Frustrating Markets!!!

[fraa]

you are on "tilt" ?

I dont trade myself, but this classic quote seems suited to you as you are trying to catch the turn.

"One of the most helpful things that anybody can learn is to give up trying to catch the last eighth-or the first. These two are the most expensive eighths in the world.”

 

[skc]

Ive actually been trying to trade live on equities and oil with a $4k account. Went up about 50% before I nearly blew it up trying to fade the rally and since then its been survival mode.

Hey VS, I just have the belief that I could make $1k a week trading with one or two lots a day. I only believe in that return of 15/20% etc being reasonable when your account is so large and you just cant trade in the same manner a small trader can.

When you are trading a small account, the % return is mostly meaningless. You are trading 1 or 2 contracts... you expect certain $ amount over good runs and bad runs. The market doesn't care how much money you have in your trading account to trade those 1 or 2 contracts. Your small account simply exaggerates the % swing.

If you are working to a $1k per week goal... that may be achievable with 1 or 2 contracts. But you cannot realistically expect that to be $1k per week every week.... it will be an average through the year. You might lose money or tread water for 80-90% of the year. You will always have periods when you get frustrated / bored / demotivated. But if you let these emotions get the better of you, you will miss the 10-20% of the time when you are / could be / should be killing it.

IF I were in your shoes... this is what I'd do.
- Get a real job! Go work for Maccas or stack shelves at Woolies or whatever. Given that you are living at home you should be able to keep your expenses low and save the majority of your after tax pay. You should have $10-20k after a year or two.
- If you think these jobs are below you, you are not wrong. But if you love your trading bad enough, nothing is below you. You will gain more social experience by working in a normal workplace... trading won't teach you any of that. It's a valuable life skill regardless of how many $billions you might make further down your trading career.
- When you are trading with your own hard earned money... let's see if you'd blow $3k in one night. You know that $3k is the result of working 3 months and you will improve your risk management.
- I'd continue to explore a prop trading trainee positions. You came close once. Everything you do in your own trading should be conducted in the same manner as if you are on show to a potential prop shop position. Would you be proud to present at the prop shop interview your trading record? Do you think they want to see you make 50% in 2 weeks? Or they want to see you make 1% a week over 50 weeks?

I wish more parents would be more supportive of their childrens passions etc.

Your parents ARE supportive. They funded your account. Be grateful of what they provided for you, rather than focus on what more they could do.

When you have saved your own $10-20k, ask them if they would like to co-invest in your trading account and share the profits.

 

[hamli]

my opinion from experience -

- not everyday is a good scalping day.
- your bankroll is way too small
- easier to have the capital to wait until you are right
- fading oil in last few weeks? lol . . .
- once you lose money, it's harder to make it back

I won't continue but mostly what skc said lol.

 

[ggkfc]

When you are trading a small account, the % return is mostly meaningless. You are trading 1 or 2 contracts... you expect certain $ amount over good runs and bad runs. The market doesn't care how much money you have in your trading account to trade those 1 or 2 contracts. Your small account simply exaggerates the % swing.

If you are working to a $1k per week goal... that may be achievable with 1 or 2 contracts. But you cannot realistically expect that to be $1k per week every week.... it will be an average through the year. You might lose money or tread water for 80-90% of the year. You will always have periods when you get frustrated / bored / demotivated. But if you let these emotions get the better of you, you will miss the 10-20% of the time when you are / could be / should be killing it.

IF I were in your shoes... this is what I'd do.
- Get a real job! Go work for Maccas or stack shelves at Woolies or whatever. Given that you are living at home you should be able to keep your expenses low and save the majority of your after tax pay. You should have $10-20k after a year or two.
- If you think these jobs are below you, you are not wrong. But if you love your trading bad enough, nothing is below you. You will gain more social experience by working in a normal workplace... trading won't teach you any of that. It's a valuable life skill regardless of how many $billions you might make further down your trading career.
- When you are trading with your own hard earned money... let's see if you'd blow $3k in one night. You know that $3k is the result of working 3 months and you will improve your risk management.
- I'd continue to explore a prop trading trainee positions. You came close once. Everything you do in your own trading should be conducted in the same manner as if you are on show to a potential prop shop position. Would you be proud to present at the prop shop interview your trading record? Do you think they want to see you make 50% in 2 weeks? Or they want to see you make 1% a week over 50 weeks?



Your parents ARE supportive. They funded your account. Be grateful of what they provided for you, rather than focus on what more they could do.

When you have saved your own $10-20k, ask them if they would like to co-invest in your trading account and share the profits.

very wise words
dont mean to damper your spirit but a lot of people fail their first few goes, just dont get too caught up on performing

 

[barney]

The last 2 weeks have been so frustrating.

Ive actually been trying to trade live on equities and oil with a $4k account. Went up about 50% before I nearly blew it up trying to fade the rally and since then its been survival mode.

Howdy DH, Long time no speak .......

Just amplifying what a couple of others have said .......

Remember when you first joined the Forum and the advice many were giving you about how you were trading (Google from memory?)

i.e. Too much risk/too large a position size relative to you account size ...... even with all the knowledge you now possess regarding the market you are doing the same thing are you not?? ....... With a 4K account you should be trading micro lots! .... simples!!

Imagine you were giving someone else advice on how they should trade with a 4K account ..... what would you tell them? Therein lies the answer to your problems!

Cheers M8 and good luck with it.

 

[Wysiwyg]

This video sums it up and not just for dark horse. Might add that it is bizarre how a losing position can get out of control when still holding but not so if you stop out. I have lost count of how many times I have closed a position at loss and price reverses back in your favour. Like there is only you versus the broker and the broker has ultimate power.

Special thanks to donkhorseppwer for the vid. link.

 

[Trendnomics]

The last 2 weeks have been so frustrating.

Equities have kept going up as with oil and every time you think it might go down it just keeps going up.

Ive actually been trying to trade live on equities and oil with a $4k account. Went up about 50% before I nearly blew it up trying to fade the rally and since then its been survival mode.

Ive got so angry ive torn my tshirt of my chest, used every swear word under the planet not to mention my parents think im going insane...

Good times lol

Far too much emotion to achieve long term success .

Read a few addiction stories on here and do an honest self-assessment:

http://www.psychforums.com/gambling-addiction/topic108461.html

 

[Wysiwyg]

Far too much emotion to achieve long term success .

I think systems (strongly rule based) work well as opposed to out of control trading. They provide some sought of order. Some sought of control as opposed to discretionary implosion.

 

[darkhorse70]

Hey guys, sorry for the lack of responds to the comments. Long story short, I tried fading selling CL on Wednesday night, closed the position an hour before it tanked, got frustrated. I knew Crude oil inventories was going to be released at 1:30am. After pirating star wars and watching it, I sold based on the market flow when the news was released like 1 minute after figures hit.

It started pulling back in that 1 minute and I thought, here we go again, a fake break out and a rally again. Flipped and got owned.

AKA blown up account. I felt miserable but some what relieved that I didnt have that weight on me anymore. The ironic thing is if I had just stuck to my gut (unfortunately the pressures of trading a small account mean I some what became bi polar due to fear of exposure) I would have got my account back to B/E and even positive.

Ive decided to go back to uni up coming semester. I plan on finishing economics and finance. Ive also applied for a few different woolworths stores. I plan on saving atleast 20k before I trade again. In the mean time its back to sim trading. I need to work on my discipline as you guys said. I also have to develop some sort of spread sheet that helps me track my performance. I also think a degree will reduce the mental pressure significantly. It means theres always a back up plan.

As mentioned above, I read everyone's posts and all points noted. Thanks for the feedback.

 

[darkhorse70]

I feel disappointed due to one main reason.

I feel great that I survived for nearly 2 weeks after cutting my accounts size by 70% I clawed myself back nearly all the way in unfavorable conditions. The day which i should of cleaned up, I let my emotions take control of me. The fact that the rally had lasted that long had crumbled some what of my confidence.

Such is life. I'll be back.

 

[Wyatt]

Do any of you wise people here change your equity trading tactics from trend following to mean reversion or similar during the choppy times, to improve performance, minimise drawdown and reduce risk?
It seems every valid trading system will have both good times and bad, would it not make sense to try and match the markets' personality changes and go with the flow. Obviously easier said than done, but.....? Thoughts?

 

[Telamelo]

This video sums it up and not just for dark horse. Might add that it is bizarre how a losing position can get out of control when still holding but not so if you stop out. I have lost count of how many times I have closed a position at loss and price reverses back in your favour. Like there is only you versus the broker and the broker has ultimate power.

Special thanks to donkhorseppwer for the vid. link.

'Market Wizard Linda Raschke’s Technical Trading Rules':

1. Buy the first pullback after a new high. Sell the first rally after a new low.

2. Afternoon strength or weakness should have follow through the next day.

3. The best trading reversals occur in the morning, not the afternoon.

4. The larger the market gaps, the greater the odds of continuation and a trend.

5. The way the market trades around the previous day’s high or low is a good indicator of the market’s technical strength or weakness.

6. The previous day’s high and low are two very important “pivot” points, for this was the definitive point where buyers or sellers came in the day before. Look for the market to either test and reverse off these points, or push through and show signs of continuation.

7. The last hour often tells the truth about how strong a trend truly is. “Smart” money shows their hand in the last hour, continuing to mark positions in their favor. As long as a market is having consecutive strong closes, look for up-trend to continue. The up trend is most likely to end when there is a morning rally first, followed by a weak close.

8. High volume on the close implies continuation the next morning in the direction of the last half-hour. In a strongly trending market, look for resumption of the trend in the last hour.

9. The first hour’s range establishes the framework for the rest of the trading day.

10. A greater percentage of the day’s range occurs in the first hour then was the case in the past, and thus it has become increasingly important to trade aggressively if there are early signs of a strong trend for the day.

11. There are four basic principles of price behavior which have held up over time. Confidence that a type of price action is a true principle is what allows a trader to develop a systematic approach. The following four principles can be modeled and quantified and hold true for all time frames, all markets. The majority of patterns or systems that have a demonstrable edge are based on one of these four enduring principles of price behavior. Charles Dow was one of the first to touch on them in his writings.

Principle One: A Trend Has a Higher Probability of Continuation than Reversal
Principle Two: Momentum Precedes Price
Principle Three: Trends End in a Climax
Principle Four: The Market Alternates between Range Expansion and Range Contraction!

12. In the world of money, which is a world shaped by human behavior, nobody has the foggiest notion of what will happen in the future. Mark that word – Nobody! Thus the successful trader does not base moves on what supposedly will happen but reacts instead to what does happen.

---------------------------

Good Luck everyone on your trading journey as you never ever stop learning ...... Cheers tela

 

[Telamelo]

TRADER PSYCHOLOGY

1. Be flexible and go with the flow of the markets price action, stubbornness, egos, and emotions are the worst indicators for entries and exits.

2. Understand that the trader only chooses their entries, exits, position size, and risk and the market chooses whether they are profitable or not.

3. You must have a trading plan before you start to trade, that has to be your anchor in decision making.

4. You have to let go of wanting to always be right about your trade and exchange it for wanting to make money. The first step of making money is to cut a 'losing trade' short the moment it is confirmed that you are wrong.

5. Never trade position sizes so big that your emotions take over from your trading plan.

6. "If it feels good, don't do it." – Richard Weissman

7. Trade your biggest position sizes during winning streaks and your smallest position sizes during losing streaks. Not too big and trade your smallest when in a losing streak.

8. Do not worry about losing money that can be made back worry about losing your trading discipline.

9. A losing trade costs you money but letting a big losing trade get too far out of hand can cause you to lose your nerve. Cut losses for the sake o your nerves as much as for the sake of capital preservation.

10. A trader can only go on to success after they have faith in themselves as a trader, their trading system as a winner, and know that they will stay disciplined in their trading journey.

--Bring your risk of ruin down to almost zero.

RISK MANAGEMENT

1. Never enter a trade before you know where you will exit if proven wrong.

2. First find the right stop loss level that will show you that you’re wrong about a trade then set your positions size based on that price level.

3. Focus like a laser on how much capital can be lost on any trade first before you enter not on how much profit you could make.

4. Structure your trades through position sizing and stop losses so you never lose more than 1% of your trading capital on one losing trade.

5. Never expose your trading account to more than 5% total risk at any one time.

6. Understand the nature of volatility and adjust your position size for the increased risk with volatility spikes.

7. Never, ever, ever, add to a losing trade. Eventually that will destroy your trading account when you eventually fight the wrong trend.

8. All your trades should end in one of four ways: a small win, a big win, a small loss, or break even, but never a big loss. If you can get rid of big losses you have a great chance of eventually trading success.

9. Be incredibly stubborn in your risk management rules don’t give up an inch. Defense wins championships in sports and profits in trading.

10. Most of the time trailing stops are more profitable than profit targets. We need the big wins to pay for the losing trades. Trends tend to go farther than anyone anticipates.

--Develop a winning trading system that fits your personality.

YOUR ROBUST METHOD

1. “Trade What's Happening...Not What You Think Is Gonna Happen.” – Doug Gregory

2. Go long strength; sell weakness short in your time frame.

3. Find your edge over other traders.

4. Your trading system must be built on quantifiable facts not opinions.

5. Trade the chart not the news.

6. A robust trading system must either be designed to have a large winning percentage of trades or big wins and small losses.

7. Only take trades that have a skewed risk reward in your favor.

8. The answer to the question, “What’s the trend?” is the question, “What’s your timeframe?” – Richard Weissman. Trade primarily in the direction that a market is trending in on your time frame until the end when it bends.

9. Only take real entries that have an edge, avoid being caught up in the meaningless noise.

10. Place your stop losses outside the range of noise so you are only stopped out when you are likely wrong.

www.traderplanet.com/articles/view/165953-30-great-trading-rules/

======

ASSAD'S RULES OF TRADING

Trading rule No 1. Never chase. Forget about the Dollar loss for a moment as the real damage comes from the distraction it creates.

Trading rule No 2. Wait for the break. Most traders buy inside the range, get impatient and as a result they sell on first sign of strength which ends up being the breakout.

Trading rule No 3. Don't ride the ticks and Dollar profits. It creates emotional turmoil and is draining. Prevention is best cure. Takes the fun out of the game.

Trading rule No 4. Price action trumps everything. Management lie or mislead but price action (money flow) never lies.

Trading rule No 5. Sell the news or a least sell partials. Markets discount everything and over the long run you will be better off.

Trading rule No 6. Always stay in control. Do NOT put yourself in news related coin toss trades, where the risk cannot be managed.

Trading rule No 7. Mind your own business, avoid conflict. If you take offence because someone has disagreed with your trade, then you are such a precious little petal.

Trading rule No 8. Do NOT set targets as all this creates is a premature EXIT. Run a trailer and let that take you out.

Trading rule No 9. Minimise whipsaw at all costs. It's a trader killer. The root cause of trading failure more often than not, starts with whipsaw.

Trading rule No 10. Do NOT buy stretched breakouts. More often than not they recoil back into the range to flush traders out.

Trading rule No 11. Start with long term charts and look to catch major breaks/moves. These tend to follow through and it makes it easier to run with winners.

Trading rule No 12. DO NOT trades Forex short-term. It is a mugs game, news driven by central banks. It is like betting on the greyhounds.

Trading rule No 13. Turn trading rules into habit. There is no point in having trading rules if you dont apply them!

Trading rule No 14. And the most important; only tell your wife about your losers.

Trading rule No 15. Hit those stops, no questions asked. Hitting your stop and watching a stock rally hurts but not htting your stop and watching the stock fall hurts a hell of alot more.

www.asenna.com.au/asenna/node/34842

--------------------------------------------------

Cheers tela

 

[shouldaindex]

I'd suggest a task for the OP.

Meet 2 people in real life who have made a living off trading for over 10 years (and aren't selling you something, because they actually can't) before you try it again.

For 2 reasons:
- You may discover they don't exist.
- But if they do you'll learn how.

Were your parents born overseas by the way? (I do have a reason for asking)

 

[peter2]

Do any of you wise people here change your equity trading tactics from trend following to mean reversion or similar during the choppy times, to improve performance, minimise drawdown and reduce risk?
It seems every valid trading system will have both good times and bad, would it not make sense to try and match the markets' personality changes and go with the flow. Obviously easier said than done, but.....? Thoughts?

Hello wyatt; Sorry your question was overlooked.
Systematic traders do not try and match their methods to the market because nobody knows what the market conditions will be. They will have multiple systems that work best in different market conditions.

 

[cynic]

Hello wyatt; Sorry your question was overlooked.
Systematic traders do not try and match their methods to the market because nobody knows what the market conditions will be. They will have multiple systems that work best in different market conditions.

Further to this, I believe it is worth mentioning that some system traders run trend following and mean reversion systems concurrently, the aim being to have the outperforming system compensating for the underperformance of the other.

 

[poverty]

This thread reminds me of my days trying to play online poker for a living, except I made 60k out of that.

 

[Wyatt]

Hello wyatt;
Systematic traders do not try and match their methods to the market because nobody knows what the market conditions will be. They will have multiple systems that work best in different market conditions.

Thanks Peter2 for your reply. It seems a lot of traders want to be in the market all the time, so they do not miss the big moves when they come, but if using say a 200 day MA filter in your trading system on your chosen index, it can leave you partially/fully on the sidelines for extended periods, which is not a bad thing as avoiding losses is as good as winning trades. Even great stocks go down in difficult periods, only to jump back up quickly when the market relaxes.
Which brings me to my question, which is when the higher momentum stocks do dive they seem to reverse at defined points of support/resistance, nothing new there I guess. Maybe my bias is only allowing me to see what I want to see, but there seem to have been a few examples of this recently. Check out ACX, BKL, PME, BAL, RCG, DMP, SGF, etc etc. With a tight stop, could this be a worthy concept?

And Peter2 I do like your monthly/weekly trend flow chart, but how could you refuse entry into PLS on Thursday, what a nice chart.

Cheers,
Wyatt

 

[priya0710]

Stock market keeps on fluctuating. Traders often find its disturbing. But you should never panic and take false decision which may not work in your favor. Keeping calm and acting according to market needs helps under such situation.

 

[CanOz]

Stock market keeps on fluctuating. Traders often find its disturbing. But you should never panic and take false decision which may not work in your favor. Keeping calm and acting according to market needs helps under such situation.

Keep Calm and Go 8alls deep!