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I have been trading off and on for three years. I'll get capital, trade randomly, lose my account and repeat. The lase time I actually watched a lot of webinars, read books, attempted to set a plan.
It seems now, I set up a trading plan and test it on a simulator. After a couple days of keeping stats from losing days, I try another entry system, etc. I know I prefer steadfast "trading rules" instead of discretionary trades. I only get lost and emotional when trying to do discretionary trades. I don't know if I just haven't found what style would fit my personality or if I'm just making excuses. Either way, the more research I do, the more lost I get.
Any information would be helpful on how you made the turn. (Presently trade on simulator with ES and go through the same losing cycles I did with live money).
Thank you
Can you help answer these questions from other members on NexusFi?
...well known for a lot of us - trading is not for everyone.
Try at least to put your stops out of the noise - or skip them altogether.
Accumulating many losses because of fear has the highest impact to
trade in the negative - psychological and for the account ;-)
Trading is not easy. Most people (+-95%), never 'make the turn'. By you asking the sorts of questions you have is a big step in the right direction. Most people look externally. They start looking at every indicator under the sun, every system that promises unrealistic profits, trading rooms where you just follow a 'guru'. All the while never really learning to trade, never learning to understand market behavior and structure, never getting in touch with the all important psychological aspects of trading. So you should feel positive that you at least seem to be asking some of the right questions.
As you have found out, trading randomly and on gut feel will not work. You are trading against professionals. If you want to make money at this, you need to be a professional.
Just a few days of stats will not cut it in determining if a trading method works. Try figuring out a method that you think has promise, do all the necessary back testing. Then forward test (ie: trade live or sim) with 100% discipline for a month without changing anything. You will no doubt be tempted to change and tweak rules. Remain disciplined, build up stats for a month. And then look back objectively and go through all your stats and trades for the month to see how it performed. A month is assuming you trade intraday and will build up enough trades through the course of the month. If you swing trade, a longer period may be necessary.
You're spot on in needing to find a style that fits your personality. That's why looking externally doesn't work. You need to figure out and understand how you view the markets. What are your beliefs about how markets move? Is there repeating behavior that you notice? Can you build a trading system from that?
Keep in mind that from an initial discretionary trading idea, a mechanical set of rules can be established. I am the same as you in that I try to avoid as much discretion in my trading as possible. What I am now left with is a subjective view of price action and market structure, with mechanical rules applied to when my subjective view tells me that the market is trading at a potential setup area.
One thing that is critical when trading sim is to take it seriously. If you take a trade which loses, dont just ignore it and say you didn't actually take it. Record the trade, analyze why you took it and learn from it just as you would with real money. Unfortunately not everyone is able to do this. Some people will treat sim as a game and think they're ready to trade live but they forget about all those trades that they just ignored in sim. If you're one of those people, you may want to rather trade mini's or spot forex where you can risk a small amount of real money so that you take it seriously.
Learning to trade well is a long process and requires far more discipline and effort than what most people realize. Study the markets. Look for patterns that you believe repeat and could offer potential. Build a trading plan. Write it down (dont just have some vague idea of what you're going to do in your head). Trade it without deviation regardless of whether it proves profitable or not. Look back on the stats that you've built up, tweak where necessary, and repeat.
you mention ONE key element that you need for successful trading, Out of many. But before getting into the meat of the "trading" related advice, you first need to apply some kind of change process to your self. What do you need to change? you need to change from being an unsuccessful trader to a consistently profitable trader.
Choose any change process out there, you can find on the internet, here is the one I use.
1. Create a list of goals. I would Imagine, one of the them would be: "Become a successful trader"
2. Chose ONE GOAL only. Lets say you choose the above goal of becoming successful as a trader.
Then apply the change process in the following steps
1. Have a burning desire: One way of doing this, if you dont already have it is to create a list of 10-15 reasons why you want to achieve the selected goal. Read the list Once in the morning and once in the evening before you go to bed. DO IT EVERY DAY. If you skip days, then you dont yet have not yet achieve burning desire. Dont move to step 2, until you have read the least morning/night for at least 2 weeks.
2. Have the Belief you can achieve your goals: There are many ways to create belief. You can find may videos on youtube about this. Some ways are Affirmations, EFT tapping, visualization, etc. Choose one way of creating belief and apply it for another 2-4 weeks. Do the techniques everyday, if you skip days, you dont have yet either burning desire or belief. DONT MOVE to step 3 until you have these 2.
Be aware, that at this point you have not dont anything trading related yet.
3. Frequency: Here is the action step of actual trading. The importance in this step is not how good you are, it is that you are consistent on what you do. So in trading, the goal is not to make money on this step, is to find a method that suits you and that you practice everyday.
I said earlier that you mentioned ONE key element of successful trading. That element applies on this step, and that is "to find a style that fits your personality". That took me several years. So my advice here is try different things (but be aware that until you find the one, you will likely lose money, so use a SIM account).
For me it was Al Brooks method. But there are others that have given webinars here on futures.io (formerly BMT) that are also very good (Futurestrader 71, Linda Raschke, etc), or even just futures.io (formerly BMT) members that have detail their trading methodology (BigMike, Pandawarrior, Perry, etc).
So for this step 3 (sorry for the long explanation), once you have found your method, FOCUS 100% on it. Do NOT go looking for other trading ideas. Study, Study, analyze the method, internilize it, evaluate it. Basically MASTER THE METHOD. I would say you need to spend at least 6 months to 1 Year ( the longer the better).
Now step 3 is frequency. So the key is to apply the method as frequently as possible. The goal here IS NOT to make money. Again, focus on mastering the method.
4. Intensity: Here is where you focus on getting better and better and focus on becoming consistently profitable.
This may seem as a very long process and you wont likely even make money or trade with real money for at least a year. But thing of this, you mentioned you started on/off 3 years ago, and you are in a place you are not satisfied with. There is a possibility you could be writing a similar post 3 years from now. So forget time, time will pas. Focus on the NOW. What is the best thing you can do NOW that will put you on the road to achieving your goal.
i think @DarkPoolTrading make some really great points. I had taken the same path you have for the most part. What has really helped me get my performance better has been doing basically what you hear over and over if that makes sense. Doing your own homework, focusing on only 1 market, sticking to 1 entry method, simplifying your charts to 3 tools/indicators or less, journaling like mad, and reviewing my stats in sample sizes of 30 trades.
In trading seeing progress is really really difficult, it has been my largest psychological barrier, not knowing if what your doing is actually working to improve your performance or are you just floundering. But you have to get consistent at least doing what you're doing even if it is unprofitable in order to identify any sort of trend in your performance. It really wasn't until i took 100 trades in a single instrument using the sample tools without changing that I actually saw something in my own statistics i could focus on to improve. I actually saw what i wanted as my stats improved over that this.
Thank you all for the responses above. I'll have to say that I wasn't expecting anything nearly as helpful. I am [U]extremly skeptical on getting trading advice. I really anticipated a lot of book requests (most of which I've probably read... on pschology, market profile, etc). Not that the books aren't helpful, because they are. It's just that I don't think I'm suffering from a lack of information, just a lack of direction and confidence but most importantly.. I think my mindset is off. (which I brought on myself by random trading). I've always envisioned figuring this out for myself, but finally thought I would attempt at sharing my frustration. I couldn't sleep last night so I decided to make my first post. I'm glad I did. I can tell there are actually people on this board that don't mind helping and just as important; know what they are talking about.
I'll give you a brief history of how I got here:
1. I've always been intrigued by people that trade for a living. I don't know exactly why, but seeing traders speculate on price was something very interesting to me. I knew early on, I would someday be a professional trader as well.
2. Growing up the soutern U.S. (you might have heard of three-wheelers, basically it's a motorcycle with three wheels you use for hunting, thrill riding,..etc.) I bought a three-wheeler that I noticed was selling in a used all-terrain magazine for lower than the "market" while I was in college. I drove to the next town in Mississippi and saw that the three-wheeler for sale was actually in good shape. I made the purchase for $1,200 and turned around and sold it for $1,500 (which is what most were selling for in that same year, condition, etc.). After that I knew I was going to be trader right after I graduated.
3. Graduated from college in 1997 and immedately took a job a stock broker/financial advisor. I told my older collegues that I wanted to learnd to trade. Well, everyone laughed and said there is no way to ever do that profitable. My manager actually took a trading book I had on my desk "Trader Vic" Methods of a Wall Street Master" and said I needed to call widows and put them in mutual funds. This had a major effect on me because all these older guys that made money in the finance industry (by making commission on stock transactions) were now telling me that what I was dreaming of couldn't be done. I was mortified.
4. Couple years later I took a "trading job" for a broker/dealer. It turns out I was just entering orders for the bank's retail clients. Once again, no real trading knowledge to be obtained. Strike two!
5. Took a job in institutional bond sales. I thought "Now I'm close to instituions, I'll learn some real secrets". Most of what I learned was that I didn't care too much for "selling" product and the portfolio managers didn't know much about trading either. Strike three! (Note: this isn't baseball, I am allowed many strikes)
6. Finally took a job on the buy-side. The firm doens't really "trade" anything, so I started trading my personal account. It took a month to lose $10,000 in options the first time, 3 weeks the second time (after I spent a year "learning"). Then after learning more and more and more. I opened a futures account and traded treasuries, NQ, ES, you name it. Lost all my money again. Spent more time really learning (read "Trading in the Zone" five times) but don't think I have changed my beliefs. I learned that you I have to change your thinking. I thought that made sense, but I didn't really change my thinking. I assumed if it made sense it would change my behaviour . I was wrong. My last stint with trading live money, I actually stopped myself before it was all gone.
7. Now I'm on simulators (like mentioned above) and getting the same fear-based random results. I know that I'm in a cycle and just chasing my tial now.
8. LASTLY, the most important thing to me now is that I know people can actually trade consistenly for a living. Also, as opposed to the past when I would run out of money and then "take time away from the markets". Only to come back with the same results... because nothing had changed at all. Now I know I have to change.
Ditch the seminars,
Ditch the books,
Ditch the chat rooms,
Ditch 90% of what you read on the internet.
Ditch the charts if daytrading.
Figure it out for yourself, and 'own' your approach.
Think outside the box in terms of what markets you trade. You dont have to trade ES, FX or CL. Perhaps look at 'boring' markets - there tends to be more opportunity and less competition there. Consider spreads perhaps? If you prefer a mechanical approach and are mathematically inclined, options may be your answer.
You are probably unconsciously incompetent by now and that needs real work and hard work to undo.
Let me quote few paragraphs from a book I highly recommend even if yo don't trade forex: "The 10 Essentials of Forex Trading" by Jared F. Martinez.
What good does it do to teach you technical skills if you do not have the courage to execute them? Why teach you trading rules if you are a rule breaker? There is no point to teaching you how to take advantage of new trading opportunities if you cannot let go of your past mistakes and failures either...
Developing a solid personal and trading constitution will be the first step of your journey toward finding your rightful pot of gold in trading. Work on your personality treats and stop feeding the bad wolf!
Successful people will do what unsuccessful people won't or can't do!
It's a common problem for beginners. You have to basically first learn your own strengths and weaknesses, truly know them, before you can really be a great trader. Otherwise trading is going to bring out the worst and you likely have never been confronted with it before in your life, knowing your true self, so will be unable to deal with it.
It should be apparent to any who watch/listen to that video that the trader was not thinking clearly. Especially towards the end of the interview when he laid out his game plan to continue, it was very poor decision making. This is what happens when you get caught up in the heat of the moment and are unable to distance yourself so that you can see what is truly happening.
nexusfi.com (formerly BMT) has hundreds of trading journals. I highly encourage them, and if you ask anyone who is maintaining a journal about the benefit of one, they will likely overwhelming tell you that it has helped their trading more than anything. So step 1 is to create a journal, and start laying everything out in detail. No one knows who you are, there is no need to lie about what is happening in your trading. You need to be honest in order to improve.
I recommend that every weekend you go back and review the prior 2 weeks of journal posts. Over time, you will see clear patterns in your behavior. These behaviorisms really have nothing to do with the market, it's just who you are. What you'll need to do next is identify them as strengths and weaknesses in terms of trading. Once you know your strengths and weaknesses, you can start to work on them.
I suggest working on them one at a time. For example if a weakness is going full tilt on a bad day and losing 10x your normal daily loss average, then you could impose some over trading rules or conditions. You could find a broker who simply will shutdown your account at a certain daily loss limit. If your weakness is over trading and taking long, short, long, short and all over the place trades back to back to back, then you could limit yourself to 3 trades a day for 2 weeks. If at the end of the day you've taken 4 trades, you failed, and there is no excuse. You should continue to work on that problem until you get it right and score "Grade A" for a couple weeks in a row, at least, before moving on to the next weakness.
Journaling is the best way to keep you honest. Post a screenshot of your chart but more importantly post why you took a trade and why you exited. It doesn't need to be a book. Three to five word answers are plenty sufficient to go back and analyze behavior.
Be honest. If you ever find yourself unwilling to share in your journal what truly happened, then the process has broken down and is failing. No one here is going to make fun of you, so you should just be honest because it's the only way to hold yourself accountable.
As far as methodology, you need to find your own path. There are 150 or so webinars on nexusfi.com (formerly BMT) from people that I've trusted enough to come and talk and share their thoughts. I think it's a great place to start to get some ideas about psychology, risk, and last methodology. I place those in that order for a reason, because I believe it's the order of importance.
Never try to copy or mimic someone else. Not me, not @FuturesTrader71, not any famous trader in history. That will only lead to failure. Instead, take the ideas that resonate the most with you from them and build them into your own methodology. Test your methodology extensively, research it, know it inside and out. Have statistics, keep data.
When it comes to analyzing performance, forget about net profit. That is the last in a long list of important things. Trading is not about some magical thing clicking and then all the sudden being profitable. Trading is about having 200 things all coming together in perfect harmony, and then you will - over time - be consistently profitable.
There is a nexusfi.com (formerly BMT) trade analyzer here that will help keep the metrics that are important for you:
Tradervue is a cloud based journaling site with a slew of analytics and broker/platform imports including Ninja/Sierra. I had been keeping an excel journal and found it cumbersome to update and share with others. Tradevue's cloud implementation …
The journal on nexusfi.com (formerly BMT) is about the journey, not about any specific trade. The analysis tools above are about metrics and statistics to build confidence.
Risk should be a priority in your trading. Spend a lot of time understanding risk. Risk is everything to a trader. To be a good trader, you must take risks. Sometimes the hardest decisions are the best trades, and what allows you to take those trades is having a concrete risk plan and the confidence in your trading plan, backed by your own research and analysis.
For psychology, I personally am a big fan of Dr. Brett Steenbarger. He has a trilogy that is excellent. I would start with "The Daily Trading Coach" personally. When it comes to books, I discard 95% of everything I read that has to do with methodology. Instead I am much more interested in the psychology, behavioral, and risk lessons to be taught and shared in books. That said, my next favorite book is probably Evidence Based Technical Analysis by David Aaronson, because it resonated with me and helped me develop some tools for analyzing performance.
. I was wrong. My last stint with trading live money, I actually stopped myself before it was all gone. 
and that needs real work and hard work to undo.
