HuggieBear's Thread of Public Shame

Quote from HuggieBear:



This will be quite a personal test as its damn hard to do when you are killing it...
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Try to forget how far you are up on the year. You could do this by withdrawing your profits or tie the capital up in bonds but don't post them as margin. Or just transfer the money to my account:D
Just don't make the mistake of putting trades on because of whim feelings, stick to the technicals.
 
Agreed and thanks. If anything, i'm scared to death I'm going to give it all back, which is, i think, a healthy thing. Historically, i would be trying to run it up and retire at this point :cool:

I have been living on the edge a little bit, and while its been working out well for a couple of months, i'm going to get burned for a 10% loss one of these days. I know for a fact that is going to happen with the approach i've been using. And when i lose 10% in a day, its going to rattle my confidence and make it hard to stay on course. Moving down to a 3% max daily loss should really help.


Finally got through all my trade logs this weekend....it is pretty enlightening to see in chart form my trade history.

I actually have been pretty consistent week in/week out over the last 10 weeks or so. I have also been generating a ridiculous amount of commissions....north of $25k already for 2010. Definitely still overtrading so going to reduce my frequency of trades (and become more selective).
 
Quote from HuggieBear:

10 years or so


Work full time...made a big mistake yesterday and left some buy positions open at support levels and got caught away for 3 hours...bad day for that to happen.

Needless to say, i compounded the problem.

It doesn't matter. I can't work full time and trade in the manner i've been trading. Simple as that.
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+1
 
Swing trade. Look for setups on weekends, place MOO orders before the open. You can do well with this approach while working, cut your teeth a bit on trading fundamentals, make a better return than passive investing (if you're successful).

Still hard to do with a job, though...def takes an extra 20 hours per week.
 
Time for a weekly update...


First, due to my trading performance so far in 2010, the purpose of this journal is going to shift slightly from the occasional public shaming to a public record of my effort to achieve the two following items:


1) Close out 2010 WITHOUT losing the gains i've made year to date

and

2) Achieve relatively consistent profitability over the remainder of the year


If I fail on point #1, I will close the books on my trading efforts and move on to greener pastures. If I'm still struggling on #2, I'll likely continue to work on that in 2011.


Now, for my weekly performance numbers. I've started tracking everything in much greater detail, and I'll begin including relevant weekly metrics during each update.

This week was another good week, but could have been much better. I got crushed on Friday and gave up a big part of my gains for the week, but did still end up positive for the week. Friday was my biggest losing day in over two months, BUT I did adhere to my daily risk controls so I feel good about that.

Here are the stats:

Portfolio Weekly % Change = + 2.9%
Portfolio 2010 % Change = + 64.3%
Portfolio % increase since MDD = + 78.3% (MDD was 2/5/2010)

Number of Trades = 32
% Winners = 66%
% Losers = 34%
E(R) = .19%

Commissions = $841




I have three subgoals I'll be focusing on over the remainder of the year:

1) Stop averaging down (even though its responsible for much of my recent outsize gains)

2) Reduce volatility and adhere to risk controls more closely

3) Reduce commissions (e.g. reduce overtrading)



Cheers,
HB
 
Quote from HuggieBear:

1) Stop averaging down (even though its responsible for much of my recent outsize gains)
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HB, this is insightful for me. I made my largest gains trading CL in my sim account by averaging down. Every day I have a temptation to enter a trade too soon and just average down if it moves against me, because it only failed once in my sim trading, and because when I get the move I wanted, I have a larger position to profit from.

However, so far it's the one trading rule I haven't broken this year in my live trading. Although I still sometimes put on trades early before I get decent confirmation, I stop out and try again. Why did you decide to stop averaging despite the outsize gains?
 
I have been averaging down mostly so that i can enter the trade early...if it moves in my direction quickly, then great and entering early means i captured a gain that i may have missed if i had waited for a more "optimal" entry.


If it moves against me, then i scale in and as long as it turns in my direction before my loss max is hit, then I make even more money because my size is bigger!


When it continues to move against me, of course, my losses are a little bigger. But, my win percentage has easily been making up for it.

Sounds similar to what you were doing in sim!


Anyway, to answer your question, I am going to stop averaging down because i want to prove and ensure i can trade consistently profitably without averaging down. Thats the simple answer.

I do not subscribe to the theory, as it seems everyone else here does, that averaging down is inherently wrong/losing/etc.

But, i'd like to be able to fundamentally trade more precisely and consistently profitably, and then maybe come back and dabble with averaging.


Also, i know from experience that averaging works A LOT LESS WELL in more volatile and heavily trending markets. I believe the market over the last 2-3 months has simply been ideal for averaging and mean reversion. Friday was a great example of a day where averaging down had the potential to be painful, for example (even though i didnt do it on Friday).


Also, and lastly, averaging down is addictive. It requires more discipline to stop when you are supposed to and not average further down. I've been doing well on this aspect of it over the past couple of months, but i have burned myself previously by averaging down too many times to too big a size.
 
Quote from HuggieBear:

I have been averaging down mostly so that i can enter the trade early...if it moves in my direction quickly, then great and entering early means i captured a gain that i may have missed if i had waited for a more "optimal" entry.

If it moves against me, then i scale in and as long as it turns in my direction before my loss max is hit, then I make even more money because my size is bigger!

When it continues to move against me, of course, my losses are a little bigger. But, my win percentage has easily been making up for it.

Sounds similar to what you were doing in sim!
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That is absolutely correct. Most days I netted $2000 simbucks or more, and only once did find myself in quite serious trouble and bail at nasty loss, but I started out that trade with much too large size for an average down play.

Quote from HuggieBear:

Anyway, to answer your question, I am going to stop averaging down because i want to prove and ensure i can trade consistently profitably without averaging down. Thats the simple answer.

I do not subscribe to the theory, as it seems everyone else here does, that averaging down is inherently wrong/losing/etc.

But, i'd like to be able to fundamentally trade more precisely and consistently profitably, and then maybe come back and dabble with averaging.
More...

When I realized that I'd never trade CL live if I didn't prove to myself that I could be profitable with straight ahead technical trading, I started posting my sim trades on CL Redux to keep me honest. I was able to be consistently profitable and that gave me the confidence to trade live.

But every day there's at least one instance where price sets up in a way that tries to lure me into the average-down scenario that worked so well in sim. It's tempting, but never feels very safe to me, so I've held fast to my rule so far...
 
You've done a great job...i noticed the process you were following over the past few months, and it seems to really have paid off.

It looks as though you have established a pretty rock solid foundation for future success.

I need to do something similar, although for various reasons I can't take the exact same approach.
 
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