The following are quotes from Reminiscenses Of A Stock Operator. Often referred to as the greatest book on trading, and the person the book is supposedly based on is often referred to as the greatest trader of all time.
Interesting that he never held success for very long...
"What beat me was not having brains enough to stick to my own game – that is, to play the market only when I was satisfied that precedents favoured my play. There is the plain fool, who does the wrong thing at all times everywhere, but there is also the Wall Street fool, who thinks he must trade all the time. No man can have adequate reasons for buying or selling stocks daily – or sufficient knowledge to make his play an intelligent play."
"Disregarding the big swing and trying to jump in and out was fatal to me. Nobody can catch all the fluctuations."
"Fear keeps you from making as much money as you ought to."
"Early that fall I not only was cleaned out again but I was so sick of the game I could no longer beat that I decided to leave New York and try something else some other place. I had been trading since my fourteenth year. I had made my first thousand dollars when I was a kid at fifteen, and my first ten thousand before I was twenty one. I had made and lost a ten thousand stake more than once. In New York I had made thousands and lost them. I got up to fifty thousand and two days later that went. I had no other business and knew no other game. After several years I was back where I began. No-worse, for I had acquired habits and a style of living that required money; though that part didn’t bother me as much as being wrong so consistently."
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Yesterday my trading was near magnificent. Today, pitiful. On Thursday I was calm, picked my spots and decided to let the market prove me wrong. On 1 contract trading, net 2400 +/-.
Today, I would say the same thing,but not follow through.
For example, I thought we would be range bound, and sold the high burst this morning...only to take 12 ticks and get out.
Then later I sold a break lower, but price came all the way to within 5 ticks of my stop (huge retracement BTW), and then... closed. I "knew" I was wrong, so why let the stop hit? It never did make it to my stop, and the trade was destined to be a big win. Had I stayed firm.
Then, I saw something I do. I missed two very big wins, and wanted them back. So I started scalping.
Then, I stoppped myself.
At the close, I saw a HVS bar, went long, got out around .52... fear again, as the market ran up another 40-50 ticks...
I beat myself today, finished down about 11 ticks...
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Sounds like you still had a great week? Even if you had a net small losing day, -11 ticks is not much. Especially compared to +240 ticks. Focusing on the negatives can be useful to learn from, but should be balanced, don't forget to congratulate yourself on your wins and use them to add to your emotional capital as well.
On the closing trade before it hit the stop, what happened on that trade makes me wonder why some traders say to exit before it hits your stop if you feel it's a loser. If your stop is well placed based on your analysis, then as long as it doesn't hit, the trade could still work out, right? Doesn't this instead mean either the stop was not optimally placed or should have been advanced further?
Last edited by Futures Operator; October 13th, 2012 at 06:21 PM.
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I think my biggest problem is I am some sort of midlife crisis. I am back up to having some money put away, not bad for a recent bankruptcy I assume, but single-digit percentage of where I was not that many years ago.
Whatever success I realize on any front, feels good for a day, and then like nothing again. I did not realize it until I went off the antidepressants, and once I saw it I requested to go back onto them.
I am possibly only part way through the PTSD that was generated by my financial fall. My wife is ok with it, many of my friends went through it right along with me, but I find myself feeling like I should have done something different every day I wake up, and it has been going on for years now.
That is a big part of where I started to journal about being exhausted. I think it originally came out here as "fucking exhausted". Beating myself up roughlly 50% of my awake hours, for so many years. Forcing myself to slave away at finding a way to make amends. I find myself getting angry about it lately. And that is where my recent high-leverage loss came from. A brief moment of insanity from what started as a small losing trade. I still have no idea what happened. But that recent proof of my ability to lose control, added to the inherent uncertainty that trading represents, has caused me to doubt my potential as a trader entirely recently.
I went back an re-read some of Reminiscences of a Stock Operator, and saw some things differently this time. What was initially a story of excitement and inspiration, this time was much darker. Does "catching big waves" also imply that the winning and losing is destined to cycle perpetually?
I realize there are a few for which this may not be the case, but it may come back to "the wrong dream", and many of us, I am afraid I may be one, have it. I may get myself into cycles where I am in it for the right reasons, but as of today the cycles persist.
I do believe that the big swings are where a trader should be, and I have thought that for years, and yet I cannot seem to allow them to mature much more than an hour at a time, if that.
I do great analysis quite often, I understand the importance of allowing winners to run, and still fall short of doing it time after time. And after doing it for so many trades, over and over, I have reinforced this pattern, and that fact only adds fuel to my doubts.
The post about the bike ride through the cemetery months back, the conclusion was to be happy. I am currently undecided on whether trading does that for me. It gave me hope, it gave me something to focus on, it gave a belief that better days were ahead of me, it filled the hours when I had nothing to do. I needed that. But today, with my business offering more solid returns, the realization of the extreme difference in certainty of taking a trade versus taking on a business project, and my recent momentary but significant loss of trading discipline, has turned my feelings to the point where I am in limbo.
I do appreciate your concern and your insight. Some of it has become the most memorable part of this journal for me.
Perhaps I am returning to my source.
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