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Results Since I Posted on 5/7


Discussion in Psychology and Money Management

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Results Since I Posted on 5/7

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  #1 (permalink)
Detroit, MI
 
 
Posts: 8 since May 2020
Thanks: 5 given, 7 received

When I came on here, I said that I treated SIM trading as serious as live trading. I definitely felt that way at the time. I can say without question that I was wrong. While I employed the same strategy that I used in SIM trading, I also panicked during a time when I wouldn't have in SIM trading.

In retrospect, I think the time I entered live trading and the time I started SIM trading were also key in this approach. Having done some backtesting, it has become obvious to me that there are some months where my strategy just doesn't work all that well, but I suppose I could just do the opposite in the future or not trade at all during those months (I'm looking at you February, lol).

On the other hand, I was able to get my discipline down and not fret over my losses or try unproven methods at a whim. Sometimes the unproven tweaks worked, but more often than not, I took a loss that was worse than if I had maintained my original position.

The losses were the best and most expensive education I ever had. It made me set some hard limits on profits as never once was my trade completely unprofitable. I made them unprofitable by not closing out when I could have. So, here are some observations and lessons I learned since posting here on 5/6 when I started going for real:

1. Micros are a waste of time. It would take an extreme case of volatility to make using them worth it, but they may be better than SIM trading for getting started since real money is on the line. My first few trades were in micros, but I wish I would have just used the GC and SI contracts since the micros usually were winners. In contrast, when I got into GC, I started losing money that wiped out all of the micro gains, lol.

2. While I don't use candlesticks to make my decisions, learning them can be extremely useful. The pinbar helped me stay calm when I thought I was done for.

3. Being an old school gamer, the candlesticks remind me of Donkey Kong. This actually made it easier for me to understand how they were talking and confirming previous and longer term price action(I think that's the term I want to use?). I now use 1 hr, 5 min, and 1 min sticks for each contract to understand what's going on.

4. Having a profit target is without question the best tweak I made even if I risk losing out by holding if my indicator still says to stay long or short. The only time I ignore this is when the position isn't doing what the indicator says it should do. Sometimes there is a lag, like on Thursday. I went short on GC and SI and was down by $3200 total at one point. I decided to stay the course since I knew there was sometimes a lag and that the change wouldn't be permanent. I stayed in the trade until Friday and boom, the swing came back in my favor and I ended up with a profit of $3,780. I never worried about being down with coins because no broker is going to margin call my coins and force me to sell.

5. Look at the data and base a profit target off of the data. From there, set a goal and don't think it's overly ambitious if the data supports it. I made $11,000 this week with this approach. I traded 2 contracts per trade.

6. While risk management on the losing side can make one more profitable, it can hurt as some positions swing the other way within the same session and even same hour. So trust in your method above all else. Hence, backtest until the cows come home. This may not work for all indicators, but for GC, I would say so.

7. Even experts don't know how gold and silver work. I have traded the physical commodities for over a decade. I am astonished at what "expert" websites publish about gold and silver. I am also astonished by what seasoned investors think determines the price of gold and silver. They don't know anything. I've been short gold since April when it peaked at $1788. I even blogged about it in the beginning of May when I sold off my gold coins for a premium above spot price (this rarely happens). Since 2008 when I bought my first gold coin, I have never lost 1 penny buying and selling gold and silver coins.

8. Daytrading can be better than buying and holding a position if you're willing to forego the max profit on all trades. I use my SIM account to see how buy and hold does versus day trading. Buy and hold for losses and day trade for wins has worked well for me.

9. I clearly still don't understand margins. I have $93,000 in my account, but TDA won't let me use more than $20,000 in overnight margin trading. It hurts my strategy since buying and holding can work on multiple contracts, but absolutely won't work with single contracts based on my SIM data.

10. I'm so glad I switched to futures. After getting a grip on my strategy and being comfortable with losses, I am positive $1500 since 5/6. My overall profit is still negative, but this includes a $10,000 loss from a newsletter's recommendation that was at one point $20,000 positive. I am now $2500 negative. When I exited the stock market completely on 5/14, I was $10,000 negative.

11. If you treat this like a business, it becomes much easier to withstand the losses. Also, this feels like a weird hybrid of gambling and sports. It's not gambling when you're well informed although they have a LOT in common with each other. I also feel like everyday is a boxing match. If the stock market is 12 rounds, futures is the old school 15 rounder. I feel tired and beat up as my hands get tired and calloused from all of the clicking. I'll be buying more displays so I don't have to click back and forth so much.

Edit: Post title should be 5/6.

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  #2 (permalink)
New York City + NY/United States
 
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petergunz View Post
9. I clearly still don't understand margins. I have $93,000 in my account, but TDA won't let me use more than $20,000 in overnight margin trading. It hurts my strategy since buying and holding can work on multiple contracts, but absolutely won't work with single contracts based on my SIM data..

Odd TDA won't allow you to to open or hold positions on more than 1 contract after regular trading hours.

Looks like for GC the initial margin is $10,065 per contract, so you should be able to overnight trade about 9 contracts at a time. If you have a stop loss as part of the ATM, then the amount of the stop would be subtracted as well, but you should still be able to trade 8-9 contracts of GC with a $93,000 account balance. Maintenance margin is slightly lower, so you should def be able to hold them if opened during RTH and hold through close into overnight.

https://www.cmegroup.com/trading/metals/precious/gold_performance_bonds.html

I'd reach out to TDA support

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