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Highly Unusual Suggestion
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Created: by mwtzzz Attachments:0

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View Poll Results: Deliberately entering a bad trade
I think this exercise is a good idea 11 31.43%
I think it's a horrible idea 24 68.57%
Voters: 35. You may not vote on this poll

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Highly Unusual Suggestion

  #21 (permalink)
Trading for Fun
Sunnyvale, CA
 
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Something to chew on

I'll like to throw out something here for people to chew on.

If you consider the worst possible case that can occur in your trading - the absolute worst - and you figure out a solid method that, at a minimum, limits your losses in a very noticeable manner, or ideally allows you emerge a winner, how about taking that method and using it in your normal day-to-day trading strategy.

you may find it makes your day to day trading more defined, easier, and chances are good that it will be more profitable over time.

The reasoning is simple: if you can handle or even profit from the worst possible event, then everything else is a piece of cake.

go ahead and spend time thinking about this.

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  #22 (permalink)
Site Administrator
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@mwtzzz,

You list yourself as an "Advanced" trader. How many years have you been a full-time and profitable trader?

Mike

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  #23 (permalink)
Elite Member
Austin, TX
 
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liquidcci's Avatar
 
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How about I go crash my car to see if I can survive car crash? Same logic.

"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
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  #24 (permalink)
Elite Member
Rockland county , New York
 
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You're eating crow from good traders for this thread buddy.

Don't get too discouraged. The bottom line is you wouldn't be if it wasn't an important and thought provoking idea (right or wrong) - indicative of a bright person - who might unfortunately also be a big enough counterintuitive competitive weirdo to trade profitably over the long haul.

We can let our egos get the best of us and be difficult people - me sometimes sounding like a 16 year old emo chick on her period. ;-)

I stopped talking to a very nice and smart guy from here because he called me lucky for getting into silver at $8. "FU it was luck buddy - you're cut off - good luck with your bankroll that's 1% of mine" was what went through my head; long before even realizing my actual entry point was in the 14's...

I also got caught in stupid lie trying to impress ProfessionalBanker (great guy and brilliant) in one private message and was too embarrassed to even acknowledge it or write back - even though he pointed it out in a really nice way and probably would have accepted the apology. This was coming off riding silver from 14 to $48 and successfully (over all) trading interday patterns for the last half of the run....

Monpere (frighteningly smart guy) told me he didn't think I should be trading during that time after I reached out to him about dealing with trading stress / anxiety. Mr. Nice guy himself (Big Mike) even busted my balls on a silver thread - when (after giving a few winning short term trades) I was on the wrong side of a colossal loser with total confidence.

If genius didn't often sound stupid to smart people at first; it wouldn't be genius. Maybe losing 1% on purpose would be the best investment ever - some how giving me a valuable new prospective - but I kinda doubt it.


You wrote "..a trader must be able to convince themselves that they are able to recover from any trading situation they may possibly encounter"

If you don't have a winning strategy this is exactly the type of rational that will leave you broke.

Rather than sticking with what had made me money before and trying to apply it elsewhere - I had to beat the indicator junkies on futures.io (formerly BMT) at their own game and back tested a system of 7 indicators in 2 timeframes for CL and 6E - that worked brilliantly interday using just a 5min chart for 3 charts total.

The problem was that it really is an enormous amount of information to process quickly and effectively day in and day out. When it went well I couldn't believe how easy it was to make the loot and when I got bogged down with it I couldn't believe how badly I managed to fuck the trade up.

I lost almost 40% of the silver profits (after taxes), made 90% of it back and then lost around half of what was made back, before throwing in the towel. After that I lost another 14 fucking grand after my brilliant range chart strategy went live. For a while (after getting back to a profitable method) I kept an order flow panel going (not even realizing it was to deal with boredom - I keep music, netflix or a play money poker game in the background sometimes instead).

Send me a private message and I'll show you what I do now.

The 500lb. gorilla on the site is that not only do most technical analysis traders fail - most really successful traders don't even look at charts... My next door neighbor is someone I would consider an advanced trader (20+ year vet in CL and lives in a mansion). Him and another guy he works with trade the personal account of someone worth 30 million in addition to trading for themselves. He won't even look at a chart and the son of a bitch nailed the June '12 low in CL within a dollar (his SL is $4 and profit target $20).

I have given him 5 trades (all were winners, 4 being big winners), held silver for an extra $6+ of profit before we met and his partner still won't meet with me once a week and share trades BC I use TA.

"Be right and sit tight." - Jesse Livermore
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  #25 (permalink)
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whatnext View Post
...is so outlandishly irresponsible and non-indicative of an "advanced" trader that wow - not cool.

I have to agree. There are many better ways to lose money that I can suggest, and if you want to focus on your psychological discipline, I imagine hiring a professional therapist is a better idea.

However, if anyone still wants to follow the threadstarter's advice, I suggest posting orders in sizes of 7, 11, 13, 19 on ES or FDAX at midquote at the open of every minute between 2.22 AM to 3.33 AM EST okay? I can help increase your odds of a losing trade.

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  #26 (permalink)
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Throw me onto the subway tracks with oncoming train so I can see if I am capable of getting off the tracks before getting cut in half. Just sayin.

"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
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  #27 (permalink)
Trading for Fun
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whatnext View Post
You're eating crow from good traders for this thread buddy.

It doesn't bother me. It is achieving the purpose it was designed to.


Quoting 
You wrote "..a trader must be able to convince themselves that they are able to recover from any trading situation they may possibly encounter"

If you don't have a winning strategy this is exactly the type of rational that will leave you broke.

I'm referring mostly to big events outside our control, such as Limit Moves, because most successful traders who went broke, was due to these events.

I'm not saying "go broke" in order to learn how to recover from it. I'm saying make sure your method can recover from varying degrees of losses.


Quoting 
<snip>
I lost almost 40% of the silver profits (after taxes), made 90% of it back and then lost around half of what was made back, before throwing in the towel. After that I lost another 14 fucking grand after my brilliant range chart strategy went live. For a while (after getting back to a profitable method) I kept an order flow panel going (not even realizing it was to deal with boredom - I keep music, netflix or a play money poker game in the background sometimes instead).

Basically my view is that as long as you don't incur margin calls or go broke (blow up), then the losses don't matter as long as you are net positive P/L for your entire trading career to date.

If someone is consistently profitable with a TA approach .... who can argue with that? On the other hand, someone who is consistently profitable tape reading, who can argue with that?

Thanks for your lengthy thread. Sounds like you are doing well, if I'm understanding you are net + P/L

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  #28 (permalink)
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I appreciate your thread and I think that exercises to simulate pressure and adverse circumstances can be helpful. This is the problem I have with it:


mwtzzz View Post
Let it go against you for 100 ticks. Do you have what it takes to work your way out of it?

What it takes to work your way out is to CUT it. Say the unthinkable happens--I have a position on and my stop gets cancelled somehow, and then an adverse market event occurs, and I walk back to the computer to discover I am down 100 ticks on a trade. There is no thinking, no "working my way out of it", there is only one thing--FLATTEN. One should not respond to an adverse situation with cleverness, one should simply get out of the adverse circumstance.

This is the only justifiable reason to be down 100 ticks in a trade for me (an unforeseeable event and a stop loss failure). Purposely letting myself get down 100 ticks on a trade would be like a soldier simulating himself going mad and shooting himself in the foot--it's just not going to happen, because if it does, then I don't need to even think about "working my way out," I need to think about not trading for about a month.

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  #29 (permalink)
Trading for Fun
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josh View Post
What it takes to work your way out is to CUT it. Say the unthinkable happens--I have a position on and my stop gets cancelled somehow, and then an adverse market event occurs, and I walk back to the computer to discover I am down 100 ticks on a trade. There is no thinking, no "working my way out of it", there is only one thing--FLATTEN.

Hi Josh,

Yes I think should explain a little better. When I say work your way out of a 100 tick loss, I don't necessarily mean immediately. Flattenning is certainly a valid first step. What I'm really getting at it is: make sure your method capitalizes sufficiently on the odds of trading in general so that it can make up a larger-than-expected loss. In many cases this will be through a series of
subsequent trades rather than with one or two.


Quoting 
One should not respond to an adverse situation with cleverness, one should simply get out of the adverse circumstance.

This is the only justifiable reason to be down 100 ticks in a trade for me (an unforeseeable event and a stop loss failure). Purposely letting myself get down 100 ticks on a trade would be like a soldier simulating himself going mad and shooting himself in the foot

Translate "100 ticks" into whatever amount would be very uncomfortable to you (but doesn't threaten your
trading existence).




liquidcci View Post
How about I go crash my car to see if I can survive car crash? Same logic.


I'm glad you mentioned this. Did you know that the cure for anxiety attacks and phobias is to
place the person in the fearful situation and make them stay there (with no way out) for much
longer than even a normal person would feel comfortable with? For example, to cure
claustrophbia, cognitive behavior therapists will do things like nail the person into a
coffin for 90 minutes. They will repeat this process every two weeks for several sessions until
the person begins to realize that they aren't going to die from it, thereby making the "phobia" lose its power because
now they fully realize it for what it is.

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  #30 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
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mwtzzz, are you going to answer Big Mike's question?

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