Trading - like riding a bike?
- Thread starter oldschool
- Start date
Thanks lescor.
I read your journal (one of the very few very I subscribe to) whenever you update. I hope other traders realize how valuable your insights are. Not too many people have the mental fortitude to come back from a loss like you recently had. Somehow I knew it wouldn't take you very long to come back from it though. With the volatility increase, I had a feeling you had a decent week. Congrats and I hope you can stop by here and lend a hand if you have the time.
Advice #1 to new traders:
Read lescor's journal. There's a lot of good stuff in there.
http://www.elitetrader.com/vb/showthread.php?threadid=187730
"what happened to other successful that you used to trade with?"
I assume you meant other successful "traders"?
They're still trading. Most of my former colleagues are over 40, if not 50 (one is over 70). Daytrading gets tougher as you age. As such, many of them have made the transition to swing trading stocks, or trading futures. Some of my friends still daytrade, but it's "different" than what we were doing back in the 90's. More on the differences later.
os
Week 1 observations:
No more "listed stocks".
Due to electronic trading, it seems like all stocks trade like NASDAQ stocks of old. For me, watching GS is like watching an OTC stock. No more .50 - $1.00 spreads right before the specialist puts on a big print, no more waiting for your fills, no more getting raped (although I learned a lot from the way specialist traded the stock - too bad in some ways, new traders could have learned a few things). This is a big change for me. I'm spending a lot of time configuring my order hotkeys. Without an automated trading system, I cannot see how else to trade for now. Maybe more on this later.
Q: How many ECNs are there anyway?
When I was trading, Instinet (green screen) was about the only ECN available. Then came ISLD and ARCA. Now I see ECNs galore. A bit too many for my taste, but c'est la vie.
Algos/HFT:
My friends told me to be careful of what I see on the tape. They explained that the algos (HFT) have changed the game. What an understatement. I used to look at last trade size and T&S. IMO, it's mostly a waste of time now. This will take some time to get used to.
News speed:
Too slow. I am subscribing to a few on a trial basis but I can't see trading off the news remotely. When I was on a desk, we had multiple T1's, lines into other trading desks and we had a good flow of info. Now that I'm remote, I have no choice but wait for the mkt/stock to settle down.
Trading remote:
Definitely different than trading on a desk - Tech issues:
I don't have tech support like back in the days. As such, I'm thinking a second isp to backup my primary would be a good investment. I already experienced a few disconnects. Not fun when you have positions, even small ones.
Physical aspects of trading remote:
This actually took me by surprise. Daytrading when you're 45 is a bit taxing on the body. Wake up at 7, grab a quick shower, get on the desk by 7:30, prep for the opening, & start trading at 9:30. By the time lunch comes around, I've been up for 5 hours. Damn, forgot to eat breakfast. Not good. The legs need a bit of stretching, so I take a walk. Damn, and it's 1pm already? Back to the screen. Watch a few things in the afternoon, make a few trades... Holy sh*t, 3:30 already? Better find some exits and get flat. At 4pm, the screen finally stops blinking. All that flickering during day really takes a toll on the eyes. Now that I think back, I don't know how we did it back in the day. It's sucks getting old. Oops, forgot to eat lunch too didn't you?
Physical aspects bottom line:
As I'm getting older, I realize for the first time that I need a physical trading plan also. When I was working in an office, I had breakfast before coming to work, had lunch with my friends, basically I didn't have to think about this stuff. Simple stuff, but "stuff" to be considered nevertheless - at least for me.
What about the trading?
I have a very simple plan during the first few weeks back. I set my trading size to 100 shares for now. I want to make my mistakes while trading 100 share lots and not 1,000s. Since there's no ticket charge these days, it makes sense for me. I'm not sure how long before I feel comfortable again, but that'll the easy part to figure out. The P&L never lies.
I'll discuss this week's trading in more detail next.
os
No more "listed stocks".
Due to electronic trading, it seems like all stocks trade like NASDAQ stocks of old. For me, watching GS is like watching an OTC stock. No more .50 - $1.00 spreads right before the specialist puts on a big print, no more waiting for your fills, no more getting raped (although I learned a lot from the way specialist traded the stock - too bad in some ways, new traders could have learned a few things). This is a big change for me. I'm spending a lot of time configuring my order hotkeys. Without an automated trading system, I cannot see how else to trade for now. Maybe more on this later.
Q: How many ECNs are there anyway?
When I was trading, Instinet (green screen) was about the only ECN available. Then came ISLD and ARCA. Now I see ECNs galore. A bit too many for my taste, but c'est la vie.
Algos/HFT:
My friends told me to be careful of what I see on the tape. They explained that the algos (HFT) have changed the game. What an understatement. I used to look at last trade size and T&S. IMO, it's mostly a waste of time now. This will take some time to get used to.
News speed:
Too slow. I am subscribing to a few on a trial basis but I can't see trading off the news remotely. When I was on a desk, we had multiple T1's, lines into other trading desks and we had a good flow of info. Now that I'm remote, I have no choice but wait for the mkt/stock to settle down.
Trading remote:
Definitely different than trading on a desk - Tech issues:
I don't have tech support like back in the days. As such, I'm thinking a second isp to backup my primary would be a good investment. I already experienced a few disconnects. Not fun when you have positions, even small ones.
Physical aspects of trading remote:
This actually took me by surprise. Daytrading when you're 45 is a bit taxing on the body. Wake up at 7, grab a quick shower, get on the desk by 7:30, prep for the opening, & start trading at 9:30. By the time lunch comes around, I've been up for 5 hours. Damn, forgot to eat breakfast. Not good. The legs need a bit of stretching, so I take a walk. Damn, and it's 1pm already? Back to the screen. Watch a few things in the afternoon, make a few trades... Holy sh*t, 3:30 already? Better find some exits and get flat. At 4pm, the screen finally stops blinking. All that flickering during day really takes a toll on the eyes. Now that I think back, I don't know how we did it back in the day. It's sucks getting old. Oops, forgot to eat lunch too didn't you?
Physical aspects bottom line:
As I'm getting older, I realize for the first time that I need a physical trading plan also. When I was working in an office, I had breakfast before coming to work, had lunch with my friends, basically I didn't have to think about this stuff. Simple stuff, but "stuff" to be considered nevertheless - at least for me.
What about the trading?
I have a very simple plan during the first few weeks back. I set my trading size to 100 shares for now. I want to make my mistakes while trading 100 share lots and not 1,000s. Since there's no ticket charge these days, it makes sense for me. I'm not sure how long before I feel comfortable again, but that'll the easy part to figure out. The P&L never lies.
I'll discuss this week's trading in more detail next.
os
First full week of trading:
What a week.
PIGS and the EU, SEC vs. Goldie, the spill in the gulf, it was a great week for trading imo.
This was the kind of week daytrading was made for.
As expected, I had my share of operator errors and other issues the first full week. Hotkeys not doing what I thought I programmed, VPN disconnects, learning/optimizing ECN routes, etc... I think by far the greatest challenge has been not to trade (esp with the mkt vol this wk). Last Fri (see blotter on prev post), I thought my hotkeys were programmed correctly only to find out they weren't. The default size didn't stay at 100 shares depending on the order. Still trying to debug this, so I reset the absolute size field to 100 shares. Lightspeed is good imo. I just have to finish figuring out the details. Probably the #1 reason for trading 100 share lots. I read the mkt ok (this was like riding a bike), but I just couldn't act on them like I wanted to within the time frame. After last Fri, I just wanted to make sure that I solved the size issue with LS. As much as I wanted to trade, I mostly stayed away and finally felt comfortable that I was shooting off 100 share lots. Yes, at times it killed me to just watch as the mkt ran up or tanked, but I also know that this wasn't and won't be the last volatile week. Sometimes, you make money by not losing it - or something like that. I'm certainly not the best writer - duh - so please excuse me while I hack away and butcher the English language.
Weds: I was tweaking the hotkeys and had another day of operator errors.
Trade size on some orders were sent with 1,000 shares and not 100. The reason for the volume uptick.
ECN fees: Note the ecn fees drop from previous week.
It took me a few days to figure out how to adjust my trading so I don't always have to take liquidity. Things were different when I was trading (I was mostly a ATM trader), so I needed to adjust this part. On Fri I actually got ECN rebates. I'll take my $3.94 and treat myself to a beer.
Reading the tape:
This will become more important as I figure out how to adjust to HFT/algos et al.
My gut feel is that rather than reading the tape, it may now come down to reading the chart with this in mind.
Same thing, but different view?
Wk 1 recap: I got what I expected.
Some operator errors, tech issues, physical toll on the body (need a plan & not expected), ECN routing, & speed of news feed.
These are what I would call "academic" issues.
Notes:
-Rate is .04c/shr + ecn fees, 95% split.
-BIDU up ~$90 on earnings sure looked a lot like the 90's.
-Position size: Although I'm entering 100 share lots, some of the positions were >100 shares in actual position size. With some of my setups, I add to the position while the move is occurring. So on 4/26, although my vol was 5,800 shares, I did not trade 29 times with 100 share positions (as an example).
P&L:
WE 4/30: ($295)
ME 4/30: $49
YTD: $49
os
What a week.
PIGS and the EU, SEC vs. Goldie, the spill in the gulf, it was a great week for trading imo.
This was the kind of week daytrading was made for.
As expected, I had my share of operator errors and other issues the first full week. Hotkeys not doing what I thought I programmed, VPN disconnects, learning/optimizing ECN routes, etc... I think by far the greatest challenge has been not to trade (esp with the mkt vol this wk). Last Fri (see blotter on prev post), I thought my hotkeys were programmed correctly only to find out they weren't. The default size didn't stay at 100 shares depending on the order. Still trying to debug this, so I reset the absolute size field to 100 shares. Lightspeed is good imo. I just have to finish figuring out the details. Probably the #1 reason for trading 100 share lots. I read the mkt ok (this was like riding a bike), but I just couldn't act on them like I wanted to within the time frame. After last Fri, I just wanted to make sure that I solved the size issue with LS. As much as I wanted to trade, I mostly stayed away and finally felt comfortable that I was shooting off 100 share lots. Yes, at times it killed me to just watch as the mkt ran up or tanked, but I also know that this wasn't and won't be the last volatile week. Sometimes, you make money by not losing it - or something like that. I'm certainly not the best writer - duh - so please excuse me while I hack away and butcher the English language.
Weds: I was tweaking the hotkeys and had another day of operator errors.
Trade size on some orders were sent with 1,000 shares and not 100. The reason for the volume uptick.
ECN fees: Note the ecn fees drop from previous week.
It took me a few days to figure out how to adjust my trading so I don't always have to take liquidity. Things were different when I was trading (I was mostly a ATM trader), so I needed to adjust this part. On Fri I actually got ECN rebates. I'll take my $3.94 and treat myself to a beer.
Reading the tape:
This will become more important as I figure out how to adjust to HFT/algos et al.
My gut feel is that rather than reading the tape, it may now come down to reading the chart with this in mind.
Same thing, but different view?
Wk 1 recap: I got what I expected.
Some operator errors, tech issues, physical toll on the body (need a plan & not expected), ECN routing, & speed of news feed.
These are what I would call "academic" issues.
Notes:
-Rate is .04c/shr + ecn fees, 95% split.
-BIDU up ~$90 on earnings sure looked a lot like the 90's.
-Position size: Although I'm entering 100 share lots, some of the positions were >100 shares in actual position size. With some of my setups, I add to the position while the move is occurring. So on 4/26, although my vol was 5,800 shares, I did not trade 29 times with 100 share positions (as an example).
P&L:
WE 4/30: ($295)
ME 4/30: $49
YTD: $49
os
Hey, who you callin' old???
Shower, snack, breakfast, lunch, walk, potty...these things will put a MAJOR dent in your potential profits. Especially if you think the price action has stalled and is boring. Out of boredom come the greatest moves.
Therefore, NEVER leave desk during regular trading hours. You can keep everything you need nearby, and Depends are quite cheap compared to the cost of lost opportunities.
100-200 shares of the big movers (GS, AAPL, BIDU, AMZN, POT, GMCR, NFLX, ISRG, PCLN, etc.) can quickly produce a nice day's pay by the way.
Quote from NoDoji:
Hey, who you callin' old???
Shower, snack, breakfast, lunch, walk, potty...these things will put a MAJOR dent in your potential profits. Especially if you think the price action has stalled and is boring. Out of boredom come the greatest moves.
Therefore, NEVER leave desk during regular trading hours. You can keep everything you need nearby, and Depends are quite cheap compared to the cost of lost opportunities.
100-200 shares of the big movers (GS, AAPL, BIDU, AMZN, POT, GMCR, NFLX, ISRG, PCLN, etc.) can quickly produce a nice day's pay by the way.
Wow, a ND sighting in my journal?
Don't you know I don't pay for celebrity appearances? Guess you missed the memo. Ask lescor or RN.
I've been following your progress young lady (ahemm, care to share how young? Hey, 'least I didn't ask about your weight, or said, "you're not THAT fat" - yes, I actually said that to a girl in my 20's), and it looks like you're well on your way. Hats off to your persistence and desire to learn how to trade. By the look of things, it also looks like you've surrounded yourself with some really good traders (always helpful).
It does seem like the mkts always move when ND is not around.
Perhaps you could start a thread called "ND - leaving the desk for a minute". This way, we know when a big move will occur.
On a serious note, my trading never depended on being in front of the screen all day, every tick. But since you brought it up, the old lunch hour seems to have moved from 12 to about 12:30. Not sure if I'm seeing things, but that's what I noticed this week anyway.I'm not a big fans of Depends, but I am thinking maybe I need glasses. Never had 'em in my life.
"(GS, AAPL, BIDU, AMZN, POT, GMCR, NFLX, ISRG, PCLN, etc.)"
Nice list of dangerous stocks.
Didn't you read? I just got back!
I'll donate to your canine fund in size when I'm ready. (or was it a "wet rag"? - thank you geez)
os
Let's just say if we were transported back to high school, there's a chance I might pass you in the hall.
You have a good point there. Not only did I announce yesterday on the ES Journal I was leaving my desk, better yet, I snuck back to my trading platform to put on another trade during a very boring range, knowing full well what happens after I leave, and grabbed another 6 points.
They're only dangerous if you make eye contact with your screen after a trade is on. Geez has the right idea; as soon as your order is filled, you bracket a stop and target and quickly avert your eyes to avoid the seizure potential of seeing your P/L rapidly flash red and green.
cal,
I meant to address your post a bit more but I've been busy learning how to ride the bike again. Further, until I have a P&L worthy of the flamers, I don't feel qualified to give advice. Look at my P&L this past week, I lost money in one of the best weeks for trading. Consider the fact that I've not actively traded since '01 and there are many others here who might be of more help.
With the disclosure out of the way...
You've answered the first part of your post.
Yes, it's possible. Probable? I don't know you well enough to say.
Many ways to skin this cat. If you look at the posts by successful traders here, you'll notice that it really is a "to each his/her own" situation. Out of all of my friends who traded and still trade, I can't remember 2 who had the same exact style. Bottom line? You need to find something that works for you. Only you know what that is. We all have strengths and weakness. I would look for strategies that limit your weaknesses and enhance your strengths. Early in my career, my weakness was trading volatile stocks. The get rich syndrome, gambler, needing action, etc...I'm sure no one has this problem. After I paid my tuition, I realized that it's better making money consistently than being in volatile stocks.
Trading for 2 years doesn't say much by itself. Where, how, when, who were you trading? If you were under the best traders getting taught and it didn't work out, then trading is probably not for you. If you were trading by yourself with no help, then there's room for improvement. Whether you can survive long enough is another question. I do not know your personal situation.
Try this, take out your 4 worst days and replace them with a smaller max loss/day $ amount. Based on your #'s, I chose ($200) as a ballpark. If you ONLY did that, you monthly P&L would be ($543). Still a loss but certainly much better for the psyche than ($2,030). Understand that this is a numbers game in the end. It's a marathon, not a sprint. The mkt will be there tomorrow, next week, month, yr, etc...will you be? I forgot exactly where I read it. but...Trading is like gambling. We need chips to bet, if you're out of chips, you cannot bet. I really butchered that one, maybe someone who's read "Mkt Wizards I" could refresh my memory. Bottom line is preservation of capital until you really know what you're doing. Otherwise, you'll never reach the finish line.
If they were setups, & you took the trades religiously as per the rules, then yes. They're obviously not working.
If you're talking about the 10 commandments of trading, no. They're still the same and most likely will never change.
Most of the above I addressed above in the "many ways to skin this cat" paragraph. But it's the last sentence that really stuck with me. Frustration will lead to more frustration and down the rabbit hole you'll go. I cannot help but feel that you're at the end of your patience rope by saying "this is ridiculous". You cannot go there, you just can't.
ack...I'm hating myself, but it needs to be said again and again:
1- This ain't easy, if it was then everyone would ....
2- Most fail, anywhere from 95-99%, depends on the author...
cal - I don't know how old/young, your personal situation. I only replied to this length because like many, I've been there. I wish you the best.
os