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How to stop picking tops or bottoms
- Thread starter jr07
- Start date
Quote from jr07:
thank you FB123
No problems... not trying to be a jerk, but it's important to get through to you. Trading is an addiction for some people, because it SEEMS so easy.
If you have the patience to walk away right now and watch all the moves that are going to happen for the next year without actually putting money on the line while you are learning, it will be a good display of patience. That is an extremely important quality for a trader. If you can't be patient enough to not trade real money while you are learning, you won't have the patience to be a good trader either.
I stopped trading for a long time at one point just to prove to myself that I had the patience to watch the market without acting on what I saw. I passed that test, and then only put money on the line when I was ready. You'll know you're ready when you start answering questions on this board instead of asking them.
Good luck!
Looks like you have allowed yourself to be opinionated, you must not. Change "I'm convinced" to "I guess it should be... but let see the final result anyway".
Quote from jr07:
Hi
Anybody have an exercise or method to stop trying to pick tops or bottoms in trading?
I've been selling into this rally like mad, convinced "this is the top" and haven't been able to stop.
Everyday it's the same thing, Im "convinced" the market can't go any higher and a correction is imminent, only to get squeezed.
How can I stop doing this?
J
jr07,
One other thing. It is in no way an exaggeration when I tell you that it will take you many thousands of hours to become a successful trader. I probably put in around 5000 hours of work before I started to consider myself reasonably confident and knowledgeable about the market. That included time spent reading, studying, writing out my trading plan, trying different strategies, etc... over a period of years, including one year of incredibly intensive study. I also blew out my account in spectacular fashion one time, and nearly blew it out again a second time.
5000 hours of work is the equivalent of approximately 32 months of full-time work at 8 hours a day, 5 days a week, with no vacations. That's almost 3 years of full-time study, or the equivalent of getting a university degree. Granted, I was trying to do something a little more difficult than most in terms of learning to scalp on short time frames, but still, these numbers are not atypical.
How much time have you put in so far in studying charts, trading, etc? Chances are it will take you years to get it, and you only started last year. You started out as everybody does thinking that this will be easy. Then you learned that it's not so easy. Then you tried adapting, changing to the short-side instead of the long side. Then you got nailed again. Now you are capitulating on the short side at close to the wrong time. This is very typical.
The next step is to realize that you aren't ready yet, go away for a long time, and work hard at this by developing and testing a system. You aren't just missing one little thing that is preventing you from being a successful trader at the moment, you are missing a LOT. You are not even REMOTELY close at the moment. There's nothing wrong with that, but it's going to take time to work through it all, and it's important that you understand this.
Most people get to the stage you are at now and either give up, or keep on doing dumb things and lose even more money, some of them going broke. I have seen some truly sad stories where people lost their entire life's savings, money that they spent decades accumulating. Don't be one of those people.
You seem smart enough to know that you don't know a lot right now, which is encouraging. However - unless you REALLY are prepared to do whatever it takes, work as hard as you have to, for as long as you have to, even years if that's what it takes - then just give up now. It will save you a lot of money and frustration, trust me.
Decide how much you really want this before continuing too much further - this isn't a hobby, it's a very dangerous game. That's the best advice I can give you.
One other thing. It is in no way an exaggeration when I tell you that it will take you many thousands of hours to become a successful trader. I probably put in around 5000 hours of work before I started to consider myself reasonably confident and knowledgeable about the market. That included time spent reading, studying, writing out my trading plan, trying different strategies, etc... over a period of years, including one year of incredibly intensive study. I also blew out my account in spectacular fashion one time, and nearly blew it out again a second time.
5000 hours of work is the equivalent of approximately 32 months of full-time work at 8 hours a day, 5 days a week, with no vacations. That's almost 3 years of full-time study, or the equivalent of getting a university degree. Granted, I was trying to do something a little more difficult than most in terms of learning to scalp on short time frames, but still, these numbers are not atypical.
How much time have you put in so far in studying charts, trading, etc? Chances are it will take you years to get it, and you only started last year. You started out as everybody does thinking that this will be easy. Then you learned that it's not so easy. Then you tried adapting, changing to the short-side instead of the long side. Then you got nailed again. Now you are capitulating on the short side at close to the wrong time. This is very typical.
The next step is to realize that you aren't ready yet, go away for a long time, and work hard at this by developing and testing a system. You aren't just missing one little thing that is preventing you from being a successful trader at the moment, you are missing a LOT. You are not even REMOTELY close at the moment. There's nothing wrong with that, but it's going to take time to work through it all, and it's important that you understand this.
Most people get to the stage you are at now and either give up, or keep on doing dumb things and lose even more money, some of them going broke. I have seen some truly sad stories where people lost their entire life's savings, money that they spent decades accumulating. Don't be one of those people.
You seem smart enough to know that you don't know a lot right now, which is encouraging. However - unless you REALLY are prepared to do whatever it takes, work as hard as you have to, for as long as you have to, even years if that's what it takes - then just give up now. It will save you a lot of money and frustration, trust me.
Decide how much you really want this before continuing too much further - this isn't a hobby, it's a very dangerous game. That's the best advice I can give you.
Again, many thanks!!!!
Im in this for the long term and i agree with the college degree timeframe analogy. Ive already blown one account, by "holding on to hope trades" and "averaging down". This was my 2008 lesson learned and thankfully i havent repeated it. Now, i stop loss every trade and if not, and im wrong, i get out.
2009 seems to be the year of the lesson to not call a top or bottom, and if i can take away one major lesson per year thats fine, im in for the long run. Thankfully i havent blown the second account since most my trading is now on paper, and i am constantly reading and studying. I still have my day job which pays the bills and thankfuly its not too difficult or demanding which allows me to monitor and trade the markets.
Once again, thanks!
Im in this for the long term and i agree with the college degree timeframe analogy. Ive already blown one account, by "holding on to hope trades" and "averaging down". This was my 2008 lesson learned and thankfully i havent repeated it. Now, i stop loss every trade and if not, and im wrong, i get out.
2009 seems to be the year of the lesson to not call a top or bottom, and if i can take away one major lesson per year thats fine, im in for the long run. Thankfully i havent blown the second account since most my trading is now on paper, and i am constantly reading and studying. I still have my day job which pays the bills and thankfuly its not too difficult or demanding which allows me to monitor and trade the markets.
Once again, thanks!
Quote from jr07:
Again, many thanks!!!!
Im in this for the long term and i agree with the college degree timeframe analogy. Ive already blown one account, by "holding on to hope trades" and "averaging down". This was my 2008 lesson learned and thankfully i havent repeated it. Now, i stop loss every trade and if not, and im wrong, i get out.
2009 seems to be the year of the lesson to not call a top or bottom, and if i can take away one major lesson per year thats fine, im in for the long run. Thankfully i havent blown the second account since most my trading is now on paper, and i am constantly reading and studying. I still have my day job which pays the bills and thankfuly its not too difficult or demanding which allows me to monitor and trade the markets.
Once again, thanks!
No problems - sounds like you're on the right track... good luck!
TURN OFF THE TELEVISION.
NEVER WATCH A BUSINESS CHANNEL.
It is obvious these clowns are blowing it out their arses, but it is all about TIMING.
Think an INDIVIDUAL stock, do not think market.
Establish RELATIONSHIPS with stocks not the market.
I only trade two stupid stocks, and I make a very nice living doing so.
Sure there is a lot of money to be made riding a BULL or BEAR market, but a lot of money is lost trying to pick the inflection points.
Do not try to be a GENIUS or a HERO by trading against the trend.
I will paraphase but a much wiser man than I said that the collective market can stay irrational longer than the individual trader can stay liquid.
NEVER WATCH A BUSINESS CHANNEL.
It is obvious these clowns are blowing it out their arses, but it is all about TIMING.
Think an INDIVIDUAL stock, do not think market.
Establish RELATIONSHIPS with stocks not the market.
I only trade two stupid stocks, and I make a very nice living doing so.
Sure there is a lot of money to be made riding a BULL or BEAR market, but a lot of money is lost trying to pick the inflection points.
Do not try to be a GENIUS or a HERO by trading against the trend.
I will paraphase but a much wiser man than I said that the collective market can stay irrational longer than the individual trader can stay liquid.
I pick tops and bottoms all the time and make great money doing it. I never bet against the trend. I'm betting that the trend has ended. MAJOR difference there.
just don't be stupid about it.
notice what happens when markets are moving into their last leg down/up.
you can trade any part of a trend and make money.
1. the body of a trend
2. the reversal point into a new trend (tops/bottoms picking)
3. retracements/dominant traverses
4. the break out point into a new trend (not the same as the reversal point)
and the list goes on and on. there is money to be made all the time here except when/where liquidity is an issue.
your question should be stated as
"since i like picking tops and bottoms, how can i effectively and efficiently (not to mention successfully) do so?"
asking THAT question leads you to a solution that does not conflict with your subconscious desire.
just my opinion
just don't be stupid about it.
notice what happens when markets are moving into their last leg down/up.
you can trade any part of a trend and make money.
1. the body of a trend
2. the reversal point into a new trend (tops/bottoms picking)
3. retracements/dominant traverses
4. the break out point into a new trend (not the same as the reversal point)
and the list goes on and on. there is money to be made all the time here except when/where liquidity is an issue.
your question should be stated as
"since i like picking tops and bottoms, how can i effectively and efficiently (not to mention successfully) do so?"
asking THAT question leads you to a solution that does not conflict with your subconscious desire.
just my opinion
Quote from jr07:
Hi
Anybody have an exercise or method to stop trying to pick tops or bottoms in trading?
I've been selling into this rally like mad, convinced "this is the top" and haven't been able to stop.
Everyday it's the same thing, Im "convinced" the market can't go any higher and a correction is imminent, only to get squeezed.
How can I stop doing this?
J
Post your trades that correlate with your market analysis about why you're "convinced this is the top".
Next, let ET members do what they do...attack methods, trades et cetera and someone may post a nugget or two out of the junk of others that convinces you to change your mind.
Seriously, stop trading and get a new method because it obviously ain't working assuming you haven't been shorting based upon intuition and lack of market experience.
Mark