systems dont work. systems do not work. people work. systems do not remove emotions from the process. people control emotions. or emotions control them
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Which real live future trading room I should choose?
- Thread starter Affecto
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systems dont work. systems do not work. people work. systems do not remove emotions from the process. people control emotions. or emotions control them
Quote from FB123:
Alright... well for starters one of your problems is obviously trading with too much size. The reason people trade with too much size is because they are impatient. They want to make more money faster, so they scale up too fast, and can't handle it. That's when emotions come into play. Had you been facing a $130 loss instead of a $1300 loss, you probably would have just taken your stop without hesitation, so if you do continue to trade real money, reduce your size significantly.
This is often very tough to do after a big loss because the tendency is to want to make it all back right away, but I can assure you that if you succumb to the temptation to get it back fast, you will lose even more.
True. I've been feeling like I have to make back my big loss by the end of the year and there are only 3 months left. I'll be taking capital loss carryovers for the rest of my life if I don't recover this loss and my state doesn't even allow those, so if I make back the money in the future, I get to pay the state 6% or more in taxes even though I merely recovering this years's losses. That bothers me, even though the big problem is the loss itself. It just annoys me that my state will be stealing in addition to my loss.
If I were up big for the year, from trading, like I was last year, then a 1K loss would not bother me, but since I am down huge for the year, almost any additional loss bothers me. It doesn't matter that my total loss is still probably only 6.5% of my net worth. I can't stand to keep losing money and it would be foolish to keep doing so.
What state are you in that doesn't allow capital loss carry over? That is tax robbery!
NJ. EDIT: and they don't let you take a loss at all, in addition to not letting you carry it over. You can only offset this year's gains with this year's losses. If your Net Loss for the year is greater than zero, you can't deduct one penny, ever.
I know this sounds crazy, but, in order to try and carry over SOME of the loss into 2010, so that my state would steal less money from me, I'm almost thinking of doing something like shorting a boatload of QQQQ while simultaneously going long an equal amount of XLK in a different account in December. If there was a big Nasdaq move near the end of the year, I would lock in the gain in one of the two positions in 2009 by closing the position and immediately reopening it. You are allowed a wash sale on a GAIN. I would then close both remaining positions at a loss in 2010. If this worked it would effectively transfer some of my loss into 2010.
Would that type of strategy work to transfer some of the loss into 2010 without too much risk, or would it backfire due to slippage, etc.? The amount of the gain taken in 2009 (to offset my loss) would depend on my position sizes and whether the Nasdaq (or whatever index I did this with) made a big enough move. Would I be better off just accepting that my state is going to be stealing money from me and not trying that strategy?
Quote from leela:
Question for FB123:
What charting or signal service you use for VSA signal?
I don't... I just use standard charts and read the signals straight from there... you get used to it. If you want a VSA charting package though, I would get tradeguider. I think they have a new version coming out in a few months...
Quote from Jreality:
True. I've been feeling like I have to make back my big loss by the end of the year and there are only 3 months left.
....
That bothers me, even though the big problem is the loss itself. It just annoys me that my state will be stealing in addition to my loss.
...
but since I am down huge for the year, almost any additional loss bothers me.
....I can't stand to keep losing money and it would be foolish to keep doing so.
I think that this is a clear cut case of you being in an emotional state right now that is not conducive to trading. If you try to do ANY trading while you are feeling this way, it is likely that you will continue to take losses. You need to be clear and calm to make money, and if there is something bugging you, the chances of success are very slim. Take some time and relax, then come back to this when you're ready, with a fresh mind. If you try to keep pushing now, you will probably only take more losses.
you should stop trading.
Paper trade until you are consistently successful.
Then trade with very small position size, and prove that you can earn profit. Then slowly leverage up.
Make a very exact trading plan and follow it. Make a business plan. Don't trade real money until you have both of these things.
Use paper trading to prove that your system works. Use the small size as your next step to prove that it works in the real world. As you continue in your success, continue to leverage.
That's it. Too easy.
Paper trade until you are consistently successful.
Then trade with very small position size, and prove that you can earn profit. Then slowly leverage up.
Make a very exact trading plan and follow it. Make a business plan. Don't trade real money until you have both of these things.
Use paper trading to prove that your system works. Use the small size as your next step to prove that it works in the real world. As you continue in your success, continue to leverage.
That's it. Too easy.
As I told someone in a private message today, there is this one trader from a different board who trades using price action and he felt sorry for me, and has offered to try and help me out via Skype. He trades with another trader using Skype and they were willing to let me join in to try and help me. This trader likes to just use charts without indicators and goes for base hits (a few points at a time) rather than home runs. He made dozens of trades today. I only took two trades today (one of them was completely on my own) and one of them was while he was around on Skype. I only made $225 but it's better than losing.
I didn't use the trading room at all today, but I will still review the video to see what trades he made (just out of curiosity).
I am bummed out that my automated system would have made over 2K today based if I had taken the trade with 3 contracts of the index I'm trading, and followed the rules. However, since the indices were already down big by the time the trade was called for, I elected not to take it. However, in backtesting, if I had traded this system since the end of July, it would only be up $1688 total if had taken a total of 22 trades using 3 contracts (and that's if there isn't slippage) which which means the results are not that great since July overall but at least it is ahead in backtesting. If I had followed the rules this week I'd be up for the week instead of down big for the week though. If I had traded this system for the past 5 years using 3 contracts I would be up around $248K in total, not factoring in slippage (which is really unknown)
Anyway, the trader who is trying to help me says I should forget about the automated system and learn how to trade price action, and accept that trading is hard work. He doesn't believe the backtested system will actually work in real life, although it most definitely would have been up this week if I had traded it but not let myself break the rules. I agree that if I try to trade it with real money I should only do 1 contract (or maybe 2 at the most) in case the system goes into a slump.
I didn't use the trading room at all today, but I will still review the video to see what trades he made (just out of curiosity).
I am bummed out that my automated system would have made over 2K today based if I had taken the trade with 3 contracts of the index I'm trading, and followed the rules. However, since the indices were already down big by the time the trade was called for, I elected not to take it. However, in backtesting, if I had traded this system since the end of July, it would only be up $1688 total if had taken a total of 22 trades using 3 contracts (and that's if there isn't slippage) which which means the results are not that great since July overall but at least it is ahead in backtesting. If I had followed the rules this week I'd be up for the week instead of down big for the week though. If I had traded this system for the past 5 years using 3 contracts I would be up around $248K in total, not factoring in slippage (which is really unknown)
Anyway, the trader who is trying to help me says I should forget about the automated system and learn how to trade price action, and accept that trading is hard work. He doesn't believe the backtested system will actually work in real life, although it most definitely would have been up this week if I had traded it but not let myself break the rules. I agree that if I try to trade it with real money I should only do 1 contract (or maybe 2 at the most) in case the system goes into a slump.
Quote from Jreality:
As I told someone in a private message today, there is this one trader from a different board who trades using price action and he felt sorry for me, and has offered to try and help me out via Skype. He trades with another trader using Skype and they were willing to let me join in to try and help me. This trader likes to just use charts without indicators and goes for base hits (a few points at a time) rather than home runs. He made dozens of trades today. I only took two trades today (one of them was completely on my own) and one of them was while he was around on Skype. I only made $225 but it's better than losing.
I didn't use the trading room at all today, but I will still review the video to see what trades he made (just out of curiosity).
I am bummed out that my automated system would have made over 2K today based if I had taken the trade with 3 contracts of the index I'm trading, and followed the rules. However, since the indices were already down big by the time the trade was called for, I elected not to take it. However, in backtesting, if I had traded this system since the end of July, it would only be up $1688 total if had taken a total of 22 trades using 3 contracts (and that's if there isn't slippage) which which means the results are not that great since July overall but at least it is ahead in backtesting. If I had followed the rules this week I'd be up for the week instead of down big for the week though. If I had traded this system for the past 5 years using 3 contracts I would be up around $248K in total, not factoring in slippage (which is really unknown)
Anyway, the trader who is trying to help me says I should forget about the automated system and learn how to trade price action, and accept that trading is hard work. He doesn't believe the backtested system will actually work in real life, although it most definitely would have been up this week if I had traded it but not let myself break the rules. I agree that if I try to trade it with real money I should only do 1 contract (or maybe 2 at the most) in case the system goes into a slump.
He's right about price action... if you learn how to trade that, you will always be able to make money no matter what the market is doing, and it is what the best intraday traders use.
But make no mistake about it... learning to trade price action is the most difficult thing you can do in trading, especially short-term action. You are going to have to literally spend thousands of hours staring at the screen before you "get it" completely and can make money on a consistent basis. Do not expect to just turn on your screen, get a couple of tips from your friend, and start making money a month from now. It's highly unlikely that you will be able to do it in anything less than a few months, and that's if you dedicate yourself to it 100%. A lot of people have taken a lot longer, and some people never get it. It's the right direction, but don't underestimate the length of the road in front of you.
Whatever you do, do NOT attempt to trade with live money while you are learning something completely new.
FWIW, I reviewed today's room video, and was expecting that the first day I was absent would be the day he finally took some spectacular trend trades to the downside. Turns out that he only took one trade today where he scalped $50 total profit. (NOTE: NOT profit per contract....total profit for the entire trade) That was it for the entire day, on a day when the /ES was down 30 handles on the day. I kid you not!
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