Forgot bout o bama day, was wondering why I wasn't filled
Oh well, will leave order in and see what happens.
J_S
Ahhh - premkt prep - could have slept in another couple of hrs
RN
Prudent Risk Management Is The Only True Edge In TRADING
- Thread starter Buy1Sell2
- Start date
Ahhh - premkt prep - could have slept in another couple of hrs
RN
Ahhh - premkt prep - could have slept in another couple of hrs
RN
I was doing some weeding, and took my usual sit down time for market open, outside in the sun of course
, and when I did not see the usual movements at the open, I knew right away something was wrong, then I remembered o'bama day
Tomorrow will be back to normal, up and down like a fiddler's elbow
J_S
Tomorrow will be back to normal, up and down like a fiddler's elbow
And likely then some - pent up testosterone being what it is
RN
As per 2B's journal thread.
Some time ago, I took a break from all trading, for about 3 years actually, and let's just say I was a real fool for that period, no more about that!
I returned around Jul15, and boy it took me ages to get back into things, for I had forgotten all of my daytrading setups and what way I used to trade. As usual, I started to lose track of what I was actually trying to do, and was doing nothing but wasting time looking at new setups in excel (those in private thread will know what I am talking about).
The main thing that was wrong, was that I was not actually trading, and was just talking rubbish on websites with others about silly things that had absolutely nothing to do with me making money.
One night, I said to myself, OK, that's it, enough of the usual crap, time to get down to business. I opened up TWS, looked up some charts, and placed a trade on an ES call option, and did not care if it won or lost, I just wanted to start trading again.
It won.
I then looked at CL options, and started to place a good few trades on ES and CL options, losing on some, winning on some, but overall, I started to do what trading is all about, making some money.
Within the first month I was down about $2K, but as I done more trades, things started to come back to me, and within 3 months I was up about $5K by being more selective, and only placing trades after doing some looking first!
Recently I have done a few outright futures trades, made a few $K, but nearly made a big mistake of holding NQ overnight, which was down nearly $3K at one stage on following day, as I added another contract, but after looking, and taking an educated guess, I held out instead of closing and giving back some profits, and closed later on same day for $900 profit.
Point is.
It is very easy to get distracted, and distractions cost you money when trading. The only way to make money is to trade, talking will get you nowhere, and when you trade, unless you do your homework, for every trade, then the odds of you winning are very small, as you are already playing with the cards stacked against you, so, due diligence is a must in order to prevent you from being "sucked in".
I do not need any documents to trade, as I know exactly what does and does not work, and, I know every time I do not do my work first, then my chance of losing is far greater than my chance of winning.
Once I do my work first, and then trade, I can, and do, make money trading.
Unless it is in your head, which takes years of losing and winning to get to that point, then, you need the likes of RN's A&M document, otherwise, you are just pissing against the wind, no matter what any other person tells you, for, the whole reason you are not making money, is because of what you are doing, or not doing, and that should be obvious, if not, then you are a fool, and you should not be throwing away your money to other people, better to keep it for your family and/or children.
J_S
Some time ago, I took a break from all trading, for about 3 years actually, and let's just say I was a real fool for that period, no more about that!
I returned around Jul15, and boy it took me ages to get back into things, for I had forgotten all of my daytrading setups and what way I used to trade. As usual, I started to lose track of what I was actually trying to do, and was doing nothing but wasting time looking at new setups in excel (those in private thread will know what I am talking about).
The main thing that was wrong, was that I was not actually trading, and was just talking rubbish on websites with others about silly things that had absolutely nothing to do with me making money.
One night, I said to myself, OK, that's it, enough of the usual crap, time to get down to business. I opened up TWS, looked up some charts, and placed a trade on an ES call option, and did not care if it won or lost, I just wanted to start trading again.
It won.
I then looked at CL options, and started to place a good few trades on ES and CL options, losing on some, winning on some, but overall, I started to do what trading is all about, making some money.
Within the first month I was down about $2K, but as I done more trades, things started to come back to me, and within 3 months I was up about $5K by being more selective, and only placing trades after doing some looking first!
Recently I have done a few outright futures trades, made a few $K, but nearly made a big mistake of holding NQ overnight, which was down nearly $3K at one stage on following day, as I added another contract, but after looking, and taking an educated guess, I held out instead of closing and giving back some profits, and closed later on same day for $900 profit.
Point is.
It is very easy to get distracted, and distractions cost you money when trading. The only way to make money is to trade, talking will get you nowhere, and when you trade, unless you do your homework, for every trade, then the odds of you winning are very small, as you are already playing with the cards stacked against you, so, due diligence is a must in order to prevent you from being "sucked in".
I do not need any documents to trade, as I know exactly what does and does not work, and, I know every time I do not do my work first, then my chance of losing is far greater than my chance of winning.
Once I do my work first, and then trade, I can, and do, make money trading.
Unless it is in your head, which takes years of losing and winning to get to that point, then, you need the likes of RN's A&M document, otherwise, you are just pissing against the wind, no matter what any other person tells you, for, the whole reason you are not making money, is because of what you are doing, or not doing, and that should be obvious, if not, then you are a fool, and you should not be throwing away your money to other people, better to keep it for your family and/or children.
J_S
It can all depend on what you are trying to achieve.
Recently, as I do a lot of looking, I have come across something that requires very close up looking, and very quick actions, but, I am thinking it will be very useful for daytrading outside my normal US Open trading, namely, US Last 2 Hour Trading, and will be testing it live over the coming weeks, with small size, to validate its effectiveness.
I have yet to confirm if it will require more than 1 timeframe to enable effectiveness, as my usual train of thought is MTF for all trading, but this time it may not, and just one chart (or 2 max) may well suffice.
Only time will tell.
J_S
Money management and psychology is what "gurus" bang on about to sell course because it is easy to define and give you a little video to watch or book to read about how if you only risk 2% you will never go bust and if you do its your own "psychology".. sign up to the next course to learn about psychology. Total B.S!
Ive been in this industry my entire career and worked with guys clearing 100-200k a month in profits. Personally i havent had a down month in about 3 years and money management and psychology is the thing i work on least. If you can even call it work.
I know what my account is and I know I have a worst case scenario where i will liquidate everything on a day if things get too bad. That probably happens once every 8-9 weeks. And all traders need to have this. But to be honest if you cant stick to that you shouldnt be anywhere near any form of financial speculation, whether it be trading or opening up a sandwich shop. Its not rocket science, its called not being an idiot!
An edge is something entirely different. An edge isnt looking at a chart and buying because its a level. Or some indicator says buy. An edge is "knowing" the market is about to move. And im talking 80%+ accuracy. This is based on working with the brightest minds in the industry for years. Learning exactly why and when markets move. Understanding how algorithms enter and exit the market. How the main drivers of your market (central banks for bonds, pension portfolios for equities etc) price their entries. What time of day they enter etc etc.
I dont mean to come across arrogant because I am not, i am only too aware of how uncertain this industry is and how you have to always be vigilant. But makes me so frustrated when i see new traders/frustrated traders marching off down the "oh if i only had a risk:reward ratio of this, and only risk x% a trade I would be ok". No you wont. If you dont have an egde money management just means you lose money slower.
Ive been in this industry my entire career and worked with guys clearing 100-200k a month in profits. Personally i havent had a down month in about 3 years and money management and psychology is the thing i work on least. If you can even call it work.
I know what my account is and I know I have a worst case scenario where i will liquidate everything on a day if things get too bad. That probably happens once every 8-9 weeks. And all traders need to have this. But to be honest if you cant stick to that you shouldnt be anywhere near any form of financial speculation, whether it be trading or opening up a sandwich shop. Its not rocket science, its called not being an idiot!
An edge is something entirely different. An edge isnt looking at a chart and buying because its a level. Or some indicator says buy. An edge is "knowing" the market is about to move. And im talking 80%+ accuracy. This is based on working with the brightest minds in the industry for years. Learning exactly why and when markets move. Understanding how algorithms enter and exit the market. How the main drivers of your market (central banks for bonds, pension portfolios for equities etc) price their entries. What time of day they enter etc etc.
I dont mean to come across arrogant because I am not, i am only too aware of how uncertain this industry is and how you have to always be vigilant. But makes me so frustrated when i see new traders/frustrated traders marching off down the "oh if i only had a risk:reward ratio of this, and only risk x% a trade I would be ok". No you wont. If you dont have an egde money management just means you lose money slower.
VG post, and it sounds like me talking to myself with most parts, but I can see a few flaws there.
I do not agree with all, but the most important parts are there, as in pension funds for stocks.
In relation to understanding what moves price, the recent looking I am talking about is based on what I believe to be mostly auto trading in the ES, and as Futures lead cash, it is a good idea to try and understand what moves ES at certain times.
Your reference to time is bang on, as, I am an avid believer in Time = Money.
We differ on risk management and liquidation, for, the only time you should be flat is when black swan arrives, and even this offers big opportunities for those with nerves of steel, but it is hard to control your risk during such times, even with options, as I have often seen the bid offers just disappear for option strikes during such times.
Very good post overall.
J_S
I meant flat for a period of days, as it is normal to be flat during the day for a very short period, as when price consolidates prior to moving again, but point is you should really be trading everyday to not miss the opportunity when it appears.
I do not agree with all, but the most important parts are there, as in pension funds for stocks.
In relation to understanding what moves price, the recent looking I am talking about is based on what I believe to be mostly auto trading in the ES, and as Futures lead cash, it is a good idea to try and understand what moves ES at certain times.
Your reference to time is bang on, as, I am an avid believer in Time = Money.
We differ on risk management and liquidation, for, the only time you should be flat is when black swan arrives, and even this offers big opportunities for those with nerves of steel, but it is hard to control your risk during such times, even with options, as I have often seen the bid offers just disappear for option strikes during such times.
Very good post overall.
J_S
I meant flat for a period of days, as it is normal to be flat during the day for a very short period, as when price consolidates prior to moving again, but point is you should really be trading everyday to not miss the opportunity when it appears.
I think TM"s point was that those who sell stuff, go for the same old textbook rubbish about risk management, etc.
Years ago I though Van Tharp was a genius with his famous R- Multiple term, and I even done up an excel spreadsheet to automatically calculate my amount of shares per trade based on my % risk, and had it all worked out to the T.
There was, however, one main problem, and that was I hadn't a clue what I was doing!
I even joined Ken Calhoun private live trading 4 month session, where Ken used to say, "only pros take this trade"
Now I look back and laugh at my foolishness, as you do not need the likes of VT or KC, for they are educators, not traders, and believe it or not, there is a big difference in what you can learn from an educator, and a real trader.
No one is stupid enough to think that TM does not use risk management, for he does, in his own way, and that is the best way, for what works for TM, might not work for anyone else, as there is only one TM!
J_S