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Attachments: a basic trading rule may be the cause of our trading losses
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a basic trading rule may be the cause of our trading losses

  • #101
  • May 29, 2016 2:01am May 29, 2016 2:01am
The main problem for most traders is to lose the Gambling instinct and to understand there are skilled to be developed before making money.

To not be distracted with thoughts or ideas of how much money can be made with potential wins or gains per day.

To learn to just trade for pips not money.

This and only this will allow a trader to really keep on their thinking cap in approaching final analysis before getting into a trade.

So the key is to trade amounts that does not mean much and still develop the instinct to defend or protect it by only getting into good trades habitually.
  • #102
  • May 29, 2016 2:31am May 29, 2016 2:31am
Quoting shellsnail
{quote} Read this book. It will help you with managing your losses. http://www.amazon.com/Necessary-Endi.../dp/0061777129 I would posit that emotions are not the biggest problem you have. The biggest problem may instead be a flawed understanding of market structure and price movements. This flawed understanding leads to unrealistic beliefs and expectations about where price may go to. You have no idea of the realistic probabilities that price...
The basic reason for trading losses is your trading strategy has no edge.

If you have traded for a long time but yet to see any success that you hope for at the start, it means your trading strategy did not give you the edge in line with your expectations.

This suggestions of "weakness in psychology" or "every strategy works some of the time, it's the trader's ability to make it work" is plain nonsense.

It may take you a long while or never to reach this understanding, it's up to you.

But consider this, the casinos base their business model on clear, determinable edge and they rake in huge profits by the billions. Psychology or "ability of the trader" does not come into play. The floor managers just do their mundane job day in day and the end result will remain the same, the casinos win big.

So, it's either you have a strategy with an edge or you don't. It's that plain and simple. And majority of the 95% traders trades with strategies that DO NOT give them any edge. That's the grim reality most traders do not accept, don't even realise that their strategy do not give them any edge and they hang on to their impossible hopes.
  • #103
  • May 29, 2016 3:53am May 29, 2016 3:53am
Quoting shellsnail
{quote} Read this book. It will help you with managing your losses. http://www.amazon.com/Necessary-Endi.../dp/0061777129 I would posit that emotions are not the biggest problem you have. The biggest problem may instead be a flawed understanding of market structure and price movements. This flawed understanding leads to unrealistic beliefs and expectations about where price may go to. You have no idea of the realistic probabilities that price may behave like you expect so your brain short-cuts it and replaces the unknown as...
Thank you shellsnail for your advice and book link.
Sorry but no book will help control my emotion ,in real life it's not that easy .
  • #104
  • May 29, 2016 3:55am May 29, 2016 3:55am
Quoting DonFF
The main problem for most traders is to lose the Gambling instinct and to understand there are skilled to be developed before making money. To not be distracted with thoughts or ideas of how much money can be made with potential wins or gains per day. To learn to just trade for pips not money. This and only this will allow a trader to really keep on their thinking cap in approaching final analysis before getting into a trade. So the key is to trade amounts that does not mean much and still develop the instinct to defend or protect it by only getting...
All tried ,but couldn't help to control the greed.
  • #105
  • May 29, 2016 4:01am May 29, 2016 4:01am
Quoting skyway
{quote} The basic reason for trading losses is your trading strategy has no edge. If you have traded for a long time but yet to see any success that you hope for at the start, it means your trading strategy did not give you the edge in line with your expectations. This suggestions of "weakness in psychology" or "every strategy works some of the time, it's the trader's ability to make it work" is plain nonsense. It may take you a long while or never to reach this understanding, it's up to you. But consider this, the casinos base their business model...
My failure has nothing to do with my trading strategy.
I was trading a demo account for the same last 3 months ,and while the real account was blown ,the demo account is up 27% with only 11% drawdown.
Because with the demo account i didn't care about increasing lot sizes,or how much money i made ,i just put the trades with no emotion ,i have no interest to break the plan ,it's not real money .
so 99.9% sure the account was blown emotionally ,not strategically.
  • #106
  • May 29, 2016 10:35am May 29, 2016 10:35am
Quoting fxnow
{quote} Thank you shellsnail for your advice and book link. Sorry but no book will help control my emotion ,in real life it's not that easy .
I really don't think your problem is all that different or new. I blew at least 15 accounts since I started trading in 2011 and I just stopped counting at some point. So if anyone can give any advice on the dangers of greed and "emotional management" it's me.

Here's the catch. The problem is not greed. It's other things masquerading as greed.

So here's how the loop typically went:

1. I am executing my strategy.
2. It takes time and it's too slow for my liking.
3. I am taking some losses. It does not feel good to be down money. // I am making some gains; but they are too small to be meaningful.
4. I see some good moves in other pairs or I read about some fundamentals.
5. I pull up those charts and start projecting where price may go to.
6. Convinced by the potential of quick or large profits, I place a large lot trade.
7. Price goes against me, I get margin called.
8. Desperate to recover back to where I started, I place another large lot trade shortly after.
9. rinse and repeat = account blown.

At first glance it may seem that the problem is with 3 or 4, where I face those "bad" emotions. But really, there's nothing you can do about those except to accept them.

What you can control is 5, 6, 7, 8, 9.

You do that by learning how to read the market better and what things DO NOT HAVE EDGE. By default, everything doesn't have edge until you can show that it does.

With a better understanding of the market, you will see how your particular approach of placing the large lot trade has a negative expectancy and a high risk of ruin. Now you just need to equate those two with hopelessness. There is absolutely NO HOPE whatsoever in pursuing a negative expectancy decision. That's all you need to convince yourself of. Once hope exits the equation, the problem resolves itself.

But let's say you falter, now you get to 7. You get another chance to make a good decision which is to stop trading. This is the second point you can intervene in.

Quoting from a book "Never Go Back: 10 things you'll never do again"

There is an old story in recovery circles that goes something like this:

My Life in Five Short Chapters

Chapter One: I went out for a walk, and I fell into a deep, dark hole. It took me a long time to get out.

Chapter Two: I went out for a walk, and I fell into the same deep, dark hole. It took me a long time to get out.

Chapter Three: I went out for a walk, and I came across the same deep, dark hole. I walked up to it slowly, got very close to it, looked inside the hole... and I fell in again. It took me a long time to get out.

Chapter Four: I went out for a walk, and I came across the same deep, dark hole. This time as I approached it, I decided to not get too close, and I walked around it.

Chapter Five: I went out for a walk. This time I went down a different street.

***
Good luck. Don't whine and complain. Do something to change.
Build good relationships with others.
  • #108
  • May 29, 2016 6:19pm May 29, 2016 6:19pm
Quoting shellsnail
{quote} Chapter Five: I went out for a walk. This time I went down a different street. .
... and I was run over by a bus ..

Chapter Six ...

Why would change be better than before ?
  • #109
  • May 29, 2016 6:23pm May 29, 2016 6:23pm
Call the road dept and tell them to fix the road.
My Threads: Trading is as simple as 1-2-3, Highest Open / Lowest Open Trade
  • #110
  • May 29, 2016 6:24pm May 29, 2016 6:24pm
Even better, hire a lawyer and sue them for millions
My Threads: Trading is as simple as 1-2-3, Highest Open / Lowest Open Trade
  • #111
  • May 29, 2016 6:49pm May 29, 2016 6:49pm
I think thread starter need to take advice from some of the earlier posters, they are right. The strategy simply do not have an edge. Trade managements are still proportional but winning percentage are way to low. If his winning percentage is just a little higher, his equity curve will build up nicely.
The only winner is the one who survive the longest...
  • #112
  • May 29, 2016 6:57pm May 29, 2016 6:57pm
Very flawed thinking by OP. i'm not surprised your myfxbook is showing a -96% loss.
  • #113
  • May 29, 2016 7:26pm May 29, 2016 7:26pm
Quoting skyway
{quote} The basic reason for trading losses is your trading strategy has no edge. If you have traded for a long time but yet to see any success that you hope for at the start, it means your trading strategy did not give you the edge in line with your expectations. This suggestions of "weakness in psychology" or "every strategy works some of the time, it's the trader's ability to make it work" is plain nonsense. It may take you a long while or never to reach this understanding, it's up to you. But consider this, the casinos base their business model...
Even if you trading strategy has an edge, you're are guaranteed to blow your account with over-leveraging and a poor trading psychology.


The risk you pose to a casino when they take a bet against you is minuscule compared to what traders risk against the market.

If you trade like the casino, you wouldn't be risking 7% of your capital per trade, hell even 1%.

My key to trading, is to trade like a bank not a Las Vegas gambler.
  • #114
  • May 30, 2016 2:12am May 30, 2016 2:12am
Quoting shellsnail
{quote} I really don't think your problem is all that different or new. I blew at least 15 accounts since I started trading in 2011 and I just stopped counting at some point. So if anyone can give any advice on the dangers of greed and "emotional management" it's me. Here's the catch. The problem is not greed. It's other things masquerading as greed. So here's how the loop typically went: 1. I am executing my strategy. 2. It takes time and it's too slow for my liking. 3. I am taking some losses. It does not feel good to be down money. // I am making...
You have explained the problem very logically Shellsnail .
I like the story very much ,it's very related to the situation ,and apparently i'm following it .
This 7% experiment was my version of chapter 3,and i fell in the hole .
Now i'm working on my chapter 4,as i said in my first post yesterday ,now i would be working on automating turning my strategies to EA ,use vps ,and just let it do the work.I 'll also try to work on trading contests and try to figure how they are making 300% /week.
Thanks again for your support.
  • #115
  • May 31, 2016 8:37am May 31, 2016 8:37am
Life as summarized by trading is about learning!

You cannot take anything else with you on exiting this life...in the same way you came....bringing nothing!

So in trading and doing anything else we learn and become prosperous.

Fail to learn and keep struggling!

Lesson for trading....Keep trading small until you learn...You can only learn your way!

An indication of beginning to learn is being able to consistently make minimum 20/30 pips per trade, losing similar amount about 20% of the time.

The result of trading should never be measured in money as it hides performance since we can easily increase risk and make a small number of pips and protect the account balance yet still losing the war.
  • #116
  • May 31, 2016 9:30am May 31, 2016 9:30am
Don, ONLY your first sentence is correct.

The human brain is a learning organism. BUT learning is forced OUT of us as kids. "Be careful, don't climb, you might fall and hurt yourself", "watch out, that's hot". Idiot parents only teach fear and caution which always creates panic, fear and road-kill. To "be careful", learn fear and DON'T learn is what kids are taught.

So, to be a successful trader, people MUST learn, but to do so they must FIRST learn HOW to learn.

The human brain is a pattern recognition, pattern storage, and pattern recall system. Yet most people have no idea about this FACT.

Traders MUST begin to focus on patterns, so that their brains can remember these patterns and later recall these PATTERNS.

Traders should NOT start out with small lot sizing. Rather, they should start out on DEMO. And on demo, they should start out with large lot sizing! But they should start out on demo with large lot sizing for SMALL DEMO ACCOUNT sizing. To demo on a $50,000 account is stupid - it teaches nothing but delusion.

They should start out with $200 DEMO accounts, with large lots for that size account; so as to TRAIN their brains to know what things will be like when they eventually go live trading.

It makes NO SENSE what so ever to throw a dart, and then hope the dart hits the wall that the dart board is hanging from. The student to Forex should be aiming at the bulls-eye on the board that is hanging on the wall.

Trading systems that need 50-150 pip stop losses are blind people just hoping to hit the wall.

And so, starting with small demo accounts, using large lot sizing for their demo accounts and trading the PATTERNS their brain learns, THIS is how Forex trading gets learned and mastered.

Quoting DonFF
Life as summarized by trading is about learning! You cannot take anything else with you on exiting this life...in the same way you came....bringing nothing! So in trading and doing anything else we learn and become prosperous. Fail to learn and keep struggling! Lesson for trading....Keep trading small until you learn...You can only learn your way! An indication of beginning to learn is being able to consistently make minimum 20/30 pips per trade, losing similar amount about 20% of the time. The result of trading should never be measured in money...
  • #117
  • May 31, 2016 10:11am May 31, 2016 10:11am
Thanks DP

Another thing....There is no right nor wrong....Just wise or unwise.

So we just all have to learn our way that works for us and stick with it!
  • #118
  • May 31, 2016 10:25am May 31, 2016 10:25am
Agreed Don!

Concepts of right and wrong, fair and unfair are all human constructs of BULLSHIT.

The reality is what matters.

And one reality is that humans are a grossly UNDER-evolved animal that has delusions of grandeur, delusions of having a special place in a Universe that doesn't give a shit about us, and nor should it. An animal that "thinks it thinks", but actually that "thinking" is just an "emotional feeling" it has about itself.

The human brain has 2 wiring systems, logic/reasoning, and the emotional wiring. And as science has now determined, the emotional wiring of the human brain is the Command and Control system overpowering its logic/reasoning. Our logic processing comes in as a poor second to our emotional brain/wiring.

For me, I want to be trans-humanist, and choose my own evolutionary path - when technology allows it . Oh to be 400 and look 40!

Quoting DonFF
Thanks DP Another thing....There is no right nor wrong....Just wise or unwise. So we just all have to learn our way that works for us and stick with it!
  • #119
  • May 31, 2016 11:13am May 31, 2016 11:13am
Quoting dancingphil
Agreed Don! Concepts of right and wrong, fair and unfair are all human constructs of BULLSHIT. The reality is what matters.{quote}
My Threads: Trading is as simple as 1-2-3, Highest Open / Lowest Open Trade
  • #120
  • Jun 2, 2016 11:22pm Jun 2, 2016 11:22pm
Quoting dancingphil
Don, ONLY your first sentence is correct. The human brain is a learning organism. BUT learning is forced OUT of us as kids. "Be careful, don't climb, you might fall and hurt yourself", "watch out, that's hot". Idiot parents only teach fear and caution which always creates panic, fear and road-kill. To "be careful", learn fear and DON'T learn is what kids are taught. So, to be a successful trader, people MUST learn, but to do so they must FIRST learn HOW to learn. The human brain is a pattern recognition, pattern storage, and pattern recall system....
I am teaching fx trading to my grandson, a secondary student and I will teach only on the lines you have indicated. Is it possible for me to become your student or have access to your trading methods?
Practice makes a person perfect
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