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Time to Give Up


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Time to Give Up

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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

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Quoting 
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.

BTW, I should complete that by saying that while willpower alone is not enough to be profitable, it is a prerequisite. You cannot succeed without it.

Some people think that their willpower to succeed is their edge, because they will make this work no matter what. I view that as more of a prerequisite than an advantage over the other professional traders.

It is always helpful to know who you are trading against and see how you compare.

Mike

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I meet some of the criteria you have in your post for not trading. I am more of the mindset that it is on hold for a bit, but refuse to give up.

D

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Gee thanks @Big Mike

Mike, you have spot on accuracy on posts of this nature. I suspect that is because you stuck it out once or twice past when you, yourself should have moved on? That IS certainly the case for me.

The follow up post IS a description of how I was able manage.

Two weeks ago I met with a friend and former CBOT guy. I was SHOCKED to here that the topic he wanted to focus on was a post trading career. He was leaving the trading business after 15 years. The floor is a young mans game (if it is still a game at all). The trailing 12 months is a loser for my friend, only the second such period in his career. A typical year, over the last 15, is + $400,000 to $600,000. He says he is just tired, like a worn out horse.

My friend told me that my recent trouble (losing more than two or three days a month) are an indication that I too should escape through the open door while I still had a bag of loot to carry. All of my quiet time on vacation was spent on this.

Here is something interesting. ALL of the points on your list are items that I can STILL find a way to wrestle with. When I get out of balance and lose just a little focus or when I reinforce just one or two bad habits I can find myself speeding down the road to ruin.

My nature is to win, win , win. Guys have seen me type about "to trade well" is all that matters. I do believe that without my recent meeting that my previous course was a path to disaster.

I'm saying this to reinforce how brutally difficult it is to be a consistent profitable trader. That said, "to persist" is the ONLY way. The how of that is the eternal question, and again Mike's post is exactly on track.

Sometimes on futures.io (formerly BMT) I see discussions that are perfect example of correct path wrong mountain or correct mountain wrong path. Often when I speak up I get grief, not consideration...and as the popular phrase goes..."ain't nobody got no time fodat". Other times I am reluctant to post asking for help or providing it because of what tends to happen in those situations is not real pleasant either. Someone who has never made any money at any endeavor will tell me I'm wrong or I will get jumped by a pack of the send me everything you know searchers...neither usually result in productive relationships.

BUT there are all kinds of posts and ideas here on futures.io (formerly BMT) that do represent extreme value. I stay on task to mine the nuggets, always learning and always considering things. I try or want to try to type in a way that helps others pick up a nugget or two from my great and many errors. For me that sometimes becomes a battle and detracts from focus.

The single item from Mike's list...try your hardest...that is the critical item and it does encompass many of the other elements. To persist IS the only way in this, the most competitive business in the world. Few have that capacity and fewer still the ability to be humble and know what it is they are missing. Once "there" finding the answer just puts you at the line to start the race...in other words most NEVER have a chance.

Interesting metaphor from my vacation. Adult alligators are top of the food chain predators, but 2 or 3 out of every 100 eggs make it to an attained age of 1 year. Trading is the same. What elements are in the alligators cognitive behavior and what is totally outside of their control. I would encourage struggling traders to consider those things... although alligators don't.

Have to leave now...can type more if anyone cares. DB

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David_R View Post
I meet some of the criteria you have in your post for not trading. I am more of the mindset that it is on hold for a bit, but refuse to give up.

D

So David let me ask a blunt question... hope you don't mind or take offense... why do you believe trading is right for you?

OK let me back up to be fair. Do you believe that anyone can be profitable at trading? Or do you believe that some people are not cut out for it? Some believe any skill can be learned, others believe that there are some things they should accept are not their strong suits and move on.

Mike

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wldman View Post
The single item from Mike's list...try your hardest...that is the critical item and it does encompass many of the other elements. To persist IS the only way in this, the most competitive business in the world. Few have that capacity and fewer still the ability to be humble and know what it is they are missing. Once "there" finding the answer just puts you at the line to start the race...in other words most NEVER have a chance.

But trying your hardest is a requirement. It is not an edge. While someone who doesn't try their hardest can have a good trade, a good day, a good week, or even a good year, the likelihood they will be a long term profitable trader is slim.

So if you are measuring yourself against long term trends, say a 10-20 year career at minimum, then I don't think "hard work" is an edge. It's a prerequisite.

All the floor traders I've talked to have had a terrible time transitioning to screen trading. On the floor there was an edge by simply being there, you could buy the bid and sell the ask and pocket the spread from my understanding. That particular edge does not exist for screen trading, but perhaps there are other edges that do. For example as an individual trader, professional or not, you are more nimble than an institutional trader which can give you an advantage.

Mike

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Very extraordinarily and awesome post @wldman, thanks a lot for speaking right from my heart.

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wldman View Post
Gee thanks @Big Mike

Mike, you have spot on accuracy on posts of this nature. I suspect that is because you stuck it out once or twice past when you, yourself should have moved on? That IS certainly the case for me.

That may be true but was not the inspiration for the post. The inspiration was one too many emails or PM's from people who -- many of which have no business trading -- wanting to know what trading room they should follow, or what system is the most profitable. Then there are the PM's and emails from the guys who have lost their life savings, are on the outs with their wife, who have devoted the last two years of their life trying to make this work -- but cannot.

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Big Mike View Post
many of which have no business trading

Does this person have any business trading?

- Has been trading for 2 years, and has lost 50K out of his kids college fund
- Has paid over 20K in "courses" and "trading rooms" for "mentorships" and "systems"
- Hasn't told his wife or kids the extent of his losses

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Does this person have any business trading?

- Has been trading for 2 years, and has lost 50K out of his kids college fund
- Has paid over 20K in "courses" and "trading rooms" for "mentorships" and "systems"
- Hasn't told his wife or kids the extent of his losses

Mike

BTW, let's also mention that this person simply cannot understand or fathom stopping because once he stops, the losses are real and concrete. While he continue to trades, he still thinks he can make the losses back.

Should this person be trading?

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Why did I start this thread?

Because after receiving a few thousand of these PM's and emails over the years, I want to scream sometimes... trading is not for everyone. Especially the guys ruining their life with trading. These guys are gamblers, not traders, and they are wrecking their life, their wife's life, their kids life not just in the monetary sense but also with their time and how it affects them and how that carries over into their personal life. Is it worth it?

I do not subscribe to the philosophy that anyone can learn to be a good trader. I am more realistic, and that everyone's life situation (prior to trading) is unique, not everyone can truly be in a good position to start a trading career and on top of that, not everyone has the personality traits required to be a good trader.

There are exceptions to every rule, and as I said before in my first post, if you aren't a "fighter" who has the thinking of simply making happen what you want to happen, then you really don't stand a chance.

Frequency of these emails continues to increase, which could be because of the popularity of the forum or could be because markets are getting harder to trade. But a common trait between emails is lack of accountability or responsibility. Everyone wants me to tell them where to enter, where to exit, or who to follow in order to be profitable.

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If your main focus and attraction to this business was/is money, then walk away while you can.
You'll probably end up blowing it all.
If your fascination with this business is managing risk, psychology, and strategy, then keep going.
Money is a by-product of those 3, not a focus.

I think a basic psychological evaluation would help most people decide if this is a career for them.
Honesty with oneself is of utmost importance. egos = internet fakers = losing traders IMO.
If it's hard for a person to be honest with themselves because their ego is in the way, then
this is the worst career choice they could make.

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What about the guys who are doing things right?

- Only trading with money they can afford to lose
- Open and honest with their spouse, kids
- Steady income outside of trading that is more than sufficient to cover all life expenses while learning to trade
- Realistic expectations, knows that is likely to lose for a long time before starting to win, part of education
- Spends all of his time on research, homework, statistics, and review -- and not on indicators or trading rooms
- Creates accountability with a journal and his support network of trading friends, and his spouse

List continues.

For these guys, this thread does not apply. In fact, for these guys, they should be applauded for their conservative approach instead of thrill seeking holy grail fixation.

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Massive l View Post
If your main focus and attraction to this business was/is money, then walk away while you can.
You'll probably end up blowing it all.
If your fascination with this business is managing risk, psychology, and strategy, then keep going.
Money is a by-product of those 3, not a focus.

I think a basic psychological evaluation would help most people decide if this is a career for them.
Honesty with oneself is of utmost importance. egos = internet fakers = losing traders IMO.
If it's hard for a person to be honest with themselves because their ego is in the way, then
this is the worst career choice they could make.

If you want to truly find out what kind of person you are, become a trader.

BTW, no one EVER emails me and asks me for help with risk analysis or psychological issues. Those don't even exist as far as most people are concerned.

Mike

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Big Mike View Post
BTW, let's also mention that this person simply cannot understand or fathom stopping because once he stops, the losses are real and concrete. While he continue to trades, he still thinks he can make the losses back.

Should this person be trading?

Mike

Its almost like a trader that is in a losing position that refuses to close it out. He keeps moving his stop or averaging down thinking it has to come back in his favor. The problem is his margain call will not be so simple, there will be no broker on the other end saying his trade has been closed out. It will be his wife calling and explaining why she took the kids and left.

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I'm probably not really qualified to mention this. But my 2c. I think most aspiring traders need to realize
how small the edge really can be. It's like the wild west out there. Like winning a lottery; ok maybe not that bad, but winning a local lottery or raffle to find a way to make trading work for oneself. Almost no vendor, book or guru is going to give you an edge that works for the relatively small amount of fees for the masses. Trade secrets are just like corporate secrets of the top fortune companies. They are not going to spell it out completely at retail level dollars. Engineering and technology secrets and personnel who carry them and defect to other companies (or other countries) are constantly being sued over (or trying to be extradited). There are those making several hundreds of thousands and millions trading according to the overall stats, but again they are trade secrets i.e. proprietary trading methods and the HFT firms and prop firms probably know all the working methods already and squeezing every millisecond front-running they can out of it. I was shocked to see how little volume there was on most every short-term trading bar. Which means imo, a lot of it is electronic and working trading methods can only go so far before being saturated by too many participants trading the same way.

Al Brooks said in his materials that while having a mentor or two, they won't give you a piece of a super working edge until you've developed a trusting relationship after a period of time, maybe even a year or more. At best vendor materials out there may provide a working clue to construct one's own working system. Also , the trade management side (i.e. psychology, money management, take profit strategies, or whatever it's called) is just as important as the entries. Other famous successful traders have mentioned they picked up one thing from one mentor or resource, and another thing from another etc. Or came up with their simplified method after reading "Edwards and Magee" etc.

Of course there are very generous people on futures.io (formerly BMT) and other places, even some solid vendors, willing and attempting to share trading ideas that may very well be a great singular piece of the personal "jigsaw" puzzle that one could put together to make their own viable trading method(s). And also good to have more than one method in case one method fails as the markets always change seemingly in some multi-yearly basis now.

I think if one can't derive or find, or modify the few things counted on one hand that works and make up their own system that works for them, after the long searching from the vast amount of learning resources, commercial or not, within a viable personalized home economic time period, then maybe that is the time to quit or at least take a year or more hiatus from trading.

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  #18 (permalink)
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Our culture is about instant gratification...getting what I want now. Heaven forbid if I have to wait...

The values of patience, resilience, hard work, relationships and honesty are replaced with you get what you want now...and to be successful = lots of money (there were and are cultures that define success by who you are not what you own).

So its a double whammy - instant gratification and a belief that money makes you. When a person starts trading its so comfortable to want a system right now that will make you all you ever wanted to be. The scammers and sharks prey on this.

Trading is a complicated mix of personality, risk management and market understanding. What works for one may not work for another given these factors. Thats where old school values come in - patience, resiliance, hard work, teamwork and honesty (all the stuff that goes into things with great outcomes).

When should you give up
  • If you believe money make you who you are - give up because you will always be trading looking at profit loss and not executing your trades well
  • If you want a quick fix and a simple solution - give up because trading is about probabilities and risk management not certainty of outcome

If however you have some old school values and value who you are - I believe you are on the right track. Well I hope its the right track because that is where I am right now.

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Cloudy View Post
Trade secrets are just like corporate secrets of the top fortune companies. They are not going to spell it out completely at retail level dollars. Engineering and technology secrets and personnel who carry them and defect to other companies (or other countries) are constantly being sued over (or trying to be extradited). There are those making several hundreds of thousands and millions trading according to the overall stats, but again they are trade secrets i.e. proprietary trading methods and the HFT firms and prop firms probably know all the working methods already and squeezing every millisecond front-running they can out of it.

Meh, I don't really agree with a discretionary trader having a "trade secret". Now many of them think they do, that's for sure, but they probably don't. As for algo trading, sure, it's lines of code so it does what it is programmed to do, and that is a different scenario as far as protecting it.

But a discretionary trader having a secret is like saying Tiger Woods has a secret to why he is so great at golf. It isn't because of where he enters or exits a swing, just like for a trader it isn't simply the entry or exit of a trade. Trying to boil it down to that is meaningless and drastically undervalues all other aspects of trading, or golfing. It would be like saying to be a good golfer you need to hit the ball well. To be a good trader you need to trade well. Really, wow. Thanks for that. The process of how you hit the ball, and how you trade, is the edge. Not your chart and indicators, not your clubs or balls.

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Disciple View Post
When should you give up
  • If you believe money make you who you are - give up because you will always be trading looking at profit loss and not executing your trades well
  • If you want a quick fix and a simple solution - give up because trading is about probabilities and risk management not certainty of outcome

I'd also like to add that almost any desk job is easier than trading. You get a paycheck unless you really screw up. With trading, you can do everything right and still have a losing trade, a losing day, even a losing week or month depending on your trade style or frequency.

Those that want to be traders because they envy the freedom it brings are in for a surprise in terms of how much responsibility and accountability is required which is not present at a normal desk job. Even for those of us who have run our own businesses in the past, and the additional responsibility that comes with that, it does not compare to the responsibility and accountability a trader faces.

Let me also say that if trading is making you miserable, you are way stressed out or constantly sweating the next trade, day, or week's outcome, then find something else that is more enjoyable. There are a lot of jobs in this world, everyone can find something that makes them happy. Especially if you live within your means and don't make it about the money.

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  #21 (permalink)
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If you want to truly find out what kind of person you are, become a trader.

BTW, no one EVER emails me and asks me for help with risk analysis or psychological issues. Those don't even exist as far as most people are concerned.

Mike

As I was writing that I remembered that I had many issues that were not suited for trading when I started.
So I guess that doesn't warrant a person giving up because they can change, or at least some can if they really want to. You're right about finding out who you are when it comes to trading. Trading has made me a better person in many aspects of my life. Discipline and patience are two qualities I didn't necessarily have a grasp on before my trading career.

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  #22 (permalink)
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Trading is simply taking money from other traders.

I welcome all poor traders to keep on giving me money.

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Massive l View Post
As I was writing that I remembered that I had many issues that were not suited for trading when I started.
So I guess that doesn't warrant a person giving up because they can change, or at least some can if they really want to. You're right about finding out who you are when it comes to trading. Trading has made me a better person in many aspects of my life. Discipline and patience are two qualities I didn't necessarily have a grasp on before my trading career.

Agree completely and I found similar traits in myself that needed significant improvement to be a good trader. The skills I learned to be a good trader have changed who I am as a person, for the better.

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r3algood View Post
Trading is simply taking money from other traders.

I welcome all poor traders to keep on giving me money.

We are trying to be helpful here. Are you able to write a helpful post on the subject?

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  #25 (permalink)
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I turned a Sizable Account into a sizable Debt selling Naked Puts prior to Sept 11, 2001.
I was shell shocked at the -275K Margin Call week and a half later; it took the 4 previous years + to build that precious account....... and then nothing but a silent black hole.
That was pretty much rock bottom, with an obligation that I wanted to run from but I couldn't...All that "success"
and the professional relationships I built, the Trust, the Pride....Just turned vacant. But I wanted it back like that smeagol and his prrrecious.
I borrowed 325K, paid the call, and spent the next 4+ months scalping futures and currencies like a smeagol... then hit rock bottom again, emotionally, and physically strung out like guttered junkie. It was over...Out...Scratch
Still -75K net I slithered away, couldn't push the buttons no more, it had become an unreal reality.
The next day I went back to rebuilding my life; it took the next 4 years to clear the last 75K, the old fashioned way, every day making less than a scalp, and losing a hell of a lot more sweat.
What did I have to lose....Everything...Bottom Out and Upside Down
What did I gain? what I lacked the most........ PERSPECTIVE.... I had to "SEE thru" the Damn BS that I was either ignoring or worse deluding myself with.

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Big Mike View Post
If you want to truly find out what kind of person you are, become a trader.

Very insightful - thanks.

I just want to share my view that your points all boil down to a simpler (and equivalent) fact: you aren't ready to accept or manage market risk when your principal sources of risk are going to be outside of it. This may be hard to understand, so I will explain in simpler words:


Quoting 
- Has been trading for 2 years, and has lost 50K out of his kids college fund
- Has paid over 20K in "courses" and "trading rooms" for "mentorships" and "systems"
- Hasn't told his wife or kids the extent of his losses

If you look at it the way I described, given an average person's risk appetite...
- The damages incurred if you cannot afford your kid's education is greater than the damages incurred if you lose 50% of your trading capital.
- The damages incurred if you lose a significant amount of trust with your wife and kids is greater than the damages incurred if you lose 50% of your trading capital.

So then, your main sources of risk already come outside of trading (although it might not be obvious to the naked eye). It makes no sense to manage and accept additional risk from the market when you have not dealt with your main sources of risk. This is bad enough. It is worse to keep risky positions in both (wife's trust and trading) and make them 100% correlated.

In fact, many retail traders are less prepared than they imagine. When some of my friends tell me that they are starting out with trading their own money, and come to me for advice, it's often not appropriate that I ask them what they think of their relationships with their wives and children. Instead, I ask them for their retirement plans. Most that I've encountered have a greater source of risk in their retirement plans than their trading activities.

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Big Mike View Post
We are trying to be helpful here. Are you able to write a helpful post on the subject?

Mike

Mike, this forum's contribution to my development as a trader has been incalculable.

I did not mean to come across as harsh or negative in any way, I simply am trying to point out to struggling traders that trading is not a big kumbaya campfire, there are thousands of professional traders that are more prepared, better capitalized, and better suited to trading that are gunning to take your money each and every day. If a struggling trader isn't ready to accept the fact that they are struggling and need to seek help or training, they will get eaten alive.

Sim trading until PROVEN SUCCESS is such an invaluable tool to struggling traders. Why risk your money when learning how to trade? Granted, a sim trader will have no idea about the psychological issues related to real money being on the line with a trade, but sim trading can help a new or struggling trader to develop market and basic trading skills that are crucial to trader development.

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  #28 (permalink)
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Big Mike View Post
Does this person have any business trading?

- Has been trading for 2 years, and has lost 50K out of his kids college fund
- Has paid over 20K in "courses" and "trading rooms" for "mentorships" and "systems"
- Hasn't told his wife or kids the extent of his losses

Mike

@Big Mike,

And my two cents....

I have always, always been a firm believer in the following: one can achieve anything in life, IF they are willing to sacrifice anything for it.

Bold statement to be sure, and it does have to be grounded in reality to a certain degree. If I decide I want to fly, the chances of me figuring out how to flap my arms fast enough to get airborne are pretty much nil. But... I can certainly get a pilot's license, or go hang gliding, or any number of things to achieve my goal.

My initial answer to your question about that person above.... IF that trader is willing to burn his kids college fund, IF he is willing to hand over that 20K in courses, and IF he is willing to sacrifice his marriage and family for trading... then yes, he should be trading.

Sound ridiculous? Absolutely. But, right or wrong, in a sick sort of way you would have to appreciate someone's absolute dedication to their goal no matter what. Brings to mind the Samurai mentality - duty above all else.

The only thing that doesn't fit in all that is this - by getting married, having kids, etc, this "trader's" first duty is to his family, to the commitments he has made to them, expressed or implied, to take care of them as a husband and father. If he/she wants to be a trader first, at all costs, then she should not sacrifice anyone else's lives or futures for that.

This thread, and that post of yours Mike, struck a deep and painful cord in me. Been there, done that to a certain degree, a long time ago. Having had much success in my life in so many different areas, I knew, just KNEW, that I could succeed at trading also. After all, how hard could it be.... buy low, sell high, right? Make truckloads of money and everyone will be happy as can be.

I was humbled beyond belief, lost A LOT, and not just talking about money. And it took me a long time to admit defeat. I am infinitely regretful for my blind pride and arrogance, but, I am also thankful in a way. I fell, I got up, and I have persevered. I have learned, and although I wish I had done things differently, I can now look back and see that every little thing was a lesson, painful as it may have been.

Wow, looking over my post, certainly didn't think I was going to spill my guts about my dark trading addiction days, and hesitating to hit the submit button. But, who knows, maybe it will help someone. I know for a fact that one can be successful in this endeavor - I trade, I am profitable, and more importantly, I am comfortable with what I do.

After all that, my answer to your question is....no, this person should not be trading. BUT.... if they are that far into that type of situation, they will absolutely not listen to anyone - you, me, their family - no one. They will have to take the absolute ass kicking that they are in for, and either be better for it, or not. I sympathize with your situation and all those types of communications I know you get on a regular basis, but someone like that has an addiction, and just like any other habit, is going to have to hit rock bottom before they come back up.

I know from experience.

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  #29 (permalink)
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Big Mike View Post
Does this person have any business trading?

- Has been trading for 2 years, and has lost 50K out of his kids college fund
- Has paid over 20K in "courses" and "trading rooms" for "mentorships" and "systems"
- Hasn't told his wife or kids the extent of his losses

Mike

No. Sometime people will hit rock bottom and change. Other times, they will hit rock bottom and keep on digging. This is one of the best threads I have seen in a long time on any forum, and I hope this does help others realize that they might need to change. Or quit.

Math. A gateway drug to reality.
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The best example I can give is try playing in a poker tournament with 1000's of players where only top 10 or so really make money. Trading is very similar to poker and chess in many aspects. As Mike pointed out some people are just not suited for it. It's a career, for the long haul. Sure you can hit a home run but it's the singles that eventually count-the home runs help but its your overall risk appetite and account size and how you handle both that's going to matter in the end.

I read a 100 books and was well capitalized when I started trading. I never blew up an account but I wasn't profitable for a long time. The only reason I didnt blow up an account was cause one thing stuck with me from over the 100 books I read was that "always preserve capital and the market will always be there whether you are there the next day or not". Lots of times I swallowed the bitter pill with a loss bigger than what I wanted to account for rather than hope for it to turn in my favor. Over the years I can remember tons of trades that were big losses but nothing catastrophic and you know what - Not a single one of them would have worked anyways. The losses would have been bigger.

And the second thing I see a lot of people doing is writing naked options without realizing the potential landmine. I had a trading buddy of mine who wrote naked calls on Phelps Dodge a mining company. It opened 25% higher the next day and he was wiped out. As cut throat trading is I never relish in pain for someone I know. He spent next 2 years paying his broker. Imagine that?

Lots of people come with trading pipe dreams of trading ES with $3k accounts and making $500 a day. Maybe they dont like their current job or whatever. Its like showing up for the NFL scout camp and taking a hit from a linebacker. Unless you are prepared for it ER is the place for you. That's how brutal trading is.

Even after almost 10 years of trading I have an edge of about 60% and that too if I keep risk under control. The moment I let the monkey out I am hurting and as a trader you are always evolving.

Dont't let my post discourage the ones who are willing to put in the effort. It's very rewarding in its own rights. Unlimited freedom. You are always in the "know" of current events. Never blindsided-Told 2 of my closest folks to take their money out in 2007 and sell real estate in 2006. Both didnt listen saying it was for the long term. Guess what ? Now they have to stay with it for long term-if you know what I mean. Again, it didnt bring me any pleasure but just self awareness and abundant thankfulness to supreme power for letting me be who I am becoming. Trading is great for the financial freedom and while people are getting laid off and sending endless resumes, you are working hard honing your skills -looking for new opportunities and making $. Each and everyday. Welcome to my world. When I am not opinionated, I am the skilled archer you see at the Olympics-bulls eye every time. Yeah, that's me. But for now time to get back to scans, news, slogging endless hours, endless hours so that when I take the shot it's perfect-each time, every time.

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I don't want to have any vendor-related discussion here in this thread about the vendor who produced this video, but this is from last year and is an interesting watch for those who haven't seen it.



Does this video speak to you about why you are a trader?

Mike

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  #32 (permalink)
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Thanks for starting such a crucial thread. Maybe some of my experiences could help others.

I've tried lot of things over the years... and found trading to be the most difficult of them all. When I went back to a regular job (at least twice in 8 years), it was mind-boggling that I was receiving a regular check and I was being paid for each day of work! And yet, I gravitated back to trading, as I wasn't ready to throw in a towel.

In my low moments, I thought of Brett's reflection Giving Up Trading.... but, I never quit though it was in the back of my mind...

After years of success and failure, success and failure..etc., and many micro-improvements and personal growth, I reached the conclusion that I truly don't care if I continue trading or not. In other words, while evolving as a trader, I stopped being addicted to the action. It became business. Nothing special, no glamor or dreaming. Win or lose, I lost the stars in my eyes.

Now I trade 1 simple setup on 1 chart. It is profitable over time, but could stop being so. If that happens, I'll find another one. And if I can't find another thing that works, I'll stop trading, without any regrets. Either way, I really REALLY don't care.

Trading has made me indifferent to trading. My happiness does not depend on being a trader, or anything else for that matter.

Now with respect to beginners, they still dream, are still addicted to action..etc. These have to be smoothed over, I think, before they can move on... or destroy what they have and quit.

"The mind is its own place, and in itself can make a heaven of hell, a hell of heaven." - Milton
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  #33 (permalink)
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@Big Mike

All out effort is pre-req NOT an edge. But few even understand what an all out effort is. That, I believe, is why indicator groupies or grail seekers come from with questions like what room should I join or what course should I buy.

Correct also that many floor guys have a terrible time learning screen trading. I believe that properly stated, the activity happening on the floor is appropriately called trading, while the screen based activity is really short term speculation. The two are very different processes.

I was lucky in that I spent years as a NASDAQ market maker before going to the trading floor. That activity was screen based, benefited from order flow "paper" and could be built on both fundamental and technical approaches. The specific edge though was absolutely the benefit of customer order flow. At the CBOE and on the other trading floors, order flow is a definite edge, so is having the ability to execute simultaneous transactions for a theoretical hedge or arbitrage. Having 20 other guys standing around looking to trade can also help as long as you are not the fool. "Edge"? as we are calling it now, to a screen based trader, starting from scratch...almost impossible.

For me though, Mike, the progression was part of the master plan. Going all out to learn something to which I thought I was well suited and believed I could compete at required me to subordinate myself to a process, the initial stages of which took years. Making a deposit, buying a nifty indicator package, reading a book or two is NOT even a half-assed effort. Almost everyone that employs that strategy is destined to lose all their money.

Almost every man I know has been golfing. I know two legit scratch golfers. In 2012 100 guys made a million or more on the PGA tour. The next hundred guys $214,000-$1,000,000. Number 300 on the money list made $31,000. 368 guys made the money list. Safe to say that those 368 are among the top 1000 in the World. I can acquire the same equipment down to the undergarments. I can read the same books, golf most of the same courses. BUT in a million years if I make every human effort possible to win the Masters, the best I might legitimately hope for is to get my pro "card" and compete at the local or country club level.

That does not mean I should quit golf. It does not even mean that I should stop trying to get better at it. What it means, in part, is that I should learn to love the game. To identify what it is that makes me love the game...to be happy to be on the course and to "shoot well" Now, that would give me something to build on, right?

So, when my options mentor suggested that I become familiar with "Options as a Strategic Investment", Lawrence G. McMillan and "Options Volatility & Pricing", Sheldon Natenberg on the Thursday before a four day weekend, I bought both at the train station on the way home THAT DAY. Over the 4 day weekend I read all 1400 pages and showed up a week later with over 400 note cards committed to memory. I was already running a Nasdaq desk. I communicated to my next mentor that I was serious and a good risk/investment. I clerked for almost 9 months before getting a badge and going on to choose a "crowd". I still did not make any real money until after I'd been in the crowd trading at least 9 months.

I'd venture that the top 300 traders in the world are all 9 figure guys...four digits past the 300th golfer. Like the golfer, none of them has more time in a day, or access to a secret club or special swing dynamic manifesto guarded by dragons. We each have our own attributes, the vast majority of which go vastly undeveloped because we are not honest with ourselves or committed to that which we claim as our desire.

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  #34 (permalink)
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Anagami View Post
Trading has made me indifferent to trading. My happiness does not depend on being a trader, or anything else for that matter.

To me, this sounds similar to "Once you know how to make money, you can make money doing anything". Or "The first million is the hardest" in other words.

Mike

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  #35 (permalink)
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wldman View Post
I'd venture that the top 300 traders in the world are all 9 figure guys...four digits past the 300th golfer. Like the golfer, none of them has more time in a day, or access to a secret club or special swing dynamic manifesto guarded by dragons. We each have our own attributes, the vast majority of which go vastly undeveloped because we are not honest with ourselves or committed to that which we claim as our desire.

Good points Dan. I think most people look at trading as a way to make easy and unlimited money. The truth naturally is not so glamorous.


wldman View Post
So, when my options mentor suggested that I become familiar with "Options as a Strategic Investment", Lawrence G. McMillan and "Options Volatility & Pricing", Sheldon Natenberg on the Thursday before a four day weekend, I bought both at the train station on the way home THAT DAY. Over the 4 day weekend I read all 1400 pages and showed up a week later with over 400 note cards committed to memory. I was already running a Nasdaq desk. I communicated to my next mentor that I was serious and a good risk/investment. I clerked for almost 9 months before getting a badge and going on to choose a "crowd". I still did not make any real money until after I'd been in the crowd trading at least 9 months.

How would you carry this over to screen trading?

I recall many conversations I've had with a close trading buddy over the last 5 years. One of the most memorable is "just add a zero", referring to the number of contracts traded. If only it were that easy. Trust me, I tried it a few times and it didn't end well (lol). The process is slow and gradual. Today I trade much bigger than I did a few years ago, but I also trade far less frequently and have much bigger targets per trade. I consider it an evolution of my process over the years, but perhaps it is just because I am getting tired so I modified my approach to help me adapt, slowing things down. I used to live on the edge with tiny charts and trading dozens of times daily. But am happy to say that is behind me and I enjoy a much slower process today, which is also far more profitable.

In a way, I think that is somewhat similar to floor traders entering the screen trading world. On the floor everything is absolute non-stop chaos. As a screen trader you would need ultra fast moving tick charts and you need to be taking dozens (hundreds even) of trades per day in order to get the same rush you would have on the floor, am I right?

Mike

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  #36 (permalink)
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Big Mike View Post
So David let me ask a blunt question... hope you don't mind or take offense... why do you believe trading is right for you?

OK let me back up to be fair. Do you believe that anyone can be profitable at trading? Or do you believe that some people are not cut out for it? Some believe any skill can be learned, others believe that there are some things they should accept are not their strong suits and move on.

Mike

Mike,

You can be blunt or ask me anything and I won't take offense.

I think some of your questions are difficult to answer, but I will give my opinion.

Do you believe that anyone can be profitable at trading? No, I think trading is indeed a skill and a profession. Not everyone is cutout for every skill or profession. Which I think answers the second question.. I do feel that there needs to be an interest in the markets and the process of trading. Interest may sound to simplistic, but what I mean is that one should not just trade for the money just like they shouldn't become a software engineer because it pays well, or there are a lot of jobs in that field. There needs to be some kind of desire or enjoyment, I think.

For me personally, I feel trading is right for a couple reasons. It's like being in business for yourself. The buck stops with you and nobody else. Ive been working for others for a long time and i don't like it. I admit that I got into trading for the wrong reasons. To make money. But in reality is that a bad reason? I think it's not a bad reason, but should not be the focus. The other reason is that I enjoy the process. I don't mind doing homework and I enjoy charting and technical trading. I think another question is, am I right for trading? Having the ability to be as some say "cool as a cucumber" does not come easy for me. I know that I have struggled with the emotional side, but I'm trying to improve upon that. I hope I answered your questions.

D

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  #37 (permalink)
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Wow. Says a lot about futures.io (formerly BMT) that this thread even got started, thanks @Big Mike and all who post in here.

Trading is indeed like golf - both 'combat activities' with an infusion of ego and talent that bring out the very best and the absolute worst in all of us as we flip between triumph and disaster, those equally unbalanced emotional magnetic poles. It is also a microcosm of life itself in all our fallible glories, forever to provide entertainment to our friends and enemies alike. If only we could suspend ego long enough to realise that's always how things are.

The 220yrd iron to the middle of the 18th green that attracted envious admiring glances or the insistence on hitting the half mud-covered ball in the hazard that resulted in the totally mud-covered shirt that had all players rolling around in fits on the floor? The sensible 2 points from the pullback in the up-trend or the widen the stop out another 10 points and add 2 contracts again because it has to turn here I just know it can't go lower but it just did?

You will never learn more about yourself than when you trade. Just be prepared to listen to the full ugly truth that emerges. Why did I start? I'm smart - just not smart enough to not start. Now I'm hooked to a terminal blessing and addiction. Why did I really start? Because I discovered that the world was not what we'd all been told it was.

What happened en-route?

Started 13 years ago shorting post dot-com trash telecom companies that were destined for (and reached) zero, just before Leonardo said a 62% retrace was due. My accounts reached zero before theirs did.

Made every mistake in the book, blew several accounts. Watched cert trades disappear in smoke. Sat and watched large losses get larger. Sat and watched large profits return to zero - because I never understood that it also takes balls to take a large profit. Lost it all and my sanity. Have traded +500% with thirty 5 minute binary option trades in one month. Have lost it all in 3 fat finger trades in 2 days. I no longer trade less than 20 minute binaries.

Learned that the learning never stops, particularly about the fat and water between the ears. That's always the tough bit, the rest of it is now pretty straightforward. Find something that works and stick to it. If it doesn't work you haven't found it.

A good day? Hard solid work and no more than 4 or 5 cherry picked trades with 2 or 3 winners.

A bad day? Tons of real turkey trades, usually with the two handed syndrome in full swing - you know - the one half says just wait and watch but the other half already clicked the mouse anyway.

Trading for me is for the income and the understanding and the art and the science and to know my place in the world that is exploding all around us - up and down.

Should I have stopped a long time ago if the advice on this forum had been available and loud enough? Hell Yeah. Listen Up.

Happy Easter to One and All. Thanks Mike. Battle restarts on Tuesday.

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  #38 (permalink)
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Great topic Big Mike,

After giving this a bit of thought I think there are essentially 3 Gates (or whatever you want to call them) that must be passed through when beginning your journey as a trader:

1st Gate:
This is an absolute pre-requisite. This gate includes your environment.
- Does your family support you? Have you explained exactly what it involves and the risks you'll be taking.
- Funds. Do you have enough money to cover expenses and trading losses to maintain your lifestyle. (in my experience so far, when you think you have enough, double it)
- Do you have the significant time available to dedicate to learning this

Do you have the right environment in place to even bother giving this a go?

2nd Gate
If you've passed through the 1st Gate, then the next pre-requisite is research and planning. This includes developing your trading methodology, risk management, trading plan

3rd Gate
The first two gates can be passed by anyone. Sure there is a lot of effort involved. But they can essentially be accomplished by most people. The final gate is your psychology and discipline. This is where things get tricky because it is all too easy to lie to yourself. The first two gates have hard and fast rules. Either you have those aspects in place or you dont. Pass or fail. However here you begin to learn about yourself and find out if you really have what it takes to be a trader.


So getting back to the thread question, I think that until you can pass the first two gates. Dont even bother thinking this can become a career. The final gate however is far harder because it doesn't have a clear end goal. It's a constant journey and one that is very personal. Hopefully you have the will power to give up if you see that you are unable to stick to your risk management plan, however it is very likely that those who dont stick to it, wont give up until they are forced to (by running out of funds, or family intervention).

On a side note, I stand firmly in the camp that sais not everyone can be a successful trader. This is not something that everyone can learn. This is not to say that traders are born. This is definitely something that has to be learnt. I am however saying that people either have an innate psychology and 'make up' that would lend itself to becoming a successful trader or they dont. Being honest with yourself on whether or not you pass that final gate is the question.

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  #39 (permalink)
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What a great thread!

Before I dare to utter my oppinion, let me first say that I am still at the beginning of my journey and not (yet) an accomplished trader.

The problem I see is that the ones that should give up will very likely not be interested in a thread like this. Almost to the point that one could say "if you are not successful and don't read this thread, it's time to give up".

There are many prerequisites for becoming a successful trader, but no guarantees.
On the other hand these prerequisites are not to be understood as prerequisites to start learning and developing, many of them can be seen as milestones on the way to becoming a (profitable) trader.
Someone mentioned a Samurai example which I rather liked. You cannot expect to succeed without thorough preparation (technical, tactical and mental) and utmost dedication. However, as this preparation and dedication was for a Samurai the only way to stand a chance in battle, it did not at all guarantee his survival.

I think doubt is an important aspect of this journey, it opens the view to problems and shortcomings and can keep your ego in check. If one lacks this doubt, it should be a big bright red warning sign, either expectations are unrealistic or the ego might be a bit oversized, or both which is probably the most likely. Of course this doubt has to be in balance with confidence and it should not interfere with low granularity decisions like individual trades.

Exterior factors like support, capitalization and so on are very important, but can at least in some rare cases be overcome. Interior factors however can be somewhat different. For example I don't believe that a person with the heart of a gambler can ever succeed in this game. Although we can develop and change to the better, I believe we can not change the very essence of who we are. So if these internal prerequisites are not met at least to some degree (no Napoleon syndrome, ability to reflect, ability to take responsibility, discipline although it can be learnt to a great extent, willingness to learn...)(note that I left out intelligence as I believe that rather little of it is neccessary to trade successfully) it probably is time to give up even before you started.

Vvhg

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  #40 (permalink)
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vvhg View Post
What a great thread!
For example I don't believe that a person with the heart of a gambler can ever succeed in this game. Although we can develop and change to the better, I believe we can not change the very essence of who we are. So if these internal prerequisites are not met in the slightest (no Napoleon syndrome, ability to reflect, ability to take responsibility, discipline although it can be learnt to a great extent, willingness to learn...)(note that I left out intelligence as I believe that rather little of it is neccessary to trade successfully) it probably is time to give up even before you started.

Vvhg

This paragraph touched on something that has caused a lot of doubt in my trading journey, so I'll put it out there to get some feedback. Even though I have never had any gambling issues, I am an addict to the core. I am very proud to say I have been sober close to 7 years now and my life has done a complete 180, however sometimes when I get excited in a trade (winning or losing trade) the switch will go off an I will make some inexplicable decisions that remind me of the state of mind I would go into when I was still active. I am naturally undisciplined, selfish, egotistical and have a high threshold for "pain". I have been able to change all of these in my daily life, but when it comes to trading, all these traits still come up with full force.

So, would this put me in the "Time to Give Up" category?

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  #41 (permalink)
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Xav1029 View Post
This paragraph touched on something that has caused a lot of doubt in my trading journey, so I'll put it out there to get some feedback. Even though I have never had any gambling issues, I am an addict to the core. I am very proud to say I have been sober close to 7 years now and my life has done a complete 180, however sometimes when I get excited in a trade (winning or losing trade) the switch will go off an I will make some inexplicable decisions that remind me of the state of mind I would go into when I was still active. I am naturally undisciplined, selfish, egotistical and have a high threshold for "pain". I have been able to change all of these in my daily life, but when it comes to trading, all these traits still come up with full force.

So, would this put me in the "Time to Give Up" category?

I don't think so, you seem to have a strong understanding of your shortcomings, and with a good understanding comes a very good chance of being able to either overcome or circumvent the problem. Maybe you would be better suited for automated trading?

.
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  #42 (permalink)
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Big Mike View Post
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.

Mike

Mike, fantastic topic for discussion. You bring up many good points for thought. I can only add that one must have an absolute passion for trading to have a chance. Once a trader realizes it is going to take actually work, and this isn't simply taking candy from a baby, they better be willing to put in a ton of work and persevere.

I think most go about it wrong but risking they're own capital while they are learning. I know I did. Traders need to be truly profitable on SIM, without cheating, bending the rules, and allowing for slippage. This is before they even think about trading a live account.

In fact, I would recommend new traders, struggling traders, and underfunded traders to go with a partner such as Topstep Trader. They will enforce discipline, and provide the capital to prove yourself. Given that option, not having capital is not a reason to quite trading, or to not even get started.

When should a trader quit. IMHO, only a trader can answer that. But given the what it takes to make it as a trader, I'm temped to say that if someone would quit, they wouldn't have made it anyway.

Here's a link that outlines the development of a trader. Since I'm not yet at the end, I can't say if it is entirely accurate, but it seems pretty good to me.

38 Steps to Becoming a Successful Trader

Plan your trade, trade your plan.
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  #43 (permalink)
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Brewer20 View Post
When should a trader quit. IMHO, only a trader can answer that. But given the what it takes to make it as a trader, I'm temped to say that if someone would quit, they wouldn't have made it anyway.

My thoughts also.

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  #44 (permalink)
Austin, TX
 
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Great Discussion. I think many people come into trading assuming anyone can do it and it is a path to easy money. For us who have been down the path we know it is one of the hardest things to succeed at doing.

I think there is a time where a person has to get honest and determine of trading or any profession for that matter fits. Trading is not for everyone just like being an MD is not for everyone. Personally I love to trade which is what enabled me to go through the rigorous process of self reflection, devastation, exhilaration that accompanies the learning curve. You can acquire through time trading knowledge that can help you make money but if you don't wake up everyday and look forward to trading then find something you do.

"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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  #45 (permalink)
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The replies so far, remind me of the time I tried to teach my sister to change the oil on her car.

Within a very short period of time I came to the conclusion that she should probably never change the oil on any car.

It was a very definitive, clear, logical decision on my part. She did not possess the necessary skills and learning them would be highly unlikely.

I told her just take your car to a place and pay them to do it for you.

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  #46 (permalink)
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Xav1029 View Post
This paragraph touched on something that has caused a lot of doubt in my trading journey, so I'll put it out there to get some feedback. Even though I have never had any gambling issues, I am an addict to the core. I am very proud to say I have been sober close to 7 years now and my life has done a complete 180, however sometimes when I get excited in a trade (winning or losing trade) the switch will go off an I will make some inexplicable decisions that remind me of the state of mind I would go into when I was still active. I am naturally undisciplined, selfish, egotistical and have a high threshold for "pain". I have been able to change all of these in my daily life, but when it comes to trading, all these traits still come up with full force.

So, would this put me in the "Time to Give Up" category?

Well, as @Brewer20 said, I think only the trader (you) can answer that question.
But I can't say "yes" due to your obviously high and trained level of self reflection. Although having a disposition to addiction, or however to put it, might be a disadvantage, being able to overcome such an addiction might just as well count as an advantage, partially or fully offsetting the other...or maybe even outweighing it, again only you can answer that.
And by the way, my hat goes off to you!
What I rather meant with my original comment was specificly a person with a disposition for gambling, active addiction or not.

It is said that war brings out the worst in a person, I think trading does too, although in a vastly different way.

Vvhg

P.S. I don't think that selfishness and egoism are as such undesirable in respect to becoming a successful trader
When it comes to trading I am pretty selfish too.

Vvhg

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  #47 (permalink)
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Brewer20 View Post

...

But given the what it takes to make it as a trader, I'm temped to say that if someone would quit, they wouldn't have made it anyway.

...


I don't understand the logic here... Isn't that exactly the reason, why traders who should quit because they do not have a chance to succeed, keep on trying endlessly? Their (unconscious) logic being: "If I quit, I admit that I could not make it in this game, I'm a failure, etc. Hence, I continue."

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  #48 (permalink)
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karoshiman View Post
I don't understand the logic here... Isn't that exactly the reason, why traders who should quit because they do not have a chance to succeed, keep on trying endlessly? Their (unconscious) logic being: "If I quit, I admit that I could not make it in this game, I'm a failure, etc. Hence, I continue."

I'm not at all saying the opposite of my statement is true. I don't believe that if someone never quits, then they will eventually be successful.

Plan your trade, trade your plan.
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  #49 (permalink)
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Brewer20 View Post
I'm not at all saying the opposite of my statement is true. I don't believe that if someone never quits, then they will eventually be successful.

You guarantee failure once you quit.

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  #50 (permalink)
Legendary Market Wizard
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I hate to say it, but...


"The mind is its own place, and in itself can make a heaven of hell, a hell of heaven." - Milton
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  #51 (permalink)
Mercer Island WA
 
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Big Mike View Post
Does this person have any business trading?

- Has been trading for 2 years, and has lost 50K out of his kids college fund
- Has paid over 20K in "courses" and "trading rooms" for "mentorships" and "systems"
- Hasn't told his wife or kids the extent of his losses

Mike

This has wide ranging consequences and needs to be addressed immediately. Sorry but stealing from your kid's college fund and not being honest with your wife about it is simply inexcusable and shows weak character, recklessness and poor judgment. These attributes almost disqualifies this person from being a good trader for starters.

The problem using college funds is it is "scared" money and you don't want to trade with scared money. This can place immense pressure on every trade and as losses pile up the trader will normally resort to destructive practices such as averaging down, doubling down etc, risking too much of the account on each trade etc.

Suggested go forward position for this trader

1. Sit down with your wife, explain the situation and take full accountability for what occurred. Explain you were only doing it to help the family financially but unfortunately the plan backfired.
2. If you don't have a job promise her you will get one and start looking asap. Promise her you will pay every cent back to the college fund.
3. If you have a job get a second one and promise her you will use those funds to pay back the college fund.
4. Once you have repaid the college fund and still have the desire to trade direct excess funds each month to a trading fund. This will not be scared money and will be money you can afford to lose. Do this with the full knowledge of your wife. The objective should be what @peterg pointed out above. Try and grow the account slowly to something sizable. Make sure effective risk management is practiced on each and every trade. One mistake can blow the entire account as Peter discussed earlier.

The most important point is to stop trading immediately right now. If you continue to dip into the college fund it will likely be all be gone and you can probably kiss your marriage goodbye at that point as well. As @PandaWarrior pointed out in one of his earlier posts family is everything so you need to do everything possible to salvage the situation while there is still time.

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  #52 (permalink)
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djkiwi View Post

The most important point is to stop trading immediately right now. If you continue to dip into the college fund it will likely be all be gone and you can probably kiss your marriage goodbye at that point as well. As @PandaWarrior pointed out in one of his earlier posts family is everything so you need to do everything possible to salvage the situation while there is still time.

Agreed. I don't recall the exact percentage but its very high that marriages end in divorce because of financial issues. That statistic is really only dealing with, for lack of a better term, the average joe. Part of the problem is money management is never taught in school. Hell half the financial professors have more debt and are more broke than anybody. Anyways though, now you take money out of whatever account be it kids college, retirement, etc and blow it trading. Talk about wanting to ramp up the fire between you and the spouse, oh boy. Reminds me of Rodney Carrington and "we need to talk" google it and first YouTube link that pops up.

In the end though the reason we are all working our ever loving butts off is to provide for our family and give them a better life them we had. At least if your priorities are in the correct order. Trading should not take over that number one priority. I admit I'm a trading addict and I could spend every minute that I'm not asleep or not at work in front of the computer watching reviewing charts but I balance that time with time with my wife. I work stupid long hours but instead of keeping to trade after long days I sacrifice trading for time with the wife and the horses and dogs. Balancing that time is still tough though.

My opinion is that there is a type of trading for everyone. My father in law is the sit back and let it ride for years type. I'm a day trading type that looks for the larger moves. He is big time successful and I'm moving in the right direction. But finding your niche is the tough part. Understanding who you are as a person will help you decide what type of trading is good for you.

My .02 ...

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  #53 (permalink)
maui
 
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I use them frequently and at Volume.

But the most important one is........................ STOP

..... Before even trading and/or during

Especially When trading Other Peoples Money...Accountability is higher, conduct is critical.
Trading affords that you take the TIME & STOP

STOP Before:

STOP....... look at the Photos of your wife and children on your trade desk.
STOP........look in your Desk Mirror, & Ask (audibly of yourself,) if this is for you or them and if you're fit to perform.
STOP........& ADMIT your trade day may end right here right now ...hit the showers,..... plant or pick flowers.

STOP During:

STOP.........& Wait, hurry up annndd wait some more
STOP....... on Individual Trades, When tired, When bored, When obsessed.
STOP........when you hit your Daily Loss Limit & especially your Account Suspension Limits, @3%,@6%,@9%
STOP ....... & Evaluate Trade Performance Stats every day, week, month.
STOP........Trading Live Completely @9% Account Loss...Game Over...off to the Simulator....
or off to work...... learn the value of the money lost..... the hard way...pick weeds.

I do this every day, its routine, somewhat childish...I have a big mirror and a Smeagol pearing out below a monitor lest I revert to this less than savory humanoid state.
I also have one forex account just off suspension after a month of sim trade back; cant break the rules, gotta own it, gotta survive,
gotta be human.

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  #54 (permalink)
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Thanks @Xav1029 that take courage


Xav1029 View Post
This paragraph touched on something that has caused a lot of doubt in my trading journey, so I'll put it out there to get some feedback. Even though I have never had any gambling issues, I am an addict to the core. I am very proud to say I have been sober close to 7 years now and my life has done a complete 180, however sometimes when I get excited in a trade (winning or losing trade) the switch will go off an I will make some inexplicable decisions that remind me of the state of mind I would go into when I was still active. I am naturally undisciplined, selfish, egotistical and have a high threshold for "pain". I have been able to change all of these in my daily life, but when it comes to trading, all these traits still come up with full force.

So, would this put me in the "Time to Give Up" category?

Hell no!!!! Just my quiet and humble opinion. Here are some of my thoughts behind this (again based on just this post and how you contribute here).

You have listed some areas that you don’t like but what are the strengths? Hard working, sharing, team player, good communication, intelligent (in awe of your programing abilities), persistent open and honest. And to have the courage to face addiction and be clean for 7 years – maturity.

It would be time to give up if you kept doing the same thing over and over, maintaining the same expectations while risking money you could not afford to lose. But your way past that. You have a lot of strengths – how do you use those to compensate for areas you are weak in? That’s a question I am working on right now.

I understand the addictive nature of the market - I have an impulsive side that kicks in. If I have a string of wins or a big trade that works well my wife can read the signs that addiction/overconfidence etc is setting in. All of a sudden I see opportunities that really are not that great – I enter and it costs me.

I owned a small business previously and the amount of younger people that wanted top dollar for doing nothing, wanting to tell me what they would do, doing what they wanted anyway when unsupervised…it was scary. Many were overconfident and under skilled and believed they could get what they wanted because they were sooo good…they trouble is they were not that skilled. They could be if they would listen and learn (Mr Miyagi style) – but few people take that road. What do they look like if they become a trader – I can do this…tell me the secret…I don’t want to waste time looking at that….your service was crap it taught me nothing (did they really apply it anyway…). For people with that approach - give up trading and look at yourself- and COME BACK when you have a willingness to learn, listen, apply, try, ask, interact and thank…and won’t use money you need in the process.

From where I sit XAV you are in the zone of what it takes to trade. I am in the same place and I believe that I will be profitable consistently BUT my hurdle currently is actually managing me. It is working on Who am I – and what does that means for trading.

Here are some thoughts that helped me reach this conclusion. These are the things that I would not look at 18 months ago BUT they are my way forward. I have three processes I am now working on as my plan
  1. Trade location and execution
  2. Money management
  3. Managing myself as I do the previous two.

Here are some thoughts on managing myself – If I don’t plan for these areas I should give up because I will continue to struggle. Thanks to Brett Steenbarger for his resources – helps me heaps Brett Steenbarger Articles on Trading Psychology and Trading Techniques

I struggle with directional bias (first trade I take a profit and I re-enter expecting a continuation). One issue here is that my state of mind when executing or managing the trade is different from the state in when I placed my first trade. I often get a good trade and if all I did was stop the second trade it would make a big impact on my trading. If I cannot do this I should stop – I will always struggle in this area but may improve over time with practice and build up to a second trade. So the plan – one trade per day.

I can be disorganized and impulsive at times. To continue trading I need to look at external brakes such as a "drop dead" once a loss limit is hit (HELLO TST ).
I also need very explicit, simple and structured rules to follow without variation (for me rules such as one trade per day and tell my wife I am finished and then get a life and do other things for the family)

Understand that I can become addicted to watching screens and PA unfolding. This leads to me second guessing my initial trade decision – I exit and reposition – and then often find out my original analysis was correct. My brain plays trick on me when I watch too much live data (that was something that took a while to figure out) see https://www.youtube.com/watch?v=JiTz2i4VHFw My plan – plan one trade, enter and do not watch the screens. Let the TSL and money management do its thing.

Also to do this I work with my wife as a team - It's pride that tells me I can handle it on my own…and it leads me to fall. I am considering working with one trader – learning from someone with a deeper knowledge of an approach I like – learn from the best to become better. Teamwork – how can this be built into my process? I need it for my personality. I will work with my family. I will find a good mentor to learn good habits.

This means that watching the DOM and order flow is now very minimal FOR ME. I love those tools but they are not the best for my personality. I need to look to a longer timeframe.

Perfectionism anxiety. I am achievement-oriented and need to replace performance goals with process goals. How do I manage…..(me, money, trade execution) not buy at XYZ for $$$ profit

A great Quote from Brett
[COLOR="rgb(255, 0, 255)"]Most traders who are convinced that they have deeply-rooted psychological problems or addictive trading patterns are actually caught in a vicious cycle of perfectionistic self-demands, increasing performance pressure, mounting anxiety, disrupted performance, and renewed self-demands to compensate for the failure. After a while, traders caught in such a cycle begin to doubt whether they will ever succeed. By addressing their problems at the source—the expectations that generate performance pressure—traders can often turn themselves around in a surprisingly short period of time.[/COLOR]

When should I give up trading? If I don’t address the issues at the source.

Another of Bretts Quotes
[COLOR="rgb(255, 0, 255)"]The key to success is finding a seamless fit between one's talents/skills and the specific opportunities available. For traders, this means finding a superior fit between your abilities and the specific markets and strategies you will be trading. Many performance problems are the result of a suboptimal fit between what the trader is good at and how the trader is trading.[/COLOR]

When should I give up trading - If there is a "cancer" in my trading, removing it may be as difficult…If I don’t want to remove it or look at it I am in trouble.

I need to reflect on what I do wrong so I can improve my game.

So to go back and add to my earlier post - The values of patience, resilience, hard work, relationships and honesty need to be applied by matching my personaliuty and life circumstances to a fitting trading approach. At the end of the day my kids and family just want time above toys).

Trading for me is a complicated mix of personality, risk management and market understanding.

When should I give up?
If I am unwilling to work on the issues above then I should give up – left unresolved they will undo my success I may have

Every trader is unique but there is a common theme – what do we do with the cancers that are killing our trading.
Do I humble myself and face them? Or ignore and hope for the best. What will the outcomes be based on my choices? That’s a good guide for me if its time to give up or not.

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  #55 (permalink)
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Xav1029 View Post
..... I have been able to change all of these in my daily life, but when it comes to trading, all these traits still come up with full force.

So, would this put me in the "Time to Give Up" category?

Thanks a lot for sharing Xav and my hat off for you succeeding in turning you life around.

When I first went into trading I did not know that it would get so close to my first goal or "higher call" in life, which is to found a retreat center for youth. I am half way in my psychology education where troubled youth is my main interest. As most others I guess I did not realize which effect trading would have on me as a person, but after a while a realized that under normal circumstances this is where one can get the best psychological and emotional beating one can get in life. If one have issues there is none that will escape when you do trading. This is the single one place where you can not lie to your self. As Dr. Rande Howell put it; "Your trading account is your "lie-meter"". You get it right away. With life in general one have the opportunity to deny, lie to one self and postpone, but with trading you get it right into your face. No room for "another day". So since I came to really love trading I also came to realize that trading is the best catalyst for personal growth there is. One could say the perfect wrestling ground for every Zen practitioner. And as a therapist at a retreat center for youth one have to go a lot of rounds with one self too before "stepping into the ring". In this regard I think trading is a quite amazing and unique opportunity.

My point, going back to your last words, maybe what I wrote could give you a new perspective on things? If you really love trading you could have an opportunity here. You can continue to grow as a person and earn money as a secondary effect by also doing something you love to do. This is my perspective on trading. So maybe quitting is not the answer?

Taking what you wrote in perspective I personally think that Dr. Rande Howell is the best trading psychologist available. He is a great presenter and I think he is addressing these issues and how to overcome them in a very unique way. I am inclined to say that he has lifted "Zen" up to a new level. You can get in contact with him over at tradersstateofmind.com .

Best wishes,
Laurus

“If you wish to see the truth, then hold no opinions for or against anything.” - Hsin Hsin Ming
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  #56 (permalink)
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Big Mike,

Maybe you could invite Dr. Rande Howell to do a webinar for us here at futures.io (formerly BMT)?


Here is some links to some interviews with him:

Mastering Uncertainty in Trading - YouTube

Achieving Confidence in Trading - YouTube

Using Your Mistakes to Develop Discipline - YouTube

Breaking Through to the Next Level - YouTube

Handling Your Emotions When There Are Trading Losses - YouTube

Rande Howell - YouTube

Achieve Peak Trading Performance - MoneyShow.com


Laurus

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  #57 (permalink)
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Laurus12 View Post
This is the single one place where you can not lie to your self. As Dr. Rande Howell put it; "Your trading account is your "lie-meter"". You get it right away. With life in general one have the opportunity to deny, lie to one self and postpone, but with trading you get it right into your face.

I think for many people at some point in their trading career, this becomes true, that the trading account is the 'lie-meter' -- they convince themselves that it's okay that they keep losing money, and they don't make necessary changes (which may include quitting, maybe permanently). But for most new traders, the account is not a "lie-meter," it's an "inexperience-meter" and an "ignorance-meter." They don't have enough experience or enough knowledge about how trading works to have much of a chance to make money. And even worse, they may do incredibly well at first, in which case the account is a "luck-meter." Account P/L is perhaps the "bottom line" for how we're doing psychologically and technically in our trading, but it says nothing about our risk profile (profit as a function of risk or drawdown), our consistency (profit as it relates to volatility), and for newer traders particularly it is not indicative of psychological issues alone (which may be present), but of all issues, including those related to skill.

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  #58 (permalink)
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I think you would just know when it's time to give up.

But.... if you were capable of knowing this, and more importantly, able to action it, then you probably wouldn't be doing too badly in the first place.

For me, it's been a steep learning curve with many false summits...so far. When I trade consistently, I am profitable, when not, I am not.

I also work part time to pay the bills, the wife is fully on board with this venture and we have reached the understanding that it is going to take about 2 years of consistent trading to make the amount of money that I will need to do this full time.

But, We have a plan and we are sticking to it.

For me, clarity came when I realized it was not about indicators, but about my insight into why price was doing what it was.

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  #59 (permalink)
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josh View Post
I think for many people at some point in their trading career, this becomes true, that the trading account is the 'lie-meter' -- they convince themselves that it's okay that they keep losing money, and they don't make necessary changes (which may include quitting, maybe permanently). But for most new traders, the account is not a "lie-meter," it's an "inexperience-meter" and an "ignorance-meter." They don't have enough experience or enough knowledge about how trading works to have much of a chance to make money. And even worse, they may do incredibly well at first, in which case the account is a "luck-meter." Account P/L is perhaps the "bottom line" for how we're doing psychologically and technically in our trading, but it says nothing about our risk profile (profit as a function of risk or drawdown), our consistency (profit as it relates to volatility), and for newer traders particularly it is not indicative of psychological issues alone (which may be present), but of all issues, including those related to skill.

Hello Josh,

Sorry for the late reply. Good points. Thanks for elaborating and widening the perspective on that one.

Laurus

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  #60 (permalink)
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A bit on the side, but I think it touches into an important part when it comes to have good perspectives on what trading is.

In my process of figuring out what trading actually is I have experienced that I have gone away from approaches only to get confirmation later that what I was doing was very straight on. Mainly I am not talking about methodologies here, but about perspectives or attitudes to what one are doing. Because I had not been taught by or been amongst professionals I thought that I had to be missing something here. You know, the common beginner or aspiring to something self doubt.

Regarding this I think what DionysusToast wrote in his document about trading over at jigsawtrading.com is the most down to earth and best document I have read on the matter. One of the things he wrote that I like is the comparison he makes between trading and sports. You learn the techniques and then you practice so much that you get a good subjective feel with what you are doing. I think this perspective is very important. It's just like with tennis or golf. I have done things in my trading that I do not do anymore, but which I did very well. But because I thought that this was not good, "because this had to be too crazy or I had to be missing something", I stopped doing it. One do not have any green crossing that or red crossing this when one play golf. If you have trained your technique to the point where you get good consistent results it's working and you got the feel! And it doesn't matter where you get it from. If I do not get into the zone where I have my subjective feel on high gear when I trade my trades goes bad. I am just not there. It's the same as when I compete in something else. If I am not able to touch into my feel I loose.

I would like to add another point regarding psychology also. In the beginning, when I was asked about recommendations from people about where to start with trading I was passing on the opinions of others who said that one should start with psychology first. Turning the typical road the other way around. But if one have not traded at all how do you know what will make you tick. One do not have any reference points. Another thing is if you do not have your general trading plan and methodology in order how can you distinguish between the degrees of if it's insecurity caused by sloppy home work that is making you more nervous or if it is the trading it self....? If today I sat down in an airplane and took off by myself I guess my pants would be wet when I landed, if I was able that is. But if I got a pilot's license I would like to think that my thongs would be okay. But back to trading; I fell into the latter category where I realized that working on psychology was meaningless as long as I did not have everything in my business in order. So it was back to the drawing board. I suspect many others have been or are in this category too.

Laurus

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  #61 (permalink)
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i have to admit that i did not read the entire thread yet, but i am impressed by the postings.

for what it is worth, here are my 2 cents:
I have stopped trading last fall after trading for 2 years. i was never really profitable, and my time (= capital to support myself) was running out. i did not lose a ton of money, as i was a break even trader most of the time. with more time i may have made the transition to be a profitable trader, but i will never find out. i am now back in my old field of work and making a decent living.

i do not consider this time lost because i have learned so much. i am more aware of my own thinking, the things we give attention to, i have developed a more objective way of thinking, emotions no longer play a role in important decisions. almost surgical - which freaks me out sometimes. but i am a better person now, i like myself more.

i think i will never fully quit trading, currently i am exploring automated trading again. but i now know the full implications of what it means to trade and so i am taking it really slow.

so in my case trading, and then stopping trading was one of the best things to date and has helped me evolve and shape my character.

It really does not have to be negative.

"I don't even see the code anymore. I just see blonde, brunette, redhead..." -Cipher, The Matrix
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  #62 (permalink)
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I never really thought the day would come that I thought it would be time to give up, but it seems like that is where I am at.

I think @Big Mike was eluding to the fact that maybe trading isn't for me. I think trading is for me, but I'm not for trading. The unfortunate thing about trading is that you either need to be really good at, or have enough money to get good at it. If you don't get good at then you still have enough money to live.

I was considering another TST combine with the thought that "this time" it would be different. I will actually succeed in the combine and get funded. But I'm not sure why that would happen. Why would things be any different this time than they have been for the last 8 years. I took their Intuitive Development training last week. One of the first things we were to do is create a trader profile. In other words, state who we are as a trader. I'm not even sure I can do that. I've been exposed to so many things over the years that I don't even know who or what I am as a trader. I don't think it's a good idea to try and incorporate all one has been exposed to. I find myself counting waves as in Elliott and I don't even like EW. I find myself trying to find tops and bottoms via VSA. A little knowledge is dangerous. I try and use the Wyckoff principles, but tend to always be looking for the reversal. Sure, there may be a reversal, but it may only be short lived.

I think the simplicity of what @VinceVirgil does is really the way to go. Just a price chart, a moving average and trend lines. That method can be employed on his 800 tick chart or an 8 hour chart, or whatever, but all the other stuff seems to just get in the way. When i say simplicity I mean in the chart set up not the execution.

futures.io (formerly BMT) is a great place for Traders. I wish everyone much success.

David_R

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  #63 (permalink)
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David my intention was to get you to evaluate some of your preconceived notions not to discourage you.

I think for any struggling trader, which is a lot of people, you need to rethink what you are doing from time to time.

I often take the tough love approach when people ask me for help yet have shown no commitment of their own. You have shown a lot of commitment so don't fall into that group but at the end of the day I do feel like you almost feel like trading is not something you deserve to achieve.

Most people have completely unrealistic expectations and frankly have no business trading. The impact to their family being a big reason. Trading is not for everyone. The few that take it seriously seem to over complicate things to the point that my head spins with some of the stuff and charts people post for reasons to take a trade.

If you trade, keep it simple, take fewer trades for more gains over longer periods of time, and spend most of your time evaluating your strengths and weaknesses, not entries on a chart.

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  #64 (permalink)
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Last thing - futures.io (formerly BMT) is a place to find support but never forget the market will eat you alive if you present as many vulnerabilities and second guessing as you mentioned in your last post

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  #65 (permalink)
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David_R View Post
I never really thought the day would come that I thought it would be time to give up, but it seems like that is where I am at.

I think @Big Mike was eluding to the fact that maybe trading isn't for me. I think trading is for me, but I'm not for trading. The unfortunate thing about trading is that you either need to be really good at, or have enough money to get good at it. If you don't get good at then you still have enough money to live.

There are barriers to entry - same as for almost any job as far as I know. If one is driven for profit reasons, I wouldn't go into finance in today's market. Pick one job and be good at it.

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  #66 (permalink)
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David_R View Post
I never really thought the day would come that I thought it would be time to give up, but it seems like that is where I am at.

I think @Big Mike was eluding to the fact that maybe trading isn't for me. I think trading is for me, but I'm not for trading. The unfortunate thing about trading is that you either need to be really good at, or have enough money to get good at it. If you don't get good at then you still have enough money to live.

I was considering another TST combine with the thought that "this time" it would be different. I will actually succeed in the combine and get funded. But I'm not sure why that would happen. Why would things be any different this time than they have been for the last 8 years. I took their Intuitive Development training last week. One of the first things we were to do is create a trader profile. In other words, state who we are as a trader. I'm not even sure I can do that. I've been exposed to so many things over the years that I don't even know who or what I am as a trader. I don't think it's a good idea to try and incorporate all one has been exposed to. I find myself counting waves as in Elliott and I don't even like EW. I find myself trying to find tops and bottoms via VSA. A little knowledge is dangerous. I try and use the Wyckoff principles, but tend to always be looking for the reversal. Sure, there may be a reversal, but it may only be short lived.

I think the simplicity of what @VinceVirgil does is really the way to go. Just a price chart, a moving average and trend lines. That method can be employed on his 800 tick chart or an 8 hour chart, or whatever, but all the other stuff seems to just get in the way. When i say simplicity I mean in the chart set up not the execution.

futures.io (formerly BMT) is a great place for Traders. I wish everyone much success.

David_R

David, I feel your pain and understand reasons, but I think you have another option if you adore trading so much but don't have time to trade futures intra day and capital to swing. Check out Forex trading. Most successful people that I know who trade Forex are trading from 4 hour or daily charts, i.e. requiring very very little time trading on daily basis. Some trade from weekly. And you need not to have a large amount of capital as you can trade fractional lots, with a little as 10 cents per tick. If you are interested I will privately recommend you a resource/community dedicated to Forex where I started 4 years ago still going strong with mostly same user base. I have no interest there but it is a genuine resource that can possibly provide you with a way out for your trading aspirations and lack of time. Most of people there are part-time traders having daily jobs and trading 30 minutes a day or so. Don't give up.

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  #67 (permalink)
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@David_R I gave up on trading one time and it was the best thing I ever did. It allowed me to pursue other things and start a successful business that I have in addition to trading to this day. A savvy tough NYC friend of mine taught me to always have many irons in the fire. Why have a sole source of income when you can have many?

Giving up allowed me to later come back to it with the correct mindset and some much needed wisdom. It is very hard when things are not working and spiraling down to approach trading the right way. So don't be afraid to leave it. Does not mean you have failed. You may move on and never come back or you may come back to trading and things finally click.



David_R View Post
I never really thought the day would come that I thought it would be time to give up, but it seems like that is where I am at.

I think @Big Mike was eluding to the fact that maybe trading isn't for me. I think trading is for me, but I'm not for trading. The unfortunate thing about trading is that you either need to be really good at, or have enough money to get good at it. If you don't get good at then you still have enough money to live.

I was considering another TST combine with the thought that "this time" it would be different. I will actually succeed in the combine and get funded. But I'm not sure why that would happen. Why would things be any different this time than they have been for the last 8 years. I took their Intuitive Development training last week. One of the first things we were to do is create a trader profile. In other words, state who we are as a trader. I'm not even sure I can do that. I've been exposed to so many things over the years that I don't even know who or what I am as a trader. I don't think it's a good idea to try and incorporate all one has been exposed to. I find myself counting waves as in Elliott and I don't even like EW. I find myself trying to find tops and bottoms via VSA. A little knowledge is dangerous. I try and use the Wyckoff principles, but tend to always be looking for the reversal. Sure, there may be a reversal, but it may only be short lived.

I think the simplicity of what @VinceVirgil does is really the way to go. Just a price chart, a moving average and trend lines. That method can be employed on his 800 tick chart or an 8 hour chart, or whatever, but all the other stuff seems to just get in the way. When i say simplicity I mean in the chart set up not the execution.

futures.io (formerly BMT) is a great place for Traders. I wish everyone much success.

David_R


"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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  #68 (permalink)
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it crossed my mind to quit about 10 months or so back .As a beginner i had read a lot and followed a few blogs and thought i had a clue , pretty soon i lost 60% of my stash, i tried a few indicators and ideas but i never really had a system , i didnt keep a journal even though i acknowledged to myself it would make me accountable, partially the reason i didnt keep the journal and didnt stay on sim(stupidly) was i keep chopping and changing thinking this was a better way and that indicator was a better way. i should have done more research and found something that worked for me and tested the crap out of it.
After losing 60% ( i originally said 50%) i knew this was going nowhere fast, so i went onto sim. I was lost or overwhelmed- there are so many indicators & systems, opinions and ideas that as a beginner, its hard to drill down to the truth or what works.
For me i am interested in trading as its a challenge, there is great learning and of course the psychology of self improvement. I have learnt a lot in the last year since then- i have moved my trading into more price action and understanding the overall market flow a bit more and where Smart money might be trading from. i have my indicator chart also for confirmation but dont relay on it and im happier now. i know i have something that works well on probability, if it hits my stop - well you can't win them all- just try to make the winners count. I'm going to take a sim account and double it 3 times in a row before going back live. i have doubled the first and im on the second time - so far so good. i know this doesnt guarantee i'll make it as a trader but im gonna give it some fight! i still need to work more on the psychology more and read Dr Brett Steenbarger again.


"But I will tell you something curious: A stock speculator sometimes makes mistakes and knows that he is making them. And after he makes them he will ask himself why he made them; and after thinking over it cold-bloodedly a long time after the pain of punishment is over he may learn how he came to make them, and when, and at what particular point of his trade; but not why. And then he simply calls himself names and lets it go at that."REMINISCENCES OF A STOCK OPERATOR

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  #69 (permalink)
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Big Mike View Post
Why did I start this thread?

Because after receiving a few thousand of these PM's and emails over the years, I want to scream sometimes... trading is not for everyone. Especially the guys ruining their life with trading. These guys are gamblers, not traders, and they are wrecking their life, their wife's life, their kids life not just in the monetary sense but also with their time and how it affects them and how that carries over into their personal life. Is it worth it?

I do not subscribe to the philosophy that anyone can learn to be a good trader. I am more realistic, and that everyone's life situation (prior to trading) is unique, not everyone can truly be in a good position to start a trading career and on top of that, not everyone has the personality traits required to be a good trader.

There are exceptions to every rule, and as I said before in my first post, if you aren't a "fighter" who has the thinking of simply making happen what you want to happen, then you really don't stand a chance.

Frequency of these emails continues to increase, which could be because of the popularity of the forum or could be because markets are getting harder to trade. But a common trait between emails is lack of accountability or responsibility. Everyone wants me to tell them where to enter, where to exit, or who to follow in order to be profitable.

Mike

As unfortunate as some of the stories may be it almost sounds like some sort of subconscious psychological attempt to transfer guilt/responsibility - everyone's situation is entirely their own responsibilty - the risk warnings are there for a reason when you open an account.

How about a couple of additional lines in your signature such as "Search on the forum if you want a place to vent your emotions re bad trades, help trading etc," and then have a standard reply that you send to anyone that contravenes this .

"The primary thing required to obtain what you want from life, is simply the will to pursue it, and the faith to believe it is possible." - Author Unknown

"The ability to maintain discipline and stick to the rules is the hallmark of the experienced successful trader" - Curtis Faith
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  #70 (permalink)
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This is the name of my journal. It would be a lie to say I never thought about it.
The question @Big Mike asked was when does a guy give up?
Ironically, the answer is as broad as the answer to the question of What is the best trading system out there?
I cannot tell you that.
Self discovery is the name of this game.

If you always do what you have always done you will always get what you have always gotten.
Celebrate because you executed your edge. Not because you won.
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  #71 (permalink)
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David_R View Post
I never really thought the day would come that I thought it would be time to give up, but it seems like that is where I am at.
..
David_R

if you find something better like cclsys did then giving up is not so bad

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  #72 (permalink)
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when the dog don't bark,

when the porch don't creek...

and when the target turns negative and the stop loss becomes familiar....


long before you're broke...

or, simply catch a money manager and let them do for you....

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  #73 (permalink)
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liquidcci View Post
[B]@David_RGiving up allowed me to later come back to it with the correct mindset and some much needed wisdom.

Obviously you did not give up. To give up means to quit and never return. You took a break. I think that is an important distinction.

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  #74 (permalink)
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jimjones26 View Post
Obviously you did not give up. To give up means to quit and never return. You took a break. I think that is an important distinction.

I agree completely and many (most) people that are suffering from trading losses would be well served to take a couple weeks off with absolutely no trading, no charts, just to regroup and clear their head. I see too many examples on the forum in the journals of people just plowing ahead aimlessly because they believe that more work = better result, but sometimes you simply need to work smarter, which includes taking well needed breaks.

Mike

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  #75 (permalink)
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Big Mike View Post
I agree completely and many (most) people that are suffering from trading losses would be well served to take a couple weeks off with absolutely no trading, no charts, just to regroup and clear their head. I see too many examples on the forum in the journals of people just plowing ahead aimlessly because they believe that more work = better result, but sometimes you simply need to work smarter, which includes taking well needed breaks.

Mike

Very true. You can get in a lockdown mode mentally after a period of misfortune and remain there. I too myself took breaks several months long after hit the wall and it helped, as I returned with a clear mind and new ideas. This is how it has to be: if you have no idea hot to fix - take a long break, only return when you get a good idea and energy for another round.

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  #76 (permalink)
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Big Mike View Post
I agree completely and many (most) people that are suffering from trading losses would be well served to take a couple weeks off with absolutely no trading, no charts, just to regroup and clear their head. I see too many examples on the forum in the journals of people just plowing ahead aimlessly because they believe that more work = better result, but sometimes you simply need to work smarter, which includes taking well needed breaks.

Mike

Good point. It's all too easy to go too deep down the rabbit hole and be so consumed in what you're doing that you lose any and all perspective on the bigger picture.

Diversification is the only free lunch
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  #77 (permalink)
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I'm really glad that I was able to come up with a plan after my first big loss. I cut down on trying to trade heavily as well and took a different approach. I didn't have the time back then to do proper research either but it worked out for me luckily. I still need to make a journal/blog but I think I'll go with an actual blog to keep track of things (and to play around with the layouts ).

Now that I've got a second wind, I'm going to follow the plan I made still but also do more research on the other stuff I eventually want to trade. I've learned a lot on my losses and while I don't think I'll ever truly give up on trading, I'll at least have better ideas of when to stop ^_^

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  #78 (permalink)
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Maybe I am missing an important point. Maybe I cannot get the complete message, because English is not my native language ...

Nevertheless I spent the time to read the complete thread and I guess the discussion is a very valueable one. But according to my way of thinking it seems simply not possible to give up trading completely. The only way seems to become a person without any capital.

But in case some money is still left, I am forced to take decisions. Even in case I hold only cash I have taken an decision that could be a wrong one. For example inflation can harm the value of my capital.

So are you pronouncing here the difference between investment and trading? From my point of view, both are similar (maybe within different time frames).

My point is to harmonise knowledge, money management, risk management and time frames. But we are all forced to stay in the game in some way.

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  #79 (permalink)
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Dogdancer View Post
So are you pronouncing here the difference between investment and trading? From my point of view, both are similar (maybe within different time frames).

My point is to harmonise knowledge, money management, risk management and time frames. But we are all forced to stay in the game in some way.

You give good reasons why we all should study and work hard in these areas, investment is simply long term trading - its just that most people will never know it.

It is also a general rule that most traders find it difficult to buy (they think the short side is more exciting) and most investors find it difficult to sell (they cannot bear to part with their decisions) - knowing both sides and also what is done to the general public in the name of 'financial advice' is important.

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  #80 (permalink)
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Big Mike View Post
But trying your hardest is a requirement. It is not an edge. While someone who doesn't try their hardest can have a good trade, a good day, a good week, or even a good year, the likelihood they will be a long term profitable trader is slim.

So if you are measuring yourself against long term trends, say a 10-20 year career at minimum, then I don't think "hard work" is an edge. It's a prerequisite.

All the floor traders I've talked to have had a terrible time transitioning to screen trading. On the floor there was an edge by simply being there, you could buy the bid and sell the ask and pocket the spread from my understanding. That particular edge does not exist for screen trading, but perhaps there are other edges that do. For example as an individual trader, professional or not, you are more nimble than an institutional trader which can give you an advantage.

Mike


Many floor traders cant make the transition to screen based traders simply because it is "different". Its like asking a 10 year veteran outfielder to make a transition to shortstop. Is it still baseball? Most definitely yes. Does it a totally different tool set to be successful? Again yes. Can some do it? Some, but not many. Trading is no different than any other "profession" that one needs to invest 1000's of hours into to succeed. Wish it were easier, but I dont know how it could be.

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  #81 (permalink)
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I would recommend that folks in this boat get with some successful traders, sit at their feet, watch and learn. So much blah blah on this thread, you ain't rich enough to trade, you ain't smart enough, you ain't cut out for it, etc, etc...
Fact is that it's a job requiring complex decision making. If you wanted to be an eye surgeon would you write your own textbook while you were learning... only if you are a complete idiot. Not to say it can't be done, I'm still trying. Experience and knowledge are the keys to success in this business. You can't rush it or force it, but you can step back, appreciate it, and develop a plan on how best to acquire the skills and knowledge you do not have. Find a pro who will take you under their wing. Otherwise, be prepared for a battle of endless frustrations and illusions as you learn what it is you don't know, which is more than you currently know..... I went all in, and that's that... Risk i tell ya''''

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  #82 (permalink)
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The day I drew the line in the sand I said to myself.... I'VE LEFT BETTER PAYING JOBS THAN THIS!!"

From that moment forward my mission was to simplify trading by backing myself off that line one inch per day (i.e. simplifying things).

simplifying doesn't mean I wanted this to be easier. It meant that I needed to focus on the work that mattered most (Ray Burchett) and be honest with myself about this and that.. forget about the level of 'work' that others are putting in and TRUST that I am doing the work that aligns with MY PURPOSE IN TRADING.

---Point is: Search your feelings --- and FYI - my trading (and entire view on trading) changed dramatically. that 'line in the sand' is almost out of view. I trade from a place of strength and confidence. I do plenty of work. Some folks might call it plain vanilla stuff. But it's working.

It all began once I drew that line in the sand.

dante

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  #83 (permalink)
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Xav1029 View Post
This paragraph touched on something that has caused a lot of doubt in my trading journey, so I'll put it out there to get some feedback. Even though I have never had any gambling issues, I am an addict to the core. I am very proud to say I have been sober close to 7 years now and my life has done a complete 180, however sometimes when I get excited in a trade (winning or losing trade) the switch will go off an I will make some inexplicable decisions that remind me of the state of mind I would go into when I was still active. I am naturally undisciplined, selfish, egotistical and have a high threshold for "pain". I have been able to change all of these in my daily life, but when it comes to trading, all these traits still come up with full force.

So, would this put me in the "Time to Give Up" category?

When we enter trading, we think the things we fixed in our daily lives will transfer seamlessly into trading but they don't. We need to absolutely love that fact! It gives us a whole new challenge and ability.

"In life they say the grass is green. In trading..THE GRASS DOESN'T EXIST" - random trading educator.

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  #84 (permalink)
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This is a great thread.

I think a lot of the reasons that have been mentioned as reasons to give up, are in fact fixable. Just a generalized list of what I noticed: Money management, psychology, lack of trading strategy, lack of family / spouse support, lack of capitalization, the "need to make money" syndrome, etc... I don't think intrinsically most people are not cut out to do it. I think they just work themselves to death in ways that don't actually address the core issues or run out of time/ money before they find a workable solution. But lets use myself as an example. Its always best to start with what you know.

I feel like giving up sometimes, I have psychological tantrums with myself due to the stresses of developing myself as a trader. Assuming that I can even make it since there are so many barriers. Do I fit into the time to quit mode? Is there a point where its like, its stupid to quit you have come to far? Or you're going in the right direction? For me I hate quitting, I never want to give up. But I don't want to be walking down the wrong road for months/years either. Working hard in the wrong direction gets you nowhere fast, which is what i think happens to a lot of other newbie traders out there.

So my question becomes, we know the faults/problems/hurdles, how does an aspiring trader overcome them?

Others have so the problems are not insurmountable, just difficult so there must be some solution. The very simple things I have come up with are, written out trading plan with risk management section, journaling, being honest with yourself and others about your trading, and understanding psychology can be a problem and know when to pull your own plug. I have no idea if these are the right things. But its what I have been doing, I hope its the right path.

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  #85 (permalink)
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peterg View Post

I turned a Sizable Account into a sizable Debt selling Naked Puts prior to Sept 11, 2001.
I was shell shocked at the -275K Margin Call week and a half later; it took the 4 previous years + to build that precious account....... and then nothing but a silent black hole.
That was pretty much rock bottom, with an obligation that I wanted to run from but I couldn't...All that "success"
and the professional relationships I built, the Trust, the Pride....Just turned vacant. But I wanted it back like that smeagol and his prrrecious.
I borrowed 325K, paid the call, and spent the next 4+ months scalping futures and currencies like a smeagol... then hit rock bottom again, emotionally, and physically strung out like guttered junkie. It was over...Out...Scratch
Still -75K net I slithered away, couldn't push the buttons no more, it had become an unreal reality.
The next day I went back to rebuilding my life; it took the next 4 years to clear the last 75K, the old fashioned way, every day making less than a scalp, and losing a hell of a lot more sweat.
What did I have to lose....Everything...Bottom Out and Upside Down
What did I gain? what I lacked the most........ PERSPECTIVE.... I had to "SEE thru" the Damn BS that I was either ignoring or worse deluding myself with.

Hey Peter,
Did you change strategies from options to futures after the margin call? Are you still trading today? Amazing story by the way.
Thanks!

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  #86 (permalink)
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I think the single most important thing anyone who wants to trade must do is keep their day job to be sure their bills are paid for. Unfortunately, it seems that when it comes to trading, most people are focused on the very short term, and that requires them to be in front of the computer all day long. In other words, they have to give up their day job, or work a night job so they can trade during the day. This is completely unrealistic.

Keep your day job and learn to be profitable with longer term strategies before considering trading full time.

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  #87 (permalink)
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there's always managed accounts

then there's returning to what still works, just without all the glitz and glitter

then there's attending one of the Trading Expo conferences and seeing which vendor's products suits your temperament, pocket, risk tolerance, time available to devote / trade / be in front of your computer...

ohh, haven't spent the time to quantify those things, then start there,
already got those answers, then consider, simplistic equity strategies, ETF trading (search on ETF websites), option trading, bond funds (high yield, tax frees, etc.)

just because the fast paced world of the ICE/CME doesn't suit your temperament, doesn't mean the game is over, unless you're out.....

just a reality check...

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  #88 (permalink)
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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

Such a great post @Big Mike.

If I could pick one as the most important I would choose "Not in a position in their life to make trading a priority."

This is a two-part characteristic, first part is getting in that position (financially, emotionally, and with family) and then the next part is actually MAKING trading a priority... Working hard every day to get at least one step closer to your goal. If one wants to achieve something in life, and especially something as demanding as trading, one must FIGHT every day to even have a shot at achieving that goal.

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  #89 (permalink)
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The cold facts is that most of us reading this post should call it quits. Why?, 90% of traders fail. OK, who knows if that the right %, even if it is only 70% of traders that fail, still the fact would be that Mos of us should quit now... speaking statistically.

There are many good replies on this thread about how to determine if one is on the right path (having a trading plan, trading journal, a consistent trading method, etc), and should STICK to trading.

However, the facts remain the facts, and most people should save the effort and $$$$ and find other occupation or hobby. Yet another fact is that MOST of us, wont really call it quits until the "pain of losing money" is greater than the "hope of making it"

Hector

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  #90 (permalink)
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hectormas View Post
The cold facts is that most of us reading this post should call it quits. Why?, 90% of traders fail. OK, who knows if that the right %, even if it is only 70% of traders that fail, still the fact would be that Mos of us should quit now... speaking statistically.

There are many good replies on this thread about how to determine if one is on the right path (having a trading plan, trading journal, a consistent trading method, etc), and should STICK to trading.

However, the facts remain the facts, and most people should save the effort and $$$$ and find other occupation or hobby. Yet another fact is that MOST of us, wont really call it quits until the "pain of losing money" is greater than the "hope of making it"

Hector

The good thing is, there are at minimum two very distinct groups on futures.io (formerly BMT). Those that spend all their time searching for the holy grail -- they are always in the vendor threads, always looking for a new mentor, a new educator, a new indicator, a new system, a new trading room to show them how to be a better trader.

Then there are those who are journaling about their trading every day, have laid out their trading plan, are posting their trades, and are reviewing themselves for strengths and weaknesses on an ongoing basis, and therefore improving themselves on an ongoing basis without "searching" externally for the answer.

So there is hope

Mike

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