My Stab In The Dark

Quote from Dura:

Awesome, I got some replies!



Thanks,

I realize that my win percent isn't high enough. To be honest going into those trades I didn't even take note as to what my risk to reward was. I need to learn more about that.

As far as setting stops. I've been hearing a lot of negative things about them. I even read an article by Don where he talks about the similarities between poker and trading and how having a stop in the market is like showing your hand in poker. I'm not to sure what he meant by that. But it sounded like not having a stop was an edge. I could be wrong in my interpretation. But here's the link. http://www.stocktrading.com/riskreward2.html



How's it going Mr. Super Trader? Thanks for replying!

I get what you're saying about being too greedy and holding on too long. My initial mind set was that I wanted to take what the market was going to give me. At one point with the MLHR trade I was up around $60.00, I didn't take profits because I wanted to let my profits run. My mind set now is to take a $30 profit and run with it. I was previously taking trades in stocks with a $0.30 stop and profit target. Most of these trades had a 4.0 risk/reward ratio using S/R and ATR. Again my stops were hit every single time.

I really like what you said about managing drawdowns. That makes a lot of sense. I'll focus on this aspect a little more.

Also the problem with being under capitalized is IMO money management. I've read everywhere that good money management means you never risk more than 2 percent of your capitol on one trade. In my case I would only be risking $40 and $30 after commissions and fees. I can't do much with that.

Also, I don't know about Forex. I hear you can't see volume on Forex, is that true? I also find learning how to trade stocks seems a little more simpler. With FX you have to learn about a slew of things like, pips, pairs, and which markets are open. You have to pay attention to the news. Trading stocks seems more cut and dry. The problem with stocks I find though is you have to scan through a lot and find set-ups.

I do plan on sticking with it. I'm pretty dedicated when I set my mind to something. I have no doubt I will eventually be successful at trading. Again, I appreciate the replies. Please keep them coming as this is helping me learn.
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Awesome that you have the dedication to succeed. My belief is perseverance is key.

I don't want to steer you in the wrong direction. So maybe learning a different market before you learn this one may not be a good idea.

You are right volume is not shown like it is in the stock market. You can read the volume through different mechanisms such as order flow and so on.

The only reason i brought it up is because you can risk 2% per trade and not pay any commissions. So regardless of your account size commissions are obsolete. Which allows for correct money management without being under capitalized.

When you build your account up or obtain more funds then you can minimize your risk appropriately.

You may think risking 2% per trade to gain 2%is to small of a gain.

Really though compounding your account with an average of 1% per trading day will show you a 1000% return or so a year.

This minimizes your draw down. You can get 10 trades in a row wrong and still be down less then 20%. On the upside 2% per trade with an edge will make you rich in no time. Even starting with a tiny account.

Year 1 starting balance 500$ end of year 1 5000 $ end of year two 50,000 $ end of year 3 500,000 $ end of year 4 500,000,000 $ end of year 5 liquidity problems time to reevaluate your method to find more liquidity. A great problem i hope 1 day i have.

I know simple math! Any body can add. My point is simple the power is in the numbers.

This is highly achievable with the right mindset with proper money management and an edge.


All this can happen risking a measly 2% per trade to gain 2% or more.

You can risk more then 2% per trade though just not too much more. Anybody can have a bad luck streak.
 
Quote from Mr Super Trader:

Awesome that you have the dedication to succeed. My belief is perseverance is key.

I don't want to steer you in the wrong direction. So maybe learning a different market before you learn this one may not be a good idea.

You are right volume is not shown like it is in the stock market. You can read the volume through different mechanisms such as order flow and so on.

The only reason i brought it up is because you can risk 2% per trade and not pay any commissions. So regardless of your account size commissions are obsolete. Which allows for correct money management without being under capitalized.

When you build your account up or obtain more funds then you can minimize your risk appropriately.

You may think risking 2% per trade to gain 2%is to small of a gain.

Really though compounding your account with an average of 1% per trading day will show you a 1000% return or so a year.

This minimizes your draw down. You can get 10 trades in a row wrong and still be down less then 20%. On the upside 2% per trade with an edge will make you rich in no time. Even starting with a tiny account.

Year 1 starting balance 500$ end of year 1 5000 $ end of year two 50,000 $ end of year 3 500,000 $ end of year 4 500,000,000 $ end of year 5 liquidity problems time to reevaluate your method to find more liquidity. A great problem i hope 1 day i have.

I know simple math! Any body can add. My point is simple the power is in the numbers.

This is highly achievable with the right mindset with proper money management and an edge.


All this can happen risking a measly 2% per trade to gain 2% or more.

You can risk more then 2% per trade though just not too much more. Anybody can have a bad luck streak.
More...

Thanks for the advice. I'm trying to get 1% per trading day. Unfortunately no trades today. I was sleeping all day, tired from work. When I woke up and saw the market going down, I wanted to take a trade but there was an error at the brokerage with my BP. Does this ever happen to anyone?
 
Let's start to talk about documentation. Remember, trading is a business.

1) The 1st goal of trading is to find one or more profitable setups. This may be called by some an edge. A profitable setup is something that allows you to make a winning trade.

2) The next step is for you to determine once you are in a trade if the market is validating your trade as it goes in your direction. Once the trade goes in your direction, you need to determine when to take a profit and if the trade is not going in your direction when to get out of the trade and wait for another profitable setup.

3) Once you have determined your profitable setup, write it down in a Word document and insert a copy of a chart the shows the trade working. This is then your rules of trading.

4) Next, for awhile, start entering all your trades into Excel. Have columns why you got into the trade. What you traded. If you made a profit or a loss. Also, add a summary of what you thought of the trade once it was finished.

5) Now the hard part, controlling your emotions. No one wants to lose money, but in trading, we must accept the fact that we are going to lose money, and it may produce an emotional response of anger or sadness when we have a losing trade. This may cause us to revenge trade, over trade, or hold a losing trade way too long thinking it will get better.

I will now talk about my discovery after many years of trying of a profitable edge. I had been losing money more to revenge trading then anything else. I then looked over a chart of a day's losses and saw I had been fighting the trend all day. I then looked back and spotted a counter intuitive possible edge that would have made me money that day. Now my chart was already setup with proprietary TA developed by some master traders that tried to help me out with some advice, so I did not need to change anything, I just needed to see clearly what I should know by now.

Yesterday, I was profitable after a trade, saw this setup and was too scared to take it since I did not want to turn a winning trade into a losing trade. However, today, I saw the setup, and took the trade, and it was a winner.
 
Still no trades. Staying in cash. Not a big fan of the way the market is moving right now. Is this what it looks like when the market is forming a base for the next uptrend?

:confused:
 
Your commission costs compared to your avg win and avg loss are too high.

Say your avg win or loss is 50 dollars, with a 5$ commission , 10% of your money is going to the house regardless of win or loss , something to think about .

All the best
 
So what would be the best solution to this problem since many of us have it. Would you suggest us to trade for an extra tick to cover commission costs assuming the trade has the possibility of going that far?

Or if he were to become a profitable trader to join a prop firm since he trades stocks.

Quote from Zr1Trader:

Your commission costs compared to your avg win and avg loss are too high.

Say your avg win or loss is 50 dollars, with a 5$ commission , 10% of your money is going to the house regardless of win or loss , something to think about .

All the best
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The op has losses and gains of less than 100 dollars which to me is a red flag considering his commission is 10 bucks an RT. thats 10% of the bottom line going to the house by default.

I look for 2-3% or less of my bottom line to go to the house vig, in CL there are usually 7-12 swings greater than 40 pts everyday. If my commission is $4.50 a rt then I want to aim for at least 45 cents per trade (450$) so that my cost per trade stays at about 1% . Cost is a huge thing to consider. OP will have to consider adequate range compared to comisison/spread.

Forex trading using adequate ranges compared to spread would be a good idea for small accounts IMO. Costs will churn the heck out of him if he's not careful. It's how the brokers stay in business.
 
Quote from Zr1Trader:

Your commission costs compared to your avg win and avg loss are too high.

Say your avg win or loss is 50 dollars, with a 5$ commission , 10% of your money is going to the house regardless of win or loss , something to think about .

All the best
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I know. It's actually the cheapest deal I found. I could use another brokerage which use the per share model but that usually requires a larger minimum. I'm currently in the process of saving up for a PDT account so I don't want to put that capital at risk yet. I'm looking at making $20-30 net right now per trade. So the commission percentage is a problem. But not one that I am truly concerned with because I've included it into my calculations. This account is just for learning. I believe I'm getting more experience trading a live account versus a sim because of the exposure to real trading emotion.
 
Nice journal so far. I was looking through the broker area and saw SogoTrade...they have 3 dollar trades with a 500 minimum. Not sure if they are good or not from my own experience, just trying to give you possible options.
 
Quote from DayTrader10:

Nice journal so far. I was looking through the broker area and saw SogoTrade...they have 3 dollar trades with a 500 minimum. Not sure if they are good or not from my own experience, just trying to give you possible options.
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Hey, I appreciate the suggestion. I took a look at the website, it seems like it could be worth it to transfer my account. I'll look into it a little more and decide if I'll switch over. I wonder why they aren't mentioned on stockbroker.com.
 
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