The CL/NQ experiment

[Rashid_G.]

As one that tried and failed (under-capitalized/emotional) at day-trading I really believe one should start with higher time-frames first.. they give you more time to think, therefore create less anxiety. Once you can survive then you move to lower times if you want to..

Every time I have done well swing-trading Daily charts, my undoing was ALWAYS when I went intraday to "reduce my risk". This always became a rabbit hole spiral from which I recovered only after I had lost a lot of money then I go back to higher TF's.. Think about it, what is THE bane of traders? CHOP!... The lower TF you go, the more you are likely to find it and the lower the chance you can recognize it when you do.

The emotional rush of small TF's is for gifted traders... I really hope Gabe becomes one. But in order for this to happen a mental calmness is a must and I really don't think the system is THAT important.

 

[foozler]

Because trading in chop is not part of my plan

A quick question for nodoji (sorry to "hi-jack Gabe). I tried to send this as a PM, nodoji, but ET says you are not accepting them right now, so I hope it is ok to ask this here: I've read a great many of your posts and I've been through your day trading journal where you were primarily trading stocks. Is there a post or two that I may have missed where you explain your reasoning behind switching from primarily day trading stocks to day trading CL futures? If not, no problem. I'm curious more than anything else. I am working on a trading plan that trades stocks - mostly day trades with a few circumstances that would allow a profitable position to be held for a day or two for additional possible gains. I've watched CL out of the "corner of my eye," and at $10/tick, I'll stick to trading small lots of stocks for now !

 

[Gabe2004]

A quick question for nodoji (sorry to "hi-jack Gabe).

All questions are welcome (no need to apologize).

 

[Gabe2004]

THE bane of traders? CHOP!... The lower TF you go, the more you are likely to find it and the lower the chance you can recognize it when you do.

I believe that every instrument has an optimal TF to trade in.

Gabe

 

[AAAintheBeltway]

That's exactly how I feel, so I quit posting my trades in my journal for now. It's just plain embarrassing. I had 89% losers today. 2 wins, 16 losses. And that's after a ton of work & research & notes. I even made a flow chart. Scrolled thru thousands of charts since I've began all this. I feel like an idiot.

The one thing that just completely baffles my mind is how easy it is to lose 80 ticks like I did today, but on a good day it feels like I have to completely work my ass off to make 20 ticks.

Why is losing so incredibly easy?

(Keep posting, if nothing else it is charitable because it makes me feel better. It's good to help fellow traders).

You pose an interesting question, "Why is losing so incredibly easy?"

I once read someone's account of being told by an experienced options trader to set up a play account and try to lose it as quickly as possible. The point was that the newbie would find it far tougher than he anticipated to lose it. Why? Because he would end up doing the right thing, ie taking losses quickly rather than letting them run, hangingon to profits instead of quickly grabbing them, etc.

It's not totally that simple though. You can take a losing system and reverse the rules and you likely will still have a losing system. Otherwise it would be easy to beat the market. Just buy pretty much any day trading system and reverse the rules.

I have the feeling my comments are not particularly welcome here, but I will offer a couple anyway. One, as I said before, trading more than three or four times a day is just not going to work. Maybe if you have an automated account and you really know what you're doing, ok, but for us normal people trading off a screen, it will not work. I know a lot of you don't want to hear that, but prove me wrong.

Two, trading a play account is close to useless. It's like the difference between playing a video war game and being in real combat. You can take 16 losses in a sim and shrug it off, but in the real world where the big boys play, there are consequences to that. There are monetary consequences, and more importantly, there are psychological consequences. You can earn the money back, but if you get too damaged psychologically, you are toast.

 

[Gabe2004]

Why? Because he would end up doing the right thing, ie taking losses quickly rather than letting them run, hangingon to profits instead of quickly grabbing them, etc.

This makes no sense.
If I wanted to lose an account quickly I should just keep doing what I do and not improve and do what I should be doing which is take small losses and let profitable trades run.

I have the feeling my comments are not particularly welcome here

It is not WHAT you say that rubs people the wrong way. It is HOW you say it.
You don't tell someone who is down that he is down. You lend him/her a hand. At least that is how I was brought up but this last post of yours signals a change in the right direction

trading more than three or four times a day is just not going to work.

I personally know a guy who made last year about 650K and he has over 10 trades a day.

trading a play account is close to useless

Would you fly in a passenger plane where the pilot is doing his 1st solo flight without simulator flights under his belt?

Gabe

 

[dbphoenix]

As an example of how two traders trading alike might differ - DbPhoenix recommends trading multiple lots so that you can take some profits along the way while letting some contracts run. Even though everything I learned about the markets and about trading came from DbPhoenix, I have chosen to trade like NoDoji here, and I am all-in at once and all-out at once.

I don't follow this thread but was told of this particular arc, and while 40's comment seems to have whizzed by those who post, I'd like to clarify it just in case it stuck with some lurker.

I do not recommend trading multiple lots, at least not for a beginner. If a beginner can't get trading one lot right, he sure as hell isn't going to find trading multiple lots any easier. What I do recommend to those who find themselves hanging on to losing trades and cutting whatever profits there might be short because they've become cojoined to that one lot is to trade that one lot for real and paper-trade another four. When they then gain confidence with that one lot, if ever, then trade two lots for real and simtrade three, all with a preplanned scale-out strategy. Then work up to three, then four, then all five using that same strategy. Few traders will ever get past one, but at least their perceptions might be changed and they won't just give up and leave the field just because they lost on their one-lot bet.

As I don't follow this thread, I may not see any comments or questions that result from this, so if I fail to answer, it's nothing personal. OTOH, everybody knows where to find me.

 

[Gabe2004]

trade that one lot for real and paper-trade another four.

This sounds like a great idea.
Why didn't I think about it b4?

Gabe

 

[pinkman]

failing to push up here?
trying a short 96.75
stop at 96.93

 

[AAAintheBeltway]

This makes no sense.
If I wanted to lose an account quickly I should just keep doing what I do and not improve and do what I should be doing which is take small losses and let profitable trades run.


It is not WHAT you say that rubs people the wrong way. It is HOW you say it.
You don't tell someone who is down that he is down. You lend him/her a hand. At least that is how I was brought up but this last post of yours signals a change in the right direction


I personally know a guy who made last year about 650K and he has over 10 trades a day.


Would you fly in a passenger plane where the pilot is doing his 1st solo flight without simulator flights under his belt?

Gabe

I must not be expressing myself too well in this thread. First, no one, at least not me, is trying to kick someone who is down. I asked a question that I'm still not sure what the answer is, ie what is the point of this thread, but if that came across as rude, my apologies. Anyway, how can you be "down" when it's only a sim account? Presumably, you're learning and that's always a good thing.

The point of the example about trying to lose was that losing traders tend to do exactly what you said, hang on to losers but cut profits short. By trying to lose, the idea was that they would do the opposite, ie they would be quick to take losses, since that was the objective but be slow to cut profitable trades. Whatever.

Just to be clear, I meant trading many times in the same instrument. A big hitter trading a big position would probably be scaling in and out of positions, so that could inflate the numbers. If your friend can do it year after year, he is one of the best. I don't see anyone here being able to do it, but in fairness i don't generally follow the journals, so maybe they are out there. How many trades is Nodoji taking each day?

About trading sims, I think backtesting is a way better approach to learning how markets work. Those pilots training on a sim actually have experience flying real airplanes as well. I would never urge anyone to do something they're not comfortable with. My point is that it's easy to get into bad habits if you're not trading real money. It's also impossible to duplicate the emotional aspect of risking your own money.