Let's be fair: Neke is up on the year, and with tighter stops in place would be WAY up on the year. Trading is a business and as in all businesses you can learn from your mistakes. I'd be sitting on an additional $130K from the past 4 months just by placing stops right away. Cut your losses quickly, protect and ride your profits.
Taking 103K to 1.2million by Year End 2008
- Thread starter neke
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Let's be fair: Neke is up on the year, and with tighter stops in place would be WAY up on the year. Trading is a business and as in all businesses you can learn from your mistakes. I'd be sitting on an additional $130K from the past 4 months just by placing stops right away. Cut your losses quickly, protect and ride your profits.
Neke, here's a tactic I'm developing for my psychology. When I make a trade, I analyze how I feel about the trade. I'm sure you notice this. Frequently when you make trades, you probably have a degree of skepticism about certain trades because they just don't quite fit your criteria, but you'll make the trade anyways. So, what I'm forcing myself to do is to second guess myself. What is my confidence level on this trade? Only trades that I feel 100% fit my criteria will I make anymore. Basically, the trade has to give me the "ah..ha" reaction. Otherwise, I don't set up a trade until I get that reaction from myself.
Then you paid too much for it.
Neke,
I had a poor week also.. down 13%.. Most of the loss concentrated in less than 5% of my trades. I will be making structural to my trading to prevent any repeat of the behavior that continues to result on 95% of my losing trades. I suggest you do likewise.... Saying "I have to stop the insane trades" is completely pointless after 6 months because you WILL NOT change!! Every week there is a fresh system of trading to implement... Once and for all.. it is not the system but the money management that is killing you! Get that into your head an program in absolute trade management!
Great money management can make even a poor system do well AGAINST the market while poor/no money management can kill the best system
Sorry..
I had a poor week also.. down 13%.. Most of the loss concentrated in less than 5% of my trades. I will be making structural to my trading to prevent any repeat of the behavior that continues to result on 95% of my losing trades. I suggest you do likewise.... Saying "I have to stop the insane trades" is completely pointless after 6 months because you WILL NOT change!! Every week there is a fresh system of trading to implement... Once and for all.. it is not the system but the money management that is killing you! Get that into your head an program in absolute trade management!
Great money management can make even a poor system do well AGAINST the market while poor/no money management can kill the best system
Sorry..
I think you've learned your lesson with ODP, but it bears mentioning just because I too recently violated this rule myself with BBG:
Don't try and catch falling knives! Everyonce in a while you'll catch it and everything will be fine, but most of the time you'll just end up cutting yourself badly.
Don't try and catch falling knives! Everyonce in a while you'll catch it and everything will be fine, but most of the time you'll just end up cutting yourself badly.
retire45 puts it well. I just placed stops on my two short term options trades from late Friday. One ended the day slightly profitable and the other at a still-reasonable loss. Both stocks moved in my favor during after-hours trading. However, if they don't continue to move in my favor, I'm out and placing the stops right now will keep me from analyzing the situation until my losses double. Every day I have to look at some losing trades that I thought (being far back month options) had plenty of time to work in my favor. Now I have nothing to count on but upcoming earnings reports to boost them (and that is not my favorite position to be in).
Josh Lukeman spends the entire first chapter of his must-read book, Market Maker's Edge, on risk control and position management. He just gets right to the point: never risk more than 2% of your capital on any single trade. Period. So when trading a $130K account, losing $2000 per trade is the limit. Neke, how many of your winning trades lost $2000 or more before reversing and making you money? Only two of mine did, and the only reason they reversed was because the market was still hopeful and having periodic rallies.
Josh Lukeman spends the entire first chapter of his must-read book, Market Maker's Edge, on risk control and position management. He just gets right to the point: never risk more than 2% of your capital on any single trade. Period. So when trading a $130K account, losing $2000 per trade is the limit. Neke, how many of your winning trades lost $2000 or more before reversing and making you money? Only two of mine did, and the only reason they reversed was because the market was still hopeful and having periodic rallies.
Neke-
Consider the following suggestions:
1. Never assume that the markets will behave as they did in the past. Markets are constantly changing. Therefore, all this massaging past results and tinkering with "system" changes.....if I did this, then I would have, could have made this...is futile.
2. The only way to get around the ever-changing nature of the markets is to keep your losses as tiny as possible, while letting your winners run as long as possible. Scaling in to trades is a possiblility so that you are not trying to be all right when you put the trade on..and if you are wrong, you are losing on a portion of your intended position.
3. Consider holding for days to weeks.
4. Drop your Goal of 1.2 million, and focus instead on trying to achieve a more doable goal, and prep for next year to go for 1.2 mil.
Consider the following suggestions:
1. Never assume that the markets will behave as they did in the past. Markets are constantly changing. Therefore, all this massaging past results and tinkering with "system" changes.....if I did this, then I would have, could have made this...is futile.
2. The only way to get around the ever-changing nature of the markets is to keep your losses as tiny as possible, while letting your winners run as long as possible. Scaling in to trades is a possiblility so that you are not trying to be all right when you put the trade on..and if you are wrong, you are losing on a portion of your intended position.
3. Consider holding for days to weeks.
4. Drop your Goal of 1.2 million, and focus instead on trying to achieve a more doable goal, and prep for next year to go for 1.2 mil.
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