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Hello all,
Just wanted to give a quick introduction. I'm lucky enough to be in a position to put all my time and energy into learning to trade, and that is what I've been doing for most of this year. I've been sim trading for a 3 months now(OEC mainly). I am consistently doing well, very well. I feel like I've come a long way and have passed many hurdles, except for the main hurdle, trading live. I'm about to open a trading account, and hope to go live in the next couple of weeks. I have until the end of the year to prove that I can do this for a living, and luckily I have an amazing wife that believes in me and backs me up 100%. I'm 33, and my whole life I've been searching for a way to work for myself but still provide a decent life for my family. Don't get me wrong, I don't expect to be making much of a living by the end of the year, if any at all. But if things head in that direction, my wife is willing to stick it out until I become profitable. I(we) don't have high expectations, and we don't have a lifestyle that needs a lot of income to support it. When I say profitable, if in a year from now, if I could start bringing in 50k a year, that would be enough to allow me to work for myself. Aside from having the time and support, it SEEMS like I have the ability. Charts, numbers, trends, critical thinking, quick instincts, do well under pressure, not a gambler, and based on sim, what seems like the ability to do it successfully. I don't risk more than 2%, and I'm not trading on margin and never would(not a gambler, again). I do NOT have the expectation that live trading will be the same as sim trading. But on the other hand, I am performing consistently profitable in sim trading, and if I only do 25% of what I'm doing now in sim, then I will more than meet my goals. Anyways, so much for the "quick" introduction, I'm just rambling on. I have been reading Big Mike's forum for a while, and wanted to join the club. I am looking forward to taking advantage of all the forum has to offer, especially the webinars and elite material! Thanks for reading and wish me luck!
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EDITED(Feb 2014):
Looking back at my original post, it is comical. Please read the entire thread.
"Jumping in"... sounds great all times!
If you are on the good path in sim and profitable - keep it like this.
Trading live normally means pressure in comparison to sim.
Take it easy and stay concentrated and "jump in" as you would in sim.
Forget about PnL numbers and you will repeat gains as in sim trading.
Just repeating the condensed advice of the best traders here on futures.io (formerly BMT)
Welcome. Sounds like you are doing well. Are you going to start a journal here? I agree with what you mean about working for oneself. It's hard for small business in general. Trading has a lot of risk but lots of advantages over traditional businesses. Like no physical break-ins and theft of inventory for example. However trading has been rocked by scandal recently and if the world economies collapse I'm worried they may shut down retail trading in the future for everyone in an over-reactionary backlash. Well, better than starting a home cannabis farm in California. If you can keep your profit factor on average, greater than 1.4 or 2.0 or above you should be fine. Good luck.
Cory,
Sorry for the late response. Yes I am trying to be as realistic as possible. Taking into account $5/rt. I started with 5k, a couple of times. Made plenty of mistakes, technically and logically, and have learned quite a few lessons. I only trade with one contract, no leverage. Risking no more than 1% normally. I'm using very conservative stops, too conservative probably, but its working for me. This is exactly how I will trade live. I know I will not make enough to live on with only 1 contract, but over 6-12 months I should have an account large enough account to start bringing in a a modest income. I've tried 4 or 5 platforms now, and found one that I really feel comfortable with, which was a really important important thing. I am now able to make profits pretty consistently, and by my math, it should work out for me. That's the dream anyways, isn't it. I'm trying to see this with great ration, and and know there is no way I will perform as good live, as I am in the sims. But 1/4 of that would make me happy and meet my needs. About a month ago we decided I would really take a shot at this, and the pressure really hit me. It felt completely different when I started trading, knowing that I really had to perform. I still did well even though I felt like the world was on my shoulders. That has passed for the most part, so I have a least a taste of what it will be like live trading, with some real stress. It probably sounds like I'm trying to rationalize or justify my readiness, and I guess I am! It just feels like I've really "caught on"
I started live trading on 5/29. I proceeded to lose $1,800 in 6 days of trading($5k starting balance). What a devastating slap in the face.
I stepped back last week to regroup and rethink. There were a couple of problems that I had: my strategy was flawed, but, it was mainly due to the psychological aspect. I was trading in simulation on pure intuition without any good knowledge to back it up. When I went live, my intuition meant nothing because I didn't have the knowledge to give me confidence in my intuition. I tanked big time. I started putting my stops in places that I never did in sim. I went from a 67% win rate in sim, to a pretty much 100% fail rate. Seriously, pretty much 100% failure. I almost gave up. If I didn't have the most amazing wife in the world who believes in me, I probably would have.
A few things that helped me immensely. I read a book by Mark Douglas(Trading in the Zone). I also started doing intense studying/researching/learning on my strategy.
That book might have helped me more with my trading than anything could have. I was trading based on right or wrong. I felt hurt that I was wrong. Stupid. Probabilities win, not right or wrong. I don't give full credit to the book though, because I've watched quite a few psychology webinars here on BM that were very helpful. And BM deserves plenty of credit here too. I might not had even read the book, had it not been for BM constantly touting the importance of psychology. Mark Douglas, however, is what really struck home with me and I can't even explain how much that book helped me.
My other problem: I had no idea that the strategy I was using could be quantified. I didn't even really know what my strategy was, I just did it with no knowledge to back it up. 50% fib retraces is what I had been doing in sim, I just didn't know it. Once I found out about fib retraces, I could start backing up my intuition with actual quantification. Intuition means nothing without the knowledge to back up your intuitions. In sim, it worked great for me. Live, I fell flat on my face. I had to have confidence in my intuition before I could move forward.
Patience. This has been a huge factor in my turn around. The patience is hard at first. Instant gratification is a tempting thing. Patience has gone from being hard, to being rewarding. Makes you want to be that much more patient. I've read this quote a few times on BM and other places, but it has really helped me: "You should be able to justify(out loud) the exact reason you are going into a trade. If you can't justify it, don't trade it."
Things have turned around completely in a matter of days. Don't get me wrong, I don't think I am some expert trader now. I know next to nothing. I get it. But I'm learning. Monday I had my first successful day. Yesterday was even better. Today, even better. I know that three days of winning doesn't mean a whole lot, but the progression I've made in 2 weeks has given me confidence again, and the confidence is priceless. I am trading on the YM right now. In the last 3 days, I've made 18 trades and have won 15 of them, and have made 6% profit in three days. I've gone from a 0% win rate, to 83.33%. The first day I profited, I chalked it up to a lucky day. Yesterday, I did even better and thought to myself, "this has to mean something". Then today, I had another, even larger successful day. 3 days in a row......that has to mean SOMETHING.
Work ethic. You better have it. So many lazy people are probably attracted to trading. I can tell you right now, if you are lazy and aren't willing to work then you might as well keep your day job. I have never worked so hard in my life, or put in the hours I'm putting in now. I have walked, talked, and eaten trading for the last 6 months. 12-15 hours a day. Little sleep. Little time spent with my family. Sacrifices must be made.
Anyways, I just wanted to post this for one main reason, and that is to hopefully give some fellow newbie traders the push and confidence that they may desperately need. I now see why there is such a high failure rate. I bet that 50% of the failures come in the first week or two. I could hardly stand losing money like that and almost gave up. I changed the way I was thinking and started considering my losses as tuition, and crammed. I stepped back, dug in, and didn't give up and have now penetrated the brick wall that all new traders face. Don't give up!! And whatever you do, don't underestimate the power of confidence, or the lack of power that comes from having no confidence.
P.S. - If you want to rain on my parade and tell me it's just a fluke, beginner's luck, etc......then you might was well keep it to yourself because it'll be water off a duck's back. I know I'm on my way, still a long way to go, but on my way nonetheless. One brick at a time.
If I could go back two weeks ago, and do things differently......I wouldn't change a thing. Losing that money taught me invaluable lessons about trading and about myself. I would much rather learn these lessons with a small account instead of a big one
Just keep in mind (as I remind myself too) that overconfidence is hurtful, confidence is not.
Also, changing market conditions also lays waste to the best trading plans and when we are overconfident those changed market conditions tend to throw us for a loop.
Every trading day is a new day and does not necessarily fall in line with our previous (winning) days.
I absolutely agree with what you've said. I agree wholeheartedly about the "overconfidence". Overconfidence is what killed me coming out of simulation. That is why I am happy that it happened the way it happened. I will aspire to never be overconfident in my trading again, because I know the pain and losses it brings. But plain ol' confidence and believing in yourself, that just can't be replaced and is the key to success in life, not just trading. Thanks for your reply!
