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If Chewy Loses Money in July - He Will Quit Trading
- Thread starter chewbacca
- Start date
Here's how I determine how much I can afford to lose:
I'll take the past 20 days of data and:
win % * ave win per day + loss % * X = 0
X is the amount I can afford to lose and still break even.
Right now:
To just break even, if average profit is 77.02 on winning days
And the percentage of winning days is 20%
Then a loss more than $(19.25) on any day cannot be afforded
I just figured this out last Friday, unfortunately knowledge don't mean shit - got to execute it.
I'll take the past 20 days of data and:
win % * ave win per day + loss % * X = 0
X is the amount I can afford to lose and still break even.
Right now:
To just break even, if average profit is 77.02 on winning days
And the percentage of winning days is 20%
Then a loss more than $(19.25) on any day cannot be afforded
I just figured this out last Friday, unfortunately knowledge don't mean shit - got to execute it.
Quote from Ripley:
Chewy...
You have to lose money to be able to make money.
F*K the naysayers.
I started off with 30K and came to my very last dollar... and I just increased my size ten fold for July.. (Yes.. 1 to 10 contracts) and I had the 2nd biggest day ever in my trading life on last Friday, when it was on a horrible range, and supposedly nothing happened in the market.
And I don't think you should quit even if you lose money in July. Often the most profitable days come after rough patches.
First Chew I donât like your stock selection. You are trading things you canât handle. A new guy should not be trading any of those stocks. AAPL and EBAY are big boy terrain and there are guys trading a few years who still wonât touch them. X and NEM are very tough ones also a lot of fake bids and offers. I made 200 net on X today and he made me earn it the hard way. You should trade no more then 100 shares at a time. You should pick stocks that trade between 300k to 800k a day. Look for stocks in the 30 to 60 price range.
Quote from steve46:
Hello:
I took a moment to look at your trading record. Based on distribution of consecutive wins and losses, it is clear that you have no edge. Your record is worse than would normally be attributed to random chance. I suggest you do not wait for the next month. Stop now. Find a tradeable edge before you start again. Regarding the idea of simply reversing your trades, well I don't want to be impolite, but that simply doesn't work, and thinking that way doesn't help you to correct the problem.
Sorry about your losses. On the other hand, (just as a matter of curiosity) why did you go so far down this road before noticing that something was wrong? While I can't really be of much help to you as it is, your frank response might help others to avoid taking a beating in the markets.
Thanks,
Steve
I would stop now, truth is - I have nothing better to do. All my friends work so I don't know what I would do with my time.
I suppose I can research, backtest, ect. - but I'm not good at math, programming, computers/software, etc. Nor am I interested in that stuff. The brightest minds have tried and currently are trying to beat the market right now. I think gambling/trading is the #1 reason we've seen many of the advances in math, probability, statistics, etc. So I don't think I can find a workable strategy thru endless research - there is no holy grail out there.
I don't want to enter or exit a trade just because my 'system' tells me so. If I want to trade like that then might as well build a robot to trade for me like a lot of funds out there.
I want to enter and exit trades based on pattern recognition, backed up by sound money/risk management plan (still working on that).
Robots built by guys with three PHDs now control over 70% of the volume out there. There's no way I can beat them with a 'systematic' approach. But maybe by developing a 'feel' for the market I may have a chance cause no robot can beat a human central nervous system when it comes to pattern recognition. The problem is that often emotions, stress hormones, biases, ego often gets in the way - so that's my biggest problem now.
Quote from chewbacca:
I'm going to now try:
Scalping. Risk 5 or 10 cents to make 5 or 10 cents and try to go for a 66% win rate.
Breakouts. Trade em when momentum is there and fade em when momentum is not there. [/B]
Scalping requires a strategy as well. I would not expect you'll have a much different outcome if you're trying to trade off the cuff.
There's a book called "High Probability Trading" by a guy named Marcel Link (http://www.elitetrader.com/bo/index.cfm?action=view&B_ID=92&CatID=6). I think his coverage of multiple timeframe decision making (similar to Dr. Elder's) could be very helpful.
Regards,
Quote from JangoFolly:
Chewy,
It looks like your average loss has been getting larger with successive trades. Are you trading more size to try to make up your losses? I know that it's very tempting to try to get it all back with one or two good trades, but it's more than likely that you'll take a whopper loss to both your account and your confidence. When I have a string of trades that have gone against me, I find it helpful to back off on size until I get my groove back. I look at my losing trades to learn why they went against me, but try not to let them fuel my thirst to win. I also get up to take a short break after a bad trade in order to wipe the slate clean so I can approach the next trade with objectivity(and an empty bladder).
I don't think you should give up, but I would respectfully suggest that you do a thorough review of your methodology and execution and trade very lightly for a week. Best wishes for better trading this week.
Regards,
1-60 days:
Yeah the first 60 days or so I pretty much just traded the QQQQs most of the time, occasionally some Naqdaq stocks. My average volume during this period was in the 2-6k a day range.
100 share lots.
60th day-Now
Now I'm still trading 100 share lots, but I'll build a position up to 300-500 shares. I started trading listed stocks. Sometimes I'll go crazy and build a 500+ share position like today in AAPL...gotta stop that. Now my daily volume is 10k a day.
Quote from brokerboy:
First Chew I donât like your stock selection. You are trading things you canât handle. A new guy should not be trading any of those stocks. AAPL and EBAY are big boy terrain and there are guys trading a few years who still wonât touch them. X and NEM are very tough ones also a lot of fake bids and offers. I made 200 net on X today and he made me earn it the hard way. You should trade no more then 100 shares at a time. You should pick stocks that trade between 300k to 800k a day. Look for stocks in the 30 to 60 price range.
You're right about AAPL and EBAY. I've tried low volume stocks - but the spread and liquidity risk scares the hell out of me.