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I fail again and again and bite the dust

  • #21
  • Nov 15, 2011 3:30am Nov 15, 2011 3:30am
Quoting Pipskateer
Thank you for your very candid answers. However, you failed to address the most important question I asked. How do you KNOW your system is not flawed? I submit to you, in absence of your answer, that a trader cannot know their system is profitable unless it has been thoroughly tested under fixed money management parameters. ......
I can relate to what you're saying. FWIW, I posted in somewhat similar vein here.


Quoting moneydeep
I have been trading live for a year now and I can not make money. Anytime I make money I end up giving it back to the market and more. ......
I suspect your problem is either:

1. You don't really have total confidence in your system, and/or

2. You've overestimated your threshold to pain, and have consequently overleveraged yourself emotionally. Trade smaller position sizes, or even revert back to demo..... whatever level you feel 100% comfortable with; then increase the stakes very gradually. So many folk attempt to fast track the process, because they want to make a decent income SOON.

It's time to ask yourself some tough questions, if you really want to succeed at trading.
  • #22
  • Nov 15, 2011 4:04am Nov 15, 2011 4:04am
Quoting moneydeep
I have read Mark Douglas books but when it comes to trading everything flies out of my head. I intake better information through audio visual methods rather than reading books. And I have realised that discipline is not something one can master just by reading books. (at least not me)
Only this - Mark Douglas "Trading In The Zone" is available at audible dot com

highly recommended !!

http://www.forexfactory.com/showthread.php?t=152671
OPPORTUNITY IS NOWHERE
  • #23
  • Edited 11:39am Nov 15, 2011 11:08am | Edited 11:39am
Hanover, that is quite an excellent post. Particularly these portions:

Quoting hanover
My guess is that it's the lack of a proven profitable trading method that causes folk to make emotionally-based trading decisions (especially with their exits), and consequently they see fear and greed are their #1 enemy; when the reality is that this is masking their lack of understanding of market behavior, and the fact that their trading method amounts to little more than ineffectual guesswork. If so, then focusing on psychology is an easy cop out, and a way of avoiding the crux of the problem....... except for the authors, psychologists and...
It has long been my belief that perhaps the majority of "psychological issues" which seem to prevent us from becoming consistently profitable traders actually have their root cause in our failure to sufficiently prepare for the battle...both in knowledge and discipline. We hit the trading battlefield as green, impulsive, and unprepared for WAR as the spring clover, fully expecting the market to just lay down at our feet upon entrance into our first position. We have ZERO real confidence in the arms we bear into the battle, never having properly tested them. Were just itchin' for a FIGHT! Which, the market promptly brings us.

I recall the excellent Harrison Ford/Tommy Lee Jones movie "The Fugitive". TLJ was "Deputy Marshal Samuel Gerard", the U.S. Marshal in charge of the task force that was tracking down the falsely accused "fugitive", Harrison Ford. During one segment, one of Gerard's deputy marshals had just purchased a new Glock handgun and was using it on duty. When Gerard questioned whether the deputy had tested the weapon at the gun range prior to using it in life and death "on duty" situations, the deputy revealed that the weapon was untested. He was properly and sternly chastised by Gerard for being so foolish as to endanger his own life and the lives of those on his team by bringing an untested weapon into battle.

That segment illustrates the importance of properly testing the weapons we use in our battle (and it IS a battle, make no mistake) as traders. I think that we just do not fully and consciously acknowledge the seriousness of the trading activity in which we engage. We discount it as if it's some sort of video game. I'm sure that rookie pit traders, standing face to face, pushing and shoving, feeling the spit from their red-faced opponents hitting their face get rid of THAT fantasy in a NY minute, eh?

But we who trade in cyberspace from the relative quiet and "safety" of our own homes, sitting behind our non-threatening computer screens are far removed from the obvious "heat" of any sort of real battle. For those who never "GET" that we are engaged in a real struggle for profits or loss, there is no tangible evidence...no "bang" to the guns that are causing us real damage. Some traders just don't seem to "feel it" until they are mortally wounded.

When you boil it all down...all these so called "psych" issues are really just symptoms of being in a state of unpreparedness and lack of discipline. When we are unprepared and undisciplined, we lack real confidence. The market quickly proves my point every time. Our novice unprepared state is further magnified by our lack of self-control. Self-control must be TAUGHT and LEARNED. These are the underlying causes for why we change rules midstream, trade without rules, add foolish amounts of leverage, get scared and move our stops (if we had any on to begin with), or get frightened into bailing early on winning trades. Because we are undisciplined, we lack the fortitude to stick to our guns. Because we are unprepared and haven't bothered to TEST our guns, we don't TRUST our guns. The end result is that our FEAR causes us to remove ourselves from profitability on winning trades. We choose to satisfy our fear by "settling" for a minor profit that isn't anywhere CLOSE to matching the initial RISK we took. Our GREED causes us to seek MORE profits than sticking to our system would otherwise bring us. We seek to "satisfy" that greed and the result is self-sabotage. This is a lack of self-control...a choice to allow our unbridled emotions and desires to overrule sound logic and proven wisdom. Failure to self-govern. I could go on and on...

The OP knows what his problems are. It is not a lack of understanding from which he suffers, it is lack of preparedness and lack of self-control. Until he prepares his system properly he will never have any confidence in it. Unless he develops self-control to follow his rules by the process of testing it under fixed and known profitable money management parameters, he can never actually KNOW whether his system is truly viable. Without fixed testing parameters and written system rules, he will never know whether any success or failure was due to the SYSTEM...or his own erratic behavior. Confidence is never given a chance to take root in solid ground. Once properly tested, the system must then be TRADED...according to the rules that gave us confidence in the testing. It's not easy...but it IS SIMPLE.

We must teach ourselves that RULES are better than REBELLION.
  • #24
  • Nov 15, 2011 11:40am Nov 15, 2011 11:40am
Pure and simple trade your system with zero leverage for 3 months, then if you are profitable reward yourself with 2-1 and so on.

If you are using Metatrader you can set the leverage.

In those out of control moments your losses with be 50 to 100 times less, and you will slowly gain.

Regards


Reform
  • #25
  • Nov 15, 2011 11:49am Nov 15, 2011 11:49am
Quoting reform
Pure and simple trade your system with zero leverage for 3 months, then if you are profitable reward yourself with 2-1 and so on.

If you are using Metatrader you can set the leverage.

In those out of control moments your losses with be 50 to 100 times less, and you will slowly gain.

Regards


Reform
Great advice, I wish someone had given me that advice 4 years ago LOL, thanks.
  • #26
  • Nov 15, 2011 2:02pm Nov 15, 2011 2:02pm
Quoting moneydeep
I have been trading live for a year now and I can not make money. Anytime I make money I end up giving it back to the market and more.

I have problems controlling my greed. When I see a good setup I will increase my risk factor a lot and when the trade goes against me my entire mindset changes. I feel very bad and depressed but the interesting thing is that I can come back the next day and put that behind me and be ready to trade again.

I have a system that works. I use elliott wave counts with vsa to stay on the right side of the market. I like...

The absolute best advice that I could give you is for you to learn the value of Non-Directional Trading in the Currency Markets.

That means, learning when, where and why to draw a horizontal line on a chart, and then learning how to defend that line until the market breaks in the direction of your most recent open position.

There is no less stressful way that I know to consistently net profits on a daily basis, even in markets that others claim "cannot be traded" because they are "too volatile" and "too directionless."

I was a systems trader for nearly 10 full years, until I learned the hidden power behind drawing a single horizontal line on a chart. If you want to learn more, see my thread: http://www.forexfactory.com/showthread.php?t=321847, and learn what you can.

It might be time for you to draw a line in the sand.
Y = MX + B. The most important price level of all.
  • #27
  • Nov 15, 2011 9:25pm Nov 15, 2011 9:25pm
I thank everyone here for replying. Every bit of info is helpful for my learning.

Quoting Pipskateer
Thank you for your very candid answers. However, you failed to address the most important question I asked. How do you KNOW your system is not flawed? I submit to you, in absence of your answer, that a trader cannot know their system is profitable unless it has been thoroughly tested under fixed money management parameters. The rules must be written down and executed properly. You cannot make a system profitable through money management, but unless you isolate the variables using a known profitable configuration and THEN test your system...you...
I know my system is profitable because I have used it on demo accounts profitably. The thing is that Elliott wave is the way the market moves and not an indicator based system as such so the user has to create a trading plan based on that which will work for him. And I'm sure trading elliott waves is profitable since there are so many practitioners out there.

What I have failed to do however, and you got me there, is that I have failed to create a specific ruleset which I will follow to trade the waves. This has led me to enter trades at wrong times and also has made me enter with no rules as to the position sizing.

Saying that I am going back to the drawing board and right now coming up with a structured plan to follow my wave trading through.

I will get back to you once I have done that.
  • #28
  • Nov 15, 2011 9:43pm Nov 15, 2011 9:43pm
Moneydeep,

Unfortunately, your answer to my question is far to vague for it to be useful. What I was looking for was something like..."I have tested my system on four pairs over 2 years of historical data on at least 100 setups per pair using a constant 1% risk per trade and each setup being a minimum trade potential of 2:1 R/R."

Just to say "I have used it on demo accounts profitably." tells you and us nothing useful. You are headed in the right direction with setting very specific rules, but you need to be thorough (professional) enough in your testing to give your psyche solid reasons to TRUST your setups. It is quite clear that your inner self is not confident in your setups and my best guess is that you do not have a sufficient quantity and quality of data in your back-testing for your "psyche" to get on board with the plan, based on your prior statements.

I'm not trying to "beat you up" at all. If you do have specific, quantitative and qualitative data, but you're just being vague in your response here, that's fine. Just realize that until you have sufficient data to convince the "trader" inside you that your system is really profitable, you will need to continue testing to build internal confidence. Furthermore, I can't stress enough...your testing needs to be founded on solid, money management constants where R/R and risk per trade are concerned so you don't skew your results to one side or the other. Probably worse than having no confidence at all is having MISPLACED confidence by way of incorrect testing.

Best wishes in getting to where you want to be!
  • #29
  • Nov 16, 2011 7:00am Nov 16, 2011 7:00am
Quoting moneydeep
I thank everyone here for replying. Every bit of info is helpful for my learning.



I know my system is profitable because I have used it on demo accounts profitably. The thing is that Elliott wave is the way the market moves and not an indicator based system as such so the user has to create a trading plan based on that which will work for him. And I'm sure trading elliott waves is profitable since there are so many practitioners out there.

What I have failed to do however, and you got me there, is that I have failed to create a specific ruleset...
Hi money,

Do you have some performance statistics of your demo trading? Or would you tell something on your demo account statement.

cheers,
kk007
  • #30
  • Nov 16, 2011 2:55pm Nov 16, 2011 2:55pm
pipskeeter is spot on with r/r instead of w/l. It's a simple numbers game. If you dial in your method so that you're maintaining at least 2:1 reward/risk, you only need to be correct 40% of the time to make money over time. 33% of the time to just break even. I mean seriously, even with poor discipline, can you not at least be correct 3 times out of 10? Flip a coin and you're 5/10 accurate AND MAKING MONEY if you maintain 2:1.

Most traders never get this in their head to stick even though they've probably heard it a million times. You can't be book smart about it.. you have to be habit smart.

It sounds like you just need to develop strong habits and eliminate poor ones. I'd suggest using something small like a $100 account. Trade a dime a pip. Don't worry about wins/losses or doubling the account or blowing up the account. Just trade 10 signals in a row with a 2:1 r/r. Set and forget orders. Once you experience the power of 2:1 or better you'll ditch half the crap in your tool box. Seriously, how hard of an exercise would it be? 10 trades... 2:1.. set and forget. Then 20 trades. Then 30 trades. The longer the time line, the higher the rate of success because the longer time line equalizes out the distribution of wins/losses.

Also, try changing your definition of winning versus losing. If your definition is wins vs losses, you're almost setup to be a loser. If you define winning as executing your plan to the T regardless of outcome, then you're setup to win because the primary variable is YOU and the market. Combined with 2:1 and a method that is 40% accurate or better, the money will take care of itself.
  • #31
  • Nov 16, 2011 3:36pm Nov 16, 2011 3:36pm
Greed is largely driven by an incomplete understanding of technicals. Once you are able to read every candle clearly and dispassionately, the greed evaporates as one then has that clarity to detect good and bad trades. Exits also improve as the reverse of an entry setup is all that an exit is (bar occasional market exhuberance which no one can predict). So I would suggest really working on reading candles. Forget the labels. Understand them for what they say.

This will be a hard and long path. No one can teach you this wisdom. It comes from insight and lateral thinking. It takes time and patience. And it is extremely complex.
The road to pipland is arduous and fraught with challenge.
  • #32
  • Nov 16, 2011 4:15pm Nov 16, 2011 4:15pm
How do you know the market moves according to Elliott Waves? I swear I thought it was Fibonacci, or Moving Averages, or maybe even MACD! There are so many practitioners of those technical indicators I swear the market moves according to each one.

When you buy an item at a store, is the price you got your item at determined by Elliott Waves or is it determined by economic supply and demand?

What I'm trying to get at here is that you haven't really answered Pipskateer's question. And your continued rambling about your lack of self-control when it comes to trading is not receiving any sympathy.

You should go back to the basics and study, for a good while, until you have a solid foundation and knowledge of why prices move in the market.
  • #33
  • Nov 16, 2011 4:28pm Nov 16, 2011 4:28pm
Quoting idash
How do you know the market moves according to Elliott Waves? I swear I thought it was Fibonacci, or Moving Averages, or maybe even MACD! There are so many practitioners of those technical indicators I swear the market moves according to each one.

When you buy an item at a store, is the price you got your item at determined by Elliott Waves or is it determined by economic supply and demand?

What I'm trying to get at here is that you haven't really answered Pipskateer's question. And your continued rambling about your lack of self-control when...
Fibonaccis are central to the markets rejections, but not in ways that many think. I haven't the time, ability nor space to explain, but this much I would say, chart time is the only antedote. There are no short cuts.
The road to pipland is arduous and fraught with challenge.
  • #34
  • Nov 16, 2011 4:40pm Nov 16, 2011 4:40pm
How is Fibonacci central to market rejections? I thought MAs are too!

If the price of an item is so expensive and the market rejects it, does it mean a key fib level was at that price level? Or is it because that people are not willing to buy it (not supplying liquidity)?

Quoting traider
Fibonaccis are central to the markets rejections, but not in ways that many think. I haven't the time, ability nor space to explain, but this much I would say, chart time is the only antedote. There are no short cuts.
  • #35
  • Nov 16, 2011 4:53pm Nov 16, 2011 4:53pm
Quoting idash
You should go back to the basics and study, for a good while, until you have a solid foundation and knowledge of why prices move in the market.
What good does that do if his trading mechanics, money management, trade management, and discipline suck? From what it sounds like, he could have tomorrow's news paper and still lose money. I'd gander to say that most traders would still lose even with tomorrow's newspaper.

Making money consistently and being able to explain why markets move have little to do with each other.
  • #36
  • Nov 16, 2011 5:12pm Nov 16, 2011 5:12pm
Quoting JR97
What good does that do if his trading mechanics, money management, trade management, and discipline suck? From what it sounds like, he could have tomorrow's news paper and still lose money. I'd gander to say that most traders would still lose even with tomorrow's newspaper.

Making money consistently and being able to explain why markets move have little to do with each other.
Excellent piece of advice.
The road to pipland is arduous and fraught with challenge.
  • #37
  • Nov 16, 2011 5:51pm Nov 16, 2011 5:51pm
Quoting moneydeep
I am asking very sincerely if there are others there who have been through this and are willing to guide me in the right path.
Moneydeep,

Have you tried taking the Van Tharp Trader Test? It is free and you can Google it (not sure I can post a link here).

It will give you some useful pointers if you haven't taken it yet - its free!.

I wish you well with your trading journey.

Kind regards
  • #38
  • Nov 16, 2011 8:02pm Nov 16, 2011 8:02pm
Had similar experiences so I feel your pain. I am now consistently profitable (took me 3 years) and here are some lessons learnt:

0) You are not serious about your trading. In your mind it is OK to consistently lose - therefore you are not really in this to make a profit.

1) You will only walk away from a certain mode of behaviour when the pain becomes unbearable (this holds for personal and professional relationships too). Because you state that you perform well when there is someone to punish you when you do not, devise a system to punish you - either a (very good and patient) friend, someone who is not necessarily a friend but will be honest, or in a pinch, yourself. Submit every trade to that person / place (this forum) for critique and agree "punishment" before the time for non-conformance.

2) The strategy is far less important than the ability to consistently execute it (as you have found out).

3) Never enter a trade without your risk / reward ratio at at least 1:2, and let the market take you out each time - that is, practice "hands off trading". That way, you take (some of) the emotions out of it, and you only need to get 50% of your trades right to still be profitable. In fact, try paper trading any setup you care (not necessarily your strategy, just anything that looks good) with a consistent 1:2 risk/reward ratio, one trade per day over 2 weeks, and look at the results.

4) You will never have the perfect entry, and you will never have the perfect exit. Take your losses when they occur, don't change your stops, and take your limits when they are due - again, let the market take you out.

Hope that helps.
Neville.
  • #39
  • Nov 16, 2011 8:51pm Nov 16, 2011 8:51pm
Demo account is not like a live account. Training your greed on demo account is maybe not the best way. So, I suggest you, leave the EUR/USD currency pair and trying maybe the EUR/CHF currency pair. Because since the SNB fixed the rate on 1.20, you're like in a "protected area" resp. like a light version of your live account. You need only set your SL - your worst case scenario - below this 1.20 zone. It's like a bicycle with training wheels

It's just a suggestion and not a solution for your whole situation. But maybe this can help you by training your greed. You know, you have invested money and you know your loss is theoretical inexistent as far as your SL is below this 1.20 zone. And if anytime the price fall, e.g. from 1.24 to 1.22, then you only need to wait until your position is back in profit. So, you training additional patient, one of the most important attribute for a trader
  • #40
  • Nov 16, 2011 10:25pm Nov 16, 2011 10:25pm
Quoting JR97
pipskeeter is spot on with r/r instead of w/l. It's a simple numbers game. If you dial in your method so that you're maintaining at least 2:1 reward/risk, you only need to be correct 40% of the time to make money over time. 33% of the time to just break even. I mean seriously, even with poor discipline, can you not at least be correct 3 times out of 10? Flip a coin and you're 5/10 accurate AND MAKING MONEY if you maintain 2:1.

Most traders never get this in their head to stick even though they've probably heard it a million times. You can't...
Agree 1000% with this entire post.
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