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Confessions - Stories of defeat and lessons learned


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Confessions - Stories of defeat and lessons learned

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  #1 (permalink)
 GaryD 
Orlando, Florida
 
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Trading is arguably one of the toughest business out there, and I doubt any trader has made it to consistent profitability without many setbacks. I wanted to see if I could entice other traders to share stories of what they believe are their greatest screw-ups, and if there are lessons to be learned from those.

I'll go first;

I got into trading somewhat by accident. I had lost a bunch of money as a real estate developer who started getting one loan after another shut down (even though the payments were current and all other loan criteria was met. Different story). The banks just stopped renewing. I personally lost millions.

In the middle of that whole mess, I discovered day trading. My business had become nearly non-existent, I was still "independently wealthy at the time (per the balance sheet of the day). I had the free time and was looking for something to ease my pain, make some money, get back some of what I lost. Trading had high liquidity, something I realized I was needing in real estate but could not find, and it had leverage, a principal I had used to build wealth in real estate. Looking back, I think I just needed something to find "hope" in.

I opened an account at Scottrade, and called myself a trader. I did "ok", considering the lack of knowledge, but after making and losing for several months I decided I needed some education. I found a class that taught how to trade futures. I called and spoke with an instructor, and one of my questions was, "so why do you trade futures instead of stocks?". The answer, "you get more bang for your buck". Sounded reasonable...

I opened a futures account and started trading away. Wow! Adrenaline rush! I was going to make back my lost millions in no time! I had put $20,000.00 in the account, and so started trading 2 contracts at the recommended leverage other traders suggested. I made and lost money $500.00 at a time, $1,000.0 at a time. Nothing really crazy either way.

Then one day, slow and lacking volume, I decided to short the ES. It had crept up nearly all day and I just KNEW was way overdue for a pull back. I entered with 5 contracts (hey, my broker says I can trade 40 if I want), the market kept creeping up, would not even come back a point, so it seemed. Getting further into the red I thought, "this market is nuts, it should at least come back a point or two". I doubled in, 10 contracts strong, and I was going to step out a breakeven. Then I was down about $3,000.00 and closed it. But I continued to watch.

I was mad at the market. How could it go in one direction all day long. It never did that before while I was trading it. I was going to get my money back. Today.

A big burst of volume came in and pushed it down a bit. "Now, finally!" I thought to myself, this market is due for 3-5 points at least. I was down $3,000 +/-, and only wanted to get back to breakeven. I'd go for 3 points, that should be an easy target. Let's see, at $50.00 per point x 3 is $150.00 per contract. I need to make $3,000.00, so that's 20 contracts....

I shorted and got out, shorted and got out. Two more losses. Went to get in heavy again. I had to stay leveraged to get back to even, right?.

Big warning sound on my screen. I did not have the proper margin requirements. I lowered the contracts traded until it let me in...

End of day, I was $13,000.00 +/- down, felt like the biggest loser, just sat there and stared at the screen. How could I be such an idiot? I knew better! How could I lose control of myself so easily? What was I thinking? I should just give it up.

At the time, I was already "down" in my real estate finances over $1 million, so in some ways the $13k loss felt insignificant. Plus, I was on antidepressants from the original financial losses and the feeling of apathy that came with the environment at the time. That trading loss was tiny in comparison, and I was angry with the world already. I was out of control.

The real estate money was not lost in the same way. I was a professional in that, considered to be very conservative. But, that was definitely not the person who I brought to the trading screen that day. That new person I just discovered was impatient, illogical, reckless, a gambler. Not a part of myself I had seen before when it came to money.

Surely that was just a fluke. I knew I was capable of handling myself professionally. I was just upset and not my normal self that day. A week or so later I went back to trading. I had learned my lesson...

I eventually "blew up" that account. Well, not really to zero. When I got down to about $800.00, and I fought that out for at least a week, I made every single tick count. I thought I would build it back to $20,000.00.

Then one trade, below $500.00 for maybe a second. Flat. My broker cut me off. I left the house and went rollerblading, Ipod to drown out the rest of the world. I cried. I was a failure in finances, in real estate and in trading. I cried harder. I was on a trail where not many people were, and was moving fast enough that the few people I did pass could not have known. And I really did not care. I was surprised I even could cry, antidepressants make it tough to do.

So, I got out of trading for several months, worked hard to try to negotiate with lenders, changed up my marketing on my remaining real estate holdings, networked like crazy, got property after property in contract, then fell through... But I kept thinking about trading. I was hooked. Addicted, perhaps. I kept thinking, "if it can take my money that fast, it can also give it back in the same amount of time".

And that was the thought that lead to the second time I "blew up". Not the same amount, $5,000.00 that time...

Then it was serious. I was going to get my money back, but this time I was going to do it the right way.

I wanted a system, I wanted to be shown how to trade, "just tell me I will follow it".

It does not happen that way, or at least it would not for me. I had to finally get into my head that there were far too many variables to ever find a "perfect" system, and that if I was going to make it, I needed a lot of skills, and they all needed to function together.

I went to simulation only. I spent years studying roughly 7 days a week, 14-16 hours a day many times. I was obsessed beyond anything I have every pursued. Building up, then giving back, then building up, then giving back, all in sim mode, but it had then become just as serious to me.

I would set goals to double a $5,000.00 sim account, or lose it all, but either way I had to ride it to the end. Blew up, reset. Blew up, reset. At least it was simulated.

Then, finally, doubled. It took me about 2 years of practice to get to that point. I cried again. I could not believe I did it. It was only sim, but it did not matter. I got my balance back, I learned to gain control over my emotions, I became conservative again.

And I learned to find MY WAY to trade. That was the toughest part of the whole process.

Reset. Doubled again, Reset...




I have since learned to trade profitably, and I trade live again on nearly a daily basis, but it looks nothing like that "trader" I thought I would be. To this day, I have no desire to make back my $13,000.00 in one day. I don't doubt that I will someday in the future have that as a reasonable target, but only when my trading capital catches back up with where it needs to be for that size of a position. I actually know there are times I probably could make $13,000.00 in a day. I have the capital, I have the experience. But instead, I actually trade at far less leverage today than others might expect, because I choose to keep my losses to an amount that I don't think about them.

Today, I could probably trade as my sole source of income, but I don't want to. Maybe I will someday, but I have learned that my mind has more to do with my results than the side of the market I choose. When I "have to" make money, I trade far worse than when I don't have to. I am possibly proudest of myself when I watch the market for hours and cannot find a trade to take. Big improvement.

It has been a very hard ride. Many times it seemed like I should have just given up and gotten over it. But, I would not let myself. I was going to figure it out, no matter how much work it took. I was stubborn, determined, vengeful in some ways. But somehow I learned to turn that energy into something positive.

I am very proud of where I have taken my trading, but I can say without a doubt, it is the hardest thing I have ever done. I had to learn so much more than how to trade. I had to learn myself in the process.

Today I consider myself a TRADER, not a gambler, not a loser. But I was one, and a big one at that.



Thanks to @Deucalion for the idea for this thread. I hope this is helpful to some traders.

I hope you will add a story of your own.


Trade safe!

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  #3 (permalink)
 josh 
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 Rockmann 
Seattle, WA
 
Experience: Intermediate
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First post here on this great board, been lurking for a long time and learned a lot.

Here's my story... but I'll give a bit of a backstory as well.

My great grandfather owned a number of taverns and was looked up to for a number of reasons for his business savvy. Probably the thing I am most proud of was that he felt it was unfair to charge blacks a quarter for beer when whites were only paying a nickel. This caused some uproar by his competitors, but he knew where his heart was and felt he needed to do the right thing. This was early part of the century so different times, different mentalities. Fast forward to the fifties and he's ready to retire and take life easy. With a small nest egg of about $15,000, he decides to make some investments in the stock market. Everyday he would get on the bus and ride to downtown Seattle to "watch the ticker". This was a room located at a brokerage where many men would gather to share investment ideas and watch the market unfold. Anytime he would close out a position, my grandmother would take half and put it away... many years after they had both passed money was found hidden in books throughout the house. I'm sure his wealth would have been compounded many times over had he reinvested all of it, but having gone through a depression, one needed to be safe. Upon his death in 1972 his portfolio was almost $300,000. Of course I heard these great stories and he always told me to put my money to work and not leave it in a bank to draw a paltry interest rate. At 8 or 9, I kinda got it, but it wasn't that important to me.

Not until I was 14 that is. One day my Mom brought home a Wall Street Journal from her office thinking I might want to read it. Over the next week I read every story in that issue and started watching the market and some of the stocks I had read about. I picked up a few books in the library to get a better understanding of investing and with my limited knowledge, looked for some stocks I might be able to "buy" by paper trading. I did this with some success and I remember at the end of the year picking up the WSJ where they would have the stock pages with each stock and it's performance for the year. I remember a company called Berkshire Hathaway that had a price of almost $3,000 a share, I thought that might be a misprint but years later the world would know who they were.

Finally when I was 16 or 17 I thought it was time to invest and I asked my Mom to open a brokerage account for me. I had researched a number of stocks and started subscribing to a newsletter even. The great thing about the newsletter was that I received a free copy of Stock Market Logic, what a wonderful book this was...wow so full of great information like "Two Tumbles and a Jump" meaning if the Feds lowered interest rates twice, the market would jump. I had found the holy grail to investing I thought and was in tune to the market and all that was going on, even subscribing to the WSJ.

Through my research I found a company called Chase Revel Inc. that looked like a great buy. Chase Revel was smart and owned Entrepreneur Magazine, something else I read on a monthly basis. So armed with some money, I gave it to my Mom and asked her to buy 150 shares. I think it was maybe .70-.80 a share at the time. Slowly I watched it move up and down, never really going anywhere, but I was an investor and dreamed of making millions. Fast forward about six months and I'm listening to the radio and hear that the guy that owns Entrepreneur Magazine had declared bankruptcy. The DJ's were laughing because this guy was supposed to be the smart one. I asked my Mom to call the broker and sure enough, the stock had tanked and I was out my money, or so I thought. Eventually I did receive money for the shares from the new owner who had taken over. I remember he called me and asked if I was willing to share my shares.

As life got busy, I still kept my ear to the ground on investments, but didn't want to risk any more money that is until I was 19. My Father had passed away suddenly and left me with a very small insurance policy that basically covered expenses and gave me a bit of money to maybe take a nice vacation. I decided to give investing another try and drove a half hour to the nearest Merrill Lynch office and gave them a check and asked them to make it grow for me. a couple times a week I would drive to the office to check the quotes on stocks like Kindercare on the Quotron. Soon I was doing this daily despite having to pay for the gas. My portfolio doubled and I was super excited but thought I needed to think about buying a house so looked for a foreclosure since I knew they would be a better deal. In 1984 I took that money and made a down payment, signing on the bottom line at an 11.18% interest rate. Five years later the house doubled and I started building a small nest egg that continued until a divorce took all that I had built 15 years later.

Fast forward to the present day and I was a Network Engineer for a major bank responsible for the network controlling our trading systems. I loved the energy and always made a point to go talk to the traders on the floor, wishing I was in their position, but without a college degree it wasn't to be. I would watch the market on a daily basis as my job required me to be aware of what the system status was. All the while dreaming of becoming a full-time trader on my own.

Last September I was told that I was no longer needed along with a large number of employees. I became a casualty of the downsizing in the banking industry. I was excited, having saved quite a bit of money knowing this day would come. As is standard, I received a severance package and for the next four months I paper traded on the Think Or Swim system. Starting with $100K I was able to double it in those few short months. I traded stocks and oil futures mostly and did quite well using some indicators like Relative Momentum Index and MACD Crossovers on 5 Minute charts. I figured I was ready to trade for real, so The first week of February this year, I went live with my own money starting with $50K

The first day I struggled, trades were not matching up with what I was seeing when I made my trade and at the end of the day realized I was trading in partial realtime.. yikes. I hadn't signed the proper paperwork to have realtime. I was able to fix that right away thank goodness, but my first day I was off a couple hundred dollars.

Next day I was in an oil trade and short 3 contracts when all the sudden it spikes down and I am up $1,500 in about 30 seconds… I was paralyzed and couldn't believe how much I made, but those profits disappeared as fast as they came and when I flattened the trade, I made a couple hundred where my hesitation and greed kept me from making more.

The next few weeks I struggled, paper trading does not have the emotion that putting up real capital does. My setups were perfect, but if a trade went agains me I would bail and lose money. $200 here, $500 there, pretty soon I'm looking at an account that is down $6 grand. Then I have the best day ever last Wednesday, Feb 29th, a day that only comes once every four years. I traded oil perfectly, every side I was on made money, short or long trading 1-2 contracts. My day netted me $3,200… wow this works!

Went to dinner with friends that night and shared my success and I was on top of the world.

But tomorrow would be a new day.

I figured I was so good yesterday, I'm going to move it up to 3-4 contracts. My first trade I'm down $1,100 in about ten minutes. "Well I have to make this back right" So I wait for another good setup and all indicators point in my direction, almost the moment I hit send on the trade and get in my position, it goes against me. I slump at my desk thinking "The trading gods are against me". How do they know when I make a trade to reverse?

I swear off oil for awhile, "Oil is the devil" I think to myself and make a few trades in AAPL that prove profitable.

But oil calls me back and I see a wonderful setup.. everything is perfect, so I put on a short four contracts at around 107.35. It ranges for about a half hour with my area and I put a way out of the money stop at $107.90 and go take a shower. I run in and out of the shower and come back to my screen and my stop was hit and I'm out of the trade …..WTF? Yep, that shower cost me $2,000.. eventually oil hit a high of $110.55 for the day (March 1st), so it saved me quite a bit. By the end of the day, I had revenge traded away more money and was down $7,000.

I took my indicators and dumped them, and started reading this forum for some help. "I'm unemployed and need this to work" I though to myself. I have always dreamed of trading for a living and this was becoming a nightmare.

So I trade on new indicators, trying Stochastics and Fisher Tranforms and all kinds of new ideas. The money still drips away… A grand here and grand there… each day I say the hell with oil I'm done. But like a crack addict.. I keep going back and getting it handed to me.

Tonight as I write this, I am $18 above my $25K limit for day trading, yup I have blasted through $25K in the past month spending over $8K on commissions alone by having way too many trades. So tomorrow I am back to paper trading to try and get the doubt, fear and negativity out of my head. I know this can work… I just need to reduce my trades, tighten my stops and find a system that works for me consistently like it did when I paper traded. The emotional part of trading wrecked me when it was for real money. Lots of lessons learned, but I'm tired of paying this expensive tuition so it's back to square one.

Thanks for starting this thread.

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  #5 (permalink)
 Big Mike 
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Thanks for sharing from the heart, guys. I know that others will benefit from your posts.

Mike

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ReaM
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Dear Rockmann,

why don't you start a trading journal, link it from your post here and people might help you (ask them to).

I am in no way a master of markets, so my advice and help will be overshadowed by other experts here in forum, but I see danger in you thinking that you take too many trades. There is no such thing as too many trades or too few trades. I would disregard all advices from all books, because they are all wrong. You can trade profitably making a hundred trades a day or five trades a year. How things should be is not how they are. Taking some average of how many trades should there be ruins all the art. One has to explore himself, see what works for him and what does not and disregard everything everyone says. Usually doing the extremes, a 100 a day, may prove to work best.

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 Rockmann 
Seattle, WA
 
Experience: Intermediate
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Posts: 3 since Dec 2009
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Thanks ReaM, I have considered creating a journal but for now I am back to paper and SOH with this lackluster market. Not seeing any good trades even if I wanted to commit except maybe for a trade on VXX, but even that seems to crank lower everyday. I'll post a link here when I get back on the horse and start a journal.

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 wldman 
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for sharing your experience. Something I needed to hear. Best of luck and trade well. DB

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 JamTheTrader 
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GaryD View Post
Trading is arguably one of the toughest business out there, and I doubt any trader has made it to consistent profitability without many setbacks. I wanted to see if I could entice other traders to share stories of what they believe are their greatest screw-ups, and if there are lessons to be learned from those.

I'll go first;

I got into trading somewhat by accident. I had lost a bunch of money as a real estate developer who started getting one loan after another shut down (even though the payments were current and all other loan criteria was met. Different story). The banks just stopped renewing. I personally lost millions.

In the middle of that whole mess, I discovered day trading. My business had become nearly non-existent, I was still "independently wealthy at the time (per the balance sheet of the day). I had the free time and was looking for something to ease my pain, make some money, get back some of what I lost. Trading had high liquidity, something I realized I was needing in real estate but could not find, and it had leverage, a principal I had used to build wealth in real estate. Looking back, I think I just needed something to find "hope" in.

I opened an account at Scottrade, and called myself a trader. I did "ok", considering the lack of knowledge, but after making and losing for several months I decided I needed some education. I found a class that taught how to trade futures. I called and spoke with an instructor, and one of my questions was, "so why do you trade futures instead of stocks?". The answer, "you get more bang for your buck". Sounded reasonable...

I opened a futures account and started trading away. Wow! Adrenaline rush! I was going to make back my lost millions in no time! I had put $20,000.00 in the account, and so started trading 2 contracts at the recommended leverage other traders suggested. I made and lost money $500.00 at a time, $1,000.0 at a time. Nothing really crazy either way.

Then one day, slow and lacking volume, I decided to short the ES. It had crept up nearly all day and I just KNEW was way overdue for a pull back. I entered with 5 contracts (hey, my broker says I can trade 40 if I want), the market kept creeping up, would not even come back a point, so it seemed. Getting further into the red I thought, "this market is nuts, it should at least come back a point or two". I doubled in, 10 contracts strong, and I was going to step out a breakeven. Then I was down about $3,000.00 and closed it. But I continued to watch.

I was mad at the market. How could it go in one direction all day long. It never did that before while I was trading it. I was going to get my money back. Today.

A big burst of volume came in and pushed it down a bit. "Now, finally!" I thought to myself, this market is due for 3-5 points at least. I was down $3,000 +/-, and only wanted to get back to breakeven. I'd go for 3 points, that should be an easy target. Let's see, at $50.00 per point x 3 is $150.00 per contract. I need to make $3,000.00, so that's 20 contracts....

I shorted and got out, shorted and got out. Two more losses. Went to get in heavy again. I had to stay leveraged to get back to even, right?.

Big warning sound on my screen. I did not have the proper margin requirements. I lowered the contracts traded until it let me in...

End of day, I was $13,000.00 +/- down, felt like the biggest loser, just sat there and stared at the screen. How could I be such an idiot? I knew better! How could I lose control of myself so easily? What was I thinking? I should just give it up.

At the time, I was already "down" in my real estate finances over $1 million, so in some ways the $13k loss felt insignificant. Plus, I was on antidepressants from the original financial losses and the feeling of apathy that came with the environment at the time. That trading loss was tiny in comparison, and I was angry with the world already. I was out of control.

The real estate money was not lost in the same way. I was a professional in that, considered to be very conservative. But, that was definitely not the person who I brought to the trading screen that day. That new person I just discovered was impatient, illogical, reckless, a gambler. Not a part of myself I had seen before when it came to money.

Surely that was just a fluke. I knew I was capable of handling myself professionally. I was just upset and not my normal self that day. A week or so later I went back to trading. I had learned my lesson...

I eventually "blew up" that account. Well, not really to zero. When I got down to about $800.00, and I fought that out for at least a week, I made every single tick count. I thought I would build it back to $20,000.00.

Then one trade, below $500.00 for maybe a second. Flat. My broker cut me off. I left the house and went rollerblading, Ipod to drown out the rest of the world. I cried. I was a failure in finances, in real estate and in trading. I cried harder. I was on a trail where not many people were, and was moving fast enough that the few people I did pass could not have known. And I really did not care. I was surprised I even could cry, antidepressants make it tough to do.

So, I got out of trading for several months, worked hard to try to negotiate with lenders, changed up my marketing on my remaining real estate holdings, networked like crazy, got property after property in contract, then fell through... But I kept thinking about trading. I was hooked. Addicted, perhaps. I kept thinking, "if it can take my money that fast, it can also give it back in the same amount of time".

And that was the thought that lead to the second time I "blew up". Not the same amount, $5,000.00 that time...

Then it was serious. I was going to get my money back, but this time I was going to do it the right way.

I wanted a system, I wanted to be shown how to trade, "just tell me I will follow it".

It does not happen that way, or at least it would not for me. I had to finally get into my head that there were far too many variables to ever find a "perfect" system, and that if I was going to make it, I needed a lot of skills, and they all needed to function together.

I went to simulation only. I spent years studying roughly 7 days a week, 14-16 hours a day many times. I was obsessed beyond anything I have every pursued. Building up, then giving back, then building up, then giving back, all in sim mode, but it had then become just as serious to me.

I would set goals to double a $5,000.00 sim account, or lose it all, but either way I had to ride it to the end. Blew up, reset. Blew up, reset. At least it was simulated.

Then, finally, doubled. It took me about 2 years of practice to get to that point. I cried again. I could not believe I did it. It was only sim, but it did not matter. I got my balance back, I learned to gain control over my emotions, I became conservative again.

And I learned to find MY WAY to trade. That was the toughest part of the whole process.

Reset. Doubled again, Reset...




I have since learned to trade profitably, and I trade live again on nearly a daily basis, but it looks nothing like that "trader" I thought I would be. To this day, I have no desire to make back my $13,000.00 in one day. I don't doubt that I will someday in the future have that as a reasonable target, but only when my trading capital catches back up with where it needs to be for that size of a position. I actually know there are times I probably could make $13,000.00 in a day. I have the capital, I have the experience. But instead, I actually trade at far less leverage today than others might expect, because I choose to keep my losses to an amount that I don't think about them.

Today, I could probably trade as my sole source of income, but I don't want to. Maybe I will someday, but I have learned that my mind has more to do with my results than the side of the market I choose. When I "have to" make money, I trade far worse than when I don't have to. I am possibly proudest of myself when I watch the market for hours and cannot find a trade to take. Big improvement.

It has been a very hard ride. Many times it seemed like I should have just given up and gotten over it. But, I would not let myself. I was going to figure it out, no matter how much work it took. I was stubborn, determined, vengeful in some ways. But somehow I learned to turn that energy into something positive.

I am very proud of where I have taken my trading, but I can say without a doubt, it is the hardest thing I have ever done. I had to learn so much more than how to trade. I had to learn myself in the process.

Today I consider myself a TRADER, not a gambler, not a loser. But I was one, and a big one at that.



Thanks to @Deucalion for the idea for this thread. I hope this is helpful to some traders.

I hope you will add a story of your own.


Trade safe!

You have earned the right to be called a trader, welcome!

I have several very similar stories and I am sure many more on here do as well.

JAM

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 Maisie 
san francisco
 
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the worst day i ever had came after a few good days in which i made several thousand dollars very quickly. oh, miss Maisie can just hit the Transmit button, and money will shower down over her head now, right? so one brisk, or at least, california-crisp, december day, i sat there on the sofa with my laptop, sure that the magic would unfold once more. yes, some bank was just about to bounce - hey let me dump twice my usual amount of money into it! oh, i'm up 10% - i know it can go higher. wait, that bar opened higher - i swear it did, why is it just ever so slightly lower now? must be my screen. what, red? i'll just hang on a little longer. glance down at the evil "portfolio window" under my charts -25%, then -35% then ...well, u get the picture. trade after trade. i ended up losing about $3,600 in about 4 hours of trading. this was over the *christmas holiday*, when my boys were home from school. the whole time, the whole family had been milling around, completely oblivious to the fact that i was blowing our money away on idiotic trade after idiotic trade. i finally raised my face to them and told them. my husband gets the official Saintly Husband award, because he kept his cool in front of the kids the entire day, and merely asked me that night, Honey, what happened??

i spent alot of time answering that question in subsequent weeks. no trades for me - studying charts, thinking about what i was doing, reading various websites, gathering information. i was very shaken.

but i knew i was capable of finding good trades, and there would be money in there for all of us if i could learn to control myself! so i've been studying away since and do seem to be making some modest improvements.

one thing i really like is the free 30-day course at scott redler's T3 live. i have found it *incredibly useful*. u do not have to be a member or anything - it's totally free. of course, there's a marketing pitch in there for their chat room, but u do not have to sign on.

i have learned the hard way, go to the guru websites and worth through *all the free* stuff. when you're done, find another website!

thanks for opening up the "confession booth"

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ReaM
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What the hell, I write a story of my own.

More than a year ago I collapsed and cried for 8 or 9 days, I could not eat, sleep. I stayed all that time in my room, feeling bad.

All that because I've found out my strategy did not work. It was a mechanical intraday strategy with several signals each day. I have found out that it actually did not work in 2008 and before that. Having backtested "only" 2 years of data (thousands of trades) it seemed like the holy moly grail and I traded it with confidence, earning money.

I was in plus, when I collapsed. So, I made money and still felt worse than ever before.
I did not stop trading it, I wanted to see it failing. Trade after trade all profits were gone and when it was clear, it is a loser, I stopped trading it.

After that I traded another system which worked on paper, but not in real life because of slippage.

So, I stopped trading systems and became a discretionary trader. I has been going well since that moment. I am more than 50% in plus for March alone. The account is tiny though and does not represent all my trading funds. In money terms (and that's all that matters), it's like I have won nothing.

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 Maisie 
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yeah i am very skeptical of automated systems. backtesting. how can you backtest the future???

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 josh 
Georgia, US
 
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Maisie View Post
yeah i am very skeptical of automated systems. backtesting. how can you backtest the future???

A little coarsely written, but much wiser than thinking that backtesting a mechanical system means anything other than "this is how the system performed," as opposed to "this is how the system will perform." Well said.

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 Maisie 
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FT71 put it better when he pointed out that each new tick was like a new variable. backtesting just can never include the x factor of the new variable of the next tick. so there ya go.

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 ashake2003 
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Are you kidding me?
Flash back to 2008: Lost my money. Lost my reputation. Lost my confidence. Lost my wife.
And by 2009, I had lost my house and its contents! By 2010, I started payiny child and spousal support. Yikes!

I was doing well in my day job as at July, 2007. Then I approached a friend of mine if he could share his secret of living without having to work so hard. After some hesitation, he agreed to share his secret. He was a day trader. For two weeks, and about $1000:00, he "showed me how to trade and make money" Now, I can resign from my day job, go part-time, and have an easy life making money, I thought to myself. Then one day towards the end of July, 2007, I resigned from my day job, put $20,000:00 BORROWED MONEY in my broker's a/c and started trading live!

By the time I declared bankruptcy in 2009, I had lost everything.

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 GaryD 
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ashake2003 View Post
Are you kidding me?
Flash back to 2008: Lost my money. Lost my reputation. Lost my confidence. Lost my wife.
And by 2009, I had lost my house and its contents! By 2010, I started payiny child and spousal support. Yikes!

I was doing well in my day job as at July, 2007. Then I approached a friend of mine if he could share his secret of living without having to work so hard. After some hesitation, he agreed to share his secret. He was a day trader. For two weeks, and about $1000:00, he "showed me how to trade and make money" Now, I can resign from my day job, go part-time, and have an easy life making money, I thought to myself. Then one day towards the end of July, 2007, I resigned from my day job, put $20,000:00 BORROWED MONEY in my broker's a/c and started trading live!

By the time I declared bankruptcy in 2009, I had lost everything.


So are you still trading, and if so, how do you feel about it?

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 ashake2003 
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Gary D
Yes, I am still trading, but in sim mode! But can I call myself a trader? No system, no plan, no confidence. I am an enbodiment of fear, greed, and indiscipline. I have blown more than 4 a/cs, yet I did not learn anything from my mistakes. Please allow me to elaborate:

I bought several books and systems- Dr. Alexander Elder, Murphy, Mark Douglas/ Vantage Point software, Paint bar factory indicators, Emimi watch, Decision Point, etc. Up till this moment, I am still searching for that thing that will give me the "aahhaa " moment. But I am gradually coming to the conclusion that my failure to date is a reflection of the totality of my existence-fear, indecision, procrastination, lack of patience, and impulsive behavior.

Fear is real. As soon as I put on a live trade, my heart starts to palpitate. I hold tightly to the mouse and waiting to close the trade with 1 tick of profit. Funny enough, I will hold on to any failed trade until the pain became unbearable. Any object within my vicinity at that time turns into a missile! It's just incredible to explain the emotions of fear.

The process of going into bankruptcy, separation, alimony, child support, causes so much mental agony and lack of confidence. I will continue to write so that people can learn from my mistakes.

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 Abde 
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ashake2003 View Post
Are you kidding me?
Flash back to 2008: Lost my money. Lost my reputation. Lost my confidence. Lost my wife.
And by 2009, I had lost my house and its contents! By 2010, I started payiny child and spousal support. Yikes!

I was doing well in my day job as at July, 2007. Then I approached a friend of mine if he could share his secret of living without having to work so hard. After some hesitation, he agreed to share his secret. He was a day trader. For two weeks, and about $1000:00, he "showed me how to trade and make money" Now, I can resign from my day job, go part-time, and have an easy life making money, I thought to myself. Then one day towards the end of July, 2007, I resigned from my day job, put $20,000:00 BORROWED MONEY in my broker's a/c and started trading live!

By the time I declared bankruptcy in 2009, I had lost everything.

Im sorry to hear of the difficult times you have gone through.
It seems to me that your fear comes also from a method where you have not enough confidence. What time frame/instrument do you trade and what is your trading approach?

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 Anagami 
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ashake2003 View Post
Gary D
Yes, I am still trading, but in sim mode! But can I call myself a trader? No system, no plan, no confidence. I am an enbodiment of fear, greed, and indiscipline. I have blown more than 4 a/cs, yet I did not learn anything from my mistakes. Please allow me to elaborate:

I bought several books and systems- Dr. Alexander Elder, Murphy, Mark Douglas/ Vantage Point software, Paint bar factory indicators, Emimi watch, Decision Point, etc. Up till this moment, I am still searching for that thing that will give me the "aahhaa " moment. But I am gradually coming to the conclusion that my failure to date is a reflection of the totality of my existence-fear, indecision, procrastination, lack of patience, and impulsive behavior.

Fear is real. As soon as I put on a live trade, my heart starts to palpitate. I hold tightly to the mouse and waiting to close the trade with 1 tick of profit. Funny enough, I will hold on to any failed trade until the pain became unbearable. Any object within my vicinity at that time turns into a missile! It's just incredible to explain the emotions of fear.

The process of going into bankruptcy, separation, alimony, child support, causes so much mental agony and lack of confidence. I will continue to write so that people can learn from my mistakes.

Do you feel you have hit the bottom? If so, there's hope. If not, there's more down.

"The mind is its own place, and in itself can make a heaven of hell, a hell of heaven." - Milton
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 GaryD 
Orlando, Florida
 
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ashake2003 View Post
Gary D
Yes, I am still trading, but in sim mode! But can I call myself a trader? No system, no plan, no confidence. I am an enbodiment of fear, greed, and indiscipline. I have blown more than 4 a/cs, yet I did not learn anything from my mistakes. Please allow me to elaborate:

I bought several books and systems- Dr. Alexander Elder, Murphy, Mark Douglas/ Vantage Point software, Paint bar factory indicators, Emimi watch, Decision Point, etc. Up till this moment, I am still searching for that thing that will give me the "aahhaa " moment. But I am gradually coming to the conclusion that my failure to date is a reflection of the totality of my existence-fear, indecision, procrastination, lack of patience, and impulsive behavior.

Fear is real. As soon as I put on a live trade, my heart starts to palpitate. I hold tightly to the mouse and waiting to close the trade with 1 tick of profit. Funny enough, I will hold on to any failed trade until the pain became unbearable. Any object within my vicinity at that time turns into a missile! It's just incredible to explain the emotions of fear.

The process of going into bankruptcy, separation, alimony, child support, causes so much mental agony and lack of confidence. I will continue to write so that people can learn from my mistakes.



You are actually making progress.

You are aware of yourself. That can be rare in trading. You know you have fear, lack of discipline, lack of confidence, lack of patience. Those are all things you can correct.

You are trading simulated, that is the perfect place for you to be. Use that environment to work through all of the issues you have already mentioned. I'll give you some examples;


1) No system, no plan

That is easy. Take your favorite chart, find something you believe occurs relatively frequently, and decide to only enter when that setup occurs. There is your system and plan. it might not work, but that is what you are going to find out.



2) No confidence.

You will not have confidence until you have a plan. Confidence is something that comes on it's own as a direct result of having believed in a plan and then seeing that prove to be a good plan. Confidence is not a requirement at this point. Don't worry about that one right now.



3) I am an enbodiment of fear, greed, and indiscipline.

That's ok, you've admitted it, you are aware of it. You just described nearly every trader. If you are trading in simulation, what are you afraid of? What could you be greedy about?


4) I have blown more than 4 a/cs, yet I did not learn anything from my mistakes.

You have learned that you can blow up an account if you do the wrong things. That, in my opinion, is a rite of passage for a trader. You hopefully have learned RESPECT, which you are interpretting now as FEAR.



Try something; The next time you take a trade, set your stop loss at a $500.00, and let it go for 10 minutes. Set a timer, and take your hands off the mouse. Watch the profits and losses flow in and out of your simulated position, and allow the movement to be free. Breathe. Relax. It is not real.

Do that several times over the next few weeks. Did you make money or lose money? Who cares.

Try it with a $250.00 stop loss, does that FEEL better or worse? Increase the hold time to 15 minutes, to 30 minutes. Start to see that the markets have nothing to do with you, they just do what they do, whether you decide to participate or not. My guess is you will learn something.

Let me know how that goes.

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 ashake2003 
ontario
 
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Abde,
My "Teacher" intoduced me to TF(Russell 2000 e mini). Since then, I have not been able to detach myself from the instrument. I have traded 5 mins, 10 mins, 100T, 233T, 400T, 610T, 300V, 500V, 4Renko, 6Renko, 4 Better Renko, 6 Better Renko, 4/6 Renkohybrid, 6 Range, 8 Range, etc. The fact is that I have not been able to stick around enough to find out if any time frame would have produced an adge. Because of my impatience, I will describe myself as a scalper. I cannot just hang on to a winning trade. Moreover, the market seems to be hunting for my stop loss. As soon as I put on a trade, at that very moment, TF would spike and take the stop out and then proceed in the original direction.

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 PandaWarrior 
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ashake2003 View Post
Abde,
My "Teacher" intoduced me to TF(Russell 2000 e mini). Since then, I have not been able to detach myself from the instrument. I have traded 5 mins, 10 mins, 100T, 233T, 400T, 610T, 300V, 500V, 4Renko, 6Renko, 4 Better Renko, 6 Better Renko, 4/6 Renkohybrid, 6 Range, 8 Range, etc. The fact is that I have not been able to stick around enough to find out if any time frame would have produced an adge. Because of my impatience, I will describe myself as a scalper. I cannot just hang on to a winning trade. Moreover, the market seems to be hunting for my stop loss. As soon as I put on a trade, at that very moment, TF would spike and take the stop out and then proceed in the original direction.

A couple of things...first if your stop gets hunted, its way to close. The stops do get hunted but not at the expense of destroying a structure. If that happens, something else is at work thats higher than the stop placement. Good stop placement should keep you in the trade but limit your catastrophic losses. This means you trade the size you are comfortable with using a larger stop....and no more.

Secondly, TF is a decent instrument, all of those time frames are valid and have an edge. Its not the time frame. Its you. If you are impatient, scalp a one min chart with one min exits. Dont trade a small time frame hoping for big daily swings. You'll drive yourself mad. And don't scalp a one hour chart, thats a waste of time.

If you are to make it as a trader, you gotta develop the balls to hold a trade. I know, I've gone on the same journey as you...from seconds holding a trade to one I held the other day for 45 minutes....its a process but you must do it.

Good luck.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 TrendTraderBH 
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Gary, great great story.....a lot of what you wrote encompasses a lot of my story - minus the independently wealthy part and my losses/blown out accounts were of much greater magnitude (both absolute and as a percentage of my entire "net worth").

I hope to write out my story like you did (but in the meantime, I can read yours to reflect on mine).

Thanks again!

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 Maisie 
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not sure why people use hard stops, really. i mean, i understand the concept. take away the emotion, make the computer bounce you out. however, i honestly think it's best to have no hard stops. 1) you dont' get paranoid "they" are running your stop, lol. 2) you have to really *feel* the price action. 3)they subtly shift agency away from you, to the computer. what do people say? "i got stopped out". call me oldfashioned, but i think these subtle language things can shape thinking in significant ways.

without a stop, you better be watching that pulsing bar. as soon as my order fills, i set up a sell order and constantly update the limit price to the bid which i then adjust if i have time but most of the time i wait till the exact last moment, then just get out at the bid. i sit there watching my positions with the mouse hovering just a tiny bit away so i can pounce on the "transmit" button. hard stops are evil!

The Incredibles:No Capes! - YouTube

(i have my share of problems with trading, just not stops...)

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 ashake2003 
ontario
 
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Gary D,
Thanks for the words of wisdom and the path you asked me to follow. I will diligently follow your suggestions and let you know how it plays out. Whao! Who could have guessed that emotions, especially the negative ones, can cause so much damage to a man's psyche. Even with a demo a/c, I am still unable to hold on a trade to it's predetermined target.

Once again, thank you for given me the opportunity to respond to your thread and your willingness to assist. May the god of trade continue to favor you.

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 GaryD 
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TrendTraderBH View Post
Gary, great great story.....a lot of what you wrote encompasses a lot of my story - minus the independently wealthy part and my losses/blown out accounts were of much greater magnitude (both absolute and as a percentage of my entire "net worth").

I hope to write out my story like you did (but in the meantime, I can read yours to reflect on mine).

Thanks again!


There's more to the story. Just not here. You may have better company than you realize.

By % of prior net worth, my trading losses are miniscule, but they may actually have more impact on me than my real estate losses.

In my developments, I really was not in control. I had no choice in many respects. The fall was unstoppable, and there are no stop losses. I would get properties under contract over and over, and then they fell through over and over, and the next time under contract they were down another 10%...

But the trading losses, that was all me. I chose to lose that money. I pulled the trigger. I could have stopped but didn't.

Now that I can pursue either direction again, I am leaning towards trading. I'm sure I will have real estate wins in the future, I knew it too well to let that go to waste. But trading has me, and I almost feel lucky to have gone through everything I did.

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 GaryD 
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Maisie View Post
not sure why people use hard stops, really.


What if your internet goes out? Or a power outage in your neighborhood? Or your computer crashes? Or some unforseen major event cause a major directional move out of nowhere?

My hard stops almost never get touched. I get what you are saying. But I would never enter a trade without one. If you own a home, you probably have insurance on it. That does not mean you just let it burn...

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 Big Mike 
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Maisie View Post
not sure why people use hard stops

A hard stop is more or less a necessity for most traders. Trading without a hard stop usually means you have no pre-defined exit, and that isn't a good thing. Combine that with the utter lack of discipline most traders have, and they'll hold a losing position forever.

The important thing is to set a stop at the point where if price trades to that level, you agree the trade decision/direction was wrong. Far too often, I see traders using tiny stops, then re-enter moments later in the same direction. Why? It's because the trade is still valid in their eyes, the stop was simply too close because they are afraid to risk more money.

Answer is to risk the same amount of money, but move the stop further away so that stop is only triggered once the trade setup is invalid. Trade fewer contracts, or trade micro CME FX or spot forex, micro spot forex, or equities and ETFs with fewer shares, etc, in order to accomplish this goal.

Mike

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 salisem 
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GaryD View Post
What if your internet goes out? Or a power outage in your neighborhood? Or your computer crashes? Or some unforseen major event cause a major directional move out of nowhere?

My hard stops almost never get touched. I get what you are saying. But I would never enter a trade without one. If you own a home, you probably have insuracne on it. That does not mean you just let it burn...

Exactly! I have backups if my internet goes out, or my computer crashes, or even if there's a power outage, but there is nothing we can do about flash crashes. Seems like "mini flash crashes" happen quite frequently! Could one could argue that if you didn't have a stop resting in the market, you wouldn't get taken out by the crash, and could wait for the crash correction to exit? Perhaps, but I'd think your broker would automatically liquidate your positions when your account dropped below maintenance margin levels, wouldn't they?

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 GaryD 
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ashake2003 View Post
Gary D,
Thanks for the words of wisdom and the path you asked me to follow. I will diligently follow your suggestions and let you know how it plays out. Whao! Who could have guessed that emotions, especially the negative ones, can cause so much damage to a man's psyche. Even with a demo a/c, I am still unable to hold on a trade to it's predetermined target.

Once again, thank you for given me the opportunity to respond to your thread and your willingness to assist. May the god of trade continue to favor you.


I suggest that emotions are everything. To make effort we must want. As a simple example, you could be angry, yet that could manifest into being productive, or, being angry could make one non-productive. But somewhere in there are emotions shaping our every move.

If I could say something to myself, when I was going through a similar time in life, use trading (simulated) as a tool, not to make real money, but to learn acceptance.

Let it hit your stop. It's ok. Let it run to you target, or remove the target and let it breathe.

We try to structure the world in a manner where we have control. In many places we can, but not all. You cannot control the markets, you can barely forecast the markets, but you can control where you enter or exit a trade. Why get out at 1 tick? Choose something better.

And if it does not come, accept it. And try again.

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  #31 (permalink)
 Maisie 
san francisco
 
Experience: Beginner
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well ty everyone for prompting me to reconsider my stops-are-evil belief. i think i just abandoned stops because i started using a trendline to time my exits, and there is no way to set up a stop based on a break of the trend. i tried making an alert in IB to bump me out of my option position if the stock got to a certain price, but what ended up happening is that i went short the same call and of course banked accidently. i still dont' fully understand that one. why wouldn't they have sold my actual position? anyways, ages ago, IB told me basically there was no type of conditional stop i could attach to my order to get me out of an options trade that was based on the equity price action. honestly, this seems...odd to me. i don't really know why they don't let you set up a conditional stop order which says, if the equity gets to x do y with this position.

there is in fact software for NT which will exit you based on a trendline break - found that on the NT board. but it doesn't work for options

*however* it dawns on me that i could bring up the options chart, draw the same trendline on there, and see where my exit would be and set that price as a stop. u guys make good points; i am going to try that.

also, finding this 97 dollar "market tamer" options course highly useful; perhaps they address the issue of stops at some point.

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  #32 (permalink)
 Deucalion 
Calgary, Canada
 
Experience: Intermediate
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GaryD View Post
I suggest that emotions are everything. To make effort we must want. As a simple example, you could be angry, yet that could manifest into being productive, or, being angry could make one non-productive. But somewhere in there are emotions shaping our every move.

If I could say something to myself, when I was going through a similar time in life, use trading (simulated) as a tool, not to make real money, but to learn acceptance.

Let it hit your stop. It's ok. Let it run to you target, or remove the target and let it breathe.

We try to structure the world in a manner where we have control. In many places we can, but not all. You cannot control the markets, you can barely forecast the markets, but you can control where you enter or exit a trade. Why get out at 1 tick? Choose something better.

And if it does not come, accept it. And try again.

Power and control comes from giving it away without losing it. Just as GaryD suggested. Yet every rule is both breakable and sacrosanct. Discretionary traders must constantly look where they can push without falling, pull without being frozen....the line is forever the same, yet forever changing....

And now I will get a thousand nasty comments about speaking in riddles again

"Visceral"..."Darwinian".....the following quote transmits (to me) the same power as those 2 words....."This is a religious issue, either you believe this or you don’t."

I have bastardized this quote...but it comes from here..... Black Box - Thomas A.Bass. Thanks to Lornz for the link.

PS - I am happy that Gary took my suggestion and acted on it, but he deserves the thanks and I don't because I did not act on it. Having read all the comments on the thread, Gary's initial thread-starter post should be printed out as a reminder of the abyss and that abyss' can be climbed.

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  #33 (permalink)
 Placebo 
Pune, India
 
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Hi. I have been trading for more than 3 years. If memory serves me right i had started in Oct 2008. Although it seems more like 20 years back.

During March 2008 i had finished my MBA Finance. This was the time when the world economies were in recession. And the majority of the people were getting laid off. I applied to a lot of firms for a job , got rejected in a few and rejected a few as the salary they were offering was quite less in my opinion. So i decided i would stop applying for jobs and focus on my thesis solely. My topic was "Manipulation in financial markets within the legal framework". I was also eager to make money and found a reputed "Analyst" ready to share his secret at a nominal price with 100 more enthusiasts like me. So i attended the weekend workshop and according to the reputed analyst i was ready to make money from in Cash Market and not futures since his method was specifically useful only in slow moving markets.

I was 24 years at that time and had just got out a relatively serious relationship. So my focus was a little off but i started trading. I bought and sold stocks as i was taught but the account was not in the green. In fact i was down about 10k for the month. So i decided to trade futures. I was trading futures based on either my broker's recommendation or what i was reading online. It wasn't bad. I was making money here and there.

Then one day i was down about 7k for the day. I recovered the money the next day (GOD KNOWS HOW) . Then i was down 20k for the day. I still remember this trade. I went long at the high of the day and as price fell i was buying more and more and more. Since i had recovered my loss of 7k earlier i could easily recover my 20k. But things were different and i lost another 18k. I had smoked about half a pack of smokes in a couple of hours. The only thing which was going on in my head was WTF is happening . I need to get a grip on things in my life. To make matters worse at that time i had a slight tear in my left quadriceps and was skipping muscle rehab and pain would become very severe at times.

Since i was a teenager i have excelled at sports and have played at the highest level and traveled a few countries to participate in tournaments and to demonstrate my skill. One thing i had understood very early in my life was that if i had to improve i had to point out my mistakes and work on them. Most people hate it when someone points out their mistakes/flaws but it wasn't an issue for me . So with the benefit of hindsight i wrote down all the things that i did wrong in my trading so far. This became a list of what not to do. If this is what not to do then the opposite should be of what to do. But what i realized was that i had little skill at that time and needed to more practice. I was drawing parallels between trading and my prior success as a teenager.

I took some time off from trading since i did not want to blow up my account.Started reading some stuff online and luckily i found out about VSA which eventually meant reading the work of Wyckoff. There were days when i would put in around 10-12 hours to get a better understanding of the market and there were those days when i couldn't sit in front of the screen even for an hour. Everyone around me was telling me to give up and get a full time job since there was no activity in my trading account for nearly a year. I read a lot of books during that period and a pattern began to unfold. All great traders had gone through this "STRUGGLE" phase and came on top of it. I had done the same earlier as a teenager and had overcome this phase in another walk of life. I knew that i could do the same in trading.

The aim was simple : I should be better than what i was yesterday. The progress will be slow but will be extremely stable.

Fast forward in time Today and I am more or less a break even kind of trader who makes nominal profits and withdraws and spends them every once in a while. After a lot of effort i have reached this point where i am extremely relaxed while trading real time.

Cheers

If you can visualize, it will materialize
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  #34 (permalink)
 jamiej83 
London, UK
 
Experience: Advanced
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This is my 1st post on a public trading forum, having been a full time day trader since April 2009. First of all, I want to thank Big Mike for giving traders a productive environment to share and discuss ideas. One of the reasons I never spent time on forums was due to general negativity of the participants - I think you have done a great job from what I have seen keeping the forum positive in that respect, so well done and keep up the good work.

I am writing this to share my experience as a trader so far and hopefully give others some guidance. From a young age, I have always been into performance-oriented disciplines starting with playing piano to concert level, national squash, professional golf and now full time trading. The reason I mention this isn't to brag about what I have done, but merely to pass on valuable lessons I have learnt on my journey to becoming a full time trader. There is significant overlap in all these endeavours and will discuss what I mean by this later in the thread.

Back in 2005, while I was playing professional golf I started to become aware of what separated the guys who were struggling to make it on the mini tours to those who were at the top of the game, consistently keeping their tour cards. Many of the guys had the ability to make it, but why weren't they? What was holding them back? To become a consistent tour player, you have to master a number of disciplines. In simple terms you have - 1) course management 2) technique and 3) psychology. Of these 3, which do you think most of the guys spent the majority of their time on? Which do you think would make the biggest difference at that level? Of course, most believed that is was their technique that was holding them back, so they spent all their time on the driving range and short game areas honing and trying to perfect their technical game, while giving much less consideration and appreciation for course management and psychology. What did the the guys at the top of the game do? They spent time working with a sports mind coach on mental preparation, pre-shot routine, state control, staying in the moment and eliminating negative thoughts while working out a game plan for each hole and weighing up the reward:risk of each individual shot. They had a deliberate set of actions that they followed with patience, discipline and focus. They also kept things simple!

These disciplines broadly translate in trading terms to 1) business planning, position sizing & trade management 2) technical analysis 3) psychology. What do the majority of traders spend their time on? What do you think professional traders focus on? Read "Market Wizards" series of books by Jack Schawager if you haven't had the chance to. Hopefully you are starting to notice some overlap here with trading & sports.

After noticing this I become fascinated in understanding what drives human behaviour and causes people to take certain actions. I found myself a sports mind coach, and started working with him one-on-one, taking him to tournaments and including him as part of my team, along with my technical coach. Funnily enough during one of the sessions, we started talking about wealth & money. He mentioned that he traded options and explained the concept to me - I became hooked. Little did I know what awaited me down this road...

I bought a trading course and like most new traders instantly became excited at how much money I could make. Plugging the numbers into compound calculators and doing projections years forward - it sounded so simple and a route to extreme wealth in a short period of time. As you can imagine, this wasn't the case, and I quickly realised that it wasn't quite as simple as it sounded! So I thought I need to understand options in more detail (as I have always been a detailed oriented person) and took an options course and read books on options - I now had a wealth of knowledge about options but did it help me become profitable - simple answer, no. So I understood multiple option strategies, what I must be missing is a timing mechanism, along came technical analysis. I found a company selling a technical trading system and jumped at the opportunity to learn and understand it. For some reason, even though it appeared profitable, I wasn't able to make consistent profits and couldn't figure out why. What I must need then is to customise the indicators - along came a technical guru with tons of technical indicators - this must be the answer. So I followed him for a few months and started to learn programming to customise my own indicators. I read books by Wells Wilder, Chuck Le Beau, Charlie Wright etc and started backtesting various strategies. After around 9 months of frustration, sleepless nights and 1000s of hours struggling to find strategies that had a demonstrable edge across a broad range of markets in different conditions taking into account trend and volatility, I began my path to simplicity! I'm sure many of you have been here and know exactly what I mean, and if you haven't I'm sure one day you will.

Although at the time, I couldn't believe how much time I had wasted, I now respect that it was necessary to lead me on a journey to where I am today. From doing all the backtesting it gave me an appreciation for simplicity - as I discovered the more variables that were introduced the more the system broke down when trading live. I eventually realised I was struggling to become profitable as the systems I was developing just weren't aligned with my own values and beliefs about the market - this was an AHA moment for me!!

Around mid 2010, I began to get an appreciation for discretionary price action trading. I read the classic technical analysis books by Edwards & McGee, Richard Schabacker & John Murphy as well as material from Pristine, Linda Raschke, Al Brooks and Bob Volman. I took all the indicators off my charts apart from a couple of moving averages and volume. I started to learn about multiple TF analysis, candlestick analysis, volume, identifying trends, TRs, BOs, fBOs, TLs etc. This was a huge leap for me and I felt naked without the indicators but I believed it was the correct path to take. Over the last 18 months or so, I trained myself to look at only 1 chart (5min) and infer what is happening on higher & lower TFs as well as taking off volume and trading off the charts so no need for DOM. Again another breakthrough for me.

Through NLP and understanding my own personal psychology, I have come to realise that the more stimuli I have, the worse my real-time execution becomes. When not under stress, I am able to process maybe 6-8 pieces of information, but when market is moving and I am reading the hard right edge of the chart, that may go down to 1-2. The candlesticks and MAs are already 2 pieces, so adding the DOM and other charts introduces more stimuli and reduces my execution capabilities. Also as I am detailed oriented, I have a tendency to want to drill down to smaller TFs and if I have them up, I become attached to them and lose track of the big picture.

So what have I learnt so far?

1) SPEND TIME WORKING ON UNDERSTANDING YOURSELF - this is the single most important point I want to reinforce. I wish I had realised this sooner as it would have saved me a lot of time and money. I still speak to my sports mind coach from on a daily basis as he now also runs a private trading fund similar to myself - this is invaluable for me. Many of the behaviors I experienced in golf carry over to trading. This is the only way you will ever be able to find a method that you truly believe in and are able to trade consistently - don't underestimate this, it is vital! I appreciate that not everyone will be able to have their own mind coach, but there is plenty of good material out there to help by authors such as Mark Douglas, Van Tharp, Denise Shull etc. Spend adequate time learning about personal and market psychology.

2) START OFF WITH SMALL RISK IDEALLY USING UNLEVERAGED VEHICLES - I started learning about options & futures without ever trading stocks / ETFs. In hindsight, this was a mistake as I donated unnecessary capital. I would recommend risking as smaller % as you possibly can to gain experience, after proving your method on SIM. Many books quote 1-2%, I would go as far to say if you can 0.25-0.5% is even better. Don't worry about impact of commissions at this stage - the key is capital preservation at first. Later you can move on to working out ways to maximise gains, but first stay in the game long enough! If you don't have a large enough account for PDT regulations, trade an instrument that isn't going to wipe you out as such as CL, GC etc - start with something like NQ with $5 tick size or trade mini/micro lots in spot FX market. Spend time understanding how position sizing can be used to meet your objectives - Van Tharp is an expert in this area.

3) SET REALISTIC EXPECTATIONS - This is important from a confidence point of view. No-one wants to feel like a failure so set targets and goals that are achievable. Don't expect to make 10% per month when you are starting out - b/e is a very good start! Accept that there is a high cost to entry into trading and you will likely have to make significant donations to learn the lessons Mr Market will teach you. Make sure you have daily loss limits and be disciplined to stick with them. Many traders have strings of winning days, then blow their profits on one bad day where they are overconfident.

4) MASTER THE BASICS & KEEP IT SIMPLE - I have always been a believer in life that the most successful people keep things simple and are able to explain a complicated subject matter in basic terms to someone with little understanding in that field. Same goes with trading - it isn't a mysterious art, although many would make it appear that way. Understand what is driving market movement and how you can capitalize on it. Figure out how you can gain a small mathematical edge and spend time sharpening it on a daily basic. Find 1 simple method that you believe it - whether it be price action, volume/market profile, tape reading, VSA, cumulative delta etc. The most profitable traders I have personally met all have mastered ONE of these, they keep it simple and they stick with it. Don't jump from one to the other on a weekly basis. I see majority of traders spending all their time searching for the holy grail in technical analysis - let me save you some time by explaining that you are competing against the smartest and most capitalised institutions in the world. Whatever concept or idea you have thought of, they have probably tested it already. Just accept this and believe you only have a small edge in this business, otherwise no-one would take the other side of your trade. There are many methods that do have this small edge, pick ONE! As humans we are naturally inquisitive and although this can have its advantages, you have to be aware that it can do more harm than good for your trading. Becoming profitable in trading is actually very simple but not easy to do, as you have to fight your desire to jump around looking for what others are doing - find what works for you and stick with it long enough to understand its subtleties, realise its edge and let the probabilities play out - this is more down to psychology than anything else.

5) QUESTION EVERYTHING, TEST FOR YOURSELF & MAKE IT YOUR OWN - On your journey to becoming a profitable trader, you will come across many different beliefs about the best way to trade - whether it be best markets to trade, time of day to trade, most effective method or trade management etc. Let me tell you, there is NO best one of any of these for everyone. There is only one best one for YOU. What works for me isn't going to work for you unless you have exactly the same belief structure, values and identity. You have to come up with your own set of beliefs that govern your actions and behavior. All the best traders again that I have met, have taken the most valuable parts from each of the courses or books they have learnt from and adapted it to suit their own personal psychology. This is the only way you will have confidence pulling the trigger on a consistent basis. A good example of this is with regards to trade management which is a huge topic and an area I have spent a lot of my time as I know the impact it has on my bottom line. Some will same use wide stops based on ATR to avoid the noise. Others will say use tight fixed stops as they believe best trades should go their way quickly with a small adverse excursion. Some will be all in-all out traders. Others will favor scaling out to bank some profits. Some will go in small initially and add aggressively throughout the trade. Which one is right for you? Only you can answer that based on doing the work yourself. Don't be lazy and try to imitate others - it just doesn't work, trust me. I have done many of the same courses and have the same experience as my sports mind coach, however our beliefs about trading are totally different and so our methods reflect that. He is extremely patience and is willing to have a much lower frequency than I am, so he trades a slower market on higher TFs. I could never trade like him and vice versa, so we don't try to, we have our own methods and they work for us. There is only so much others can help you, ultimately your success in this business is done to you and putting in the required screentime and hard work to take money off your competitors. Over time you will find your own way of looking at the market that makes sense to you and be able to recognise certain characteristics and behaviors that have a tendency to repeat themselves when certain criteria are present.

6) THINK IN TERMS OF PROBABILITIES & BE PROCESS ORIENTED - This was a big one for me. I come from a family full of professionals - doctors, dentists, surgeons etc. Many of whom have perfectionist streaks and this can be a big disadvantage in trading. What I came to learn is that trading is a probability numbers game. You have to think in sample sizes and not give too much weight to individual trades. Most new traders give far too much importance to mastering technical analysis, believing this will make them right, not really understanding the purpose of it. Technical analysis is designed to give you a probabilistic edge over a series of trades, minimum 20. You shouldn't expect to know what is going to happen next, as there are so many variables and one trader could make your prediction wrong. Don't fall into this trap and let your edge play out by ensuring you do the same repetitive actions for long enough without tinkering and finding reasons to take or skip trades. Don't measure success based on your PnL at the end of the day but rather whether you followed your plan and executed it flawlessly.

7) KNOW YOUR EDGE INTIMATELY - Unless you understand your edge, it will be impossible to sharpen it. All profitable traders have an edge, whether it be their speed of execution, market timing, patience to wait for only the best setups, laser focus, extreme discipline etc. Figure out what your edge is, write it down and work on it consistently.

8) HAVE A BUSINESS PLAN & RESPECT THE MARKET - Many traders come into this game due to the low barrier to entry believing it is a quick road to riches. It should be treated like any other business and taken seriously. I would hazard to guess around 1% of traders have substantial business, contingency and trading plans. Take the time to do this, you won't regret it. Again Van Tharp is an expert in this field. You will have times throughout your trading career where you lose connection to your broker or the exchange goes down, your PC crashes etc. Prepare for it now, this is part of risk management - how will you hedge your positions? If you are trading ES and the CME goes down, how many SPY options contracts would you need to offset your ES position etc. There is nothing worse than spending months of hard work building up your account to lose a chunk of it unnecessarily when it could have been avoided in advance by a bit of simple planning. Amateurs focus on profits, pros focus on risk. Have a deep respect for the market - the sum of its participants are far larger and more powerful than you as an individual trader will ever be.

9) KEEP A JOURNAL & LEARN FROM MISTAKES - Keep a journal and note what worked and what didn't. Did you follow your plan? Each week identify which were the 1/2 biggest mistakes you made and aim to eliminate them the following week. Were you getting in too early? Cutting winners too quickly? Going against the trend? Don't try to fix everything at once, take it 1 step at a time, and it you will get to where you want much faster.

10) DON'T UNDERESTIMATE IMPACT OF EXECUTION SKILLS - This is especially true for intraday discretionary traders. If you could squeeze 1 extra tick out of each trade on average, how would that affect your PnL at the end of the year? Hone your skills in this area.

11) CONSTANTLY WORK ON INCREASING EFFICIENCY OF TRADE MANAGEMENT - To start with I always recommend traders use a passive style of management. Set an OCO order and walk away. Keep things simple and focus on taking only the best setups. Once you are profitable doing that, then you can start with an active style of moving stops and targets. Always use an All or Nothing (OCO) approach as a benchmark. From my experience over the years, around 80% of traders are better using this approach even today than an active style of management. Once you can consistently beat All or Nothing, constantly work on ways to improve your trade management and keep a journal comparing your current method with 1-2 others. Don't spend 90% of your time working on entries believing that is the holy grail, which majority of traders seem to do - this may give you a few % edge at best - believe me. Working on trade management will make a much greater difference to your PnL. I proved this to myself by developing trade management strategies that made money with random entries - try it for yourself, it may be an eye opener.

12) IGNORE NEWS - Be aware of important releases such as Non-Farm Payroll, FOMC etc, and don't initiate positions just before, but don't try to trade off information from news. The institution have trading desks specifically to do this and pay millions of dollars a year to get access to this info in electronic format, that is processed and executed on in micro seconds right next to the exchange servers before it will even appear on your chart - don't try and compete, as this is not your edge as a retail trader.

13) DON'T GET SUCKED INTO SMALLER & SMALLER TF CHARTS - Many traders including myself get sucked into the smaller TFs. They lure you in believing that you can have smaller risk and better timing. The markets are now becoming more and more dominated by HFTs (some estimate they make up around 70% of the trading volume). Their edge is NOT your edge as a retail trader. Use them to your advantage and trade in alignment with them, don't try and compete against them or you will probably lose. They do leave recognisable footprints that you can capitalise on especially when they are in agreement and market is out of balance you get fast momentum moves. I recommend sticking to 5min and higher TFs for most traders, until you are consistently profitable and only then considering going down to smaller TFs and tick charts.


Hopefully, some of you will be able to relate to my journey and learn a couple of nuggets of wisdom. Hope that helps and happy to answer any questions where I can.

Trade well
JJ

Trading is: Having the KNOWLEDGE to know when the odds are in my favour, having the PATIENCE to wait for that moment, then having the DISCIPLINE to handle the trade properly when it goes in my favour and properly when it goes against me
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  #35 (permalink)
 phantomtrader 
Reno, Nevada
 
Experience: Advanced
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My worst day was on August 31,1998. The market opened, I had a long signal, and I went long on the BIG S&P. Yeah, that one - the full sized S&P at $250 a lot.

So there I am casually watching the monitor. I had an initial stop of 3 points. The market reverses and I say to myself "you know it always comes back - just hang on". Yeah, right. I cancel my stop. One hour goes by and the market is still tanking. Okay, I say, I'll wait it out. My account is large enough - I can take the heat. Another hour goes by and the market is still tanking - already down 50 points. I see my equity disappearing real fast by now. And I STILL say to myself - hold on - you know you're ALWAYS right!!!!

So long story short, by the end of the trading day, I was in margin call for $18,000! This loss was completely avoidable. I was arrogant and thought I was smarter than the market. If I had not cancelled my stop, I would have had a loss, but it would have been only about 10% of my eventual loss. Big wakeup call.

I started trading again a few weeks later with a newly funded account. Different attitude, however! I did blow another account, but it was basically because the system I was using was over optimized and I wasn't experienced enough to see it.

Anyway, now I have great respect for the market and am much more humble in my approach to trading. I remind myself quite often that I'm NOT smarter than the market and manage my risk like my life depended on it.

Take home message: When you're in a bad trade, get out while the getting is good. Obey your stops. Tomorrow is another trading day - if you don't blow your equity!

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  #36 (permalink)
 TrendTraderBH 
Detroit, Michigan
 
Experience: Beginner
Platform: Ninja Trader
Trading: Futures
 
Posts: 299 since Nov 2011
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Here is my story:

Growing up I always gravitated to the markets. My first two stock investments in the 80's as a kid (3 shares of Phillips Industries and 2 shares of Church's Chicken). I tripled my money on Phillips Industries and made a few bucks on Church's chicken (I was hooked).

Fast forward to the early 90's while working my first job out of college in Chicago, I received a small booklet advertising a course called TWMPMM (funny how we remember these things) from a guy by the name of Ken Roberts. Although I had no capital to speak of I ended up ordering the course as the futures markets always intrigued me. It was simple technical analysis (1-2-3, break outs) supported by a daily phone hotline. Since I had no money I mostly paper traded (literally paper traded on graph paper). Once I came up with about $500 to open a brokerage account, I scoured the Chicago area for any brokerage that would allow me to do so. There were very few but finally got one to let me buy options (one at a time). Of course, a little technical analysis and blindly following recommendations resulted in a couple losses and a realization that this "holy grail" did not work.

A few years later when I had sufficient capital I went on to open a few more futures accounts and had some wins (Gold in 1995) and losses (Heating Oil in 1995) - but overall mostly in the red.

I always followed the markets and fantasized about making it big and having the freedom that entails, while I slaved at my various sales jobs.

It wasn't until around 2005 when I became active in the markets again, mostly trading ETFs in the gold/silver area (GLD, SLV) when they first came out around 2005-06. My M.O. would be a few good winners and then giving all my winning back plus some in subsequent massive drops these instruments had over the years (see the charts). Then holding on to them hoping for break even.

Around 2007-08, I ventured to open a day trading stock margin account for the first time to really make a go of it trading SPY and QQQ and after my ceremonial first few wins promptly blew out my first account to the tune of mid-5 figures. "Margin call" was something I never heard of so that was quite a surprise - getting it more than once is a real nightmare. I always seem to be in the market heavy when the market crashed - and 2008 (of course) was one of those years. The mistakes were quite common - averaging in losses, over-using leverage, not using stops. In a parallel account, I was "experimenting" with options on a massive scale (way more than my account could handle). For example, I bought a ton of options on USO (I think that's what it was) on of the last ticks on the oil parabala (that last gap to $150 - yes that was me) and rode it all the way down until worthless options expiration. That account went from mid 5 figures to low 5 figures and a margin call of course.

After those two accounts were blown out good I decided to stick with my day job and give the markets a break for a couple years.

I became active for some more "punishment" last year (2011) but had not yet learned the lessons of my past trading mistakes - so was bound to repeat some again (hopefully for the last time). Mostly I traded gold, silver, gold stock EFT's and was having a lot of success with a metholodogy I put together. The success went to my head and all risk tolerance out of the door when again I got caught on margin in a leveraged silver ETF and options on the crash from $50 last April. My account went from up $15k to down $10k ($25k swing) in a matter of days.

This time I was beaten, so I decided to change my approach. I started to study position sizing, trading with the trend, risk tolerance, psychological issues, proper stop loss, trade management. It was either that or quit trading forever. It's been about a year since that time - I've invested a lot of time and money in education and research (happy to share where I found the best of the best). Most importantly I learned that I can't trade someone elses methodology - I need to create my own from all the available resources at my disposal.

At the beginning I kept losing money trying to make back all those losses (I estimate over $100k over the years) but slowly started to listen to common sense. It's been a lot of hard work but my ETF account is profitable in 2012. I'm still trading SIM on NT (and have been for the past 3 months) but I'm also profitable there.

All the mistakes I made in the past beat me up enough to take the path I'm on now.

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  #37 (permalink)
 PushHands 
San Jose, CA
 
Experience: Beginner
Platform: NinjaTrader
Trading: NQ
 
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GaryD View Post
I suggest that emotions are everything. To make effort we must want. As a simple example, you could be angry, yet that could manifest into being productive, or, being angry could make one non-productive. But somewhere in there are emotions shaping our every move.

If I could say something to myself, when I was going through a similar time in life, use trading (simulated) as a tool, not to make real money, but to learn acceptance.

Let it hit your stop. It's ok. Let it run to you target, or remove the target and let it breathe.

We try to structure the world in a manner where we have control. In many places we can, but not all. You cannot control the markets, you can barely forecast the markets, but you can control where you enter or exit a trade. Why get out at 1 tick? Choose something better.

And if it does not come, accept it. And try again.

What a fantastic post

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  #38 (permalink)
 Rachel 
San Diego
 
Experience: Advanced
Platform: Private
Broker: private
Trading: CL future
 
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Posts: 1,380 since Mar 2012
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I first learned how to read a quarterly report to figure out which companies grew 20-25% to make an aninvestment in them from a retired successful investor.

Opened an account with Charles Schwab and who knew about a market topping? Threw out all that knowledge and bought stocks I believed in and kept buying as the market fell early 2000's. Felt bad about it, till I heard some fund managers on CNBC, telling their story about buying a stock during a down trend and then felt better, everybody makes the same mistakes.

Meet a broker who stated, he doesn't care what direction the market goes in, he makes money in down trend and up trend and that was a new concept to me, you could make money as the market goes down? I had to learn that because I vowed never to be in the market overnight again.

I studied with Tom Bugsby: lost money. Studied with TTM guys, lost money. Found out all these guys have working relationships with the brokerage houses they recommend, so they make a percentage off of each trade I made and really didn't care about me becoming a successful trader but expect you to blow up your account since very few people become successful traders.

I have some horror stories about these guys, needless to say, I decided never to pay big bucks to learn so I found Woodies CCI, studied with him and lost money. Doens't matter what the system is, they all work in trending markets and loose money when the markets aren't trending.

The thing is: other people's systems didn't suit me. I had to learn what kind of trader I was and had to develop some skills: learned money management: risk only 1-2% of my account in any trade,
learned to keep a stop in place,
learned to know the instrument I am trading,
learned I loved to short but needed to learn to go long which I did after some time.
Learned I would make a winning trade or trades in the early part of the day and then give it back and some, so learned to stop trading after I was in profit after a certain amount,
learned all the different indicators and then learned it is all about price structure for me.

My favorit set up:

price makes a low, then makes a higher low, then price comes down to test or touch that HL: go long!!! I see it all the time on different time frames. I have had successful trades and lossing trades on different things: TF, GC, DAX, NQ, ZS and CL, which is what I concentrate on now.

I learn something about myself from my trading each day and then work to correct that part of myself be it: greed, fear, lack of focus etc.

I started trading futures around 2005. Before that, in my IRA and SEP, I would do one trade a year and make 25% on my account each year, without risking all of my account. I would study different stocks through out the year, find the one I felt had the biggest potential to move and buy it at the bottom when the markets pullback in Sept or Oct, hold it for a few days and make my profit.

I got into trading because I have a jewelry business, where I make custom jewelry for people and saw the price of Gold rising. I thought, if gold continues to rise, people are not going to want to buy jewelry and I better learn to support myself independantly and choose: day trading. It suits my personality.

I have made all the mistakes mentioned and came to the conclusion: I had to throw out a lot of what I learned and do what was right for me, which each day is a new discovery and adventure.

If I have made money: I will stop trading for the day, I am still watching the markets, I might sim trade to test out some system,set up, theory etc but my main focus is to be green. If I have made a couple of trades and have come to my limit of what I feel comforatable trading: I stop, I will go into sim. I love trading but I have learned through experience, to keep my profits and if I am loosing, I stop trading live, once I come to my limit.

The biggest mistake a made was at the beginning buying that stock in a bear market and while trading futures: one day I was so angery at Tom Bugsby: I had just quite his system, I decided I will trade for myself: and traded without any true set ups, and lost one after another trade. That day I lost over a thousand dollars and I learned never to trade like that again. I stopped trading for about a week, so I would calm down and then started again.
Never trade when you don't feel well, are sick etc.

Here are the set ups I look for in a day:
1. Low, HL and 2nd test of HL, go long, is my favorite set up.
2. Bottom: watch big buying volumne come in, price still comes down, at the new low, more buying vol comes in, but not as much: it bottoms. I might only trade this in sim, waiting for the next HL's.
3. 2nd test of high of day or LH
4. Waterfall: 3 lower highs: on the third go short.
5. Market Maker set up: draw box on H and Low of Globex: night makret, price just goes a bit below the low: big buying: price rallies up or price does oppositie at High of Globex: price goes above Globex High, big selling comes in: price falls.
6. Trendlines: Bull Channel, Bear Channel, Wedges, looking for fake out break outs. Inside and Outside days.

I learned stocks, options and futures and for me: CL futures fits me best. I don't care if I make $50.00 for the day or $1,000 for the day, as long as I am green is fine. If I go into a loosing streak, I go into sim mode, till I start becoming profitable again.

Each day the market is different and I have to adjust myself to fit CL for that day. I wanted to be a great trader, able to trade any kind of market but for right now, I do my best trading when the markets are not trading wildly. I can have a very successful day just trading a small range day on CL but have also learned to stay out
when it's range is very narrow and difficult to trade: topping action or the big funds are exiting just before the next down leg.

I still have my jewelry business which isn't doing so well in this economy but I have a few high end clients that kept it still going. I make money trading and use that to support myself when I need it.

I have to say, I find Big Mikes forum the most useful trading forum/info I have come across and Thank him and the other very successful traders I have observed here: Gary, Gabriele and Perry up to this point. Thank you all for sharing, teaching, I appreciate you (those I haven't mentioned) all so very much.

Wishing eveyone the very best on all levels,

Rachel

PS One of my horror stories: about one of the people I studies with: was in their inner circle and was told to look at the YM option during the summer months. That YM usually rallied 9 out of 10 times into the fall. At the time the option was around 2.50 a contract. Was told, we were going to make a lot of money on this trade and that we should watch that option and buy it, when our trading Guru told us too. Finally the day came, in the trading room, his secretary announced we should go buy, buy buy this option, which I did. Bought a lot, didn't know anything about money management at the time. The option was now 5.75 and saw the volumne was hugh: over 50,000 contract bought that day, where the contract above and below had very low vol. Well that option, decreased in price, called in to see, should we stay in it: was told, it will go up. It keep going down, called in again when it had lost half of it's worth, was told, stay in it, it will go back up. While I was in the trading room, the Guru came on and mentioned all these people went into YM and they are hurting. He said this as if these people had made a mistake and didn't mention, he had instructed his inner circle to buy those Options!!! I thought what is this? I exited the trade. Within an hour, one of his sales men contacted me wanting to sell them there overnight trading room. I previously told him: through email I wasn't interested yet he called me. To make a long story short: we had an arguement, I hung up on him, he called me again, I hung
up on him again. Then the Guru's secretary called me: I accussed the Guru of Selling us those options to us, his students and wanted my money back. They never gave refunds but I got my money back because he was selling us those options and he didn't want me to report him.

Also, this Guru manipulates the night market and all these big traders know each other. There is about 12 of them, that meet each year. They pay about 10K each, bring their brokerage account statements to prove they are successful traders, and each one shares one of his set ups. I have seen Tom Bugsby's set ups work better, once some of these big traders know his set up. When you have hugh funds, you can make it happen because people like me are watch volumne all the time.

I have also meet successful honest traders, just doing their thing. Meet this one guy trading Woodies CCI system: very successful, like a robot but it took him 5 years to get there. We have all made the same mistakes, you need to develop a lot of different skills to make it and to learn about yourself and what kind of trader you are. Hopefully, you have the funds to go through the learning curve or have learned the lesson to be in sim, till you have been consistently successful, then go live.

Me, each day, I change what kind of trader I am going to be that day, scalp, not trading, looking for a bit of a swing.

Get to know your trading vehicle really well, so you know what kind of mood she is in.

Example: certain times of the month, CL trades better than other times, also different times of the year and differently before certain news events. Certain times of the day etc.

Once again, just want to thank Gary, Gab and Perry and Big Mike, you are all very special and appreciated.

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  #39 (permalink)
 jeronamo 
ireland
 
Experience: Beginner
Platform: NT, MT4
Trading: forex,Futures
 
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Here's a girl I was in the Philippines I think I had bloomberg on the television. I started to google for how to trade and trading lesson I came across understanding candlestick charts. There was a small e-book which I forget the name of but I downloaded and printed all out and gave it my full attention.

It explain things like dojis and the open cause of the candles.
It took me a long time to figure out how to get a trading platform and a broker.

Before I figured that out I discovered spread trading. It was tax-free and she did into and basically bedding but it had to candlestick charts that I studied. I had no idea about news or anything and went ahead and traded the main currency pairs. I would say I last about €2000 doing this.

With a little more research I found out there was different platforms and 30 use one of them was ninja trader which I like the sound of, Particularly since I've found meta trader 4 quite difficult to understand and ninja trader looks somewhat like my spread trading online account.

So I did a google for forex and ninja trader seen as Forex was now what I was used to and I found online educators called triple threat trading.

This showed a little bit about how to set up ninja trader which is what I needed to know. But then it also went into details analysis and concepts that I was not ready for such as gartley patterns And butterflied patterns.

Luckily my stepfather helped me pay for this tuition which in fairness I thought did help me quite a lot as I began to understand how broker platform and trading came together along with new ideas of patterns

Sadly this tuition ended after two months and I was left high and dry again and of course I didn't have any of my own money to invest in alive account to try It.

We are now about four years down the road. Another year past and I decided I would really like to put what knowledge I learnt to use but I needed more education I looked at training academy online and even went to some of the seminarists here in Ireland Along with plenty of other spread trading seminars from market spreads.

So back to Google again looking for a longer term educator I remembered joseph James from last year that he had a lifetime membership at school of trade so I decided I would give this a goal and this time With the goal of going live at some point. With no real money to my name again I had to Ask for a loan and also I had to pay for ninja trader when I want to do trade live. This cost about $5000 all together. Then I also funded my live account would $5000 making it all together $10,000.

At first I thought joseph James was great and it got me a lot about a simple pastor and that I could use to trade and start me a lot more about ninja trader. In the first week I actually doubled my investment but I soon found out that it was partly just luck. Needless to say I lost my $5000 investment in my live account but with my appetite wetted so much at how much I could make every day as soon put in another $5000 which I also lost.

I am still a member of school trade and attend almost every day but I am beginning to get very concerned that he does not sure his trading management window where I can see how and when he gets his entry on trades.

In some ways I feel like I already have my money's worth because I have learnt so much but in other ways I can also see that through it all I am down $20,000 and could have gotten this information from free sources with out spending a penny. Having said that, it is very hard to do this on your own when you're starting and you do need someone to show you the way and show you the ropes, Therefore it is huge advantage to be able to watch someone trading. But now I know there is a lot of free rooms out there that I can attend with other like minded traders.

This is my story so far and my platform is still ninja trader although I am looking at indicator warehouse for a new strategy that is more solid. And I am also interested in learning about options. I feel very grateful to have the information that I do and have the experiences. But I just wish it didn't cost so much. I still believe I can make it as a trader but I am almost only halfway there I would say.

Thanks to beat Mike for this forum I have done a lot of searching and found a lot of answers from hope you enjoyed my story let me know what you think..... Cheers

Ps sorry about the weird words I done this on my iPhone recognition is a bit off but you get the idea.

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  #40 (permalink)
joejoe
Hong Kong
 
 
Posts: 6 since Sep 2012
Thanks: 14 given, 15 received

I started to trade (full time) around mid-2011 with 20K capital, opened a future account with a broker and tried paper trading for 2 weeks, read another dozen of books, free materials on internet.

In the first month while I was using moving average, volume and %R for buy/sell signals and made 50% up in my account ! I made 2 weeks off to Thailand.

When I came back, I doubled my contract size and number of trades per day, then I started to lost 1 or 2k per day. I felt angry and traded more wanna to get back what I lost, this blown out my 1st account in 2 weeks' time !

I took a break and spent my time reading more books, searching for more advanced indicators from internet, paper trades. While I felt better, I deposit another 50K capital March this year trading ES, GC, ZC and options on futures. I tried use only %R, trendlines, and volume as my indicators but still losing money due to the fact that I did not proper manage my emotion and resulted in over trades.

I saw my capital down by another 90% this Sep, so I deposit another 10K early Oct.

Here I summarized what I learned,

1) Only trade ONE instrument at ONE time at key price level, my favorites are day high, day low, prior day high, day low
2) Trade less (frequency), trade small (start with 1 contract and pyramid), and slow i.e. use bigger time frame
3) Always use stop for future, and the stop should not exceed 1% of capital (I had times that my margin can only trade mini or micro size contracts but I came back to full size after a while)
4) Be VERY patience, the market may not give you signals every day or hour. Stay tuned, wait for next setup.
5) Do not blame yourself on early exit, late entry as long as it is a winning trade. This gradually build up your confidence.
6) Do not trade when prices are narrow ranging and volume is thin (market markers are hunting)

I have been following above lessons learned for 2 weeks now, and keep having positive ticks every day. Though the amount is small and the progress is slow, I have more time to plan and review my trades to advance my skills and system. Good trading !

Thanks to BigMike to have such a wonderful forum people can share honestly and learn together. Hope all of your trades are good.

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  #41 (permalink)
mwtzzz
Sunnyvale, CA
 
 
Posts: 171 since Dec 2012
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Most of these stories have to do with three things:

(a) believing you can predict the market

(b) interpreting current market behavior in terms of what you have observed in the past (this is a subset of (a))

(c) allowing emotion to affect your trading

Correcting these three areas eliminates most of what holds you back to being a successful long-term trader. The only thing that remains is a reasonably accurate assessment of price behavior, which is not difficult at all to have and does not necessarily need to be the same as another trader's assessment. There are different interpretations of price behavior and as long as each is "reasonable" then a sufficient edge is in place to provide the success.

Regarding (a) and (b): you cannot have expectation of price. You can only have an assessment of general price behavior: that is, higher-probability versus lower-probability setups. You must always be willing to concede that any trade can behave in a way that defies the probability.

Regarding (c), you must eliminate this. If you allow emotion to interfere with your trading, chances are pretty much nonexistent that you will be successful over the long term. If you are the type of person that allows emotion to interfere, I suspect that correcting this behavior can be pretty easy with the right "therapy" if you will. I'm not a psychologist, but I imagine it would be a straightforward "behavior-adjustment" that a competent psychologist would know how to do.

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  #42 (permalink)
 mokodo 
Bridgwater, UK
 
Experience: Beginner
Platform: Ninjatrader
Broker: MB Trading
Trading: Forex
 
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Everyone. These are great battle stories and a great pool of experiences. I have resolved to send anyone asking me for advice to read this thread.

As for me I have been at this for 3 years, pretty much full time. I have learned more more about myself than about how to trade. It has been a humbling experience, but extremely worthwhile.

Happy trading to us all

know thyself
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  #43 (permalink)
 dbarno 
Madison, Wi
 
Experience: Intermediate
Platform: Ninja Trader, Trade Navigator
Trading: CL,GC, HG
 
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Posts: 79 since Jul 2012
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Started out about 15 years ago with Ken Roberts. Had the independent s.o.b. blood type. Received a subscription to the twice weekly commodity charts. Learned a lot about brokers very quickly. Being a newbie, they could smell fresh blood. Took a while to find a good one. Not impressed with K.R. but got the big picture. Haven't made any money, but still trying to figure it out after two years. More blundering. After a year of part time learning/trading was finally able to break even. Got a computer for data. All of a suddenly things started to click and was making money, not a lot but something. Found out when globex started up, that trading markets not exclusive to the pits were bad for my account. Almost went thru an account that way. Also made every mistake conceivable at least once....

Got tired of trading and working part time. 30 + years of electrical work got the boot. Started to learn Market Profile. Was working at it for about 50 hours a week for a year and half before able to make money on sim and break even on live. A friend told me about Shadow Traders and it didn't take long to plug up the holes in my system. Making a living at trading.

What I've learned about myself and trading. I don't have a crystal ball. It's 70% mental, 15% money management, and 15% technique. It's amazing how you can be wrong so often and consistently. My attention span wanders, do 1 min charts. Keep a 30 min up also to keep me honest. Works great for me. Don't have the patience to watch one market go sideways, 3 markets, no problem. I scalp with runners. The simpler the chart and system the better. I know my markets. I'm fortunate my mind won't let me touch a mouse unless the brain knows what I'm doing. Only trade when in my mental "groove". Gotta keep learning, always looking for nuggets of knowledge. Still consider myself as a beginner. Took quite a while to get the right level of attitude (aggression level) for trading. Learned how to trade 8 markets, run 3 platforms, and have become a want to be geek.

I'm very lucky to have a wife that has supported me.

Ten traders will trade 11 different ways. They are all right. I have nothing but respect for anyone who can do this.

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  #44 (permalink)
mwtzzz
Sunnyvale, CA
 
 
Posts: 171 since Dec 2012
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You can't be trying to predict price. You're going to be wrong half the time. You can only make probability guesses as to price areas. "Price should go into area X before it goes the other way into area Y."

As poster above said, the trick to trading is to make money consistently (over the long term) in spite of being wrong consistently.

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  #45 (permalink)
lu2013
Ostrava, Czech republic
 
 
Posts: 21 since Jan 2013
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ashake2003 View Post
Are you kidding me?
Flash back to 2008: Lost my money. Lost my reputation. Lost my confidence. Lost my wife.
And by 2009, I had lost my house and its contents! By 2010, I started payiny child and spousal support. Yikes!

I was doing well in my day job as at July, 2007. Then I approached a friend of mine if he could share his secret of living without having to work so hard. After some hesitation, he agreed to share his secret. He was a day trader. For two weeks, and about $1000:00, he "showed me how to trade and make money" Now, I can resign from my day job, go part-time, and have an easy life making money, I thought to myself. Then one day towards the end of July, 2007, I resigned from my day job, put $20,000:00 BORROWED MONEY in my broker's a/c and started trading live!

By the time I declared bankruptcy in 2009, I had lost everything.

Dear Ashake,

your story honestly is very scary and I feel very sorry for you. On the other hand I think you are on perfect position to become a succesful trader. You have lost so much that the succes must and will come in your way. hold up there! I am a beginer trader, or better to say future trader (have blown my account twice.) want to start live in February.
Here are some thoughts from my experiance. The most I am controling is my emotions, I know the feeling of beeing scared, or upset or nervous. So I do this, I have Onenote open and I write down anything I feel, starting with things what have influence on me, like fight with girlfriend or bad mood because of bad sleep, or bad wheater what makes me tired... In case of opening position, I am writing again, everything about it why open, why that or that direction, why I feel how I feel. At the end of day I am giving myself grade like in shool. Try this book ''Trading Coach " Brett N. Steenbarger is about how to become a psychologist to yourself. One more thought if I can, I would never buy a system, because trading is somethig that express your individuality, something that you feel is yours it came from your self. something you belive in.

Sorry about my english it isn't my native language

Lumir.

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  #46 (permalink)
mwtzzz
Sunnyvale, CA
 
 
Posts: 171 since Dec 2012
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ashake2003 View Post
Are you kidding me?
Flash back to 2008: Lost my money. Lost my reputation. Lost my confidence. Lost my wife.
And by 2009, I had lost my house and its contents! By 2010, I started payiny child and spousal support. Yikes!

I was doing well in my day job as at July, 2007. Then I approached a friend of mine if he could share his secret of living without having to work so hard. After some hesitation, he agreed to share his secret. He was a day trader. For two weeks, and about $1000:00, he "showed me how to trade and make money" Now, I can resign from my day job, go part-time, and have an easy life making money, I thought to myself. Then one day towards the end of July, 2007, I resigned from my day job, put $20,000:00 BORROWED MONEY in my broker's a/c and started trading live!

By the time I declared bankruptcy in 2009, I had lost everything.

That sucks man. Honestly there ought to be a manual that tells people the results of two weeks, or one month, or even 6 months of trading is rather meaningless. It's not time that matters, it's the number of trades, and a small number of trades (think 500 round turns) do not give an accurate picture.

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