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Introducing myself, pure luck made me 150% profits in my first week of trading, with the GameStop craze. Yes, I'm one of those who luckily didn't get burned, and after 2 years of learning how to trade and introspection, I concluded that, that was my most successful trade because I had no clue of what I was doing. During those days, I never felt fear because I never thought that the price would come down the way it did. I was totally ignorant about market dynamics.
It happens that, all that beginner's extreme luck I've had, had a perverse effect on me. For months I used the profits to actually try to learn the trading process. Took countless trades just to watch them turn against me, and started to grow a certain resentment towards the market for not making it easy for me anymore. Soon I realised that the market doesn't make it easy for anyone of us.
Seeking quick profits, I started to trade with leverage. Made all the mistakes someone can make in the market, until I gave all my profits back, and a little more, trading CFDs of NQ and VIX futures. That's when I accepted the fact that I was overconfident because of that first GME trade, and actually didn't knew what the hell I was doing. I decided to take a step back by trading using only the demo account. My rationale is that if I can't grow a demo account, I surely won't grow a live account. And that's were I stand today, trading with a CFD demo account so I don't destroy more capital. I think this is also some kind of risk management, and a sign that I'm starting to actually gain some conscience of my weaknesses. But it's not enough because I feel stuck at the moment.
I have periods of time where my win rate is high, and managed to grew the demo account by 100% for 2 or 3 times in the past months, just using 5 moving averages, with discretionary entries and exits. But there are other times, like the past month, were I just cannot get anything right, and give all the profits back. I know I still suck at risk management, and suffer great losses because of that. The thing is:
- When I use stop losses, I get stopped out many times, just to see the trade revert in my favour in the next candle. It actually feels like someone is trading just against me. It's extremely frustrating.
- When I don't use them, sometimes I can recover the losses and make some more. I know that's how I've managed to grew my demo account in so few time, but also the reason I lose all the profits made this way in the next weeks.
About the profitable trades, I tend to not let the profits run much, because when I've tried to do that, the market always took them back, and I closed the trade at breakeven or a loss. So, I'm kinda lost about what should I do to actually get more consistency in risk management, because when I try to follow the advices that I read and hear everywhere, I feel that I'll "die from a thousand cuts", and when I don't, I'm actually slaughtered. This dilemma is holding me back in my trading journey.
One other issue I have, and I'm sorry if this sounds like some crazy conspiracy theory, but I feel that the market is just there to squeeze the retail. There are times when the price action is very strong in one direction, and reverts the moment after. It looks like the intention is to trick people to believe it will go in one direction, just to turn in the other direction, and get everyone profits. This leads me to think that all the technical analysis thing, and all the news, exists to get people to believe that one thing will happen, just to get the opposite of what were "supposed". It's general knowledge that retail use technical analysis, and where everyone put their stop losses. This can be exploited against ourselves, and I believe it certainly is.
And this conclusion leads me to the idea that global market manipulation isn't something really that impossible. What prevents some really wealthy people to create an international telegram or whatsapp group, and coordinate trades? The channels are encrypted, so there's no risk of being caught. There are countless groups like that in crypto, why would the other markets be different?
I know that this kind of thoughts are pointless and counterproductive, because what I need to focus is to get consistency in my trading style, and just adapt to the market conditions on the fly, but somehow I can't shake the feeling of injustice and frustration that these thoughts create on me, and get paralysed by them. As a solution to cope with this thoughts, I'm starting to accept the fact that the market is just like any other online game where 2 teams are constantly battling each other, and that it's fair that the best team wins. The question is that I always feel like on the losing team. The effect this is having on me is that I'm always suspicious of the market, thinking that I'm being lured to a trap, even when I'm not.
So, my questions are:
- How do you feel when you get trapped in bull or bear traps?
- How don't you get emotional knowing that exist so many ways to rig the market against the small fish?
- And, lastly, how do you disconnect from this kind of thoughts?
Sorry for the long text, but I wanted to be clear about the issues I'm facing at the moment, and I'd appreciate very much if someone share their thoughts.
Thank you!
PS: English is not my native language, my apologies for any odd expression.
Hi, and welcome. I'm not profitable, so you should take what I say with a grain of salt, but from one relative noob to another, here are somethings that I have learned am learning about the markets that might help you.
Losing sucks but is unavoidable. Are you sure you are thinking with probabilities in mind and not taking it personally? Seeing an individual loss as a referendum on you is a quick and easy way to get in a bad head space. Ask me how I know...
You might want to read this post. Opened my eyes in a big way. Yes, there's manipulation, but are you sure they care about you/us?
This isn't quite accurate. I suppose we can say that the vast majority of people have the ultimate goal of profit -- that is, the underlying, root, most core motivation for participation in markets as a whole is indeed profit. But it's not possible …
Hahaha, wish I had an easy answer for you, but time/experience, backtesting, and patience are the things that have helped me become less of a disaster than I used to be.
As someone who spends a fair bit of time in languages other than his own, it seems like you are doing more than fine. In fact, if you are looking to improve your trading, going back over how you learned English might help you find some insights about how to more forward. Learning a second language isn't easy, and there are no magic solutions. I've heard people much smarter than me say something similar about trading.
Well, I don't dare to claim to be consistently profitable but I can say from past experience that you might be setting yourself for few more future traps.
1. Don't use demo account for measuring your improvements, use smallest tradable contract but use real money. Demo is generally useful in the stage of strategy development where you are testing out theories and experimenting/coding indicators/strategies but when you think you are in the next phase, where you have a "plan", you need to implement it in real account.
Demo will mess you up, in terms of both expectations and constant adjustment in theory part of plan rather than working on most important part which is trader (you). A plan here can be anything, even something as simple as "no bearish trades when price is above vwap and no bullish trades when price is below vwap"
2. Markets are just markets, it doesn't really care if you are big player or a small player, it only cares if you are making a mistake or not. Its really not out to get you (or any of us), a proverbial small retail trader (all of us).
Even big player/ institute/ bank/ companies/ countries also can and have lost money in the past, sometimes they have gone completely kaput. No body can predict the future, at the end of the day what you are doing is making sure "risk is less or mitigated and you are not blowing through your account in just small number of trades".
I know, I know, above 2 points don't really seem like answers to your questions, but let me tell you a secret, they are.
Its about having a different attitude, being relaxed with the money on the table (for that finding out amount you are comfortable trading is paramount) and having a statistics backing your tailor/self made unique plan, which requires running lot of back test. And last but not the least, loads of experience with trading real money, even if its a single contract.
Rather than answer your questions I will make a few comments/suggestions.
You did not say if you still trade the same instruments as the ones that lost all of your profits.
If you have found an 'edge' in trading, I suggest you switch to LIVE trading smaller risk/reward instruments.
If you have not found an 'edge' you need to 'study' the smaller risk instruments and become comfortable with the rhythum of those instruments. Watch the DOM (or similar tools). Keep any charts simple with only a few indicators. (most indicators show 'historical' not real time action). The more 'screen time' you put into this, the more you will see. Don't be impatient, it does not happen over night or even over a few weeks. Just watch and learn.
There are many journals on Futures.io that you can follow and learn techniques. Find one that suits your style and study it. There are many video webinars on Futures.io that are there for your research.
If the reason for your initial profit was luck, then you need to find an 'edge' that is based on a repeatable profit percentage. Define the risk you are willing to accept and embrace the trade when your edge is triggered.
The most important thing you can do is read/watch/learn.
I don't want this to sound like a sales pitch but being an elite member of Futures.io is one of the most important things that changed my trading. Perhaps it will for you also.
I saw a post on Futures.io (you may not be able to see it if it is for Elite only). The post is from a journal of a trader that trades MES. (low risk/reward instrument). This is a link to a post explaining how a trade is taken.
I initiate my 1st 'feeler' position after assessing past stats using investiquant and current price action/trend using EMA crossovers. It's ofen at RTH open but can be pre-open.
My 2nd position is …
I hope these comments are helpful and I wish you great success on your journey.
Rejoice in the Thunderstorms of Life . . .
Knowing it's not about Clouds or Wind. . .
But Learning to Dance in the Rain ! ! !
Your English is fine, by the way. Very expressive and easy to understand.... it was particularly easy to understand because we have all felt and experienced something like what you describe, and more than once. It's a large part of why trading is not easy. (If it were easy, everyone who tried it would be rich, which has not happened. )
I see that you began with the GameStop insanity. It's good that you got out in time, but making a sudden large profit when you just start out is sometimes actually an unfortunate thing, because it teaches lessons that do not actually work over time. But everyone has to start somewhere, and I suggest you take what has happened up to now, including the losing stuff, simply as a beginning and a learning experience, and take what you can from them.
I hope you find you get good suggestions from others who add in here. I will try to add a small amount as well. Unfortunately, no one can tell another how they should trade. This is something each has to find for themselves, and it may not be the same for everyone (actually, it definitely won't.)
But here are a few things:
1. First, no matter how it seems, no one is out to get you. The market is too big to know or care about you, and has other things to do. I know it seems otherwise -- yes, I have (often) bought at nearly or exactly the high point, only to see price immediately turn down. I have said "Damn, they got me!" But there is no "they" that got me, there is only me, usually buying too late, or with too much optimism, or on a whim, or because I really want to make the money, or because I am afraid I will lose out, or because I must, must, must "make back" my losses, or because of a whole list of things that I do. I have become a little better at recognizing when I am working from my list of favorite mistakes, and I can (sometimes) stop myself in time, but not always. Your list may be different, but you probably have one, and if not, you might want to see if you can recognize and list them. It can save a lot of agony. You're looking for things that you do, not that "happen" to you. It is worthwhile self-knowledge.
2. Also, of course, many times I do everything right and price still turns around. No one is perfect, and no one knows everything. I suggest always controlling losses. I know, everyone says that, and I did read what you said about your stops. Well, that happens often too. But without a stop, you will be dead. Try not to have them so tight that they always get hit unnecessarily, but not so loose that they don't protect you. It is best if you simply pick some criteria that you can live with and just always use it. That will keep you out of a death slide that loses everything.
3. By all means, keep the amount you commit per trade very small. Do this even in simulation (demo). I notice you are trading CFD's, which I know nothing about (CFD's are illegal in the US.) But if you were trading futures, I would suggest trading no more than one contract of the micro emini's: MES or MYM. (Probably stay away from MNQ because it is so quick-moving.) And I would use very, very little leverage. The idea is to keep risk small. Yes, eventually you will have to face and deal with the emotions of risk, and of live (non-demo) trading. But start small, and treat risk seriously even in pure no-loss sim.
4. @AllSeeker said, quite correctly, that "Demo will mess you up, in terms of both expectations and constant adjustment in theory part of plan rather than working on most important part which is trader (you)." That is really good. I do understand using demo at first, but it also lets you retreat into an unreal world where you never have to confront the most important factor in your trading, be it good or bad: yourself and your reactions. So don't dwell too long in that simulated world. Use it wisely, but don't be dependent on it. It's not real.
5. I could go on and on and on, but really, no one can actually tell another what they "need" to do to learn to trade. Be aware of your own attitudes, emotions, desires, and all the things that come into your mind while you trade, and try to find an objective point of view from which you can apply a rational plan and method. Then, of course, you need a plan and a method ( ). But really, while you do need a method/plan/whatever, you need a steady, open, rational non-emotional, non-erratic viewpoint more. Then you can examine your methods and plans and think how you can improve them.
This is not going to be easy, but it does not have to be as hard as it probably seems. I hope I gave you something useful, and I'm sure others will chime in with suggestions you can use as well.
Good luck.
Bob.
When one door closes, another opens.
-- Cervantes, Don Quixote
The effect this is having on me is that I'm always suspicious of the market, thinking that I'm being lured to a trap, even when I'm not.
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