Trading - like riding a bike?

[trader198]

to my view, fear is from being unprepared. the market is full of uncertainty. if you do not admit it consiously, then you will be full of fear.
to deal with fear, you need first admit the market is uncontrollable and it is full of uncertainty. the only thing you can control is yourself. that is why we trader need a plan. in the plan, tell yourself what you should do under different market situations (must be detailed). you can not freeze before unpredicted market movements, your pray does not work, your wishful thinking does not work, ...... the only thing you need do is you need firmly stick with your plan, and you know it will be good.

so bascially to me, I view trading as a gambling activity.
I did not see 1000 point drop in 5five minutes in dow as a threat if I have a 30points stop loss there, or 100points mental stops, since I know I will not lose 1000points in five minutes. so whatever unpredictable things will not seriously wound me. am I afraid of those 1000points drop? no, the worst is I toke 30points loss, that is it. further, if I am afraid of market suspection/halting (or limitdown/limitup traps), I reduce my size to an insignificant level, even without stop loss, it does not do any hurt to me. so I am not afraid at all.

I am just using hard stop loss and size reduction to manage risk. it is a great way to become better trading

Quote from oldschool:

Personally, I think the fear of losing comes from a lack of confidence to bail when you're wrong. Some are disciplined enough to close out a losing position manually while others (geez comes to mind) always places hard stops.


os [/B]

 

[ChkitOut]

Quote from NoDoji:

I spent so much time focused on how to lose properly I had no idea how to win properly.

I think this is a great line and speaks volumes about why most have trouble.

So much focus on the entry but no so much on the exit. (I think that's what you're saying)

 

[garchbrooks]

Quote from NoDoji:

Thanks OS. Not long ago breaking $1000 day seemed so remote with the small size I was trading. I had a choice, either size up or learn to let winners run. I like limited risk, so I've been working really hard on letting my winners run. I spent so much time focused on how to lose properly I had no idea how to win properly. Fortunately a few guys here got on my case about it and I hate when people get on my case. It's like saying to me, "I dare you to..." I'll take the bait. (Now feel free to dare me to have a 5-figure winning day.)



I already had my face slammed into sidewalk at length my first year and half trading real money, so the lessons about risk management were firmly reinforced. The experienced left me fearful and gun shy. I had reduced my size significantly and practiced good risk management day after day. I also realized that the way I was trading was not safe and I didn't feel I would have a true edge until I reached the point I could trade anything put in front of me and come out net profitable.

Around this time I found out I had a sim account available to me and decided to hone some strategies. My sim platform looks and feels identical to my live platform and by discovering and practicing successful strategies over and over again while FEELING NO FEAR anchored the act of TRADING WITHOUT FEAR into my psyche. I agree that trading very small size with real money does the same thing, but I was testing all kinds of strategies and didn't want to throw money away during the testing phase.

Once I was over the fear of losing I was free to focus on learning to let winners run.

Interesting take. This is kind of what I'm doing on my mentally-challenged thread. I trade a lot of small size, and am not under-capitalized, and do around 4-10k shares or so a day. But rather than focus on winners running or taking size up, I just keep adding lots of tiny, tiny bets. My PnL looks like +10,+30,+37,+40, -$80, etc.

I need to set up another computer with a sim account so I can run crack-pot strategies, but I feel like I don't take the analysis seriously enough unless even a tiny amount of money is involved. I just can't do it without real money involved.

 

[NoDoji]

Quote from garchbrooks:

Interesting take. This is kind of what I'm doing on my mentally-challenged thread. I trade a lot of small size, and am not under-capitalized, and do around 4-10k shares or so a day. But rather than focus on winners running or taking size up, I just keep adding lots of tiny, tiny bets. My PnL looks like +10,+30,+37,+40, -$80, etc.

I need to set up another computer with a sim account so I can run crack-pot strategies, but I feel like I don't take the analysis seriously enough unless even a tiny amount of money is involved. I just can't do it without real money involved.

That's where I was for quite some time. I was practicing a lot of stuff in sim, mainly ES and CL. In my live account I was either not trading much at all or taking small profits on small size.

I kept seeing these momo stocks making 3, 4, 5 pt moves and more each day and I found some that I really liked a lot - AAPL, AMZN and POT in particular. I wanted to be able to trade small size and capture a chunk of those moves. I practiced in sim, got a feel for it, then transitioned to live account, and it just got better and better as I gained confidence. I went from 100-200 shares to 400 shares. I now trade POT most of the time because I found it to have the most stable price action of the three. I almost always trade 400 shares now, though occasionally 200 if I don't get in quick enough and have to place a wide stop. A 1 pt move on 400 shares is a good day's pay IMHO and I often catch 2 or 3 of those moves early in the day and occasionally catch 2 pts.

Try this: Put up a 1-min chart of POT with full stochastics. Wait for the first half hour to settle in and set up a micro-trend. If the micro-trend is up, wait for price to pivot up from an extremely oversold zone and go long with a stop a few ticks below the pivot low. (Your stochastic lines will pivot up from deep in the oversold zone.) If the micro-trend is down, wait for price to pivot down from an extremely overbought zone, same tactic.

Your profit target as a scalper would be when price drives the stochastic to the opposite end of the spectrum on the 1-min chart. For a longer term hold, cross reference the 3- or 5-min chart and if you're trading in the direction of the trend in the larger time frame, hold on to at least half the position until price reaches the opposite end of the stochastic spectrum on the larger time frame. Technically that should be a new high or low in the direction of the trend. This is where you catch your 1-2 pt moves or better.

Looking at Friday's 1-min chart, your first trade trigger would be a long position around 10:07 when stochastic lines pivot up from extremely oversold, because the micro-trend is up off the open. So you're long around 100.80-101.00 with a stop at 100.59. Satisfactory R:R here, because you're almost always going to get at least 50 ticks. Price becomes extremely overbought around 101.50 and you exit all or at least part of your position. I personally would've exited all of my position because the pullback off the opening run up was deeper than 50% retracement and that is a red flag for possible trend reversal. Sure enough price fails to break previous resistance and the short signal is on, both stochastically and now as a lower high. The micro-trend has now reversed to down.

You should initially target a retest of previous support (100.60). If that breaks down, target the next support level before that (the low of the day in this case). A retest of the LOD will take stochastics deep into oversold territory where you can take off half, or wait to see if you get a breakout. A breakout will give you a new low and a tidy profit. In Friday's case, a very tidy profit of 2.5-3 pts depending on whether you aggressively shorted the overbought zone, or waited instead for a break through 100.60 before shorting.

Anyhow, that's one extremely reliable tactic that I use frequently. I find it important to wait for a pivot off overbought/oversold before putting on and taking off the trades. You generally avoid heat on the trade and capture the meat of the move.

On 1-min time frame you can scalp either direction, but I prefer to trade with the trend as much as possible until a reversal signal is put in by way of a higher low or lower high.

I would like to thank Redneck Trader for alerting me early this year to the value of using various time frames. It really turned my trading around almost overnight, giving me the confidence to get in early and get out quickly with limited losses if the price action didn't play out.

 

[Redneck]

Quote from NoDoji:

I would like to thank Redneck Trader for alerting me early this year to the value of using various time frames. It really turned my trading around almost overnight, giving me the confidence to get in early and get out quickly with limited losses if the price action didn't play out.

NOD

You are Very Welcome Ma’am….


On a seperate note;

I read another thread where some dipshit claims you don’t trade/ says you purport to win too much – I told ya….

To anyone else questioning her – we’re traders, we trade, we make money – feel free to stick it up your ass if you think otherwise - personally I couldn’t care less




OS,

Sorry for the rant Sir – just fed up with the BS….

She’s one of very few on here willing to help anyone – anytime – without asking for anything in return – un-f’n-believable

RN

 

[oldschool]

Days were when I used to live for weeks like the last two.
Too bad I have nothing but bad numbers to report.

Just so people don't think I'm making this stuff up, it was my worst week so far.

WE 5/14: (811.40), 41.57, (318.29), (1,035.14) , 55.81
Week Total: (2,067.45)
YTD: (3,417)

One of those weeks where everything I touched turned to shit.
It actually was the most educational week so far though.

Some examples:
A few times when all the stars lined up for a short, (mkt weak, sector weak, stock weak, good chart, ticks around -800, etc...) I decide to short a few hundred apples (hush NOD...hope you're happy eating that steak with my money ) risking about 25 cents. Trading something like .65 - .78 offered on a downtick. I place an order 1 cent below the offer and I'm IMMEDIATELY filled at .77. I'm like, "oh shit". The next quote is .98 - .05. Even before I can enter my SL, the stocks gone another 75 cents. It all happened in about 3 seconds. Another similar example with GS to a lesser degree, but same type of action. One error during pre market on Thursday cost me about (700) without even blinking an eye. Back in the days, stocks never traded this wildly (granted aapl and gs are volatile stocks - but even they didn't trade this quickly and jump around so much). At least we had the specialist to blame back then. Now I'm beginning to believe that the price action is due to not just the big funds throwing paper around, but also the HFTs who seem to have their algos set at certain levels to hit or take in size.

If anyone has any thoughts on the last comment, I'd love to hear them.

On a brighter note, if it wasn't for 2 of my setups actually working, my losses would have exceeded (6000) easily. So my plan now is to look at my losing trades and see what I could have done better to limit the losses. I'm even thinking if I should trade the opposite of some of the larger losses looking at the levels I took the trades. My thought process is that if I could figure out the levels the HFT kick in, I should join them instead.

The strangest thing so far is that when I look at the charts, they seem like the same charts with the constant ebb and flow throughout the day. But it seems my timing is off just enough to suffer. I never thought I could just start making coin right away, but I must admit that it is a VERY different mkt today than when I was trading. Such is the game and next week is another week. As long as I don't have (2,000) days, so far, I'm not overly concerned. A loss is a loss and we move on. One thing is for sure, I do need to make some serious adjustments.

So now I'm off to Rhode Island in a few hours to do some fishing and get some fresh sea air.
After I get back, I'll be spending Sunday pouring over my trades and see where I could do better.

os

 

[coolweb]

Quote from oldschool:



Some examples:
A few times when all the stars lined up for a short, (mkt weak, sector weak, stock weak, good chart, ticks around -800, etc...) I decide to short a few hundred apples (hush NOD...hope you're happy eating that steak with my money ) risking about 25 cents. Trading something like .65 - .78 offered on a downtick. I place an order 1 cent below the offer and I'm IMMEDIATELY filled at .77. I'm like, "oh shit". The next quote is .98 - .05. Even before I can enter my SL, the stocks gone another 75 cents. It all happened in about 3 seconds. Another similar example with GS to a lesser degree, but same type of action. One error during pre market on Thursday cost me about (700) without even blinking an eye. Back in the days, stocks never traded this wildly (granted aapl and gs are volatile stocks - but even they didn't trade this quickly and jump around so much). At least we had the specialist to blame back then. Now I'm beginning to believe that the price action is due to not just the big funds throwing paper around, but also the HFTs who seem to have their algos set at certain levels to hit or take in size.

If anyone has any thoughts on the last comment, I'd love to hear them.


os

The best way to fix this problem is, replace the buy button with a sell, and vice versa. This is a serious advice. Rethink how you do your timing after you replaced the buttons imaginary in your head.

Cause you are buying and selling the places where I would sell and buy, or no action.

 

[NoDoji]

Quote from oldschool:

I decide to short a few hundred apples (hush NOD...hope you're happy eating that steak with my money )

Not me, OS. I'm sorry You must not've got my memo in late March: "...so I expected AAPL to hit $230 today, but the price action was so wide and whippy, that I was unable to trust myself on this and so I didn’t trade it at all." AAPL got too rich for my blood. I took up trading crude oil for stress relief :eek:

 

[Rabbitone]

To Old School and No Doji .

On being old.

I had breakfast other morning alone in my wife’s favorite restaurant while she was on travel to Washington D.C. As I was leaving the restaurant I said hello to an old fellow I had seen a number of times before. He was wearing a blue hat with “NAVY” printed in large gold letters across the brim as he sat sipping his morning coffee in the small booth close to the door.

He recognized me as a regular and smiled at me. I smiled back at him and said “I love your Navy hat.” as I attempted to open the door to leave. Before I got a step the old man motioned me to come closer. In a frail raspy voice he said “I was in the Navy during WWII” as he pointed at his hat. The simple statement caused the wrinkles on his weathered face to well up. I smiled back and said “So was I. I was in during Vietnam…” The old man chucked and belly laughed at me as he waved his frail finger “Ahhh, you are just a kid. You should have seen what it was like in the big one…” Some time later I realized how important that moment was in my life.

Though I had retired several years ago to trade full time this last month I had come to a bend in the road. I had signed up for Social Security, Medicare and my pension two months earlier and now it all had come home to roost. The flood of paper said it all; I was now officially old by endorsement of my government. So the old mans simple statement had come at a significant time in my life and his timeless words had help put my life back in order. The message is simple “You are only old if want to be…”

Best of trades,

CaveMan

 

[pairsarbtooo]

Quote from oldschool:

Hi ND,

Congrats on your record day recently. I have a feeling that your record #s will continue to grow as your skills seem to be going parabolic lately. The most frustrating part for me is that I decided to trade again when I saw the tape starting to act like a big move was coming. Just a shame that I didn't start a month ago to get the platform learning curve out of the way. But there's always next week, month...

Trading SIM: I never traded sim for one reason. Call me a fool, but for me, nothing reinforces lessons like making or losing real money - even small money. Further, trading sim never gave me the "real" feel of being in a trade. Since I have a hard max loss/day, this never bothers me. When I'm' not trading well, I will just shut down on my own before hitting my daily stop. So far, no real complaints, I didn't expect to put up any good numbers right away.

os

PS: Since you're only 27, I doubt it was your age.

I like the thread. The weakness is your belief about age and trading performance being inversely related. You haven't traded for 10 years, thats much more significant than your age. What if someone didn't exercise for 10 years then started attempting to run every day? Use/disuse is much more important now than some chronological age number. If I were coaching you I would forget that argument until you have worked on the more important aspects of conditioning your trading back to the levels where you were before.