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Time to Give Up
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Created: by Big Mike Attachments:4

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Time to Give Up

  #281 (permalink)
Trading Apprentice
Minneapolis+ MN / USA
 
Futures Experience: Advanced
Platform: NT
Favorite Futures: 6E
 
Posts: 28 since Jan 2011
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When to quit

I think an integral part of trading is nearly blowing up, most ppl don't acquire the right money management headset/mindframe until they have lost significant capital
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You're close, yet ever so far away. The one and only lesson that must be learned from blowing up your account is this-- You have to face the cold hard truth that you have no idea what you are doing. And until you admit it to yourself and then figure out a winning edge, you must never ever place a trade until you do. Only 5% have figured it out. Which probably translates to 99.9% of people on this site should never ever even start thinking about trading. Only when and if you wake up one morning and can truthfully say--- I without a shred of doubt have a winning edge, then and only then can you place a trade.

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  #282 (permalink)
Elite Member
west palm beach florida usa
 
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farmer55 View Post
I think an integral part of trading is nearly blowing up, most ppl don't acquire the right money management headset/mindframe until they have lost significant capital
------------------------------------------------------------------------------------------------------------------------------------------------
You're close, yet ever so far away. The one and only lesson that must be learned from blowing up your account is this-- You have to face the cold hard truth that you have no idea what you are doing. And until you admit it to yourself and then figure out a winning edge, you must never ever place a trade until you do. Only 5% have figured it out. Which probably translates to 99.9% of people on this site should never ever even start thinking about trading. Only when and if you wake up one morning and can truthfully say--- I without a shred of doubt have a winning edge, then and only then can you place a trade.

....And then, once you have that edge, you need to have the discipline to wait for that edge to show up and reject all setups that aren't the edge. I found an edge a couple of years ago, but had trouble resisting the temptation to jump in at other moves. Only until I learned to ignore everything but my designated setups and the particular market conditions they occurred in, did I start seeing consistency.

Failure is not an option
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  #283 (permalink)
Market Wizard
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farmer55 View Post
I think an integral part of trading is nearly blowing up, most ppl don't acquire the right money management headset/mindframe until they have lost significant capital
------------------------------------------------------------------------------------------------------------------------------------------------
You're close, yet ever so far away. The one and only lesson that must be learned from blowing up your account is this-- You have to face the cold hard truth that you have no idea what you are doing. And until you admit it to yourself and then figure out a winning edge, you must never ever place a trade until you do. Only 5% have figured it out. Which probably translates to 99.9% of people on this site should never ever even start thinking about trading. Only when and if you wake up one morning and can truthfully say--- I without a shred of doubt have a winning edge, then and only then can you place a trade.

Respectfully, I disagree.

One could learn everything there is to learn about juggling balls, windsurfing, or driving a car, by reading the techniques in books. Nothing ever gets even close to doing it for real.

Same goes for trading.


Last edited by xplorer; March 23rd, 2016 at 01:20 PM.
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  #284 (permalink)
Trading Apprentice
Hartford Connecticut
 
Futures Experience: Intermediate
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I learned...


Big Mike View Post
I get a lot of emails and PM's from people seeking advice. Usually they've been losing money and don't really know what to do next. But I received a particular letter recently that made me want to write this post.

What are some of the characteristics of people who are losing money:

- No plan
- No way to measure themselves (they just focus on net profit)
- No consistent method, jumping from one trading room or indicator to the other
- Unrealistic expectations
- Unwilling to do the work required
- Not in a position in their life to make trading a priority

There are many more.

For every good trader out there, there are 100 more who think they can just copy someone else's method and start making money or join some trading room or download some expensive set of indicators, and be profitable.

Most of these guys have completely unrealistic expectations. They expect to take $10,000 and turn it into $100,000 at the end of the year, for example, even though they have no track record of performance or gains.

These people have no plan. They constantly blame their computer, their trading platform, their broker, their wife, their kids for missing trades or mistakes during a trade. They have no idea what to focus on or where to start.

And worse, most of them are unwilling to do the work. Yes, there are people for which that does not apply who are truly trying their best. But they are few and far between. Most people that are struggling aren't even willing to maintain a journal. Most people aren't willing to set realistic expectations. Most people aren't willing to accept responsibility for their actions.

On top of that, most of these guys aren't in a position in their life to even give trading a chance. Examples would be that they just lost their job. That is the worse time to start trading. Other examples would be that they have a job but no real savings, no money to burn in trading education expenses (and I don't mean from a trading room or buying a product). Worse still, many of these guys have no support from their wife or girlfriend because as you can imagine, they are losing money and also spending a lot of "free time" with trading instead of with their loved ones or kids. This is an impossible situation to put yourself in and expect good results.

So the point of this thread is not to talk about really any of that but instead to talk about when it is time to give up, or simply to move on.

In fact, a lot of times my advice to these guys is to move on. Stop trading. Let's be real, if you are undercapitalized, unwilling to do the real work, and have no support from your family -- you aren't in a position to be a good trader.

But I also have to be honest, some times when I tell someone to stop trading, what I am really wanting them to do is come back and tell me NO, they will not stop, they are going to make it work. I mean if you really want this, then fight for it. But as I've said countless times before -- willpower alone is not enough to make you profitable.

We know that most people "give up" once they blow all or a significant portion of their initial deposit at a broker. This usually happens in less than 90 days according to brokers I've talked to. Most of these people aren't a part of any trading forum, and those that are, most of them are not participating, do not have a journal, have not taken time to ask questions or formulate a plan, etc. Again let's be honest: if anyone had taken the time to formulate a plan and prepare, they would not have allowed themselves to blow an account in 90 days.

For the rest, the ones that are members of futures.io (formerly BMT), I find that the overwhelming (close to 100%) of people that are struggling are the ones that have zero posts. I've come to look at this as an important metric. The ones that are uninvolved in the forum, for whatever reason, are going to be at a big disadvantage in my opinion. They lack a support network but also lack the benefit of accountability which is so critically important.

I've also found that these struggling traders are ones that haven't participated in any webinars. So that means they are unwilling to put in the time. They spend all their time, instead, on downloading indicators or searching for a new trading room to call trades.

OK so let me end by putting this out there... when is it the appropriate time to give up? Let's be honest, not everyone is cut out for trading. In fact, if we are honest, very few are. So it's cruel to string some of these guys along, it would be better for them to help them identify early on they don't have what it takes and they should move on.

Mike

As a beginner I learned that I have to make a plan before I start trading, I know that it is tempting to start big and invest a lot of money, but it's a mistake. The best way is to start small and make a slow progress SO THAT THE LOSE WILL NOT BE THAT BIG...

PEACE

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  #285 (permalink)
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SO THAT THE LOSE WILL NOT BE THAT BIG..
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You have already lost, but just don't know it yet. If you really truthfully have an edge, you know that you will make money every day.

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  #286 (permalink)
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farmer55 View Post
If you really truthfully have an edge, you know that you will make money every day.

I have spent quite a lot of time reviewing longer term track records of some of the best traders out there and notice that some of them even have losing months. Some of them even have successive losing months. Yet some of these traders who have had losing months are regarded as the best in the world. Heck, some of them even feature in Market Wizards. If these traders who are obviously some of the best in the world can't make money every day, does it mean they have no edge???

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  #287 (permalink)
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Lviv, Ukraine
 
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Japhro View Post
Depends on your mindset, I treat trading like a job and am happy to make money every day, and peace of mind goes a long way.When I start adding size outside of my comfort zone, I don't trade as well and I don't hold as long. I also don't enjoy it as much. So, sweating a lot more for a few extra bucks, maybe, doesn't seem worth the hassle, to me at least

I prefer to be loke Rocky =) Hard work and hard trainings.

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  #288 (permalink)
Elite Member
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farmer55 View Post
I think an integral part of trading is nearly blowing up, most ppl don't acquire the right money management headset/mindframe until they have lost significant capital
------------------------------------------------------------------------------------------------------------------------------------------------
You're close, yet ever so far away. The one and only lesson that must be learned from blowing up your account is this-- You have to face the cold hard truth that you have no idea what you are doing. And until you admit it to yourself and then figure out a winning edge, you must never ever place a trade until you do. Only 5% have figured it out. Which probably translates to 99.9% of people on this site should never ever even start thinking about trading. Only when and if you wake up one morning and can truthfully say--- I without a shred of doubt have a winning edge, then and only then can you place a trade.

Respectfully, I make a living at this. I will not brag or lie that I make millions, I don't, but I make an average of $400-500/day which suits my risk/reward ratio and capital without risking too much ever. I take all profits out and use the same account size, because any of these brokers can collapse at any time for multiple reasons. I have an edge, a small one and thats what I rely upon

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  #289 (permalink)
Trading Apprentice
Minneapolis+ MN / USA
 
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Japhro

Great post! $400-$500/day is all you need. Same reason for never holding a trade over night, is the same reason for taking money out of your account. Any thing can happen. MF Global any one?

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  #290 (permalink)
Elite Member
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Platform: Qtrader,NT8,Sierra
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farmer55 View Post
Great post! $400-$500/day is all you need. Same reason for never holding a trade over night, is the same reason for taking money out of your account. Any thing can happen. MF Global any one?

For me, as a trader you need to find your own method and your own risk profile and just keep making the same kinds of setups like a bricklayer. It's the only way I have made money at this, that's for sure. The only trades I will hold overnight are ES options trades, I will often fade the day's move overnight with some and the risk is limited to the cost of the option

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