Learned my weakness the hard way!

D

dac8555

I wanted to share an experience that may help someone.

I have been managing a small fund of family and freinds for a few years and done pretty well (32% yoy). I do it in an extremely simple and hands off way. entering positions, setting stop losses and walking away....maybe i check positions once a day.

So i took my results and presented them to a friend of mine who owns a broker dealer and asked if her wanted to start a fund. He went for it and gave a a couple million bucks to start with while we work out the "bugs" and get some clients together.

We started trading this month...in 2 weeks i lost 1.5% and have egg on my face.

WHY?

I am was using realtick...and have had lots of problems. the main think is the lack of programability and lack of GTC orders...SOOOO i had to sit and baby sit the stupid positions all day..and the intraday fluctuations drove me nuts...so i would exit positions WAY too early and second guess everything.

Where as what i have done in the past is ignore intraday fluctuations and simply check to see if any stop losses were hit.

So if it helps anyone...if you are like me and it make you nervous and doubtful of you own ability. to watch your positions go all over the place intraday....maybe try to program and walk away.

I analyzed that if i simply kept the positons i bought originally, i would have been up several percentage points in 2 weeks.

I am switching to cyber trader next week.
 
sorry to hear that.


for what's it's worth, you're not alone.

I did great last year(+25%) - my first year swing trading by placing exit orders when I entered.

The first 3 months of this year I lost 130k by going intraday and trying for every single move - I had to get it - every move - couldn't let potential profit's go!!1!!1!!!

Now my discretionary trading account is down to 6k.

Always keep in mind - it could be worse.



Let's get that $$$ back man!


-krazy




(do you have an IB account? you might like the platform if you've never used it...)
 
All this kind of things happen when trader use a discretionary approach. Smaller chance for this to happen when a trader use a mechanical system, whether it is automated or manually executed. Correct me if wrong.
:confused:
 
<i>"Smaller chance for this to happen when a trader use a mechanical system, whether it is automated or manually executed."</i>

<b>Karl</b> will make all of his money back and then some with one simple, mental adjustment... and he already knows what it is.

Rather than "having to have" every possible wiggle, targeting only specific setups that fit within method = system guidelines and acceptance to pass up everything else elevates one from gamer to professional trader, asap.

Much if not most of any day's potential profits are just out of reach... that is a fact which will never change. Just get good at capturing one's share, more days than not and control losses in the remaining days.

A trading account can go from $6,000 to $600,000 carefully, methodically, eventually if one gets real good at trading a few specific setups AND (painfully) ignores all the rest.

Greed kills. Deliberation enriches :>)
 
Im not a fan of active trading anymore. 32% and 25% are very respectable returns. However, it involved trading in and out on a daily basis. Very risky and requires lots of manual labor. Sitting in front of a monitor and carefully looking at the trades.

There are other strategies that could have been used and you would have realized a similiar, if not better, return.

My belief is swing trading a small basket of carefully picked stocks should yield excellent results. For example, the oil stocks in 2005 were obvious picks. Small oil drillers. etc. Some of them doubled from Fall to Spring 2005. During the summer, consumer staples seemed to be the fad and P&G realized a 20% return from June until now.

I realize that some people yield great profits and/or some type of joy from actively trading. However, I see it as being an overly risky strategy and the same returns can be found with the small basket with a hold time of 2-4 months.
 
Quote from eagle488:

Im not a fan of active trading anymore. 32% and 25% are very respectable returns. However, it involved trading in and out on a daily basis. Very risky and requires lots of manual labor. Sitting in front of a monitor and carefully looking at the trades.

There are other strategies that could have been used and you would have realized a similiar, if not better, return.

My belief is swing trading a small basket of carefully picked stocks should yield excellent results. For example, the oil stocks in 2005 were obvious picks. Small oil drillers. etc. Some of them doubled from Fall to Spring 2005. During the summer, consumer staples seemed to be the fad and P&G realized a 20% return from June until now.

I realize that some people yield great profits and/or some type of joy from actively trading. However, I see it as being an overly risky strategy and the same returns can be found with the small basket with a hold time of 2-4 months.
More...

100% agreed.

I was born a swing trader.

Too much activity wastes me.
 
I've had the same problem for a long time, also with an issue of pulling the trigger.
Isn't this a simple matter of discipline?
If you trade your strategy flawlessly, taking profit/losses exactly according to your strategy without giving in to your emotional whim, this problem wouldn't exist anymore, right?
Anyways you could try self-hypnosis techniques, they had helped me with this issue.
 
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