Through the Looking Glass

Quote from sowterdad:

Congratulations on putting in a turn-a-round week!
Stay grounded - Build on that 'success.', even though you felt it wasn't perfect trading, you controlled the outcome to be a net positive, by controlling yourself. That's an outstanding reversal of trend!

Could you elaborate on :
" More than a few times this week I managed to flip losing or near-losing trades into a decent winners -- cutting my position size in half was the key to that -- and this reinforced a new-found ability to forget the past quickly and focus on what needed to be done."

Good Luck on your continued success!
SD
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Thanks SD. I'm going to try and maintain the same focus (and un-focus too) this week and see if the changes hold water.

With regards to flipping positions, it's just a personal failing of mine that I've always had a hard time letting go of profitable positions that start to deteriorate quickly. For instant losers I'll close things out without too much pain, but for the winners that reverse, I'll berate myself for not getting out sooner and end up at times exiting with a bad loss -- that "peak profit" price would linger in my head as a price to hold out for again, the way that most would hold a loser until they could get out at breakeven. But once you get to that point of flexibility where you're just looking for the next move, either up or down despite being currently long or short, it just gets alot easier to forget the recent numbers and focus on the moment. This is all pretty much trading 101 but for certain situations I just had a mental block on executing, things did get much easier after each successive time I managed to do the right thing, it really is like working out a newfound muscle of sorts.
 
Thanks for the follow up.
This thread has provided some motivation for focus in my own limited trading.
I look forward in the weeks ahead to reading about your ongoing ability to maintain your focus, leading to positive net results! SD
 
P/L for the week: a big fat 0 on 546k shares traded

+3, -5, +15, -5, -8

A frustrating week but just glad to be alive considering. Monday was really the only day I stuck to my guns, trading a mere 28k shares. But each day thereafter I can say I really strayed from the gameplan; some days it works, like on Wednesday, and some days it can kill you. Thursday was the real tipping point, even before the mayhem; I'd had a good morning, put on an extra position and went out for lunch. By the time I got back my p/l had flipped into negative, and the carnage had just begun. Of course I started picking bottoms early and watched as I went 5-figures into the red before recovering by the close. Friday felt like a re-run by 10am, including a couple really bad pre-market trades. By the time the market bounced I'd had the starch taken out of me, there was this hollowed out feeling after twice witnessing such severe swings in my account.

It's ironic, I had sworn off position trading and holding multi-day overnights a week or so earlier, having built up a very bearish bias while the market was swinging up and down day-to-day. But that's the way it goes -- you need to choose your weapons and stick with them, and forgo the (perceived) could-have-beens in order to maintain your balance. Sure, it was a momentous week that might not be seen for another decade or so, but these kinds of moves leave both lucky winners and unlucky bodybags in its wake; given what could-have-been this week, I feel lucky to have landed right in the middle.
 
There's always two ways to solve this problem. One is to do what you are doing and return to the original trading plan. It will be interesting to see if it is as simple as that, or if you find that subconsciously you sabotage it because it is time to move on.

The other solution is to tighten up your trading so that technique takes care of discipline rather than the opposite way round. The mind is a fascinating thing and sometimes it needs refreshing and if you don't give it what it needs, it wanders off to do its own thing.

That is why I subscribe to slow but continual development. It keeps the mind fresh. A coach can lead a team to victory, but without the knowledge of how to prevent routine becoming staleness a great team can begin to self destruct.

I could say more but might influence your thinking, and as this is a self discovery process I will stand back and enjoy your journey.

Good trading :)
 
Quote from illiquid:

P/L for the week: a big fat 0 on 546k shares traded

+3, -5, +15, -5, -8

A frustrating week but just glad to be alive considering.
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Hi illiquid,

5/6 is a "black-thurday" for many traders..only a few big "lucky" winners.
i like to 'click' ET to check how's you and neke are doing in trading..maybe
because i am intrigued by your forum's title "through the looking glass" or neke's "taking 410k to 4 million by ...."

illiquid.. i know you'd read almost all the trading books and i am sure you're an avid reader but may i know have you read " the art of war" ?

"Siun Zi Bing Fa"--The Art of War is wrriten by SUN TZU in the 6th century BC. It translated into French in 1772. Napoleon, Mao Zedong and many other Great Warriors were influenced and drawn inspiration from the book. It has also been applied to business and managerial strategies today.

The Art of War is the oldest (written thousands years ago!) and most successful books on military strategy..my mentor used this book to coach me.. how to apply into trading etc.

many people have read the book but many can't fully understand and don't know how to apply the teaching/strategies...

if you have any question regarding the book ... please let me know..we can discuss the book together :)

Quotations from the book~

~ so it is said that if you know your enemies and know yourself, you can win a hundred battles without a single loss.
~ if you only know yourself, but not your opponent, you may win or may lose.
~ if you know neither yourself nor your enemy, you will always endanger yourself.
..............................................................................

construing skillfulness as victory "without fighting"

~ Therefore one hundred victories in one hundred battles is not the most skillful. Seizing the enemy without fighting is the most skillful.

.................................................................................

~ all warfare is based on deception.

................................................................................

Master Sun Tzu also knew the dangers of over-confidence in strategy...
so he wrote "hence, we can well predict who would win but there is no strategy guaranteeing winning.

in another words-- also there's no strategy guaranteeing winning in trading, if we're in the wrong side better cut-loss and retreat. Fight another day:D

have a great weekend. TGIF :)
 
P/L for the week 5/14: +6k on 458k shares traded

+10, -3, +2, -10, +7

Quote from ~~~:
illiquid.. i know you'd read almost all the trading books and i am sure you're an avid reader but may i know have you read " the art of war" ?
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I'll confess that I bought a translated copy of AoW years ago but never sat down and read its entirety with any seriousness; back then, I think I found much of the wisdom therein kind of opaque in regards to how it pertained to trading. But I realize now that was mostly a result of a) my lack of a real edge, and b) my then "concept" of the market as a benign/random/indifferent arena. Your post reminded me that I need to sit back down and re-read AoW with my current perspective of the market, as it's much clearer now who the "enemy" is on this most hostile battleground (no, I didn't mean "me", although you could interpret it that way to some extent).

As usual it's the negative days that stick in my head when the weekend rolls around, and Thursday was one of the ugliest mornings I've had in a long time. So ugly in fact, I never had a chance to get frustrated at myself like I usually do; instead, that day I knew I thoroughly deserved that particular thrashing. It was more like a "wow, you still have this huge gap in your game" realization, and somehow that made the losses much easier to accept. Knowing your enemy, battles being won before they're ever fought -- ~~~'s post on AoW was pure synchronicity in regards to my failings that day. It overshadowed a near-perfect Friday where my biggest loss per position was -180; I even made money on SPY and AAPL (yes I need to brag about that). But like I've said before: losses where you learn something about yourself are worth far more than the mirror-image gain. I'll have to again be thankful this week for necessary tuition, despite the frustration of having another weekly net figure less than a single session's range.
 
P/L for week 5/21: +25k on 720k shares traded

+13, +15, -8, -8, +13

A good chunk of both profits and losses/drawdowns this week was the result of market bias -- a sword that cuts both ways. Worked out well monday and tuesday, then got caught offsides thursday, which led to a very deep drawdown. I knew I was wrong right off the bat, yet stupidly let the losses balloon. Fortunately, when the numbers looked their worst, I was able to wake myself up and take some action, and was very relieved to end the day where I did.

Again, another week marked with big swings in the p/l, mostly due to market conditions but I could have been far less volatile with my own numbers. Far too much time was spent digging myself out of unnecessary holes, and it's cumulatively exhausting. Next week I'd like to get my focus back on individual setups and shelve the spy, vxx, tqqq's etc, more than 60% of this week's volume was in the various index etf's and they're just not good for me to continue trading. Earnings are also winding down, so all the numbers across the board need to get scaled back.
 
ilq,i assume you don't use stops,and i know your stubborn,same here ,this volatility is a good time to learn to use them,i had 2 early morning great profits going and watched em disappear,got back to positive both days but nowhere near the morning highs,used stops next 3 days and had a good week,you need all the mental energy u can get,stops are a good way to releive the pressure and preserve,that said,u had a good week,nice job
 
Quote from ammo:

ilq,i assume you don't use stops,and i know your stubborn,same here ,this volatility is a good time to learn to use them,i had 2 early morning great profits going and watched em disappear,got back to positive both days but nowhere near the morning highs,used stops next 3 days and had a good week,you need all the mental energy u can get,stops are a good way to releive the pressure and preserve,that said,u had a good week,nice job
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Ammo, stops? You're scaring me :p

Funny thing is I had only until 30 mins after the open yesterday to trade so I was looking for a big bang for buck trade. AMZN in pre-market looked to be seriously on sale and it's a great day trader's short squeeze stock, so I tried going long right off the open and was stopped out twice because of price jumping around .30+ at a time.

I thought to myself, "Maybe I should be like ammo and not use those damn stops!"

I did finally catch a 2 pt move to the upside and yes, I used a stop on that trade, too :cool:

Nice week, Illiquid!
 
I usually only use stops when I have too many positions to look at (7-8+), or when there's a pretty obvious line in the sand after I've mentally given up on the position already.

I don't know if it's just a function of the way I trade, but there have been times when I'm trading very cautiously where I'd cut losses quickly (stops or no) and I'd end up losing 10pts on a stock with a 3pt range. I have a longer intraday time frame for most trades I do, and a pretty wide tolerance to pain (to my own detriment usually). Given there are times being wrong badly once will cost less than getting lightly singed 5 or 6 times, I've figured that using stops ALL the time will probably cost me more in the long run -- this includes profits missed on the inevitable shakeouts.

I see using stops like most things trade-related; sometimes they work great, other times not so much. I guess my overall opinion is that each situation is different and is fluid, by the time I realize where a proper "stop" price should be, it's usually pretty much there already. More important to me is the ability to accurately realize when one is wrong, and subsequently pulling the trigger to get out as close to that realization as possible. It's so easy for me to go the other way and double down on a loser, all it takes is a millisecond of self-delusion and an itchy trigger finger -- by then it's twice as hard to do the right thing. But I do realize that, given my dubious ability to sit through both extreme pain and gain, I should really lean towards cutting the losers off as quick as I can, whether or not hard stops are used.
 
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