More than 80% trades i took a loss on would have been a winner < 24 hrs later

Kingfish, the sad news is that you are not by any means alone in your experience and current situation. Based on the large number of hugely enthusiastic newbies that come here, post a few times - and then completely disappear - it is clear that many, many people first decide to become full-time traders and only [I][U]then[/U][/I] start to learn how to trade and find out what life as a full-time trader is actually like and what it requires from you. The lure of financial freedom, the ability to leave a mundane job, the yearning to have all that “the good life” has to offer, even the romantic image of being a big successful player in the global foreign exchange markets, all draw innocent wannabes into the business before they have established a consistent track record and learnt the business. It is strange that in any other trade or profession such an approach would be seriously frowned upon, afterall, one wouldn’t go pulling people’s teeth out without first qualifying as a dentist? :slight_smile:

You can chose whether you want to [I]“live to trade”[/I] or [I]“trade to live”, [/I]but if you choose the latter then you are opening up an entirely new ballgame. If you are trading full-time then you are constantly drawing down funds to cover regular expenses even when you are not trading for whatever reason and also when you have the inevitable losing streak. If you have a family then the demands are even greater.

Full-time trading also impacts considerably on your choice of trading style. The longer the timeframe for your positions then the longer the delay before you know whether they have succeeded and the longer before you can access the profit.

Full-time trading also demands a lot of time researching and simply waiting for things to happen. For many this is very frustrating and boring. Trading is not so very glamorous most of the time!

Full-time trading requires a large buffer to cover all these difficult periods and uncertainties and to be able to maintain your trading capital at the required level in spite of drawdowns. The psychological pressures arising from living though negative earnings periods and the constant need to perform is an extreme addition to the already significant pressures purely from trading itself. I think you are already experiencing these pressures right now?

Personally, I would advise you to seek a regular income from another source to sustain you during your training period and forget about full-time trading until you have a consistent performance record from a specific, well-defined trading method that you have complete confidence in.

Turbo has already mentioned above that you can expect to lose for at least 2 years. Many other traders (not even full-timers) state that it took 5-6 years to become consistent. Lexys, one of this site’s most studied and consistent full-time traders traded on Demo for some years before starting. On another thread, Clint, another highly-respected long-term trader here calculated a demonstration of how much capital it takes to produce sufficient ROI to turn professional - its a lot!

If you are very good and learn very fast then maybe you [B][I]can [/I][/B]hit the road on the run, but most can’t and don’t and since you said yourself that you do not yet have confidence in your own performance then that is a very risky basis on which to even think of going full-time.

I know this is not what you want to hear and sorry if this sounds so pessimistic, but I want to state how I see it so that you get a broader view of what you are facing.

[QUOTE=“borsaci;784379”]either the problem is with your entry points or your stop-losses are too tight…[/QUOTE] Welcome to the site my friend. Where you from?

manxx, thank you for the extremely well thought-out post!!

have been going through tons of self-debate on this. of course the ideal option is to find a job and keep honing my trading skills. the only concern is that i may end up not putting in enough effort on forex and eventually falling into that frequently quoted 95%. i have been working 90 to 100 hours a week on forex in the past 3 months, screen time, reading, post mortem, etc. believe me, jobs in my career field won’t allow more than 10% that level of effort, though i understand in forex, working hard doesn’t equal to trading well.

the other option is to find a mindless part time work, i.e., uber, coffee shop.

keep debating…

Indeed … people very widely under-appreciate the time-commitment/educational-phase required to make a living from this. [I]You[/I] clearly haven’t, though. :cool:

As Manxx mentioned above, I was actually on demo for 4 years, myself, before trading with any real money. (Admittedly, that was partly because I was “under-age” for live trading, at the time, but still … with hindsight I needed it, though it didn’t always feel that way at the time!). And it was another two or two and a half years [I][U]after[/U][/I] that before I was making profits steadily enough to be making what most people would call “a decent living”.

For what it’s worth, I always feel that it’s terribly easy both to overestimate what you can achieve quickly and to underestimate what you can achieve slowly (that last part’s the “better news”, in the long run!).

I totally understand your problem, here: “going back to work” reduces the time available for the learning-curve needed, and makes it all seem that much further away. There just isn’t an easy answer.

(I thought Manxx’s post above was outstanding, and I hope it’s helpful with your deliberations. Good luck!).

great post manxx. theres always a “but” isnt it :smiley:

i didnt attack short time frames trading. i only pointed out that it isnt more or less profitable then long timeframe trading. your day routines are very interesting but nott my style.

because out of 2 reasons:

1st. i have my business i need to manage so i cant watch charts all day

2nd. i dont want to watch charts too long.

to the second point: there was a time i watched charts 15 hours a day. the only thing i realized is the boredome with it and the result of many factors were i immagined good opportunities and was tempted to constantly act in the markets and constantly over trade. i was never able to overcome that obstacle. not even now.

but i changed my weakness into a strength. i came to terms with the fact that i always want open positions 23/5 and learned to benefit of it.

my trades last days/weeks so im constantly in the market with something but with longer traders.

my strength is to analyse instead of following a system. analysing is impossible in smaller time frames than the daily. i switch to 4 hours (smallest time frame i use) to find good entry points. on the daily i find the trend and the direction.

everyone has his/her own ways and theres no better or wrong or right way as long as it yields profits everything is ok.

my day looks like this:

i wake up around midday (11:00) or so and check what happened on the opening of frankfurt/london and in the asian sessions.

then every 4 hour candle i take 15 minutes before it closes to see what happened on my trades and my anticipated trades (opportunities which are developing and potential future trades). and thats it. i dont look at charts longer then 1 hour a day.

on the weekend im doing my analysing away from “moving prices” since weekends everything is closed i can concentrate to analyse the trends and directions (several hours on saturday and sunday) and set a plan for the next week/month and note dowm which securities are to be traded or observed connected with fundamental data coming out within the next week/month and taking into consideration a lot of fundamentals from the previous weeks.

draw my support resistance lines. trend channels. insert datas for what days there are high impact news. etc etc

and thats it. monday-friday i only manage my trades on behalf of what i set on the weekends. most of the time i dont need to change anything on the chart. for example on the brent chart i didnt change anything since months simply because nothing is changing. it has its support resistance areas inbetween which its constantly flipping directions of several hundret (sometimes 1000+ points) and the only thing im doing is sitting and observing what its doing when it reaches one of these lines. reverse or continue. and then i enter a trade. the rest im only managing open trades and potential future trades and doing my scaling in to profit as much as possible from a trend im already in.

scaling in is the greatest tool someone can have. once learned correctly it yields you huge profits with minimum risk. a trade of 1:4 R/R Ratio is becoming a 1/8 rr trade in the same timeframe etc. etc.

you saw some of my charts in my trading thread “turbo trades” those are so to say scaled in pictures. if you zoom out it looks like this:


inbetween those lines i find entry points and take profit points. the next stop for brent is between 46.5 and 45 if it turns around in this zone it will go to 60 till xmas and thats 1500 pips. with scaling in, this potential future trade yields 4500-6000 points profit.

the last 10 days in brent i did not know where the direction it going to be. it was 50/50 so i set up a strangle/straddle trade which unfortunately did not get triggered. if it would have gotten triggered id be by now in profit of 160 points… without even knowing or caring what the direction of the trend/movement would/could be.

heres the straddle/strangle trade: post number 137

http://forums.babypips.com/free-forex-trading-systems/78986-turbo-trades-14.html

OK Kingfish, I greatly admire your persistence and determination as well as your dedication - all excellent and essential characteristics for a trader…:slight_smile:

So, if you are going to have a go at this then I guess we have to give you all the help we can!

Firstly, I think you have to put your charts and forex stuff well on one side and do a serious analysis of your financial requirements for the next, say, 12 months:

[B][U]Income requirement:[/U][/B]
Use a spreadsheet or similar and set out all your family’s essential costs and your overall income from other sources. We don’t know anything about your family financial situation but you will need to prepare a family “profit and loss” in the same way that your mortgage lender would need if considering a house loan for you. Íf your overall family earnings don’t cover your expenses then you can calculate the minimum amount you need to earn from your trading and the frequency with which you will need to be making withdrawals (not forgetting that the taxman will also be interested at some stage, but lets earn the money first! :slight_smile: ).
On top of that essential minimum earnings you can now establish how much additional income you would need to make life enjoyable and achieve those extras that make life “work”. Don’t also forget that items like cars, washing machines, etc don’t last forever…
And then on top of that, it is essential that you plan an excess earnings amount to build up your capital base to facilitate increasing your trading size. Without that your trading capital will start to stifle your ability to expand.

[B][U]Capital requirement:[/U][/B]
You available capital has to cover at least two things:

  1. your margins and a large enough buffer to absorb the interim minuses on your open positions (which is partly defined by your trade money management and risk exposure, e.g. max number of open positions x max stoploss etc).

  2. how much capital to cover your expenses over, say, a 2-3 month period when you do not reach your trading targets or have a nil or minus month - or are not trading for reasons like holidays, sickness etc.

Once you have gone through these two analyses you will know how much you need to make per month and whether you have the capital available to sustain your trading through the lows as well as the highs.

Once you have a clear idea of your income requirement then you can start to consider what kind of trading model you will need to produce it based on position size constraints, risk exposure parameters, timeframe considerations etc,

At the same time ( :D) you can think about whether you are primarily an indicator person or a Price Action or a combination of both. Once you are clear about this part then I am sure there are people here who will gladly advise on method setup!

Another axiom that I think is well worth remembering is that a good trader can succeed even with a mediocre method but a poor trader will not succeed even with the best methods. The point being that consistent success depends more on [I]your [/I]personal skill and proficiency as a trader than the type of method you are using…

Just some thoughts…

manxx, thank you so much.

not sure if you are suggesting i may get to trading consistency in the next 12 months. im certainly flattered. that would be the 2nd shortest time commitment i have heard so far, which range from 8 months to 5 years.

certainly not looking for getting rich quick scheme, otherwise i would just fund a micro account buying a whole lot, go big or go bust. i suspect lots of young folks doing it that way thus all the account blow-up chats. with my speed of wealth destruction, it would take quite a while to achieve that distinction:18:

my budget shows that i have another 3 months expense saved up. still can dig up more but that’s all tied up in stocks.

to switch topic a little bit, if you don’t mind. since we trade the similar TF, how do you decipher the overall trend for scalping purpose? if i look at the cable daily chart, 5, 10, 20ma all point to different directions, flat, up, down.

was thinking about sending you a pm, but i haven’t post enough to qualify the pm function.

thanks always,

No, I am [I]not [/I]suggesting that at all! In fact, my opinion was that you should not attempt trading full-time at all until you have all the components in place and functioning. I.e. trading method, capital, risk/reward and money management, etc,etc.

I live up here in the North countries and winter is approaching. If someone said to us that they are planning an expedition to the North Pole now then we would say that it is not a good idea, wait at least until the spring. But if that person says that he is going to try it anyway then we would at least try to give our best advice and suggestions about how to plan it and what to take with him to give the best possibility of succeeding against all odds…

The only reason why I said 12mths is nothing to do with your trading success. I was talking about your business analysis plans and in particular your Cash Flow and Profit & Loss. Every company needs a written plan that identifies their forthcoming costs and expenses - and how they will be financed. If you are going to try and trade full-time then you also have to plan and think full-time. This means it is not sufficient just to trade and see what it looks like at the end of the month. There is also no point in any of this if you make a small profit for two months and then your quarterly bills arrive and there is not enough to cover them!

A 12-month cash flow analysis will tell you what payments are coming up in which months and also how much on average you need to make per month to cover a full year - i.e. what has to be your minimum “annual salary” equivalent to even survive.

This is the core difference between trading alongside a job, where you can experiment, test, lose, gain etc and it does not matter how little of much you make provided you don’t blow it all - but the moment you go full-time then you have to make [U][B]at least your minimum “salary”[/B][/U] before you even start to make any extra!

I haven’t even started to talk about your trading methods and probablilities of success. You have to get these targets clear first so that you know exactly what you are taking on. Three months buffer is not much at all. I could imagine that your minimum “salary” will be at least around 2000 per month. In any trading month there is realistically about 12-15 actual trading days, so you need to target earnings of around 150-200 per day every single trading day. And when you don’t make that on one day, then you have to make up that shortfall on another day - that is extreme pressure on a new trader!!!

So, what I am saying is that, before you think further about full-time trading now, work out these figures and decide is it really feasible. If you still think so then we can move on to helping with your trading methods :slight_smile:

You are at a crossroads here. I am [I][U]not [/U][/I]saying you will be a consistent trader in 12 months - what I [U]am [/U]saying is that you will [B]have [/B]to be a consistent trader before your cash runs out…

hi manxx, i really mean that sentence in a facetious way. 8 months or 8 years, nobody really knows. it’s like a trade.

have ANOTHER 3 month of living cash committed in this biggest “trade” of my adult life, probably. :51: . but just like trading, i need to think about the risk. i certainly can dig up more fund to buy more time, but my “lot size or sl” in this “trade” would also be getting bigger. that’s why advice from you and everyone contribute here is so valuable.

money aside, there are other considerations as well. for example, here in the States, employers tend to bias against folks who are out of job for too long.

really need to think long and hard on this…

thanks always
wanna-be trader

Exactly! But what is certain is that there is no natural law either that states that you [I]have [/I]to lose for a certain period before you can be profitable! :slight_smile: There is a reason why it takes time and that is because there is a huge amount to learn about (at least) four major areas:

how markets move
what trading method to use
how to manage risk, profitability and capital
how to manage one’s own patience, psychology, character, etc

Since there is no standard schooling to go to (except maybe the BP school!), most newbies inevitably learn this stuff individually in a totally haphazard manner, and mainly by finding out firstly what doesn’t work - and that inevitably means losses! How long it eventually takes to reach the “breakeven point” in learning is very individual.

But there is one small, but very bright diamond shining through all this heaviness: You have actually clearly and significantly [U][B]outperformed [/B][/U]all three of those signal services that you subscribed to !!! Think about that for a moment - you made a profit from your [U][I]own [/I][/U]trading for these three months. That is one big achievement no matter how small the numbers were. As it happens, the fact that your results [I]were [/I]small is even more positively significant beause it shows that you already have an understanding of risk and didn’t just “bung it all on the red” and see what happens.

You have all the right attitudes and you have all the right character traits of controlled ambition, persistence, determination, objectivity and…a longing to trade. I am sure you have all it takes in personality terms to be a successful trader, but you do not yet have professionalism and confidence in handling the [I]tools [/I]of the trade. And gaining that is not difficult.

This is why I would hate to see you end up blowing all your spare capital by taking on too much too soon and ending up with neither capital nor a trading account and a big chip of frustration on your shoulders from what “could have been”. If you could only find a way to trade alongside a job income for a while then you would be free to make mistakes, develop your style, build your confidence, build you capital… and then the big step into full-time trading with at least the tools and the knowledge of what you are capable of.

But don’t just listen to my reservations., I’d hate to be the one “that got in your way”! :smiley:

thanks Manxx.

continuing on with my trading, but also be using scraps of time i have to try to find a job. let’s see how it goes.

So [I]how [/I]are you going to continue? It would be nice to hear your plans (TFs, pairs, methods etc) and how you are getting on - and of course, if there is anything you would like to ask the forum.

Sincere personal wishes for every success…:slight_smile:

[QUOTE=kingfish;783940]started full time trading 3 months ago, just went through a trade by trade analysis. frankly i am bit stunned by this discovery. but i have this cynical view that, the day i decide to ride it out rather than cutting the loss (or letting it hit stop loss) would also be the day i blow up the account.

i would appreciate if people on this forum can share some thoughts on this. does this imply stop loss is over

In my own trading it was more like 90% of my lossing trades could had been winners had a gave the trade more time and a wider stop. Some of the things I have down to combat this is to
Trade less
Only take high probability entry signals
exit a failed trade manually rather then be taken out by a stop loss order
Scale into a trade,
Most importantly have a trade plan for each trade, and stick to it.

This last one, think of it like going to a grocery story with a list in hand and only buying what is on the list, as oppose to the person who buy whatever attracts his attention

Good luck and keep reviewing your past trades, that is how you learn

hi dennis3450, thanks.

i started putting together WRITTEN trade plan now. but still sometime my impulsion got the best of me and i deviated from the plan. seems to me i don’t trust what i wrote down myself!!!

Kingfish as you can see , we all want you to do well . When it comes to stop lost , what i do is , i have a mental stop , but when i leave the house i then put a physical stop, and that is because i don’t trust the brokers. To trade full time , having a track record of good trades is very important too. Now you must know what you break even point is of livings expenses for the month are. Now you must have an account that can produce that amount and more monthly to be able to live. If you don’t open an account with that kind of money , you will be coming across with money problems, which will affect your trading allot.

thanks tonyro44

Hi kingfish!

Your id distracts my focus. Haha… So… Yeap its true to say that the market is very volatile. It’s like you are navigating the ship. If you fail to have your direction for sure you will end up lost in the middle of the rough sea and at the end of the day sink with your ship. Not only you… People who are successful out there and even myself and team was also have been in your place those days. Without realizing… The issue is just a matter of we did not find the right and exact map to find the route to the destination. To cut it short, I believe you are eager to success in trading as others do. IMHO what I can suggest here is that you can read these few min recommended books first in order to find the exact map as I mentioned earlier about Forex Market. Then you are ready to trade and subsequently accumulate your profit gradually. The best chronology that I can depict here is… How the &*(^ you want to make someone like you if you don’t know what he/she wants. To be certain, it’s not only technical involves in trading. As a matter of fact 4 significant pillars play their own part.

  1. Fundamental Analysis (Min: datas that I mentioned above)
  2. Technical Analysis (Min: Reg Line, Divergence, Fibo Ret, Fibo Ext)
  3. Risk Managment (Min: Limit to 2 - 5 % for every position and don’t exceed 10 - 15% of your total balance)
  4. Psychology (Plan your trade and trade your plan)

Extra reading Material (Min Recommended)

  1. Inside Currency Market
  2. Day Trading
  3. Trading Chaos

All the best kingfish (Come on you are the KING of the fish).

“Safe Trade, Trade with Conviction”

Cheers!

hi maximuscience, thanks for the advice, especially on planning the trade.

every week when i do the post mortem, there is always tons of regret, why did i chicken out, why was i so greedy, etc. then starting monday, i keep making the same mistake of not trading the plan. i guess everything else can be hurried, but trading psychology takes quality time to improve.

also i have this habit of looking at a live trade in multiple systems. not infrequently two systems give totally opposite directions. that could be another side effect of weak trading psychology, since if i have 100% confidence in my trading plan, there is no need to looking for comfort in one system this minute then another the next minute.

thanks,

Hi Kingfish.

I recently presented this exact issue to an audience of traders.

What you are describing is what I call an Illusion of Control. Here is an example I took from our database. The chart shows the journey of a random sample of trades. As you can see except for one of the trades they all are either profitable or at break even. From the picture you can draw the same conclusions you drew that holding onto losers long enough will produce profits.


One of the data scientists in our team was so convinced from this study that holding onto losers would be more beneficial and profitable to his trading.

I said to him he was wrong and that we can prove it. To cut a long story short we built a model which we then subjected to monte carlo simulations and proved that running a strategy without a stop loss based on “time” would severely under perform a strategy with a time stop loss.

My summary answer to your question or statement, is that your observations appears to be a fooled by randomness situation.

Good luck and honour your stops.


Hi Kingfish. I battle with not sticking to my plan and I have implemented a personal strategy that has really helped my discipline.

When you look at your last 50 trades you can easily see which were losers and which were winners.
But, can you easily see which ones you stuck to your rules on and which ones you ‘cheated’ on? I bet you cant.

To fix this: After every trade that you record, simply put a ‘yes’ or a ‘no’ corresponding to whether you stuck to your rules and allowed the trade to complete as per your plan.

You will be surprised with the results. AS newby traders we acquire so much ‘scar tissue’ from previous trade losses that we become slaves to every little movement against our position. Once you allow that fear to get a grip you will be defeating yourself and cutting out of trades too early.

I have found that it is not the market that is difficult to beat but my mind! Your mind is clearer when you are out of the market analysing. When you are in a trade your mind suddenly becomes your enemy because now it seems to find new levels, new dangers, new reasons not to be in the trade!

I wont babble on. Just try what Ive suggested it really helps. Now when I enter a trade if I start wanting to wuss out I just remember that it will be another ‘fail’ on my spreadsheet regardless of whether the trade wins or loses.