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Zen & the Art of The Small Account


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Zen & the Art of The Small Account

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  #21 (permalink)
In the heat
 
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aslan View Post
You hit the nail on the head. Sim is only as real as you make it. You have to trade in sim like that is real money, not just reset after a week because you made some dumb mistakes that you know you would not have made normally. Most people think they have sim down and are ready, but most people are wrong because it was not done as if real. Did they have a plan or were they just pushing buttons? Did they do daily trade logging or just look at the PnL? Lots of ways to fool yourself, I know I have been there.

One of the key uses of sim, is using it to make sure you have the mechanics down, so you can execute a trade in your sleep, without trying to remember how to enter a stop order etc. This is necessary for anyone starting out, especially with a small account.

Another item with sim, be sure you set your account balance small. If you are using a $100K sim account, you are hurting yourself if you plan to trade $5-10K.

No matter how good you do your sim, the feelings WILL be different when you go to real money. You have to accept this, monitor it, and adjust.


Well said....I have reset my sim account so many times its not funny. But not once in the last 20 days. And I won't for the remainder of the month.

When I go live again in July, I know I will experience the joys and sorrows of trading live money....but I am beginning to look forward to it. Especially when I get through the rest of this month with the sim account intact.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #22 (permalink)
Wake Forest, NC
 
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AZ
I really am looking forward to this thread. After reading it last night, I went and read your elite journal as well. It really wet my appetite.

I know most people would like to have a large account to start, but the fact is if you trade poorly on a small account, you don't lose as much as you do on a larger account; it is the percentage loss in the account that hurts. If you lose your discipline and don't cut a bad trade, it can really cause a lot of problems. (Been there done that) Most folks just take on too much risk regardless of account size (the more in the account, the more contracts they trade).

I left NinjaTrade in late Feb or early Mar (read about too much instability on NT 7 and NT 6.5 was giving me some minor problems). I put my futures money at Thinkorswim (free charts, low cost, and best of all will run on any platform and I switched to Ubuntu) and one of the things ToS does is require full margin on futures. I looked at all the margins and migrated to 6B since it has low margin (about $2500). It trades $6.25 per tick so it takes more ticks for a given dollar amount, but it allows quicker ability to trade multiple contracts. I am using it to develop my overall skill before moving to other contracts.

I need to work on my discipline at maintaining my setup constant for 2 weeks at a time as you did in the elite journal. That was good.

Anyway, keep up the good work.
Papa14

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  #23 (permalink)
British Columbia
 
Experience: Advanced
Platform: NINJA
Broker: ZEN
Trading: Crude
 
Posts: 1,091 since May 2010


What game are you referring to? Is there only one game to be played in the market? The point of this thread is to define that game. How does one work an edge trading one car with a slim margin.

Clearly the trader must have a very advanced read on the micro-structure of the market. Trade with a larger tf trend. Bank your wins on the short range. Do you win more than you lose. If yes, welcome to the club, your account will grow fast.

As if the capital in a trader's account should have anything to do with the talent and ability of a trader to develop a winning strategy. That's just plain silly. And probably a disaster waiting to happen.




MetalTrade View Post
Thanks for this thread, looking forward reading it.

I'm a strong believer nobody should be in this game without at least $30.000 but you might prove the contrary.


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  #24 (permalink)
British Columbia
 
Experience: Advanced
Platform: NINJA
Broker: ZEN
Trading: Crude
 
Posts: 1,091 since May 2010

Hi Luke,

I've studies 6E and currencies for a quite a long time. I am going live with a one car scalping strategy on YM, the price point is 5$. The strategy I would like to deploy requires two cars on 6E, and I just can't risk it.

Hey, we could pool our funds, haha.. btw, come into the skype room sometime, lots of us working together there...


LukeGeniol View Post
I'm not agree with this statement cos real trade is really different from sim trade, I know many people that make this error, thinking that they can make money cos they do in sim, initially me too.........
In real trading all change, there are different emotion that came into play, and you can lose your focusing, take bad decision etc.....
Most of the traders I hear lost their money when go live, I also had blown up my account 2 times before became profitable.
So I think u have to take into consideration also the possibility to fail when u go live for the first time.
So starting with a little account is a good idea, but i must trade accordingly to keep your risk low and this is not simple in the futures market cos there are only standard lot. An opttion could be starting trade the spot market with micro and mini lot.

Good luck.

Luke.


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  #25 (permalink)
British Columbia
 
Experience: Advanced
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Trading: Crude
 
Posts: 1,091 since May 2010

There is quite a large retail/small instituional FX broker in Switzerland by the name of Dukascopy. I would not advise trading with any fx broker regardless of size and propaganda. Their website does have some valuable information however.

Click on their web tv and navigate to the trader of the month section. The award is based on total account return on capital. The winner gets flown over to their offices in Geneva for a champagne party. They interview the winners and from what I've seen over the past few months winners are usually scalpers targeting 10-15 pips per trade on the euro or pound. Their average monthly return is 100% ROC.

So out of thousands of traders the ones who can turn out the highest numbers are scalping for small wins and doing lots of them, and apparently nobody is doing more than 100% scalping like that. These are driven traders. Most of them just wanted to win the contest and they say that watching the previous winners' inspired them.


jungian View Post
I agree with Luke. Micro FX account would be best for an account of your size.

I started with a micro FX account with $500 and doubled it in about 3 weeks. But I quickly lost it all by trading WAY too many lots. Starting with 1 lot and worked my way up to 2 or 5 or 10 if I saw the right setup.

But your stops must be in proportion to your account size/strategy win and loss ratio.

Also, the emotional/psychological component is what is the hardest to overcome.

Personally I found myself looking at targets 10-15 even 20 pips away but would take profits early (same old broken record trader's story of letting losers run and winners being cut short)....

Good luck !

Jungian


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  #26 (permalink)
British Columbia
 
Experience: Advanced
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Broker: ZEN
Trading: Crude
 
Posts: 1,091 since May 2010

Watching the market for a time can be an excellent exercise. The key point to becoming a practitioner of the market is to truly know what it is, our great foe. Paraphrasing Sun Tzu, if you know your enemy and you know yourself you need not fear 100 battles.

I find that concentrating on observing the market for a few weeks without thinking about trading a very good way to learn the enemy. In the trade is the only place to learn yourself. Hence, it is good to step back sometimes and balance your energy.

Equal parts Ying and Yang required; 'Float like a butterfly, sting like a bee'


LukeGeniol View Post
I'm not agree with this statement cos real trade is really different from sim trade, I know many people that make this error, thinking that they can make money cos they do in sim, initially me too.........
In real trading all change, there are different emotion that came into play, and you can lose your focusing, take bad decision etc.....
Most of the traders I hear lost their money when go live, I also had blown up my account 2 times before became profitable.
So I think u have to take into consideration also the possibility to fail when u go live for the first time.
So starting with a little account is a good idea, but i must trade accordingly to keep your risk low and this is not simple in the futures market cos there are only standard lot. An opttion could be starting trade the spot market with micro and mini lot.

Good luck.

Luke.


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  #27 (permalink)
Italy (IT)
 
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Platform: ATAS, R|Trader, NT8
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syxforex View Post
Hi Luke,

I've studies 6E and currencies for a quite a long time. I am going live with a one car scalping strategy on YM, the price point is 5$. The strategy I would like to deploy requires two cars on 6E, and I just can't risk it.

Hey, we could pool our funds, haha.. btw, come into the skype room sometime, lots of us working together there...


Good choise, will follow your progress on your journals.

Luke.

Take your Pips, go out and Live.
Luke.
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  #28 (permalink)
Italy (IT)
 
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syxforex View Post
Watching the market for a time can be an excellent exercise. The key point to becoming a practitioner of the market is to truly know what it is, our great foe. Paraphrasing Sun Tzu, if you know your enemy and you know yourself you need not fear 100 battles.

I find that concentrating on observing the market for a few weeks without thinking about trading a very good way to learn the enemy. In the trade is the only place to learn yourself. Hence, it is good to step back sometimes and balance your energy.

Equal parts Ying and Yang required; 'Float like a butterfly, sting like a bee'


Watching the market to understand how it works, especially for a new instruments, is very important as trade the strategy on sim is very helpful exercise, practice is the key, on real trade too.

Luke.

Take your Pips, go out and Live.
Luke.
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  #29 (permalink)
Italy (IT)
 
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papa14 View Post
AZ


.......................I looked at all the margins and migrated to 6B since it has low margin (about $2500). It trades $6.25 per tick so it takes more ticks for a given dollar amount, but it allows quicker ability to trade multiple contracts. I am using it to develop my overall skill before moving to other contracts.
.........................
Papa14

6B is really good instrument for the reasons u say, and also cos it moves generally many more ticks than other futures, including 6E too.

Luke.

Take your Pips, go out and Live.
Luke.
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  #30 (permalink)
In the heat
 
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Tom Hanks plays a man selected during WWII to coach a professional women's baseball team while all the men are off fighting. Baseball simply could not go away just because there was a silly little war being fought.

During the course of the season, an incident caused one of the girls to cry......Tom Hanks delivered a truly classic line. "Crying, there's no crying in baseball!"

I was reminded of this quote this morning while I was complaining to my wife for the 900th time about the sorry state of my health and fitness.

I am about 20-25 pounds to heavy, out of shape and miserable. Nothing fits anymore. Over the last couple of years, I've seen it coming on, this place I am today.

And while I was getting ready for church this morning, whining about this, it dawned on me, "there's no crying in baseball" or trading or fitness or anything else I would like to do with my life.

What Tom Hank's character was saying was, get over it, get over yourself, take 100% responsibility and do something about it.

I have done this with my trading, finally! But in other areas not so much. No more. I will assume responsibility for my own fitness, my own health. I cannot blame McDonalds, my wife's cooking, or anything or anyone. It is me. The trouble is, I've wanted to be lazy more than I wanted to be fit. So I invented every excuse in the book to shift blame for my ever expanding waist line to external reasons and avoid being fit.

The same applies in trading. The market is innocent. It is not good or bad. It does not care about my system, my signals, my mental state, my health, my sleep habits, my account size or anything else. It just is.

The success or failure of my trading depends solely on me. I use every excuse in the book to shift blame and responsibility away from myself for my lack of progress toward being a successful trader. No more!

I am in control of how, when, why, where and what I trade. I must be honest about it.

Beginning tomorrow, I am up 30 minutes earlier than normal, I'll take my normal walk, then on the $1000 coat rack I have outside, the hated bowflex. Only this time, I will use the rowing function to begin building my aerobic ability and lose some calories. I will also cut my food portions in half, no soda, candy, fast food. I eat entirely too much at each meal. I've done this before but it was only half hearted, I am serious about it now. I'll include health on my daily score card as well.

I am in control of how much, what, when, where and why I eat and exercise. I must be honest about it.

As in baseball, there's no crying in trading, and there's no excuses in life, only responsibility.

Sorry for being preachy today.....this is really personal for me.....I had to get it off my chest and onto paper.....been thinking about it all day.


Here's to a healthy and happy trading week. Tomorrow I will have a confession to make....stay tuned.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris

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