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Zen & the Art of The Small Account
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Zen & the Art of The Small Account

  #951 (permalink)
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aztrader9 View Post
Is trading without expectations the Holy Grail? I don't know but going into today's session, I felt at peace with myself and with the market. As the session opened, I had conflicting ideas about what it might do for the day. Part of me was long and part was short. The chart said short, but I thought long. Eventually I made peace with my conflict and just traded what I thought I was seeing.

As it turned out, it was long and I got some of it. I also had some short trades as well. I ditched (permanently????) my three moving averages in favor of the Super Trend and trend lines. This worked out pretty well but I failed to execute on every trade I saw. After trading I took off the trend lines and discovered I may not have needed them at all today. Just follow the super trend. I guess that works some days and others not so much. No matter, I ended up with a nice profit of 29 ticks today. Less than I could have had but still a decent mornings work.

Hi AZTrader,
nice work. I think I need the realisation you've got. I'm sim trading the Euro/USD forex and I keep fighting myself, getting into analysis paralysis about whether I'm looking at a bull or a bear market.

I'm not using any indicators - in fact the exercise I'm doing at the moment doesn't allow them at this stage, it's like naked entry signal testing.

I think what is key is to be able to hold two conflicting ideas in your head at the same time without getting married to one or the other. So I'll think, from my 24 hour wide chart, I can see a bull trend so I'll look for long entries, but from the last 50 5min bars, I'll see a bear trend and I'll be looking for short entries.

I know in my mind that I can do it but I keep getting bogged down again. What's nice is when they're both the same!

Is that how you look at it?

You can discover what your enemy fears most by observing the means he uses to frighten you.
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  #952 (permalink)
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Its all mental

Mon, Tues, Wends, I traded happy, free and without to many worries about what the trade would bring. Yesterday and today, I felt like I was forcing trades. Not to much went my way.

I had some software glitches that kind of threw me off my game yesterday and I thought I got over it. But the results speak otherwise. Today, from the 30 minutes prior to the open, I felt like prices were going down today but price just kept driving higher. At the very top of the range, I got a long signal. Now I have been very bad about cherry picking the entries so I decided to take the entry but take a small profit of 10 ticks. That trade went my way 7 ticks, came back to BE and I just bailed with one tick of profit. Then it went straight to my target, went one tick past and sold off the rest of the morning just like I thought it would.

BUT, I got pissed at two things. 1. Not holding that trade the way I should have. 2. Missing the first short signal because I was mad about not getting my ten ticks. Thereafter, it was a complete mental fiasco. I had one revenge trade, a fat finger trade????? then I took a real signal short, bailed out to soon for a small loss, reversed to a long, took a full stop out and then decided enough is enough.

So three profitable days this week, two unprofitable days. Net= 1 profitable day. Not bad but not great.

I have identified three things I need to work on.

1. Wait for the pattern to develop and then take every signal in context of price action.
2. If I like the trade, there is no reason to take it off unless the stop is hit or the target is hit or if the trade is green, price action says time to quit.
3. Set realistic targets before risking money.

Failure to adhere to these principals has cost me big time over the last few weeks. I've had pretty good instincts about price action and where possible levels are for entry and exit. Not holding to those levels is devastating to the equity curve. Getting impatient and not waiting for the pattern to fully develop will almost always cost you ticks. And being greedy with targets is worse than being to conservative with targets.

So my task next week is this.

Be in the flow of what the market is doing. Take my trades and hold them to my predetermined levels for exit. Thats it. If I can do that, I will make money. I proved it the first three days of the week. And I obtained negative proof the last two days. My buddy says to trade my intuition. Easy to say, hard to do.

Cheers.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #953 (permalink)
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aztrader9 View Post
My chart has one indicator that is price action related and that is my handy dandy MA indie. The rest are assists for levels and other information I find important.

Tomorrow, my chart may have even less indicators on it. Been experimenting with trend lines and am starting to find them really intriguing.

Great thread AZ, keep it going.

The chart on https://futures.io/trading-journals/4211-zen-art-small-account-95.html#post122399 looks very nice. Is that public indicators or some proprietary?

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  #954 (permalink)
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omaron View Post
Great thread AZ, keep it going.

The chart on https://futures.io/trading-journals/4211-zen-art-small-account-95.html#post122399 looks very nice. Is that public indicators or some proprietary?

The indicators are all public here on the forum.

1. Mydynamicpivots
2. Slingshot
3. SMA
4. ADXVMA

I had someone play around with the sling shot a bit to include different selections for moving averages but you can get the same thing with the things I've mentioned.

They are not the holy grail though.....just eye candy

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #955 (permalink)
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aztrader9 View Post
The indicators are all public here on the forum.

1. Mydynamicpivots
2. Slingshot
3. SMA
4. ADXVMA

I had someone play around with the sling shot a bit to include different selections for moving averages but you can get the same thing with the things I've mentioned.

They are not the holy grail though.....just eye candy

Thanks AZ. I thought it may be slingshot but it looked a bit different, i guess is because of the MAs used.

Eye candy is good enough. PM me when u find the holy grail


Last edited by omaron; May 28th, 2011 at 11:43 AM. Reason: typos
 
  #956 (permalink)
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aztrader9 View Post
Here goes....

So my account size started at $5,000. Its all I had left after a 15 year mortgage career that both made me almost "rich" and then took it all away. I got close. I made over 2 million dollars over a 6-7 year period. I owned commercial real estate, no debt other than my house, traveled a lot and gave a lot of money away.

But when the real estate collapse happened here in Arizona, it took my brand new mortgage office I had just opened with $250,000 of borrowed money and flushed it down the toilet. I lost the mortgage business, an Allstate insurance agency I owned, $1,000,000 of commercial real estate and filed a business BK to keep the creditors from taking everything else. I got off easy. Many of my friends lost their wives, their kids and one guy I know was homeless for a bit. I managed to keep those things and my health as well. I am fortunate!

I tell you this so you know where I am coming from. I know how to make $25-40K a month. I've done it once and I think I can do it again. The first time I did it, I did it in a business I knew nothing about but learned very rapidly. Just like in trading, the mortgage business was all mental.

The account size is no longer $5,000. I have refunded it a couple of times over the last year. The guy that got me into trading said it would take $10,000 and a year to "get it" and become profitable. It has taken every bit of that.


AZ,

I was a real estate developer and was taken on a similar ride. Lost millions. Still in debt roughly $3 million, equity has evaporated.

Got into trading, lost more. Refunded account...

My fast forward is now 2 1/2 years. Trading much better.

I agree that trading a small account has all of the issues you brought up. I started trading simulated accounts of $5,000.00, creating several at once and naming them things like "Aggressive MACD", or "RSI Swing". I have doubled some, blown up some, some held about breakeven.

I am currently trading a single $5k simulated account (letting the real account rest 90% of the time). It is simply called "$5k May 3". I am seeing how long that takes to double, then plan to reset and start again. When I can reach doubling three times in a row, I will follow the same trading process with a live account of $5k to see if the psychology changes.

Trading with less money makes me focus more on protecting the account than on making money. For me, focusing on making money is how I lose it. Focusing on risk/reward and having the patience to let profits build is how I am learning to grow accounts.

Good luck with your trading. Great posts!

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  #957 (permalink)
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omaron View Post
PM me when u find the holy grail

Assuming you are serious.......

I can tell you where the holy grail is.

Go look in the mirror. Stare at the person looking back at you. Stare long and hard. Look that person in the eyes. See what is there. Do you see confidence? What about ambition? Do you see a disciplined person? Patience? Is there a gambler there? Look into the soul you see behind the eyes of the person looking at back you in the mirror. Ask yourself this question; "Would I give my money to that person to manage knowing what I know about him/her?"

If the answer is yes.....bingo, holy grail discovered.
If the answer is no....bingo, become the person you can answer yes to that question and then you will have found the holy grail.
If the answer is maybe, one of the two persons looking at each other in the mirror is lying.

Its a true/false question. Be honest.

Assuming you are joking....I guess the jokes on me.....I am after all, preaching to myself as much as to anyone reading this thread.


Time to

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #958 (permalink)
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GaryD View Post
AZ,

I was a real estate developer and was taken on a similar ride. Lost millions. Still in debt roughly $3 million, equity has evaporated.

Got into trading, lost more. Refunded account...

My fast forward is now 2 1/2 years. Trading much better.

I agree that trading a small account has all of the issues you brought up. I started trading simulated accounts of $5,000.00, creating several at once and naming them things like "Aggressive MACD", or "RSI Swing". I have doubled some, blown up some, some held about breakeven.

I am currently trading a single $5k simulated account (letting the real account rest 90% of the time). It is simply called "$5k May 3". I am seeing how long that takes to double, then plan to reset and start again. When I can reach doubling three times in a row, I will follow the same trading process with a live account of $5k to see if the psychology changes.

Trading with less money makes me focus more on protecting the account than on making money. For me, focusing on making money is how I lose it. Focusing on risk/reward and having the patience to let profits build is how I am learning to grow accounts.

Good luck with your trading. Great posts!

Sorry to hear about your pain.....glad you enjoyed the thread.

I can tell you the psychology will only change when you are 100% confident in your ability to see what you need to see on the chart and flow with the market. And it will only really change once you are doing it live. Sim is fantastic for developing an edge in terms of the technical and mechanical aspects of trading.....but live money is so much more complicated than that.

We both bet big on real estate. How did you feel when you were winning in real estate? You need to feel that again with live money. How did it feel when you were losing in RE? Thats what it feels like with live money trading....except its worse because the feedback is instant. At least with RE, the results of the trades we made were not known for many months or perhaps years depending on the project.

My suggestion, develop an edge in sim, then just trade live with small dollars and look for small wins. Develop the winning attitude like you developed the winning attitude in RE. Gradually. My first real estate deal was a $25,000 fixer upper I bought on a credit card and that I doubled my money on. It felt like I hit a home run. It was small potatoes compared to what was to come......same way in trading. Start small. Forget about the big wins...play like its a big win but take smaller profits for now, just to get some wins under your belt. It really changes the chemistry of what it feels like to be a successful trader.

Like Mark Douglas says, once you get your mind right, money will flow to you like it once flowed away from you.....there is unlimited opportunity flowing every day in the market. Our job is to position ourselves to receive part of that flow. Nothing more.

Good luck on the journey.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #959 (permalink)
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aztrader9 View Post
Assuming you are serious.......

I can tell you where the holy grail is.

Go look in the mirror. Stare at the person looking back at you. Stare long and hard. Look that person in the eyes. See what is there. Do you see confidence? What about ambition? Do you see a disciplined person? Patience? Is there a gambler there? Look into the soul you see behind the eyes of the person looking at back you in the mirror. Ask yourself this question; "Would I give my money to that person to manage knowing what I know about him/her?"

If the answer is yes.....bingo, holy grail discovered.
If the answer is no....bingo, become the person you can answer yes to that question and then you will have found the holy grail.
If the answer is maybe, one of the two persons looking at each other in the mirror is lying.

Its a true/false question. Be honest.

Assuming you are joking....I guess the jokes on me.....I am after all, preaching to myself as much as to anyone reading this thread.


Time to

I was joking, but i appreciate the reply as well. . It made me thinking. What about if the answer is both yes and no though?

Do you see confidence? Yes
What about ambition? Yes
Do you see a disciplined person? No but i hope it can be achieved by persuation.
Patience? Hard to answer, i am not sure what kind of a patience you mean. I don't want to find something that will double my account next week, i don't want to start trading live tomorrow. In other aspects i may not be patient though.
Is there a gambler there? Hell no. I don't gamble on anything, not even play lottery.

 
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omaron View Post
I don't gamble on anything, not even play lottery.

But then you can't win...


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