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How much money have you lost before figuring it out???
- Thread starter jinxu
- Start date
I lost about 5k over 5 years when I thought I could be a day trader.
I swing trade now. Sometimes hold for a day to a couple of weeks. I always take on a partial hedge using weeklys or front month options. The best decision I ever made. It reduces my profit for the insurance (sometimes)but if it sure make trading alot easier. Especially in this market where stocks are getting crushed on any hint of bad news.
I go long, I buy puts. If I am correct my put loses value but I make up for it in my long position, if I am wrong I let the puts ride and and get stopped on my long for a small loss. As I go to close my long I buy calls setting up a strangle. Then trade in and out. Sometimes they expire worthless, sometimes I make a little and lately sometimes I make alot. Sometimes I leg into them to reduce the loss and sometimes I leg in and get the free trade plus the spread (if it hits, god do I love those). Lately I have made money on both due to the volatilty over the course of the month. Normally my strangles are 1 strike away. Lately I have been trading Bidu and using 2 strikes OTM and raking in 200 to 400%(and thats just my insurance). It's been working great. Makes me sleep easier at night as well.
I don't use any system or programs. I don't trade 50 times a day for nickel. I use MACD, volume , S&R levels and 50,100 and 200MA. and my 6th sense. Thats it. ( I do keep an eye on the fundies as well) I basically study price action and get a feel for sentiment and one can see that sentiment in the price of calls and puts. One can see where the bias lays. I watch the markets from 7am to 8pm and absorb all the info I can and filter out what I feel is relevant and what is not. Its funny watching all these clowns on CNBC with their foolish hyphothesis.
For me, trading is not a job or a hobby. Its a passion. I sleep, shit, shower, shave and dream the markets. I hate weekends. I cant wait til monday comes.
IMO if trading is not a passion for you, if it does not completely absorb you then you have little to no chance at success.
I swing trade now. Sometimes hold for a day to a couple of weeks. I always take on a partial hedge using weeklys or front month options. The best decision I ever made. It reduces my profit for the insurance (sometimes)but if it sure make trading alot easier. Especially in this market where stocks are getting crushed on any hint of bad news.
I go long, I buy puts. If I am correct my put loses value but I make up for it in my long position, if I am wrong I let the puts ride and and get stopped on my long for a small loss. As I go to close my long I buy calls setting up a strangle. Then trade in and out. Sometimes they expire worthless, sometimes I make a little and lately sometimes I make alot. Sometimes I leg into them to reduce the loss and sometimes I leg in and get the free trade plus the spread (if it hits, god do I love those). Lately I have made money on both due to the volatilty over the course of the month. Normally my strangles are 1 strike away. Lately I have been trading Bidu and using 2 strikes OTM and raking in 200 to 400%(and thats just my insurance). It's been working great. Makes me sleep easier at night as well.
I don't use any system or programs. I don't trade 50 times a day for nickel. I use MACD, volume , S&R levels and 50,100 and 200MA. and my 6th sense. Thats it. ( I do keep an eye on the fundies as well) I basically study price action and get a feel for sentiment and one can see that sentiment in the price of calls and puts. One can see where the bias lays. I watch the markets from 7am to 8pm and absorb all the info I can and filter out what I feel is relevant and what is not. Its funny watching all these clowns on CNBC with their foolish hyphothesis.
For me, trading is not a job or a hobby. Its a passion. I sleep, shit, shower, shave and dream the markets. I hate weekends. I cant wait til monday comes.
IMO if trading is not a passion for you, if it does not completely absorb you then you have little to no chance at success.
Quote from riskaddict:
I'm intrigued now, I am assuming they have info the avg schmuck such as myself doesn't know...
...
...I'm also guessing really successful traders don't trade that much. ...
...
...Sorry none of this has anything to do with learning experiences but it's interesting. In my case I think I just got lucky my 1st few years as a longer term position type trader but when I tried day trading I lost about 30k that year. I don't think I'll ever really "get it" but I know how to make more money than I lose and that seems to be good enough.
I'm one of the few small account traders that is successful. The only information I know of that I have that others don't have is money management. If you toss a coin you have a 50/50 chance of being right. So if you do that on a game that costs $1 to play and gives you $10 per win, it's near impossible to lose unless you begin with only a couple of bucks and have two losses initially.
As a successful trader, I can affirm that I don't trade all that much. I pick trades that have a risk/reward of no less than 4. In other words, I risk $100 for the opportunity to make a minimum of $400, and often times much more. There are plenty of moves that either don't fit that, or don't fit that predictably. Often times I will pass due to this fact and watch the market go for an unexpected long move. I don't fret over this because I could not have known the reward would be so great on that signal.
I lost around $4000 over 3 years for my education. But the greatest piece of advice I can give in this area is that a move doesn't always equal an opportunity. Instead of looking at movements and saying, "look at all this stuff I'm missing out on!" rather say, "I haven't seen a good trade yet." until it comes. I average 3 to 6 trades per month. In april, I took only 1 and it lasted 4 days. The rest of my time was spent waiting. I made 58% that month trading with only 1/2 of my account. It only took one. I'm at 1600% for the year.
Some people on here will try to minimize the value of blowing up one's account and the positive impact that it has on one's emotions (though it hurts for a time). Without that $4000 of losses, though, my arrogance and impatience would not have been crushed into powder and I would never have been able to become okay with passing on so much and taking, sometimes, only 1 trade per month.
Quote from OAKUS:
May I ask what broker you are using Joseph? As a small account trader would you not get burned on the comissions for trades the size of 100 dollars?
The numbers were just hypothetical. But since you brought it up, let me say two things.
First, I use tradeking. $4.95 per option trade plus $0.65 per contract up to 8 contracts. Eight or more is $8.95 plus $0.15 cents per contract. That's pretty low as far as I've seen, especially when trading more contracts.
Secondly, don't confuse risk with position size. Let's say, for the sake of simple math, that I have 5 contracts at $400 each. That's $2000 in the trade. If each contract drops by $20 each, that's my $100 risk even though I put in $2000. I have to sell there. I enter those trades with the expectation that, if I'm right, I will not make less than 20%, or $400 of the position size, and if I'm wrong (barring a gap down which does happen occasionally) I will not lose more than $100. That being said, I don't use 100% of my account on any one trade. That 5% loss ($100 of $2000) is only 5% of the trade, not 5% of my account. More like 2% of my account. So, with a hypothetical $5000 account, my risk is $100 per trade roughly. Hope that clarifies.