Platform: Ninja Trader, Nexgen T-3 Fibs Pro Trader (Love Them!)
Broker: AMP/CQG & Kinetic
Trading: CL
Posts: 69 since Jun 2010
Thanks: 130 given,
76
received
I use what I learned with Nexgen-that there is a progression to follow to move toward live trading. Good success must be made at each step before moving on to the next. You have to really master each step. The more time spent at each step, the better trader one is going to be. I do hundreds of trades at each step before moving on. The sequence is:
(1) Define the entry rules for a trade.
(2) Do Historical Chart Marking where you mark trades from the middle of the chart. You get to see what happend before and after as you mark up a trade. To me, this is the most important step and the one people skip past. Whenever I am having trouble, I go back to this step. Sometimes I do it just for fun. This is the key to developing a precognitive vision of the market.
(3)Do Bar by Bar chart marking where you paper trade the right edge of the chart moving the chart one bar at a time by hand.
(4) Trade with Market Replay. Ninja is great for this. It looks like and feels like live trading.
(5) Do Live Market Sim.
(6) Go to Live Trading with real money.
Each one of these steps is important and must be done in sequence so that you build a foundation. With Historical and Bar by Bar you move through the market very quickly. You can do a weeks worth of the market it in one afternoon. Therefore, you gain more experience in a shorter period of time. As you progress to Replay, it get harder, but you now have experience to build from. Jumping ahead before you are ready for the next step creates confusion and the precognitive vision never gets developed. This is what I've been taught. I had to fail miserably before I accepted and adopted it. But, of course, I'm just an odd Duck. So it may be different for you. Quack!
Great to read that I am not the only one experiencing frustration or fears of losing and hence are afraid of "pulling the trigger". Most of the posts contain valuable lessons, but I believe that the conclusion here is that everyone of us needs to make the same mistakes again and again. Of course, going through these posts, I learned from other people´s lessons as well but I am not too convinced that these will be remembered and avoided as well as the mistakes I make myself. People (like myself) tend to believe, what do these guys know, I will prove them wrong, I am different.
I have been live trading for only 6 months so far, so I am very new at trading and there is no doubt I will be able to make many mistakes in the future. My start can be described as the worst possible (but reading "classic" cases of failure, quite typical, I guess). I demo traded for 1 month and made 10k from 500$. Great, trading is simple as that, I wonder why aren´t all people trading and driving Ferraris, people are strange (read: stupid) indeed. This made me think I am invincible, a natural talent in trading etc etc. However, as soon as I started trading live, my account went broke several times in a row (of course, believing that once or twice was only a coincidence ).
After my 3 first months in trading and negative account balance, I started believing that there is little more to trading that I had thought so far. During the last 3 months I have been trying to find the Holy Grail of trading, perfect set of indicators, entry and exit criteria etc etc. What the situation is at the moment is that I trade on the verge of parity, most of the time my profits cover my losses and some more. Some weeks I end up losing, some weeks I end up with a profit.Why is that, you ask. Answer is simple, I do not trade consistently and I do not trust my own system. When I take the trade according to my own rules and principles, I lose and stay out of next three trades that met my criteria perfectly and would have earned me profit. Basically, I trade mainly the times that the market is behaving against the odds or against the way it has most often acted in the past. After losing, I get back to demo trading just to find my system works. One would ask now, why do you keep doing this to yourself. Well, actually I figured all this out last week . I do not claim that with this knowledge I will be a gazillionaire but it is just another lesson for me that I need to get my head fixed, nothing else is important as that.
So, I have not reached my destination yet but so far all of the previous has not been able to scare me off. I still continue to trade, I see light at the end of the tunnel .
But the bottom line is that I agree with people who say you can demo trade for years but if you do not have your account funded by (a huge amount of) the money you can afford to lose, there will always be a huge difference in your psychological attitude regarding demo vs live trading.
Actually it was quite interesting to write all this down and some things seem unbelievable reading them now but all the more makes me believe in my title, the blogs and books do not teach, life teaches.
Cheers!
The following 2 users say Thank You to krist403 for this post:
stay in the game,learn from your mistakes and move on.you will be profitable consistently
some day and you will remember those days and laugh.we all have been there,busted some accounts
but we are still here.we are alive.
The following 2 users say Thank You to 327trader for this post:
When you trade with a methodology you know is robust, debilitating fear is no longer a factor. If you are trading without a proven methodology, you should know that your brain is simply trying to protect you from yourself. Do you have a profitable methodology? If so, then wade into the waters with one contract. If you do not have a proven methodology, then shift your focus to finding one, or better yet, developing one on your own. When one understands why they are trading and what they expect, emotion is much smaller road block. Confidence emerges from making the money that you already know will come in advance.
The following 3 users say Thank You to zer0 for this post:
to the original question. I say you just really take down your size and have an account to handle it. Make sure you've tested well and you should be fine. You simply have to just keep at it.
To the original question: My advice would be that you should use a tight risk management, 1-2%.
Make sure that your trades' stop loss are equal to 1-2 % of your account.
Like 15 pips = 1-2%
or 80 pips - 1-2%
Next, you should look for trades with at least a 1:2 risk:reward ratio scenario.
Lastly, move up to a higher tf, if you're not profitting, go ahead and move up to a higher TF, 4H or Daily charts, if you will, the market is less volatile there and things will often go your way.
With a 120 stop loss on the daily chart for example, dont be scared or afraid, like I said, Make it like 120 pips = 2% of account So you're still losing the same amount of money but earning more.
This way, the amount you lose is constant, but the amount you gain is different.
If your strategies work than you'll be able to back-test them and auto-trade them. Back-testing is the ultimate solution to fear, after seeing your strategy trade thousands of times on historical data you gain confidence in it, and then automated trading takes care of the rest.
I highly recommend you start backtesting and auto trading via NinjaTrader or if you're not a programmer both TradeStation and IQBroker are monsters in back-testing and have easier languages you can quickly learn.
Back Test until the cows come home....only when you have confidence that you have a winning system will you lose your fear. And then, use only a small portion of your account per trade (1% max) to reduce the risk of ruin and to make the losses easily manageable (from a physc standpoint and a real bank-account standpoint).
Platform: Ninja Trader, Nexgen T-3 Fibs Pro Trader (Love Them!)
Broker: AMP/CQG & Kinetic
Trading: CL
Posts: 69 since Jun 2010
Thanks: 130 given,
76
received
This is my view, but I realize that I have not seen it all.
Trade set ups that have nuance are very hard to automate. If code can be written for a backtest then I assume it can also be automated. But nuance may be left out. Nexgen has tried to automate their system with limited success. Their autotrader is profitable, but it cannot duplicate what successful traders can do. They have not been able to include the nuance. I know people who have back tested (by hand) other strategies that work, but have failed to create code to autotrade their methods successfully. The step from successful backtesting to autotrading is difficult. Any nuance may make that too difficult for most retail traders. Of course, we can't see what large institutions are doing. With large budgets and armies of Quants they may have succeeded here. I have seen many autotraders through Hotcom webinars but none are as good as a flesh and blood Master Trader. Many, however, look like they are profiatable. But if your goal is to Master the Art of Trading, autotrading is not the answer. One thing all of the autotraders I have seen have in common is Large Drawdown. Large Drawdown is not part of my trading plan.
The following user says Thank You to Trader Duck for this post:
The only thing i would suggest, that it is not a huge amount of money, but proportional amount. One strategy that worked for me, and mind you i am trading FX Spot markets, is that broker products allow you to trade even as low as 1c per Pip. By utilizing those type of products, you can devise the roadmap for position sizing according to your account. The example would be, let's say you are starting with $1k account and your maximum risk is 1% per trade, that means that depending on your stop losses you would be able to trade live with positions between 10c (cents) and a dollar a point. As your emotions fall in place, and you earn positive points you can progressively top up account till you get to the 'living' point. It is enough to inflict the pain and enforce the discipline, but will not break the bank.
As through the weeks and months positive trading, your emotion handling will grow, and you will learn to treat the trade mechanically and see only points or pips, worrying about the dollar figures only while at the bank teller.
One of the most common mistakes, and one i have done as well, most beginners tend to take 'shortcuts' and jump ahead in a hope that they will make money. The one thing that markets have thought me is that there are no shortcuts. If you do not have complete method and able to follow it with just about no emotions, you will loose money.
Happy trading
Markets are logical and
The following 4 users say Thank You to sinisa for this post:
Are you trading the right market for you? (The ES is the most difficult market to trade)
Are you confident in your method? Are the signals clear or are they subjective and open to interpretation?
Are you properly funded? Are you trading scared?
Are your trading goals realistic? Are you trading win or die?
Are you emotionally prepared? Is trading fun for you or do you dread beginning each day and sigh with relief when the trading day ends?
Are you trading from a written plan?
Is your reward/risk properly set?
Do you really know how to manage the trade? Do you know beforehand when you need to exit or do you keep giving the trade more and more "breathing room"?
Do you have a lack of trust in yourself? Your method? Or the market?
Is trading the right way to make money for your personality?
The following user says Thank You to Aragorn for this post:
This is an excerpt from an article I wrote about the importance of trading with a plan.
Trading With a Plan
Everyone has a different emotional reaction when it comes to money. Entrepreneurs are always taking calculated risks. They realize there is always a risk of loss but they take that risk because they think the chance of them being successful is greater then their chance of failure.
There are hundreds of thousands of traders who are trading without a written trade plan. There are those who have been trading for so many years they don't need one, but you do.
Successful traders use a trading plan. Big institutions often have a plan written for and executed by a computer. If you don't have a trading plan of your own how can you hope to survive?
You have to think like an entrepreneur. The trade you take with a well thought out and executed trade plan will have a greater chance of success then failure.
As stated above, and earlier in this thread a while back, was READ THE BOOK TRADING IN THE ZONE, and also read the Disciplined Trader, both by Mark Douglas....
Having fear, which is what you are experiencing will be impairing your trading, and you will essentially be funding other traders accounts, if you trade with real money....
Mark gives multiple ways to identify and collapse negative believe's, the most important thing for me when I was going though this "scared feeling" was to be able to identify my thinking. The technique to do this can vary, but a very easy one that I learned was simply counting to 5, and staying focused on doing this for 15-30 minutes per day, EVERY DAY. The more you do this, and focus ONLY on counting, your mind will start to drift off... Once you realize that its drifts off, you need to re-fucus...
This application is VERY beneficial when I am trading, if I am trading, and a negative thought starts to arrise in my mind, I am able to quickly identify it and dismiss it immediately. I know that every moment in the market is unique, so when stuff happens, I just look for my next trading edge, and take it, I know that over multiple trades is where my success will come from, not just this trade, or the next trade..... Learning to thing like this can take time, but doing these exercises, and especially the trading exercise as outlined in marks books will help you get there faster.
Also another very valid suggestion which was given already in this thread, was to reduce your trading down to a level where you dont care. Perhaps trading a micro account on the FOREX market doesn't sound good, but doing this as an exercise to learn the mental skills can be invaluable experience....
Just my .02...
The following 2 users say Thank You to c12345 for this post:
Dismissing your fears, sticking to your plan, and having the self-discipline to dismiss any negative thoughts that enter your mind, will allow you to consistently follow your plan, and equity increases flow into your account.
If you're having fears trading, it's likely to due one or both of the factors below:
1) Risk aversion. Simply put, you much rather not lose $x than win $x, despite the trade having positive expectation. In this case, trade smaller. You should typically be risking 1.5%-2% per trade anyway, and if that's what you've been doing, then go even smaller. The amount lost and won should feel like nickels and dimes.
2) "Unconsciously" you're not confident in your trading. You understand some trades are going to be losers, but you don't feel your system has merit to make a profit in the long run after commissions. In this case I think it's reasonable to continue to trade on a demo until you create a sample size.
These is exactly my problem, lack of a plan. Thus ended up blowing my first trading account and afraid to trade a second one. With so many indicators/systems, which one will make a good plan for me?
Thx.
For 'short term' trading, consider working with longer time frames, ETF's and smaller positions, with 'bigger' stops, willing to hold overnight .... until you get your sea legs or, just as an ongoing trading style. Use 'significant' support and resistance areas -- as shown by price on hourly/daily charts -- as buy and sell points.
Also consider spending lots of time -- while you patiently wait for the short term trades to develop -- looking for stocks that might be 'ten baggers', taking extremely small positions in them after id'ing, then buying and holding .....
I heard some days ago someone speaking about simulation trading and the need to do trading in real. That is the same that I always thought because one time you have your system that seems to work it is nonsense to continue in simulation, what are you expecting in this way?
But, I have to be realistic and explain something that I saw and I don't understand yet but has a heavy weight before to make the decision of coming back to "real": Why is so different simulation and real market? Why something what is supposed is your training works so differently depending of one or another way, so different that changes everything?
I would like to give an example about what I mean:
I work with limit orders and when I set my order in the market at the same time I set my stop and my target order automatically. I move, maybe, in this moment this target further or closer depending supports, resistances or others technical aspects, but after I don't move this position because following the theory my target order is in the queue as an execution order and I don't want to lose this position, logical? Suppose so.
But it seems that it is not absolutely true, because I had the luck to see something really strange working in real, something that I had never seen before in simulation and I cannot take off my mind: I saw how in my target price there were around 800 contract (MiniSP), so I could be the last but if after appear more contracts in the same price we do have to suppose that they will be executed after my order. But not... In this moment I had a volume bar chart with 500 contracts in each bar and when the price touched my position I could see how only after six bars this was closed, more than 3.000 contracts... It was in a moment of high volatility but what happens when there is no so high volatility? Easy: You can see your position touched one and other time and continuing open, something that we know well.
The opportunity for seeing something like this was very funny and I know that is a very extreme example, but more than something that amazed me it gave me a new confirmation about some bad feelings that I had before, because before this experience I have felt that something wrong happened in the real, the stops are immediately executed, as the theory say, but the limit orders seem to exist in a different order, another space, having a very, very long life, maybe there is latency for the limit orders and not for the stops? (Of course you have the option of a direct order, but as you know the price that you receive is always the worst, and that is no the matter about what I speak now).
Thinking about what I have seen I ask: What more things in the real happen that you cannot see or understand but are hurting you?
You can learn different systems, capital management, techniques, grow for overcoming the "psicotrading" but, are the markets really fair with us or there are something under the carpet that could not be handled, something thought for doing very hard to win in this game if you are not a big shot...?
Further the psicotrading and others really is the same to work in simulation or in real or really when you change this aspect there are more things changing that you cannot control, things that do not depend on you, your knowledge, your training, your abilities, your skills...?
I think demo trading is good to warm up the brain before trading real money (especially as scalper).
Also, if you execute like you would do it real, sizing and riskwise, you train yourself and so get more confidence in your workflow/system. I think this is important to get rid of the anxiety that buit up in real trading.
Also demo practice helps you to watch yourself in thinking and emotions and learn to cope with it.
@bpr17
Stops are executed market at the wanted or worse available price, limits are executed fifo at the exact price, like you said.
When somebody accepts a smaller price (and fills the orderbook with lower limits than yours, some iceberg order or algo executing market at lower price) then your limit will not be filled, the move is exhausted. You would also have had the possibility to decrease your limit or close market if you see price not going further. I think Ninjatrader has a very realistic demo executionn wise.
You think very well, "NT has a very realistic demo execution" is absolutely true, but a very strange execution in real too...
I mean (and in addition to the written before): I have received a NT in basic version for free, as my broker promised to me before to open my account, but this NT is too far to have a "realistic execution". I can understand that things like strategies or other could not be included, but the basic version is so basic that really is nearly dangerous, especially because there are something really strange on other things: I am used to set the orders with "limit orders" just one tick above (short) or below (long) the price with the ask or bid option. With the demo the "noise" permits that in the 80% ore more of these orders are taken, but in the "real version" (basic) is just the opposite, less than the 20%. Maybe the latency...? Maybe but...
On the other hand, I do can say that there are other differences that I cannot understand, e.g.: I have traded with two different PC, the best with the NT in real account (RNT), the worst with the NT demo account (DNT) at the same time and both with a simplified version of W7 (without Aero and others). In the RNT when the one minute chart has finished the minute is normal that there is a time in which the platform stops, and after you can see that the clock starting maybe in 52 seconds, but also in 34... Not always, but a lot of times, and almost 30 seconds without information... But the DNT in the other PC with the same Workspace and all exactly all the same the platform doesn't stop... How is possible? When you have to work in real this is frightening. Again the latency...?
It is very easy to blame always the same thing, too easy, because I am speaking about two computers with the same network and the same platform, the unique difference is that one is in demo (with all the features) and the other is in real (with the minimum of services). I'm not a computer programmer, but by experience and computer literacy I think that there are more things that are different in the RNT and the DNT, not only some features that doesn't work, I don't know where or in what, but these things are always against us, no in our favor.
I am waiting for more than TWO WEEKS (no bad) that my broker give me another platform that he promised to give me, it seems that this platform set the orders directly in the data-feed, if at the end I can have this platform I will to say you if it was the latency, but I have my doubts seeing the other issues.
Last but not least... My experience says that it is very difficult to win in the trading not only for our awkwardness, but also for all these things that muddy the work, ¿could you imagine that your car stops each minute or the speedometer jumps a few miles to the other like in a quantum leap...? ¿The petroleum latency...?:tape: By my experience we are not only working against our own problems, lack of knowledge or the market, and it is something that does not worries me, I know so well that anyone never created the trading thinking we could earn money... The trading is something that some people created for earning our money and we are fighting against their rules and games, and I think that the shame is that there are more business behind the trading that in the trading, and the people that is supposed that have to help you don't do this too often... I mean: Brokers, courses sellers, notices agencies, data-feed, etc, etc.... All these people want your money but... Are they fair? In too many cases I am not so sure (for this reason I am in futures.io (formerly BMT), here there are some different people) .
Afraid to trade? Of course, how not?
P.S.: If someone is thinking to suggest that I buy the Standard Edition thanks, but my money management says that I have to try other things before to expend money in something that I don't feel reliable, because if on the contrary the Standard Edition works different in real that the Basic that gave me my broker that would be something that, if it could be true, was criminal.
Revisiting this thread in almost a year later, and I believe the solution to this thread is: don't do discretionary trading. It's subject to human errors, biases, emotions, imperfect memory and rationalizations, which a computer is not. In theory, most (any?) discretionary trading systems can be programmed then backtested. And many strategies which are breakeven or slightly losing can be perceived to be winning, as they may be in the green for 6 months until finally revealing their true value.
).
. I do not claim that with this knowledge I will be a gazillionaire but it is just another lesson for me that I need to get my head fixed, nothing else is important as that.
