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Futures trading wipe out 1/4 of my account
- Thread starter innovest_11
- Start date
Quote from s0mmi:
#1 - TIME STOP
- Whenever I enter a trade, I know my time stop. Is this a trade I'm willing to 'work around' and utilise for 12-14 hours? Or is it something I want to be out of in 15-20 minutes?
-Before you enter your trade, just put a TIME in your head to get out. That's it. The time stop is the greatest stop of all. And never taught in prop shops.
#2- AVERAGING....
- Averaging MUST be done in order to succeed and make lots of money but it all comes down to the way you do it. You seem to be 'doubling down' which is, in my opinion, the quickest way to make money over 3 months then lose 3 months worth in one day.
-Next time you enter a position, I want you to mentally examine the next 'region' of price you want to enter again. And then, when it gets there, I only want you to enter with HALF (1/2) your current size. If you were long 2 gold, and it goes to your next average price, I want you to only enter with '1'. And then wait some more. Keep collecting in half size.
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It took me a very long time to work out some tweaks in performing the execution as well as a sniper needs to hit his target on a battlefield... but it's worth it and absolutely necessary.
BLIND averaging/adding to position is a KILLER. Do NOT do it.
You will recover from your loss. If you don't learn from this, your next loss is going to wipe half your account.
Cheers friend xo [/B]
Time stops are best after extensive backtesting over large sample size and over min of ten years of data, and then finding the largest 90%, should see a pattern where blunt of winning trades occur. Most knowledge is gained by examining profitable trades, we want to mimic profitable trades and finding out more than 50 reasons why the trade was profitable, micro exams of Price Action and finding the right questions/answers to define what re-occurring patterns developed to have that profitable trade. Then you want to examine "time" broken down into blocks of ten seconds of losing trades, out of this area of study is where one can take an eventual losing trade if kept long enough to changing target after proper Time Stop target hit. By using Time Stops, can alter some losing trades into breakeven trades.
Averaging down should only be considered if one's losing trades are 10% or less and reward to risk is not too inverse. Must have a hard mental stop. If losing % are low enough, ave down works extremely well on profitable trades and breakeven trades(these ultimately become winning trades).
But I seldom advise anyone to ave down, few will do what is necessary to backtest. Got to know past History, it is not in stone if current conditions will never exceed drawdowns of the past, but at least one gets general idea of how it works.
I been using Time Stops for past nineteen years, I use them on all timeframes and methods.
I enjoyed reading the posts that emphasize staying in this game, and making sure you understand you must destroy the idea that a "unrealized loss" is a real capital loss.
There's a guy who started to think that since he had a higher degree than I do, Trading must not be very hard since he appears so smart. He sends me text messages, emails and phone calls asking for help to unwind the stocks he is getting in trouble with. He won't read any trading books, no systems, no psychology, just watching Jim Cramer and buying his picks.
Staying in the game, not adding to losers, keeping your account from holding too much stock, and adding to a winning stock blowing through All-time Highs add to profits, buying All-Time Lows usually adds to your capital losses. You can't buy information from experienced traders like you get on Elite Trader, listen to this people, they know!
There's a guy who started to think that since he had a higher degree than I do, Trading must not be very hard since he appears so smart. He sends me text messages, emails and phone calls asking for help to unwind the stocks he is getting in trouble with. He won't read any trading books, no systems, no psychology, just watching Jim Cramer and buying his picks.
Staying in the game, not adding to losers, keeping your account from holding too much stock, and adding to a winning stock blowing through All-time Highs add to profits, buying All-Time Lows usually adds to your capital losses. You can't buy information from experienced traders like you get on Elite Trader, listen to this people, they know!
Quote from JesseJamesFinn:
I enjoyed reading the posts that emphasize staying in this game, and making sure you understand you must destroy the idea that a "unrealized loss" is a real capital loss.
There's a guy who started to think that since he had a higher degree than I do, Trading must not be very hard since he appears so smart. He sends me text messages, emails and phone calls asking for help to unwind the stocks he is getting in trouble with. He won't read any trading books, no systems, no psychology, just watching Jim Cramer and buying his picks.
Staying in the game, not adding to losers, keeping your account from holding too much stock, and adding to a winning stock blowing through All-time Highs add to profits, buying All-Time Lows usually adds to your capital losses. You can't buy information from experienced traders like you get on Elite Trader, listen to this people, they know!
>>> Yeah here's the thing. At my firm, I have had many trainees come thru the ranks. I'm very friendly, open, and honest to them.
Sometimes I get very close to a few, and we communicate very often through our in-house chatting system. I will actually tell them what my trades are, etc.
But here's the thing, it's not good enough. To just tell someone to get long or short something means nothing. There are a multitude of variables and what-ifs that come alongside with it. Things like executing the first entry size, risk, scaling in/out, where do you average, what's your time-stop, what's your target... etc. etc. etc.
>>> For all we know, Jim Cramer could have a 80% win rate over a 3-year holding period with his picks. But on the 20% ones that he gets wrong, maybe they are catastrophic losses and require time-stops?
See, I hope I open some of the minds reading this post. It's very possible there are pearls all around you, but trading is not about that. It's an art.
>>> The best traders at my firm have plans. Before they enter, after they enter, and as the trade happens they are thinking about more entries, more exits, etc. This doesn't just happen overnight, you need to pump thousands of hours into the game. This is how I think as well.
Good luck friends