How do you handle big draw-downs the next day?
- Thread starter Bolimomo
- Start date
Nice post. Yes there's a clear difference and distinction.
Dude no offence but you are a fucking idiot! Saying discretionary trading is a losing game is just stupid! Every successful trader I know (and I know a lot of legends here in Chicago) are all discretionary traders. Saying that you need a system to maintain discipline just explains how poor your discipline really is! Having a system is the worst thing you can do especially in this volatility......you have to be able to change and adapt as the market moves during the day. By being forced to follow a "system" puts you at an extreme disadvantage.
A good post by an 18 year old who is grossing as much money as 99% of ET. There's a few system guys racking up solid returns managing money like my namesake Bill Eckhardt but neither have I ever known a system trader who achieved extraordinary, life changing personal returns.
I tend to disagree with changing anything when you are in a drawdown, except for your patience in picking market opportunities. The math just doesnt work out when you start changing position sizes(up or down), and you definately dont want to go all in when you arent seeing the market well.
I posted on this just a few weeks ago when I was in a drawdown here:
http://tickjunkie.blogspot.com/2009/03/just-keep-swimming.html
Oh, and as a purely discretionary trader who IS profitable, I would take everything you read from this board with a grain of salt (my advice included). The one thing I know about trading is that every single person is completely unique in how that make money.
I posted on this just a few weeks ago when I was in a drawdown here:
http://tickjunkie.blogspot.com/2009/03/just-keep-swimming.html
Oh, and as a purely discretionary trader who IS profitable, I would take everything you read from this board with a grain of salt (my advice included). The one thing I know about trading is that every single person is completely unique in how that make money.
http://www.youtube.com/watch?v=PqqzqwxCN0M
who cares as long as u are making money u r a trader.. who cares what style of trading only that u r good at it.
I would tend to agree with Robert Weinstein and IShopAtPublix sentiments. 4k probably isn't the end of the world if you are making $1000 per day average. Simple answer is trade what is in front of you. Only you have a memory, the market doesn't. However, if the losing streak continues, don't be too proud to take a few days off to get your head together and get some perspective.
Good trading.
Good trading.
Thank you all kindly for your comments.
I know I have lots to improve on my trading methodology, risk management, and psychology. As do many traders. I know my approach to trading is far from perfect. And everyday, every trade is an opportunity to improve myself.
But to immediately say outright that I don't freak'ing know what I am doing IS NOT USEFUL. Rightly or wrongly, I have been consistently profitable for the past 4 years and I have been making a comfortable living off it, far better than any professional engineer (which is why I quit my "day job" a while ago). Trading is my sole source of income.
We traders all have drawdowns. It could be a one big red day or even if I use a day-down-limit a series of drawdowns to accumulate to $4000 (by the way this figure is just a made up for the purpose of this discussion). I am interested to know the psychological burden on the trader in getting back up and how it affects his/her next move.
Those pit traders in the S&P pit: aren't they discretionary traders? They stand in the pit all day, waving their hands in the air while thinking on their feet how to do the next move, watchingout for any hint of a market direction change. Do they have time to nicely draw a line on a chart (what chart?), pinpoint their entry/exit/stop and their "R" before jamming in front of the next guy trying to catch the next order? Are you saying these traders are all failed traders (or doomed to fail?)?
I know I have lots to improve on my trading methodology, risk management, and psychology. As do many traders. I know my approach to trading is far from perfect. And everyday, every trade is an opportunity to improve myself.
But to immediately say outright that I don't freak'ing know what I am doing IS NOT USEFUL. Rightly or wrongly, I have been consistently profitable for the past 4 years and I have been making a comfortable living off it, far better than any professional engineer (which is why I quit my "day job" a while ago). Trading is my sole source of income.
We traders all have drawdowns. It could be a one big red day or even if I use a day-down-limit a series of drawdowns to accumulate to $4000 (by the way this figure is just a made up for the purpose of this discussion). I am interested to know the psychological burden on the trader in getting back up and how it affects his/her next move.
Those pit traders in the S&P pit: aren't they discretionary traders? They stand in the pit all day, waving their hands in the air while thinking on their feet how to do the next move, watchingout for any hint of a market direction change. Do they have time to nicely draw a line on a chart (what chart?), pinpoint their entry/exit/stop and their "R" before jamming in front of the next guy trying to catch the next order? Are you saying these traders are all failed traders (or doomed to fail?)?
What is so wrong with being a discretionary trader? How would you describe a trader who has so internalised his "system" that he knows when to buy and sell and so on and so forth without resorting to some computer program? A "system" is just afterall an approximation of a human decision making process which is at best discretionary.
I suppose it's the case that someone so misguided might actually think statements like this would carry any weight.