add some type of volume indicator to your 15min chart, in panel 2, so that you can analyze it alone and give it its proper due. that should give you confidence, as you said you did not have
use volume profile (altomp, gomi or some other method)
use market profile or some other longer term (15min, 30min, 60min, etc) indicator to help
consider using and analyzing a much shorter term interval (4 range, 3min, 2min, 5min, 233tick / 633tick, or whatever) other than 15min in which to decide to enter, alter, exit orders from
think of jumping from a building ledge. do you think you would survive if it were:
a) 15 stories tall (i.e. 15min chart)
b) 60 stories tall (i.e. 60min chart)
c) 5 stories tall (i.e. 5min chart)
d) 2 stories tall (i.e. 2min chart)
e) 1 story tall (i.e. 1min chart)
get the idea?
some of the guys use gartley harmonic patterns and with wings to indicate patterns that are "most likely" to happen going forward. consider those parachutes, and then ask yourself the same questions again....
get the idea?
Last edited by kronie; November 29th, 2014 at 04:58 PM.
The following 3 users say Thank You to kronie for this post:
I learned to trade from a successful day trader. He started with 10,000$ in 1981 and made millions. When I met him I connected with his methodology. It made sense to me. I turned profitable after two months. At that time I was working for a private equity firm. The fund I was in charge of eventually closed. When I lost my job, my performance tanked. I went from being very profitable to being close to breakeven minus.
I could not understand what was going on. I started to hesitate, exit too early, too late, etc. Yet I had money to cover my life spending for several years ahead, I had support from my family, and I had a methodology with an edge.
It took me 18 months to figure out what was wrong. I really considered quitting. The Sedona method is what really turned things around for me (I am not an affiliate and I have no financial interest). I realized my mind had taken over my consciousness. I WANTED to make a living day trading. When I was at my job, I did not give a hoot. I would take my trades; the markets were telling what to do. My intuition was at its peak.
I soon understood how my wanting to control and my wanting security generated emotions I was either trying to suppress or express. Eventually I learned to let go, not give a hoot, and my trading started improving again.
There are many books out there on trading psychology. But most of it is information, it does not tell you how to actually achieve transformation. This one did.
“Fear, and it will appear.” Lester Levenson
The following 15 users say Thank You to Newzy75 for this post:
Is there an immutable rule that successful traders must blow their first trading account? Is this a required lesson that I had to learn? I believe so.
I knew the rules - the two most important rules I had set for myself, and I broke them. When I woke up yesterday morning and saw that I had hit a margin call for the second time in two days, and practically all the money I had was simply gone, I was literally sick to my stomach.
The second trade was exactly like the first. After grabbing $300 to $500 gain - and zero losses - several days in a row, I got greedy. Way too greedy. The price reversed, but I didn't want to lose, so I doubled down, and doubled down again. Lost it all.
Rule 1 - only trade on a signal, not an expectation.
Rule 2 - limit risk to 2% of account.
I won't detail just how much financial damage I inflicted on myself, I don't want you to think I'm as foolish as I've been accusing myself of being. As foolish as I was. A VERY painful lesson.
I'm grateful that this lesson occurred, I now have some assurance, that having broken through the first step to trading successfully, I'm actually getting ahead.
I have had excellent support from my family, but I can't bring myself to show them what I've done. If the result is that I have to seek out employment (again) I'll just give a general picture that I made mistakes. I have to tell somebody though. I'm embarrassed and ashamed.
No, I will NOT quit. I've averaged 12 hours per day 7 days a week for the last 6 months working, studying, and learning my market and my trading software. Success is the only option.
I WILL take losses from now on, so I will NEVER lose money like that again!
The following 8 users say Thank You to CryptoTrader for this post:
word for word, i know exactly where you are coming from and the pain that losing all that money can bring as i recently lost a significant amount of my trading capital in one days effort. now i am convinced that was something i had to go through in order to succeed. i was trading with money that i could afford to lose, but ended up losing ALOT more than i was willing to lose before i told myself to stop trading all together, as i am currently unemployed also and will start looking for a job soon. After my big loss i requested a full withdrawal from my account, then changed my mind a few days later, i decided to give it one last shot and started trading again this week with the little remaining balance i have in my account.
will see what happens from here
You've certainly got the qualities to be a professional, profitable trader. Some of your bullet points should be requisite in the learning phase (although I do believe we should never stop learning.) In regards to your comment about blowing up your first account...I blew up many more than that...and I stuck with it because I knew I can do it...if I could just rap my head around the discipline and expand my horizons to what traders like @tigertrader and @tflanner have offered up.
~in rule 1 you trade the signal, not the expectation....I personally have found that not to be correct. Know the broader markets and trade the expectation...when you get "your" signal, be it price action and a significant level, market/volume profile or what you are using to...stalk and pounce!
You can do it, I know you can.
The following 4 users say Thank You to Devil Man for this post:
Just thought of adding few points from my experience
If you trade to avoid loss and contain risk, you will be stuck at the max as a break-even trader. At the heart of successful trading is to embrace risk and accept loss as integral part of trading. Winning trade is not defined by profit and loss BUT whether you execute it fully as per the plan, setting proper stops and letting the profit target hit without taking few ticks profit just to reduce risk and feel comfortable.
In Japanese Risk is written as "Opportunity riding a dangerous wind".
As many have pointed out before, accepting loss and embracing risk is not an easy thing to do. You have to deal with a number of your limiting beliefs to achieve this.
Another aspect of psychology is having confidence in your trading system by having clear statistics on your systems performance and expectancy. How can you think in probabilities if you dont know the probability of your trading system?.
The following 11 users say Thank You to rahulgopi for this post:
I got into trading options and then futures with the idea of transitioning away from my day job. I never planned on it being easy or quick. I did well initially with option trading but then had trouble with a sideways market when I wanted to be long and directional. I also got frustrated with shady practices in individual equities and then focused on index options which was painful.
Switching to futures too quickly was also a painful, painful lesson at first. Not managing risk correctly, trading too often, not having the ability to dedicate enough time (trading while working the day job)- things I didn't have to worry about as much with options became a huge issue with futures trading. It took me over a year to realize that I can't multitask trade- it simply is impossible. I now can dedicate a few hours during the day to trade and have stemmed the bleeding and manage risk better than before- I hope to recover the losses incurred and build a foundation for the future trading but as we all know, it takes patience and a lot of money.
Thank goodness I kept the day job...
The following user says Thank You to Onecarl78 for this post:
feel bad for the people who "trade on a signal" because i can almost guarantee that you are a slightly green trader or not green at all. MACD, RSI all that BS tell you what you already know. this game is all about understanding context and anticipating (not reacting if you are a discretionary trader like most are)..not red light/green light. key is managing emotions and understanding how markets actually work (both quantitatively and qualitatively). GL in all your quests to become profitable. its a long journey.
Last edited by mabr0408; April 17th, 2015 at 01:42 PM.