How to know when your ready

May I suggest keeping a journal or record of EACH TRADE?

In your journal, ask yourself, when you put on the trade, WHY did I put it on? Be specific. These should be rational reasons, not feelings.

After you have completed the trade, ask yourself (1) How good of a job did I do in sticking to my rules?; (2) What did I do right? (you can have a losing trade and still do everything right, and a winner while doing nothing right); (3) What did I do wrong?; and (4) What lesson(s) did I learn?

I do this for every trade. And I am brutal. I teach for a living, and my students have NEVER seen me this way.

What have I learned? Sometimes everything comes together. Still, I often suck, and still make stupid mistakes (but fewer all of the time--I learn from them, because I keep the journal). I also am consistently profitable, but know that there is always room for improvement.
 
Im pretty anal about keeping records. Does anyone know if the 5k required by velocity is set in stone or if its flexible. 4k would work better for me.
 
imo (having trained futures traders and seeing what works and what doesn't)

starting to trade futures with 4k is absurdly optimistic.

really.

hey, if u can afford to lose it - go right ahead
 
Quote from chewbacca:

wow - this is like a message from the trading god......one of the best posts ever.
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LOL Basically it is the common sense I had to learn on my own. I have had bad days where all set ups failed and the market kicked my ass but the way I handle it has finally changed. I remind myself of bad trading days I had when I first startd out in futures.

What stands out on those specific days was the HUGE drawdown and shitty feeling I had and doubt of my abilities.

It took me time to get over being upset at the losses (and accepting the fault as my own) and realizing a down day is a good day if you follow your risk management rules.

It led to me becoming a a totally different trader. Down days still suck ass but I am confident I can make it back so it does not bother me as much. Only bothers me if I ignored a set up or took too big a loss.

So I tell all beginners, just imagine your worst day ever and see if you can live through it. Of course that is just imagining but I know they will experience it shortly so at least I have them thinking about it and perhaps they will take with good perspective.
 
first of all, i think you mean 1:3

RISK/REWARD means just that

you are quoting (i am assuming) REWARD:RISK when you say 3:1

fwiw, using the term "risk/reward" to describe the stop distance in relation to target distance is somewhat incorrect, but it's how most people use it, so it's the common usage.

you can't really define "risk/reward" without knowing the positive expectancy of the setup, which is related to the above, but not the same thing

for example, if your stop distance is X and your target is 1/2 X but GIVEN that stop and target, you get target hit before stop 87% of the time, that is still a positive expectancy trade.

so, while the "risk/reward' ratio may seem bad, it is actually good

i KNOW the positive expectancy of ALL my setups.
 
Quote from whitster:

first of all, i think you mean 1:3

RISK/REWARD means just that

you are quoting (i am assuming) REWARD:RISK when you say 3:1

fwiw, using the term "risk/reward" to describe the stop distance in relation to target distance is somewhat incorrect, but it's how most people use it, so it's the common usage.

you can't really define "risk/reward" without knowing the positive expectancy of the setup, which is related to the above, but not the same thing

for example, if your stop distance is X and your target is 1/2 X but GIVEN that stop and target, you get target hit before stop 87% of the time, that is still a positive expectancy trade.

so, while the "risk/reward' ratio may seem bad, it is actually good

i KNOW the positive expectancy of ALL my setups.
More...


Textbook stuff, well remembered.
 
Quote from whitster:

first of all, i think you mean 1:3

RISK/REWARD means just that

you are quoting (i am assuming) REWARD:RISK when you say 3:1

fwiw, using the term "risk/reward" to describe the stop distance in relation to target distance is somewhat incorrect, but it's how most people use it, so it's the common usage.

you can't really define "risk/reward" without knowing the positive expectancy of the setup, which is related to the above, but not the same thing

for example, if your stop distance is X and your target is 1/2 X but GIVEN that stop and target, you get target hit before stop 87% of the time, that is still a positive expectancy trade.

so, while the "risk/reward' ratio may seem bad, it is actually good

i KNOW the positive expectancy of ALL my setups.
More...

With the crazy volatility that we're seeing these days, you can throw that textbook methodology out the window.
 
youll have to excuse me I use REWARD/RISK and not RISK/REWARD, but ya i try to make 3X my risk or i wont bother with the trade.

I go live on monday guys. Going to take it very light and stick with 1 contract for now. This volatility is insane so im going to limit my exposure and attempt to balance letting a winner run w/o letting greed take over.
 
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