This journal will document my effort to un-blow up an account by doing the exact opposite of what every new trader seems to be able to instinctively do so well.
I have always been excellent at cutting my losses and letting my winners runâ¦unfortunately those few occasions where I have taken my profits before they became monstrous have really hurt me. On a number of separate occasions I would have nearly doubled my account equity without any scaling whatsoever, but by taking the profits off the table before they became large enough, I have managed only a small interruption in the slow bleed of my account.
Some examples that come to mind are long aapl at $90, long YG about a year ago, and long spy puts that cost .08 and expired at 3.00 each (I sold at .20).
Soâ¦.from now on I am setting out to only realize lossesâ¦
I use a mix of fundamental and technical analysis but have been around long enough to realize (that for me at least) these probably lend little value beyond getting me into positions which contain the possibility of outsized moves in one direction and the reality of a tight stoploss in the other direction.
I am risking +/- 2% of account equity on each trade. I still think there is a good chance of blowing up here, and would risk less if the account size were not so small.
Trading instruments are to be leveraged and liquid, most major currency pairs, YM futures, SPY options etc.
Stop losses will be very tight +/- 10pips in currencies, +/- 10 Dow points, etc. I know these may seem TOO small, but they fit with my risk tolerance and my experience that:
A. the probability of getting in at a price level that will not be seen again (at least for a while) is much greater than one would expect and
B. my best trades are usually profitable right from the start.
Once I manage to get into a winning position the unrealized profits function as an increased stop loss â the further the position moves from my entry the less likely I am to get stopped out.
I realize there is a good chance here of death by 1000 cutsâ¦but it is a chance I am willing to take.
I will update the journal as I take positions and periodically in-between. You are all welcome to read and make relevant contributions! Thanks!
I have always been excellent at cutting my losses and letting my winners runâ¦unfortunately those few occasions where I have taken my profits before they became monstrous have really hurt me. On a number of separate occasions I would have nearly doubled my account equity without any scaling whatsoever, but by taking the profits off the table before they became large enough, I have managed only a small interruption in the slow bleed of my account.
Some examples that come to mind are long aapl at $90, long YG about a year ago, and long spy puts that cost .08 and expired at 3.00 each (I sold at .20).
Soâ¦.from now on I am setting out to only realize lossesâ¦
I use a mix of fundamental and technical analysis but have been around long enough to realize (that for me at least) these probably lend little value beyond getting me into positions which contain the possibility of outsized moves in one direction and the reality of a tight stoploss in the other direction.
I am risking +/- 2% of account equity on each trade. I still think there is a good chance of blowing up here, and would risk less if the account size were not so small.
Trading instruments are to be leveraged and liquid, most major currency pairs, YM futures, SPY options etc.
Stop losses will be very tight +/- 10pips in currencies, +/- 10 Dow points, etc. I know these may seem TOO small, but they fit with my risk tolerance and my experience that:
A. the probability of getting in at a price level that will not be seen again (at least for a while) is much greater than one would expect and
B. my best trades are usually profitable right from the start.
Once I manage to get into a winning position the unrealized profits function as an increased stop loss â the further the position moves from my entry the less likely I am to get stopped out.
I realize there is a good chance here of death by 1000 cutsâ¦but it is a chance I am willing to take.
I will update the journal as I take positions and periodically in-between. You are all welcome to read and make relevant contributions! Thanks!
don't want to chase YM short here, because i'm worried about getting stopped out too many times in the overnight chop. hope is bug guys will be hedging/dumping japanese open.