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Time to call it quits

  • #41
  • May 29, 2012 4:28pm May 29, 2012 4:28pm
You know the saying, "If you cannot stand the heat, get the heck out of the kitchen". Have to agree with most of the points listed here, including the cherry popping. Wonder how many noobs actually believe Forex trading is a cash generating machine, delivering cash on demand?
  • #42
  • May 29, 2012 6:20pm May 29, 2012 6:20pm
Quoting Robertk
I attached a spreadsheet that might help you some in case you are considering to continue. I made this a week ago myself. It truly helped me in generating patience, only cherrypicking the best trades, and to not be greedy. .....
Robert,

I don’t want to dissuade you from setting goals and targets, especially if they help to motivate you. However, in my experience, there are some pitfalls and caveats that every aspiring trader needs to consider.

Firstly, I don’t dispute the math: 2% per day compounds to a whopping amount in just a few months.

However, targets create this dilemma: what to do if you find yourself falling behind your projected daily/weekly/monthly goal? There is no way to catch up, without overtrading (taking poorer quality setups) or overleveraging yourself (risking bigger positions in an attempt to recover). The alternative is to lower your sights, which means that — if I may be blunt — the original target was effectively meaningless.

Targets can cause a trader to become P/L focused, rather than market focused. A profitable strategy is profitable because it exploits market inefficiencies, not because it is seeking an arbitrary pip target that’s set by the trader, which the market takes no cognizance of. From what I’ve read in Market Wizard-type books, the best traders focus on executing a strategy flawlessly and consistently, and let profit take care of itself.

Targets can cause a trader to take profits too early. Trend-following systems, for example, make their money when the market trends most strongly, and to cut winners short would be counter-productive, reducing your bottom line. Those extra pips help compensate for other losses, and can be the difference between an overall positive or negative pip count. It’s not greedy or risky to take any ‘extra’ pips that are on offer: many experts believe that if you have your SL at breakeven, you have a risk-free trade, and you should milk this opportunity for everything that you can get. As pipmutt says in his signature: "It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong." That’s a Soros quote, if I’m not mistaken.

Targets can also cause you to avoid good setups, if you say to yourself: “I’ve already made my 10 pips for today; to take another trade might be tempting fate”. In other words, you find yourself no longer following your system rules.

A small (e.g. 10 pips per day) target tends to encourage scalping, which requires greater knowledge and skill than longer term trading, especially because the effect of the spread is greater. For example, if your trade horizon is 10 pips, then a 2 pip spread represents a 20% edge against you, whereas if your trade horizon is 100 pips, then the same spread represents only a 2% barrier. Keep in mind that transaction costs both reduce the size of your winners, and increase the size of your losses.

Finally, here are some words from a professional trader with more than 30 years’ experience:
“All of the professional traders I know, whether they trade forex or futures markets, do not make "so much per day". That is a phrase used by marketers, because they know what beginners are looking for, and that is a steady income so they can get rid of their jobs. Money from the market that you can count on does not come steady or nicely "so much per day". Real traders make profits, budget their expenses, save some profits, add some profits to their accounts for further building of the account, etc. Just like any business, which is what real trading is.”
If you want to read the whole post, it is here.

Just my 2c, for whatever it's worth.

David
  • #43
  • May 29, 2012 6:41pm May 29, 2012 6:41pm
Quoting unknown4x
Most of those people don't have a single clue about trading other than how to spell black scholes.
Please excuse my impertinence, but shouldn't that be capitalized?
  • #44
  • May 29, 2012 9:47pm May 29, 2012 9:47pm
Quoting hanover

As pipmutt says in his signature: "It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong." That’s a Soros quote, if I’m not mistaken.
Correct, unfortunately there weren't enough characters available in the signature option to credit the author! Despite being in a different league and playing a different game I've found some of his comments to be very pertinent to all types of traders/markets.

Excellent post as always David, clear and concise.
  • #45
  • May 30, 2012 7:46am May 30, 2012 7:46am
@pinkiaiii

take a look at the chart below, its AUDUSD on the 5m timeframe for today and yesterday, look where the price changes direction to make a considerable move, when I decided to learn from the ground up on my own, I asked myself what caused that move? why there? why did the price suddenly shoot up or down and stop at a certain level or area and reverse? how could I have an idea where these areas are? or a good idea of where I should wait for the price to hit before I get into a trade?

What do you think?
Attached Image (click to enlarge)
Click to Enlarge Name: PLAINCHART.jpg Size: 74 KB
  • #46
  • May 30, 2012 4:44pm May 30, 2012 4:44pm
i know well above basics in technical analysis,it hit that area because it was last resistance on failing to take it out,it went down again to support.All would be nice if such things as fake outs or some bull$hit news that you never heard country of wouldnt come out everyday and straight away go trough 2-3 major supports giving you wtf immpresions.
Im still trading everyday,if not just id take a peak from time to time to see whats market up to,but eventually probably gonna give up trading,as i want to setup my own business in the future that i have already plans,and maybe try to learn poker instead
  • #47
  • May 31, 2012 8:34am May 31, 2012 8:34am
Quoting hanover
Robert,

I don’t want to dissuade you from setting goals and targets, especially if they help to motivate you. However, in my experience, there are some pitfalls and caveats that every aspiring trader needs to consider.

Firstly, I don’t dispute the math: 2% per day compounds to a whopping amount in just a few months.

However, targets create this dilemma: what to do if you find yourself falling behind your projected daily/weekly/monthly goal? There is no way to catch up, without overtrading (taking poorer quality setups) or overleveraging yourself...

Very informative post. Thanks David. The spreadsheet that was included was somewhat meant for backtesting my current strategy and to test my own psychology. Which % will I receive on average per day with my current strategy and state of mind and over what period am I able to continue this avg. Amount.

I completely agree with you on the arguments of removing targets. Full potential of a system cannot be achieved when you’re not taking any setups after a target is reached. Perhaps I should remove the fixed targets and only keep track of the average % I will be able to make.

Anyway, thanks again for this post and awesome quotes!
  • #48
  • May 31, 2012 8:39am May 31, 2012 8:39am
Quoting pinkiaiii
i know well above basics in technical analysis,it hit that area because it was last resistance on failing to take it out,it went down again to support.All would be nice if such things as fake outs or some bull$hit news that you never heard country of wouldnt come out everyday and straight away go trough 2-3 major supports giving you wtf immpresions.
Im still trading everyday,if not just id take a peak from time to time to see whats market up to,but eventually probably gonna give up trading,as i want to setup my own business in the future that i...
Sounds like your mind is already there.... probably time to move on then.

As for poker, it's pretty much the same skill from what I understand of it.

But, good luck with your future business ventures!

X
  • #49
  • May 31, 2012 8:44am May 31, 2012 8:44am
Quoting hanover
Robert,

I don’t want to dissuade you from setting goals and targets, especially if they help to motivate you. However, in my experience, there are some pitfalls and caveats that every aspiring trader needs to consider.

Firstly, I don’t dispute the math: 2% per day compounds to a whopping amount in just a few months.

However, targets create this dilemma: what to do if you find yourself falling behind your projected daily/weekly/monthly goal? There is no way to catch up, without overtrading (taking poorer quality setups) or overleveraging...
I COMPLETELY agree with regards to targets! I personally have max losses, but no targets and no max profits.

Last week I felt a higher degree of confidence and clarity than I have this week over all. I also had some higher quality setups trigger last week, and I didn't have such this week.

I made about 9% last week, but this week i'm only up 2.7%

Imagine if I made my target the same as last week. I would feel an immense pressure to act in such a way that may not be best for my overall profitability.

At any rate...I know that if I focus on plugging leaks, fixing flaws... reducing mistakes...these numbers just naturally get better.

X
  • #50
  • May 31, 2012 8:49am May 31, 2012 8:49am
From forex to poker, well...
  • #51
  • May 31, 2012 11:33am May 31, 2012 11:33am
Quoting duyk20
From forex to poker, well...
just joking never understood the game
But this is my last post,wont be trading anymore,as it might seem a small amount to loose money for others here but,i would of rather spend it somewhere in Spain laying on the beach with all the nice girls around drinking cocktails for a week or two,or small travel around Europe which would at least me give some pleasure and good memories.Gl to all and bye.
  • #52
  • May 31, 2012 12:11pm May 31, 2012 12:11pm
Quoting pinkiaiii
just joking never understood the game
But this is my last post,wont be trading anymore,as it might seem a small amount to loose money for others here but,i would of rather spend it somewhere in Spain laying on the beach with all the nice girls around drinking cocktails for a week or two,or small travel around Europe which would at least me give some pleasure and good memories.Gl to all and bye.
Nice to cross with you in life.
  • #53
  • Jun 1, 2012 12:31am Jun 1, 2012 12:31am
Inserted Video
  • #54
  • Jun 3, 2012 9:55am Jun 3, 2012 9:55am
you boy are a quitter...2 yrs is a very short time to master this game....its like every month I discover new better techniques to roll wit'
I don't know how long it will take for my methodology to crystallize...I can't believe how far I have come...from mechanical to discretionary trading and the discovery that a high win rate is possible ...as long I have breath in me I'll never quit...this game mutates so fast.
wo-yoy! wo-yoy! wo-yoy! wo-yoi! wo-yoy-yoy-yoy!
  • #55
  • Jun 3, 2012 10:24am Jun 3, 2012 10:24am
Quoting pemully
you boy are a quitter...2 yrs is a very short time to master this game....its like every month I discover new better techniques to roll wit'
I don't know how long it will take for my methodology to crystallize...I can't believe how far I have come...from mechanical to discretionary trading and the discovery that a high win rate is possible ...as long I have breath in me I'll never quit...this game mutates so fast.
In which sense does it mutate?
  • #56
  • Jun 3, 2012 11:52am Jun 3, 2012 11:52am
profitable strategies becoming unprofitable or not worth the hassle.

its well documented that markets changes ...Richard Dennis alluded to the fact that trendfollowing will never be as profitable as before...the market shifted from retail to institutions .
wo-yoy! wo-yoy! wo-yoy! wo-yoi! wo-yoy-yoy-yoy!
  • #57
  • Jun 4, 2012 12:53am Jun 4, 2012 12:53am
Quoting pinkiaiii
just joking never understood the game
But this is my last post,wont be trading anymore,as it might seem a small amount to loose money for others here but,i would of rather spend it somewhere in Spain laying on the beach with all the nice girls around drinking cocktails for a week or two,or small travel around Europe which would at least me give some pleasure and good memories.Gl to all and bye.
Sincere congratulations. By not trading in the forex, you are already more profitable than all forex traders. I hope soon you will recover all your money with income from a worthwile job and you will look back in total astonishment and wonder what devil put you on this path of financial destruction.
  • #58
  • Jun 4, 2012 9:47am Jun 4, 2012 9:47am
Why not trade another market on a simulator? too many traders end their careers early without trying different markets/ strategies. I started out trading a volatile market (equity futures) i lost money everyday for 6 months untill i gave myself another chance by searching for new markets. I settled in fixed income which is slow moving and gives you plenty of time to think of your next move. I suggest you stay in touch with markets and look into new ideas even if your not trading and taking time off. I did this and came back stronger then ever.
  • #59
  • Jun 4, 2012 9:58am Jun 4, 2012 9:58am
Quoting Mingary

By not trading in the forex, you are already more profitable than all forex traders......path of financial destruction.
Sadly that is so true (of most but not all) but really, some of the most unsuitable people just drop into this business with little or no experience and even less common sense and somehow expect to produce instant money, did they really honestly believe that was ever going to happen?
  • #60
  • Jun 4, 2012 10:06am Jun 4, 2012 10:06am
Quoting wadewade

I started out trading a volatile market (equity futures) i lost money everyday for 6 months untill i gave myself another chance by searching for new markets. I settled in fixed income
Did you trade both with a prop shop? Maybe that was the difference rather than the market?
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