19 yo trader

T

terminator

Hi, before i get calls to use the search button, ill say that ive used it and cant find anything that i need.

I am 19 yo and from australia. Ive played blackjack (properly not friggin gamblin away, card counter) for the past year and ive always been interested in the market. Ive studied it for the last 2 years and have traded it for 7months

i opened up a small account trading mini-contracts, but i cant seem to find a method which makes money. I've got strict money management in place and never risk more than 1.5% of my account and will not take any trades with less than 2-1 risk/reward ratio. Ive basically carried my trades exactly as ive written them down on my plan. I keep two logbooks one for my plan and one for my trades. 95% of the time they match up, occasionally they differ a bit due to improvisation, but thats to stop major losses if say price of commodities crashes overnight. I think 80% of that 5% deviation has been succesful in averting big losses. I trade just like how i play blackjack, but i just CANT SEEM TO BE PROFITABLE. i make like 10% in week and then end up slowly bleed it all away in 1 or 1.5% chunks over the next few weeks.

i currently trade discretionary classical TA (s/r trendlines, channels, mov avg) and only one indicator (stochastic). I also look for chart patterns.


Ive read Pring on price management, and edwards and magee's technical analysis and trading for a living by alexander elder.

I tried for the last year to code and develop a systematic system but it just seems completely beyond my abilities, besides i think most technical indicators are completely shit like rsi, ADX, %williams R they all give signals that are laggy and too late. unreliable. If anyone has other experiences with these indicators id like to know. i use them with TA trendlines and S/R, i.e i usually short when price is reaching resististance and has been trading in a rectangle and stochastic is above 80. i place a small tight stop so i wont get caned if it is a valid breakout of the rectangle.

ive kept a log of all the trades ive made and the reasons why i made them and why they lost money. the majority of my money is lost on big gaps i.e i short when it gets to resistance with a tight stop and then it completely gaps my stop overnight and ive blown my risk by 2 or 3 times the amount ive intended. Should i stop trying to fade breakouts and go with them? i fade them first cause there always seems to be so many false breakouts and i stop and reverse if it turns out to be a genuine breakout. i stuff up when it looks like a genuing breakout and then so i reverse adn then it goes back into the trading range and so i lose double!!!! I look at volume as it can precede and confirm the trend, but its misleading sometimes. I lose as much going with the trend (due to false breakouts) as i do fading trend (due to breakouts which gap my stop points). I usually look at two supports or resistances that close to each other. i'll buy when the price reaches the first support and place a tight stop just beyond the furthur resistance. if price breaks the furthur resistance then ill go with the trend.

Do any experienced traders here recommend i continue with using a discretionary method (i seem to be able to ignore the emotions and just focus on the process of putting the orders in) or look into mechanical trading? all my mechanical systems have been a mish-mash of indicators together that just end up making big patches of money in say trending markets adn jsut getting whipped in a choppy market. statistically i think that most of them are curve fit anyway. Ive looked at spydertrader's journal and it seems interesting, but very complex. I quite liked the pivot points journal by jimmyjam and its something i might want to trade later on as its simple and easy

I dont want to trade styles continously because trading requires specialisation, better if i can do one thing well rather than many things decently. Im currently trading crabel's opening range breakout on the aussie SPI200 and a few equities with limited success. I think i like end of day trading better than day trading.

I'm not losing that much due to tight money management but its been a slow and steady bleed which indicates to me that i dont have an edge. Also its bad because the markets which im trading are very trendy recently and that tells me that if they start going into choppyness then id have even bigger losses. i feel that if i find an edge i can exploit it mechanically just as i do in the casino. I do a simulator in tradestation where i analyse a chart and add on one day at a time to see whether i'm right, kind of like paper trading on steriods. On that i am decently profitable

I am still young, and i trade very very small CFDs with tiny leverage so as not to blow my account whilst im learning. I supplement the account with occasional trips to the blackjack tables to card count and top up equity on month end. much a case of robbing peter to pay paul.

I'm doing a commerce degree in finance and statistics and would definately look at trading as a career options so any hints as to how to get my resume fixed up and ready to send out would be gratefully appreciated.

I've included a copy of my resume so any of u ex IB people or ex traders can have a look and send me tips or ur resume's then i can get some idea as to how to get an inteview. SO far ive basically gotten each job ive gotten an inteview for so im strong on the inteviews, its just that i dont get alot of them, so i think it must be my resume.

i think that as alexander elder said that if i just focus on the method of placing orders, making the trade, following the plan then money and profits will come. its just that i lack an edge and so any setups or hints that u pros may have will certainly be appreciated.

thanks
 

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When I began playing poker I was bleeding money too, maybe you need better money management. Really, you won't get everything right away.
 
Quote from SPX Baller:

I just forwarded your cv to Goldman sales and trading.
More...

LMAO. Do you think, you can pass my resume also? Actually on the other hand I rather work for Bear Sterns, do you know anybody there? Wait a second I heard LJM gives a hell of a bonuses in the end of the year, can you put my resume there? Nah, nevermind I love my college, I will rather study until I die.:cool:
 
You are shorting when sentiment is long. Stop it.

At S and R the market retests and nothing else. Pring has this wrong. By this I mean, in person, I asked the key Q at the END of a long illustrated session and he did not even get past saying he did not undertand the Q after it was repeated when he said he didn't hear it correctly, he thought. Stop looking for reversals at R or S. I have read his stuff thoroughly over and over.

Finally. Go one level deeper in understanding. The direct variables allow you to differentiate retraces from reversals. You do not at this point. Since you know channels overlap; can learn the difference between patterns in channels and patterns in the period of overlap. Go to Granville and learn what he means by volume leads price. Then, start with retraces and discover that they are short term phenomna WITHIN the traverse of price WITHIN channels. They are non dominant breathers between trend continuations. THEREFORE, they occur on falling (leading) volume, only. All reversals begin AFTER trend overlap has come to an end, AND they occur only when sentiment has proved to have changed AND volume is INCREASING to support the new dominant trend direction. Three conditions ANDED together.

All of this occurs OUT of the testing range of S and R Think of all testing ranges as lateral ranges where one side is R or S.

sub point. Oscillators only give HOLD signals as a rule. Absence of a hold signal is NOT a reversal signal at all. Use STOCH only as a leading indicator of volume which is a leading indicator of price. Thus, you just use the leading part of the oscillator and skip the trailing stuff. SET a 5, 2, 3 and use the fast line going through 50% for sentiment change only.
 
Quote from jack hershey:

You are shorting when sentiment is long. Stop it.

At S and R the market retests and nothing else. Pring has this wrong. By this I mean, in person, I asked the key Q at the END of a long illustrated session and he did not even get past saying he did not undertand the Q after it was repeated when he said he didn't hear it correctly, he thought. Stop looking for reversals at R or S. I have read his stuff thoroughly over and over.

Finally. Go one level deeper in understanding. The direct variables allow you to differentiate retraces from reversals. You do not at this point. Since you know channels overlap; can learn the difference between patterns in channels and patterns in the period of overlap. Go to Granville and learn what he means by volume leads price. Then, start with retraces and discover that they are short term phenomena WITHIN the traverse of price WITHIN channels. They are non dominant breathers between trend continuations. THEREFORE, they occur on falling (leading) volume, only. All reversals begin AFTER trend overlap has come to an end, AND they occur only when sentiment has proved to have changed AND volume is INCREASING to support the new dominant trend direction. Three conditions ANDED together.

All of this occurs OUT of the testing range of S and R Think of all testing ranges as lateral ranges where one side is R or S.

sub point. Oscillators only give HOLD signals as a rule. Absence of a hold signal is NOT a reversal signal at all. Use STOCH only as a leading indicator of volume which is a leading indicator of price. Thus, you just use the leading part of the oscillator and skip the trailing stuff. SET a 5, 2, 3 and use the fast line going through 50% for sentiment change only.
More...

your points on trend reversals occurring out of S/R is very interesting. I have always thought that reversals occur at key points of R or S. i.e hits R bounces back and breaks through S on heavy volume.

Also how can i properly identify the "dominant" trend? i currently just look at weekly charts and eyeball the trend on those, if the trendline is up then i figure that the dominant trend is still up. Should i only restrict myself to buying in on down retracements with falling volume and with the dominant trend going up?

you mention channel overlaps and their patterns, something ill definitely have to look into. i'm still quite amateur at drawing channels (usually just use keltners). one thing ill definitely NOT be doing anymore is buying at support when volume's increasing. thats were i've been gapped quite a few times.

Also if say a channel overlap has occurred between an up and down channel then i should just be looking for breakouts of support yeah? If i do catch a trend i just ride it until it closes below the 12 day EMA, i tend to lose alot of profits that way. is there any other method which is more efficient?

thanks alot
 
Quote from SPX Baller:

I just forwarded your cv to Goldman sales and trading.
More...

thanks alot mate but i think its goldman in the US and im like the full pacific ocean away in australia. But definitely id like some feedback on it even from the US guys cause ur job market is so much more competitive there so if its decent in the US then itll be very good here. Id just like to see what the IB and institutional guys look for on the resume's so i can actually get an inteview.
 
Jack Hershey

As my nick suggest I am very interested in channels. I have read a number of your posts. When you are on top of your game you pack more information in a paragraph that most do in a book. Can you suggest a particular title by Granville?
 
Quote from terminator:

your points on trend reversals occurring out of S/R is very interesting. I have always thought that reversals occur at key points of R or S. i.e hits R bounces back and breaks through S on heavy volume.

*****In my response to OP, I was, first of all, cutting a lot of his unecessary short term losses. For him, there is quite a distance from R to S. Most often, R and S are not both seen on the same day for intraday traders. There are always range limits to be seen however.

Lets say you are stepping up your level of extraction from the markets. This is not conventional and doesn't go along with the conventional wisdom paradigm. You are looking at the flow of capital as time passes.

At some point, you decide you have to get in there and really pull money out of the pipe.

In this environment you are always on the right side of the market and you are told this all the time and ahead of the time regarding price moves.

This happens between R and S and a lot of the BO's of R and R are followed by FBO's after the BO. That place is not a common consideration compared to keeping the pipeline flowing money into your account at all times.

Here, I could do a dissertation on a fair number of perveyors of the conventional wisdom. they are not connected to any pipelines or anything like that so they are unimportant to anyone, however.

Getting to be able to see the market is the initial step a person has to take to just ease into the ballpark of making money. The OP sees that there is something to do that makes 21 and poker look silly. So far he has a poor screen set up etc...

So there is a lot of money making space between R and S and we need to extract it all day long at max.

Also how can i properly identify the "dominant" trend? i currently just look at weekly charts and eyeball the trend on those, if the trendline is up then i figure that the dominant trend is still up. Should i only restrict myself to buying in on down retracements with falling volume and with the dominant trend going up?

*******I responded to the OP's comments on commodities trading. Zip over to a five minute chart and put your seatbelt on. Use ES for the example. Check out Spyder's charts that he puts up daily after he has progressively annotated them during the day. All those trades may be taken since they are telegraphed in advance of price on volume.

For making money in stocks, you need to use a chart that shows where money is made. It is not the weekly. I do trade stocks to make money. The pipeline there runs at 2.5% of capital daily as a minimum. You can also see about a million daily charts on here in the journals; the presenters really grove on how the time passes and how you have leading indicators of price (esp volume) to keep your timing great for entry and for exit. If you are monitoring during the day drop down to the 30 min chart to see the advance warning system better.

you mention channel overlaps and their patterns, something ill definitely have to look into. i'm still quite amateur at drawing channels (usually just use keltners). one thing ill definitely NOT be doing anymore is buying at support when volume's increasing. thats were i've been gapped quite a few times.

****Channels annotated into the future (right 1/3 of chart) are best prep. Use the daily. The conventional wisdom misses what the market does to a large extent. That is simply because the conventional wisdom was invented and made rock solid before there was any real time information available to the inventors.

The second thing you need are the better stocks to trade. Two reasons: repeatability and reliability. This is not part of the conventional wisdom either. Some people have committed the capital to defining these two items and the corrolation comes down to two things: making percentiles of stocks related to their FA and TA. FA relates to earnings and TA relates to relative price performance. Here you are working with 3 beta stocks on the TA side and the A (high quality) stocks on the FA side.

Also if say a channel overlap has occurred between an up and down channel then i should just be looking for breakouts of support yeah? If i do catch a trend i just ride it until it closes below the 12 day EMA, i tend to lose alot of profits that way. is there any other method which is more efficient?

******MA stuff is silly. This is hard to explain but why would a person come up with any indicator that is lagging in nature? The MA's were designed to sell stuff to people who are easy marks for buying stuff. Now MA's are free in most cases and they have that value for sure.

You need to switch to leading indicators of price to make money trading price. The conventional wisdom doesn't have many leading indicators of price.

Here is how a channel is traded. You enter and follow the long diagonal of the parallelogram. To make it easy, use the channel which is inside the slower channel that inscribes it. The first two bars of the channel you are trading define all of the points needed to draw and mark in in the future the long diagonal.

Do about 70 or 80 repeatable and reliable charts and you will be ready to begin.

thanks alot
More...
 
Thanks jack, i think i've neglected the volume graph when trading and now having read your insights i think that i should pay alot more attention to it.

Do you trade on an intraday basis or end of day?

also every time i draw a trendline it just gets crossed after 10 or so bars and then gets crossed again and the trend goes on after shaking me out!

is this thru a lack of experience or is there something wrong with the method of my channel drawing? i just connect the lows and highs
 
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