Solvable? For myself, the answer is yes, if I stop trading altogether.
After I blew my account the second time, I have a program installed to liquidate all my position once the losses exceeds S$10K. I had it removed a few weeks later as I am not confident it will work and I don't feel comfortable trading with an automatic cut loss mechanism as futures prices can flash up and down momentarily.
Later I employed a trader who sits right beside me and told him to slap my face and kick my butt whenever I start to average losing positions. It didn't work as he only screamed at me to tell me to stop averaging my losers the day the Japanese stock market crashed during the morning break on 15 Mar 2011. I ignored him altogether and only stop buying more when my trading platform got locked out. When prices stabilized, I was staring at about S$900K floating loss which ballooned to touch S$2.5M at the peak when Nikkei 225 futures traded down to about 7800 from its 9230 morning open that day (1430 Yen drop from high to low), a few Yen from hitting the second limit down. I was trading from my broker's arcade at that time and the Manager came down from his office upstairs to my booth to ask me to get out of my position and take my losses. I shouted back a him and told him that I will either top up my account or cut my positions at the close. That action in the midst of the most frightening few hours or my life helped saved my trading account from being wiped out that day.
At the present moment I have set a limit of just 2 lots each on my trading platform for the MSCI Singapore and MSCI Taiwan index futures contracts, to stop me from blowing my S$100K account on them.
I know I can blow my S$100K trading account on the Nikkei 225 contracts anytime if I lose control again as I have a combined total of 120 lots on CME NKD/NIY & SGX NK.
Just last year I had a S$22K realized loss being long on 21 Feb 14 and a S$48K realized loss being short on 02 Jun 14, trading the Nikkei 225 contracts. My trading capital last year was about S$140K.
Last edited by JacLau; March 28th, 2015 at 07:11 AM.
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I don't mean this at all negatively toward you, but if you have been studying for half a year now, it is time to stop studying and find out what trading is like by actually doing some.
When you have a stake in the game, it is completely unlike what it seems to be when you are just watching it. You will find that trading is mostly about the acceptance and management of risk, and the management of your own reactions when you have money on the line, and are either making it or losing it. Both success and failure have their own psychological/emotional pressures, both can distort your judgment, and learning to handle the issues that both give you is probably more than 80 or 90 percent of what real trading is about. The things that you are able to learn by studying the market are about 10 to 20 percent of the puzzle, if that. Really.
I think from your comments that you have not had to face this by actually being in the middle of it, and if you want to be able to trade, that's where you have to steer your ship, not reading and studying.
I absolutely am not trying to put you down, but getting into the market with some real risk on the line is the only way that you will ever understand anything at all useful about trading.
If you are financially unable to do this, then, for one thing, that is a very good argument against attempting to trade now. Build up a financial position and develop a personal life situation that allows you to have risk capital that you can afford to lose if you have to. By the way, you will lose at least some of it. Then you may understand the answer to your question.
If you aren't in the market and don't have something at stake, you are not really studying anything that is either real or helpful, and you really are not learning anything. Sorry to tell you that, but it's the simple truth.
There are many resources here that can help. If you can manage it, an Elite membership can be very valuable because of the many, many Elite-only threads.
Again, I'm not putting you down and not being negative, but you really should take some of this advice seriously, and then work with it in your own way.
It is not the easiest road in the world, as many have found out. But that's what the road is. Doing something else is going to take you somewhere else, but not to trading.
Good luck with this.
Edit: this sounds like I am lecturing you. Please forgive that, but I can't think of a better way to say it. I hope something in it is helpful to you, and to anyone else in the same place as well.
Edit 2: I just saw in another thread that you have been trading live for a month now. Good for you. If my assumption about your experience was wrong, I apologize. However, a month is not long (), and the suggestions are still good ones, and will be, I suspect, for a long time. It is still trading psychology that will make you or break you. And you are probably going to have a lot of interesting experiences with it all.
Again, good luck and good trading.
Last edited by bobwest; March 28th, 2015 at 08:58 AM.
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Thanks for the reply. It's good advice. My little time on this forum has already been invaluable. I imagined successful traders as brilliant, calculating logical machines-and come to find out it's just regular people like me. At its core, this game is about intelligence, skill AND knowledge-a combination of chess, poker and real time strategy. It's actually very easy if you are used to monitoring and regulating your emotional reality(which is apparently hard even for the best of them). What I'm lacking right now is the knowledge of individual instrument behaviour over time, and market reactions to announcements-which I suppose will come with time. Kind of feel like I taught myself to fish
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2008 was the year I began to trade..
No Sim or anything, looked easy with a few simple sup/res lines!
Received a couple of big slaps in the face that year and didn't begin to trade live again for almost 6 years.
Although it was probably the worst year to trade for most in the last decade, it taught me an invaluable lesson, that anything can happen and a bear market will go lower than anyone expects and vice versa for a bull market.
It's hard to fathom how traders can be consistently profitable without hard stops as I saw a friend of mine blow up in 2008 after 5 years of profitable trading for not using a hard stop in the crash. He hasn't traded since!
I would add patience and discipline to your list of required traits. Some of the smartest people I know don't trade well at all, thus not sure about intelligence.
I never found "monitoring and regulating my emotional reality" easy, thus I doubt trading will ever be easy. However, with a certain amount of perspective, patience becomes easier and maintaining discipline also becomes easier. To put things into perspective, making 5% a month would yield returns of ~100% per annum. Most day-traders I know scoff at 5% per month and aim much higher, yet no-one accomplishes that. I wonder why?
Individual instrument behaviour - some traits may be noticeable. How you plan on making money off these traits would be a good question. Also, how can you be sure that the behaviour is not just random noise? However, I am not an expert at uncovering such behaviour thus will refrain from further comments.
Market reactions to announcements - depending on your time-frame this could be just noise. I would rather focus on my own plan should the market price reach certain thresholds.
I am no expert on markets, but most trading should be focused on the trader and the plan. We will set ourselves up for failure so often it is pretty scary. Analyse your past trades and see what you could have done better. I am not talking about finding better indicators...I am talking about "why did I enter?", "should I have waited for a better signal before entering?", "why did I exit?", "did I exit according to the plan?", "should I have held longer?", "why did I not exit according to plan?". You can add a lot more questions to the list. You will notice all of the questions focus on the trader. A lot of introspection needs to go into this. Remember you are your own greatest enemy.
Last edited by grausch; March 31st, 2015 at 05:00 AM.
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This part really scared me I have a daughter now (1 year old ) and trying to put aside some money for the families for sure. Now I have life insurance, some cash for at least 1 year's family expenses, some dividend play in 401k and looking to buy a investment property for her.
Best wishes to your trade!
EDIT: I'm just a retailer trader with most of my money in investment properties and really don't need that much money in future trading account. Our trading and money management could be totally different.
But anyway good luck trading!
Last edited by dix173; March 31st, 2015 at 07:46 PM.
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I blew up my day trading futures account 3x's. The last time was in 2009 when I put on a few large ES shorts. Ready for this: moved my stops!! Total idiot move and I knew better. I lost 125K on a 150K account! Dumbass.
At this point I had 25K left, took a break for two months to try and figure out why I was able to make so much money and then blow it all much faster than I made it. I came down to simple math: trading too big too fast and cutting winners and holding losers! I realized I could not scalp the ES/NQ/YM/TF as it just wasn't for me. I'll leave index future scalp trading to other who can figure it out. I got my ass kicked! I accepted I was not a good index trader. But I committed to making one last attempt at trading when I was ready.
When I jumped back in late 2009 I had a totally different game plan that has worked every since. This strategy works for me and I'm not saying it's a holy grail. I am by no means a great trader...maybe average at best. I took the 25K and put on 1 lot CL swing trades. I traded nothing else then (or now). I never traded choppy days. I pre-set my stops and stuck to it. It took a few months, but I figured out a way to added to winners and cut the losers quicker. I think it took well over a year to build my account from 25K to 50K so I could add 1 or 2 more contracts. In 2012, I was able to start trading a lot bigger while using the same simple strategy.
Nowadays, if I see a choppy day in CL once the cash markets opening, I walk away and trade nothing. When I do trade, I can loose 6 or 7 out of every 10 trades just because price action revisiting levels after adding to winners. However, I am consistent in capturing nice profits on the 3 or 4 winners out of every 10 trades. I still track my performance on a "10 trade cycle". Don't know if this is right or not - it just works for me. If I start losing more or less than 6 or 7 out of 10 times, I know something isn't right. I constantly have to check myself because I have the tendency to trade larger than I should at times.
Am I am profitable? Extremely. But I still loose 60%-70% of trades. I love my losses because I know in my system I must have 6 or 7 losers out of every 10 trades. But I never have big losers because I need the losers to be only small losers in order for me to make any money! To me, accepting a losing trade means I'm actually right and its' time to move closer to a winning trade.
I trade using only simple price action, MA's and volume profiles - I abandoned the pure technical approach along time ago. I don't trade Wed. morning when inventory weekly reports come out. I use no other indicators. My strategy is simple: I stick my toe in the water with anywhere from 1-3 CL contracts and then add 5-7 contracts right around a profit area of +40 ticks. I'll do this maybe once or twice more. It keeps my overall break even/stop rather close, thus, I get stopped more often than not. But when I can catch a nice CL trend of a dollar and a half or more...I can capture monster profits. At the end of the day its no different than fishing and pulling in a bunch of baby carp before you eventually hook Moby Dick. I believe in "keep it simple stupid".
For me personally, I also had the advantage of having a spouse that worked and I did not have the "pressure" to generate income regularly. It gave me a rather large window of time to be a student and try to figure out a system that would eventually work. I think this was the most important factor and I would have definitely failed and never been profitable if I had to generate "x" amount each month to live and pay bills on. I think this is actually the biggest hurdle for new traders to overcome.
These days I don't know if CL will head into the 30's in the 2nd Qtr of 2015 or it we are now at the bottom in the 45-50 area. Don't know...don't care. I think once you start believing you understand the market and can anticipate moves - you then will go broke!
If it's said that 85% of traders pocket small profits and then get cocky and blow their accounts up by taking on just a few huge losses....isn't the inverse the ultimate goal? I know it's hard said than done...but "keeping it simple stupid" can work IMO.
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