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4% A Day Forever

  • #301
  • Sep 16, 2009 1:44pm Sep 16, 2009 1:44pm
I was going to post something meaninful but everyone beat me to it.

regarding the trade that the market screwed (because the market does whatever it wants)- I'm glad there are other humans around besides me. I've never seen so many bulls#!t artists in my life in some of these threads.

And that's all I got to say about that....
  • #302
  • Sep 16, 2009 1:54pm Sep 16, 2009 1:54pm
Fool,

Thank you for the guts the share your story, it's a great lesson all of us can learn from. I too did a couple of dumb trades today, posted on my journal. What's important is to reinforce the learning, get over the pyschological damage, and make a comeback. Afterall, what doesn't kill us makes us stronger.

Looking forward to your return as a stronger trader. Watch this Paul Tudor Jones video and read Market Wizards. Drop a note if you need any ebooks. Regards.

http://www.learntotradethemarket.com...e-documentary/
  • #303
  • Edited 2:59pm Sep 16, 2009 2:40pm | Edited 2:59pm
Quoting gammase1

Well done on cutting your position, though. I think you should take a couple of days away from the market, get your head together, perhaps write down your new trading rules, based on this experience, and pin them to your desk or somewhere you will always see them.

Finally, I look forward to seeing you coming back strongly from this setback.

Best regards, Paul
Thanks Paul. & thanks to Tanya, calderone, TraderT & everybody here. For a long time I treated the FF pretty much like a diversion & nothing more, but in the last couple months I have started to feel like I am part of a community here, & thats cool, & really especially valuable when I can get some support in trying times like this. I hope I will be able to return the favor sometime.

So, I am not trading. Watching the E/U & markets a little bit. I never felt comfortable trading at the top of a trend anyway. I hope some of you have the skills and the guts to grab a short in XAU or E/U at the right time & ride it down for megapips. Next week I will probably start doing some demo trading. Scalping is kind of like a sport - you need to stay with it or you'll get rusty. I will probably not live trade again for another couple weeks.

I have been going through Van Tharp & Steenbarger books I have alluded to here. Journaling. I know that I am at a real crossroads here. I have worked up some skills as a trader but I have also fallen into some bad habits & a pattern of complacency. I am like that drunk who is on the verge of really losing his shit. (Man, how many of these guys have I known?) You can't really have a nice sit down with him and say, "OK, dude, its time to change now, seriously." No, he has to drunkdrive his car into a busload of cub scouts or something, he needs some kind of trauma to help shake him out of his bad habits. Well, here I am. Pulling the plug on my bad trade yesterday cost me $9k. Damn. Two months of steady work down the drain. I can not let stupid mistakes like this happen again. I have got to change.

I am actually glad to have a place to talk about this because that is very helpful. Welcome to my intervention.

On a happy note, the bubbly stock markets are treating me well. I have made up that $9k spot forex loss and more in the last week. See there, you can't keep a good man down.

Good Luck all & Be Careful.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #304
  • Sep 16, 2009 5:01pm Sep 16, 2009 5:01pm
I am very glad you have had a good return on your stocks! Sounds to me like you know what you're doing.
Whenever my sl gets hit, and they have been getting hit more than I'd like over the past 2 months-it puts me in a state of mind that can only be experienced by another trader. You know, the market turns back and your trade would have been good? lol Anyway, my point is-do your demo work and when you go live again-reduce your lot size for the first few days. The reason I say this is because I got trigger shy from getting burned.lol

I'm all good now-I'm numb!
  • #305
  • Sep 16, 2009 5:43pm Sep 16, 2009 5:43pm
Quoting calderone
Whenever my sl gets hit, and they have been getting hit more than I'd like over the past 2 months-it puts me in a state of mind that can only be experienced by another trader. You know, the market turns back and your trade would have been good? lol Anyway, my point is-do your demo work and when you go live again-reduce your lot size for the first few days. The reason I say this is because I got trigger shy from getting burned.lol

I'm all good now-I'm numb!
I know how you feel. Well, after losing more than 1/2 my account I will not have any choice. I don't intend to refund the account again. I will probably have a 1/2-lot position size limit until I get rolling again. I actually had been doing pretty well re: position sizing, generally. Pretty much all of my problems have come from adding to a losing position to try and average out. Of course, that worked many times and resulted in some really big winning positions. As TurveyD noted above, that's the trap. I just made the near fatal mistake of trying to do it against an historic drop in the USD. And of course, its always a mistake. So that will be a rule I am going to try to live by: don't add to & try to average out of trades that are going against you - just kill the trade quick & wait for a better entry or a better trade. I actually think emtee is onto something (see above) with his large entries. Doing that would force you to take quick losses and also limit your ability to add to a loser. I am thinking if I set a hard time-limit on all trades then I may limit any tendency to try to prolong a loser as well.

Nah...I'm not really much of a stock picker. For every one that has gone green in this summer's rally I have another thats still deadmeat. I am liquidating alot of the winners. I have an IRA full of stocks that I am considering liquidating & rolling into a self-directed IRA where I can trade forex and futures. I am going to try to be careful to cash in the winners this time because it has taken 1-2 years for many of those to come back around....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #306
  • Sep 16, 2009 5:45pm Sep 16, 2009 5:45pm
Quoting calderone
I am very glad you have had a good return on your stocks! Sounds to me like you know what you're doing.
Whenever my sl gets hit, and they have been getting hit more than I'd like over the past 2 months-it puts me in a state of mind that can only be experienced by another trader. You know, the market turns back and your trade would have been good? lol Anyway, my point is-do your demo work and when you go live again-reduce your lot size for the first few days. The reason I say this is because I got trigger shy from getting burned.lol

I'm all good...

I think I had 12 SL's hit in a row over the summer chop so I can dig that hugely, my stops are at a price via my system which indicate a direction change and I only take trades if I can use a SL of <25 to much to lose for me after that, I average down @-15 area to.

Having a stop hit while the direction is still over all in your favour is well a waste of money, random market fluctuations will hit it frequently.

No confidence to trade here so doing other things till my head is back.


Fool, atleast it sounds like you can lose 9K without really caring thats something to be happy about, thinking about losing 9K makes me a) envious and b) sick

I lost $6K years back trading options Puts in the bear market, market reversed hard everything gapped up and my options opened pretty much worthless all gone in 1 day LOL If I'd bought Calls I'd of turned $6K into $100K over the next 2 weeks
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #307
  • Sep 16, 2009 5:51pm Sep 16, 2009 5:51pm
Quoting The Fool
As TurveyD noted above, that's the trap. I just made the near fatal mistake of trying to do it against an historic drop in the USD. And of course, its always a mistake. So that will be a rule I am going to try to live by: don't add to & try to average out of trades that are going against you - just kill the trade quick & wait for a better entry or a better trade. I actually think emtee is onto something (see above) with his large entries. Doing that would force you to take quick losses and also limit your ability to add to a loser. I am thinking...
Thats kinda a double edges sword though, you can't predict the market you've got to take advantage of its kinda randomness and Averaging down is the way to do it, example :-

The direction is down on the period your interested in which suites your style, so you go short!!

Something happens, market runs up 50pips but the direction is still down so you might aswell take advantage of the better price and short another.

If all goes to plan you make money on both and your risk on the 2nd position is less, same bang for less risk bonus!!

BUT you need a line in the sand a worst case loss scenario you can live with, without this your doomed cause ultimately you'll get the margin call all positions closed box I love so deerly and see often

If your swing trading something as simple as the 10hour average value ( 600sma on M1 ) works well, shorts below, stop just the other side of that line. 24hour is also very strong if you want a slower system.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #308
  • Sep 16, 2009 5:59pm Sep 16, 2009 5:59pm
Quoting Turveyd
No confidence to trade here so doing other things till my head is back.

Fool, atleast it sounds like you can lose 9K without really caring thats something to be happy about, thinking about losing 9K makes me a) envious and b) sick
Take your time TurveyD, the markets will be around a while longer yet, I'd bet.

I do feel sick about losing the money. I am sitting right on break-even for the 4 months I have been live trading, with that one loss. Could have been worse but it still sucks.

I am fairly philosophical about money. I have been literally destitute and homeless several times in my life and I have also gone through stretches of living quite well. One thing I know is: money can not make you happy & you can be miserable & wealthy just as well as you can be if you are poor. Some of the happiest times in my life have been when I was a penniless vagabond. Suits a younger dude though & I am definitely interested in stashing away some cash now. I will be back to forex trading & I will be a better trader. I have assumed that this education that began some months ago would take at least a year and probably more of ups and downs. So I am not about to get truly stupid and run up some credit card debt or sell a kidney so I can fund my forex gambling habit. I still have plenty of time to learn to win consistently.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #309
  • Sep 16, 2009 6:03pm Sep 16, 2009 6:03pm
Quoting The Fool
Some of the happiest times in my life have been when I was a penniless vagabond. Suits a younger dude though & I am definitely interested in stashing away some cash now. I will be back to forex trading & I will be a better trader. I have assumed that this education that began some months ago would take at least a year and probably more of ups and downs. So I am not about to get truly stupid and run up some credit card debt or sell a kidney so I can fund my forex gambling habit. I still have plenty of time to learn to win consistently.
(still laughing) glad to hear you're not stooping to organ donation
  • #310
  • Sep 16, 2009 6:05pm Sep 16, 2009 6:05pm
Quoting Turveyd
Thats kinda a double edges sword though, you can't predict the market you've got to take advantage of its kinda randomness and Averaging down is the way to do it, example :-
What you say is true and I have enjoyed playing that way when I won. But, since all of my blow-outs have in these averaging-out situations, I am going to have to cast those aside.

I need to define a neatly-proscribed winning niche and stay in it faithfully for some time. So I am going to try getting back to my roots & just scalp on the low tf's.

Its hard for me to stay in a box; I have no shortage of self-confidence & believe I can do anything so I'm liable to actually try to do anything. But I will just have to learn to live in the box until I grow out of some stupid habits. I will probably be making money so it won't be all bad. I can try all the kinky stuff (like trading spot gold, mmmmm) on demo...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #311
  • Sep 16, 2009 6:13pm Sep 16, 2009 6:13pm
Quoting The Fool
What you say is true and I have enjoyed playing that way when I won. But, since all of my blow-outs have in these averaging-out situations, I am going to have to cast those aside.

I need to define a neatly-proscribed winning niche and stay in it faithfully for some time. So I am going to try getting back to my roots & just scalp on the low tf's.

Its hard for me to stay in a box; I have no shortage of self-confidence & believe I can do anything so I'm liable to actually try to do anything. But I will just have to learn to live in the box until...

Don't do that quite yet, demo trade averaging in with a hard set exit point, averaging in is a very good tool if used correctly, used badly ofcourse it's suicide.

Habits are hard to break so I find it best to compromise this is my compromise, I can average down until my point is hit the SL's hit and game over.

your 9K is nothing, american lad I know did the averaging down thingy on a move against him today ( just logged on literally ) and blew 25K today, likely ES moved up 30 points or something or Spy ( same ??? )
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #312
  • Sep 16, 2009 9:10pm Sep 16, 2009 9:10pm
Hi "The fool"
A further comment to you on a foolproof way of avoiding the problem you just encountered. I have experienced the same many times and I finally figured out for me how to avoid it.
Going back to my earlier example. I am trading 5 contracts which needs $15000 capital to cover the margin. Put in $20000 which allows for a 25% drawdown and set your default trading quantity at 5 contracts.
If I am in a losing position and want to average out, I cannot do it for the following reason. If I click to add to my position, the server rejects the request and says "insufficient capital" as it would require me to have $30000 in the account for 10 contracts. This really has worked for me over the last 4 months.

It also provides another protection. You cannot add to winning trades either. I think adding to losing positions is a very bad idea and adding to winning positions is also not such a good idea, for the following reason.

Say you bought 5 contracts of e/u at 1.46000 and the market goes to 1.46500 and you add another 5 contracts because you are convinced that the trend is up, however just after entering with the second lot the market ignores your ideas and comes back to 1.46250. So now you are at break even and fuming and possibly damaged mentally. You ask yourself " why in the hell did I not just buy 10 in the first place at 1.46000 ". That way I would still be up $2500.
Worse still, you decide to hope and wait because this is just a normal retracement. No, the market once again is not listening and prices sink down to 1.46000. Now I am down $2500 and suffering a mental spasm. If I had of bought 10 in the first place I would be at breakeven and would bailout now.

These are just my thoughts on how to take care of the downside with a minimum of damage. Downside damages our confidence and pschyie.

regards
emtee
  • #313
  • Sep 16, 2009 9:21pm Sep 16, 2009 9:21pm
Quoting emtee
Hi "The fool"
A further comment to you on a foolproof way of avoiding the problem you just encountered. I have experienced the same many times and I finally figured out for me how to avoid it.

....

These are just my thoughts on how to take care of the downside with a minimum of damage. Downside damages our confidence and pschyie.
Well, emtee, I like the way you think & thanks for sharing.

The simplicity & quickness of "get in & out with a quick profit" is what attracted me to scalping in the first place. I all along imagined that, as I would build more and more equity, I would be able to shrink my pip target and increase my trade size and end up with nice profits for minimum risk.

Well, as I built up more equity I found myself slow to increase my trade size. Nothing wrong with being conservative but there's no sense in overdoing it, either. I am going to try to do better in that regard in the future.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #314
  • Sep 17, 2009 11:40am Sep 17, 2009 11:40am
Never trade without a stoploss.

Never risk on any one trade what you cannot lose without it bothering you.

For gods sake, don't trade forex in your IRA. Or if you absolutely must, wait till you've got several good years of profitable trading under your belt and a very, very good understanding of risk managment.

And a quick question, you mentioned in one of your posts that youve been very good with position sizing. Since you havent been using a stoploss, how exactly do you position size? Personally, I think that position sizing without a stoploss is impossible since you are not defining risk on your trades.
  • #315
  • Sep 17, 2009 12:52pm Sep 17, 2009 12:52pm
Quoting ThePipDoctor
Never trade without a stoploss.

Never risk on any one trade what you cannot lose without it bothering you.

For gods sake, don't trade forex in your IRA. Or if you absolutely must, wait till you've got several good years of profitable trading under your belt and a very, very good understanding of risk managment.

And a quick question, you mentioned in one of your posts that youve been very good with position sizing. Since you havent been using a stoploss, how exactly do you position size? Personally, I think that position sizing without a stoploss...
Thanks, Doc. The IRA is down about 20% over the last 2-years (and it has come up from over 50% down) & its in your typical "buy and hold" type stocks. I am definitely going to go into a self-directed IRA and I might hold some of those stocks but I am also going to add in other means of wealth generation such as forex & futures trading accounts, real estate investments, etc.

You are right - I need to make a habit of better risk management. Do you trade? Have you ever made a mistake?

RE: stoplosses. I have more often than not used an emergency stoploss when I scalp. I also typically stop trades manually b4 they ever hit the sl. Position size can be assessed from either a hard sl or a mental one. As I have said before most of my larger losses have been due to situations where I abandoned loss management entirely & tried to average down losing trades, so that bad habit, at least, is getting worked on intensively.

Thanks for your comments.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #316
  • Edited 9:46am Sep 18, 2009 9:15am | Edited 9:46am
Quoting The Fool
I appreciate your thoughts endroute. I couldn't get no love at the Tokyo open, saw my drawdown hit 60%, and closed it all down.

I am working on, thinking about trading within a set of rules. Started a thread about it last week: "What Are Your Trading Rules"....

I won't be live trading again for a while, but I ain't giving up.

i am so sorry to hear about ur drawdown...

i've been there ...

a word on stop-losses:

always use them... not only emergency ones...

but also the ones that when u see u r in the wrong side of the market get u out as quickly as possible.

hard stops are called.

if u use "indicator stops" -as in not gettin out until ur macd or whatever tells u, trust me... it can get REALLY bad-.

never stop trying... that is what will make the difference in the long run... u will never know if 6 months... or 6 years.. but it worths the try.

best of lucks buddy.
  • #317
  • Edited 4:41pm Sep 18, 2009 12:22pm | Edited 4:41pm
Quoting iiivb
....never stop trying... that is what will make the difference in the long run... u will never know if 6 months... or 6 years.. but it worths the try.

best of lucks buddy.
Thanks iiivb, I appreciate the encouragement. I have not stopped trying & I am even trying harder. I am trying something different, though & it does not include making trades. (OK, I have been doing a few scalps here & there for $0.01/pip but just to stay tight.) I am taking a step back and looking at how I came into trading, what I have been doing - kind of a "taking stock" process...

I am working on a Trading Plan. I have a Daily Trading Log in process, as well. I am basically trying to formalize my approach to trading and reform it...to result in a more professional approach. I am a professional person and I know what's required to manage teams of people to get projects done, to get complicated things built. I think I need to apply this experience & mindset to trading, to approach trading in a more professional way, treat it like a job.

Check out the T2W Trading Plan Template (see attached) & a big Thanks to Silverheat for the link. I am getting alot out of this document.

I imagine that most people who aspire to become traders - daytraders trading electronically - come into that aspiration by various means but in general they are on their own. They start trading and find a place like Forex Factory where there is a bewildering amount of Opinion, Guidance, Information, and Junk. Its not like they are coming into a job where someone says: OK, this is how we do things here & this is what we expect of you. No, you basically have to negotiate this maze and get to the cheese as best you can.

Is it any wonder so many fail?

So, at any time it might be a good idea for anyone in this situation to step back and take a good look at what they are doing. What is my Plan? What are my Rules? What am I doing right and how can I improve on that? What are my bad habits - what am I doing wrong & how can I remedy that? This is where I'm at.
Attached File(s)
File Type: pdf T2W_Trading_Plan_Template_2005[1].pdf   160 KB | 218 downloads
"If The Fool persists in his Folly he will become wise." - William Blake
  • #318
  • Sep 18, 2009 1:27pm Sep 18, 2009 1:27pm
Looking at the action I'd bet my mate who went Long GU Monday right before the big 100pip sell off has likely been margin called, so from £800 to £200 ( maybe £100 ) I suspect this week, doing exactly the same as you, either way huge hole in her account -400pips OUCH!!

Pride, not being able to take a loss and trading on hope really is a traders worst nightmare hey.


Sadly this is a lesson you've got to learn the hard way a few times I've been there and I think we all have and I'll likely be there again and again!!


Take it easy though Fool, atleast your not starving any time soon
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #319
  • Sep 18, 2009 1:32pm Sep 18, 2009 1:32pm
Quoting Turveyd
Looking at the action I'd bet my mate who went Long GU Monday right before the big 100pip sell off has likely been margin called, so from £800 to £200 ( maybe £100 ) I suspect this week, doing exactly the same as you, either way huge hole in her account -400pips OUCH!!

Pride, not being able to take a loss and trading on hope really is a traders worst nightmare hey.
Yup, live & learn or die. I expect the early September action has taken a heavier than usual toll amongst the retail traders.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #320
  • Sep 18, 2009 1:50pm Sep 18, 2009 1:50pm
Quoting The Fool
Check out the T2W Trading Plan Template (see attached) & a big Thanks to Silverheat for the link. I am getting alot out of this document.

I imagine that most people who aspire to become traders - daytraders trading electronically - come into that aspiration by various means but in general they are on their own. They start trading and find a place like Forex Factory where there is a bewildering amount of Opinion, Guidance, Information, and Junk. Its not like they are coming into a job where someone says: OK, this is how we do things here & this...
WOW--great document! Thanks for sharing it--I think it will be really helpful.
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