Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
I'm absolutely devastated, don't know where I'm heading now
OliverB, You are way ahead of me but it is hard to look on your suffering and not want to help. This market for the past year is mainly what I have been cutting my teeth on, and bleeding a lot.
I understand from FuturesTrader71 that in trading as in life, suffering is actually an important element of growing and improving. After fighting a recent trend day and getting spanked, I found some free resources that helped:
Try dif time frames cause you said volitility was in play, ATR AVG to set new stop and targets, you have to adapted to new market conditions daily, it might be time for new system if your don't have an edge anymore, but you have to be able to reset your mind set as well so your mind doesn't keep trying to get you into what felt good before, don't hang on to what was.
Took me a long time to read all the posts...
but this stood out and i dont know if others will agree with my diagnosis and thoughts
Just to make my point clearer, I used to have around 75% success in catching trends.
2019 and onward? Maybe 20-30% success, not to mention times where it shifts on my a** and going opposite direction unexpectedly.
I can tell from this what the major problem is.
You relied on a high success rate to compensate for low money management process
There is no way to blow up your account (another statement you made, i dont need to copy forward), if you have good money management.
I have run Monte Carlo simulations of trading mathematically.. Why?
To find out what the math behind the magic curtain and understand the mechanics of things.
Regardless of what your trading, this math governs all these systems, high or low hit rates..
was there a hit rate that was too low.. yes.. of course...
However, that point was lower than most people would ever guess.
There is no advice more useful that anyone can give you that will raise your positive hit rate
There is no secret trend that will last forever, and so not need adjustments
The more trends people mine in the market, the more order they remove, and what is left is more random
Ultimately this is why trading can be really difficult, and more so the shorter the time period
Take a step back and lets do a bit of analysis of the game itself to clear your head a bit and get some breath
Trades can go three ways, and only two of them matter
Zero movement for a time period is rare and doesn't matter
So a trade, any trade, whether its stock, futures, bonds, buying a house, buying crap and selling it on ebay
Can only go two ways. Up or Down.
The bottom line is that its a coin toss - At worst its a balanced coin toss where the outcome odds are split perfectly
at best its a skewed coin toss where heads or tails come up a bit more than the other. Its never a two headed coin.
Hopefully people are following me here.. and realizing that this truth makes me money, but cant make me rich except over time. IE. if i know this stuff, i will earn money, but it will not earn me a lot till i have a lot more.
so here we are all making bets on what technically amounts to coin tosses.
We study charts, or read fundamentals, and other things in which we try to find the periods in which the coin toss is lopsided over other times, and then try to do that consistently to earn more positive outcomes than negative.
what if i told you that mathematically speaking that this doesn't much change the outcome, but only the rate of earnings not whether you earn (unless your abysmally/abnormally worse than picking at random).
This is where everyone focuses on, as its the exciting part, and the part that gives ego validation!
i am a great stock picker... sounds a lot better than i am a good money manager...
here is a game you can play yourself to teach you this if you dont happen to program as i do.
take a quarter, take some paper, and take a bit of time to grasp the concept thoroughly
what your going to do is learn the difference between odds as a number and odds as they actually occur
the difference between what our heads think and what a Monte Carlo simulation does
All of us can agree that barring a two headed or two tailed coin, the odds are 50/50 on the toss and guess.
and that the whole point of this is to show that even if you cant control the coin odds you can control the outcome
why? because the outcome doesn't happen in a vacuum - there is more than just the trade guess quotient in play
Its combined with the way you bet - your money management
while a coin toss is 50/50, and each toss has no connection to other tosses (no matter how much we want to believe the gamblers fallacy, and how it appears to happen when statistics are looked at in different ways), the outcome does not come out symmetrically in real life... you dont get HTHTHTHTHTHTHTHTHTHTHTHTHTHT as a pattern. you get a jumble of HHTTHHHHTHTHTHHHTHTTTTTTHHHTTHTHT sometimes heads is ahead, sometimes tails is ahead.. the more you toss the more the total numbers will converge towards 50/50... though not necessarily perfectly..
now.. what your going to do is combine the series you generate with managing the money
if you lose 10 cents on heads and gain 10 cents on heads, your going to find that how far ahead you get is quite limited... this will be true even if you can use a computer to toss the coins 100,000 times or a million.
If you run a simulation on it and run it so that your looking at 1000 people making 100,000 coin tosses
your even going to notice that a few are 'lucky' enough to get ahead and appear as winners!!!
and some are going to be unlucky enough to crap out their purse right away and are out
now your going to do the toss and your going to say if heads you pay out 5 cents, and if tails you get 10 or 15 cents... while the odds of the trade are completely random, your going to find out that an asymmetrical outcome can change the total outcome of the series!!!
IF you take a course (a real one not the hoaky ones they mine people for cash to learn to trade) you will find this is what they are going to teach you.
in your past your 70% hit rate allowed you to attack what is a 50/50 game and get 70/30 out of it
now its failing... but what if you can have a 60/40 losing game, and still come out ahead?
and that's where the asymmetry of the outcome created by managing the money of your trades does its magic.
lets do some quick back of the envelope concept math.. its not a sim and its only valid in illustration
lets use right and wrong, pay and keepjust to get letters that make it easy to see.
so in the coin toss without betting you get 50r/50w and symmetrical money would be 10p/10k
now... 50r/50w combined with 10k/10p will be a wash.. you make nothing you lose nothing you break even
ok.. lets take your 70right/30wrong and add that to 10keep/10pay
you would get 700keep and 300pay and end up with a 400keep outcome
huzzah your profitable.. and your account is making money and your happy
what if we try 50right/50wrong and do 10keep/5pay?
thats 500 keep, and 250 pay... your ahead 250...
huzzah your profitable.. and your account is making money and your happy
what if your a bad guesser or the coins are a bit off
40right/60wrong and do 10keep/5pay?
thats 400keep and 300pay... your still ahead 100
by the way, if you do 70/30 and have do 5keep/10pay
thats 350keep and 300pay... you barely come out ahead..
Now what if you do 30right/70wrong and your management has you 15keep/5pay
thats 450keep vs 350pay... your ahead 100
while that is oversimplified... its actually how the math really works!!!!!!!!!!
the 15 keep vs 5 pay in real life is 15 cents up with a 5cent stop loss..
in my simulations i ran them AON... meaning all or nothing...
which is that the trade ends at 15 cents even if it can go more, and bottoms out at 5 cents
but in real life if your monitoring the trade there is no reason why you cant get 20 cents up and 5 cents down
on AVERAGE...
and this is because the 50/50 trade outcome can get skewed a bit by research, trend following, news following
its not a perfect 50/50... you can find small edges that skew it a bit.. and that improves the money management outcome...
its not going to help you make a million fast...
but it will help you make a lot over time... it makes time your friend and less of an enemy
is it romantic and exciting? no... but it can change 30/70 odds into a winning game..
there is plenty of proof that it works as that is the math basis of card counting in a casino
you bet higher when you are more likely to win, and lower when your less likely
same kind of formula but kind of turned around a bit...
and note... if your doing your good management and your not using large portions of your purse
your going to slowly get ahead... and your success rate on picking now is a profit rate, not a success rate
if you are hitting 70/30 you make money faster... if your hitting 40/60 you make it slower..
odds are converted to rate, as money management controls the outcome
before MonMan odds controlled the outcome, and MonMan controlled the rate
i know i can be long, i am not good at short answers
but this is the key to the game...
as your purse grows you can apply the principal to larger amounts as a small amount of the purse is larger
in the heads tails analogy, there are going to be runs where heads comes up 10 in a row
and if your using too much of your purse, your going to blow the account and be out of the game
but if your not using too much of your account (exposure), your going to lose on the 10 in a row
but still be in the game to earn it back over time and keep going.
If a trading system works for one timeframe and fails for other timeframe, then it is not a good trading system/strategy. You need to try to come up with a strategy/system that must work for any timeframes, any security products (stock, option, mutual fund, futures, forex, etc.). You need to go back and revisit your trading system/strategy to make it better.
I have worked on my trading strategy/system for over 3 years to make it perform consistently across timeframes and across security products. I have done tones of backtesting and live testing as well to make sure the system if consistent in producing consistent P/L.
The problem with the casino or coin toss analogy is that the markets are not random nor are they uniform, but they are zero-sum gambits -- a few will win big and many will lose. Trading "educators" do a terrible disservice to burgeoning traders by telling them to set a 4-tick stop loss and an 8-tick take profit and all will be well.
Before price moves up to the 8-tick profit target, it is likely to first move down to where all of the well-"educated" retail traders have dutifully placed their stop-losses.
I have not figured out all that consistently and successfully works, but I have gotten this far: The right approach seems to be to a triune approach on a foundation of hard work and discipline. The triune approach balances on 1) Good technical and/or fundamentals, 2) Good risk management, & 3) Good soul (mind and emotions/heart) management
I am going to recommend a service that offers a free trial no strings attached. You will be trading futures with a hard stop (minimal risk). I have been trading for 14 yrs and have had some of the same issues as you. They offer a free 5 day trial and they will set you up with the trading platform along with the indicators for free using a sim account. You will be attending the morning live trading room where you will be taught how to use the indicators for a high probability edge. They have a live radio broadcast every weekday at noon where they will go over the results from the trading room as well as the results from the alerts that are sent out to members. They have been doing it since 2006 and have NEVER had a non profitable month. Just pm me and I will provide you the link as I don't know if you are allowed to put links to websites in these posts as I don't want to break the rules.
Thank you for sharing about your trading. Very interesting!
I can tell you that based on my personal trading system and one other professional trader's system that I have seen, the market definitely changed in the second half of 2019. We also experienced a worse trading performance in 2nd half 2019, especially since October and onwards to even today. This is trading ES and NQ.
I have no special advice except to say that I believe the technical behavior of the current market has changed since the middle of 2019 compared to previous years.
If you are talking about technical analysis of the market, it never changes. Market goes up, down, sideways. Technical analysis and resulting technical patterns should always provide edge and clues on when to enter, what must be the risk (stop loss), and what should be the potential target. I am attaching a sample technical pattern to demonstrate.
Hello, I have been reading all the posts and I find the early ones helpful. It is interesting to read the opinions here. Personally, I trade futures and stick to the NQ. Back testing was critical to what I do but you have to experience real time to dial it down to your system. Price action, tredlines and a key indicator to help with confirmation. I trade a hybred Renko. Believe it or not it works. I would never have arrived at what I do without back testing but you have to get the feel of the market in real time.
