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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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  #291 (permalink)
 handelaar 
North Carolina
 
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I'm in a similar boat with sim trading, and this is for a couple of reasons. 1.) itís a small account, less than 10K so it canít take a lot of experimentation hits and survive. 2.) I need to find out where the weaknesses are Ė my method or my emotions/psychology.




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  #292 (permalink)
Swamp Yankee
Freetown, Massachusetts, United States
 
 
Posts: 3 since Aug 2010
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AZ,

The intent of the thread is admirable. I cut waaaay back on message boards, but was compelled to check out Big Mike's world due to a case of NT.

I read the first five or six pages of the thread and a few posts I purposefully skimmed as I honestly didn't want to absorb what was being said. WHY?

I am so gratified that you asked!

The attraction to read the thread is also what makes it potentially harmful. I am trading with a small account. So psychologically you have an "in" to my head and my belief system. Part of my guard is down because I recognize that we share so much.

The issue is this:

WHAT YOU DISAGREE WITH POSES NO THREAT TO YOU.

WHAT YOU AGREE WITH IS ACTUALLY WHAT IS MOST DANGEROUS.

I hope this is not lost on everyone as it is my highest and best.

For me trading with a small account right now is nothing but a blessing. I think its crazy cool that you can get an account at at an established ECN broker and trade forex without risking big money. Forex might be a tougher market to trade in some regards, but it is also the biggest pool of liquidity on this planet. To be able to participate in it with small size is a gift. I see it all quite the reverse of everything that is parroted about account size. I think if some one is new to trading, or lost the handle, or never had a handle on it, that they would be very wise indeed to start with a very small account. Better to blow out a tiny account a few times and figure it out than to blow out a big one and do terrible psych damage to oneself and build awful neural pathways tying trading disaster to all sorts of emotional baggage.

Check you beliefs! One hell of a fire can be started with just one match.

Just because a whole bunch of clowns don't know how to cup a match in their hands to protect the flame from a breeze, hunch down deliberately to ignite well chosen and prepared fuel, never turn back to the infant fire as it slowly creates a bed of coals, put hands right down in the smoke and make a chimney to coax that little guy into something bigger... doesn't mean you have to be a clown too.

The fact its this and then I must be on my way; if you can't start a fire with one match, you really haven't got it figured at all. Yes it is fun to use gasoline on a fire. I have done it!!! Fun fun fun, but holy guacamole can it have consequences ; )

The skills learned are the same skills that will allow you to go a hell of a lot further most would ever have you believe.

Beware what you agree to!

Andy

"Its all in your Head"

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  #293 (permalink)
 PandaWarrior 
In the heat
 
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Swamp Yankee View Post
AZ,

The intent of the thread is admirable. I cut waaaay back on message boards, but was compelled to check out Big Mike's world due to a case of NT.

I read the first five or six pages of the thread and a few posts I purposefully skimmed as I honestly didn't want to absorb what was being said. WHY?

I am so gratified that you asked!

The attraction to read the thread is also what makes it potentially harmful. I am trading with a small account. So psychologically you have an "in" to my head and my belief system. Part of my guard is down because I recognize that we share so much.

The issue is this:

WHAT YOU DISAGREE WITH POSES NO THREAT TO YOU.

WHAT YOU AGREE WITH IS ACTUALLY WHAT IS MOST DANGEROUS.

I hope this is not lost on everyone as it is my highest and best.

For me trading with a small account right now is nothing but a blessing. I think its crazy cool that you can get an account at at an established ECN broker and trade forex without risking big money. Forex might be a tougher market to trade in some regards, but it is also the biggest pool of liquidity on this planet. To be able to participate in it with small size is a gift. I see it all quite the reverse of everything that is parroted about account size. I think if some one is new to trading, or lost the handle, or never had a handle on it, that they would be very wise indeed to start with a very small account. Better to blow out a tiny account a few times and figure it out than to blow out a big one and do terrible psych damage to oneself and build awful neural pathways tying trading disaster to all sorts of emotional baggage.

Check you beliefs! One hell of a fire can be started with just one match.

Just because a whole bunch of clowns don't know how to cup a match in their hands to protect the flame from a breeze, hunch down deliberately to ignite well chosen and prepared fuel, never turn back to the infant fire as it slowly creates a bed of coals, put hands right down in the smoke and make a chimney to coax that little guy into something bigger... doesn't mean you have to be a clown too.

The fact its this and then I must be on my way; if you can't start a fire with one match, you really haven't got it figured at all. Yes it is fun to use gasoline on a fire. I have done it!!! Fun fun fun, but holy guacamole can it have consequences ; )

The skills learned are the same skills that will allow you to go a hell of a lot further most would ever have you believe.

Beware what you agree to!

Andy

"Its all in your Head"

Thanks Swamp Yankee......

What I think I hear you saying is this.....what an incredible opportunity it is to start a business with unlimited potential with such a small amount of capital and that you can keep trying over and over until you get it and when you do get it, the sky is the limit because the skills you learned while small serve you well when you grow. Am I correct in what I think I hear you saying?

If so, then I am in total agreement with you, if not, then I have no idea what you are trying to say.

Thanks for stopping by!

Cheers

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
Started this thread
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  #294 (permalink)
 PandaWarrior 
In the heat
 
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handelaar View Post
I'm in a similar boat with sim trading, and this is for a couple of reasons. 1.) itís a small account, less than 10K so it canít take a lot of experimentation hits and survive. 2.) I need to find out where the weaknesses are Ė my method or my emotions/psychology.




The answer is easy...its your emotions/psychology. No need to wonder. I don't know you but I know this is the answer. You must get your head right or this will never work for you. I have thought sim was the place to get my head right and to a very small degree it is as it relates to discovering and edge and learning to trust it. But beyond that, sim is useless. You must trade real money in order to conquer the emotions.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
Started this thread
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  #295 (permalink)
 worldwary 
Williamsburg, VA
 
Experience: Intermediate
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Just finished reading this thread. Thanks for keeping the journal up. You clearly have a sincere desire to succeed as a trader and I hope you achieve all your goals.

If I may offer an observation, it appears to me that you are not fully confident in your system at present. Confidence is key. Unless you are firmly confident that each trade gives you a positive expectancy, the psychological demons will inevitably take over and sabotage you.

Your system performed amazingly well earlier in the thread. I would encourage you to go back and revisit the particular entry and exit criteria you were using at that time. Those criteria worked. You have the proof documented right here in this thread. That's a system you should have confidence in.

Go back and trade that system. If you create a new system or even just "tweak" the old one, you won't have any reason to be confident that the new system performs any better. A few losing trades and you'll begin to doubt that new system and start searching for the next tweak. Stop the cycle and go with what works. Do your best to trade your proven, profitable system as faithfully as possible. String together a few profitable days and the confidence will return.

I may be off base in my observation; perhaps confidence is not a major issue for you. Just offering my perspective as an interested observer.

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  #296 (permalink)
 PandaWarrior 
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worldwary View Post
Just finished reading this thread. Thanks for keeping the journal up. You clearly have a sincere desire to succeed as a trader and I hope you achieve all your goals.

If I may offer an observation, it appears to me that you are not fully confident in your system at present. Confidence is key. Unless you are firmly confident that each trade gives you a positive expectancy, the psychological demons will inevitably take over and sabotage you.

Your system performed amazingly well earlier in the thread. I would encourage you to go back and revisit the particular entry and exit criteria you were using at that time. Those criteria worked. You have the proof documented right here in this thread. That's a system you should have confidence in.

Go back and trade that system. If you create a new system or even just "tweak" the old one, you won't have any reason to be confident that the new system performs any better. A few losing trades and you'll begin to doubt that new system and start searching for the next tweak. Stop the cycle and go with what works. Do your best to trade your proven, profitable system as faithfully as possible. String together a few profitable days and the confidence will return.

I may be off base in my observation; perhaps confidence is not a major issue for you. Just offering my perspective as an interested observer.

Hi Worldwary,

Thanks for stopping by. Many do but don't post. I am grateful to those that do. Truthfully, I have spent 18 months not being confident in my system because that system kept changing. I am finally back to where I am comfortable and in fact, spent the better part of the afternoon today looking back at many different charts with my basic system on to once again validate both trend and chop days.

The system I traded in July was something that had evolved over a period of 60-90 days out of a desire to stick with something long enough to prove I could be consistent and show some discipline. But even in July I knew it was not final. I was still missing something. That something had to do with my conviction that fibs were the way to go and yet I was not using them. Then in late July, I discovered a fib tool that gave me a big picture overview of the entire day and I knew that was the major component of what the final system would look like.

In August, I tried to trade that combined with some stuff from July and it was totally counter to what I believed. Of course it failed. I am not surprised. Then last week, I tested some stuff from a guy I know and over the week, really dialed it in. Funny thing was, I got both entries and exits dialed in along with correct stop placement when all I really wanted was entry finessing. So now I am finally a fib trader like I always wanted to be but with the added conviction of KNOWING where my entries AND exits are. The best things are usually deceptively simple and this is. There is a lot of theory behind it but the operation is both simple and visual. Things I desperately need.

You are so right that confidence is important. I have been really lacking this for a long time. No more. I have confidence and a reasonable expectation that what I have created has an above average edge that is within my abilities to trade. I've always known this day would come, now it is here and on Tuesday, we will see the first demonstration of this.

Stop back if you like, the more the merrier....

Cheers....

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #297 (permalink)
 worldwary 
Williamsburg, VA
 
Experience: Intermediate
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Trading: Stocks
 
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aztrader9 View Post
But even in July I knew it was not final. I was still missing something. That something had to do with my conviction that fibs were the way to go and yet I was not using them. Then in late July, I discovered a fib tool that gave me a big picture overview of the entire day and I knew that was the major component of what the final system would look like.

I wish you the best and hope that you can find consistent profitability. It is possible that this conviction about Fibs is an obstacle to profitability, but of course I don't know that to be the case. How could I? This is your trading journey and I am just a random stranger who has picked up bits and pieces of your journey based on what you have chosen to share on this thread.

But from my perspective as a random stranger, it is noteworthy that you have sim traded a system that generated a 400% return in a month but still found yourself questioning that system on the basis that it does not match a preconceived notion of how you should be trading. One possible solution to this dilemma is to change the system so that it matches your preconceptions, in which case it may or may not generate comparable returns. Another solution is to abandon your preconceptions and figure out a way to trade the proven system with discipline. This latter route may be difficult or even impossible at this point in your journey but just keep in mind that it is always there as a choice that is available to you in the future.

Again, best of luck and I hope you return to the profitable ways you demonstrated earlier in the thread, however you get there.

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  #298 (permalink)
Swamp Yankee
Freetown, Massachusetts, United States
 
 
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aztrader9 View Post
What I think I hear you saying is this.....what an incredible opportunity it is to start a business with unlimited potential with such a small amount of capital and that you can keep trying over and over until you get it and when you do get it, the sky is the limit because the skills you learned while small serve you well when you grow.

I believe you gleaned the highest and best of my message and stated it very clearly as well.

Good trading!

PS @ beach a lot this weekend with chillunz. I was noticing that the waves never cease. Next time I feel a bit too excited about entering a trade, I am going to close my eyes and picture the waves as far as the eye can see approaching the beach rhythmically. Although waves keep crashing on the beach there are never any less waves approaching. The supply is surely inexhaustible.

I have never seen a surfer flip out and go home because they ran out of waves. It must be the case in trading that an infinite supply of potentially profitable trades march towards us and so to regret missing a trade would be a silly use of our energy and attention. Am I to regret the past or learn from it and face all that is coming toward me?

I am going with "B"

Over and out! ; )

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  #299 (permalink)
rfharris
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Thanks Az, for your post i'm a new trader with a small acct and any info on money management is great.

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  #300 (permalink)
 PandaWarrior 
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Swamp Yankee View Post
I believe you gleaned the highest and best of my message and stated it very clearly as well.

Good trading!

PS @ beach a lot this weekend with chillunz. I was noticing that the waves never cease. Next time I feel a bit too excited about entering a trade, I am going to close my eyes and picture the waves as far as the eye can see approaching the beach rhythmically. Although waves keep crashing on the beach there are never any less waves approaching. The supply is surely inexhaustible.

I have never seen a surfer flip out and go home because they ran out of waves. It must be the case in trading that an infinite supply of potentially profitable trades march towards us and so to regret missing a trade would be a silly use of our energy and attention. Am I to regret the past or learn from it and face all that is coming toward me?

I am going with "B"

Over and out! ; )

Funny you mention surfing, one of my buddies is a surf dude in CA. He said the best surfers take only the best waves and the beginners take every wave that comes along. The good ones sit out in the water counting waves because they know a good one comes along every 7-8 waves or so. They ride it in, swim out and wait for the next one......Wait for the good one.....

Cheers..

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
Started this thread
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