The treacherous path to $200k a year

here's a thought coolweb.

keep it simple.

follow 1-2 stocks everyday
only trade 100 shares at a time
USE a stop loss
place a target that is 2X your stop loss

for your entry, KEEP IT SIMPLE, just enter on some simple trend line break or a pivot cross or whatever, (the point is not about your entry system)

you need to develop some consistency for following rules. The point is NOT to make money right now. it's to get consistent. Remeber that, repeat that to yourself.

Close the futures account, (futures do make good sense to move to in the future, but it's not necessary now)

You need to learn the basics of money and trade management, and you can't do that if you're focused on winning or losing money. The only way to not focus on either of those IS to take positions that are so small (relative to your account) that they seem almost not even worth your time to put on.

again, i stress this: YOU NEED CONSISTENCY IN FOLLOWING YOUR RULES.

at the rate you are going, YOU ARE on your way to blowing up your account. And it's NOT because you lost 1.35% or whatever, it's because of your mental attitudes and beliefs. They are not in line with either a consistently profitable trader nor even a consistently break even trader.

hopefully you'll take this advice to heart.

In a previous post you did state on awesome and powerful market observation, but i dont' think you truly understand how powerful an observation it was....you said something like "man anything can happen in the market"

if anything can happen, then you need safeguards in both directions.

once again, don't focus on your entry system, that's the least important...you just need some very simple and basic entry signal (even if it SUCKS)...it's more important to follow that signal with your 1R stop and 2R target, then it is to actually make money at this point (besides, if you do what i suggest you'll probably come close to breaking even)

your focus is on the wrong things right now. period.

and please read about 10 times, trading in the zone by mark douglas

and for full disclosure, i am a consistently break even trader for the last couple months after being a consistently losing (though i never busted an account) trader for the first 2.5 years. I never busted my account cause i knew to use stops and to take a loss quickly. I now break even cause i know how to take profits (though i still have a few mental blocks to work through).

good luck, make your own luck.
 
dantheman,
Are you in the hosting business? I remember a similar person with the same nick as you.

The random part was from trading in the zone, I Actually have 2 copies of this book hehe, ordered it by accident.

Good advice though, Position management and risk managements are on the top of my list to shape up.
 
no, no hosting

just keep at it, and stay small till you get some verifiable evidence (example, 1-2 months) consistent results, then look to change what isn't working

but changing your entry system every day (and believe me i know the temptation to do so) will not give you consistent results.
 
My new plan is basically this:

1 lot of Emini- nasdaq

will trade 1 lot till I'm consistent in the money making.

I've always wanted to trade futures because basically I follow the broad market dow/NASDAQ, not the stocks, only reason I traded stocks because my broker only trades stocks and bonds, no futures. so Either I can trade the QQQQ who moves like 1% max a day and isn't shortable, or I trade a stock that correlates and gives me 3% gain a day when the market moves 1%


So as DantheMan said, stops/ simple entry points,

I'll be using the same system as before

1) stops 1.5 points in the futures ($30 stop lost)
2) simple entry points, above pivot / extreme buy, below pivot/ extreme sell , below low , above high.

3) 1 lot (trade small)


I don't have any doubts in my system, I backtested it already, it was my stock picking that kept messing me up.

We'll see how this goes, Change is always good I say, like in business, you need to keep testing different opportunities until something makes money and works for you.
 
dantheman,

Also the reason why I hate daytrading stocks is this, I short more often then long, so lets say I know the market is about to do a death spiral, I wait for confirmation, I see it ,
I enter my market short order immeidately for a stock, I twiddle,
Takes 3-5 minutes for that piece of shit order to fill, So by the time 3-5 minutes goes over, the market fell 5 points, the stock droped 15 cents, and I get filled 15 cents away from my magical low risk point. My entry point is great but my fill is horrible, Now I have to take extra risk. Not only that, the market probably bottomed and the stock is ready to rush back up.


Thats why daytrading stocks espically shorting is hard for me at least, if I was position trading like before, it would be easy, anywhere fill near a 30 cents range would be fine, but if I'm daytrading and 10 cents is your stop limit, getting filled 10 cents away from your limit is suicidal.
Can you guarantee a fill right on your magical risk free 20.01; 5 cents above pivot? No, you can't market maker calls the shots there.


So lets say you think about scaling up the money doing 10,000 shares in the future once you have the method right, I can't even think what kind of slippage I'll be getting on a stock like NTAP with 10k shares.

If I was doing futures, there would be immediate shorts, I wouldn't have this issue of TERRIBLE fills.


Mike805,

To answer your questions since you took the time to write them,

1. What are your goals?

1-3% a month

2. What did you learn for each mistake?
I print out each execution I do once I execute it (I learned it from someone on ET)
Then at night I see what I did wrong, Any Mistakes, I fix a lot of them constantly.

3. Was it a mistake because you lost money (remember losing small is trading well)?
No, Most of my mistakes are
1) Bad stock picking
2) Sometimes overtrading (entering at noon chop central)

4. When entering or exiting a position - what was your emotional state?
1) No state, I follow a system My computer beeps when I'm suppose to do a trade, I take it,
I enter the trade in QT , I see a 0.30% lost, I market buy to cover.
Thats it or I let it run and start checking for signs of reversals.

5. What was your emotional state when a stop was getting hit (or the price was closing in on your stop)?

No state, 0.30% stops doesn't effect me at all, I just tell myself, that entry wasn't the best entry, or that fill was so shitty of course it'll hit my stop.

Most of my problems have to do with slow 3-5 minute fills, I enter in a position, I go take a shit and shower and I'll probably get filled when I come back. By that time the price is long away from my supposed entry point,

This doesn't happen all the time, but its been happening for the past 5 days.
 
Quote from Cluseau:

Only idiots listen to lawyers when looking at real estate. Smart money tells lawyers what to do, not the other way around.
More...

First of all...i didnt take his advice..he just stunned me for 2 days while i thought about what he said which made me lose the deal...and saying smart money tells lawyers what to do, not the other way around, is something an IDIOT would say. Do you know how much shit you can get into by telling your lawyer what to do? Sure it works for some people but the people that it doesnt work out for get slammed hard.

When you are 20 years old and have never done a real estate deal you look to the advice of professionals. This lawyer was strictly in real estate law which is why i went to him.

I bet you are one of those people that when he goes to court for anything always represents himself and loses. (because he has a fool for a client)

Anyway Im done, dont respond back to me because this is cools journal and its getting off topic now.
 
Ok, in regards to stock picking and overtrading - is your system is giving you signals to do this? If so, then you are following your plan and the mistakes should be based on your abilty to execute.

This seems contradictory if your system "tells" you to overtrade or does a "poor job" picking.

IMO systems shouldn't be about picking as much as they should be about dealing with the uncertainty of the outcome.

0.30% stops... you had a 1200 loss on one trade. Something went wrong there - what was it exactly?

Poor fills? You are not trading excessive size. Fills are not your problem.
 
Mike,

Heres how the system works,
It beeps me when the market is about to rise, or about to fall.

so once it beeps me, I have to hurry up and find stocks to short or go long on.

This is where overtrading comes in, I might find the wrong stock to short , so I cover, and re-short again since its still shorting time, but by then its not the best time.


So I get signals on the MARKET (which is why I want to trade the futures)

I don't get signals on which STOCKS to short. That I have to pick manually, My Edge is predicting short term NASDAQ market movements,

And I will put it to good use in the futures market where I won't have problems stock picking.


I hope this clears things up.

Fills are a problem when you get filled 15 cents from your entry price, Do you short stocks? You get many bad fills all the time.
 
Alright guys,

I've been setup with my IB broker account,
Great software, been testing and getting use to it this whole week, I must say its a pretty good software.

So I've been buying 1 lots, I feel, in the futures market, there isn't even a need to use a lot of capital ever until you are super skilled.

The margins on futures is GODSEND , $500 for 1 contracts at places, Thats pretty much free money, but the skills is whats hard to achieve.

So I'll be doing 1 lots for awhile, probably a month or so, maybe 2 lots after consistent wins, because I like to take half profits off the table and let the other half run.

my first impression of NQ0509,

ITs spectacular, everything I could have dreamed for, This is the trading vehicle I've been waiting for,

So instead of 100 high cap symbols lagging up my computer,
I have 4 symbols with trins,adxs,composites, s&p500s
Maybe 5 charts, Just right for my brain to process.


I follow the NASDAQ composite first, cause thats the mother.
then NASDAQ100 futs
then NASDAQ100 cash
then S&P 500/Dow Jones


The correlation is pretty good, I don't look at the nasdaq 100 cash too much, but the lines are a lot straighter :D


While being scared shitless, I've been puting out limit sell orders on extreme buys , limit buy orders on extreme sells.suprisingly I get filled on them :)

but Got filled 2 times today.


The commissions, $2.30 per oneway trip, man how can you get any freaking better then this! :D

+ the spread, spreads about $10


Being a 0 sum game in the futures, I feel I have to now step up and improve my game till its my A game.

One person loses is my gain, To accomplish this task, I will be choosing my entries/timing SUPER CAREFULLY,

I sat here for 9 hours, and only entered maybe 5 entries, canceled 2 of them for doubts, and filled on 2 entries.
Which is great.


I feel everythings very straightforward here in the futures, market falls, I make money, market jumps, I lose money and vice versa. Theres no market maker games, there is absolutely nobody to blame which I love :D


The biggest thing I feel is that, money means nothing in futures, Only your skills and experience.



I will be fighting with my plastic sword until I can graduate into the Conqueror I will become!


Thanks for the support guys!
 
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