Disillusioned
- Thread starter BertH
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Quote from Cheese:
There is always a lot of talk about risk management.
Simplistically, what is it? It has to mean that you stop out loss positions and don't oversize entries in relation to your deployed capital.
The key ingredient is never oversize your entries or total entries in relation to your trading capital.
If all or most of your trades are successful it pretty much puts risk management in the back seat. What it comes down to is the amount or proportion of trading you do which is unsuccessful (ie losses). The weaker your trading methodology the more important would be your risk management.
wtf??? a cheese post that doesn't put someone down??? Without profanity? A cheese post that actually attempts to contribute something without lapsing into teenage spew?
What the hell is the matter with you, man?
sheesh.
Don't equate lack of success with trading with failure in life. People are wired up for different things.
You want an example? Years ago I took a call from a Swiss bank of the type I associate with self made not inherited money. He was very up front. He had a very valuable client who had suddenly decided he wanted to trade FX. The bank had an FX desk and could have accomofated his trades but they had been there before and their experience was that clients lost and this association of FX losses with their banking business was not good as it associated losses with their bank. First rule of private banking is don't lose money for the client, make him 5% when you should have made him 30% but don't lose it.
Point is there are people who can generate the kind of fees off their asset base to interest Swiss bankers who fail at trading.
Don't think I am breaching any etiquette here as the banker was very open on a first call and it was a long time ago and no names are mentioned.
Professional businessmen know when it is time to take the equity out of a business and invest it in something that will give a better retuirn. Nothing is achieved without MAJOR determination and resilience but amateurs get too wrapped up in a dream or in succes/failure pride dynamics until the bank stops the cycle by reposessing their home.
That said, don't lose sight of the fact that the last 2 years have not been especially easy for anybody, just look at Hedge Fund returns.
You want an example? Years ago I took a call from a Swiss bank of the type I associate with self made not inherited money. He was very up front. He had a very valuable client who had suddenly decided he wanted to trade FX. The bank had an FX desk and could have accomofated his trades but they had been there before and their experience was that clients lost and this association of FX losses with their banking business was not good as it associated losses with their bank. First rule of private banking is don't lose money for the client, make him 5% when you should have made him 30% but don't lose it.
Point is there are people who can generate the kind of fees off their asset base to interest Swiss bankers who fail at trading.
Don't think I am breaching any etiquette here as the banker was very open on a first call and it was a long time ago and no names are mentioned.
Professional businessmen know when it is time to take the equity out of a business and invest it in something that will give a better retuirn. Nothing is achieved without MAJOR determination and resilience but amateurs get too wrapped up in a dream or in succes/failure pride dynamics until the bank stops the cycle by reposessing their home.
That said, don't lose sight of the fact that the last 2 years have not been especially easy for anybody, just look at Hedge Fund returns.
Quote from Cheese:
There is always a lot of talk about risk management.
Simplistically, what is it? It has to mean that you stop out loss positions and don't oversize entries in relation to your deployed capital.
The key ingredient is never oversize your entries or total entries in relation to your trading capital.
If all or most of your trades are successful it pretty much puts risk management in the back seat. What it comes down to is the amount or proportion of trading you do which is unsuccessful (ie losses). The weaker your trading methodology the more important would be your risk management.
Simplistically speaking, the minds of some of us are truly simple. Isn't it?
The last week I don't know what happened. My account size is crippled,... I had 95% of the trades going in the wrong direction. I can hardly believe it... how many people get 25 trades in-a-row wrong? I must have got a special talent for this?!
I didn't do anything else, like greater risk, more contracts, larger stop size... No, it all just went wrong in one week.
Anybody experienced something similar? And what about stats for this one? Someone told me to do exactly the opposite of all my trades... I did that (on papertrading) and again lost massively... I'm at a loss here, I can't put it better than the thread originator I'm disillusioned, frustrated and lost ...
I didn't do anything else, like greater risk, more contracts, larger stop size... No, it all just went wrong in one week.
Anybody experienced something similar? And what about stats for this one? Someone told me to do exactly the opposite of all my trades... I did that (on papertrading) and again lost massively... I'm at a loss here, I can't put it better than the thread originator I'm disillusioned, frustrated and lost ...
As you say you "don't know what happened" then you have your answer.
You don't know.
You shouldn't be trading. But like all the other countless lemmings who start trading, its your money to blow away. The analogy is you are going to jump into a deep rip tide off the sea coast although you haven't yet learnt to swim .. little chance of survival!
Quote from Cheese:
As you say you "don't know what happened" then you have your answer.
You don't know.
You shouldn't be trading. But like all the other countless lemmings who start trading, its your money to blow away. The analogy is you are going to jump into a deep rip tide off the sea coast although you haven't yet learnt to swim .. little chance of survival!
Well let me correct that: I do know what happened, i.e. all my trades went in the wrong direction. Unfortunately I don't have a valid explanation for it! I've checked and double checked every trade and they were all conform my rules... none of them were impulsive ones so how do you analyse a consistent failure like that? I'm puzzled...
Some possibilities:
1) Your rules were wrong, i.e., they were never positive expectation even though you thought they were
2) Your rules are right, and market action was a statistical outlier last week
3) The dynamics of the market - that your rules depend on - have changed, making your previously right rules wrong
The fact that you would just "trade the opposite of your rules" when things went bad is a huge red flag, though, and shows you have no idea what you're doing.
Fletch
Well how long have you been checking or using your signals for entry? What market or instrument are you trading?
If you have a thoroughly tracked and tested methodology and assuming you enter on the signals it gives and assuming too that there is a rare time when the signals prove false then on a fast chart (ie 1min) you are going to know within the next bar or the next few bars that you are wrong. You would have to stoploss.
However stoplosssing requirements arise from a weak or simplistic or incomplete methodology.