There comes a point in your trading, where you are against the ropes. You are afraid. You are near broke, and have a steady flow of bills coming in each month. You can't afford to lose any more money. You use to be profitable, maybe handsomely so, but your just not trading like you use to. You wish you could correct the problems that your facing, but your running out of time, money, patience, and you feel even more pressure from the accumulation of all these factors against you in your trading. You are in a death spiral.
Instead of going over your trading plan and reviewing your strategy against the current market conditions, you may find yourself thinking of how much you need to get back to BREAKEVEN, or your searching random stocks on yahoo that are the highest percent gainers for the day, or maybe you've stumbled aimlessly onto some stock forum or some blog like this. How is this blog going to help you? The only thing I can do for you is maybe motivate, entertain, and maybe teach you something. Whether or not you put into action your knowledge or experiences is up to you. I only hope that you have a plan.
Last fall we saw some CRAZY Volatility (1000pt range in the DOW in a DAY!), but since the start of the year volatility has declined greatly.
I'll tell you what. I felt so bad after my video blowup that it really hurt me in a negative way. I'm sure a lot of people could have seen it as a great lesson to learn from, but being the "Internets' example of how not to trade" made me feel depressed and negatively affected my confidence in trading.
After I blew up I wrote a long list of things I did wrong, and what steps I needed to take to correct my bad habits in trading. My failure came when I didn't follow through on the plan. Arggh... I get so tired from writing that last statement in this blog because I've wrote it so many times before. What the HECK is wrong with me? Didn't I learn the first time? Over the last year I've noticed a plethora of traders that share many of the same bad trading qualities I have.
Most retailer traders have no edge. It may also be said most retailer traders that have no edge are "newbies" or have traded less then 2 years. To be able to design a working edge requires hard work and time. For the traders that have put in many years looking for the answer when it comes to trade automation and strategy development, many will share my feelings that even the most high end software out there for retail traders right now is just CRAP. You can spend months if not years wasting your time on a strategy that will never work. Perhaps you weren't smart enough to design a good strategy, or maybe its because the available software for retail traders is incapable of automation on a high frequency level, or the software is incapable of comparing multiple data series for correlation studies that you require for your strategy. Whatever the case may be, retail traders have it rough . In this case, maybe you should have gone a step further an hired a programmer to write you a black box. Us retail guys are trading against Hedge Funds that have hired guys with PhD's to make complex strategies that work on high frequencies. Maybe 10 years ago you had a better chance at making money in trading when technology was less of a threat. Maybe then you could have played off the general herd mentality of the market or jumped on to one of the hundreds of momo stocks during the tech boom.
There is a sliver of Traders out there that don't need a so called "edge" to trade. Some traders are able to cut losses quick and let runners run. There's been a few days where I felt I was one of these traders. Some days you may have felt the feeling where you were "in tune" with the market, only to see a total failure the next day. You have to realize some people are better at staying in tune with the markets then others. Practice makes perfect.
I've written hundreds of posts in my personal journal from my days trading performance, and I would notate the mistakes I would make on a repeated basis. The problem isn't a FREAK ACCIDENT in the stock market where I was long and the market suddenly did the unthinkable (OK maybe 1 freak accident), but the majority of my repeated losses were from not sticking to the plan. Have a plan, a stop, a setup, and don't overleverage yourself (be able to lose 10-20 trades in a row and not let it effect you emotionally). That's it in a nut shell.
Showing posts with label Reflection Time. Show all posts
Showing posts with label Reflection Time. Show all posts
Thursday, 7 May 2009
Dinosaur Trader Farewell
There comes a point in your trading, where you are against the ropes. You are afraid. You are near broke, and have a steady flow of bills coming in each month. You can't afford to lose any more money. You use to be profitable, maybe handsomely so, but your just not trading like you use to. You wish you could correct the problems that your facing, but your running out of time, money, patience, and you feel even more pressure from the accumulation of all these factors against you in your trading. You are in a death spiral.
Instead of going over your trading plan and reviewing your strategy against the current market conditions, you may find yourself thinking of how much you need to get back to BREAKEVEN, or your searching random stocks on yahoo that are the highest percent gainers for the day, or maybe you've stumbled aimlessly onto some stock forum or some blog like this. How is this blog going to help you? The only thing I can do for you is maybe motivate, entertain, and maybe teach you something. Whether or not you put into action your knowledge or experiences is up to you. I only hope that you have a plan.
Last fall we saw some CRAZY Volatility (1000pt range in the DOW in a DAY!), but since the start of the year volatility has declined greatly.
I'll tell you what. I felt so bad after my video blowup that it really hurt me in a negative way. I'm sure a lot of people could have seen it as a great lesson to learn from, but being the "Internets' example of how not to trade" made me feel depressed and negatively affected my confidence in trading.
After I blew up I wrote a long list of things I did wrong, and what steps I needed to take to correct my bad habits in trading. My failure came when I didn't follow through on the plan. Arggh... I get so tired from writing that last statement in this blog because I've wrote it so many times before. What the HECK is wrong with me? Didn't I learn the first time? Over the last year I've noticed a plethora of traders that share many of the same bad trading qualities I have.
Most retailer traders have no edge. It may also be said most retailer traders that have no edge are "newbies" or have traded less then 2 years. To be able to design a working edge requires hard work and time. For the traders that have put in many years looking for the answer when it comes to trade automation and strategy development, many will share my feelings that even the most high end software out there for retail traders right now is just CRAP. You can spend months if not years wasting your time on a strategy that will never work. Perhaps you weren't smart enough to design a good strategy, or maybe its because the available software for retail traders is incapable of automation on a high frequency level, or the software is incapable of comparing multiple data series for correlation studies that you require for your strategy. Whatever the case may be, retail traders have it rough . In this case, maybe you should have gone a step further an hired a programmer to write you a black box. Us retail guys are trading against Hedge Funds that have hired guys with PhD's to make complex strategies that work on high frequencies. Maybe 10 years ago you had a better chance at making money in trading when technology was less of a threat. Maybe then you could have played off the general herd mentality of the market or jumped on to one of the hundreds of momo stocks during the tech boom.
There is a sliver of Traders out there that don't need a so called "edge" to trade. Some traders are able to cut losses quick and let runners run. There's been a few days where I felt I was one of these traders. Some days you may have felt the feeling where you were "in tune" with the market, only to see a total failure the next day. You have to realize some people are better at staying in tune with the markets then others. Practice makes perfect.
I've written hundreds of posts in my personal journal from my days trading performance, and I would notate the mistakes I would make on a repeated basis. The problem isn't a FREAK ACCIDENT in the stock market where I was long and the market suddenly did the unthinkable (OK maybe 1 freak accident), but the majority of my repeated losses were from not sticking to the plan. Have a plan, a stop, a setup, and don't overleverage yourself (be able to lose 10-20 trades in a row and not let it effect you emotionally). That's it in a nut shell.
Instead of going over your trading plan and reviewing your strategy against the current market conditions, you may find yourself thinking of how much you need to get back to BREAKEVEN, or your searching random stocks on yahoo that are the highest percent gainers for the day, or maybe you've stumbled aimlessly onto some stock forum or some blog like this. How is this blog going to help you? The only thing I can do for you is maybe motivate, entertain, and maybe teach you something. Whether or not you put into action your knowledge or experiences is up to you. I only hope that you have a plan.
Last fall we saw some CRAZY Volatility (1000pt range in the DOW in a DAY!), but since the start of the year volatility has declined greatly.
I'll tell you what. I felt so bad after my video blowup that it really hurt me in a negative way. I'm sure a lot of people could have seen it as a great lesson to learn from, but being the "Internets' example of how not to trade" made me feel depressed and negatively affected my confidence in trading.
After I blew up I wrote a long list of things I did wrong, and what steps I needed to take to correct my bad habits in trading. My failure came when I didn't follow through on the plan. Arggh... I get so tired from writing that last statement in this blog because I've wrote it so many times before. What the HECK is wrong with me? Didn't I learn the first time? Over the last year I've noticed a plethora of traders that share many of the same bad trading qualities I have.
Most retailer traders have no edge. It may also be said most retailer traders that have no edge are "newbies" or have traded less then 2 years. To be able to design a working edge requires hard work and time. For the traders that have put in many years looking for the answer when it comes to trade automation and strategy development, many will share my feelings that even the most high end software out there for retail traders right now is just CRAP. You can spend months if not years wasting your time on a strategy that will never work. Perhaps you weren't smart enough to design a good strategy, or maybe its because the available software for retail traders is incapable of automation on a high frequency level, or the software is incapable of comparing multiple data series for correlation studies that you require for your strategy. Whatever the case may be, retail traders have it rough . In this case, maybe you should have gone a step further an hired a programmer to write you a black box. Us retail guys are trading against Hedge Funds that have hired guys with PhD's to make complex strategies that work on high frequencies. Maybe 10 years ago you had a better chance at making money in trading when technology was less of a threat. Maybe then you could have played off the general herd mentality of the market or jumped on to one of the hundreds of momo stocks during the tech boom.
There is a sliver of Traders out there that don't need a so called "edge" to trade. Some traders are able to cut losses quick and let runners run. There's been a few days where I felt I was one of these traders. Some days you may have felt the feeling where you were "in tune" with the market, only to see a total failure the next day. You have to realize some people are better at staying in tune with the markets then others. Practice makes perfect.
I've written hundreds of posts in my personal journal from my days trading performance, and I would notate the mistakes I would make on a repeated basis. The problem isn't a FREAK ACCIDENT in the stock market where I was long and the market suddenly did the unthinkable (OK maybe 1 freak accident), but the majority of my repeated losses were from not sticking to the plan. Have a plan, a stop, a setup, and don't overleverage yourself (be able to lose 10-20 trades in a row and not let it effect you emotionally). That's it in a nut shell.
Wednesday, 15 October 2008
Volatile Stock Market
"The credit belongs to the man who is actually in the arena; whose face is marred by sweat and blood; who strives valiantly; who errs and comes short again and again because there is no effort without error and shortcoming; who knows the great enthusiasms, the great devotion, spends himself in a worthy cause; who at best knows in the end the triumph of high achievement; and who at worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who have never tasted victory or defeat."Theodore Roosevelt
Another Down day in the market. I'm not sure why some people that visit this blog dislike me. I never claimed to be a guru. I've shown great humility and many of my worst trades ever on this blog and yet people find enjoyment in my failures. Besides the negatives, I know for a fact that I have helped many people in there trading and that is why I kept this blog going for so long. I'm not deleting this blog because there is a lot to be learned of the journey I have taken as a trader for the last 3 years. Trading futures is very tough. I first lost half my account in the first 6 months of trading and then I made it all back and doubled my account the following year. At the start of 2008 my account was at its peak and I took a devastating long trade over the holiday weekend which more than wiped out half of my account in a day. No one expected the move January 21 2008. I took some time to recover from the loss. I came back and started trading consistently again and I was up nicely after a couple months. My hope and dreams of making it were starting to come back as a trader but then I made some terrible mistakes in June trying to short Crude Oil when it was around $120 a barrel followed up the next month by betting gold was a good buy around $850, unfortunately my timing was a month off. It was a vicious cycle I had put myself in. A cycle that I had seen for the 2 previous years of trading. Make a sold month worth of profits and then lose it all in a couple days from moving stops because I didn't expect the market to be so wild. I have proven to myself that I lack discipline and that I should practice more even after 3 years of trading.
"I have not failed 10,000 times. I have successfully found 10,000 ways that will not work"Thomas Edison
"The desire to win is born in most of us. The will to win is a matter of training. The manner of winning is a matter of honour."Margaret Thatcher
"Risk more than others think is safe ~ Care more than others think is wise ~ Dream more than others think is practical ~ Expect more than others think is possible." Unknown
"If you love what you do, you won't work a day in your life" origin unknown
"If you believe in yourself, have dedication and pride and never quit, you'll be a winner. The price of victory is high, but so are the rewards."Paul "Bear" Bryant (Late, great coach of the Alabama Crimson Tide football team)
More Great Quotes
Another Down day in the market. I'm not sure why some people that visit this blog dislike me. I never claimed to be a guru. I've shown great humility and many of my worst trades ever on this blog and yet people find enjoyment in my failures. Besides the negatives, I know for a fact that I have helped many people in there trading and that is why I kept this blog going for so long. I'm not deleting this blog because there is a lot to be learned of the journey I have taken as a trader for the last 3 years. Trading futures is very tough. I first lost half my account in the first 6 months of trading and then I made it all back and doubled my account the following year. At the start of 2008 my account was at its peak and I took a devastating long trade over the holiday weekend which more than wiped out half of my account in a day. No one expected the move January 21 2008. I took some time to recover from the loss. I came back and started trading consistently again and I was up nicely after a couple months. My hope and dreams of making it were starting to come back as a trader but then I made some terrible mistakes in June trying to short Crude Oil when it was around $120 a barrel followed up the next month by betting gold was a good buy around $850, unfortunately my timing was a month off. It was a vicious cycle I had put myself in. A cycle that I had seen for the 2 previous years of trading. Make a sold month worth of profits and then lose it all in a couple days from moving stops because I didn't expect the market to be so wild. I have proven to myself that I lack discipline and that I should practice more even after 3 years of trading.
"I have not failed 10,000 times. I have successfully found 10,000 ways that will not work"Thomas Edison
"The desire to win is born in most of us. The will to win is a matter of training. The manner of winning is a matter of honour."Margaret Thatcher
"Risk more than others think is safe ~ Care more than others think is wise ~ Dream more than others think is practical ~ Expect more than others think is possible." Unknown
"If you love what you do, you won't work a day in your life" origin unknown
"If you believe in yourself, have dedication and pride and never quit, you'll be a winner. The price of victory is high, but so are the rewards."Paul "Bear" Bryant (Late, great coach of the Alabama Crimson Tide football team)
More Great Quotes
Volatile Stock Market
"The credit belongs to the man who is actually in the arena; whose face is marred by sweat and blood; who strives valiantly; who errs and comes short again and again because there is no effort without error and shortcoming; who knows the great enthusiasms, the great devotion, spends himself in a worthy cause; who at best knows in the end the triumph of high achievement; and who at worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who have never tasted victory or defeat."Theodore Roosevelt
Another Down day in the market. I'm not sure why some people that visit this blog dislike me. I never claimed to be a guru. I've shown great humility and many of my worst trades ever on this blog and yet people find enjoyment in my failures. Besides the negatives, I know for a fact that I have helped many people in there trading and that is why I kept this blog going for so long. I'm not deleting this blog because there is a lot to be learned of the journey I have taken as a trader for the last 3 years. Trading futures is very tough. I first lost half my account in the first 6 months of trading and then I made it all back and doubled my account the following year. At the start of 2008 my account was at its peak and I took a devastating long trade over the holiday weekend which more than wiped out half of my account in a day. No one expected the move January 21 2008. I took some time to recover from the loss. I came back and started trading consistently again and I was up nicely after a couple months. My hope and dreams of making it were starting to come back as a trader but then I made some terrible mistakes in June trying to short Crude Oil when it was around $120 a barrel followed up the next month by betting gold was a good buy around $850, unfortunately my timing was a month off. It was a vicious cycle I had put myself in. A cycle that I had seen for the 2 previous years of trading. Make a sold month worth of profits and then lose it all in a couple days from moving stops because I didn't expect the market to be so wild. I have proven to myself that I lack discipline and that I should practice more even after 3 years of trading.
"I have not failed 10,000 times. I have successfully found 10,000 ways that will not work"Thomas Edison
"The desire to win is born in most of us. The will to win is a matter of training. The manner of winning is a matter of honour."Margaret Thatcher
"Risk more than others think is safe ~ Care more than others think is wise ~ Dream more than others think is practical ~ Expect more than others think is possible." Unknown
"If you love what you do, you won't work a day in your life" origin unknown
"If you believe in yourself, have dedication and pride and never quit, you'll be a winner. The price of victory is high, but so are the rewards."Paul "Bear" Bryant (Late, great coach of the Alabama Crimson Tide football team)
More Great Quotes
Another Down day in the market. I'm not sure why some people that visit this blog dislike me. I never claimed to be a guru. I've shown great humility and many of my worst trades ever on this blog and yet people find enjoyment in my failures. Besides the negatives, I know for a fact that I have helped many people in there trading and that is why I kept this blog going for so long. I'm not deleting this blog because there is a lot to be learned of the journey I have taken as a trader for the last 3 years. Trading futures is very tough. I first lost half my account in the first 6 months of trading and then I made it all back and doubled my account the following year. At the start of 2008 my account was at its peak and I took a devastating long trade over the holiday weekend which more than wiped out half of my account in a day. No one expected the move January 21 2008. I took some time to recover from the loss. I came back and started trading consistently again and I was up nicely after a couple months. My hope and dreams of making it were starting to come back as a trader but then I made some terrible mistakes in June trying to short Crude Oil when it was around $120 a barrel followed up the next month by betting gold was a good buy around $850, unfortunately my timing was a month off. It was a vicious cycle I had put myself in. A cycle that I had seen for the 2 previous years of trading. Make a sold month worth of profits and then lose it all in a couple days from moving stops because I didn't expect the market to be so wild. I have proven to myself that I lack discipline and that I should practice more even after 3 years of trading.
"I have not failed 10,000 times. I have successfully found 10,000 ways that will not work"Thomas Edison
"The desire to win is born in most of us. The will to win is a matter of training. The manner of winning is a matter of honour."Margaret Thatcher
"Risk more than others think is safe ~ Care more than others think is wise ~ Dream more than others think is practical ~ Expect more than others think is possible." Unknown
"If you love what you do, you won't work a day in your life" origin unknown
"If you believe in yourself, have dedication and pride and never quit, you'll be a winner. The price of victory is high, but so are the rewards."Paul "Bear" Bryant (Late, great coach of the Alabama Crimson Tide football team)
More Great Quotes
Saturday, 17 May 2008
Bad Publicity
The best publicity is often bad publicity. Thanks TraderEyal and Tapeworm for your continued support.
I was thinking that now since I'm a failed trader I can become a trading coach or make my blog crappier and link to other blogs about other crappy traders like myself. On second thought, that idea looks to be a little crowded. The post about bad trading habits was like so many email questions I get on a daily basis that I had to address the question. For some reason the traffic on this blog keeps increasing everyday and the fan mail is pouring in more than ever. Since I suck at trading I was thinking of never posting my P/L, my trading strategies, or anything related to my trading again. People don't really come here for me. They come here for comedy relief about some crappy trader that has never learned from his mistakes. In fact some people go even as far as betting that I will blow up my account again. It's great being HPT. The empty bank account. The large amount of love I get from all the regular readers and people that link me. Once in a while I even get real advice from other real traders.
The Dream
HPT dreamed of a time when he made a lot of money in the market and people came to him and asked him how he did it. The envy and jealousy of HPT's trading returns kept people coming back, 1000 times more than any Elite Trader P/L thread. Oh, yes, HPT was in the making For Trader Monhtly's TOP TRADERS for the year. He even made appearances on CNBC about where he thought the market was going. He was dignified and a force to be reckoned with in the stock trading world. HPT was a name just like T. Boone Pickens or Buffet was to common investors. He grew up in a small town, had a rough childhood, but persevered and made his way to the top, never gave up, even after blowing up several account to get there. For there was one thing driving HPT, and that one thing was,,,,,,,,,,
To be continued................
(Surely the fans will come up with an answer to what was driving HPT this whole time)
I was thinking that now since I'm a failed trader I can become a trading coach or make my blog crappier and link to other blogs about other crappy traders like myself. On second thought, that idea looks to be a little crowded. The post about bad trading habits was like so many email questions I get on a daily basis that I had to address the question. For some reason the traffic on this blog keeps increasing everyday and the fan mail is pouring in more than ever. Since I suck at trading I was thinking of never posting my P/L, my trading strategies, or anything related to my trading again. People don't really come here for me. They come here for comedy relief about some crappy trader that has never learned from his mistakes. In fact some people go even as far as betting that I will blow up my account again. It's great being HPT. The empty bank account. The large amount of love I get from all the regular readers and people that link me. Once in a while I even get real advice from other real traders.
The Dream
HPT dreamed of a time when he made a lot of money in the market and people came to him and asked him how he did it. The envy and jealousy of HPT's trading returns kept people coming back, 1000 times more than any Elite Trader P/L thread. Oh, yes, HPT was in the making For Trader Monhtly's TOP TRADERS for the year. He even made appearances on CNBC about where he thought the market was going. He was dignified and a force to be reckoned with in the stock trading world. HPT was a name just like T. Boone Pickens or Buffet was to common investors. He grew up in a small town, had a rough childhood, but persevered and made his way to the top, never gave up, even after blowing up several account to get there. For there was one thing driving HPT, and that one thing was,,,,,,,,,,
To be continued................
(Surely the fans will come up with an answer to what was driving HPT this whole time)
Thursday, 15 May 2008
Avoiding Bad Trading Habits
Reader Fan Mail Q&A-
Hi HPT,
I'm a good scalper, with most days being profitable, but when I get down X amount of dollars, the emotions turn on, and I go on tilt and have a big blow up. What do you recommend I do?
Thanks,
TraderJoe
Hi TraderJoe,
You are making the same mistakes that I have been making on this blog for years now. I would recommend setting a daily loss limit. Get a broker or software that has this feature. If you are not wise enough at setting daily loss limits then you will surely run into this bad habit again and eventually lose all your money.
Sincerely,
HPT
Hi HPT,
I'm a good scalper, with most days being profitable, but when I get down X amount of dollars, the emotions turn on, and I go on tilt and have a big blow up. What do you recommend I do?
Thanks,
TraderJoe
Hi TraderJoe,
You are making the same mistakes that I have been making on this blog for years now. I would recommend setting a daily loss limit. Get a broker or software that has this feature. If you are not wise enough at setting daily loss limits then you will surely run into this bad habit again and eventually lose all your money.
Sincerely,
HPT
Saturday, 19 April 2008
Weekend Trading links
Dr. Brett goes over A Few Trading Psychology Observations
I'd like to highlight a few key points I like from his post-
- Traders develop plans and trade patterns that simply don't work; they're based on randomness.
- 90% don't/can't sustain the process of keeping a substantive journal. Among the group that does journal, well over 90% of the entries are about themselves and their P/L. I almost never see journal entries devoted to figuring out markets.
-In every performance field of note--from Olympic athletics to Broadway--performers spend more time in practice than in formal performance. That is how expertise develops. The ratio of "practice" time (time spent on markets outside of trading) to trading time is a worthwhile indicator of a trader's prospective success.
Dr. Steenbargers book- Enhancing Trader Performance: Proven Strategies From the Cutting Edge of Trading Psychology (Wiley Trading)
How do traders enhance there trading skills while the market is closed?
-Record the Trading day and review it later using screen capture software like Camtasia studio or !Quick Screen Capture
-Review your charts and setups
-Back Test your strategies
-Review your past trades, look at trade frequency, share size, max drawdown, max gain
-Review the trading day with tick replay feature if your charting software provides that feature (sierra chart, NeoTicker, eSignal)
-Trade on a trading simulator if your broker has that feature (InteractiveBrokers)
-Review your trading journal to find trading mistakes you keep making, so you can focus on improving those problem areas
I'd like to highlight a few key points I like from his post-
- Traders develop plans and trade patterns that simply don't work; they're based on randomness.
- 90% don't/can't sustain the process of keeping a substantive journal. Among the group that does journal, well over 90% of the entries are about themselves and their P/L. I almost never see journal entries devoted to figuring out markets.
-In every performance field of note--from Olympic athletics to Broadway--performers spend more time in practice than in formal performance. That is how expertise develops. The ratio of "practice" time (time spent on markets outside of trading) to trading time is a worthwhile indicator of a trader's prospective success.
Dr. Steenbargers book- Enhancing Trader Performance: Proven Strategies From the Cutting Edge of Trading Psychology (Wiley Trading)
How do traders enhance there trading skills while the market is closed?
-Record the Trading day and review it later using screen capture software like Camtasia studio or !Quick Screen Capture
-Review your charts and setups
-Back Test your strategies
-Review your past trades, look at trade frequency, share size, max drawdown, max gain
-Review the trading day with tick replay feature if your charting software provides that feature (sierra chart, NeoTicker, eSignal)
-Trade on a trading simulator if your broker has that feature (InteractiveBrokers)
-Review your trading journal to find trading mistakes you keep making, so you can focus on improving those problem areas
Monday, 10 March 2008
Second Chance at Life
Have you ever thought about the things you would do differently in your life if you could start all over again?
Become a Doctor or Pilot
Spend more time with family
Watch less TV
Eat healthy
Exercise more
What if this life was your second chance but you didn't know it?
Is it too late to start over?
Can you go back to school at age 50 to get that degree?
Ray Kurzweil thinks that if you can make it to 2023, you won’t ever die of old age.
"The closer we come to death, the more we appreciate life."
Friday, 29 February 2008
Traders getting the Sh!T kicked out of them
I suspect TraderFeed is getting high traffic right now as I'm noticing most traders are getting there accounts beaten up from all the chop that's occurred over the last 6 weeks.
Traders facing frustration-
Trader Mike
Dinosaur Trader
Stewie
Retard Trader
In other news DT is taking a break from blogging. I checkout DT's blog everyday to see the performance of the Virtual Office Traders. These last 2 months have been very difficult to trade. After my big loss in January I went through a period of depression as I predicted, caught the nasty flu that was going around and was sick for 3 weeks.
Trading with a smaller account is much harder and it forces you to stick to your stops or else you will blowup quickly. Since the start of the year I've been learning how to code with the goal of being able to backtest and make an automated trading strategy. I've got some new ideas I've been researching involving Pair trading. The focus of my new trading ideas is not to make an ATS based on a candlestick formation or some variation of indicators that tell me when to buy or sell. My trading idea is based on statistical deviation between a pair of stocks/indices/bonds with a focus on scalping and short term holding periods of 2-10 days.
I know many professional traders base there trading decisions by comparing different indices/sectors/stocks. We look for divergences and deviations between stocks that have a high correlation with one another and try to correct any miss-pricing between stocks/indices.
Some traders use a market opening order method in there trading. Premarket these traders scan for stocks/sectors that are gapping up or down and look for accompanying stocks that should be affected by the gapping stock/sectors.
There are many trading strategies out there to choose from. One thing that I think many traders lack is confidence and friends that help them in their trading decisions. Wouldn't it be nice to hear the opinion of another trader before you make a trade in case they see something you don't and warn you of something you don't see? I remember Trading AAPL back in January and I was long when it was tanking hard. I was a deer in the headlights not wanting to take the huge loss that was mounting and Stewie asked me where my stop was and I said something cocky like "$0". At the end of the day I had my worst stock loss ever and had lost $10,000 on my AAPL long by being a dumbass that didn't listen to another trader trying to help me out. If you have someone that is trying to help you out, please listen to them, because it may help you and it can't hurt. Also trade with a plan before you make each trade. The #1 reason I've lost so much in trading is from trading without a plan.
I'm open to sharing ideas, working with other traders, and making new friends. My email- highprobabilitytrading@gmail.com
Traders facing frustration-
Trader Mike
Dinosaur Trader
Stewie
Retard Trader
In other news DT is taking a break from blogging. I checkout DT's blog everyday to see the performance of the Virtual Office Traders. These last 2 months have been very difficult to trade. After my big loss in January I went through a period of depression as I predicted, caught the nasty flu that was going around and was sick for 3 weeks.
Trading with a smaller account is much harder and it forces you to stick to your stops or else you will blowup quickly. Since the start of the year I've been learning how to code with the goal of being able to backtest and make an automated trading strategy. I've got some new ideas I've been researching involving Pair trading. The focus of my new trading ideas is not to make an ATS based on a candlestick formation or some variation of indicators that tell me when to buy or sell. My trading idea is based on statistical deviation between a pair of stocks/indices/bonds with a focus on scalping and short term holding periods of 2-10 days.
I know many professional traders base there trading decisions by comparing different indices/sectors/stocks. We look for divergences and deviations between stocks that have a high correlation with one another and try to correct any miss-pricing between stocks/indices.
Some traders use a market opening order method in there trading. Premarket these traders scan for stocks/sectors that are gapping up or down and look for accompanying stocks that should be affected by the gapping stock/sectors.
There are many trading strategies out there to choose from. One thing that I think many traders lack is confidence and friends that help them in their trading decisions. Wouldn't it be nice to hear the opinion of another trader before you make a trade in case they see something you don't and warn you of something you don't see? I remember Trading AAPL back in January and I was long when it was tanking hard. I was a deer in the headlights not wanting to take the huge loss that was mounting and Stewie asked me where my stop was and I said something cocky like "$0". At the end of the day I had my worst stock loss ever and had lost $10,000 on my AAPL long by being a dumbass that didn't listen to another trader trying to help me out. If you have someone that is trying to help you out, please listen to them, because it may help you and it can't hurt. Also trade with a plan before you make each trade. The #1 reason I've lost so much in trading is from trading without a plan.
I'm open to sharing ideas, working with other traders, and making new friends. My email- highprobabilitytrading@gmail.com
Saturday, 9 February 2008
Feelings on the video
Edit- I won't be putting the video back up. I've also declined Break.com's offer to pay me for the video.
I'm sure some people are mad to see the notorious trading blowup video gone.
I took it down a few weeks ago because it makes me feel depressed and makes me feel like a loser. At first it was kind of funny, but now it's painful to watch. It's like a mistake you wish never happened, but in the back of your mind it is there ready to jump up and remind you of who you are and what you've done. There's no going back and changing the past. What's done is done.
Someone suggested I make a video of me making money, which is something people would like to see. Kind of like a real life story of a guy who lost it all and came back fighting to become very successful through hard work.(ie Chris Gardner). Easier said than done. My plans right now are to get a better job while continuing to work on improving my trading.
Broadcasting my trading performance on this blog may have been detrimental to my trading performance as it has been somewhat serving to the ego.(ie never wanting to post a negative day on the blog to show the people how good of a trader I was, like the SocGen trader who wanted to be a star and ended up making a huge mistake). Perhaps this is something to think about if you are contemplating posting your performance publicly on a blog or you already are posting your performance and having negative results.
I'm sure some people are mad to see the notorious trading blowup video gone.
I took it down a few weeks ago because it makes me feel depressed and makes me feel like a loser. At first it was kind of funny, but now it's painful to watch. It's like a mistake you wish never happened, but in the back of your mind it is there ready to jump up and remind you of who you are and what you've done. There's no going back and changing the past. What's done is done.
Someone suggested I make a video of me making money, which is something people would like to see. Kind of like a real life story of a guy who lost it all and came back fighting to become very successful through hard work.(ie Chris Gardner). Easier said than done. My plans right now are to get a better job while continuing to work on improving my trading.
Broadcasting my trading performance on this blog may have been detrimental to my trading performance as it has been somewhat serving to the ego.(ie never wanting to post a negative day on the blog to show the people how good of a trader I was, like the SocGen trader who wanted to be a star and ended up making a huge mistake). Perhaps this is something to think about if you are contemplating posting your performance publicly on a blog or you already are posting your performance and having negative results.
Friday, 25 January 2008
Message To The People
I only had about 100 active readers to this blog before I posted the first video. I've been making posts to this blog for over 2 years. I never cared about driving traffic to this website. What is the motivation, ad revenue? To make a couple dollars from random people that stumble upon this blog? Yes, you have all figured me out now. This was my master plan. To make a couple dollars a day from ads by making a video of myself swearing at the computer screen. I will be a millionaire in no time.
-I've made over 500 posts over the last 2 years on this blog, journaling each trading day so I could become a better trader and learn from my mistakes.
-No one I know personally even knows about this blog.
-The first video was real. I wish it never happened. I wish I never posted it.
-The second video was a fake I made because people wanted to see me have another blowup.(Very nice people were cheering me on, calling me an idiot, saying they knew the market was going to tank 600+pts over the weekend, telling me I should kill myself)
-I hope most of the anonymous posters will leave. You don't have a name, you don't have a voice. I don't care who reads this blog, I don't care about traffic.
-Over 350,00 people have watched the video in less than 5 days. People have connected with the video and laughed because they see themselves making the same mistakes. Thousands of people have said that they learned something from the video.
-A large majority of anonymous posters threw up there arms and said that they felt betrayed and called me a lier. These people have learned nothing. These people were only here for the laugh to begin with, and these people probably have never tried trading for a living.
-Chances are I will never meet any of you people out there in internet land. Over the last 2 years I have only had two connections in meeting people through my website that cared for what I had to say and wanted to learn how I traded. These people contacted me by email. These people are KS and MS. To both of you, I'm sorry for the way my blog has turned out recently. Life has been tough and will probably get tougher.
-To the people that commented and saw my sense of humor, got the Trader Monthly joke, heard my sarcasm when visiting Tim Knights website and calling him "the best trader in the world",,,, you people I can tell are real traders. DT and the VO team got my sense of humor on the last video and that is what matters most. All you other guys can say all you want and I won't care.
-Here's a challenge for all you anonymous people that are bashing me. How about identifying your blog, your trades you make each day, and your P/L statements. Also, post a picture of your face for the world to see. Until then, you need to take a step back before you even have the right to call me harsh names.
I'm turning comments off and I'm contemplating deleting all of my videos and even this blog at this point. Real people can email me if they want. Thanks to the people that offered words of encouragement an advice. Thanks Dr. Steenbarger for stopping by. I wish I could be a trader at Kingstree, but like you said, most traders will never make it to the elite level. I will keep plugging away and maybe one day I will have proven myself through my P/L statements to get an interview.
-
-I've made over 500 posts over the last 2 years on this blog, journaling each trading day so I could become a better trader and learn from my mistakes.
-No one I know personally even knows about this blog.
-The first video was real. I wish it never happened. I wish I never posted it.
-The second video was a fake I made because people wanted to see me have another blowup.(Very nice people were cheering me on, calling me an idiot, saying they knew the market was going to tank 600+pts over the weekend, telling me I should kill myself)
-I hope most of the anonymous posters will leave. You don't have a name, you don't have a voice. I don't care who reads this blog, I don't care about traffic.
-Over 350,00 people have watched the video in less than 5 days. People have connected with the video and laughed because they see themselves making the same mistakes. Thousands of people have said that they learned something from the video.
-A large majority of anonymous posters threw up there arms and said that they felt betrayed and called me a lier. These people have learned nothing. These people were only here for the laugh to begin with, and these people probably have never tried trading for a living.
-Chances are I will never meet any of you people out there in internet land. Over the last 2 years I have only had two connections in meeting people through my website that cared for what I had to say and wanted to learn how I traded. These people contacted me by email. These people are KS and MS. To both of you, I'm sorry for the way my blog has turned out recently. Life has been tough and will probably get tougher.
-To the people that commented and saw my sense of humor, got the Trader Monthly joke, heard my sarcasm when visiting Tim Knights website and calling him "the best trader in the world",,,, you people I can tell are real traders. DT and the VO team got my sense of humor on the last video and that is what matters most. All you other guys can say all you want and I won't care.
-Here's a challenge for all you anonymous people that are bashing me. How about identifying your blog, your trades you make each day, and your P/L statements. Also, post a picture of your face for the world to see. Until then, you need to take a step back before you even have the right to call me harsh names.
I'm turning comments off and I'm contemplating deleting all of my videos and even this blog at this point. Real people can email me if they want. Thanks to the people that offered words of encouragement an advice. Thanks Dr. Steenbarger for stopping by. I wish I could be a trader at Kingstree, but like you said, most traders will never make it to the elite level. I will keep plugging away and maybe one day I will have proven myself through my P/L statements to get an interview.
-
Thursday, 24 January 2008
Withdrawing funds
Lets review and summarize the 1,000's of comments I've been reading all over the internet-
-Your a gambler
-Your an idiot
-You need to quit
-You should have never held over the weekend
-Everyone new they were going to do a surprise interest rate cut
-You should have expected YM to go limit offer down -650 pts
-You should have diversified
-I've made the same mistakes
-30k isn't even that much money
-I know some people that have lost even more
-You should get a real job
-Where's your stop
-I hope you bounce back
The list goes on,,,
Position sizing has always been my problem. A recent commenter said the 1k swings are to big for me to handle emotionally, and he is right. I was at all time highs in my account last week after having a personal best day of making over 10k in a day. And then I took a gamble trade over the weekend and a blackswan event occurred and I lost almost everything. How can you come back and trade? You didn't learn your lesson in just a day? Your still trading too much leverage?
I've read the comments and I realize my mistakes. The only way for me to recover is to take action and start correcting my problems. As much as I hate it, I'm withdrawing more than half of what I have left in my account today. I feel like I will be handicapping my trading ability doing so, but it is the only way I will learn. By doing so, I will have reduced my leverage available, and my P/L swings will be much smaller. There is a much higher probability of me losing my whole account as it gets smaller, but I was able to turn 7k into 40k in 6 months last year, so I do have a chance at making money with a small account.
I could make more videos of me blowing up my account, but the couple dollars in ad revenue isn't worth losing thousands of dollars and being laughed at by hundreds of thousands of people on the internet.
Thank you for visiting.
-Your a gambler
-Your an idiot
-You need to quit
-You should have never held over the weekend
-Everyone new they were going to do a surprise interest rate cut
-You should have expected YM to go limit offer down -650 pts
-You should have diversified
-I've made the same mistakes
-30k isn't even that much money
-I know some people that have lost even more
-You should get a real job
-Where's your stop
-I hope you bounce back
The list goes on,,,
Position sizing has always been my problem. A recent commenter said the 1k swings are to big for me to handle emotionally, and he is right. I was at all time highs in my account last week after having a personal best day of making over 10k in a day. And then I took a gamble trade over the weekend and a blackswan event occurred and I lost almost everything. How can you come back and trade? You didn't learn your lesson in just a day? Your still trading too much leverage?
I've read the comments and I realize my mistakes. The only way for me to recover is to take action and start correcting my problems. As much as I hate it, I'm withdrawing more than half of what I have left in my account today. I feel like I will be handicapping my trading ability doing so, but it is the only way I will learn. By doing so, I will have reduced my leverage available, and my P/L swings will be much smaller. There is a much higher probability of me losing my whole account as it gets smaller, but I was able to turn 7k into 40k in 6 months last year, so I do have a chance at making money with a small account.
I could make more videos of me blowing up my account, but the couple dollars in ad revenue isn't worth losing thousands of dollars and being laughed at by hundreds of thousands of people on the internet.
Thank you for visiting.
Just quit, walk away,
Lets get the record straight.
I day trade Part Time.
I work 40hrs/week like every other avg. American at a good paying job with people I like.
My trading account IS NOT MY LIFE SAVINGS, even though I said it in my video. I've had many bad days and never would want to be totally wiped out of all my assets. I realize that my trading account can be lost, and that trading is very dangerous, and that you should only invest/trade what you can afford to lose.(RULE #1)
I started with less then 10k in the account last year.
I've made good returns trading futures
I have a tendency to lose a lot of my gains in one day from poor discipline. And I should use daily loss limits to avoid this from happening in the future.
My Trading blowups
I'm a Trader, and each day I learn more about the markets and I get better.
Truth be told, I lost most of my account in the first 6 months when I first started trading 2 years ago, but I didn't completely wash out, I traded small, stayed focused and made back my stake.
There have been some good comments that I would like to quote/address.
For whatever reason, you've chosen this public cathartic path to "deal" with the situation ... "OK"... it's unique and it's your way of coping: kudos.
Now, Go To Ground ... get back to your roots and your "edge". Is your edge on market timing the larger swings or grinding it out on the short term interval? Do that which feels comfortable because you've practiced the competent trade to the point of being bored and pay your way through life -- enjoy the bounty that your screen time, methodology and unique "day to day" methods have afforded you. The legacy HPT trader stayed on the positive side of the equity curve week in and week out without the account crippling blowups.
You've already demonstrated time and time again that you've discovered how to exploit and execute on your "edge" in grinder mode .... and, you have done so without investing a bazillion $$$ in a bunch of silly retail trading seminars. You self education, unique intermarket approach for trade management and ability to read order flow has seperated you from a "herd" of retail mutts who refuse to do the hard work and continue to shell out $$$ for the latest "squiggly line" indicator panacea.
Finally, my parting thought --- "It's OK to be successful." I know that sounds like psychobabble tripe BS, but you've set yourself up for the "Big One" time and time again after being on a pretty decent equity run. I've seen the type, I know the type, I am "the type" --- until you believe that you really deserve to consitently be on the winning side, you'll find a way to sabotage yourself and engage, once again, in a cathartic drama for all to hear and see around the world.
I'm looking forward to your future posts that continue to show the detailed analysis of why you executed a particular trade in a particular way and justify the reasoning for taking that trade a 1000 times again.
4.Tim Knight said...
We've all been there. And the anonymous jerks telling you that you got what you deserved can fuck themselves. I'm just sayin'.
5.bigbear said...
i feel your pain.
IB auto-closed my position of 8 NQs 1/2 point above limit down.
my realized losses came up to nearly 30k.
after the fed cut and bounce, i could not get back in to reduce losses as my excess liquidity was only enough to open 1 position.
so we learn ...
6. My buddy DehTrader has also taken a beating from the recent drop, as I'm sure many investors/traders have. Simply put, Trading is a tough business.
I day trade Part Time.
I work 40hrs/week like every other avg. American at a good paying job with people I like.
My trading account IS NOT MY LIFE SAVINGS, even though I said it in my video. I've had many bad days and never would want to be totally wiped out of all my assets. I realize that my trading account can be lost, and that trading is very dangerous, and that you should only invest/trade what you can afford to lose.(RULE #1)
I started with less then 10k in the account last year.
I've made good returns trading futures
I have a tendency to lose a lot of my gains in one day from poor discipline. And I should use daily loss limits to avoid this from happening in the future.
My Trading blowups
I'm a Trader, and each day I learn more about the markets and I get better.
Truth be told, I lost most of my account in the first 6 months when I first started trading 2 years ago, but I didn't completely wash out, I traded small, stayed focused and made back my stake.
There have been some good comments that I would like to quote/address.
1. Easy to say "take a break, walk away, etc" but daytraders know how it is. Like everyone else who's on auto-pilot to wake up and go to your job, this is what a daytrader does. Has nothing to do with addiction or anything. People with godawful 2 hour commutes to go to their sickening desk job every damn day of their lives aren't addicted to it.
2.Daytrading is easy.
I could get anyone with a working eye and a stick taped to their stump up and trading online in a day.
The only hard thing is keeping your sanity for the long haul since it's possible you may put in 100 hours/week and lose money for the week, month, year. Plus, it's very lonely so you'll be flocking to the idiots on CNBC, chatrooms and blogs for cameraderie. Plus, all your family & friends will deem you a loser & societal misfit until proven otherwise (i.e. you're making insane amounts of money).
For whatever reason, you've chosen this public cathartic path to "deal" with the situation ... "OK"... it's unique and it's your way of coping: kudos.
Now, Go To Ground ... get back to your roots and your "edge". Is your edge on market timing the larger swings or grinding it out on the short term interval? Do that which feels comfortable because you've practiced the competent trade to the point of being bored and pay your way through life -- enjoy the bounty that your screen time, methodology and unique "day to day" methods have afforded you. The legacy HPT trader stayed on the positive side of the equity curve week in and week out without the account crippling blowups.
You've already demonstrated time and time again that you've discovered how to exploit and execute on your "edge" in grinder mode .... and, you have done so without investing a bazillion $$$ in a bunch of silly retail trading seminars. You self education, unique intermarket approach for trade management and ability to read order flow has seperated you from a "herd" of retail mutts who refuse to do the hard work and continue to shell out $$$ for the latest "squiggly line" indicator panacea.
Finally, my parting thought --- "It's OK to be successful." I know that sounds like psychobabble tripe BS, but you've set yourself up for the "Big One" time and time again after being on a pretty decent equity run. I've seen the type, I know the type, I am "the type" --- until you believe that you really deserve to consitently be on the winning side, you'll find a way to sabotage yourself and engage, once again, in a cathartic drama for all to hear and see around the world.
I'm looking forward to your future posts that continue to show the detailed analysis of why you executed a particular trade in a particular way and justify the reasoning for taking that trade a 1000 times again.
4.Tim Knight said...
We've all been there. And the anonymous jerks telling you that you got what you deserved can fuck themselves. I'm just sayin'.
5.bigbear said...
i feel your pain.
IB auto-closed my position of 8 NQs 1/2 point above limit down.
my realized losses came up to nearly 30k.
after the fed cut and bounce, i could not get back in to reduce losses as my excess liquidity was only enough to open 1 position.
so we learn ...
6. My buddy DehTrader has also taken a beating from the recent drop, as I'm sure many investors/traders have. Simply put, Trading is a tough business.
Friday, 30 November 2007
Elephant Poop sized reflection on my Trading Blow Ups
No Trading for my today, so I will leave you with this link to all my posts of all my trading blow ups from this year. When looking back you can see I've lost over $50,000 this year due to blow up trading days.Reflecting on these acts as a good motivation tool for me, and that is why I have put them in my journal.
I'll also leave you this link to Tradersfeed- Seven (Questionable) Things I Hear From Traders, it's another great post by the Doc.
My passion is not to trade...My passion is to make as much money as I can...
If I could make $1,000-$2,000 a day shoveling elephant Poop I would do it over trading.
You could say I shovel poop for a living, but I'm still rich and the job is easy. Having a bad smell on me when I get home is something I'm willing to accept.
Trading just happens to be a way to make a lot of money, and it has been my focus for the last 2 years. Losing is the hardest thing I have had to face, and failure to except losses has slowed the progression of my account. I've had many blow ups, and many good months of profits, and along the way I have learned a great deal about who I am, and what I'm capable of if I put my full effort into it. The key is setting goals, making a plan, and staying focused on your path. There are some psychological impediments I've faced along the way in my trading career, such as taking a loss, getting past a certain value in my account, and making X amounts of dollars in a day. I plan on continuing my trading career and putting more effort into making money because I believe I have an edge, I believe I have a strategy that is profitable when backtested, and I believe in myself. There have been a number of times I ALMOST GAVE UP TRADING, but yet I'm still here, and I'm producing results, because the passion to make money is still there and won't be going away for awhile.
Now who comes up with better topic headings than ME?
Friday, 13 July 2007
Reflection Time
I read a thread on EliteTrader today that had me thinking of what I've done to prepare myself in avoiding another blowup trading day.
I really haven't done much except that I've been trading smaller size and that I don't immediately start adding to a losing position the minute it goes against me. I have been giving my positions a little breathing room and averaging some of my small losing trades, but I still haven't been using my stops wisely. I had some major losses the last 2 months, and I need to avoid at all costs another blow up day, and in order to do that, I need to develop a more sound trading system.
My ideas on avoiding blowup trading days-
1.Set a max loss for the day (no more than what I average in a 2-3 trading days, maybe 1k)
2.Use audible alerts that sound off when extreme situations are occurring, ie. advancing to declining issues is 3:1, "LONG ONLY, if your short COVER YOU DUMB ASS"
3.Be apart of a trading chat room where you can talk with others, and they may be able to help you if you become a deer in the headlights.
4.Having a trading system that will not average into a trade past a certain point (ie. no more than 2pts, Why would you want to average into a LOSING trade past that point, YOU LOSER)
5.HAVE and KEEP a PLANNED OUT STOP ON EVERY TRADE, no more, "oh, it'll come back, I'll just add a little here and it'll go back down to my breakeven point"
Here is my trading blowup escape technique example-
Based on how I trade I will say I can add to the position only 3 times, meaning if the trade started out as a 1 lot, I will not add more than 3 contracts to this losing trade. Also, the trade has to have a stop on it placed before the entry is made, for this example lets say I'm trading ER2 with a 1.4pt stop placed away from the initial entry. If the trade goes 1pt against my initial entry I'm already feeling like I screwed up, and at this point my brain starts to think, "this can't be right? I'll add to the position and it'll go back!", but then the trade goes another 1pt against you and you are now flat from having your stop hit. If we didn't have a plan in place we would be saying to ourselves, "this is totally out of wack, I'm loading up here now big time, this has got to go back now!,,,,,,,,,,
We know what happens next,,,,Right?
What if scenarios-
What if there is a bombing or something bad happens and the stock market freaks out, did you have in your stops ahead of time?
This is the problem with US retail traders, we are not smart about trading, we may be good at certain times scalping short term moves, but we are for the most part never hedged in our positions the way a option traders would be with a calendar spread or a hedgefund would be with having bought VIX calls for protection.
So what? How about a strategy trading futures where you are long one contract like YM and short ER2. You know both trade similarly to each other, but sometimes during the year the big caps are better than the small/mid caps. So our strategy would be for the most part hedged by being long big caps and short small/midcaps because we see that year to date that big caps have outperformed the small/mid caps.
So we will add to our YM position on down days and add to our ER2 position on up days, and over time we would assume that we are making money by one index outperforming another.
You can use this strategy on stocks and ETF's too, and the possibilities and profits are more likely to be greater IMO. For example you could check out the leading and lagging ETF's for the last 3-6 months and choose to use this strategy by buying the bullish ETF on weakness and Selling the bearish ETF on strength. Checkout the WSJ on their gauge of money flow into and out of stocks for a determinant of what stocks/ETF's this would be a good idea on.
For example you may have an idea to short IYR on strength and buy SMH on weakness, because you are bearish on housing on bullish on tech.
I really haven't done much except that I've been trading smaller size and that I don't immediately start adding to a losing position the minute it goes against me. I have been giving my positions a little breathing room and averaging some of my small losing trades, but I still haven't been using my stops wisely. I had some major losses the last 2 months, and I need to avoid at all costs another blow up day, and in order to do that, I need to develop a more sound trading system.
My ideas on avoiding blowup trading days-
1.Set a max loss for the day (no more than what I average in a 2-3 trading days, maybe 1k)
2.Use audible alerts that sound off when extreme situations are occurring, ie. advancing to declining issues is 3:1, "LONG ONLY, if your short COVER YOU DUMB ASS"
3.Be apart of a trading chat room where you can talk with others, and they may be able to help you if you become a deer in the headlights.
4.Having a trading system that will not average into a trade past a certain point (ie. no more than 2pts, Why would you want to average into a LOSING trade past that point, YOU LOSER)
5.HAVE and KEEP a PLANNED OUT STOP ON EVERY TRADE, no more, "oh, it'll come back, I'll just add a little here and it'll go back down to my breakeven point"
Here is my trading blowup escape technique example-
Based on how I trade I will say I can add to the position only 3 times, meaning if the trade started out as a 1 lot, I will not add more than 3 contracts to this losing trade. Also, the trade has to have a stop on it placed before the entry is made, for this example lets say I'm trading ER2 with a 1.4pt stop placed away from the initial entry. If the trade goes 1pt against my initial entry I'm already feeling like I screwed up, and at this point my brain starts to think, "this can't be right? I'll add to the position and it'll go back!", but then the trade goes another 1pt against you and you are now flat from having your stop hit. If we didn't have a plan in place we would be saying to ourselves, "this is totally out of wack, I'm loading up here now big time, this has got to go back now!,,,,,,,,,,
We know what happens next,,,,Right?
What if scenarios-
What if there is a bombing or something bad happens and the stock market freaks out, did you have in your stops ahead of time?
This is the problem with US retail traders, we are not smart about trading, we may be good at certain times scalping short term moves, but we are for the most part never hedged in our positions the way a option traders would be with a calendar spread or a hedgefund would be with having bought VIX calls for protection.
So what? How about a strategy trading futures where you are long one contract like YM and short ER2. You know both trade similarly to each other, but sometimes during the year the big caps are better than the small/mid caps. So our strategy would be for the most part hedged by being long big caps and short small/midcaps because we see that year to date that big caps have outperformed the small/mid caps.
So we will add to our YM position on down days and add to our ER2 position on up days, and over time we would assume that we are making money by one index outperforming another.
You can use this strategy on stocks and ETF's too, and the possibilities and profits are more likely to be greater IMO. For example you could check out the leading and lagging ETF's for the last 3-6 months and choose to use this strategy by buying the bullish ETF on weakness and Selling the bearish ETF on strength. Checkout the WSJ on their gauge of money flow into and out of stocks for a determinant of what stocks/ETF's this would be a good idea on.
For example you may have an idea to short IYR on strength and buy SMH on weakness, because you are bearish on housing on bullish on tech.
Friday, 1 June 2007
June 1st 2007- Reflection Time
The last few months my trading has started to take off and I think it's time that I re-evaluate things. I'm working a fulltime job on top of my trading in the morning and I'm starting to question, "Why am I working a full time job and limiting my trading time when I am making a lot more money trading?" It's really a great question to be asking yourself, because there was a time when I asked myself "Why are you trading and losing all the hard money you worked for and not working a second job to regain your losses?"
What's my day like?
My typical day is getting up 15-30min before the market open (6am my time) trading the morning open before I go to work (posting a trade summary on this blog right before I leave), leaving the house to work an 8 hour job (looking at my charts on my lunch break), going to the gym after I get off from work, doing my trade and chart analysis when I get home, spending time posting charts, checking emails, and answering questions on this blog, and then going to bed and getting about 5-6 hours of sleep.
So what are my plans?
I'm going to try to get the latest shifts I can so that I can trade more in the morning and I may also cut back the hours I work. I like my job, and I like the social interaction I get with my coworkers. My other job gets me out of the house and I hate being in the house all day sitting in front of the computer because I'm a very active person.
What would I do if I didn't have a second job?
I would trade all day. I would do more trade analysis. I would look for other trading ideas. I would look for trade setups using options and also look for trade setups on stocks for swing trades.
What are my goals?
My goal is to get better at trading and progressively increase my avg. profit per week. A couple of weeks ago my goal was 1k a day. If I can trade a full day I try to get 2k. I'm begining to think that as time progresses 5k a day will be possible and from there who knows. What I want for the next month is 5k a week minimum. If I can continue to make 1k a day this next month then I will have proven to myself that it looks like I have indeed learned how to trade. I believe my trading blowup day I had 2 weeks ago was due to a psychological barrier I had in getting my account balance past a certain point. I have phased that point and I believe I'm going to have less severe drawdowns and that I should have continued progressive success. Other goals I have will be to upgrade my old computer, lower commissions, and become more prepared for the trading day by putting aside more time to sleep so I won't be falling asleep while trading.
Where am I headed?
I want to become a fulltime trader and make 10k a month minimum. (although I made more than 10k this month and my trading results are pretty consistent, the next few months I could blow up, you never know). If I had the chance to work at a futures prop firm or hedge fund I would probably try it out for the experience.
REFLECTION ON MY BLOG-
Why did I start this blog?
I started this blog as a journal to track my trades and explore trading ideas.
Who looks at my blog?
My guess is mostly aspiring traders that are still searching for ways to trade.(I've been there).
What do I look to get from readers of this blog?
Nothing. Thanks for all the comments, but please don't ask me for my secrets, because there are none, you just need time to see what is in front of you. I post my charts everyday, and you get to see what I'm seeing in the charts. Personally static charts are very boring to look at, and I'd much rather watch a recording of live trading action so that my brain can get to working.
What do I want this blog to give me?
This blog is a great place for me to post my charts so that I can go back to a particular day and look for repeated patterns. I also use this blog to access my favorite links. I'm not looking for money from readers of this blog and I have no ads on this blog.
What's my day like?
My typical day is getting up 15-30min before the market open (6am my time) trading the morning open before I go to work (posting a trade summary on this blog right before I leave), leaving the house to work an 8 hour job (looking at my charts on my lunch break), going to the gym after I get off from work, doing my trade and chart analysis when I get home, spending time posting charts, checking emails, and answering questions on this blog, and then going to bed and getting about 5-6 hours of sleep.
So what are my plans?
I'm going to try to get the latest shifts I can so that I can trade more in the morning and I may also cut back the hours I work. I like my job, and I like the social interaction I get with my coworkers. My other job gets me out of the house and I hate being in the house all day sitting in front of the computer because I'm a very active person.
What would I do if I didn't have a second job?
I would trade all day. I would do more trade analysis. I would look for other trading ideas. I would look for trade setups using options and also look for trade setups on stocks for swing trades.
What are my goals?
My goal is to get better at trading and progressively increase my avg. profit per week. A couple of weeks ago my goal was 1k a day. If I can trade a full day I try to get 2k. I'm begining to think that as time progresses 5k a day will be possible and from there who knows. What I want for the next month is 5k a week minimum. If I can continue to make 1k a day this next month then I will have proven to myself that it looks like I have indeed learned how to trade. I believe my trading blowup day I had 2 weeks ago was due to a psychological barrier I had in getting my account balance past a certain point. I have phased that point and I believe I'm going to have less severe drawdowns and that I should have continued progressive success. Other goals I have will be to upgrade my old computer, lower commissions, and become more prepared for the trading day by putting aside more time to sleep so I won't be falling asleep while trading.
Where am I headed?
I want to become a fulltime trader and make 10k a month minimum. (although I made more than 10k this month and my trading results are pretty consistent, the next few months I could blow up, you never know). If I had the chance to work at a futures prop firm or hedge fund I would probably try it out for the experience.
REFLECTION ON MY BLOG-
Why did I start this blog?
I started this blog as a journal to track my trades and explore trading ideas.
Who looks at my blog?
My guess is mostly aspiring traders that are still searching for ways to trade.(I've been there).
What do I look to get from readers of this blog?
Nothing. Thanks for all the comments, but please don't ask me for my secrets, because there are none, you just need time to see what is in front of you. I post my charts everyday, and you get to see what I'm seeing in the charts. Personally static charts are very boring to look at, and I'd much rather watch a recording of live trading action so that my brain can get to working.
What do I want this blog to give me?
This blog is a great place for me to post my charts so that I can go back to a particular day and look for repeated patterns. I also use this blog to access my favorite links. I'm not looking for money from readers of this blog and I have no ads on this blog.