I gave up the "grail" yet he failed.

Quote from jinxu:

What is this "personal low" that everyone keeps talking about? What are ways that a trader get to this "low"? How do you know if you reached it? Why do you need to reach a low before you can become successful? *confused*
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The "personal low" is a generalization; for one person, it may be losing $1K in a single trading day, for another, it might be turning a day-trade into an "investment" and losing half your bankroll.

Think about a hot stove--the best way to learn not to touch it might be by touching it. If you can learn from the advice and mistakes of others, terrific. The point is to learn the lesson, and without a mentor, you are probably going to get burned a few times until you learn to respect the game.

It is a great idea to know in advance what you are going to do, not only when you are RIGHT, but when you are WRONG, BEFORE you enter a trade. Things can get out of control very quickly in trading, especially day-trading, that the less time you must spend deciding what to do, the better.

The longer you are a trader, the greater the chance that something will happen that you never expected, and you will get stuck with a nasty loss. Call it a "personal low" or just a "learning experience" but the point is, if you can't learn from it, then eventually you will be forced out of the game. If you plan to trade for a very long time, then you will learn from these "lows" or you will be hit with a succession of "lows" that will eventually destroy your trading capital.
 
Backtest the damn thing and find out if your both beeing fooled by randomness..... it will also go a long way in showing him that he doesnt have to "think" when executing.....

Quote from TrueRange:

A family member came to me 6 months ago for some advice. He lost some money trading stocks and wanted to know the secret sauce.

I was very reluctant to give advice for a couple reasons. But the primary one being this : trading success for most requires a personal low to be hit before you can begin the process of "re-wiring" your natural born tendencies that allow one to become a long term winner at this game. He had not hit this low. A loss of a few grand was the brunt of the "pain". Of course this made me chuckle.

But since he is a family member and he once did me a favor that was very small in effort but came back to me in spades regarding my own psychology I decided to assist. I gave him a set of rules based on my own experience of 8 years that would guarantee at the very least he would not make a account ending trade(barring an act of god) and best case he makes some money and learns how to evolve his own style and approach.

The rules were simple too follow. Details I wont share, but basically it went like this

- A filter to choose what to trade.
-money management rules to choose how much to trade and what to risk per trade.
- and a general market filter to determine whether to be in the market(long only) or stay in cash.

I then told him I dont want to hear about your progress at all for one year. Stick to the rules then report back to me. And if you have done exactly what I told you, regardless of actual PnL I will assist you further and help you step it up.

So, fast forward 6 months I get a call. "I followed your rules, they were working great! I was making money. Then I stepped outside your rules and lost half my money. Can you help me make it back?"

So, I am considering helping him one more time for the sake of second chances.

What would you all do?
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lol....

I second that. Send them to me if you are willing to share. It'll only help me see what's missing in my discipline.



Quote from lynx:

Send me the rules and I promise to follow them to the letter...
:)
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Quote from jinxu:

What is this "personal low" that everyone keeps talking about? What are ways that a trader get to this "low"? How do you know if you reached it? Why do you need to reach a low before you can become successful? *confused*
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Out of deference to Vette – I’ll not disagree with his post – much

Out of deference to those who’ve faced their low – I’ll not go into specifics – but easily could

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When/ if you ever face your low – you’ll know it

When you become uncertain - down to your core of everything – especially of your ability to trade successfully – you’ll know it

When you have but only one way to turn – or not – you’ll know it

And once you know it – there will only be the above two choices

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Aside

If you’re never afforded the opportunity to meet your low – then you’re not pushing your envelope


If you’re fortunate enough to meet your low – then you’ll know exactly what you’re made of

(personally I hope you like what you find – although I am well aware hope is a piss poor technique)

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Final thought

Livermore was a damn good trader – imho

Livermore met his low – then put a bullet in his head


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So do you need to reach your low to trade successfully – probably not – but then I don’t really know…

I will say reaching your low – then recovering – will make you bullet proof

And btw don’t take bullet proof to mean – never having a losing trade…

I have losing trades all the time – woo pity doo


RN
 
Quote from TrueRange:

So, I am considering helping him one more time for the sake of second chances.

What would you all do?
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TR,

We’re all human – we all screw up

If you want to help him – then help him

If you don’t – then don’t



Yes Sir; I could share what I would do – but then it wouldn’t mean much to you – or him…. Really


Regards

RN
 
Quote from Redneck:

TR,

We’re all human – we all screw up

If you want to help him – then help him

If you don’t – then don’t

RN
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This might be the best answer yet.

BTW RN, thank you for your civility! It is great to know there are still many here that are willing to add value to these forums. We've all travelled different roads to get here today, and I appreciate the chance to listen and learn--when the message has substance
 
Quote from jinxu:

What is this "personal low" that everyone keeps talking about? What are ways that a trader get to this "low"? How do you know if you reached it? Why do you need to reach a low before you can become successful? *confused*
More...

During this journey you either get sick and tired of losing and making mistakes and become profitable or you dont and you blow up and quit.

I have been at this game for over 10 years and I dont know anybody who was succesful out of the gate, doesnt mean they dont exist, just my experience that the ones that have made it went thru a process of mentally breaking down existing thought process`s and rebuilding into a traders perspective.
 
Quote from pwrtrdr:

Backtest the damn thing and find out if your both beeing fooled by randomness..... it will also go a long way in showing him that he doesnt have to "think" when executing.....
More...

My rules have worked for traders since Munehisa Homma ruled the Rice markets of Japan in the mid 1700`s and will continue to work as long as prices are able to move in an open market type envoirnment.

There is nothing to backtest really. Sounds flip , right? Sorry..not meant to be that way. But I dont know any other way to put it.
 
update - He asked me to "trade his account out of the hole". I refused and told him he had everything he needed already. Go back to the rules and if you break them again my offer of further assistance one year out is off the table.
 
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