I have not yet met a trader that consistently makes profit short-term scalping. Actually, all of them have blown accounts, and most are struggling to just break even. They all dream of getting consistent results while failing to acknowledge that perhaps the market is not willing to give them these consistent results.
Regarding the walking away bit, it could lead to some missed trades. Equity markets went nowhere in 2012, but suddenly perked up in Dec 2012. 2013 was a great year, and missing that initial upswing would have been detrimental to the 2013 returns. For my style of trading, missing that initial upswing is not very nice. Perhaps monitoring the markets outside of market hours or over weekends may work better. Granted, you still need to trade your plan and not interfere with it which can be tough if you monitor your trades at all.
Based on the above, it can be seen that riding out positions can be quite tough. There is always an urge to protect profits which means you miss out on potential large gains. These large gains are literally what kept my portfolio alive over the years. If I take those away, my performance would be really terrible.
The following user says Thank You to grausch for this post:
Thanks for your advise guys, but the stress of trading and loosing just lately is just simply killing me.
Best I just walk away for awhile and engage my brain in doing something else. The markets will always be there if and when I decide to return.
A man can only take so much kicking before he has to put his hand up.
A trader said to me awhile back that it is no shame if you have to take a break!!
Last edited by traderx4; March 2nd, 2015 at 05:34 AM.
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I also stepped away from the markets in the past. Helped me put things in perspective and come back with a) more realistic expectations, and b) a much more concrete plan.
One thing I would suggest though, is even if you don't trade now, try and save up as much capital as you can. If you then restart trading, you will have a decent bankroll, and if you don't then at least you have some rainy day savings.
The following user says Thank You to grausch for this post:
Shoot, as a newbie looking to soon enter the trading arena, this is a post I really not need to read. Man, I sure feel for you. All the hard work invested for so long. Sure rooting that this break gets you back in the game.
Currently I am practice trading. I will begin my trading as I continue to work 1st shift. This will allow me to begin trading without scared money. Also, with the small lots available to trade, this gives me the opportunity to begin with a small account.
No, this is not my primary income.
N/A to the $100,000 (50,000 would be a big number).
2,200 hours invested so far.
Living in the U.K., I'd think you could be shorting your currency as the USD continues it's strong move long.
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Hmm...after skimming through this thread, I decided that an alternative take on this issue might be helpful.
Now I would suspect that my aggregate account values are much larger than the average participant in these forums. (If I were to hazard a guess by reading the trading journals, a $50k account is already at the top end of the spectrum of account sizes at futures.io (formerly BMT), and if I'm testing a strategy with live funds, that's already about the minimum amount a strategy gets tested in a live environment for me).
Despite this, a successful track record, and also devoting a considerable amount of time to trading, I would not consider trading to be my "primary" source of income, because the "trading" funds never get withdrawn because they are re-invested in investment accounts in the truest since of the word. Other sources of investment income and consulting fees pay the bills and put the food on the table so to say.
I would say though, that perhaps the biggest psychological edge I have over normal retail traders is being able to treat trading as a secondary source of income rather than primary.
A good analogy would be this: let's imagine that we lived in a primitive society. My neighbor is a nomad hunter and therefore must find something to hunt and kill in order to eat. I have a farm, and can also choose to hunt. Let's assume the farm in this analogy provides a steady source of food that I can just harvest something from the fields and droughts are not a concern.
The farm affords me the luxury of not having a lot of psychology issues. When I decide to pick up a bow and arrow to go hunt, I don't have to take very many risks. I can patiently wait until a very slow, nonthreatening, and fat animal comes across my path before I decide to waste any energy, because worst case scenario, I can go home and earn corn instead of starving and picking fight with a big bull or big bear.
However, my neighbor that only has a single source of food from hunting, has to be successful in his/her hunt every day/week. No success that day = no food. This makes my neighbor more prone to taking risks I wouldn't have to take. Maybe it's being forced to chase small game instead of big game, or picking a fight with a big dangerous bear just to get food. But on a per hunt basis, maybe 95% of my hunts will be successful because I can afford to be patient for the easy prey, but my neighbor can't.
So this is all to say that having a primary source of income outside of trading provides a huge psychological edge.
The following user says Thank You to MacroNinja for this post:
The most difficult question for me to answer is how to find a mentor thats not a scammer. Its more easy to teach 100 students at $5000 tuition a pop (thats half a million dollars a year) than actually day trade. Ive come across quite a few vendors and all they teach is something like "after your price breaks through the midband of your bollinger and comes back to midband take trade in direction of the market"....Personally I only want to trade Futures and I cant seem to get beyond break even on a net monthly basis.
The following user says Thank You to anthony667 for this post:
Ive lost all faith in indicators, even if they work its only in certain market conditions for each indicator...there has to be a simpler solution than mastering an indicator. Usually the most genius solutions are the simplest!