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How to lose money

  • #41
  • Jan 18, 2019 1:51am Jan 18, 2019 1:51am
Quoting OutThere
I've never been to one of those AA meetings but if there was a trader kind of AA meeting, this is how I'd expect to be. ( Until the guy above showed up . And this statement: Trading even if in the end you don't succeed will make you a better person. I wish I had thought of that to say to the ex wife while she was nagging at me that all I do is sit in front of the computer and lose money. Honey, but I am trying to become a better person. Don't you want me to become a better husband for you? In fact, it is working so good that if you watch...
Staying in my lane...
  • #42
  • Jan 18, 2019 5:27am Jan 18, 2019 5:27am
Quoting OutThere
I've never been to one of those AA meetings but if there was a trader kind of AA meeting, this is how I'd expect to be. ( Until the guy above showed up . And this statement: Trading even if in the end you don't succeed will make you a better person. I wish I had thought of that to say to the ex wife while she was nagging at me that all I do is sit in front of the computer and lose money. Honey, but I am trying to become a better person. Don't you want me to become a better husband for you? In fact, it is working so good that if you watch...
Trade fearless not careless...
Syed Mohsin Ali Profit This Month: -299
  • #43
  • Edited 1:25pm Jan 18, 2019 10:22am | Edited 1:25pm
Quoting Rennaissance
{quote} Random times are trendless markets, I think it is most prevalent and occur 2/3 of the times. So basically it's hard making money in the markets. The odds are that you will lose or not make a dime. Only those that are mentally strong can wait for those trends.
What is a trend? More importantly, what is a “trendless” market???

“Uptrend”, you buy? “Downtrend”, you sell? How do you define what is an uptrend and what is a downtrend? To me it doesn’t matter whether the market is in an uptrend or a downtrend. If my signal tells me I need to open a sell position in an “uptrend”, and everything lines up and looks good... I don’t care, I will open that sell position.

When the market is “ranging” or “trendless”, I’m just letting you know that people are making the decision to keep the market in the current state that it’s in... and yes, you can take advantage of that.

I’ve heard of this same saying over the years. How a “ranging” market is just random noise and you can’t make any money from it. It may look like noise to you, but it doesn’t for a ton of people.

There are people who see opportunity in a ranging market and can make money from it. Including me and many others.

My whole point is: markets are not random and there are always opportunities.
  • #44
  • Jan 18, 2019 10:49am Jan 18, 2019 10:49am
Quoting Chart1st
{quote} What is a trend? More importantly, what is a “trendless” market???
Even more importantly, what is a 'Stop Hunt' ?

Learn to identify those and you start having a real chance of some success.
  • #45
  • Jan 18, 2019 12:30pm Jan 18, 2019 12:30pm
Quoting Chart1st
{quote} What is a trend? More importantly, what is a “trendless” market??? “Uptrend”, you buy? “Downtrend”, you sell? How do you define what is an uptrend and what is a downtrend? To me it doesn’t matter whether the market is in an uptrend or a downtrend. If my signal tells me I need to open a sell position in an “uptrend”, and everything lines up and looks good... I don’t care, I will open that sell position. When the market is “ranging” or “trendless”, I’m just letting you know that people are making the decision to keep the market in the current...
Good discussion but let's turn this around and ask ourselves how NOT to lose money. I lose in range and make more in trending. Care to share what technique you use in ranging markets (sell on top and buy on bottoms)? I will share my perspective as it is not fair to share mine before asking for others to share theirs.

I need to wrap up my week but I will return if we have a deal.
Staying in my lane...
  • #46
  • Jan 18, 2019 12:35pm Jan 18, 2019 12:35pm
My opinion is trading good when you are sure of what you want frustration are part of the game so are losses but strategy has to be tested and with the right rules you apply by rules I mean 50 to 100 elements you look at before you plunge and with obvious foresight its possible. I am talking 1 hour 2 hours before it happens then it should be painless.
  • #47
  • Jan 18, 2019 12:51pm Jan 18, 2019 12:51pm
Quoting VEEFX
{quote} Good discussion but let's turn this around and ask ourselves how NOT to lose money.
In a very simplified illustration, it's like this, ask yourself, why do you lose? It's because your trade gets stop out right?

Trend or range, apply the same!!
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  • #48
  • Jan 18, 2019 1:45pm Jan 18, 2019 1:45pm
After spending almost 4 years in forex and 7 years in stocks trading my end conclusion is if you really give proper time to your trading and never ever do it just like part time or fun trading you eventually be able to succeed in this war. e.g From day 1 in my forex trading when ever I open my ist trade it always give me profit but after ist trade greed and over trading kills everything. From last one year I am trying to overcome it but still I.am not completely able to control it.. its humans nature and only those survive in the end who able to beat that nature.
  • #49
  • Jan 18, 2019 1:56pm Jan 18, 2019 1:56pm
Quoting VEEFX
{quote} Perhaps I should clarify... How NOT to lose and maintain long term 3+yrs of positive expectancy. I can easily get 20 of 10 pips TP runs with reverse RR but we all know what eventually happens. So, my question is "How to not lose and end the trading life cycle in profit" With range bound trading, there is a concrete relationship between # of attempts versus range distance and duration. How do you know in advance what that relationship is until it is too late? Looking at charts in hindsight (As someone mentioned here) is all good but reality...
I'll get back to you on that in 2023
  • #50
  • Edited Jan 19, 2019 1:34pm Jan 18, 2019 2:17pm | Edited Jan 19, 2019 1:34pm
Quoting VEEFX
{quote} Good discussion but let's turn this around and ask ourselves how NOT to lose money. I lose in range and make more in trending. Care to share what technique you use in ranging markets (sell on top and buy on bottoms)? I will share my perspective as it is not fair to share mine before asking for others to share theirs. I need to wrap up my week but I will return if we have a deal.
Yes, I sell tops and buy bottoms in a "ranging" market. You hear people saying to NOT do that... but I'm good at it, sooo I’m going to keep doing what works for me

You can show someone your exact technique, but usually who you show it to might not be able to replicate what you did and can't understand what you see. I have tried this before with personal friends and they don't understand what they're looking at. By all means, I hope it helps... but it might not. This is what works for me though.

As a pure technical trader, I know there are people out there who use this method. I know of one other person who frequents this forum that also uses this technique. That is the RSI Divergence (although we look at the charts differently, the RSI Divergence is still fundamentally the same). This friend was the one to introduce me to this strategy after over a year of thinking, "indicators are useless!!!"... what's useless to you, might not be useless to other people.

He has also tried to show me how he sees the charts, but I can't understand why he picks the trades he does... I don't know, it's just how it is.

This is a "good" sell example:
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This is a "bad" sell example:
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Another "bad" sell example:
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Note: We are talking about sell positions.
For the bad examples, I can definitely see people thinking that the setup looks "good"... but momentum was very strong going up. Plus, there was no divergence (if you don't know what a divergence is, Google it. There are plenty of websites that will explain what it is). Before I enter a trade, I have to have a checklist... How is momentum looking? How many candles is at that important level? What are the wicks looking like on those candles? Is there a divergence in the RSI Indicator? Etc. etc... So if you were to try and sell there without "marking off” your checklist, then you would have lost money on those picks.

Quoting VEEFX
{quote}So, my question is "How to not lose and end the trading life cycle in profit" With range bound trading, there is a concrete relationship between # of attempts versus range distance and duration. How do you know in advance what that relationship is until it is too late? Looking at charts in hindsight (As someone mentioned here) is all good but reality could result in quite the different outcome.
All I can tell you is that the only way to get better and to know which setup is "good" or "bad" is by spending more time staring at the charts (meaning, stay away from forums if you are not profitable yet!!! Come back when you spend some time with just you and the charts... you will come back a different person). Not just mindlessly and blankly staring, but watch the movement of price and ask why it is moving the way it is. Why did price reverse right at this point? Or why did price not hold at a certain level, and shot right through it? Or why did price get to a certain level extremely fast? Or why did price get to a certain level extremely slow? Etc. etc.

This sounds pretty corny, but it really comes from within. It was mentioned earlier as well, but this is stuff you can't learn in a classroom..... you can have guidance, but nobody can really teach you "how to make money". You get it or you don't. Only time and commitment will tell.
  • #51
  • Jan 18, 2019 2:26pm Jan 18, 2019 2:26pm
Quoting Chart1st
{quote} This sounds pretty corny, but it really comes from within. It was mentioned earlier as well, but this is stuff you can't learn in a classroom..... you can have guidance, but nobody can really teach you "how to make money". You get it or you don't. Only time and commitment will tell.
Yes, you are absolutely right, there is stuff you can learn, but the rest is kind of from within, you could compare it to doing a degree, so in UK, first of all you need A levels, takes 2 years, then you do a degree so another 4 years, BUT to succeed in forex you need to be at PHD level, so another 4 years, and a PHD is not classroom stuff, it's coming up with your own research, methodology etc..., even then it does not guarantee a successful career, same with Forex.
  • #52
  • Edited 9:05pm Jan 18, 2019 2:48pm | Edited 9:05pm
Quoting Bushy
{quote} Yes, you are absolutely right, there is stuff you can learn, but the rest is kind of from within, you could compare it to doing a degree, so in UK, first of all you need A levels, takes 2 years, then you do a degree so another 4 years, BUT to succeed in forex you need to be at PHD level, so another 4 years, and a PHD is not classroom stuff, it's coming up with your own research, methodology etc..., even then it does not guarantee a successful career, same with Forex.
Yes, exactly. A lot of folks think that trading is something someone can show you within a day, and suddenly you're profitable.

It's like playing a sport. When you first start playing golf, basketball, football, or whatever sport. Do you think you will become amazingly talented at it within one day??? There are so many components to consider... so many different things you have to work on before you get good at it. It takes practice and commitment to learn.
  • #53
  • Jan 18, 2019 2:56pm Jan 18, 2019 2:56pm
Quoting Chart1st
{quote} It takes practice and commitment to learn.
And some banging your head against a wall, stamping the floor, crying, screaming, throwing stuff, shouting, nausea, headaches and so on...…….

(I nearly broke my toe once)
  • #54
  • Jan 18, 2019 4:43pm Jan 18, 2019 4:43pm
Quoting Chart1st
{quote} What is a trend? More importantly, what is a “trendless” market??? “Uptrend”, you buy? “Downtrend”, you sell? How do you define what is an uptrend and what is a downtrend? To me it doesn’t matter whether the market is in an uptrend or a downtrend. If my signal tells me I need to open a sell position in an “uptrend”, and everything lines up and looks good... I don’t care, I will open that sell position. When the market is “ranging” or “trendless”, I’m just letting you know that people are making the decision to keep the market in the current...
Range means price doesn't deviate too far from equilibrium. Price is like a swinging pendulum, on the contrary a trending market is like a swinging pendulum whose string cut off as it was swinging in either direction.
When you see it, BET big.
  • #55
  • Jan 18, 2019 5:06pm Jan 18, 2019 5:06pm
I believe there is no way to make money in every market condition. This is what I think the evolution process for a trader is.


1.CLUELESS

2.FINDING THE TRUTH ABOUT THE MOVEMENT OF PRICES BUT STILL CAN'T HANDLE LOSING.

3. EMOTIONAL STABILITY BEING ESTABLISHED

4. SUCCESS

If you have a mentor, he can short-circuit the process by making you start at 3. Note: A lot of people spend years or even a decade in-between 1 and 2.
When you see it, BET big.
  • #56
  • Jan 18, 2019 6:48pm Jan 18, 2019 6:48pm
Quoting VEEFX
{quote}. With that said, trading solely on divergence across price derivative indicators with never work in the long run.
Hello, I am one of the traders that use the RSI Divergence method, and have been since mid-2007, so I suppose it is what an individual considers "the long run". There is nothing odd about this pattern, as it is basically just a double top with the second high not having the same 'strength' as the first high, so it just doesn't have the buying power needed to push higher and therefore drops. This is just normal market (all markets) movement and is actually not even close to an arbitrage issue. This pattern can be seen on all pairs on any timeframe. I have screenshots on the thread 'What Works and What Doesn't' to explain the pattern, so I see no point in reposting here.

In my opinion, I don't believe that pattern recognition such as this can be boiled down to a binary code, as the entire chart, plus multiple time frames should be looked at prior to jumping into a trade. In that respect, I believe that human logic trumps Boolean logic for the sake of determining if the trade is a good one or one that should be passed on. Even though I consider RSI Divergence a very simplistic method of trading, I am not sure if it can be boiled down to an IF-THEN equation with the same results. It would be great if that were the case, but I highly doubt it would be.

Being a facts and data guy, I am sure that simply the use of the Scientific Method to test the hypothesis "If a first high is made outside the upper Bollinger Band and 3-6 candles later another high of the same value is made, and the RSI of the second high is less than the RSI value of the first high, providing the first high was not due to news, then price will drop to either the 5/10EMA or mid-BB, depending on the timeframe of the chart" will provide enough data to allow a conclusion to be drawn that this pattern is a very statistically predictable pattern, and therefore can be exploited to make money. I am confident that if you choose to take the time to actually research the pattern, you will change your own hypothesis.

Have a good weekend....
  • #57
  • Jan 18, 2019 6:53pm Jan 18, 2019 6:53pm
I lost money today about £400 from trying to short the DAX/DE30 above highs but it kept on pushing through higher.

I really need to stop trying to 'trade' on a friday as it goes into silly mode and doesn't behave, monday and thursday are my most profitable days overall.

edit - fuck the dax
  • #58
  • Jan 18, 2019 8:27pm Jan 18, 2019 8:27pm
Quoting GDR3k
I lost money today about £400 from trying to short the DAX/DE30 above highs but it kept on pushing through higher. I really need to stop trying to 'trade' on a friday as it goes into silly mode and doesn't behave, monday and thursday are my most profitable days overall. edit - fuck the dax
Part of the process buddy, stay wise.
When you see it, BET big.
  • #59
  • Edited 4:52pm Jan 19, 2019 12:23am | Edited 4:52pm
Just to be clear and because it is kind or a pain to get to the other thread, I'll repost what I'm talking about:

Attached Image (click to enlarge)
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This chart is from the 2008-2009 timeframe when I was teaching my daughter to trade. I no longer use the Ichimochu Cloud (and seldom stochastics) so they can be disregarded.

Attached Image (click to enlarge)
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Attached Image (click to enlarge)
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As you can see, this pattern happens now just as it did then. The best setup is when the first high occurs outside the upper BB, then 3-6 candles later another high of roughly the same value as the first occurs inside the BB, and the second high RSI value is lower than the first high RSI value. I typically trade at the very end of the second high candle or the very beginning of the next candle. Goal is typically the 10EMA on shorter time frames or the 5EMA on 4hr or Daily charts, but that depends on what it looks like as the trade progresses. I shoot for a minimum of 10 pips profit, naturally letting it run if it chooses to do so. I always add the spread amount to the EMA value to set my take profit to ensure it is hit. Look at the other time frames for where price is in relation to the EMAs/mid-BB and you will see the minor support levels. I have found these to be very safe, high confidence trades, and if you make up an MT4 template with these indicators and look back at your charts, you'll see it happens pretty frequently on all pairs on all time frames. Certainly often enough that it is kind of silly to say it doesn't work in the long run....

But because it requires checking other time frames to determine the best time to get out, and the legend on the right of the chart to see if it is even worth getting into, I think it would be very difficult to condense this down to a mathematical equation so that the trader does not have to think any more, but just set it and forget it. That is where a trader's screen time and experience and knowledge and emotion comes into play, that just can't be replicated, in my opinion, by an algorithm.

But getting back to the original question posted by the OP, the first thing I recommend to do for handling your losses is to try to prevent them. This is what I do:
1) I trade high confidence, small, safe trades of 10 pips minimum (not that 10 pips is my target profit, just that if I can't easily make at least 10 pips, I don't make the trade). Much easier to make that than to try for 100+ pips every time I open a trade.
2) I don't force trades. If the setup isn't just what I want, I pass. I found out years ago that overtrading is a bad thing!
3) I don't use tight SL settings. A trade needs to 'breathe' and if stops are too tight, you will be out of the trade before it does exactly what you expected.
4) If a trade starts going against me, I get out. Take the small loss. Back in 2006 when I started, I would ride a trade right down to the SL. Didn't take long to figure that was a screwed up strategy! If it is going against you and you think it will still go your way, get out, let it go against you, and get back in at the price you got out at....that way you have missed the drawdown, and all you are out is the spread!
5) When I take a loss, I do not 'Revenge Trade'!! Very easy to want to teach that mean old market a lesson for taking your money, but anger is not a good emotion to be trading on! The market will steal your toys, put gum in your hair, and kick you out of the sandbox if you do...
6) Take your trading ego and pride (don't get your normal ego and pride, make sure it is your trading ones) and rip them out of your body. Drown them, then burn them, then bury them deep in the woods. That allows you to think outside the box much more easily.
7) Listen to all others, but only take advice from someone that is more successful than you that's trading a live account and preferably full sized lots. When I first started, I took advice from a lot of people that I soon found out was as clueless as I was, so I stopped. It may sound mean, but it is absolutely necessary to shorten the learning curve. Remember, you aren't trading to stroke someone's ego, you are trading to make money for you and yours!! I mean, come on, a semi-pro golfer isn't going to come to me for advice to improve his game.....heck, I can throw the club farther than I can hit the ball!

These things have helped me not only minimize my losses, but survive the ones that happen.

Just my two pips worth.....
  • #60
  • Jan 19, 2019 12:50am Jan 19, 2019 12:50am
Well, if you can't make money with this 2 beautiful tools (BB and RSI) consistently, then maybe Forex is not for you..

Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 140 KB
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