A Bad Trader

aBadTrader · 2 August 2014

hi all - I just registered today to the forum. As my name indicates, I am a bad trader. The only success I have found is in buy and selling retail products. I love it, actually. But back in 2012, I tried my hand in shares and CFD's.

When I began, I had delusions of grandeur - setting up stops so short you would have to kneel down to pat its head, and limits so long that the best bionic eye could not catch a glimpse of, and in turn lost money. The money I lost, was insignificant - however, that did not stop me. Learning a lesson, I came back with a vengeance, with some new information, and then lost again.

Repeated this cycle about 10 times, before I gave up and went back to the only investing I know - buying retail products, and retailing them. Currently I am in the process of building a retail store online because my initial industry is on a downturn and I need something to fall into. But I still could not get the fact that I had failed so utterly miserable on trading indexes.

So, I've opened up another play money account with IG, and am trying to learn the ropes.

So many of you here are just fantastic and carry so much knowledge up there in your noodles - where can I go to learn these skills. I have come to the realization long ago that this game is not something to earn big bucks really fast and is not a "get rich quick" scheme that so many others perceive it to be.

Thank you for your time

burglar · 2 August 2014

aBadTrader said:
... So many of you here are just fantastic and carry so much knowledge up there in your noodles - where can I go to learn these skills ...

Hi aBadTrader,
Welcome to ASF!

Why not here?

CanOz · 2 August 2014

aBadTrader said:
where can I go to learn these skills.

www.propex.net.au

DJG · 2 August 2014

I assume your "play money" account is real money. Thought about a demo account?

If you don't mind me asking, what is your retail store?

aBadTrader · 2 August 2014

DJG said:
I assume your "play money" account is real money. Thought about a demo account?

If you don't mind me asking, what is your retail store?

Thank you for the welcome! Much appreciated I am already a lurker, merely now a registered one with an empty portfolio.

Oh, when I say "play money" I do mean a Demo Account - hance why I opened "another", they are only valid for, I'm sure it's 30 days or something, or is it a fortnight, I can't remember.

I'm tinkering with support and resistance and only trying to take a few ticks rather than my old style of greedy "see where it goes". I'm also taking advice of some forum members who say that if a trade turns back on you, don't hold onto it, breaking even is better than losing.

So much to learn. But you know there is one thing that I can't bring myself to do and that is to set a stop at a price that is relevant to movement rather than my emotion. Stops are one thing that have hurt me severely in the past.

Oh and I shall be checking that website ASAP. Cheers for the replies

If you don't mind, Dangaff, I'd like to keep that to myself for now. Not because there is anything shady about it but I'm generally a very private person by nature

pixel · 4 August 2014

aBadTrader said:
hi all - I just registered today to the forum. As my name indicates, I am a bad trader. The only success I have found is in buy and selling retail products. I love it, actually. But back in 2012, I tried my hand in shares and CFD's.

When I began, I had delusions of grandeur - setting up stops so short you would have to kneel down to pat its head, and limits so long that the best bionic eye could not catch a glimpse of, and in turn lost money. The money I lost, was insignificant - however, that did not stop me. Learning a lesson, I came back with a vengeance, with some new information, and then lost again.

Repeated this cycle about 10 times,

[...]

Thank you for your time

Welcome BT, and congrats on plucking up the courage to ask questions and aspiring to become "a Better Trader".

First though, let me start my answer with a counter question: What were the lessons you've been learning? When you say you came back with a vengeance ... what was it that made you believe your learning enabled you to try again ... TEN times?

I gather you must know quite a lot about buying and selling retail goods. Have you analysed the recipe for success in that endeavour? Could it be that you - even if only subconsciously - know what your customers are after, and then find a source where to buy those goods in bulk at a lower price than your retail customers are prepared to pay?
If your answer is Yes: You have the solution. There is no difference to share trading! Find a stock that others are (or soon will be) willing to buy; then see if you can buy it at a low enough price for a profit.

Just as with retail trading, you won't succeed 100% of the time. Otherwise, there won't be any end-of-year or stocktake sales, where duds and leftovers get flogged to the public.
So you'll have to give a stock picking/ trading method time to prove its statistical effectiveness, Ten stops and restarts within what? a year? 18 months? That's definitely not enough. From personal experience, I would suggest paper-trading for at least 3 months, better six, before the true merit (or otherwise) of a methodology becomes apparent. And you may have noticed that, until now, I haven't even mentioned a word of Technical vs Fundamental analysis. Because as long as your method is sound and you apply it consistently, both approaches can provide on average a positive expectancy, meaning the resultant method leads you to more profitable trades than stopped-out losses.

Two main reasons why I chose Technical Analysis:
1. T/A makes it easier to automatically "backtest" a system, evaluating how an algorithm would have performed over a period in history; that way, your months of paper-trading can be multiplied many times without costing you a cent, by simulating the system over as many years as you can get data history.
2. I'm far more technically-minded and find studying financial reports a drag. (I can also write my own algorithms and test programs, which helps...)

One thing I'm wary of and won't make a part of my selection process: I don't rely on reports, broker valuations, crib sheets, or subscribe to newsletters that promise to highlight the next Big Thing.
Correction: I do take notice of some "recommendations" - but I use them as warning flags that tell me when it's better to get off a hyped-up rally sooner rather than too late.
(I don't chase Holy Grails either, i.e. I don't follow every new method that promises even higher returns: "Simply sign up at $xxxxx, and we'll help you make an average of 34% or 67% or whatever ..." The honest truth is that those offers are only benefiting the sellers, not the students. Special case of retail trading: Create a demand for a product that costs little or nothing to produce, then persuade customers to pay a high price.)

aBadTrader · 4 August 2014

pixel said:
Welcome BT, and congrats on plucking up the courage to ask questions and aspiring to become "a Better Trader".

First though, let me start my answer with a counter question: What were the lessons you've been learning? When you say you came back with a vengeance ... what was it that made you believe your learning enabled you to try again ... TEN times?

I gather you must know quite a lot about buying and selling retail goods. Have you analysed the recipe for success in that endeavour? Could it be that you - even if only subconsciously - know what your customers are after, and then find a source where to buy those goods in bulk at a lower price than your retail customers are prepared to pay?
If your answer is Yes: You have the solution. There is no difference to share trading! Find a stock that others are (or soon will be) willing to buy; then see if you can buy it at a low enough price for a profit.

Just as with retail trading, you won't succeed 100% of the time. Otherwise, there won't be any end-of-year or stocktake sales, where duds and leftovers get flogged to the public.
So you'll have to give a stock picking/ trading method time to prove its statistical effectiveness, Ten stops and restarts within what? a year? 18 months? That's definitely not enough. From personal experience, I would suggest paper-trading for at least 3 months, better six, before the true merit (or otherwise) of a methodology becomes apparent. And you may have noticed that, until now, I haven't even mentioned a word of Technical vs Fundamental analysis. Because as long as your method is sound and you apply it consistently, both approaches can provide on average a positive expectancy, meaning the resultant method leads you to more profitable trades than stopped-out losses.

Two main reasons why I chose Technical Analysis:
1. T/A makes it easier to automatically "backtest" a system, evaluating how an algorithm would have performed over a period in history; that way, your months of paper-trading can be multiplied many times without costing you a cent, by simulating the system over as many years as you can get data history.
2. I'm far more technically-minded and find studying financial reports a drag. (I can also write my own algorithms and test programs, which helps...)

One thing I'm wary of and won't make a part of my selection process: I don't rely on reports, broker valuations, crib sheets, or subscribe to newsletters that promise to highlight the next Big Thing.
Correction: I do take notice of some "recommendations" - but I use them as warning flags that tell me when it's better to get off a hyped-up rally sooner rather than too late.
(I don't chase Holy Grails either, i.e. I don't follow every new method that promises even higher returns: "Simply sign up at $xxxxx, and we'll help you make an average of 34% or 67% or whatever ..." The honest truth is that those offers are only benefiting the sellers, not the students. Special case of retail trading: Create a demand for a product that costs little or nothing to produce, then persuade customers to pay a high price.)

Thanks so much for taking the time to write that post - I'll do my best to have a crack at it.

At the time I came back with a vengence, I hadn't learned a thing, hence why I lost. I came back trying to predict spontaneous moves based on market reports, then fell into the trap of "it was short term, but I'll make it long term now", purely to make myself feel better. BAD attitude.

I don't know what my customers want - I just "try" to find niche products in industries that are consistent. At this time I am a wholesaler and my new retail venture is going smoothly but slowly. I'm not a guru - but your post and question certainly motivates me!

So far I am just learning T/A for trading index's. At the moment, as mentioned just support and resistance. I believe that breaks above or below a certain price point indicates excess pressure to buy/sell which could yield a small profit.

But hey, I'm still learning Once I am comfortable to move onto the next lesson, I shall, but for now, I need to get a handle on this one

This is NOT easy

pixel · 5 August 2014

aBadTrader said:
Thanks so much for taking the time to write that post - I'll do my best to have a crack at it.

At the time I came back with a vengence, I hadn't learned a thing, hence why I lost. I came back trying to predict spontaneous moves based on market reports, then fell into the trap of "it was short term, but I'll make it long term now", purely to make myself feel better. BAD attitude.

I don't know what my customers want - I just "try" to find niche products in industries that are consistent. At this time I am a wholesaler and my new retail venture is going smoothly but slowly. I'm not a guru - but your post and question certainly motivates me!

So far I am just learning T/A for trading index's. At the moment, as mentioned just support and resistance. I believe that breaks above or below a certain price point indicates excess pressure to buy/sell which could yield a small profit.

But hey, I'm still learning Once I am comfortable to move onto the next lesson, I shall, but for now, I need to get a handle on this one

This is NOT easy

Hey BT,

Let me pick two highlighted items in your latest:
1. Whenever I see the word "predict", I suspect the writer still has to "get it". Trade planning is not about "predicting" the next move, but assessing the relative odds of three different outcomes: Is it more likely for the sp to rise? fall? or move sideways? Most of it is pure guesswork based on experience - either from the study of general chart behaviour - study candlesticks, patterns, volume, ... - or more complex indicators/ signals. But even if the odds favour, say, a bounce off an inverted Hammer at the bottom of a decline, we cannot predict that it will happen, but only make a decision at this time based on the 3:1 likelihood. If it turns out that, this time, the sp follows a less-likely course, we must have a Plan B - which usually means abort the trade and stop further losses. What if we stopped out too early? As a wise man once said, "I'd rather be out of the Market, trying to get in, than in the Market, desperate to get out."

2. Don't believe for a second anyone that tries to tell you trading profitably is easy. Trading is a trade. You don't become a good plumber by attending a $10,000 2-night seminar on plumbing. Nor do you become a good electrician by buying 5 CDs for $995 and listening to some news reader mouthing platitudes. All three take dedication and an apprenticeship of several years' duration.
... and an ongoing learning process to stay abreast of new developments that help avoid emerging hazards.

But it's a challenge that many people find stimulating. and a few lucky ones even make a living from it.

darkhorse70 · 5 August 2014

You need to do alot of critical thinking. Once you know the basics, you follow the simple do's and dont's. You have to figure out what you did wrong and really understand why it was not the right thing to do. By really UNDERSTANDING it means that you are smart enough not to make that same mistake twice. After a while you will realise what trades/setups/trading style you have the most success in.

Dont beat yourself up.like any art it takes a long time to get good at. Just dont go blowing all your cash away. You are at your worste when you first begin, there for its logical to play smaller to lose less haha.

GL man. Oh yeah and one personal advice from a noob. Dont be impulsive. Wait for the perfect setup like your life depends on it. Maybe it might take months or a year but so what.

tech/a · 5 August 2014

Oh yeah and one personal advice from a noob. Dont be impulsive.Wait for the perfect setup like your life depends on it. Maybe it might take months or a year but so what

There are better setups.
But Id like to put your observation in
another way.

Wait until the chart is screaming at you---go long OR go short.
Don't predict but anticipate.
If your analysis is NOT validated don't hang around.
Validation in my view must be immediate.

Get used to being wrong you'll be wrong often.

Learn to make decisions often. DONT WAIT MONTHS OR YEARS!

A setup on a 3 min chart isn't going to govern the price action for the next
5 days (well it might on very rare occasions).
A Daily chart is best used for background when using smaller timeframe charts.

aBadTrader · 5 August 2014

pixel said:
Hey BT,

Let me pick two highlighted items in your latest:
1. Whenever I see the word "predict", I suspect the writer still has to "get it". Trade planning is not about "predicting" the next move, but assessing the relative odds of three different outcomes: Is it more likely for the sp to rise? fall? or move sideways? Most of it is pure guesswork based on experience - either from the study of general chart behaviour - study candlesticks, patterns, volume, ... - or more complex indicators/ signals. But even if the odds favour, say, a bounce off an inverted Hammer at the bottom of a decline, we cannot predict that it will happen, but only make a decision at this time based on the 3:1 likelihood. If it turns out that, this time, the sp follows a less-likely course, we must have a Plan B - which usually means abort the trade and stop further losses. What if we stopped out too early? As a wise man once said, "I'd rather be out of the Market, trying to get in, than in the Market, desperate to get out."

2. Don't believe for a second anyone that tries to tell you trading profitably is easy. Trading is a trade. You don't become a good plumber by attending a $10,000 2-night seminar on plumbing. Nor do you become a good electrician by buying 5 CDs for $995 and listening to some news reader mouthing platitudes. All three take dedication and an apprenticeship of several years' duration.
... and an ongoing learning process to stay abreast of new developments that help avoid emerging hazards.

But it's a challenge that many people find stimulating. and a few lucky ones even make a living from it.

This is all wonderful advice and sorry I have not learned to Multi-Quote, or rather don't have the time for it (lol, i know) but this post is in regards to all replies.

Point well taken - I used the term "predict" loosely. I am not trying to predict as much as I am trying to anticipate moves of the market based on my strategy. Currently after 3 days of trading I am up a very tiny amount, copped some heavy losses and got those losses back.

In my losses I try to analyze where I went wrong - why my entry point did not work, and I learned from my mistakes, but let me assure you those mistakes can and will happen again, which I combat with cutting losses short.

I am purely reading candle sticks, support and resistance; that's all. I don't use any indicators, they have burnt me in the past and all the YT videos I watched, especially on stochastics, have proven to add little value to a trading strategy.

I back test my theory in the most crude fashion - by using a random index chart scrolled back to a random position and scroll right tick by tick looking for an entry and then scroll right again tick by tick to see how I fare. So far this is the method that is getting me more wins than losses or an even amount on both sides.

This is NOT easy, but my God, do I ever get a kick out of it.

I envy you traders who trade solely for a living. Just the mere thought of making a correct anticipation with your edge, and cashing in from it in the comfort of your own home (yet discomfort of your racing mind ) is indeed such a gratifying and surreal feeling that I just cannot get enough of.

Thank you all for your input, it really does help and though you have no obligation to place your input I appreciate wholeheartedly the time you all have taken to educate this bad trader.

cheers

darkhorse70 · 5 August 2014

Yeah like tech/a said, when the charts screaming at you. If you have doubts then imo its going to go wrong haha.

aBadTrader · 5 August 2014

darkhorse70 said:
Yeah like tech/a said, when the charts screaming at you. If you have doubts then imo its going to go wrong haha.

Depends on your personality I guess - I always have doubts. Doubts fuel my theories on where to cut losses. Doubts, though, keep me away from some hefty profits ie. last nights DOW futures, but eventually managed to catch a wave after I saw a buy signal and my working orders opened.

Then I went to bed, to find my theory was more than ample, as I missed out on 40 points. Sleep - it is our enemy!

pinkboy · 5 August 2014

darkhorse70 said:
GL man. Oh yeah and one personal advice from a noob. Dont be impulsive. Wait for the perfect setup like your life depends on it. Maybe it might take months or a year but so what.

Dont give 'personal advice' if you yourself don't have the background to warrant as such. Even from 'a noob'!

pinkboy

aBadTrader · 5 August 2014

pinkboy said:
Dont give 'personal advice' if you yourself don't have the background to warrant as such. Even from 'a noob'!

pinkboy

Oh come on Pink it's just a lesson from his experience - he most likely is already further than I am education wise and I appreciate the input. But I see where you're coming from Always nice to see the experienced fellows looking out for the newbie

darkhorse70 · 5 August 2014

Abadtrader what im trying to say is that if youve done enough research and put enough homework in your mind is at ease. If youve thought of all the possible moves it might take. Hence at every acrion the price takes you habe a general idea of what is going on. On the other hand if youve done 1hr of looking at a chart amd have only thought of a few what of scenarios etc then you or I find it personally more of an anxious wait. However when you are very confident and have went over your projections a hundred timez in your head you find flaws or you become more certain of your choice.

Pinkboy what are ypu on about. Its my personal experiemce from one year of paper trading. I treat it as serious or try to as the real deal. I didnt tell him what to do. Just what to avoid. And in reality its a common sense thing. Im not telling him some speculative idea. Its a shared consensus among every one I presume. Do your homework and if you have doubts then its your subconsious guilt telling you, you havent done enough to be sure. Peace out

aBadTrader · 5 August 2014

darkhorse70 said:
Abadtrader what im trying to say is that if youve done enough research and put enough homework in your mind is at ease. If youve thought of all the possible moves it might take. Hence at every acrion the price takes you habe a general idea of what is going on. On the other hand if youve done 1hr of looking at a chart amd have only thought of a few what of scenarios etc then you or I find it personally more of an anxious wait. However when you are very confident and have went over your projections a hundred timez in your head you find flaws or you become more certain of your choice.

Pinkboy what are ypu on about. Its my personal experiemce from one year of paper trading. I treat it as serious or try to as the real deal. I didnt tell him what to do. Just what to avoid. And in reality its a common sense thing. Im not telling him some speculative idea. Its a shared consensus among every one I presume. Do your homework and if you have doubts then its your subconsious guilt telling you, you havent done enough to be sure. Peace out

Totally agree with you there Horsie - and indeed it is advice from a safety point of view and I respect that.

I too also treat my paper trades as real. I try to go one better and try to mimic what my reaction might be to a particular price. As mentioned above, what I might do for the day when testing out a new strategy is take a random index chart and then scroll to a random point and tick the candles one by one, making entries into the market and seeing how it all pans out. I take note on paper (excel) the times I've won, lost and broken even, trying to minimize loss amounts and take relatively profitable win amounts.

But still a long way to go - and I'm enjoying myself considerably in the process

Julia · 5 August 2014

pinkboy said:
Dont give 'personal advice' if you yourself don't have the background to warrant as such. Even from 'a noob'!
inkboy

dh, when you say stuff like

Wait for the perfect setup like your life depends on it. Maybe it might take months or a year but so what.

from a position of zero real experience, seems to me pinkboy was acting pretty reasonably in drawing the attention of the OP to that inexperience.

aBadTrader · 5 August 2014

Julia said:
dh, when you say stuff like
from a position of zero real experience, seems to me pinkboy was acting pretty reasonably in drawing the attention of the OP to that inexperience.

I'm so sorry guys - I didn't intend for the thread to arouse a potential row but the manner in which I interpreted DH's comment was merely wait for your optimal (or AN optimal) signal for your entry point.

Wouldn't it be safe to say that although generalized, it is still viable advice which combats compulsive entry and exit?

tech/a · 5 August 2014

aBadTrader said:
I'm so sorry guys - I didn't intend for the thread to arouse a potential row but the manner in which I interpreted DH's comment was merely wait for your optimal (or AN optimal) signal for your entry point.

Wouldn't it be safe to say that although generalized, it is still viable advice which combats compulsive entry and exit?

No Its terrible.

If you don't want sound advice (After asking for it)
I'm sure many of us wont bother to reply to your queries.

His reply is exactly what holds back people from learning HOW to trade!

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