I'm so LOST and feeling stupid. This is very long!!

This may sound crazy but the OP should do just as Trading in the Zone mentions and just cry his eyes out, drain those fears, and reset everything. It is the fear of losing and being wrong that is making him continue to make bad choices.

I had a rough go of things myself with my friends and family up until recently. I was living a life that I wouldn't wish upon my worst enemies.

I started off with one little lie that ultimately led to an ascending logarithmic curve of consequent lies to cover up the previous lie until finally it imploded and I had no friends left. I never intended on it happening, I just let my moral fiber dissipate one lie at a time until it was completely gone. I wasn't in the zone of honor and integrity.

I had a person whom I greatly admired call me a pathological liar and upon reading it I completely agreed and actually began to felt better. I went to the beach that night by myself and cried myself into a controlled rage and felt like a new person the next day.

It wasn't until I made all those mistakes and alienated everyone who ever meant anything to me until I lit a fire up under my arse and started getting to work.

Fear is a sonuvab*tch.

When a fearful man is asked how he is doing by another person he always says "I'mgoodthankshowareyou" or something of that effect. He has nothing useful to say at all because he is consumed by his fears. He says that because he is not in the zone.

In the zone in trading..

In the zone with women at the club..

In the zone with family..

In the zone with life..

Getting in the zone is nothing more than a choice.
 
Well I started trading with $5000 and had a friend who was making good $ trading options and figured if I followed his trades, I couldn't go wrong. Ha,ha ha. Like the original poster's friends, he was a contrarian and averaged down his loses all the time, something you cannot do with a $5,000 piker account as one or two bad entry points and pretty soon your money is gone.
I've been trading off and on for about 7-8 years and at least now can admit I don't have a clue and it is beyond me at this time to be successful with the methods I've used over the years.
 
Quote from chrismontez:

Well I started trading with $5000 and had a friend who was making good $ trading options and figured if I followed his trades, I couldn't go wrong. Ha,ha ha. Like the original poster's friends, he was a contrarian and averaged down his loses all the time, something you cannot do with a $5,000 piker account as one or two bad entry points and pretty soon your money is gone.
I've been trading off and on for about 7-8 years and at least now can admit I don't have a clue and it is beyond me at this time to be successful with the methods I've used over the years.
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I keep reading these posts about successful traders averaging down all the time. IT IS BS! Sure you can do that successfully for a while, but not for long.

For the sake of the rookies, consider this: if you blow up with 5k, you would blow up with 50k as well: you simply would take 10x positions. Alternatively, if you take the same poistion, then your returns would be a mere 10% of what you (would) make with a 5k account. How on Earth can anyone come out as a winner from this?

Those who average down masterfully are not doing it in a martingale mindset. It is planned ahead, and they have learned the discipline to cut their position out at the stop level. They don't push the stop level lower with the 2nd trade, in fact, the stop level stays the same as for the 1st trade, thus the 2nd trade is put on with a very tight stop. And tight stops also don't have positive expectancy.

Rookies should not average down, because they don't have the discipline to cut losers in the first place. And by the time you survive and get the required discipline to trade, you will know much much much better ways to trade than to average up, down, or through. (Hint: if you're itching to put on another trade why not put on a trade in a different instrument? You'll be a hell of a lot more diversified as well.)
 
averaging down doesn't have to be any more risky. say you want to risk 3% of your account of 50,000. thats 1500, and if you divide by 3, you get 500

this means that you can add 500.00 worth of stock to your positions three different times before being stopped out at your intended 3%. I dont do this, but if I were, I wouldnt be scared at all, because the risk is the same as it would be if you were to risk 3% on just a single trade. So if you look at it from a different point of view, your chances of having a winning trade might actually be higher.

but as a new trader...just dont do it :)

cm
 
Well my friend who is still averaging down probably makes between $60-$100,000 per year trading part time and has been doing so successfully for about 12-13 years. He used to enter a position of 20 calls/puts with the intention of taking $20 profit per option. I've seen him then average down to a position of 200 options looking to break even. Last year he was down $30,000 on an OEX call position he kept adding too , but still came out ahead when the market ran up for a few days. The thing is, even in a heavily trending market like the recent bear market, you still get days that run against the trend. If you load up enough on a turn you can get out of your trade without a large loss IF YOU HAVE THE TIME AND MONEY TO SEE IT THROUGH. And if you know anything about hedging. there are lots of alternatives to taking a loss.

But this isn't a trading style I recommend to anyone new. Just enter a stock position with a stop slightly outside the daily range of the stock is probably safest.
 
What about averaging down the stock while holding collars to avoid catastrophic losses from sending you to the poor house? I haven't tested it, it's just a idea.

Collars limit both gains (since you write a covered call) and losses (you've got a protective put).
 
I've had this conversation a number of times on this board so will just say that in reviewing the scores of trades I made over the years that involved spreads of any kind, I would have made more $ by just risking the same amount of $ on a naked option position. My calls/puts that I capped at a potential $150 - $250 profit in the spread often had the long leg expire 5 times that or more in the money.
 
Dude, after you have a loss, no "hedging" is gonna save your ass.

Quote from chrismontez:

And if you know anything about hedging. there are lots of alternatives to taking a loss.
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Quote from aalluubbaa:

I cannot trade, PERIOD. For a long while, even when I was losing/not making money, I could find some "reasons" and try to make something positive out of it.

I started to day trade last year in a prop firm from febuary to june. Didn't really blow my 5k accout but had like 1 k left. I didn't feel all that happy but it was ok because i found out later that i got completely robbed by having a 1 dollar/100share commission. Ya, so buying and selling on 100 shares cost me 2 bucks!! I still managed to trade almost half a million shares during that half a year and not blowing my 5k completely.

I stopped trading for like half a year and found a few profitable traders to rent an office to trade. They were all formal Swifttrade traders. They are all contrarians!! I see them average down all the time and take small profits. Their winning percentage is extremely high like 80 to 90 percent. They scalp and average down and make money 8 out of 10 days. I don't like their method and I don't think I can trade their method because when i started to day trade, I trade trend and averaging UP.

Now I have no idea what is right and what is wrong!! I have to admit that i have no methods. Ya, it sounds pretty stupid but i just look at support and resistence and the market. If i feel that the market is ranging, i will go long on the support. So basically i make/lose money of rangin market and trend market.

This monday and tuesday i made some money real quick trading range. On wednesday, i traded range the first few times and traded trend because i "imagine" that the market will go up so i keep on going long whenever spy is breaking new highs. On thrusday i was scared of trading trend so i was picking bottom the entire time and had a rediculous 5% winning percentage. On Friday i was averaging down and died real fast.

The only thing mabbe im still "happy" is that there isnt a signle trade that killed me. its always a series of small losses without any winners.

Last night before i slept, i feel like i have be so confused and lost. Because i have no idea what to do. What i learned was to trade trend, and everyone in my trading room is trading "counter-trend" and make money every month!!

I looked at how they trade and i dont think i can learn from them. They hold on to "huge losses" and average more down. they have the discipline to make some money on "every pullback." I cant do either. They win almost every day but only when there is a stock going one direction without even a 10 precent pullback. Good thing about their max loss of the day is that they will be stopped out in days like that.

To me, their method do have an EDGE. But its an edge i cant learn. How the heck do i trade trend when every single one of my collegues r going counter-trends? And you know that they will make money this month and i am just a friggin noob.

I NEED SOME SERIOUS HELP. Any strategy that requires discipline of cutting small losses can fit into my tradying style.

Thanks for reading this long and dull post!
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Use the box to save your socks!

Sorry for rhyme, but my mind is like chime.

Bye - Bye:)
 
"Dude, after you have a loss, no "hedging" is gonna save your ass. "

That's a pretty stupid statement if you have any actual experience using single stock futures and options.
 
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