Unsuccessful trading with full-time job

Quote from NoDoji:

Choose a chart bar interval (5-min chart is very reliable for day trading) and study some common price action patterns, such as this favorite of mine:

http://www.dacharts.com/123.htm

In a spreadsheet, log the price excursions that surround every appearance of a given pattern for a single instrument (a single high beta stock or an active ETF or a liquid futures contract).

Eventually you'll find positive expectancy such as price runs N ticks favorably before running N ticks adversely 60% of the time, or price runs 2N ticks favorably before running N ticks unfavorably 50% of the time. You'll start to notice that the successful runs happen more often under certain conditions such as a tilting channel (trend).

Create a set of trading rules based on your observation and apply the rules to 20 days worth of charts. Is the result net positive over time? Apply the rules to 20 days worth of charts of other stocks, ETFs or futures contracts. Net positive over time?

Once you have a set of rules that produces positive results when applied over an acceptable time period, trade your plan in a simulated account that allows you to replay any day's action.

If you're able to do this successfully over a period of 20 or more days, then try real-time simulated trading sessions any time you're able to.

Finally, try your plan in a live account. I'd recommend a small Forex account as a test because you can keep the losses very small in the event your psychology is screwed up.

This method teaches you to develop a plan based on price action, which is an edge that never dissolves as long as there is a liquid market to trade.

This method also allows you to achieve your income goals more consistently without the crazy ups and downs that accompany many trading methods.
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Hmm...I typically don't go so microscopic on any equity, but I will try to do this and create a plan around it.
 
Quote from th3moneytrain:

Thanks, I will check it out. Lot of reading there.
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Only read the first few posts to get a hang of what's going on.

Gringo
 
Quote from th3moneytrain:

Hmm...I typically don't go so microscopic on any equity, but I will try to do this and create a plan around it.
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You're "trading/scalping...for intraday moves" and you "scalp intraday" and you consider it microscopic to study price action using a 5-min bar interval.

:confused:

If it's because you're trading options, understandable; scalping with options seems ridiculous to me. You get leverage and precision with futures such as stock indexes, oil, natural gas, bonds, currencies.
 
Quote from th3moneytrain:

I trade weekly Options on equities. My strategy is to play the first hour in the morning with high beta stocks. I just (primitively i.e no indicators) watch the price pop, if it does pop, I quickly jump on the early morning trend and try to collect $1 - $2 move. If it reverses, I cut losses. By this time, I usually have to get ready to go to work anyway. I don't leave positions open unless I "feel" that the price will continue on the trend. I know that there should be no emotion behind the trade, but I haven't found any quantitative reason to stay/leave a trade, at least not yet, so I just leave it up to gut feeling and pattern of move.

Typically I lose money because I bought the option when it was over-priced i.e. market had already anticipated or saw the move and over-priced the option. So over time...theta decay, bad strike price, market reversal, etc. all chip away at the profits. However, currently I haven't found a good filter/screener/methodolgy to find options/stocks that will be "popping" in the near future and getting in them before the pop. The whole prediction strategy, doesn't work too well for me because 1) My predicting skills are not that good 2) It's too risky to predict a move to happen within a week 3) Option pricing based on forecasting will kill reward vs risk ratio due to the volatile nature of the high beta stocks I play.

Are you able to successfully predict stock moves in the near future? I'd like to learn how if you can share. Thanks.
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Buddy, congratulate yourself that trading Options you have been able to keep account alive or near break even after two years. In my books, Options and derivatives are the fastest way to a blown up account. Congratulations again !! :D :cool: :)
 
Quote from NoDoji:

Choose a chart bar interval (5-min chart is very reliable for day trading) and study some common price action patterns, such as this favorite of mine:

http://www.dacharts.com/123.htm
More...

That is one of my favorites although I got it out of John Hills books from late 70s, it were failed attempt to make a new high or low. It is actually half of what I do scalp Indexes. Whether ES, NQ, YM or TF, and have done well enough in CL, but I have found it to work best by keeping stats on what the average larger swing is in all these markets before looking to do counter-trend trades, like right now it is 9.5 points in ES, so when I see the ES has moved this amount, no more trend trades and look to go other way. I believe CL is .96 right now.
Quote from th3moneytrain:


Typically I lose money because I bought the option when it was over-priced i.e. market had already anticipated or saw the move and over-priced the option. So over time...theta decay, bad strike price, market reversal, etc. all chip away at the profits. However, currently I haven't found a good filter/screener/methodolgy to find options/stocks that will be "popping" in the near future and getting in them before the pop. The whole prediction strategy, doesn't work too well for me because 1) My predicting skills are not that good 2) It's too risky to predict a move to happen within a week 3) Option pricing based on forecasting will kill reward vs risk ratio due to the volatile nature of the high beta stocks I play.
Thanks.
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So you "Typically I lose money", why are you trading? You lack education is reason you can't predict well. It won't matter if you have a small or large bankroll. You are saying you have no system or Trading Plan and none of it is well backtested and you are trading by hunches. As far as saying dollar amount of what you want to make each month is foolish, you are like forever and a day from that point. I am not trying to insult you, trying to save you from losing all your money. I started in 1978 and until 1999, I worked days and eventually nights full time. Do nine hours between work and travel and another eight hours in front of a screen. You have to put in real time screen time for a few years if you want to do this full time. I started doing long term trading off weekly charts and I still do them, check out stocks in the $2-20 range, ave of one million traded, after price retraces to 20 EMA and breaks last weeks highs=buys. Can do covered calls and Put Credit Spreads for a little extra. You only need one way to get in for now and work on a few dozen ways to either get out, not to take trade at all, identify when chart is screening for a reversal. When you get your trading down to boring, you are doing incredible trading in my book, you want a nice smooth equity curve.

Most of us have started with smaller bankrolls cause many of us busted out for years. I became good at long term stocks, but it was the 80s and everything was going up, where I make my mistake was going into futures and being like you, too lazy to backtest over years of data and not put my money at risk. Took few years to learn to code, found all the money was in money management rules and less so in entries.

I have found that trading same stocks all the time to be best for me. Each stock has it's own personality, you watch long enough, many show their hands before taking off. I have found for myself, options are horrible for buying and best for selling naked or Credit Spreads and keeping them more than a day, often time weeks.

Quote from th3moneytrain:

This is exactly my style. But I'm lacking confidence in it because of my failures and becaus all I hear is buy low/sell high. My experience has been the same as you have seen. Some days the buying of highs goes even higher beyond belief and that's where I have made most of the money. However I lose it eventually b/c I try doing that with similar plays to have those plays reverse on me. I haven't been able to quantify this buy when high move because I don't know how to discern which one will run and which one will turn.
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You really need to take a couple years off trading and come back with a well defined Trading plan. You need to be able to read charts, support and resistance. Buying low means risk is low, there are few markets like intraday Crude Oil where buying high works consistently over long haul that I have found that tested well.
 
Quote from NoDoji:

You're "trading/scalping...for intraday moves" and you "scalp intraday" and you consider it microscopic to study price action using a 5-min bar interval.

:confused:

If it's because you're trading options, understandable; scalping with options seems ridiculous to me. You get leverage and precision with futures such as stock indexes, oil, natural gas, bonds, currencies.
More...

by microscopic, I meant, very focused on one stock/contract. As in, no macroscopic monitoring of index, market trend, economics, global activiites, etc. Pretty much, focus on the specific action on that stock/contract and play accordingly. Wasn't referring to time period. Also, yes, I do trade options and projections/expectations become more important than time periods because it's already being priced in.
 
Quote from toc:

Buddy, congratulate yourself that trading Options you have been able to keep account alive or near break even after two years. In my books, Options and derivatives are the fastest way to a blown up account. Congratulations again !! :D :cool: :)
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Haha....thanks. That's a positive way to look at it. Although we won't discuss the one account I blew out...shhsssh... :)
 
Quote from Handle123:

That is one of my favorites although I got it out of John Hills books from late 70s, it were failed attempt to make a new high or low. It is actually half of what I do scalp Indexes. Whether ES, NQ, YM or TF, and have done well enough in CL, but I have found it to work best by keeping stats on what the average larger swing is in all these markets before looking to do counter-trend trades, like right now it is 9.5 points in ES, so when I see the ES has moved this amount, no more trend trades and look to go other way. I believe CL is .96 right now.


So you "Typically I lose money", why are you trading? You lack education is reason you can't predict well. It won't matter if you have a small or large bankroll. You are saying you have no system or Trading Plan and none of it is well backtested and you are trading by hunches. As far as saying dollar amount of what you want to make each month is foolish, you are like forever and a day from that point. I am not trying to insult you, trying to save you from losing all your money. I started in 1978 and until 1999, I worked days and eventually nights full time. Do nine hours between work and travel and another eight hours in front of a screen. You have to put in real time screen time for a few years if you want to do this full time. I started doing long term trading off weekly charts and I still do them, check out stocks in the $2-20 range, ave of one million traded, after price retraces to 20 EMA and breaks last weeks highs=buys. Can do covered calls and Put Credit Spreads for a little extra. You only need one way to get in for now and work on a few dozen ways to either get out, not to take trade at all, identify when chart is screening for a reversal. When you get your trading down to boring, you are doing incredible trading in my book, you want a nice smooth equity curve.

Most of us have started with smaller bankrolls cause many of us busted out for years. I became good at long term stocks, but it was the 80s and everything was going up, where I make my mistake was going into futures and being like you, too lazy to backtest over years of data and not put my money at risk. Took few years to learn to code, found all the money was in money management rules and less so in entries.

I have found that trading same stocks all the time to be best for me. Each stock has it's own personality, you watch long enough, many show their hands before taking off. I have found for myself, options are horrible for buying and best for selling naked or Credit Spreads and keeping them more than a day, often time weeks.



You really need to take a couple years off trading and come back with a well defined Trading plan. You need to be able to read charts, support and resistance. Buying low means risk is low, there are few markets like intraday Crude Oil where buying high works consistently over long haul that I have found that tested well.
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Good stuff, thanks. I will add this to the list of things I need to consider.
 
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