Hello, I've been live trading for about 2 months,..small account of $2,000... (emini) a few trades didn't go so well, and quickly went down to $1,200....took some time to paper trade and work on my strategy and the mistakes I had made,...now, I feel like I have a solid strategy, my only issue is,..pulling the trigger,...the fear of the losing trades still scaring me a bit,....i've missed on some big trades this week, because I didn't pull the trigger,..anyone have advice,....how did u deal with the losing trades? Or how to over come those mistakes, any advice would help.
Advice,.Losing Trade.
- Thread starter Ruben R
- Start date
rmorse
Sponsor
You will not like my advice, but you don't have enough capital to properly trade anything including ES contracts. Even if some FCM is reckless enough to offer margin that low. You need capital to learn, scale into trades and make mistakes. You are setting yourself up for failure. Others will disagree here, but you need at least $25,000 to give yourself a chance at success with futures. Otherwise, you will be trading sacred all the time and not making decision for the right reasons.
Good luck...Bob
Good luck...Bob
I agree and disagree with Rmorse, 2K or 1.2K depends on your natural trading ability, more $$$'s imho if you can't trade just = more $$'s wasted.
I agree with the scaling in, trend is up, take a long, pulls back further trend still up, take another only exiting when trend no longer valid, that's the way to make money, scared and trying to keep your loss sub $100 say each trade, will just get you loads of SL hits repeatedly.
Open an FX Spot account if I was you ( what I run ), drop Margin to 50:1 to restrict your trade sizes and trade at a much smaller size, making above possible.
I agree with the scaling in, trend is up, take a long, pulls back further trend still up, take another only exiting when trend no longer valid, that's the way to make money, scared and trying to keep your loss sub $100 say each trade, will just get you loads of SL hits repeatedly.
Open an FX Spot account if I was you ( what I run ), drop Margin to 50:1 to restrict your trade sizes and trade at a much smaller size, making above possible.
Rmorse is completely correct.
Learning to trade is difficult enough without putting yourself in a position where your account can't handle the risk.
I myself, about 6 months in, am prepared to allow 3-5 years to become a trader. My approach is swing trading off daily charts as I work full time and actually like this timeframe. Intraday charts make no sense to me at this point. Just an approach that resonates with me.
The best tip I ever got was from a podcast. It suggested new traders, trade as small enough as you can. You don't want to feel financial pain for every losing trade and need to preserve your trading capital to survive the learning process.
This made perfect sense to me as why would I want to trade a large size since I haven't proven my system and methodology profitable yet? Having real money on the line still allows for learning and dealing with your psychology and emotions but keeping the risk of ruin smaller.
So instead of risking 1 percent of my capital per trade which seems to be a number I've seen used a lot, I risk half that, or even smaller.
My goal is to develop a good sample of trade to analyze and to develop a routine of keeping up with my journal, managing trades, looking for setups, adding to my trading plan, analyzing the outcomes of particular setups. Recently I've been working with Amibroker and excel a lot and learning about working in a quantitative way. This doesn't mean I plan to make an automated system but just how to work with statistics and validating them.
I really think this is the key to success is just survival. If heard this from quite a few traders on chatwithtraders and maybe it's hocus pocus but I'm willing to put the time and I have a blast learning new stuff everyday about markets so it's not like a chore.
Ill give an example of how I approach my risk in a trade. This isn't anything new to the world of trading, think most work in some sort of system like this.
Most new traders think to manage risk by adjusting their stop to a level that keeps their loss small. So for example taking a trade at 5.00 and setting a stop at 4.95. The issue is that the market fluctuations can kick you out before your signal could prove to be right.
My approach is taking my setup, each setup has a general level where I put my stop. This is usually outside of the noise and away from those obvious support/resistance levels that in my experience, the market loves to hunt for those clustered stops where it seems everyone has theirs. I give my setup the room to let the signal be validated or be proven wrong.
So here's a simple calculation I use for my size.
Example:
I see a setup for a trade I want to enter. I see current price is at 10.00$, looking for an entry. My stop is usually set before I take the entry signal but I have my stop at 9.50. If price gets to here my setup was completely wrong. My capital is 25000$.
I only want to risk 1 percent per trade, 1 percent of 25000 is 250$.
This means my total loss( expecting, theirs always slippage and major gaps possible) I'm willing to take is 250$ on this trade. With my stop 50 cents away from my entry, I divide my total loss by the loss per share.
250/0.5 = 500.
I'm going to purchase 500 shares to fit my risk allowance.
Now I also have rules for total capital in a trade as I don't want any black swan events breaking the bank but usually my stops and risk allowance keep this below this number.
This is just initial risk however and theirs room to manage the trade and move the stop up as it works in your favor. Just never move it down.
Anyways, ridiculously long winded post, sorry.
Just seeing your capital and the risk your taking leads me to believe you have a lot of basic concepts to learn and grasp and how to keep yourself in the game.
Your just not giving yourself a chance to learn.
Learning to trade is difficult enough without putting yourself in a position where your account can't handle the risk.
I myself, about 6 months in, am prepared to allow 3-5 years to become a trader. My approach is swing trading off daily charts as I work full time and actually like this timeframe. Intraday charts make no sense to me at this point. Just an approach that resonates with me.
The best tip I ever got was from a podcast. It suggested new traders, trade as small enough as you can. You don't want to feel financial pain for every losing trade and need to preserve your trading capital to survive the learning process.
This made perfect sense to me as why would I want to trade a large size since I haven't proven my system and methodology profitable yet? Having real money on the line still allows for learning and dealing with your psychology and emotions but keeping the risk of ruin smaller.
So instead of risking 1 percent of my capital per trade which seems to be a number I've seen used a lot, I risk half that, or even smaller.
My goal is to develop a good sample of trade to analyze and to develop a routine of keeping up with my journal, managing trades, looking for setups, adding to my trading plan, analyzing the outcomes of particular setups. Recently I've been working with Amibroker and excel a lot and learning about working in a quantitative way. This doesn't mean I plan to make an automated system but just how to work with statistics and validating them.
I really think this is the key to success is just survival. If heard this from quite a few traders on chatwithtraders and maybe it's hocus pocus but I'm willing to put the time and I have a blast learning new stuff everyday about markets so it's not like a chore.
Ill give an example of how I approach my risk in a trade. This isn't anything new to the world of trading, think most work in some sort of system like this.
Most new traders think to manage risk by adjusting their stop to a level that keeps their loss small. So for example taking a trade at 5.00 and setting a stop at 4.95. The issue is that the market fluctuations can kick you out before your signal could prove to be right.
My approach is taking my setup, each setup has a general level where I put my stop. This is usually outside of the noise and away from those obvious support/resistance levels that in my experience, the market loves to hunt for those clustered stops where it seems everyone has theirs. I give my setup the room to let the signal be validated or be proven wrong.
So here's a simple calculation I use for my size.
Example:
I see a setup for a trade I want to enter. I see current price is at 10.00$, looking for an entry. My stop is usually set before I take the entry signal but I have my stop at 9.50. If price gets to here my setup was completely wrong. My capital is 25000$.
I only want to risk 1 percent per trade, 1 percent of 25000 is 250$.
This means my total loss( expecting, theirs always slippage and major gaps possible) I'm willing to take is 250$ on this trade. With my stop 50 cents away from my entry, I divide my total loss by the loss per share.
250/0.5 = 500.
I'm going to purchase 500 shares to fit my risk allowance.
Now I also have rules for total capital in a trade as I don't want any black swan events breaking the bank but usually my stops and risk allowance keep this below this number.
This is just initial risk however and theirs room to manage the trade and move the stop up as it works in your favor. Just never move it down.
Anyways, ridiculously long winded post, sorry.
Just seeing your capital and the risk your taking leads me to believe you have a lot of basic concepts to learn and grasp and how to keep yourself in the game.
Your just not giving yourself a chance to learn.
rmorse
Sponsor
I agree. All traders go though a difficult times but you need to do what is necessary to survive to be there for the good times. I would also add that the next most important item, is to find an edge. You need to do something to give you an advantage or you will never turn trading into a profit business that does well over time.
Thanks for the input fellas, appreciate the replies. Yeah, I have more capital available but wanted that feel of live trading with $2000,...since the losses, I analyzed the losing trades,...and have gone over the intraday charts for the last few weeks, I would say the biggest thing to work on is controlling my emotions, since then I've implemented a couple more indicators and such,the reason why I started the thread was because on Friday I didn't execute a couple of trades that would have practically put me back at $2,000 and it's that feeling of missed opportunity that stuck to me.
I was kind of basically in the same predicament as you when I first started trading. -- I started with a slightly larger account, but was basically tarnished and jaded...even years and years of watching/studying the market...I couldn't seem to jump back in.
I have no simple answer on how you specifically can overcome that...that's something you have to find deep within
It has nothing to do with money or acct size (with respect to Bob Morse, it doesn't matter if the OP had a million dollars, he still would have difficulties) it is purely a fear of being wrong. It's an ego thing, that you might look like a fool, you might be judged badly, your self esteem will crumble, you might have to face the fact that all that time spent constructing strategies that don't work was wasted etc.
How do u overcome it? Not easily. We are wired biologically to have fear as a survival mechanism. You have to say to yourself that you don't care, that it doesn't matter, in short, you have to be willing to die.
Good luck.
My view is if you can't turn the $1200 into $12000 you cant turn $25000 into any meaningful profit either. Stick with your $1200 until you learn. I recommend paper trading until you figure out your mistakes and how to correct them. If you do have a solid strategy in place, place your trade when you see it and use a stop to limit your loss if the trade goes against you. You can overcome the fear of losing this way. Once in the money I move my stop to break even and once profitable I keep moving my stop up to protect profits. Personally I usually trade 1000 shares and put a stop in at 10 points on a trade. I know the max I can lose on any one trade is $100 plus the broker fee. My gains are usually 15 to 300 points on a day trade. Hope this helps.