Highly Unusual Suggestion - futures io
futures io futures trading



Highly Unusual Suggestion


Discussion in Psychology and Money Management

Updated by whatnext
      Top Posters
    1. looks_one mwtzzz with 17 posts (6 thanks)
    2. looks_two whatnext with 5 posts (4 thanks)
    3. looks_3 liquidcci with 5 posts (6 thanks)
    4. looks_4 djkiwi with 3 posts (8 thanks)
      Best Posters
    1. looks_one djkiwi with 2.7 thanks per post
    2. looks_two liquidcci with 1.2 thanks per post
    3. looks_3 whatnext with 0.8 thanks per post
    4. looks_4 mwtzzz with 0.4 thanks per post
    1. trending_up 7,355 views
    2. thumb_up 46 thanks given
    3. group 18 followers
    1. forum 55 replies
    2. attach_file 0 attachments




Welcome to futures io: the largest futures trading community on the planet, with well over 100,000 members
  • Genuine reviews from real traders, not fake reviews from stealth vendors
  • Quality education from leading professional traders
  • We are a friendly, helpful, and positive community
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts
  • We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

(If you already have an account, login at the top of the page)

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

 
Search this Thread
 

Highly Unusual Suggestion

(login for full post details)
  #51 (permalink)
Legendary Market Wizard
Georgia, US
 
Experience: None
Platform: SC
Broker: AMP+CQG
Trading: ES, HSI, Nikkei
 
josh's Avatar
 
Posts: 5,466 since Jan 2011
Thanks: 6,054 given, 14,450 received


mwtzzz View Post
If you always protect yourself against devastating losses, and if you know you can recover from day to day losses in the normal course of trading, then you won't have any problem letting your profits run.

I like this; very succinct and logical.

Reply With Quote

Can you help answer these questions
from other members on futures io?
SC parameter optimization
Sierra Chart
Zytrade Brokerage Review (www.zytrade.com)
Brokers
QDEL
Stocks and ETFs
Do You Have A PlayBooks/What Form Does It Take?
Traders Hideout
Range bar differences in Tradestation vs. TOS
TradeStation
 
 
(login for full post details)
  #52 (permalink)
Point Roberts, WA, USA
 
Experience: Advanced
Platform: IB and free NT
Broker: IB
Trading: ES
 
aquarian1's Avatar
 
Posts: 3,896 since Dec 2010
Thanks: 1,476 given, 2,497 received


ratfink View Post
Good ideas should always feel exciting OR scary. This one definitely meets the scary criteria. It is also interesting that some of the more recent agile program development movements use pairs programming for similar goals. or

@ratfink

Thanks - I think. Not too sure about the scary part.

I read many people say they are good traders.

In x's book (I forget the name its about 400 pages long,) in any case he is talking about money management and how important it is and then goes on to say that with good money management you can trade successfully even with random entries then has a little study on it.

It would seem to me logical that a person trying to forward test a strategy could pair with an experienced trader to evaluate it. The experienced trader could help with the evaluation if they have good trading skills/ good money management skills.

If the strategy has an edge then in the hands of the good trader it should produce more profit than random entry.

..........
peace, love and joy to you
.........
Visit my futures io Trade Journal Reply With Quote
 
(login for full post details)
  #53 (permalink)
Sunnyvale, CA
 
 
Posts: 171 since Dec 2012
Thanks: 8 given, 105 received



aquarian1 View Post
@ratfink

In x's book (I forget the name its about 400 pages long,) in any case he is talking about money management and how important it is and then goes on to say that with good money management you can trade successfully even with random entries then has a little study on it.

Money/risk management is perhaps more important than entries. This is why I mentioned previously in this thread the idea of getting into a trade sometimes without any signal - just flip a coin. The idea is that if you have the money management aspect of it under control (and I mean, really under control) then it won't hurt you in the long run. Maybe it'll put you in a drawdown period, but you're going to get those regardless.

This is contrary to a lot of people who approach it from an entry perspective only. They focus 90% of their time and energy on setups, when they should be putting 90% on limiting risk and preserving capital.

The focus on entries/setups comes from the belief that they always have to be on the winning side of trades, and this is where they get into trouble. Drawdowns are an unavoidable part of trading, but many people don't consider it thoroughly enough, and so they don't know how to cope with it when it happens. They haven't done the preliminary work of quantifying the expected outcomes of their trading strategy. You really have to crunch the numbers. At least with pencil and paper. Preferably with some sort of automated tool or software that can summarize the results of many trades.

The quote you mentioned at the beginning of your post reminded me of something similiar someone else said. I went and dug it up: Charlie Wright "So if there is no edge in the entry, then where is the edge in trading? The ultimate success in getting the trading edge is how you manage the risk - how you do the money management on the back end."

Ultimately, doing your homework will have a positive effect on the emotional aspect of your trading experience. You will have removed the "uncertainty" of how to handle strings of losses. You will have a method that recovers from them, and it's just a matter of riding it out.

Even during the times when I am sitting on cash and am up for the year, I know that I'm only three or four trades away from entering another drawdown period. But it doesn't matter. The strategy works through it.

Reply With Quote
The following user says Thank You to mwtzzz for this post:
 
(login for full post details)
  #54 (permalink)
Legendary Market Wizard
Georgia, US
 
Experience: None
Platform: SC
Broker: AMP+CQG
Trading: ES, HSI, Nikkei
 
josh's Avatar
 
Posts: 5,466 since Jan 2011
Thanks: 6,054 given, 14,450 received


mwtzzz View Post
This is contrary to a lot of people who approach it from an entry perspective only. They focus 90% of their time and energy on setups, when they should be putting 90% on limiting risk and preserving capital.

The focus on entries/setups comes from the belief that they always have to be on the winning side of trades, and this is where they get into trouble.

Approaching trading from an entry only perspective is common, and as you say is bound to have negative outcomes.

However, my focus on entries (NOT setups, as I don't have "setups") is inextricably bound to risk. When my entry is at an advantageous price, my risk is lower. It does not come at all from a belief that every trade has to be a winner, it comes from a conclusion I have drawn from growing as a trader, that in practice, when my entry points are based on sound practices and are at advantageous prices, I take less heat, and incur less risk, and my losses, which are going to happen, do not hurt my mind or my account so much. It's when I have been sloppy with my entries that I have experienced the most psychological anxiety, and the largest losses.

Also, tied in with your idea of random entries producing profits based on a solid money management strategy is the simple notion that exits must be such that they overcome the 50/50 odds of random entries; this is not so much risk management and preserving capital, it's beyond that.

Reply With Quote
The following 2 users say Thank You to josh for this post:
 
(login for full post details)
  #55 (permalink)
Sunnyvale, CA
 
 
Posts: 171 since Dec 2012
Thanks: 8 given, 105 received

Interested folks might check out my homepage where I have a trading section summarizing my views. I compiled some information there so I wouldn't have to keep typing the same stuff over and over on these forums.

Reply With Quote
The following user says Thank You to mwtzzz for this post:
 
(login for full post details)
  #56 (permalink)
Rockland county , New York
 
Experience: Intermediate
Platform: NT 7
Trading: CL, 6E, SI, ZC
 
whatnext's Avatar
 
Posts: 235 since Mar 2011
Thanks: 338 given, 80 received

“Here's to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes... the ones who see things differently -- they're not fond of rules... You can quote them, disagree with them, glorify or vilify them, but the only thing you can't do is ignore them because they change things... they push the human race forward, and while some may see them as the crazy ones, we see genius, because the ones who are crazy enough to think that they can change the world, are the ones who do.”
-- Steve Jobs

"Be right and sit tight." - Jesse Livermore
Reply With Quote


futures io Trading Community Psychology and Money Management > Highly Unusual Suggestion


May 23, 2013


Upcoming Webinars and Events
 

NinjaTrader (special webinar #400 w/giveaways)

Oct TBD
 

Bookmap

Oct TBD
 

SharkIndicators

Oct TBD
 

Carley Garner

Oct TBD
 

Ironbeam

Oct TBD
 

Zytrade

Oct TBD
 

GruttePier

Oct TBD
     



Copyright © 2020 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts