Are most small traders just losing ?

June 2nd, 2019, 02:42 PM

FuturesTradr

HI guys
I was a loosing trader for a very long time. For the first 5 years, I was just always sim trading, and everytime I thought I found something I would simply get crushed in testing. BIGGEST ADVICE ANYONE CAN GIVE YOU IS LEARN TO BREAK-EVEN YOUR TRADING POSITIONS. I LEARNED TO BREAK-EVEN MY POSITIONS, MOST TRADERS HERE WILL ALREADY KNOW WHAT THAT IS, AND AFTER THAT MY TRADING CAPITAL STARTED TO SLOWLY RISE(SLOWLY, NO MAGIC IN TRADING AND MAKING MILLIONS IN A YEAR).
EVERY SINCE I CAME UP WITH PERSONAL SYSTEM OF LOOKING AT PRICE ACTION AND CONSISTENTLY WINNING TRADES, I HAVE ALWAYS MADE MONEY. EVERY DAY FOR THE LAST 5 YEARS, I TRADED SIM ONLY, I HAVE MADE $100 OR MORE AND THEN I STOP ALL TRADING FOR THE DAY.
IT CAN BE DONE. I AM CURRENTLY RUNNING MY OWN THREAD WHERE I HAVE STARTED WITH 2000 USD AND NOW WE ARE AT 366 AND COUNTING. YOUR SYSTEM HAS TO BE AT LEAST 80% OR MORE PERCENT CONSISTENT AND PROVEN, IN REAL TRADING, NOT SOME BACKTESTING NONSENSE, AND BIGGEST CHALLENGE FOR YOU, IS TO STAY DISCIPLINED AND MAINTAIN IT.
HAVING A PASSION FOR THE TRADING I THINK IS A HUGE, HUGE FACTOR IN ANYONE BEING SUCCESSFUL AT TRADING AND MAKING ANY SORT OF INCOME. LIKING WHAT YOU DO, LEADS TO BETTER DECISIONS, MORE TIME SPENT ON LEARNING IT AND TO BETTER RESULTS OVER TIME. I CAN GIVE 8 YEARS OF RESULTS FROM MY SYSTEM THAT HAS EVERY SINGLE DAY WITH $100 OR MORE MADE DAY TO DAY, WITH LIVE TRADING VIDEO OF EACH DAY. IT DEPENDS ON THE SYSTEM BUT BIGGEST THINK IN TRADING IS CONTROLLING YOUR POSITION, CONTROLLING YOUR POSTION
JUST MY TWO CENTS WORTH

Wait.... with all that SCEAMING AND SHOUTING I didnt understand..... Did you just say that you have made a hundred dollars a day for the last 5 years? Because that equals $26k per year based on 260 trading days per year.

June 2nd, 2019, 03:40 PM

Yes, that is what I am saying. The way I look at the markets, is like any other price action reader. Simply read the charts and follow the prices, I am basically a day scalper on ES and Nq. So if that equals to 26k a year, then yes, that is what I have been making. This has been a hobby to me for a very long time, until I learned that I can actually start trading on my own and make it a full time job. Up till now, I have been shit scared to take things to this level, since in reality, as everyone knows, even the greatest system can have its days. I am going to start a trading thread, doing the 25K combine with Oneup trader, welcome to check out my results there. Happy trading guys,

June 5th, 2019, 01:26 AM

shodson

The problem is that there are too few barriers to trading, and your expectations are too high.

Given your description, you are like a guy that has a basketball, some nice Nike shoes, have dribbled the ball a few times, and you've watched a few NBA games on TV. You are now ready to go play in the NBA! Fortunately, you wouldn't get drafted and you will be spared from the utter destruction you would experience going up against actual professional basketball players.

However, with trading, there is no draft. Open an account and, voila, you're a trader! Unfortunately, us pros are just waiting for you to enter the court so we can take your money.

So, what are you to do then? How do you achieve success diving head first into a pool full of sharks?

Pick an asset type to trade. Stocks? Options? Futures? Crypto? Figure out which type of asset type you are more passionate about because to trade well you need to know and understand the market(s) you are trading.
1. Stocks: if you like to follow companies, brands, trade companies of products and services that you know and love
2. Futures: if you like to follow macro economics, commodities, overall stock market indexes, etc, then futures are for you. Plus, they get better tax treatment and offer interest-free leverage.
3. Forex: if you like to follow international macroeconomics and foreign central banks then forex might be for you
4. Options: these are derivatives of the above three asset types, more complicated, potentially dangerous if you don't know what you're doing, stay away for now until you are more advanced
5. Crypto: if you are passionate about the emergence of cryptocurrencies and blockchain technology, mining, already have wallets full of crypto then maybe this is for you. But bid/ask spreads can be wide, transaction costs can be high, and brokers can be slippery, so only trade these if you really know the crypto world.
Find a strategy that suits your personality
1. Want to win frequently (65-75% of the time), but at the risk that your losers will be larger than your winners, potentially losing several months of profit in one day? Then mean reversion trading is for you.
2. Want to get the occasional big-time home run trade, but have the rest of your trades win only 30-40% of the time, most of the time grinding out small losses and barely breaking even most of the time? Then trend-following is for you.
Figure out how active you want to be
1. If you want to look at charts and the market all day, then you might be a good day trader. However, after a while you'll find this is very mentally draining and is not as glamorous as it sounds. Also, day trading is the most difficult type of trading to be profitable at, but many beginners gravitate to it because they want trading to be a job replacement, and they want a lot of "activities" to perform so it feels like a job. Or, they are a degenerate gambler and just want a lot of action, like a video game, buying and selling all day, but paying lots of commission and slippage to their broker and never making any profits.
2. If you just want to check the markets an hour or so a day, then maybe swing trading is more for you. You pay less commission and slippage, and ignore the noise of the intraday swings while you spend your day doing other activities, like perform an income-generating job.
3. Some of the most successful traders I know check the market once a week. Some even only allow themselves to trade once a month! They pick stocks with good fundamentals and short-term momentum (IBD50), set their stops and let it ride. Often, doing nothing and giving the trade time to evolve is the best thing you can do.
Learn to trade on SIM - learning to trade a simulator, or paper trading, is good in that it helps you learn the mechanics of how to execute trades. Once you can execute your trades confidently then look to make paper profits. Record your trades in a journal and/or spreadsheet. Treat it like a real business, because it is. Don't trade real-money until you can consistently make paper profits for at least three months. Real trading is harder than paper trading so if you can't paper trade your way to profits you'll get smoked in a real-money market. Think of SIM/paper trading as making the JV team, but you still need to make Varsity, play in college, and then hope to make it to the pros. One step at a time Sparky.
Once you are consistent on SIM, go into a live market never risking more than 1% of your account on any single trade. This way, if you screw up a lot, which you will, you'll still have a chance to trade again tomorrow. Look to make a few months of consistent profits. Once you do, then maybe look to risk 2% or maybe even more if your usually don't hit your max loss because you are managing the trade before it can take a max loss.

Along the way you'll have to conquer a lot of psychological obstacles, but you will also learn a lot about yourself. And instead of expecting a certain monthly return, just take what the market will give you, and be content that you made good, disciplined trading decisions that protect your capital. Eventually you'll realize that successful trading is more about protecting what you have, not "killing it" by meeting an expectation of what the market owes you every month. Markets are always changing so its the most nimble ones that can navigate the changes that make the best traders.

That should get you started...Enjoy the ride!

High expectations are not the problem, demand expectations are. But of course reading a book is going to be required to figure that one out.

"Along the way you'll have to conquer a lot of psychological obstacles"... probably the understatement of the century.

If new traders need to choose between reading a book and not reading a book, I highly recommend reading a book. I read Mark Douglas and it made a world of difference in my approach toward trading as a full time skill and income.

Without reading a book, (and trying to learn on sim and then trading live) I lost 50K and than I lost another 20k getting a "professional trader" to teach me some basics.... I ended up learning more from a $3.99 book called Price Action Breakdown than I did spending 20k.

It's easier to make great trades by checking the market only once a week because there is no psychology involved. Just watch for price to get overextended and trade against it. (phone your broker to make the trade) I bought puts when oil was bumping up against 74 and that's why I have a trading account today. But day trading is 90% psychology and requires not only understanding things like demand expectations, but also extensive self training to implant those concepts into the mental environment. (I didn't need to be a Super Duper Trader to buy puts, just needed to recognize a price excess)

I was a wreck before I took to reading (more like study) the psychology of the market environment. Anxiety, trepidation, fear (like terrified) and subject to having my account blow up at anytime. Until I learned that the markets do not produce threatening information. The only way market information is threatening, is for me to perceive it as threatening.

Armed with the knowledge of what I needed to do, I traded live and stopped out as many times as I needed to in order to learn how to trust myself to do the right thing, be disciplined, and protect myself from blowing up over one bad trade. I am in a position now to trade without fear, and without risk of having inordinate losses. Yes I lost some cash, but I chose to take those losses as part of my education. And I lost a lot less than the 20k I paid some Bozo to train me.

When I was still trying to get every trade right and avoid losses I was having 2k losing days. When I decided to just take whatever trade I felt like taking and managed my loses correctly my worst day was a $1400 loss. Now I'm seeing $150. loss after taking 7 losing trades and one winning trade. The only thing that has changed is how I perceive trading and how I perceive the nature of the market environment. (psychology)

I am learning to trade without fear and trust myself to be disciplined. I know the market is not going to burn me any more than my hot stove is going to burn me. I figured out that as long as I don't put my hand on the hot burner the stove is not threatening to me at all.

Just my perspective.

June 5th, 2019, 03:42 PM

CrudeDude

I ended up learning more from a $3.99 book called Price Action Breakdown

This book?

https://www.amazon.com/Price-Action-Breakdown-Exclusive-Financial-ebook/dp/B01C222NR6

June 5th, 2019, 05:15 PM

shodson

This book?

https://www.amazon.com/Price-Action-Breakdown-Exclusive-Financial-ebook/dp/B01C222NR6

Yes that is the book. Keep in mind this book teaches nothing about demand expectations.

It show how to find value area and control price along with excess price and responsive/initiative price moves. He talks a lot about keeping an eye on the larger time frames so as to understand where the bigger longer term traders are likely to enter/exit the market.

Really good basic information that I was lacking.

I'm up to 30 books right now, with my main focus being on trading psychology.

Mark Douglas- excellent
Ari Kiev- very very good
J. Donald Walters- good for meditation
Som Bathla- looking forward to reading, Mind Hacking Secrets
Bret N. Steenbarger- looking forward to reading
Mark Minervini- looking forward to reading

June 19th, 2019, 04:49 AM

I browsed FIO for 5 minutes and did not find any single thread about money and risk management. Again and again, thats why 95+ % are losing money constantly.
Here comes the holy grail for you small traders: You will make constantly money even if your signal has only a 30% winning probability. But then your risk/reward ratio has to be at least 3.

Got it?

If you don't know what a risk/reward ratio is, or winning probability, you might want to look it up.

You are welcome.

June 19th, 2019, 08:40 AM

Money management and risk reward are part of proper trading psychology. If you have your psychology right, you have your money management and your risk reward ratio right.

Thank you.

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June 19th, 2019, 02:09 PM

CrudeDude

Money management and risk reward are part of proper trading psychology. If you have your psychology right, you have your money management and your risk reward ratio right.

Thank you.

Sent using the NexusFi mobile app

Not really. 2 different things. But highly dependent on each other.

June 21st, 2019, 02:23 PM

shodson

The problem is that there are too few barriers to trading, and your expectations are too high.

Given your description, you are like a guy that has a basketball, some nice Nike shoes, have dribbled the ball a few times, and you've watched a few NBA games on TV. You are now ready to go play in the NBA! Fortunately, you wouldn't get drafted and you will be spared from the utter destruction you would experience going up against actual professional basketball players.

However, with trading, there is no draft. Open an account and, voila, you're a trader! Unfortunately, us pros are just waiting for you to enter the court so we can take your money.

So, what are you to do then? How do you achieve success diving head first into a pool full of sharks?

Pick an asset type to trade. Stocks? Options? Futures? Crypto? Figure out which type of asset type you are more passionate about because to trade well you need to know and understand the market(s) you are trading.
1. Stocks: if you like to follow companies, brands, trade companies of products and services that you know and love
2. Futures: if you like to follow macro economics, commodities, overall stock market indexes, etc, then futures are for you. Plus, they get better tax treatment and offer interest-free leverage.
3. Forex: if you like to follow international macroeconomics and foreign central banks then forex might be for you
4. Options: these are derivatives of the above three asset types, more complicated, potentially dangerous if you don't know what you're doing, stay away for now until you are more advanced
5. Crypto: if you are passionate about the emergence of cryptocurrencies and blockchain technology, mining, already have wallets full of crypto then maybe this is for you. But bid/ask spreads can be wide, transaction costs can be high, and brokers can be slippery, so only trade these if you really know the crypto world.
Find a strategy that suits your personality
1. Want to win frequently (65-75% of the time), but at the risk that your losers will be larger than your winners, potentially losing several months of profit in one day? Then mean reversion trading is for you.
2. Want to get the occasional big-time home run trade, but have the rest of your trades win only 30-40% of the time, most of the time grinding out small losses and barely breaking even most of the time? Then trend-following is for you.
Figure out how active you want to be
1. If you want to look at charts and the market all day, then you might be a good day trader. However, after a while you'll find this is very mentally draining and is not as glamorous as it sounds. Also, day trading is the most difficult type of trading to be profitable at, but many beginners gravitate to it because they want trading to be a job replacement, and they want a lot of "activities" to perform so it feels like a job. Or, they are a degenerate gambler and just want a lot of action, like a video game, buying and selling all day, but paying lots of commission and slippage to their broker and never making any profits.
2. If you just want to check the markets an hour or so a day, then maybe swing trading is more for you. You pay less commission and slippage, and ignore the noise of the intraday swings while you spend your day doing other activities, like perform an income-generating job.
3. Some of the most successful traders I know check the market once a week. Some even only allow themselves to trade once a month! They pick stocks with good fundamentals and short-term momentum (IBD50), set their stops and let it ride. Often, doing nothing and giving the trade time to evolve is the best thing you can do.
Learn to trade on SIM - learning to trade a simulator, or paper trading, is good in that it helps you learn the mechanics of how to execute trades. Once you can execute your trades confidently then look to make paper profits. Record your trades in a journal and/or spreadsheet. Treat it like a real business, because it is. Don't trade real-money until you can consistently make paper profits for at least three months. Real trading is harder than paper trading so if you can't paper trade your way to profits you'll get smoked in a real-money market. Think of SIM/paper trading as making the JV team, but you still need to make Varsity, play in college, and then hope to make it to the pros. One step at a time Sparky.
Once you are consistent on SIM, go into a live market never risking more than 1% of your account on any single trade. This way, if you screw up a lot, which you will, you'll still have a chance to trade again tomorrow. Look to make a few months of consistent profits. Once you do, then maybe look to risk 2% or maybe even more if your usually don't hit your max loss because you are managing the trade before it can take a max loss.

Along the way you'll have to conquer a lot of psychological obstacles, but you will also learn a lot about yourself. And instead of expecting a certain monthly return, just take what the market will give you, and be content that you made good, disciplined trading decisions that protect your capital. Eventually you'll realize that successful trading is more about protecting what you have, not "killing it" by meeting an expectation of what the market owes you every month. Markets are always changing so its the most nimble ones that can navigate the changes that make the best traders.

That should get you started...Enjoy the ride!

After more serious consideration and consultation with a professional hypnotherapist, I have decided that your advise that most people have expectations that are too high may be correct.

When I became a trades person I had to go through a four-year apprenticeship before I could become a journeyman. I also had to go through a four year journeymanship before I could become a licensed contractor or �Master� tradesmen.

In light of my new perspective on the pursuit of a trading career, I have decided to treat the first four years as a beginner and an apprenticeship. I�m getting a good start and with my new perspective I think I will be better equipped to learn and progress over the long haul. Thank you for your suggestions and thank you for reading my post.

Sent using the NexusFi mobile app

Are most small traders just losing ?

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Are most small traders just losing ?