From Micros to Millions: 2% per day

[IamTheCasino]

This is strange man. You have outstanding success according to your numbers, and still quit this again, to "refine" something that cannot be refined ? All you would have to do now is to keep trading, keep growing the account like you did the past 4 weeks and slowly add size when possible.

Thats what I try to warn new traders from... having unrealistic goals that can not be sustained for a longer period of time (2% per day), and then always hopping back to the drawing board, trying to "improve", perfect the system, the methods.

It is not about the system, the methods. Once you learned the basic mechanics of the markets there is not much you can tweak or improve in theory. All you should focus on from there is to step into the ring every day, interact with the market, do your trades, learn a bit every day, gain experience, and slowly grow your account. Not by 2% a day. But more something like 0.2% per day.


“Most people overestimate what they can do in one year and underestimate what they can do in ten years.” -- Bill Gates

Its really a sad state of affairs Ive seen here on ET lately. Excuses after excuses.

Go into the market everyday with no more of a goal than to be green - instead of this n% a day BS. You might find that you make a lot more than that on some days. As long as you lose significantly less money than you make - whats the problem?

Your "problems' will only be solved by being in the market. I never got the fascination of people looking at bigger time frames to try and predict whats going to happen for the day - everyday is new.

Find some type of "indicator" that can keep you in the market longer than what you are currently doing - but that shouldnt cause you to stop trading all together. Better to make a little and work out your kinks than make negative.

The idea about constantly refining your process is in the hopes you find something that is a 90% success rate where you can make 20pts a trade and trade 50 times a day.

It aint happening. Better to take 10 trades a day for 5pts a piece with the understanding that you WILL lose at some point, its inevitable. You can win for 4 days in a row, 8 days in a row, and then lose for 1 or 2 in a row. You are still majorly in the green.

 

[tiddlywinks]

I do wish him well.

His track however has two major flaws as far as I am concerned.
1) He has failed to scale up his size based ON HIS OWN rules. There is always a reason why he "can't"... He has a fear problem that he must address.
2) He has bailed on the "experiment", for whatever reason, TWICE in the (not distant) past.

I am not seeing much difference this go around.

until next time, stay well @sstheo

 

[Gaslight Capital]

However I will say, OP has been an extreme gentleman in the journal.

I agree, and it is a rarity indeed here at ET it would seem. For example, there's this guy goes by @themickey ...

 

[Overnight]

It seems sstheo just got a taste of the crazy while now trading his own scratch, as a contrarian, instead of spending the $150 or whatever on a combine reset. He made some money, and was scared to death while doing it. Like he said, the psychology of it can be brutal, so he is taking a rest from it. Nothing wrong with that. It is very hard to scalp in markets like this.

Once we have the new president-elect, we'll see some crazy through December, but once Jan 20th passes, things should settle down. Just in time for Q4 earnings! Markets up, VIX down!

(And boy was I totally wrong about VIX to 50 on this one! DAYUM!)

 

[BlueWaterSailor]

(And boy was I totally wrong about VIX to 50 on this one! DAYUM!)

You and me both, bubba. I've got a VIX trade on right now that I'm thinking of just walking away from... but hey, [ghoul_mode]maybe there will be riots![/mode_off]

 

[Laissez Faire]

However, the volatility of the last two weeks has really shown me some big weaknesses in my method

I almost always take profits way too soon.

I suggested to you earlier that you could experiment with trailing a stop behind price. Just by luck alone you should be able to capture a few big ones with this method assuming your entries are generally good.

The optimal long trade on any time frame is to buy near a swing low and sell near a swing high and vice versa for a short.

I am guilty of moving stops more than once in the last 3 weeks. "Stop-moving" is the main problem I have had since I started 15 years ago, and something I have preached against repeatedly on these pages. I am a lucky hypocrite, because blowouts are the inevitable result of this dangerous behavior.

This is something you need to address.

I think part of why you do this is because you use wide stops and know that a big stop will take away a lot of your smaller profits.

I haven't yet been able to eliminate my big picture bias, and it gets me into a lot of trouble.

A random bias is deadly - unless you have a strong reason for technical bias. I'm here differentiating between a bias in 'what you think should happen based on feelings/intuition/common sense' and a technical bias where your system tells you what's most likely to happen.

Try to have a neutral mindset.

Even a bear market will rally and even a bull market will plunge. Roughly speaking, every day will either go up or down. As a short term trader you shouldn't be concerned with the weekly or daily trend beyond maybe helping you to anticipate today's direction in light of that.

I still screw up at the open on most days and go the wrong way. (Starting the day with a loss really sucks.)

Easy. Stop trading the Open, then. Or make a rule to for example wait until the 15 minutes before you trade.

Often, the Open will have a strong counter move prior to the daily Main Move. So you can easily be whiplashed if you don't know what to expect for the day ahead. But I didn't think it should matter that much for a scalper as your profits would be small anyway.

Despite the short-lived 4 week sojourn back to ET, I have decided that I am going to step away from live trading for a while to refine my system even further. I will address the issues above and consider other things to help me succeed as a trader who really wants to go full-time. (The Covid-19 world of real estate has really worn me out.)

That's not a bad decision if you feel that's needed, although you seem to be doing well? Or is the actual truth that you had large unrealized losses from moving your stops and feel that maybe there's a bit too much luck behind your profits?

But I'd like to echo what @CALLumbus already said about the daily 2% target. I don't think it's a good idea.

Some days the market offers a lot. Some days it offers less. And some days there will just be crumbs.

Optimal trading is about taking as much as you can from what the market offers. That's nothing to do with a fixed x % profit goal.

Having a profit target may not be a bad idea, though. I just think 2 % is too high and not sustainable in the long run.

But having a goal of being profitable/green every day is a good one, I think.

Either way - good luck in trading and life!

 

[Laissez Faire]

My opinion, short term trading leads to high stress.
These stresses impact you negatively in all areas of your life, bad nerves, bad temper, sleeplessness and one becomes more prone to making mistakes.

I feel the other way to be honest.

When I have overnight trades on or swing trades I'm constantly thinking about it and checking my positions. Even if it's well in the green. That's when I lose sleep and may even wake up in the middle of the night and check positions on my cell phone.

I won't lie and say my short term trading is stress-free, but stress levels are fairly low and when I'm done for the day and FLAT I sleep like a baby.

IMO, high stress levels in short term trading comes from not knowing or trading with too high leverage. Of course, it may also be that some people generally are not suited for this kind of activity as is the case with everything else in life.

 

[Laissez Faire]

i wonder at what point should we call it quits? i remember in one of shark tank episodes, kevin stated that if the business is not working after 3 years, do something else. In the realm of trading that could be a different strategy and not doing the same shit over and over again. but at what point do we walk away altogether? At some point you gotta say, trading is not for me? what is that point of no return, cause obviously running out of money aint it lol.

Someone enlighten me cause i'm at that fork in the road with trading. i'm thinking i should invest in managers programs like you see in collective 2 site and just forget about doing it on my own. Then focus on other worthwhile money making schemes.

This is a very hard question to answer, I think. Generally, I'd say most people underestimate what it takes to become a successful trader and 3 years in this business is just about enough to get a general overview of the markets and various strategies. That's for the lonely retail trader without a mentor or guidance. Most people I've talked to who succeeded in trading took about 10 years before they became successful.

As for calling it quits - here's some general questions which might helpful:

1. Do you have an idea at all about how the markets move or is it still a big puzzle for you?

2. Why are you not yet successful? Lack of methodology? Or poor risk management?

This is interesting, because there are people who may have a a successful method or even a very small edge, yet lose because their risk management is horrible.

3. Do you find trading and studying trading enjoyable?

4. What else would you do with your time if it's not spent on trading? Is there something else you'd find more enjoyable and profitable?

Also, remember that it's not necessary to keep losing money while learning trading or developing a system.

 

[QTrader20]

A reality check is that you can only take what market offers everyday, not by what you need to take.

Treat every trade likes a very last trade using highest probability setups. You'll be amazed to yourself that scalping or day trading isn't as stressful as many people imagine. Once you build your confidence you can begin to trade ES/NQ so you can put more foods on the table.

Good luck to you and yeah, I'll also spend much less time on ET and more times on other things to keep myself healthy

 

[syswizard]

A reality check is that you can only take what market offers everyday, not by what you need to take.

This is very important to understand and embrace. Each instrument changes almost every trading day.....it morphs.
The challenge is to create a way to measure the PA in these markets and then to adjust your bet size accordingly.
Is the market.....
1) trending
2) chopping
3) flat-lining (this really sucks of course)
4) sine-waving (a killer for trend-following systems)
5) range-expanding or range-compressing
What I am suggesting is that a portfolio approach is needed here. That means trading multiple instruments with multiple diverse systems. For the systems types we generally have:
1) trend following
2) counter-trend
3) mean-reversion
4) scalping
Finally, matching up the system to the type of PA in the particular instruments you are trading is the final challenge. For instance, if the market is chopping, then scale back the betsize on the trend-following system (or stop trading it altogether)....and increase the betsize on the counter-trend system.
In the end, there is no simple solution to consistent, profitable trading.