How to never get an account wiped out?

Will

Thank you. You are right! I can't make a living form that account.

My target is to be consitent in an average gain of 2% - not focussed on a specific $ amount - per day. All problems will then solve by time (see the Kelly formular above).

To have such big variances in my performance is a big issue. This comes because I overtrade, revenge trade, trading (still) to much emotions.

This thread is for education - and I explore any advise accurately.
 
Quote from gg12:

To have such big variances in my performance is a big issue. This comes because I overtrade, revenge trade, trading (still) to much emotions.
More...

GG,

Start to solve these problems, should be a desent first step.
 
02/06/07 +9.3% (Max risk was not more than 25% of my account to achieve that result).



I stopped trading after reaching this level. There have been two hours to go (but I decided to stop for today).

My goal is 2% a day and I more than reached it today.
 
until 1/3/07 -78% (resulting from early trades)

No Date Results
1. 1/4/07 +13.0%,
2. 1/5/07 +5.7%,
3. 1/8/07 +11.2%,
4. 1/9/07 +11.4%
5. 1/10/07 +16.2%
6. 1/11/07 +6.3%
7. 1/12/07 +3.6%
8. 1/15/07 +3.6%
9. 1/16/07 -8.9%
10. 1/17/07 -22.1%
11. 1/18/07 -5.5%
12. 1/19/07 +44.2%
13. 1/22/07 +12.5%
14. 1/23/07 +32.3%
15. 1/24/07 -11.8%
16. 1/25/07 +8.9%
17. 1/26/07 -31.9%
18. 1/29/07 -4.8%
19. 1/30/07 -24.4%
20. 1/31/07 -35.2%
21. 2/1/07 +79.9%
22. 2/2/07 +9.7%
23. 2/3/07 +9.3%

Avg. geometric growth is 2.7% per day (Target 2% per day).
I am at 40.5% of my original bankroll.
First Target is to get back to 100%.
 
24. 02/06/07 -14.7%
Nearly destroyed two days of work.
Reasons:

Greed
Overtrade
Taking big risk
Missing real time controlling
Playing on breakout in today's sideway market
Impatience - Pressing on results
Overinvesting time for trade execution and monitoring

Avg. growth is 1.9% per day (Target is 2.0% per day).
 
GG

Do you trade mechanically?



Quote from gg12:


Greed
Overtrade
Taking big risk
Missing real time controlling
Playing on breakout in today's sideway market
Impatience - Pressing on results
Overinvesting time for trade execution and monitoring
More...
 
Will

I have no automated system.

I am using spreadsheets to do wave analysis.

Today I 've made good and bad trades in the sideway market.
Then I decided to bet on a breakout (up or down).
The breakout was to the downside and the postion developed well.

Finally with all trades together I made a plus today.

02/07/07 +5.1%
 
Quote from gg12:

Will

I have no automated system.

I am using spreadsheets to do wave analysis.

Today I 've made good and bad trades in the sideway market.
Then I decided to bet on a breakout (up or down).
The breakout was to the downside and the postion developed well.

Finally with all trades together I made a plus today.

02/07/07 +5.1%
More...

GG,

OK, let me guess...

You buy on pull back, and sell on top of heads. I do the same thing in a much large time scale.

You get kill by those early counter trend trades and late trend trades. If the counter trend stuff works, you make up from what you loss earlier, rite?

Just a rough brainstorm, maybe you could start the counter trends stuff after 2 or 3 heads? or stop doing pullbacks after 2 or 3 heads? (or just get smaller!?)

Been thinking on a day trading system for the past few weeks. Just frist reversals for those 9/20 entries etc, couldn't write it in easy language so can't really backtest the stuff. (Tested trading every pull back, around 60% winning percentage depends on R/R), still profitable; but again the key is the right risk and rewards ratio (profit target and stop losses). Anyway, enough about my BS, let's get back on you.

GG, are you polishing your entries and exits after trading hours? Is it possible for you to back test your stuffs? (no, don't send your system to me, hehehe) Have you reached a stage where you stopped reading cause you have an idea of what's correct and what's not and you rather find profitability from your own ideas?

I hope you really make it. I understands the feelings of everybody wanting you to fail or look down on you. Been like that all my life (chinese growing up in New Zealand, poor kid in a rich neightbourhood etc). When I first started out, I hoped so much that someone can teach me, but all the advices I got was from a failed trader (dad, part time when he was in business, never profitable). I am learning along side you, cause whatever I can explain to you, to me it's a reminder to myself, remember those money management stuffs before? :)

The key is never really external, the only competition you are in, is in with yourself. If you can list what the problems are, what are you doing about it? Forgive me for being pushy, GG.





Will
 
GG,

Just a final word, you have done well already.

When I first start out, I had a feeling that if I had trade any earlier I would fail. Feeling that I wasn't mature enough to trade in my early 20s.

You have the courage, now be smart ok?
 
Will

I normally buy into a trend or into a range breakout or act on a continued sideways 'trend'. A trend to suddenly change is unlikely most of the time. Therefore I like trends. This should work on all timeframes and provide a small edge vs. randomly selected entries. The other thing is that waves don't follow a gaussian distribution. The market is 'producing' too long or too short waves most of the time.
http://en.wikipedia.org/wiki/Normal_distribution gives a lot of stuff to read about distributions.

For my trade tactics I currently only observe few hours of data before I get in. To get a strategic picture I am looking at 10 day charts and daily charts - and I am posting on this forum. I also look at the opening range and the closing of the last day.

I am counting and measuring waves (using grids). Normally there are 3 pushes from bottom to top and vice versa. The most powerful one is often the 2nd wave. I am also looking at support and resistance levels.

I don't use a professional backtesting programm yet (maybe to come...). I am doing my analysis manually and use often a spreadsheet. Key is as you say the right risk and rewards ratio (profit target and stop losses). It's also a question of feeling. If I am feeling confident I am risking more i.e. if I am 60% sure I risk 20% of my full account. Sometimes I have bad results because of that!

I have no written down trading system for what I am doing in this thread. But I think I have an edge. It's all about money management here. I am writing for enabling communication and self awareness reasons. I am happy for everything you can use (check before applying and apply on your own risk; only risk minimal inital money). The essence is that you can't wipe out an account if you have an edge and use the Kelly formular.

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A focus on growth is important - not the inital bankroll.
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And if you are in the Web everyday than multible information pools will offer a lot of valuable information - that's what I do and like.

I think we (and hopefully many other readers) get interesting information out of this thread.
 
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