Archive for: January 2007

Well, losers! Want to say you - be happy with 40 or 50% of a move. Works well for every trader. You Should find what works for you, trail a stop, or close half. Whatever. It is not you money/profit until the trade is closed. …but once closed… Greed (of wanting more profit) is fighting with fear (of loss or giving back)! You have to determine which one wins.
Im sure if Steve Cohen, Paul Tudor Jones, etc did ‘fictional’ autobiograhies, people would treat those like the bibles as well.
What about close 50% of what ever position you got, take the profit and ride the other 50%?
I’m also trying to adapt my trading style - cut my losers as fast as possible and hold winning positions while adding to them. The problem i’ve been having is adding to my winners, and not closing them(!), and the whole psychological aspect of really only winning on nn % of my trades - it seems like i need a lot more discipline to make money with this approach (the discipline to not be afraid to get; then get out of the trade if it isn’t working; plus the discipline to hold onto the winner and try to add until my target is hit. I’ve been getting a nice lead on positions, then when i try to add to the winners i’m adding at the wrong time and getting stopped out for basically a break even trade. (Last week issues).

One thing i have noticed that will help is i’ll immediately stop myself out or add to the position within the timeframe of the chart i’m trading on….example: if i find a trade setup using a 1 hour chart i’ll enter the trade; and immediately (a) stop myself out after 1 hour if the trade isn’t working (the next 1 hour candle bar); (b) or i’ll add to the position after 1 hour if the trade seems to be working. Then, if i get stopped out, i’ll make myself wait another two bars before i try to re-enter another trade on the same side of the market…example: if i get a long signal on a 15 minute chart i’ll get long; if after the first 15 minutes the trade isnt working i’ll stop myself out; then force myself to wait another 30 minutes before i’ll try to re-enter the market on the long side….this keeps my losers smaller if it looks like the trade will run straight to my stop loss (i’d rather get out prior to my stop if i know the trade isnt working). It also prevents me from chasing the market after i get stopped out - it limits my impulse trades that i use to have after a losing trade and it prevents me from chasing the market.

Other thing that works for me is to put in my exits (targets, stop) and stop looking at it. Close the p&l window if you have to or watch your stoch and macd without P&L or you`ll get here.
…thanks to elitetrader, only close to me ideeas wrote down.

A very interesting/stressful situation for a trade a`ve been read on Coping with Depression following a major drawdown

LordMelbury said:
Hi All

I am 51 and been trading for 7 years full time, i have gone from around $1 million to over $2 million net assets but in just the last 12 weeks i have unbelievably and stupidly lost 600k, 300k thru trading and 300k thru a bad property deal.
LordMelbury saying here:
I was diagnosed with Kidney cancer 6 months ago, which thankfully i caught fairly early, but its been stressful, i have a 16 month baby and one on the way.

I mention the above because i think maybe i was pushing it to hard and trying to go for the home run in case i didn’t make it.( which i`m confident i will now)

I had my blackest day yesterday when i realised that i was 200k worse off then i thought thru a stupid mis calculation of my assets (what a jerk i am).

The feeling of guilt towards my family is immense, and i have been quite distraught and emotional, has anyone had a similar major drawback and come back again ?

( Suffice it to say, i stopped trading yesterday and intend to give it a rest for at least a few days )

His replays:
bgp:
yes, of course ! not as large of #’s ,but yes. dont worry about it . relax and put most of your money in 3-month t-bills . start off trading smaller and dont go for home runs. i have that problem.

good luck,
bgp

Odgnut:
I would definitely take a little break. The last thing you want to do is to trade with the mindset you’re currently in. You would probably trade more aggressively to try to make back your losses and just dig yourself into a bigger hole.

You need to also realize that even the great traders eventually go through large drawdowns at some point in their career. What I find therapeutic is to read some inspirational trading books like “Market Wizards” and “Pit Bull” among others…it’s a great comfort to know that some of the greatest traders in the world go through really bad trading periods…but through discipline and perserverence…they always come back stronger than before.

And If you’re married…I would also be completely open with your wife….you would be amazed how understanding someone that loves you can be….and getting this off your chest should relieve some of that stress. Going through what you’ve been through lately with cancer…I would think that your family values your health much more than any monetary losses you may have incurred.

And 1 million plus is plenty of trading money to work with. When you come back…just trade smaller until you get your mojo back.

Good luck.

more here:
Coping with Depression following a major drawdown

Nothing strange here.

GBP/JPY is climbing back to all time highs, or to its Exchange Rate Mechanism (ERM) levels, before the British Government announced the exit of the Pound from the ERM on Black Wednesday, September 16 1992, after speculators, George Soros amongst them, sold huge billions of Pounds. Soros (The man who broke the Bank of England ) made GBP 1 billion during this episode. GBP/JPY hit 8 year 5 month highs o 240.85-90, its highest level since August 11 1998 highs of 240.91. A break of 240.91- or 241.00 will send GBP/JPY to its levels when GBP was in ERM - to its highest level in 14 years and 4 months high since Sept 11 1992, when it was at 245.15. The GBP/JPY subsequently plunged from 233.03 to 222.48 on Black Wednesday when the Pound exited the ERM.

Barriers at 241?
Forecast?

I entered GBP/USD long @ 1.9870, target 2.0150, trailing stop 125 pips.

My question was, how many of you stop trading when u reach your goal for the day? Also do u have a downside limit for the day?

A problem I had when i began trading 3 years ago was that i was having 4-5 hundred dollar days from the beginning, but i was never satisfied. I always wanted more. And I always ended up giving back the money I was up and eventually ended up in a huge hole. This set up some nice psychological patterns that i am still dealing with today.
…If i had a firm goal and respected it I would have been making some nice money from the start and would have saved myself from some traumatic experiences. At the time I just did not have the experience to protect my day without giving it back. I always traded great off the open and kind off struggled for the rest of the day.

Over the years I`m learning to leave after reaching a certain point and during those periods have always had great months but I still wonder (the same voice that made me wonder if i should stay 4 years ago) should i be leaving. Well for the majority of the time when i stay, I end up losing money or churning, but there have been several periods where I would stay and had good profits. I guess my point is, i was just curious to see how many of you stop when your up a certain amount of money regardless of whats going on???

Method is more important than strength, when you wish to control your enemies. By dropping golden beads near a snake, a crow once managed To have a passer-by kill the snake for the beads.

All things must change to something new, to something strange.

Ambition is so powerful a passion in the human breast, that however high we reach we are never satisfied.

And yet not turn your back upon the world.

Build today, then strong and sure, With a firm and ample base; And ascending and secure. Shall tomorrow find its place.

Each morning sees some task begun, each evening sees it close; Something attempted, something done, has earned a night’s repose.

Every man has his secret sorrows which the world knows not; and often times we call a man cold when he is only sad.

Fame comes only when deserved, and then is as inevitable as destiny, for it is destiny.

Give what you have to somebody, it may be better than you think.

He that respects himself is safe from others. He wears a coat of mail that none can pierce.

However things may seem, no evil thing is success and no good thing is failure.

I have an affection for a great city. I feel safe in the neighborhood of man, and enjoy the sweet security of the streets.

I stay a little longer, as one stays, to cover up the embers that still burn.

If you only knock long enough and loud enough at the gate, you are sure to wake up somebody.

Into each life some rain must fall.

It takes less time to do a thing right, than it does to explain why you did it wrong.

Life is real! Life is earnest! And the grave is not its goal; dust thou art, to dust returnest, was not spoken of the soul.

Man is always more than he can know of himself; consequently, his accomplishments, time and again, will come as a surprise to him.

Most people would succeed in small things if they were not troubled with great ambitions.

Perseverance is a great element of success. If you only knock long enough and loud enough at the gate, you are sure to wake up somebody.

Henry Wadsworth Longfellow

Trading without adequate knowledge of the markets and self is foolish because by doing so you are gambling. There are traders that subconsciously want to lose money. I used to be that way, I think. I believe that my problem was I didn’t do much research or preparation. So essentially deep down I didn’t feel I deserved the money. There is a certain amount of self-knowledge needed to choose the proper trading method. It has even been suggested that many small traders in the futures market, without knowing it, secretly want to lose. They jump in with high hopes - but feeling vaguely guilty. Guilty over ‘gambling’ with the family’s money, guilty over trying to get ’something for nothing,’ or guilty over plunging in without really having done much research or analysis. Then they punish themselves, for these or other sins, by selling out, demoralized, at a loss.