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

Beginner Questions
38

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…

39

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

40

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:

41

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.

42

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:

43

[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

44

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!!!

45

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.

46

thanks tonyro44

47

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!

48

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,

49

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.

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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.

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50

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.

51

grantx, what you said is just so true!

i noticed the exact same thing. everything seems crystal clear after the trade is closed, but during the trade there are so much conflicting thoughts and anticipations whirling around.

will try your tip. thanks!

52

mickson, thanks for sharing the research result. very much appreciated.

still not clear why those hypothetical trades without stops eventual lose out in your simulation. the only thing i can think of is the margin calls due to account size. once the margin is called, it’s all over, even if the market starts moving to the favorable direction the next minute.

is my assumption correct?

thanks,

53

and the 20% that doesn’t become a winner would have become account busting catastrophes.

Nothing is worse for a trader than being stopped out by just a few pips but it happens, even to experienced traders. Spend more time evaluating where to put your stop loss.

54

…and then price reversing and going in your original direction.

My computer just doesnt know how lucky it is, so many times it came within a ball hair of being smashed to pieces and thrown out the window. You seen the latest star wars where kylo ren takes out his rage on that computer console with his light saber? Thats how I feel sometimes :smiley:

55

If you’re using trend lines or moving averages to decide your stops, always put your stop a little higher further than the trend line. Often pairs push the trend line in an attempt to push through it but it fails. Never put your stop bang on a support line or something.

56

Have a great week-nd great traders and we will do it again next week.

58

I would like to suggest that in order to minimize the chance of loss we should use the small lot size and should trade with the help of stop loss.