Favorite Futures: CL and GC. NOT YM, nor NQ, nor TS. And certainly not ES!
Posts: 23 since Jan 2014
Thanks: 9 given,
Hope you're doing this in SIM!
That aside, after three years, pretty well full time (40-50 hrs/wk; I'm retired so can afford to spend the time), I TOTALLY feel for you. I'm living what you have lived.
Although I've been tempted many times now to throw in the towel, I have not yet quit. But then I have a pretty thick skull...
In one of the many books that I read (like a lot of people here), the author stated that trading is the most difficult occupation in the world. Well, I've done some pretty difficult things in my life and believe me: HE IS RIGHT!!!
Good luck to you.
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@rleplae 4 hour charts with 50 EMA and daily charts with 200 SMA using what I believe is support and resistance and trends. 5% max risk per trade. Use 30 minute charts only when the position is winning in my favor and place the new stop loss right below the higher low on a uptrend and lower high on a downtrend.
I also have a personal journal. However, I may consider posting a public journal in the Trading Journals section of this forum.
@mluka The micro lots in forex allow me to trade with very low capital and I personally prefer to trade with actual capital on the line instead of SIM. Thanks and good luck to you as well!
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I don't want to sound negative, but you really need an edge.
An "edge" is something historically/statistically proven, something that gives you both a head-start and a sustainable advantage on the bulk of the other market participants.
Futures trading is a zero-sum game (i don't like the word game, it's a business).
No value is created, compared to a stock that goes up, value is created (the market cap goes up), while there is not necessary somebody loosing. If you hold a future contract and make a profit, somebody holding the other side lost on it (maybe offset to holding the underlying).
Based on the above definition of what your perception is of your edge, i would like to mention a famous quote of Mark Baum, I agree, I took it a little outside the context
Bottom line, my view, as long as the edge is not clear, stay on SIM, after that maybe test it on topsteptrader or similar and after that go to live trading.
However, good luck, knowing/identifying the problem is one thing, addressing/improving is the next step
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IMO, forget the swing trading and move on in life. There are not many businesses that can bleed money for 10 years and survive. With trading, it just occurs in a bit more personal way.
If you want to look into trading again in a few years, once you are back on track financially, or if you truly love the markets and want to look at charts or trade SIM for the enjoyment, then that makes sense.
From what I read in your posts, you were looking for 'fast money', while being under capitalized and lacking impulse control...swing trading is not the answer. Although I understand some the supposed benefits (I swing traded stocks in the late 90's before trading intraday futures) at the end of the day, you are still dealing with the same factors....analysis, execution (entry, mgmt, exit), business planning and so on.
As for the 'fast money', most days are "grind them out" sort of days. When we get the occasional big move or "trend" day, it will make your month or quarter. The "grind them out" days are what makes the 'fast money' days possible, because you are conditioned to keep taking the next trade, one after the other....and when one breaks big, you get paid for being in.
If you can keep your wits about you while all others are losing theirs, and blaming you....The world will be yours and everything in it, what's more, you'll be a man, my son. - Kipling
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Thanks for your honesty. As a newbie, I am really glad I can read this and think more about what all I am getting involved with.
What all is your experience with price action? I am trying to get a lot out of Al Brooks, and with sim it is going well and I see how it can get better in sim. I am tempted to add to it, but for now and the foreseeable future I am only trading Al Brooks. Putting order flow and volume profile learning off to later. I wouldn't want a doctor operating who only spent a month or two learning about only one body of medicine. My monkey part of me is not happy about this, but I am sure my intuition is correct in believing in a patience fulfilled with methodical action.
Last edited by johny1971; April 3rd, 2017 at 11:18 PM.
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What is an edge in your eyes? Not just a question to @rleplae but to anyone. Curious as to what the consensus is if there is one.
Would an edge have to quantifiable like how we know the quantifiable edge a casino has on roulette for example or is it permissible to say in a qualitative fashion my edge is discipline, patience, identifying support, resistance etc.
Simplicity is the ultimate sophistication - Leonardo da Vinci
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An edge is something that puts you ahead of the crowd.
This can be a statistically proven trading setup (for simplicity lets call this an algo)
This can be a mathematical model
This can be a synthetic data-feed
This can be a technology component
This can be personal skills, insight or industry knowledge
This can be 'insider information' (although that is illegal)
Bottom line, this is an 'advantage', you have and that allows you to make consistently money, as you are ahead of the mass.
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Good question. Mark Douglas defined an edge as a "an indication of a higher probability of one thing happening over another". This definition could be applied to a specific event (e.g. a specific price pattern, price action, etc.).
In general I say profitable traders have an edge, which to me means they have a 'consistent advantage over the majority of the other players in the market'. So if one were to quote the (in)famous 95% of the people allegedly losing consistently, a profitable trader would have an 'edge', i.e. a consistent advantage, over them.
IMO when an edge (when defined as applicable to trading events) is quantifiable it makes things much easier for traders, especially beginners. It gives you the confidence that over the long term the series of trade the edge is based on should bring profits to you.
All the things you quote above (discipline, patience, etc.) I think contribute to developing an edge but they would not individually be an edge in themselves.
Hope it makes sense.
EDIT: Ron replied as I was typing this but I'm glad my definition is pretty much aligned with his
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I do not agree with that view at all unless I was running a casino...
I can't recall if Mark mentioned expectancy, but I would be very surprised if he didn't. Merely looking at the probability of an event would not be an edge - I could randomly enter / exit the market with a fixed profit target and stop-loss and probably lose some money. If I decide I need to increase my win rate, I could either go for smaller profit targets or increase my stop-loss. However, even with the increased win rate, I would be very surprised if the end result is much better.
As you can see, I have done a fair amount of backtesting while playing around with certain variables trying to see how they influence my P&L...
On a more serious note though, if you are in a casino you are in a closed system. In a closed system it becomes quite easy to calculate the edge someone has and even find ways to exploit it. In a market with all of the different inputs it becomes impossible to accurately determine the probability of an event - you can make an educated guess, but you never know if you have accounted for the "unknown unknowns".
I choose to end this post here as going down this rabbit-hole is something I have done often enough in my life. However, I can say that I am quite content in the knowledge that I have no edge...
Edit: @rleplae also replied while I was typing up the post and I agree with his statement - "An edge is something that puts you ahead of the crowd."
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