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I'm absolutely devastated, don't know where I'm heading now
Some great advice given to me during a time of frustration was to walk away for awhile, don't trade, don't check charts, don't even open a platform, don't turn on CNBC or Bloomberg take a total vacation from trading and do something else for awhile.
Sometimes when we get behind in trading we force trades to catch up, this has a cascading affect and forced trades usually do not meet our standards of a good trade when things are going well.
It worked for me, no trading, no trade talk, nothing like that until your head is clear and you can approach it freshly, it might be two weeks it might be a month but it helps.
Judging by the description of what you do, your strategy is pure crap.
Neither MACD nor some Bollinger crap or moving averages or candlestick patterns give you any edge, right click on them and select delete.
Quoting you: "There are calculations into it, but basically it's a checklist of breaking out/bouncing of a line (resistance/trend) + MACD up + breaks a Pivot point on the chart (I usually take a point extra for safety)."
This does not work! It's utter nonsense! And yes, random stuff can work for two years (been there, done that, hurt by it)
Well, if you ask what is that which works you can have the answer for 250K, I can teach you how to trade but with NDA signed and all. Or you can try to figure it out on your own the probability of which would probably be not far away from winning a lottery, because the vast majority of information available is pure crap (would say near a 100% of all information, videos and books), all of them are scammers who film their rented Lamborghinis while trying to sell you their trading course for $299.
I would also recommend the book recommended on the previous page, it has a good chapter on position sizing (it would explain to you why you lost your bankroll), it has a formula which I also devised independently when I studied physics at university, but that book won't tell you how to have an edge.
Hey Oliver,
I am empathetic to your situation. I too experienced a similar story. I went back to paper trading and tried to analyse what went wrong, to no avail. So in turn, I broke my technical analysis down to each individual part. I took one part, applied it to historical paper, and if worked, i kept that part. I did this for each analysis. From there, I went shopping. I researched each analysis indicators and applied them one at a time to my already (now small) technical indicators. (still historical, all on Simulated). Once i found a combination i thought would work, i would apply it the next day on the upcoming movement of a market. I did this until i rebuild my system of trading.
I hope this helps. Good luck, let me know how you do.
OliverB, my 2cents due to personal experience would be to understand that you need to be always ready to adapt, for example, don't get stuck on this specific market trading options, there are other markets out there.
Start with a new clean chart. Go over the price action, different timeframes, tick charts etc, try to find a pattern. Going back to the basics like pure price action, drawing trendlines etc can be really an eye opener sometimes and give you a new perspective.
Make a system that on your calculations even if you are 30% profitable you still will not lose money. Personally in order to convince myself about any system I just take 1 live trade per day. If after X amount of trades it goes off my calculations I just scratch it and start again.
Also make sure you stay positive and do not let frustration to fill your soul. Anyone that runs a business, does trading, freelancing etc knows and understands how difficult it is when you fail. Use your failure to learn and be reborn again and NEVER EVER GIVE UP!
I wasn't sure if I should post or not, one due to absence of detailed info from you and two there are some really good bits already there in this thread, but I can give some personal experience.
1. Markets change, change your strategy/approach accordingly. If you can't then you need to wrap up and find different more suitable instrument for your existing setup or find other source of income. I know its harsh but its real
2. Back testing is important, I wouldn't have enough time and money to check everything I can imagine/think of on live or even paper trade. Its a important filter in my process and beginning point from where further development is done.
3. Sometimes it really is just "good luck" or bad for that matter, my first small a/c with my broker I turned into multiples in year or so. Later I lost 70% it on single trade. I didn't want to admit it and had denial period of year or so, but I had to go back to drawing board.
4. There are no set strategies/tools that work for everyone, I firmly think there are as many ways to trade as many there are traders. So don't sought out others for ready made profitable strategy, ask for critique and advice but never expect to translate it into straight success. It doesn't work like that.
5. There isn't anything particularly wrong with option buying but if its only buying then you are most certainly waiting for repeat of this episode again in future. You need to learn hedging and risk management, maybe that's even more important than researching new tools for you atm.
TLDR; your method of probability stacking has stopped functioning, you don't have any risk management to fall back on and asking online for ready made ideas wont help much unless its specific to problem/chart.
Go back to drawing board and start a journal here or wherever you think experienced traders can give opinions on it. That's a good starting point. Trading is exercise that requires great amount of knowledge, patience, perseverance and experience at both failure and success. Money is often just after thought.
I'm sorry you're experiencing this and I can't give you a specific strategy to use to get back on track. But as a failed
options trader myself, I would like to offer two suggestions. 1) Don't give up on yourself. You may have lost a lot of
money, but you're not a loser until you quit. The game is not over. If you were successful once, (or lucky, as someone
suggested) you can do it again. 2) Since it sounds like you may be low on capital now, consider changing your market to
Futures. While futures trading is challenging, I find it infinitely simpler to trade than options. Futures also offer a much lower barrier to entry in terms of capital required, and better leverage. I have never traded Forex, but that may be an alternative worth considering as well. Best wishes and God's blessing.
ldcapital
I'd say it's time to unlearn a few things. Despite being a spectacular year, 2019 was somewhat choppy and could have got one killed, depending on your time frame.
The first thing to (re)learn is risk management. No matter your technical analysis, you should make sure you admit when you're wrong and cut your losses quickly and move on. After a while - surely much sooner than you did - you'd realize your system or whatever you used to enter trades was no longer working. In this low commission environment, there's hardly any excuse.
