Distribution of wins/losses

[Hooti]

....my issues are with holding winners and its a struggle. ...If on these 27 trades I hit either -3 or +5, I would be 50 points ahead on only 9 trading days...

KP, there is another exercise you might consider that takes some variables out. Establishes a baseline truer for yourself.

It might sound like going away from your long term goal, but you can break what you are doing into smaller pieces to work on them. Consider making your reward to risk 1:1. And make the target/stop smaller, say, plus or minus 1 or 2 (I’d make it so each trade gains or loses $100 or $150 just for the sake of the math)… so that what you are isolating is your ability to see and take an entry. Don’t worry at all about trade management: Once you place an order, it is going to hit the target or stop.

This eliminates all of the issues around holding for winners. Tell yourself that once you prove the viability of your entry, you will have real data on which to build a trade management strategy.

While you are doing this exercise don’t look at your P&L at all… you just want to do a week’s worth of trades and see the math at the end. It will give you essential info to build on. Even if you lose money, it’s worth it to get the data – decide that you are willing to pay the tuition even at the max... so don’t worry about that, choose to not think about it until it’s over.

You might be surprised how profitable 1:1 can be.

And this is a great exercise in not moving your stop or target once a trade is in place. And not worrying about the money. These alone can make you profitable.

This is an outrageously simple exercise, but the experience of it will have long lasting benefits. It will clue you into what kind of trade management plan will work for what you are seeing as entries. Maybe with some more solid information the struggle will be less for you.

 

[k p]

KP, there is another exercise you might consider that takes some variables out. Establishes a baseline truer for yourself.

It might sound like going away from your long term goal, but you can break what you are doing into smaller pieces to work on them. Consider making your reward to risk 1:1. And make the target/stop smaller, say, plus or minus 1 or 2 (I’d make it so each trade gains or loses $100 or $150 just for the sake of the math)… so that what you are isolating is your ability to see and take an entry. Don’t worry at all about trade management: Once you place an order, it is going to hit the target or stop.

This eliminates all of the issues around holding for winners. Tell yourself that once you prove the viability of your entry, you will have real data on which to build a trade management strategy.

While you are doing this exercise don’t look at your P&L at all… you just want to do a week’s worth of trades and see the math at the end. It will give you essential info to build on. Even if you lose money, it’s worth it to get the data – decide that you are willing to pay the tuition even at the max... so don’t worry about that, choose to not think about it until it’s over.

You might be surprised how profitable 1:1 can be.

And this is a great exercise in not moving your stop or target once a trade is in place. And not worrying about the money. These alone can make you profitable.

This is an outrageously simple exercise, but the experience of it will have long lasting benefits. It will clue you into what kind of trade management plan will work for what you are seeing as entries. Maybe with some more solid information the struggle will be less for you.

Hey Hooti... sorry I missed this. I would have replied sooner but somehow I didn't get the email.

You're absolutely right about this and I have thought about this as well. I have to tell you that I'm really shocked to discover that I hold for a full 3 point stop, but I have trouble holding for a 5 point profit. That is some messed up psychological issue! LOL

The nice this about 1:1 and a 3 point target/stop is that it would hit faster, so I know sooner the outcome, and can hopefully move on quicker regardless of the outcome. But, I also know that in terms of money, this will be detrimental. Even if I hit a 50% win rate (which really should be higher if I was already getting 67% from my very smaller sample but with a 5 point target), but lets just assume that it was 50%, then I would actually be negative after commissions and slippage. So although there might be some benefit to being done with the trade faster, since the overall strategy would actually perhaps lose more money, this might be more damaging in the long run.

Honestly, my dream was really to be able to work with a mentor, even if for just a week. I wanted to put on a trade that the mentor perhaps also thought was decent. This way, at least I wouldn't be the only one wrong (how messed up is that.. LOL), but I could also help be guided into the next trade, to be helped to move on quickly as opposed to wonder where I went wrong with the trade (and most times there isn't even anything to wonder about as the trade was legit, regardless of the outcome). Because I spent quite a bit of time doing things wrong and losing money in the process, I'm a little gun shy right now so to speak and just wanted a bit of hand holding perhaps.

But this has been exceptionally impossible to find so its an issue I have to solve myself. It will perhaps take more data, another few weeks of seeing that early exits are causing me to not collect profits, and maybe just being sick of myself with having put myself into this rut will make me finally start to do it right. There is clearly some fear inside of me that is working overtime.

 

[Hooti]

The nice this about 1:1 and a 3 point target/stop...

Honestly, my dream was really to be able to work with a mentor, even if for just a week.

Yes, fear and all that. I've certainly been there.
I paid for a mentor early on in my training. They sat with me on-line for an hour a day for 3 months. Then they let me sit in for free on a "trading lab" for an hour a week... they let me do that for 2 years. Normally they charged for the lab but the mentor said they had never seen anyone work as diligently at it as I did, and they liked my input.

And they were competent. Still, that didn't do it for me.

At least in my experience, trading is weird. It has taken me years to... it's like the thread something about why the obvious isn't obvious. I could sit trading with a mentor and watch success and not be able to 'get' it. NoDoji said she had the same experience over a year with a mentor. We both learned something, but there is something about trading that is different from anything else.
For me it is like pealing another layer of the onion. I go around the same thing over and over -- maybe a little deeper or with a little different experience -- and all at once it starts to make a different kind of sense. I hear the exact same words or ideas but they just mean something different. All the mentoring in the world couldn't help me hear it before I had... I guess enough experience to be able to hear it.

I think a mentor who could get you off on the right foot would be great... but it was to late for both of us on that one apparently. I don't think very many mentors can help us when we are in fear. Other than prove success can happen.

I remember talking to one group who said they could take a consistently break even trader and help them. But very very few losing traders could work through the fear by being around successful traders. You have to do that on your own time.

Which is kind of what I've done. I was always up (for months even), then would lose my way. It was the most frustrating thing, but layer by layer the onion has gone by. The fear is gone. Can't remember the last time I had that old gut clinch. Mostly by not thinking about the money, and thinking about process instead. I finally became consistent inside myself. Took forever. And things the mentors said before that just didn't make sense... fit together better now.

A lot of the changes happened by coming up with homework assignments like the one above. In fact, that particular one was pivotal for me. It was a lot more profitable than I expected. In hindsight it likely was because I eliminated thinking about winning or losing -- I just wanted real data about my win rate for the entries. I'd decided the max loss possible and was good with that if I got real data for myself. So I inadvertently stopped worrying about the money. Afterwards, as soon as I started being aware of the money again for each trade, I started losing. Some lights went on. And having an actual basis for a successful win rate, my plan shifted to build on that. And I kept coming up with more homework assignments.

I don't know how it will work for you, but taking little bites... having actual experiences... I don't know any other way you can get there.

You are having insights into your trading... I hope you find your mentor or whatever works for you.

 

[Trader22]

I think there's been a handful of traders here on ET who have claimed to be able to do this everyday, but we need to remember that these traders are the exceptions and the best of the best. Probably best not to let their reults interfere with ones own trading.

When i scalp ES i have 75%+ win rate. Options a bit lower

 

[k p]

I think a mentor who could get you off on the right foot would be great... but it was to late for both of us on that one apparently. I don't think very many mentors can help us when we are in fear. Other than prove success can happen.

Interesting experience, thanks for sharing. I do agree that the timing is crucial. Just because you can get a mentor doesn't mean that you're ready for one. At the same time, not getting a mentor in time can be highly destructive. A trading style also has to match your personality, and until you actually try to do this yourself and fail, which at the very least shows you what type of trader you're looking to be, then getting set up with a mentor too soon would also not be that useful.

But the thing is that each trader is essentially re-inventing the wheel and this doesn't need to be the case. If scientists never shared what they discovered and published it, future scientists couldn't build on that work. I think most of the time is actually spent first looking for a method, undoing previous damage, and finding out what is necessary and what over complicates this without adding anything useful.

The beautiful thing about what you suggested is that it allows a trader to think in terms of series of trades and not be focused on any one outcome. When you're new, its extremely difficult to analyze if a losing trade is the result of of actually taking a trade that didn't have the odds in its favor, or just one of those that doesn't work as per the normal distribution of wins and losses.

Out of curiosity for the benefit of others reading this in the future, can you comment about how you went about finding your mentors? These days, I think its almost next to impossible to find someone. I almost want to discredit any source on the internet that advertises since I believe a successful trader shouldn't need to have a trading business.

Someone posted a link in another thread to one they recommend, and when I looked at their months worth of data, seeing profits of only 1-2k per month sometimes (for many months), along with an entire month that had a loss, makes me really wonder how much of this person's income actually comes from trading versus teaching to trade. Sure they are profitable overall, but if you aren't making at least 100k a year from trading, and hence have trading replace your job, something is wrong.

I believe that the best mentors will actually help for free, don't do it for the money/business, of course don't advertise, and are impossible to find. Its not a matter of finding a mentor, its a matter of being lucky enough to be in the right place at the right time where a generous individual offers help.

Anyway, so since you say you've actually used one, and there are hardly any reports of anyone ever commenting on using a mentor, can you almost do a little interview style summary? How did you find them? How much did you spend? Did you see how profitable they were? Was this important for you to see? How much did they disclose to you about their own trading? (ie. how much transparency was there) Everybody seems to have comments about mentorship on this forum, and yet, I don't think that most have ever been a mentor, or used a mentor, so all the discussion about mentorship is mostly fluff based only on preconceived notions of what might be involved.

Oh.. and before I forget, I fully agree with you that having real data, with real trades and making/losing real money is pivotal. Sure sim trading has its place, but the nature of the trading beast really only comes to light when you are doing it for real. Almost every successful trader here whose background story I am familiar with has said they used to lose for years, so this is an interesting statistic.

 

[Trader22]

Interesting experience, thanks for sharing. I do agree that the timing is crucial. Just because you can get a mentor doesn't mean that you're ready for one. At the same time, not getting a mentor in time can be highly destructive. A trading style also has to match your personality, and until you actually try to do this yourself and fail, which at the very least shows you what type of trader you're looking to be, then getting set up with a mentor too soon would also not be that useful.

But the thing is that each trader is essentially re-inventing the wheel and this doesn't need to be the case. If scientists never shared what they discovered and published it, future scientists couldn't build on that work. I think most of the time is actually spent first looking for a method, undoing previous damage, and finding out what is necessary and what over complicates this without adding anything useful.

The beautiful thing about what you suggested is that it allows a trader to think in terms of series of trades and not be focused on any one outcome. When you're new, its extremely difficult to analyze if a losing trade is the result of of actually taking a trade that didn't have the odds in its favor, or just one of those that doesn't work as per the normal distribution of wins and losses.

Out of curiosity for the benefit of others reading this in the future, can you comment about how you went about finding your mentors? These days, I think its almost next to impossible to find someone. I almost want to discredit any source on the internet that advertises since I believe a successful trader shouldn't need to have a trading business.

Someone posted a link in another thread to one they recommend, and when I looked at their months worth of data, seeing profits of only 1-2k per month sometimes (for many months), along with an entire month that had a loss, makes me really wonder how much of this person's income actually comes from trading versus teaching to trade. Sure they are profitable overall, but if you aren't making at least 100k a year from trading, and hence have trading replace your job, something is wrong.

I believe that the best mentors will actually help for free, don't do it for the money/business, of course don't advertise, and are impossible to find. Its not a matter of finding a mentor, its a matter of being lucky enough to be in the right place at the right time where a generous individual offers help.

Anyway, so since you say you've actually used one, and there are hardly any reports of anyone ever commenting on using a mentor, can you almost do a little interview style summary? How did you find them? How much did you spend? Did you see how profitable they were? Was this important for you to see? How much did they disclose to you about their own trading? (ie. how much transparency was there) Everybody seems to have comments about mentorship on this forum, and yet, I don't think that most have ever been a mentor, or used a mentor, so all the discussion about mentorship is mostly fluff based only on preconceived notions of what might be involved.

Oh.. and before I forget, I fully agree with you that having real data, with real trades and making/losing real money is pivotal. Sure sim trading has its place, but the nature of the trading beast really only comes to light when you are doing it for real. Almost every successful trader here whose background story I am familiar with has said they used to lose for years, so this is an interesting statistic.

The best mentors will help you for free. If you EVER pay someone to make you a better trader it is 100% a scam

 

[Hooti]

The best mentors will help you for free. If you EVER pay someone to make you a better trader it is 100% a scam

I didn't find it 100% scam. The people I was with were competent and tried to help. Day trading is just something that in a peculiar way most people find they can't do -- at least at first -- even when shown exactly how to do it.

I'm wondering if moderators will think I'm promoting something to comment on who... but I understand they have changed all the people I dealt with, so I have no way to know if they are good now or not. I was doing real estate with the "Rich Dad/Poor Dad" guy and was able to do their program for that. Then at a taping for real estate for a PBS special... while testing the mike before they started Robert Kiyosaki said he would answer questions. One guy asked if Robert lost all his assets, with what he knows now, how would he start over? He responded by saying that while we were here to talk about real estate, if he had to start over he would do paper things like options and futures. I sat up in my chair and said I'd never heard that before.

So I signed up for some classes. Then hired their mentor for futures. etc. etc. But while I found it valuable, it certainly didn't take me into success. It did give me some basis for it I guess. In talking to the other students... the one's who already had a measure of success were able to do better. The one's like me who already had a bit of fear by the time I hired the mentor... none of the one's I talked to were able to move through the fear to success during the time I talked to them; and that was over a year or so. I don't fault the mentor for that.

I still use things I learned there. But working through the fear/greed I had to do on my own and in my own time. I think that is just the way it is. I'll never know if a mentor early on could have kept me from falling into fear, or being able to work my way out of it sooner.

Sure sim trading has its place, but the nature of the trading beast really only comes to light when you are doing it for real. Almost every successful trader here whose background story I am familiar with has said they used to lose for years, so this is an interesting statistic.

Yes, I lost for years also. Thought sim and live where like comparing apples and oranges; and that was my experience. Doing sim was a total waste of time. But after listening to a Mark Douglas video he said something about the value of sim trading and that any difference with live was psychological. You know, if you take worrying about the money out of live trading (or even awareness of the money)... it is no different from sim. While there is certainly a truth to live being live and sim being sim... After thinking about what Mark said I gave more thought to ways to not allow thoughts about the money to come into my thinking when either doing sim or live. I don't think about the money until the end of the week or month.

I now can work things, ideas, out in sim and they transfer very close to 100% to my live trading.

edit: It wasn't until I was looking for ways to take the money out of my thinking that I realized that is what I'd done with the 1:1 assignment I'd given myself. [I tried doing CL with a 10 tick stop & 10 tick tgt. I just wanted to isolate my entries from trade management; so for the assignment I wasn't going to move either my stop or target once in a trade.] It was one of my most profitable weeks up to that time. Shocked the heck out of me. But then for some reason I couldn't keep it working. I realized after the fact that the failure to repeat it was pretty much just to starting to think about the money again.

So later when thinking about sim and live I realized I had been able to not think about the money for a week one time long ago. I went back and worked with *that* aspect of what I'd done, and the trick to improvement wasn't the size of my stop or target, or that my entries had a success rate -- it was that I stopped thinking about the money for a week and also stopped moving my stop to BE as soon as I had any profits.
Yes -- I did learn that my entries were working and had a success rate.
BUT the thing that made the far and away biggest difference was knowing I could get the money out of my thinking... I'd done it once, I could do it again.

That changed everything.

But I didn't even recognize it at first. It wasn't what I was trying to do.
I'm sitting here just shaking my head in amazement at how long it took me to figure out what was right in front of me.

 

[k p]

I'm sitting here just shaking my head in amazement at how long it took me to figure out what was right in front of me.

Wonderful summary... thanks Hooti!

I'm not surprised that the mentorship didn't help more actually. From what I understood of your experience, it was just too soon. In a way, you might have been shown the right way, before you even knew what the wrong way was. Plus, it seems like at the time you didn't have a passion for it, they were just showing you stuff when you knew nothing about it.

I do agree that the only difference between live and SIM is the money, and hence its a psychological issue.

Not being able to see what was right in front of you isn't all that accurate in my opinion. Don't get me wrong, I feel this way often times as well for so many different things in life, but I try and remember that it wasn't really right in front of me if I didn't see it. Its like a job interview that you go to for a great job you really want. If you didn't get the job, you might think you blew the interview, but perhaps the job was never yours to begin, never an option. They might have already had someone in line but had to still interview more people to fulfill some regulatory requirement.

So with trading, although it appears as if it was right there all along, when its all a different language that you cannot speak, I try and be kind to myself by remembering that it wasn't really there just yet, as if it was only my incompetence or ignorance that got in the way of seeing it. I simply didn't have the tools yet to read/understand it.