Ten-thousand in Education and still not profitable! | Trading Reviews and Vendors


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Ten-thousand in Education and still not profitable!

  #188 (permalink)

Orinda CA
 
Trading Experience: Intermediate
Platform: NinjaTrader
Favorite Futures: Currency Futures
 
Posts: 3 since Feb 2011
Thanks: 1 given, 1 received

The Art and Science of Trading

Trading, to me at least, is both art and science, heavy on the art. It is a lot like sailing. Knowledge of oceanography, meteorology, navigation are helpful and in some cases very necessary. You need charts, compasses, GPSs, rader and the like. Still, not ending up on the shoals comes down to making judgements based upon what you know, what you measure, what you see and then taking action based on these judgements. To sail successfully knowledge, judgment and motor skills are need in at least equal supply. Everyday is different. You can't rely solely on one instrument like radar. You have to look with your eyes, think with your head and steer with your hands. If your are in the fog, you have to be doubly careful--or stop until the fog lifts. Good, safe sailing comes from experience at the helm, not from the next, best gadget. Seamanship is an art supported by science.

So it is with trading. You need experience. You have to feel the market you are trading and the tools and indicators you are using. If it was as simple as being mechanical then everybody would be doing it and doing it successfully; evidence abounds that they are not. You will know you are on the right track when it feels right. I know many won't agree with me but this has been my experience. Things start to go right with you feel good about your trading approach, you have confidence in it and you expect your trades to work out. Mathematical positive expectancy is one thing. Mental positive expectancy is another and makes all the difference in the world.

You have to synthesize all of the information for yourself and trade yourself, your way. I can teach you to drive a race car, but I can't teach you to win races. You have to work that out for yourself. You have to have the skills and experience. You need a good car. Then, you have to want to win. You have to see yourself as a winner. Otherwise all that expensive training and experience will be for naught.

Everybody is different. Different markets, systems and approaches work for different personalities and temperaments. The trick is finding an approach to the market that you feel positive about, that you can and will execute properly and that one way or another is "yours." You can come up with your own from scratch or you can borrow from others and make it your own. Either way, it's your money, your approach and you have to own it. You have to win with it; nobody can do it for you now matter how much you pay them for their system.

For me it was, and is, scalping the ES though I hate to use the term scalping as it means different things to different people. These are my own personal criteria. I want to be in and out--less the a minute and I'm ecstatic, no more than a small number of minutes or I get fidgety. I don't have the psychological staying power to hold a position much longer. On good days I want to be done for the day early and move on to other things. On tougher days I want to have enough trading opportunities to recover from a loss and end up at break even or better. I'm paranoid. I want excellent liquidity so I feel like I can get out in a crisis and not be stuck holding a losing position any longer than necessary. Although I am not the most patient person I am willing to discipline myself to wait for my setups and not over trade--this is tough for me and I constantly work on it.

So, I set a modest goal per trade, 5 ticks on the ES, all in/all out. I manage the trade very closely. I am very aggressive about not taking losses. If the trade doesn't feel right I scratch the trade or better yet take a tick or two profit. I'm not proud--ticks is ticks as they say. I automate the target and stop management to keep myself as honest as possible and reduce the thinking and fiddling required during a trade. I practice so that pulling the trigger is muscle memory--automatic. I see a setup; I pull the trigger with as little "thinking" as possible--this takes constant drilling for me. I'm fortunate to be able trade with enough size that when I book my 5 ticks I'm done. I specialize in hitting singles and leave the home runs to the big bats. This fits my personality, my financial situation and my lifestyle. It works for me.

I think it is helpful for anyone to think about these kinds of criteria before getting bogged down in trading systems. See yourself at your trading desk. What does your day look like? Do you want to up early and be done in an hour because you have another job or things to do? Can you trade all day? Do you want study the market in the evening and place swing or position trades but not sit at the desk during market hours? Do you want to make fewer, bigger trades or do you want to be active and make more, smaller traders? How will these approaches affect your stop loss tolerance? What are you willing to risk per trade and how long can you psychologically tolerate that risk? How much would you like to make from a single trade? How much money do you need to make to be done for the day, week, month, year?

Know yourself. Then you can develop or buy a trading approach that has the best chance of working for you. You can't trade somebody else's trading plan. Trade YOUR plan.

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