feel good that that means you’ve just established a lower risk level, or if you’re already in profit, a higher profit level that you’ll come out at if it gets hit again. Far more of your trades will go into positive territory right off the bat and those that don’t will move against you far more quickly and let you know you were wrong without you having to hang on every up tick and down tick for – cheering one and despairing at the other – for an eternity. You’ll no longer stick to your target (an ethereal thing at best) and give back all your profits as it retreats, having reached within a few ticks of the completely arbitrary goal, you’ll let the price action let you know when it’s time to take your profits (or your losses). Each trade setup, entry, management and exit will be in perfect harmony with your system and your own personal psychological needs in relation to trading a system. You’ll be trading the perfect timeframe and the perfect system for your personality and your needs. Until you find a methodology that suits you perfectly you’re just spinning your wheels and likely bleeding capital. If you don’t feel good trading – stop. Right now. ‘Cos it ain’t going to work otherwise.

How do you find this perfectly suited system? There are as many ways as there are bods trying to find a way. Pretty unhelpful.

What’s the point of this post? I’ve just waded through an entire weekends’ worth of the normal “I want a system”, “I’ve got a system and it’ll work for you” and “How do I make Money” posts. All chasing and offering the wrong things. And they’re the wrong things because none of them know YOU or address YOUR needs.

There are an infinite number of combinations of usage of price and volume and time. Such a large set of instruments and markets they may as well be infinite. And the range between the most well informed, highly teched and savvy institutional investor and the most clueless, under-funded, inexperienced and ill-equipped mug punter is so large as to beggar belief. Where do you think you are you on the spectrum? Where do think you REALLY are on that spectrum?

A very small percentage of people make money in trading. The odds of you doing so are miniscule.

Those that are making money are using techniques of such simplicity it would amaze you. In fact, it probably wouldn’t, as you’ve already covered that in your first few months interest and education in trading – and then put it behind you as being too simple to be worth further consideration.

You’ve gone off to pursue the newest and latest fads and techniques and systems and indicators, without realising you already have all you need to make the bare bones of a system that will suit you perfectly. You’re entranced with the prospect of being a Darksider. It’s a fabrication. An attempt to create a sense of asceticism or elitism which does you no favours at all and offers you no advantage, but gives a good laugh to those that think you’re stupid enough to believe that that’s the only way to go. You’re convinced a splay of indicators, or Gann fans, or Elliott waves or Di Jango’s reversal trines will be the ‘solution’. They my or they may not be. You’re convinced that trading a pure VWAP engine with no charts or indicators at all is going to be the only way for you. You feel the raw random noise of the 1 minute chart is the only place to be or the Daily gives you the freedom to be largely relaxed in stops and targets. It makes no difference. There’s no difference in the way you make your money be it with bar charts devoid of any further information or if charts covered to the exclusion of all white space with indicators of all manner, hue and type, or a bare excel style numbers grid. Your profits are made whatever way you make them and no one way is better than any other.

But unless you’re totally in tune with the way you’re trading, you’ll feel uneasy when you’re in a trade and you’ll fear the trade moving against you and you’ll feel varying degrees of pain when it does. Your profits will be fewer and smaller than your losses and you wont have any confidence in what you’re doing and you’ll feel insecure, lacking, a loser and a failure. What to do? Stop. Simply stop. You’re not going to be consistently profitable trading if this is where you’re at.

Go back to basics. Look at the charts, with whatever indicators you want to be using and just LOOK. Simple stuff like lower lows, lower highs or higher lows, higher highs. If you can’t see them – they’re not there. If you can see them –what is that telling you? They’re giving you direction, entry, S&R and exit points. How much more could you ask for?
 

Mr. Charts

Legendary member
7,364 1,181
Experience, mental fortitude, position management.......

Promises to be a good thread :)
Richard
 

Mayfly

Established member
514 28
The thing is, the probabilities are that you’re not a good trader and that you’re far more likely to join the large percentage that fail, one or more times, before giving up for good.
A very small percentage of people make money in trading. The odds of you doing so are miniscule.
I dreamed a dream or something similar.......

Cautionary tales and a great health warning for anyone dreaming the dream. :)

Every little bit helps.

Cheers

Mayfly
 

nine

Senior member
2,038 506
Good post TB.

I feel (probably wrongly) that it is oversimplifying but I wonder at times if the holy grail level secret of trading is to "be a really good loser." To lose with equanimity, totally relaxed about the outcome of the trade is what lets people trade a pretty average strategy over and over without pain or interference until its odds pay out.
 

frrh

Newbie
2 0
1st - don't be greedy
2nd - be patient
3rd - analyise and believe in yourself
 

TheBramble

Legendary member
8,395 1,169
I feel (probably wrongly) .
Not at all wrongly – you’re spot on. It can’t be anything other than a gross over-simplification.

How do you condense EVERYTHING you know about the markets and trading and try to cover ALL the thoughts, actions and developments you had over the years (assuming you can remember even just 5% of them, I’m not sure I can) and describe the pivotal point for you personally that was as clear as it was sudden that you had understood sufficiently to make an immediate and stunningly obvious difference, not just to your bottom line, but to the Way you trade – into one post on a bulletin board? And to make clear it’s that event, not any system or method, that is the key? Every trader on these boards who has gone through that event knows what I’m talking about, even if they can’t or don’t wish to express it.

It’s the difference in the way you trade rather than the change to your system performance, W:L, Aw:Al – they all come AFTER the change to the way you trade. And the way you trade is a direct response to how you feel about your trading. The first time you feel absolute certainty that you’re on the money in what you are doing and realise you are fully confident, not through some macho, brash, self-stoking delusion of hoped for confiodence, but the genuine quiet inner confidence that is just ‘there’, and that first losing trade after that realisation that you take with not just passive acceptance, but something approaching delight as you realise you ‘need’ the odd one or two to make sense of the winners. The first time you trade with your full size (be that 1% or 10%) and feel totally OK with that, not a shred of concern or anxiety as you watch the trade develop and adjust your stops and finally take the profit, and sometimes, obviously, the loss.

But it’s ALL built around what suits you personally. What works for me will not necessarily work for you, or for anyone. In fact, it’s unlikely to work for anyone else, because they’re not me.

FWIW – I operate in a very short TF (1 min). I have a pre-week multi-TF trend, S&R analysis that takes all of 10 minutes which sets my bias (or lack of bias) for each of the currency pairs I trade. I will only trade with that bias. I’m in with a preset stoploss which I almost always immediately (within 60 seconds) move closer to the price action. In theory, knowing I’m going to do that I could keep within my 1% risk rule and take an even bigger position, but when I’ve ever done that, I don’t get the same ‘good’ feeling when I place the trade. So I don’t do it. Could I be making more money if I did? Sure. But I wouldn’t feel as good about what I’m doing. I’m then following the price up (or down) and at reaction/rally points, when the trade is moving against me, this means I’m in a really good position and I feel good about this move against me, because that contra move is a line in the sand for me either to, within a few more minutes normally, set a more advantageous stop loss (less loss) or increase my locked-in profit. This system works for me. I’m typically in trades for no more than 30-45 minutes (although Friday they were delightfully long-winded, over 3 hours for one) and I’m placing about 60 trades per day. I’m never facing double-digit pip drawdowns on any trade and the trades are typically moving in my direction from the off. I have no fixed target on entry although I’ll be aware of S&R in all its various flavours, but I wont let them ‘dictate’ where the price ‘should go’, I’ll just be aware and ready at those levels. Consequently, I’m rarely into hunderd or multi-hundred pip wins, that doesn’t do it for me. I’d rather scoop a handful of 10-30 pip wins. I’m keen not to be in the market or put another way, to be in the market on any trade for as short a time as possible. Time is exposure. I’m not going to detail my system as I don’t want anyone else trying it as it likely will take them further away from where they should be going and there is so much discretionary stuff, I’d be doing you a disservice as much of it, I’m sure, I’m unaware on a conscious level. But its basic setups and entries and exits are those you will have covered in your early days as a trader. HHs & HLs, LHs & LLs.

But even armed with this, few would be able to work it the same way I do because their personality and psychological needs are quite different to mine.

The key is that you need to find what ‘fits’ for you – and you need to do so before your capital runs out. Your psychology trading a demo account is very different trading a live account. Which is precisely why I suggest on the move from demo to live you pull your risk right back to where you started on demo, fractions of 1% per trade.

In the beginning, staying alive is the most important thing. Not making a fortune.
 

RedGreenBen

Well-known member
268 52
Simple stuff like lower lows, lower highs or higher lows, higher highs. If you can’t see them – they’re not there. If you can see them –what is that telling you? They’re giving you direction, entry, S&R and exit points. How much more could you ask for?
It really p****s me off when people give away profitable trading systems that took me years to discover for myself :)

Ben
 

JRP2891

Established member
752 125
It really p****s me off when people give away profitable trading systems that took me years to discover for myself :)

Ben
I really don't think it matters if and when a profitable system is given away, as unless the person has developed the required discipline to follow it, and the mindset to run winners and cut losers, they will continue to lose regardless of their strategy.

Even the bests systems and strategies will experience a string of losses, i recently had a very unpleasant drawdown myself, but i just stuck to the plan and I'm now very comfortably out of the hole and ahead. This is where the inexperienced traders lose their confidence and don't execute the plan, which is in contrast to the traders who've blown up a couple times, got the battle scars, self analysed and consequently developed the winning mindset of a successful trader. In my opinion only experience can give you this, not a system.
 

trendie

Legendary member
6,078 973
I really don't think it matters if and when a profitable system is given away, as unless the person has developed the required discipline to follow it, and the mindset to run winners and cut losers, they will continue to lose regardless of their strategy.

Even the bests systems and strategies will experience a string of losses, i recently had a very unpleasant drawdown myself, but i just stuck to the plan and I'm now very comfortably out of the hole and ahead. This is where the inexperienced traders lose their confidence and don't execute the plan, which is in contrast to the traders who've blown up a couple times, got the battle scars, self analysed and consequently developed the winning mindset of a successful trader. In my opinion only experience can give you this, not a system.
[I cant rep TheBramble again for his second post]

There are a number of little steps that need to eb taken before we reach that state of stability.

There is the separation of the trading from the monetary value of the trades. ("there goes this months mortgage payment")

Then there is the sense that if you're not buying the bottom and selling the top, your rule-set must somehow be wrong, and in need of change. When we look at a chart, the tops and bottoms are obvious, but we sometimes fail to see the scope within their bounds. (sometimes just grabbing a small target can build the confidence to go for more later)

Then there is the tweaking the rule-set to "replay the last losing trade", in the same way generals are always fighting the last war. Letting go of the loser and to look to the next trade can be difficult especially when a string of losers happens. problem is, if you change your rules to "win the last losing trade", you will surely miss the winning next trade because your original rules were changed.

Then there is the feeling of needing to be in the market, and creating an excuse to be in a trade.

Once you get over these things, the rests easy. :cheesy:

EDIT: wait a minute!!

60 trades a day, and about 10-30 pips per trade? thats 600-1800 pips a day!
(the 1-min chart is hyper-intensive, hope it doesn't chop you about too much. I guess the HP sauce on your bacon sarnie must help)
 
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simcom

Active member
142 8
In a somewhat perverse way, I'm actually slightly pleased whenever I have a difficult drawdown to cope with.

Because the strategy I trade is highly simplistic, I often have nagging doubts about whether it could really work (even though I have spent thousands of hours proving to myself that it does) merely because I hear the regularly banded-around phrase "If it's so easy, why isn't everyone doing it?". Lengthy periods of consecutive losses are good for reminding myself that maintaining discipline isn't as easy as people think and that this is responsible for many people - even those with good methods - giving up.

I think a good analogy is that of a diet. Most people know what they need to do to lose weight but only a small fraction of dieters actually end up weighing less than when they started. This shows that it is down to finding what works for you as an individual and just as importantly, being able to stick to it.
 
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1Pipped

Well-known member
273 35
I’m typically in trades for no more than 30-45 minutes (although Friday they were delightfully long-winded, over 3 hours for one) and I’m placing about 60 trades per day.
Time machine is it? I always thought such a tool would be useful for trading, and that.
 

robster970

Veteren member
4,566 1,389
This is some of the best advice I've read on here without question.

I wish it had been written at a time when I was just starting.

Having said that, I think the points many of us recognise will always be lost on newbie's in the same way that the saying "Youth is wasted on the young" is a truism.

It's a shame as TheBramble's posts are incredibly eloquent and insightful.
 

clorets

Member
52 0
I agree that demo trading has little to do with real trading, have been there and I remember modifying my strategy just two weeks in! But its still necessary, just so that you get the hang of trading terminology, and so that you can observe market behavior.

I really don't know how people that trade a rigid system based on indicators succeed. I believe more in adapting to markets.

I also believe that your background has a lot to do with your success. I've been trained as a mechanical engineer, which allowed me to develop a good sense of realism, risk assessment, and discipline.

Good luck to all new traders
 

white4burgundy

Junior member
25 1
If you fail once, get challenged.
If you fail twice, get books (meaning, study)
If you fail thrice, get another pair of shoes, walk an extra mile, diversify if necessary, if only to prove that you can rise after falling.
 
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