10K in the hole

This thread looks like its getting a lot of good advices from the veterans so I'll chime in.
With about 30k gbp in your account, you should risk no more than 1.5% per trade.. Why 1.5%? Because a small account should not risk anymore than this (but that's just from my personal experience)

Now to fix your losing streak,, your profit target should be the same (1.5%) as your risk. If you have a good strategy (i.e. trade set-ups), you should begin with a 1:1 risk/reward.

Never mind the commissions at this point. Give it about 3-5 months and if you come out ahead then you know your strategy it is a sound strategy. Many folks believe in 'cutting the loss short and let the profit runs' but seriously, not a lot of new traders can weather losing streaks, not to mention multiple ones. Once you know your strategy is a winning strategy then you could always go for a better R/R.

Btw, fuck sim trading.. Fuck back testing... Only way you become great is by going live. I rarely post here so I tell you, It took me 6 years (and multiple blow outs) to become consistently profitable. So I hope my wisdom shorten your learning curve.
 
Quote from dalodoma:



Btw, fuck sim trading.. Fuck back testing... Only way you become great is by going live. I rarely post here so I tell you, It took me 6 years (and multiple blow outs) to become consistently profitable. So I hope my wisdom shorten your learning curve.
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Truer words have never been written. Sim trading is no substitute for the real thing. You have to be willing to lose and learn, and be willing to keep losing while forcing yourself to keep learning.

I had to get losing out of my system before I was ready to start winning.

It is a silly and brutal pursuit, one I never would have tried to master had I known what would be required of me.

On the other hand, I'm glad I didn't know, now that I'm here.
 
Quote from slumdog:

I feel honoured to be in the presence of so many consistently profitable traders :D
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dalodoma and i have posted of massive losses/multiple blowouts on the route to consistent profitability. if you've been at this for a year or two and you're struggling, as we did, understand that's just part of the journey. You either last long enough to keep getting beaten up until, finally, you're not getting beaten up anymore...or you don't.

it really is that simple
 
Quote from dalodoma:

This ....
Btw, fuck sim trading.. Fuck back testing... Only way you become great is by going live. I rarely post here so I tell you, It took me 6 years (and multiple blow outs) to become consistently profitable. So I hope my wisdom shorten your learning curve.
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Ignore this advice. Only by backtesting will you have a plan, OP. Blowing out accounts is not the right way to learn to trade.

Most losers like this don't know how to program, so blowing out accounts becomes an extension of their pro-trading-gambling mentality. Learning how to arbitrage by far through portfolio simulations and learning to control risk will teach you how to manage money better than losing it will and that is a fact.

You shouldn't trade because I see +100 and -100 and these are values similar to trading mentalities that don't ever fair well in markets where automation and emotional detachment is required to avoid the pitfalls of overtrading and other hyperbole such as this poster's advice on his way to still not knowing how to trade.

Read up on it, and learn to program using third party software like Multicharts. That's better time spent than losing, and do it in a trade sim until you've lost a thousand then buy those programs and you'll have paid for it by not losing.

To my own experience, I've only seen where trail stops and unreasonable values of slippage and commissions can refute a positive expectancy backtest over time but that genetic algorithms are required to have a working trading robot, so while it is true backtests don't mean anything neither does a mutual fund prospectus and they tell you that in both scenarios where you choose to take a risk.

Mathematics leads to a strategy, then a workable strategy will lead to something you can modify through iteration not necessarily the logic of it but through such things as genetic programming and so long as you don't use trailing stops any market order or stop order system will always yield either profitable results or marginally profitable results using these methods.

In your search for the right algorithm for trading know that as the market goes lower, securities become more undervalued, and as they go higher, securities are becoming more overvalued. Any algorithm you come up with must take advantage of this because that is how supply and demand works. I've seen the arguments for momentum but they aren't good on a risk-reward basis.
 
All posts are welcome.

However i have a way of trading that suits me, it may or may not make money in the long run, who knows.

But im going to stick to it.. any money lost now will be negligible as i have cut back size considerably and have no plans to increase size unless i book some profits.

So only thing at risk going forward is having wasted my time if in the end i never make it.
 
Quote from slumdog:

All posts are welcome.

However i have a way of trading that suits me, it may or may not make money in the long run, who knows.

But im going to stick to it.. any money lost now will be negligible as i have cut back size considerably and have no plans to increase size unless i book some profits.

So only thing at risk going forward is having wasted my time if in the end i never make it.
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You have to know you might make it before you can say whether you can.

No, your method is not profitable if you don't already know whether it is or not, and if the trading results haven't told you this I don't know what "wasting time" would be if you actually have to do real research into something that "might" be profitable.
 
Slumdog, here's the original post:

"Im trading stock index futures mainly.

Started 2013 with £40000 (about $63K usd)

Currently have £30430 ($48K usd)

Took some big hits around the February/March time period, 6K lost in two days, cut back size but continued to lose and the account balance slowly drifted even lower during the following four months.

Am now trying to make it back slowly.

My confidence is shot to pieces, not so much by the loss of money but by the long losing streak duration (including a flat 2012)"

So, does your system/strategy actually have a tradeable edge ?
 
Quote from bwolinsky:

You have to know you might make it before you can say whether you can.

No, your method is not profitable if you don't already know whether it is or not, and if the trading results haven't told you this I don't know what "wasting time" would be if you actually have to do real research into something that "might" be profitable.
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Traders are prisoners to market conditions, you can get years which are ok for trading and years which are excellent. In hindsight you can always pick a market that was good to trade in the last 12 months. But if your focus is SIFs or FX and they ain't moving much there is not much you can do.

We are currently in a period of medium to low volatility, still there is money to be made but it doesn't allow for many mistakes. High volatility environments are more forgiving, as there are many more good trade opportunities, and the win rate/profit factor is higher.

How long will this period of medium to low volatility last? i don't know, but i'm hoping the volatility doesn't get any lower than it is now.
 
Quote from slumdog:

Traders are prisoners to market conditions, you can get years which are ok for trading and years which are excellent. In hindsight you can always pick a market that was good to trade in the last 12 months. But if your focus is SIFs or FX and they ain't moving much there is not much you can do.

We are currently in a period of medium to low volatility, still there is money to be made but it doesn't allow for many mistakes. High volatility environments are more forgiving, as there are many more good trade opportunities, and the win rate/profit factor is higher.

How long will this period of medium to low volatility last? i don't know, but i'm hoping the volatility doesn't get any lower than it is now.
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There shouldn't be any losing years in a good system.

I'll verify the point by reiterating the Mo06 question:

Do you have a quantitfiably verified edge in the markets?
 
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