:eek:
Successful Trading and Compounding - On Steroids
- Thread starter gmst
- Start date
:eek:
I'll take that as a NO!.
This is impossible, we all do and will continue to make mistakes, your plan can't rely on operating error free.
Aren't you trading multiple ES contracts with a 26k acct? If so, imo, your only mistake is overleveraging....and arguably trading es rth (why do you think you have edge there)?
M2c, trade spy in small size and work on consistency. GL.
Make it your goal not to win big etc etc but to lose as little as possible per trade. Everyone makes bad calls but the trick is killing them dead in their tracks before they kill you. It really is as simple as many others have said.. add to winners and dump the losers. With a good R/R ratio you can at least stay semi flat on gains vs losses while trading till you find an edge to manipulate to ramp up on while it lasts. Just don't go to crazy and find yourself in the death of a thousand stops.
GL
GL
Biggest mistake is to allow yourself to lose 50% in a week.
I would suggest that you assess the costs of your errors this week (not all losing trades are errors, right ?), and that you stop trading actual money until you can re-fund your account for that amount.
Do it every time you make an error. It won't take long before you think before you act.
Anyway, it doesn't seem you have any edge (I mean, at least confirmed by 500 trades in backtest w/ positive expectancy after comms & slippage). If you think you do, please post your backtesting results FOR THE LAST WEEK, and compare that to what you actually did.
yes, I was going to ask you, "What is the proper time frame to lose 50% in?"
If never, then what is the other 50% doing just sitting there if you are never going to use it?
If I lose 50% in a month is that ok?
or should I try to make it last a year?
You seem to know a lot about time, why don't you explain it to me? We all want to avoid the "biggest mistake."
Assuming reasonable position sizing (each trade's risk set to 1% of account balance), the answer is a string of 68 losing trades net, unless other risk management rules put you to the sidelines prior to that.
On a starting 26k account, 1% risk is$260, for 1 contract that's 5 ES point or 26-ticks in CL ... way too small for swing or position trading, but most intraday setups should be more than ok with that size of initial stop.
I once read an article that said "If you have positive expectancy, with leverage you can make any return you like, as long as you are willing to endure the associated drawdown". That's why trading accounts should be funded with money that you can afford to lose 100% of. That way, when you encounter the inevitable 50%, 60%, 75% drawdown that comes with making outsized percentage bets, you don't freak out and pull the plug.
I'm of the opinion that it's OK to lose 50% along the way, so long as at the end of the journey, you are up at least 200%. A max return to max drawdown ratio at that level will put you in the upper echelon of traders, from what I've read. I don't think gmst is going to reach that level, though. His execution is just too poor.
gmst,
With all due respect, here are some tough questions.
1) With the kind of experience you have now - you are clearly not a complete newbie any longer and have been doing this for some time now - how is it even possible to lose 50% in a single week save a market crash?
Was this loss because you lost an incredible amount of points and overtraded or because you are way overleveraged? Or a combination?
2) Why are you risking this kind of money without being properly prepared? You have a 26K account, but did not even bother to buy one cheap extra LCD screen before you started? What`s the rush? I have one laptop for backup and two 22" for my workstation and I could need more space, only for ES trading.
3) Why don`t you follow your plan? Is it a poor one?
4) How can one single missed trade mess with your psyche for one complete trading week? The market offers an ample amount of swings up and down every trading day. Each day offers opportunity. You need an objective methodology to exploit the daily swings. Free from emotional content. If one missed trade fucked up your whole week, it tells me that your methodology is not good enough. At least take time off the next time you notice that a 10 point lost trade destabilize you. And remember, hindsight is always 20/20. You don`t know if you would have exploited those points if you were present.
5) What will you say to your family and friends about this loss considering you raised money from them? How can you defend continuing to trade at this point? Would you have given yourself money to manage at this point? Answer honestly.
If anything, you should not trade on Monday or next week. Even Marty Schwartz took time off after a destabilizing loss. It`s necessary. It took me a long time and a lot of lost money to learn this.
6) Why do you average down? It is a losing strategy and poor arithmetic. If anything, add to a winner.
7) Do you think posting in the ES journal during market hours adds or takes from your trading performance?
At this point, I think your best bet is a TST combine. Lose $150-300 instead of the rest of your account.
Better yet, take the time to prepare yourself and create a reliable methodology. Losing days should not be a part of it, much less losing weeks. Even consider spending 10K on research and software development to create something that is really good. You can come a long way with that and the funding is there when you`re ready.
Good luck!
Regards,
LF
With all due respect, here are some tough questions.
1) With the kind of experience you have now - you are clearly not a complete newbie any longer and have been doing this for some time now - how is it even possible to lose 50% in a single week save a market crash?
Was this loss because you lost an incredible amount of points and overtraded or because you are way overleveraged? Or a combination?
2) Why are you risking this kind of money without being properly prepared? You have a 26K account, but did not even bother to buy one cheap extra LCD screen before you started? What`s the rush? I have one laptop for backup and two 22" for my workstation and I could need more space, only for ES trading.
3) Why don`t you follow your plan? Is it a poor one?
4) How can one single missed trade mess with your psyche for one complete trading week? The market offers an ample amount of swings up and down every trading day. Each day offers opportunity. You need an objective methodology to exploit the daily swings. Free from emotional content. If one missed trade fucked up your whole week, it tells me that your methodology is not good enough. At least take time off the next time you notice that a 10 point lost trade destabilize you. And remember, hindsight is always 20/20. You don`t know if you would have exploited those points if you were present.
5) What will you say to your family and friends about this loss considering you raised money from them? How can you defend continuing to trade at this point? Would you have given yourself money to manage at this point? Answer honestly.
If anything, you should not trade on Monday or next week. Even Marty Schwartz took time off after a destabilizing loss. It`s necessary. It took me a long time and a lot of lost money to learn this.
6) Why do you average down? It is a losing strategy and poor arithmetic. If anything, add to a winner.
7) Do you think posting in the ES journal during market hours adds or takes from your trading performance?
At this point, I think your best bet is a TST combine. Lose $150-300 instead of the rest of your account.
Better yet, take the time to prepare yourself and create a reliable methodology. Losing days should not be a part of it, much less losing weeks. Even consider spending 10K on research and software development to create something that is really good. You can come a long way with that and the funding is there when you`re ready.
Good luck!
Regards,
LF
I recently read the book "Trading And Exchanges" by Larry Harris. I recommend it.
He differentiates between informed and uninformed traders. Utilitarian traders are uninformed traders who obtain some benefit from the markets besides trading profits. For example hedgers.
Speculators are informed traders who use information to predict future price changes more accurately than most other traders can. Their superior information gives them an advantage when they trade. Speculators trade because they expect to make money.
Let me quote the book for the rest:
"In contrast, gamblers are uninformed traders. Although they hope to make money, they have no rational reason to expect that they will do so.
Many - probably most - traders who gamble in the financial markets are unaware that they are gambling. Most believe that they are pursuing other objectives. Traders need great discipline to discriminate between prudent risk-taking behavior and gambling. Many traders who believe that they are speculating actually are gambling because they do not recognize that the information upon which they trade does not give them any advantage over other traders. Traders who gamble can sometimes be identified by their enthusiasm for trading and by their inability to clearly articulate their reasons for trading."
He differentiates between informed and uninformed traders. Utilitarian traders are uninformed traders who obtain some benefit from the markets besides trading profits. For example hedgers.
Speculators are informed traders who use information to predict future price changes more accurately than most other traders can. Their superior information gives them an advantage when they trade. Speculators trade because they expect to make money.
Let me quote the book for the rest:
"In contrast, gamblers are uninformed traders. Although they hope to make money, they have no rational reason to expect that they will do so.
Many - probably most - traders who gamble in the financial markets are unaware that they are gambling. Most believe that they are pursuing other objectives. Traders need great discipline to discriminate between prudent risk-taking behavior and gambling. Many traders who believe that they are speculating actually are gambling because they do not recognize that the information upon which they trade does not give them any advantage over other traders. Traders who gamble can sometimes be identified by their enthusiasm for trading and by their inability to clearly articulate their reasons for trading."