An Attempt to Learn How to Trade Consistently and Profitably

[InAllHonesty]

Oh, one more question though. If the chart that you show is from your platform, how is it that its able to display entering a short position while still in the longs?

Also, what exactly do you mean when you say you hedged your longs by going short? It seems like all you did was enter short. How is this a hedge? Usually a hedge would be buying a different instrument.

I can trade both ways with my broker.

Ah, yes, that's just me not agreeing with the traditional methods of hedging. It's a bit pointless to me. E.g. you have too much long exposure to Apple so you sell ES. If I am worried about delta, I'll just hedge with the same instrument that I'm more familiar with and watch it all in one browser. Personal preference!

 

[attempt]

Hey kiddo.

I wish you would take heed of the advice to stop trading until you find success on demo.

It’s a shame to see you wasting your money and that you’ve now gone negative.

Some last ditch advice from someone who makes money trading the S&P. There’s a lot of frauds out there, don’t get yourself drawn in by them.

1. Ditch the intraday correlations from your chart. Ain’t gonna help. Track VIX, 10yr, TLT, DXY etc for market health - sure.

2. Swing trade. You’re a deer in the headlights on the lower timeframes and I can see panic and confusion in your exits.

Swing trading on support and resistance even with MAs is... so easy.

3. Patience. It’s what you don’t have and it’s the only reason why you are losing. I know this. After time you’ll develop a feel for the market and it’s easy. You won’t develop that feel when you’re constantly rushing in and out of positions, panicking.

4. You’re trading options without knowing about the Greeks it seems? They’re important. Gamma and delta.

It took me a few years to realise with trading that all that’s truly needed is just solid psychology combined with some basic math skills.

You’ve heard it all before but impatience and leverage kills.

I went long at the bottom of the market this week and bought strength on the way up. Heavy leverage, 80% off the table at new highs and now I’m sleeping easy at night with my stop loss comfortably above my entry (but not where a retracement should touch).

This is where you want to be. Based on regime (bullish/bearish, risk on/off), when a market rips or dips, you should be ready to act. You’re acting in between the real action and getting tossed around like a rag doll.

Posted this as I don’t want to see the market cause a smart young guy trouble. Please be wise. Best of luck...

Yeah, I'm pretty sure you and everyone is right. They warned me that I should do longer time frames and trade securities that are less seen. Pretty much trade less known stocks and on a longer timeframe. I guess I was ignorant. I didn't really understand the risk. Had high hopes of myself. I think I will do so, I will start swing trading. Don't care how long it will take. I'll take advice from everyone here and start combining techniques. Also I think it will do quite well for my time schedule. Daytrading is really time consuming. I appreciated everyone trying to help. I am going to consolidate some plans to swing trade before I enter the gate of swing trading. I have mid terms coming up the next two weeks, but slowly I'll try to view some charts/correlations.

Trying to purse a data science career also. So I am working on that everyday along with trading. Although I am more focused on my midterms as of now. Trying to do projects so I can get internships, or at least have something on my resume. I think they go quite well together, data science and trading.

Many thanks. I wont be posting much, until I start trading. Maybe view it ever now and then. Appreciate the help. This is my first pivot I'll be doing, from intraday to swing trading.

Something pretty interesting is, I always thought about this one thing. When people get advice, it really depends on where they are in their path. If you give advice from someone who has never experienced the reason why the advice was given, it falls on deaf ears. But when you experience it and see why it can work, that is when most people follow advice. Advice is given by all levels of traders from pro to noob, but to beginners it is really hard to follow, because they either do not understand the reason why they need to follow, or they just haven't experienced the need to follow it. Although the latter is really, ignorance it is hard to validate the advice until the experience is experienced and is in the past. That is why I try to follow blindly people who I think are saying truths, but it is still hard to understand the reason why.

I appreciate all the help everyone has given though and am not saying one way is wrong or right.

 

[Dr_Trade]

Although I use candlestick patterns for technical analysis, along with that I use bollinger bands to look for the market position. This helps me in discovering the price trends and whether the pair is overbought or oversold. So if you know how to read charts you can go for any trading platform.

 

[attempt]

Hi Guys,

I've been studying for school for a while and I am back at it after reading up on markets and thinking. I've taken two probability courses so I tried to apply what I know, also I have been playing some poker. Poker has helped me understand what edges look like, and why some hands are better than others. Using poker as a playing ground I started to think about how I could use it in trading, from poker things like AA, AK, KK, etc. hands are profitable in the long run. So I did some backtesting for the past 5 years on a couple strategies. This is the current strategy I am working on. Although the EV is quite low? Not sure if it is but it is positive excluding commissions, commissions may ruin this strategy but it is a sign there are edges in the market. If I were to trade stocks the only fee I would have to pay on TDA would be REG fees, which are close to nothing($0.0000051 per $1).

Anyways the numbers for my trading strategy is:
Probability: {Win:0.56990, Neither:0.125173, Lose:0.30493}
probabilities in terms of [0,1]

Value: {Win:0.018843, Neither:-0.00287, Lose:-0.02374}
in terms of percent change from entry
value means for the amount of money I put in I will win 0.018843*Money. So if I had a 1k trade. The max profit I could make on that trade would average around 0.018843*1000, or $18.843. Since these are averages they can vary, over the long run they converge to 0.018843.

Expected Value: 0.3141%(or 0.003141)
over the long run on average I would make 0.3141% on my money per trade.

I have a neither option because I will sell on close after 1 day meaning it can both not hit my target and not hit my exit, therefore neither. My holding time per trade is the next trading day, I buy near or at the close.

Still working on it but it is great to see that it is possible .

Data Set:
Fortune 500 Companies (505 Companies)
Trades/Company: 208.804
Direction: Long only
Date Range: 5 Years
Timeframe: 1 Day Candles
Average EV/Company: 0.30849%

Will be doing single share trades, although some of the 500 companies cost a lot. I want to feel out how this system works while tweaking it.

 

[attempt]

I think I have figured out my problem I had. Position sizing in trades is actually key(for me). I used to do 1 big lot per trade, but splitting them up into smaller lots allows me to reduce my capital used, therefore allowing me to trade more if a trade goes wrong. Also I lose less when I am incorrect. Adding into winners is actually insanely, like mind blowing(never thought of implementing it before even though I have read about it). I used to go in 1 big lot because I think I wanted to prove to myself I could trade, essentially I was trying to be correct in every situation. Poker taught me I can be wrong even though it is in my favor and I really took that to heart. Been at it for 3 weeks now, and up 34.94% on my account. I'll continue but it looks promising, still have doubts in the back of my head, but as long as I follow my plan and continue trading my way I think it will go quite well, I'll do monthly updates at the start of each month. Many thanks to the people who helped me.

 

[NoahA]

I think I have figured out my problem I had. Position sizing in trades is actually key(for me). I used to do 1 big lot per trade, but splitting them up into smaller lots allows me to reduce my capital used, therefore allowing me to trade more if a trade goes wrong. Also I lose less when I am incorrect. Adding into winners is actually insanely, like mind blowing(never thought of implementing it before even though I have read about it). I used to go in 1 big lot because I think I wanted to prove to myself I could trade, essentially I was trying to be correct in every situation. Poker taught me I can be wrong even though it is in my favor and I really took that to heart. Been at it for 3 weeks now, and up 34.94% on my account. I'll continue but it looks promising, still have doubts in the back of my head, but as long as I follow my plan and continue trading my way I think it will go quite well, I'll do monthly updates at the start of each month. Many thanks to the people who helped me.

I find it incredibly powerful to scale into a trade, especially a losing trade. Price never moves in a straight line, and both sides need to be shaken out. This creates an opportunity to get out of a losing trade at breakeven many times.

And you're right, when you accept that you aren't a hot shot trader, and accept your entries wont be perfect, and know that after you initial entry it still might not work in your favor so you're ready to add to your position at a worse price, it not only makes the stats better, but also makes you more calm. And this pays dividends in my opinion.

 

[attempt]

I just want to say, even though I'm not consistently profitable. That it is quite amazing, what just putting time in does. I was never the hardest working or the smartest, but I survived based on pure perseverance. Lol I talk as if I made it, but after these 2-3 weeks trading it's like I am in touch with trading. I think I finally understand reading the tape and how I trade, although I don't look at Level 2 or Time&Sales, they are just in my peripheral vision to gauge the speed of the market. I started to question everything I had on my screen, like what do I use Level 2, T&S, daily chart, etc. Pretty much defining my use for every thing that took on real estate on my screen to understand what I use what for, so when I have a question I look at that specific thing. Instead of just thinking maybe this maybe that I have a direct path to the question.

I think I have developed a feel for buying/selling pressure on $SPY, based purely on how the candles tick up and down. Like yesterday I rode the wave down adding to my position just because every up move on a 1m candle had a fast reaction down, and every attempt higher was smacked down like someone was afraid that someone else would sell. Similar to todays feeling at the open I felt the same thing, people were selling but someone was buying like a maniac at every low. So I added into my long position at the open.

My biggest day was on last Tuesday 04/13/2021, with $SPY. Where I rode my position all the way to the top. This was the realization that I could see people buying like their life depended on it. Then throughout the rest of the week leaking into this one I developed the feeling even further. My 2nd biggest was today 04/21/2021, could have been my biggest if I held longer, but I don't mind I expected a swift move down but it didn't happen. I couldn't reload since I already used all my capital.

Quite amazing! It might be just luck for now, but it makes me enjoy trading even more and makes me want to learn more about markets! I sound very euphoric and indeed I think I am , I have my euphoria in check but every day for the past few days I haven't been able to sleep I just think of the markets for a very long time and read up on tickers. My next situation I want to be in is when both demand and supply meet for a extended amount of time, I feel as if I may fuck up in that situation since I depend on a market that will trend/explode my way after consolidation. Sounds like I am flexing and I think I am but man am I enjoying the experience right now.

 

[attempt]

Might start working on scaling out, like I scale in. Been leaving profits out to dry. The problem comes on when to sell all vs scale out, but I think with yesterdays drop it is reasonable to sell out in situation where markets move dramatically in 1 way. Today I rode the wave up but should have attempted my proposal, but I hit a new milestone in profits today!!

 

[waderichards]

Might start working on scaling out, like I scale in. Been leaving profits out to dry. The problem comes on when to sell all vs scale out, but I think with yesterdays drop it is reasonable to sell out in situation where markets move dramatically in 1 way. Today I rode the wave up but should have attempted my proposal, but I hit a new milestone in profits today!!

Yes, that’s really important to know when you should sell and when to scale out. I have seen traders often confused between these two and end up making the wrong decision. Though I cannot tell you what to do and when to do that, you need to remember that scaling out is the risk-averse strategy that can be a great help when the price of an asset subsequently reverses the trend and falls.

 

[olivemckenzie]

Yes, that’s really important to know when you should sell and when to scale out. I have seen traders often confused between these two and end up making the wrong decision. Though I cannot tell you what to do and when to do that, you need to remember that scaling out is the risk-averse strategy that can be a great help when the price of an asset subsequently reverses the trend and falls.

But don’t you think that this might make traders and investors feel that scaling out is always a better option than selling out.