Millionaire
Registered: Mar 2009
Posts: 306
05-18-11 07:19 PM
Day trading is still viable if you know what you are doing.
Failed traders are either under capitalised, have unrealistic expectations, or have no market edge, or no understanding of the draw downs that may occur even with a good system..
Day traders should be looking to make annual returns in the 20% to 100% range, instead most day traders are looking to make between 200% and 1000%.
This also makes the game 10 times mentally harder than it should be, ie you will be more likely to lose discipline.
As a day trader, risk at most 0.5% of your account on each trade. You can lose 10 times in a row and still be only down less than 5% in total.
And make sure your average winner is bigger than your average loss, don't eat like a bird and shit like an elephant. And make sure you have a long term positive expectation trading method.
PhiliC
Registered: Jun 2007
Posts: 53
05-19-11 10:01 PM
Interesting thread. Hood makes a lot of good points. I agree w/ him for the most part. Day trading stocks is brutal..Its pure speculation and when those algo machines get a hold of a stock forget it. Most so called day traders are indeed fooling themselves because it is gambling. I've been in the markets 25 years -- made every mistake imaginable. I'm an attorney and RIA so Im no dummy., rookie, or guy who doesn't get it. I also floor traded futures in my younger days.
I do day trade futures (I don't touch the EM so that tells you something). I warn you -- it's a grind. You wont find it in the books. Its not in there. The key is how you handle the futures platform and what to look for. You're saying -- another guru chat room joker. I don't aspire to be like that Jellies guy who is after innocents' $. This is why. I paid my dues where those chat room guys didn't. that's their problem. They don't know what they are doing - trust me.
Of those who are taught -- some will get hammered I expect. This isn't the holy grail. I despise unscrupulous promoters. Students will be expected to sign disclosure forms and file applications for acceptance. Will also be interviewed by me. All applicants will not be accepted. Also I'm going to stay with the students for 3mos on line where they watch me execute and we trade together. Trading comes down to two categories. I. Learning how to make money. II, Learning how to Keep it. The second part is the toughest. The first class will cost around 3K until I can gauge how it works. Get the kinks out, etc... The first group will be my test subjects one might say. Why am I charging? I'll be in my fifties and I believe I earned that right from a lifetime of this shi*. Plus I like making risk free money. The older you get the less romantic is the idea of risk.
As far as I can tell, my techniques are unique.. developed by trial and error. The trip wasn't a pretty one I can tell you. And No -- day trading is not a business like running a law practice or grocery store. The element of "what will happen in the future" is the bogie man over hanging the trader. Unfortunately for us the future is unknowable. In a real business the outcome of the future isn't hanging over your head minute by minute, hour by hour. That's why its highly speculative.
Sorry to stray, but been thinking of this idea for a while. I'm just throwing this out there -- don't bombard me w/ questions. I'm not ready to stat the program now.
Problem w/ stock Day traders:
1. they are the sleimels of the industry. Most of em don't understand any theory, how to read a balance sheet, etc..
2. They don't understand that the real money is made in the big swing. Why in the world anyone would want to jump in and out everyday is idiotic and makes no sense. To me anyway. If someone can do that over a long period of time -- power to ya.
3. They are un-credentialed. Hardly any day traders have passed the series 65 or 7. Day traders can't have client's on the side as an investment advisor because they don't know how to invest. Investment doesn't seem to compute w/ these guys. Plus they aren't taken seriously except by their own community.
4. Why don't you guys set up as investment advisors and earn fees on the side. No brainer, Right.
5. The term day-trader is demeaning. It reminds people of Cramer for the most part even though even he isn't stupid enough to day trade.
6. You may find a contradiction that I day trade futures but find the term demeaning. True so do I. I call myself an investment advisor, because I am one. Plus it is much more respectful in the professional world.
7. Avoided the minor trend like the plague.
8. Im sorry for being so harsh. But just like Hood it may make some of you think hard about your beliefs. I don't mean to be but just making a few points and thinking about some guys I know who call themselves day traders. These guys are real nit wits. I won't associate with them. They don't understand Dow theory, Value investing, capital markets, interest rates. They know almost nothing.
Hood sounds like he didn't have the proper training or knowledge. A gamblers mentality with no comprehension of position sizing. Had my rant for a-while.
People do what they like to do, and if not, theyґre just someone else slaves (boss, society, wife, etc), because all their life they will be just doing things that OTHER people wants them to do. They will always do what people think is "correct" or "respectable" , and NEVER EVER will be free from that.
James
Registered: Nov 2008
Posts: 22
07-26-11 05:56 AM
I think NYCHood had a gambling problem and didn't understand risk management.
To new traders...this could of course happen to you. And I recommend NOT quitting your job to be a daytrader (or whatever). My advice is:
1) Find a system that gives you an edge...this isn't as difficult as it seems (there are many things out there) and isn't the most important.
2) Don't feel mortified if you lose sometimes (treat trading almost like a lottery--who gets depressed and discouraged if they don't win the lottery?)
3) Your system doesn't PREDICT anything it just increases your chances.
4)MOST IMPORTANT: Size your trades to levels that does not make your heart pound with every tick. Put a trade on with a clear defined set up (like where do I get out?) and just let it go. If 1000 shares of something makes you nervous and you will get upset about losing your stop's worth, then lower it to 500 or 100 shares...yes you won't make as much but you will be more effective. Also if futures are too risky for you then go to forex or stocks (least risky).
You want to be an EFFECTIVE and CONSISTENT trader. You don't want to strike it rich. The latter will lead to ruin and is for INVESTING. To be effective/consistent you need an edge and you need to have a clear head with clear defined entry and exit points. If this means that you have to trade only 100 dollars then so be it...
пʼятниця, 7 грудня 2012 р.
понеділок, 3 грудня 2012 р.
No Doji edge
NoDoji
Registered: May 2008
Posts: 7803
12-01-12 06:44 PM
When you say "good at trading technically" I'm interpreting that as "good at recognizing price behavior that leads to profit A before hitting stop loss B more often than not and B is less than or equal to A". (If you don't have rules defining positive expectancy price behaviors/patterns, you have no basis for technical trading, and should expect the same long term results as a recreational casino gambler but without the free liquor.)
Now assuming you CAN read the market technically based on a well-researched plan with fixed rules, when you say "I don't have patience and discipline" I'm interpreting that as any or all of the following:
"I jump the gun and put on trades before a valid signal appears."
"I get bored, lose focus, miss a valid trade entry and either get in late or put on 'out-of-plan' trades" to try and get back what I missed."
"When a position shows an unrealized profit, I move my stop to break even to prevent the chance of a loss, or I take a small profit instead of holding for a full minimum profit necessary to maintain the edge provided by my plan."
If my interpretations are in line with your experiences, the solution is to trade in a simulated account until you're trading your plan according to the rules and producing results in line with the profits demonstrated during the research/testing phase of plan development.
The goals of the simulated trading experience are much like the goals of a student pilot's simulated flight experiences. You're learning to follow fixed rules until it becomes second nature to do so. You're learning to focus on what needs to be done right here and right now by adhering to a process that results in safe and timely arrival at a particular destination more often than not, rather than focusing on the destination and forgetting to follow the important steps that get you there.
The first positive sign you may be ready to trade live is when you're trading all valid setups that appear and managing them according to your plan, and have a profitable net result that's close to your test result.
The second sign that you may be ready to trade live is when you find yourself immediately placing your order when a valid setup signals; when you find that the mere placing of the initiating order according to your plan brings immense satisfaction.
The sign that you're finally ready to give it a go with real money is when "in plan" losing trades that were managed properly produce no more emotional response than paying your utility bills each month, and you find yourself patiently awaiting the next valid setup.
I assure you that 95% of aspiring traders are missing one or more of these important steps to success: research demonstrating an edge; written plan based on research; regular forward testing demonstrating results very similar to research/backtest results; ability to follow the plan comfortably and confidently in a real-time simulated environment.
If you're not able to then transfer this mindset to live trading, yet still want to trade, you should seek the help of a professional trading psychologist.
Registered: May 2008
Posts: 7803
12-01-12 06:44 PM
Quote from mrnate22:
The truth is I'm good at trading technically but my biggest problem are my emotions.. I don't have patience and discipline.
When you say "good at trading technically" I'm interpreting that as "good at recognizing price behavior that leads to profit A before hitting stop loss B more often than not and B is less than or equal to A". (If you don't have rules defining positive expectancy price behaviors/patterns, you have no basis for technical trading, and should expect the same long term results as a recreational casino gambler but without the free liquor.)
Now assuming you CAN read the market technically based on a well-researched plan with fixed rules, when you say "I don't have patience and discipline" I'm interpreting that as any or all of the following:
"I jump the gun and put on trades before a valid signal appears."
"I get bored, lose focus, miss a valid trade entry and either get in late or put on 'out-of-plan' trades" to try and get back what I missed."
"When a position shows an unrealized profit, I move my stop to break even to prevent the chance of a loss, or I take a small profit instead of holding for a full minimum profit necessary to maintain the edge provided by my plan."
If my interpretations are in line with your experiences, the solution is to trade in a simulated account until you're trading your plan according to the rules and producing results in line with the profits demonstrated during the research/testing phase of plan development.
The goals of the simulated trading experience are much like the goals of a student pilot's simulated flight experiences. You're learning to follow fixed rules until it becomes second nature to do so. You're learning to focus on what needs to be done right here and right now by adhering to a process that results in safe and timely arrival at a particular destination more often than not, rather than focusing on the destination and forgetting to follow the important steps that get you there.
The first positive sign you may be ready to trade live is when you're trading all valid setups that appear and managing them according to your plan, and have a profitable net result that's close to your test result.
The second sign that you may be ready to trade live is when you find yourself immediately placing your order when a valid setup signals; when you find that the mere placing of the initiating order according to your plan brings immense satisfaction.
The sign that you're finally ready to give it a go with real money is when "in plan" losing trades that were managed properly produce no more emotional response than paying your utility bills each month, and you find yourself patiently awaiting the next valid setup.
I assure you that 95% of aspiring traders are missing one or more of these important steps to success: research demonstrating an edge; written plan based on research; regular forward testing demonstrating results very similar to research/backtest results; ability to follow the plan comfortably and confidently in a real-time simulated environment.
If you're not able to then transfer this mindset to live trading, yet still want to trade, you should seek the help of a professional trading psychologist.
Nodoji gambler mindset
NoDoji
Registered: May 2008
Posts: 7803
12-02-12 05:38 PM
You're mired in a gambler's mindset. Every trade is brand new, anything can happen, and there's a random distribution of wins and losses among the trade setups that constitute your edge. The fact that you FEEL 90% certain about the outcomes of technical setups in an environment where 90% win rates belong to professional institutional traders (HFT, iBanks, hedge funds that blow up every few years and start fresh, etc.) tells me that you suffer from confirmation bias; you remember the setups that work and conveniently forget the same setups that fail.
There was a setup where I got trapped into losing trades a couple times and I was ready to place a filter on this pattern to eliminate it from my trading plan. But I've learned that stats derived from actual research reveals the market's reality, and prove or disprove the "reality" manufactured in my mind based on a few personal experiences. When I did the research of the outcomes of every appearance of this particular setup over a period of months, I found that it had 55% success rate and when a contextual filter was added the success rate improved to 65%. Yet in my mind it FELT like a 90% failing setup.
If you really want help, do the work:
1. Do you have a trading plan based on research and hard stats (demonstrating an edge) that precisely describes the setups, what triggers a trade entry, and how the stop placement (or averaging process) and profit-taking are to be managed?
If no, do the work and put a real plan together.
If yes,
2. Have you practiced applying it in a simulated account until the simulated results approximately match the profits your edge should be producing based on your research?
If no, practice until you can follow your plan.
If yes,
3. Seek help from a professional trading psychologist, because you've made it clear that you're not trading in line with your plan.
I don't think your problem is impatience; I think it's that you believe you can predict the market based on selective after-the-fact cataloging of price action.
Registered: May 2008
Posts: 7803
12-02-12 05:38 PM
Quote from mrnate22:
I'm not saying 90% of my trades are profitable.. In fact, most of my trades are losers because of my impatience, overtrading and so forth..
What I'm saying is I can spot trades where I know 90% of the time, it's gonna work.. unfortunately, I'm so impatient that I trade other crap setups instead.. and what I'm asking for help.. I have no problem in technical stuff, it's the mental where I'm horrible at..
You're mired in a gambler's mindset. Every trade is brand new, anything can happen, and there's a random distribution of wins and losses among the trade setups that constitute your edge. The fact that you FEEL 90% certain about the outcomes of technical setups in an environment where 90% win rates belong to professional institutional traders (HFT, iBanks, hedge funds that blow up every few years and start fresh, etc.) tells me that you suffer from confirmation bias; you remember the setups that work and conveniently forget the same setups that fail.
There was a setup where I got trapped into losing trades a couple times and I was ready to place a filter on this pattern to eliminate it from my trading plan. But I've learned that stats derived from actual research reveals the market's reality, and prove or disprove the "reality" manufactured in my mind based on a few personal experiences. When I did the research of the outcomes of every appearance of this particular setup over a period of months, I found that it had 55% success rate and when a contextual filter was added the success rate improved to 65%. Yet in my mind it FELT like a 90% failing setup.
If you really want help, do the work:
1. Do you have a trading plan based on research and hard stats (demonstrating an edge) that precisely describes the setups, what triggers a trade entry, and how the stop placement (or averaging process) and profit-taking are to be managed?
If no, do the work and put a real plan together.
If yes,
2. Have you practiced applying it in a simulated account until the simulated results approximately match the profits your edge should be producing based on your research?
If no, practice until you can follow your plan.
If yes,
3. Seek help from a professional trading psychologist, because you've made it clear that you're not trading in line with your plan.
I don't think your problem is impatience; I think it's that you believe you can predict the market based on selective after-the-fact cataloging of price action.
NoDoji about consolidation
12-03-12 02:46 AM
Day trading a 5-min time frame isn't easy because it requires a lot of focus. Price might consolidate for 10 minutes or 60 minutes. You have to fight the urge to manufacture something out of nothing during these periods, yet at the same time remain focused enough to act without hesitation once price tips its hand.
What might be helpful to you is an exercise where you act as if you're teaching a class on day trading and describe what's happening with each price bar that prints. Describe the market environment to your "class". When a setup forms, identify it and describe why it's valid (or why it's not valid, if you use filters).
It will be more difficult to trade out of plan while you're doing this.
I sometimes Skype with some other traders and it helps relieve that impatient feeling where you just want the market to make a move and it refuses to do so for quite a while, and you're certain every little move means you're about to miss out on something big. There's a flat 20EMA, and price is breaking out of a narrow range by a tick in both directions, slowly destroying the morale of impatient overtraders. Thing is, most of the time the market finally tips its hand on the smaller time frame (such as a 1-min chart for 5-min traders), and you'll be able to get in on it with far better odds in your favor if you're patient and wait for those little patterns to appear.
Read Bob Volman's book for a superb and comprehensive analysis of these small time frame patterns where the market tips its hand quite reliably.
Quote from mrnate22:
Nodoji,
You're absolutely right.. I can read the market but I'm not trading based on my ability and it because of my stupid emotions.. it's always in the way of my trading. I'm grateful for many advice that was given to me here but I've done them before and my stubbornness still wins.. Maybe I'm not meant to be a trader..
I mostly trade stocks and I'm a daytrader.. I look at different timeframes but my main one is the 5 min. chart..
Day trading a 5-min time frame isn't easy because it requires a lot of focus. Price might consolidate for 10 minutes or 60 minutes. You have to fight the urge to manufacture something out of nothing during these periods, yet at the same time remain focused enough to act without hesitation once price tips its hand.
What might be helpful to you is an exercise where you act as if you're teaching a class on day trading and describe what's happening with each price bar that prints. Describe the market environment to your "class". When a setup forms, identify it and describe why it's valid (or why it's not valid, if you use filters).
It will be more difficult to trade out of plan while you're doing this.
I sometimes Skype with some other traders and it helps relieve that impatient feeling where you just want the market to make a move and it refuses to do so for quite a while, and you're certain every little move means you're about to miss out on something big. There's a flat 20EMA, and price is breaking out of a narrow range by a tick in both directions, slowly destroying the morale of impatient overtraders. Thing is, most of the time the market finally tips its hand on the smaller time frame (such as a 1-min chart for 5-min traders), and you'll be able to get in on it with far better odds in your favor if you're patient and wait for those little patterns to appear.
Read Bob Volman's book for a superb and comprehensive analysis of these small time frame patterns where the market tips its hand quite reliably.
понеділок, 12 листопада 2012 р.
CL trading guide by NoDoji
Here is my cautionary message to anyone wanting to trade CL intraday because you've looked at those charts and seen all those nice price swings and you think of how much money you could make trading just a few contracts.
Take the time to dissect every price swing of .30 or more every day for at least a couple months worth of days.
If you find patterns that lead into these tradable price swings more often than not, and you can recognize them at the hard right edge of price action, then you have the first "gift" necessary for profitable manual trading: pattern recognition skills.
Then analyze the max favorable and adverse price excursion (MFE & MAE) using various trade entry methods, for each appearance of the positive expectancy patterns you found. Keep doing this until you end up with what appears to be the potential for net profitable trading setups.
If you can do this for a couple months worth of trading days, then you have the second "gift" necessary for profitable trading: work ethic.
Next, use the data you collected to set up up rules for trade entry, stop placement, and profit-taking, and apply your rules to simulated live trading for a couple months. Trade every appearance of your chosen setup(s) and manage each trade according to your rules.
If you can do this successfully for a couple months, then you have the third "gift" necessary for profitable trading: discipline.
Once you obtain sim trading results that are in line with your back test results, trade your plan with the smallest size possible in a live trading account, trading every appearance of your setups and managing each trade according to your rules.
If you can do this successfully, then you have the final "gift" necessary for profitable trading: a trader's mindset.
If you do attain that level of success, then pay it forward.
ADD: It took me waaay more than a couple months to go through each of those steps because I was not "gifted". But I did have a huge work ethic.
Take the time to dissect every price swing of .30 or more every day for at least a couple months worth of days.
If you find patterns that lead into these tradable price swings more often than not, and you can recognize them at the hard right edge of price action, then you have the first "gift" necessary for profitable manual trading: pattern recognition skills.
Then analyze the max favorable and adverse price excursion (MFE & MAE) using various trade entry methods, for each appearance of the positive expectancy patterns you found. Keep doing this until you end up with what appears to be the potential for net profitable trading setups.
If you can do this for a couple months worth of trading days, then you have the second "gift" necessary for profitable trading: work ethic.
Next, use the data you collected to set up up rules for trade entry, stop placement, and profit-taking, and apply your rules to simulated live trading for a couple months. Trade every appearance of your chosen setup(s) and manage each trade according to your rules.
If you can do this successfully for a couple months, then you have the third "gift" necessary for profitable trading: discipline.
Once you obtain sim trading results that are in line with your back test results, trade your plan with the smallest size possible in a live trading account, trading every appearance of your setups and managing each trade according to your rules.
If you can do this successfully, then you have the final "gift" necessary for profitable trading: a trader's mindset.
If you do attain that level of success, then pay it forward.
ADD: It took me waaay more than a couple months to go through each of those steps because I was not "gifted". But I did have a huge work ethic.
четвер, 23 серпня 2012 р.
Top endurance challenges
http://www.findingdulcinea.com/features/feature-articles/2008/september/The-World-s-Five-Hardest-Races.html
http://www.cnngo.com/explorations/escape/worlds-toughest-endurance-challenges-152211
http://www.forbes.com/2005/03/30/cx_ns_0330feat_ls.html
http://www.toptentopten.com/topten/most+challenging+races+in+the+world
http://ashotofadrenaline.net/8-most-insane-endurance-events-in-the-world
http://listverse.com/2010/04/13/10-grueling-endurance-events/
http://jonny-smartblog.blogspot.com/2012/06/top-10-hardest-endurance-events.html
http://www.cnngo.com/explorations/escape/worlds-toughest-endurance-challenges-152211
http://www.forbes.com/2005/03/30/cx_ns_0330feat_ls.html
http://www.toptentopten.com/topten/most+challenging+races+in+the+world
http://ashotofadrenaline.net/8-most-insane-endurance-events-in-the-world
http://listverse.com/2010/04/13/10-grueling-endurance-events/
http://jonny-smartblog.blogspot.com/2012/06/top-10-hardest-endurance-events.html
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