Going down with the ship ...
- Thread starter aphexcoil
- Start date
I love trading, I hate trading, I am going to trade futures, I am going to trade stocks, I am going to trade options, I am going to stay away from ET for a week or two, I know nothing, I know everything, I am special, I am worthless, I love trading, I hate trading, I am going to trade futures, I am going to trade stocks, I am going to trade options, I am going to stay away from ET for a week or two, I know nothing, I know everything, I am special, I am worthless, I love trading, I hate trading, I am going to trade futures, I am going to trade stocks, I am going to trade options, I am going to stay away from ET for a week or two, I know nothing, I know everything, I am special, I am worthless......Infinite loop.
So, I decided to write my own very basic program to download quotes from YAHOO and calculate standard deviations for whatever stock I want to trade. I then pipe that through a real-time filter and use IB's quote to send me a signal of when an option may be overpriced on underpriced based on volatility levels.
Overpriced and underpriced is only the start of the evaluation process. Just b/c an option is mispriced doesn't mean there is a play there. In fact, sometimes the mispricings gives you information on directional or volatility bias in the underlying.
Also, if you are downloading EOD data from Yahoo for your program, you are almost guaranteed to get the wrong spread on most strikes. You need to look at real-time data.
I will guarantee you this much. I may blow through this account and several more before I finally figure out a distinct edge.
You should work on your edge first. The reason most new traders have to "pay a price" for the initial learning curve is attributed to the psychological aspects of trading. Other essentials to good trading- having an edge and proper money managed, can indeed be book learned. This is why you are getting so much flak here... because you talked the talk with regards to book learning and everyone warned you about the psychological aspects. When you went live trading, you not only succumbed to all the psychological terrors to trading, but also abandoned all your book learning!
My old system doesn't work with my capital level. I made a fatal error in paper-trading 50k and scaling positions only to find out that it won't apply to a 5k account. What am I going to do, by 1/10'th of an ES or NQ contract?
Must be bad system to trade on such short time frames but require 50k! At 1% your average risk is $500 on ES... and you're trading on 1m or shorter time frames? If your system requires scaling in order to be profitable then it is not a profitable system. It should be able to succeed on just one unit per trade. Sounds more like an excuse to me.
People starting out with a little capital are at a distinct disadvantage because of many SEC rules.
Some people here don't think you can trade ES with $5k, but many short-term intraday strategies can survive with a $5k account while only increasing the risk-of-ruin by a little. E.g. Your risk-of-ruin starting with $10k may be 1% but increase to only 2% with $5k. And this often assumes you are starting at the peak of the peak-to-bottom drawdown. Either save more $ or stick rigidly to your short-term trading system. Key here is short-term = small stops = small risk per trade. This is assuming your short-term method does have an edge to begin with.
This is a hard game and if you want to learn, you have to fall on your face to succeed.
Not true. Assuming you have a solid edge and trading plan with proper money management, then your ability to succeed or fail depends on your ability to follow your plan. If I paid you $10/hr to click "buy" when my Wealth-Lab produces a buy alert, and click "sell" when it produces a sell alert, I guarantee you that you will be successful over time. You are executing perfectly. The "edge" is contained within my WL program. Now take this same scenario and instead let's use your program. If it has an edge, you will be successful.
I will watch and observe options long enough to find an edge.
Just be sure to back-test what you believe to be an edge and not to simply accept short-term empirical observations, or some information gleaned from a book.
However, to just say, "hey there are better people out there than you at this" is really pointless because I can guarantee each of them went through a period of brutal first-learned experiences.
Not true. There are many who started out successfully, either by luck or combination of proper execution of trading fundamentals with a trading edge. To think that "everyone pays a heavy tuition therefore it's okay if I blow out my account" is not acceptable in my view. I realize many people on ET feel this way, but I disagree. This way of thinking may have more validity to discretionary trading, but if you study the markets, have a well defined edge that his been thoroughly backtested, you have a much higher chance to succeed than average joe trader. This is why you are getting so much crap, because you talked the talk, said all the right things, and now you're completely falling apart. Either the psychology of trading is completely destroying your ability to follow your plan, or perhaps your edge that you thought you had isn't that much of an edge after all.
Overpriced and underpriced is only the start of the evaluation process. Just b/c an option is mispriced doesn't mean there is a play there. In fact, sometimes the mispricings gives you information on directional or volatility bias in the underlying.
Also, if you are downloading EOD data from Yahoo for your program, you are almost guaranteed to get the wrong spread on most strikes. You need to look at real-time data.
I will guarantee you this much. I may blow through this account and several more before I finally figure out a distinct edge.
You should work on your edge first. The reason most new traders have to "pay a price" for the initial learning curve is attributed to the psychological aspects of trading. Other essentials to good trading- having an edge and proper money managed, can indeed be book learned. This is why you are getting so much flak here... because you talked the talk with regards to book learning and everyone warned you about the psychological aspects. When you went live trading, you not only succumbed to all the psychological terrors to trading, but also abandoned all your book learning!
My old system doesn't work with my capital level. I made a fatal error in paper-trading 50k and scaling positions only to find out that it won't apply to a 5k account. What am I going to do, by 1/10'th of an ES or NQ contract?
Must be bad system to trade on such short time frames but require 50k! At 1% your average risk is $500 on ES... and you're trading on 1m or shorter time frames? If your system requires scaling in order to be profitable then it is not a profitable system. It should be able to succeed on just one unit per trade. Sounds more like an excuse to me.
People starting out with a little capital are at a distinct disadvantage because of many SEC rules.
Some people here don't think you can trade ES with $5k, but many short-term intraday strategies can survive with a $5k account while only increasing the risk-of-ruin by a little. E.g. Your risk-of-ruin starting with $10k may be 1% but increase to only 2% with $5k. And this often assumes you are starting at the peak of the peak-to-bottom drawdown. Either save more $ or stick rigidly to your short-term trading system. Key here is short-term = small stops = small risk per trade. This is assuming your short-term method does have an edge to begin with.
This is a hard game and if you want to learn, you have to fall on your face to succeed.
Not true. Assuming you have a solid edge and trading plan with proper money management, then your ability to succeed or fail depends on your ability to follow your plan. If I paid you $10/hr to click "buy" when my Wealth-Lab produces a buy alert, and click "sell" when it produces a sell alert, I guarantee you that you will be successful over time. You are executing perfectly. The "edge" is contained within my WL program. Now take this same scenario and instead let's use your program. If it has an edge, you will be successful.
I will watch and observe options long enough to find an edge.
Just be sure to back-test what you believe to be an edge and not to simply accept short-term empirical observations, or some information gleaned from a book.
However, to just say, "hey there are better people out there than you at this" is really pointless because I can guarantee each of them went through a period of brutal first-learned experiences.
Not true. There are many who started out successfully, either by luck or combination of proper execution of trading fundamentals with a trading edge. To think that "everyone pays a heavy tuition therefore it's okay if I blow out my account" is not acceptable in my view. I realize many people on ET feel this way, but I disagree. This way of thinking may have more validity to discretionary trading, but if you study the markets, have a well defined edge that his been thoroughly backtested, you have a much higher chance to succeed than average joe trader. This is why you are getting so much crap, because you talked the talk, said all the right things, and now you're completely falling apart. Either the psychology of trading is completely destroying your ability to follow your plan, or perhaps your edge that you thought you had isn't that much of an edge after all.
Posted earlier by Aphexcoil:
"what am I going to do, trade 1/10 of an e-mini/"
Aphie, the answer is... YES!
Get your Dad's $25,000 and get your account out of reach of the PDT** monster. Then trade 50 shares of SPY as many times a day as you get a signal. ( .. 50 shares of SPY = 1/10 e-mini)
You will have to hit above the offer and below the bid on ISLD, so your slippage will be more than you will like***. Record the trades using the actual e-mini fill you would have gotten (at bid or ask only, no improvement).
When you can trade for a tiny real profit this way for a couple of months, then you can trade the e-mini successfully.
In any case, you ain't gonna do nuthin' til you get loose from the PDT** thing.
** Thank you very much thieving, lying a##holes at the SEC
*** and AMEX.
"what am I going to do, trade 1/10 of an e-mini/"
Aphie, the answer is... YES!
Get your Dad's $25,000 and get your account out of reach of the PDT** monster. Then trade 50 shares of SPY as many times a day as you get a signal. ( .. 50 shares of SPY = 1/10 e-mini)
You will have to hit above the offer and below the bid on ISLD, so your slippage will be more than you will like***. Record the trades using the actual e-mini fill you would have gotten (at bid or ask only, no improvement).
When you can trade for a tiny real profit this way for a couple of months, then you can trade the e-mini successfully.
In any case, you ain't gonna do nuthin' til you get loose from the PDT** thing.
** Thank you very much thieving, lying a##holes at the SEC
*** and AMEX.
Aphie the swing trader
P.S. Mr. Moderator, please either delete the entire post or include the image.
is this a demand, or a request ?
If I had the power of demand I certainly would request it.
LOL...you called it...
It's very educational, however, to be able to look at his cycles and see the mistakes I made when I was first learning, which isn't long ago, and reflect on them.
This was my own "cycle"-
1)moving average crossovers, purely intraday
2)complex systems with lotsa math to trade momentum, purely intraday
3)swing trading listed, using outrights and options spreads
4)tape reading, sup and resistance, trends, and volume; intraday scalping and swing positions (trying to keep it at 100% intraday these days; too much risk for overnighters lately IMO)
The first three taught me how NOT to trade. Not that what I think I do is best, but I know it's best for my personality and I can make it work.
