What's Wrong with Me?
- Thread starter caplan8293
- Start date
Having a business plan is not enough: it must be realisable or anyone can make a business plan to go to the moon 
Quote from omcate:
Trading is a business. Do you have a business plan ?
I said also in another post, I don't remember which one but I will summarize: market has tendancy to first go on the opposite of upper trend, so that 1°) you should expect it, 2°) you could exploit it, notably for intraday this is the way to reduce slippage.
Quote from harrytrader:
Easy:
Risk of ruin = 1-P[K]=1 - {1 - (q/p)^K0}/{1 - (q/p)^K}.
p is the probability of winning 1$ at each bet and q = (1-p) the probability of losing 1$ at each bet, K0 is your initial Capital and K the fortune you would like to reach.
Since you said
>Let's say I buy a stock at $11, which my analysis shows should >go to $13 in about two weeks. Instead, it drops down to $9 >about two days later.
the formula above applied just use K0/2 instead since it is 2$
And Since you said that "The cycle starts over" I suppose it means over and over again then q/p is even < 1/2 that is to say you don't even have a "fair game", a casino could be even more fair than you ... with yourself
Prob faqs work in progress interrupted at the moment by other tasks on my site
http://www.econometric-wave.com/faqs/probability/home.html.html#Q_what_is_the_probability_of_ruin
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Quote from caplan8293:
Let's say I buy a stock at $11, which my analysis shows should go to $13 in about two weeks. Instead, it drops down to $9 about two days later.
I am disappointed and want to get out, but do not want to take a $2 loss, so I hold on to it, hoping for a rebound. A week later, it goes back up to $11, which would allow me to exit flat. Do I sell it? NO. Instead, I feel that if I hold on to it a little longer, it will still go up to $13.
So what happens? I hold on to it and it drops back down to $9. The cycle starts over.
What is wrong with me?
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Shit, you just remind me myself 10 years ago! Exactly what I was doing back then.
Solution that worked for me:
1. Right down your strategy on a piece of paper.
2. Place GTC limit orders, stops, etc. according to your strategy
3. Don't place all your capital in one trade, IOW, do multiple entries.
4. Replace closed trades continuously
5. Analyze the results
6. Correct you strategy
7. Right down your new strategy on a piece of paper
Repeat the process.
Cheers,
Quote from SlickRick:
What is wrong with you? You need to let me know what your next trades is going to be. If you just keep doing what your doing and call me before you do the trades, I can make money on the other side. I'd be willing to give you 10% of the net.
:eek:
ignore slick rick i will give 20% of the net
It's all about subjective feelings and emotions versus objective reality.
Some very smart folks went around and surveyed people about profit and loss. They asked them a few very basic questions, where they had x% chance to gain or lose, and how much they'd gain or lose.
I've got the whole thing in a book downstairs (or across the room on my bookshelf) but I'm too lazy to go get it.
But it showed that odds are far from intuitive, and (as I recall) people have a lower value on money won than money lost. The questions were along the lines of this:
Would you wager $50 with a 20% chance of losing it all, and an 80% chance of winning $15?
The odds (over the long run) favor this wager. But they discovered that most folks were not interested. While they could win more money, the won money was worth "less" than the losses in their eyes.
Some very smart folks went around and surveyed people about profit and loss. They asked them a few very basic questions, where they had x% chance to gain or lose, and how much they'd gain or lose.
I've got the whole thing in a book downstairs (or across the room on my bookshelf) but I'm too lazy to go get it.
But it showed that odds are far from intuitive, and (as I recall) people have a lower value on money won than money lost. The questions were along the lines of this:
Would you wager $50 with a 20% chance of losing it all, and an 80% chance of winning $15?
The odds (over the long run) favor this wager. But they discovered that most folks were not interested. While they could win more money, the won money was worth "less" than the losses in their eyes.
Quote from harrytrader:
Having a business plan is not enough: it must be realisable or anyone can make a business plan to go to the moon
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Caplan 8292;
Noticed you live in Silver springs , watch this silver/gold pattern.
I am going to assume you have or have acess to a good trading library ;
I am also assuming those numbers you gave are pretty accurate .
Harrytrader i cant resist, President John Kennedy had a good written plan to moon & we taxpayers worked that plan to the moon;
Harrytrader is right on working , working your plan- gold & silver mine takes work.
$ 11 to 9 is not necessarily ''wrong'' but if its stalling continually at $11 in a bull market-kick out that underperforming dog!
That may be somewhat temporary % price behavior in a index derivative;
and would not necessarily think the problem was with me.
But sounds like the market votes that stock isnt worth $11.
Doesnt sound like its market makers fault at all-traders problem for sure;
my written plan includes comparing to DIA, SPY, QQQ in many time frames...
Nothing's really wrong. You are just obsessed by the idea of keep on buying and selling to make money. Don't forget buy-and-hold.
This occurs also for intraday. Since I posted the picture for another thread http://www.elitetrader.com/vb/showthread.php?threadid=30651, I can use it as also a good example of what I said above:
On right chart model, for March 31th session you have the daily forecasted trend which is bullish with target for the day at 10401.8 (projection 1 = day 1) but on the left side on subscale you can see a bearish trend before a bullish trend. So when market opened it wasn't a surprise that it plunged first before making the target (real high was 10401.7 so very near 10401.8 the theo value; remark that the next two tops sessions were already forecasted at 10416.5 - see red border label - and 10496 - see orange label).
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