So Near and Yet So Far

I have been trying to day trade the Nasdaq market for about three years now, I feel about 90% there but have felt this way for a couple of years. I would be interested in hearing from other people who are in the same position as myself i.e. would be traders who feel so near and yet so far and have been trying for a couple of years.

I am in full time employment (Mon-Fri 9 till 5) but often manage to trade the first half hour and the last hour of the day. I occasionally trade the afternoon session. I day trade using standard TA, totally ignore fundamentals, anyone with a reasonable level of experience of TA would recognise the type of setups and trades.
I keep a trading log and my average win is 25c and my average loss is 10c but my win/loss ratio is only 0.5242, this gives me an overall expectation of 1.23 (based on 202 trades since May 2008). I use the e-signal trading simulator (which is excellent) and I have not actually committed money to the markets, I feel I need to improve my win/loss ratio before I do. I also feel stuck at this level.

As I mentioned I use e-signal (with the scanner), through experience I have learnt

• There is no holy grail, it’s a case of a number of small edges giving you a higher overall probability of success on a trade
• Keep losses small (every big loss starts as a small stop)
• The importance of the futures, try and get in rhythm with the market and trade accordingly
• The importance of whole numbers, a lot of my trades are based around trend/breakout behaviour at whole numbers
• Only trade stable and readable stocks (average true range is a good indicator of this)
• The cleaner and clearer the pattern the more likelihood of success
• Trading is a reflection of your personality, to be successful you need to devise a method you are comfortable with and suits your personality

I have read extensively about trading; books and bulletin boards. I find it frustrating but fascinating as well, I'm hooked on the challenge. I look at the markets (Nasdaq) every day and when I have not traded the markets (due to work commitments) and review the markets later on it all seems so straight forward. When I do trade the markets I find a number of trades failing. Sometimes it’s very difficult to see why a trade succeeded or failed because the setup and conditions were very similar prior to taking the trade.

If anyone identifies with my position I would be interested in exchanging experiences and it could be mutually beneficial if we shared our learning. I would be interested if someone has been trying for a while, say more than a year, and is still trying or who finally made it having tried for some time.

Thank you for moving your post
Richard

Hi Nearlythere,
Welcome to T2W.
I would imagine that pretty well everyone who's been in this game a while but not yet making consistent profits will nod in agreement when reading your post. I know I did and I've been at it for 7 years! You make the oft repeated comment that there's no holy grail which I used to subscribe to - but not any more.

Top performers like Richard have cracked it, enabling traders like him to make a fantastic living and lead the dream life. Your problem, my problem and the problem of everyone else in the same predicament as us is the inability to identify that missing piece of the jigsaw that stops us from achieving the kind of success enjoyed by Richard and others. That is the holy grail and the real bu88eration factor is that it's different for each one of us. I'm not talking about a sound understanding of the markets, TA knowledge, money management and discipline etc. Take the basics of trading as given. I'm talking about that final magical ingredient that is unique to each one of us. That's what separates the star performers from the also rans. Once we identify what we're doing that we ought not to be doing, or the thing that we're not doing but ought to be doing - then we will crack it. I suspect it's a relatively small detail, which is what makes it so hard to find - like looking for a needle in a haystack. That's the holy grail.
Tim.

Agree entirely with Tim at #3.

Once you have got beyond the stage of trying everything and anything and not sticking with any of them for any time, you can make some progress. For me, leaving that stage was my first real progress. But you have to go through it to find out what suits you (unless you're one of those rare smart-arses who has a visionary and incisive mind that goes straight to the nub of the problem and cracks it there and then )

From then on it was careful analysis of what worked or perhaps more importantly, what didn't work for me. Have you ever seen a wasp trying to get out of a jam jar - just keeps on trying without success and that's how it's possible to get with trading if you are pursuing a futile methodology.

I think Rathcool put his finger on it at http://www.trade2win.com/boards/members-meetups-socials/58914-looking-mentor.html#post731402 The next key for me was to simplify everything - i now find just using price/support/resistance within a given trend is very successful. Some might say even that is over-complicated but it works for me.

So keep at it. As everyone says - "it ain't easy" but the penny will drop eventually and what seems difficult now will become a lot easier. But of course, by then you will have moved on to another level and will have harder and more difficult targets and perhaps the cycle starts again?

Nearlythere,don't underestimate the fact that you are only doing 1.5 hours a day in 2 parts. thats equivalent to doing probably less than one day a week as it will be so diluted. This makes it hard for your brain to really absorb trading to get to a point that it can start to become automatic.
don't get me wrong I'm not knocking you, most people can't just quit their job and dedicate themselves to trading full time, but this does result in them labouring under yet another handicap.
On the positive side you seem to be going about it the right way and along as you can keep making progress and not getting stuck in a rut and quitting,know that you can make it and it will be well worth it.

Thank you all for taking the trouble to reply. I find it quite isolating trying to make it as a trader, I no longer tell people that I am doing this because they usually just take the mickey when I tell them that I am still trying and have not made it yet, it will be good to become part of the T2W community, like minded individuals. I have been a silent lurker for sometime, I have actually been interested in the market since 2003 and started off systems trading using Tradestation on Nasdaq shares. I did not manage to achieve any consistency with this and decided that it was not possible and switched to discretionary trading and e-signal in 2006; so I'm in for the long term. I have made a significant investment in time, I look at the markets every day, about the only thing I have not done is quit my job to do it full time (because I cannot afford to, I have a young family). My game plan is to try to get to a level such that I have enough confidence in my trading abilities to quit and trade full time. I take a couple of afternoons a month off to trade as well, basically I trade whenever I get the chance. If I was ever made redundant with a lump sum I don't think I would rush into taking a job, I would be thinking now is the opportunity to devote more time to trading. I think trading is the best way to a make a living, it's the only true form of self employment because you are not answerable to anybody and it is also a true meritocracy, the results depend solely on your actions and abilities. It's the independence which appeals and as you can see I am very persistent.

Well having said all that (sorry if it comes across as rambling) here's a few trades I made in the first 30 mins today.

ORCL (see below attachment 1 minute candles) was an overnight gapper and was trending well, it was also quite stable with an ATR of 6 cents. I waited till it had made the whole number (so as not to get caught in a bull trap) and entered at a price of 18.14 at 14.38, there were still greens on T&S but it was just about the end of the trend and at 14.40 my stop of 18.10 was hit, so a loss of 4 cents ( my intial stop loss was 6 cents the ATR so I had moved it up).
I went off to look for other things to trade but ORCL was still on my radar, I always keep a close eye on the futures which were strongly heading south and I waited until ORCL had passed down below the whole number (so as to avoid a bear trap) and with the futures momentum and all the reds on T&S I went short at a price of 17.92 at 14.45. It continued south but ran out of steam and I exited at 17.88 at 14.48 which is just about the turning point where the reds change to greens, so a gain of 4 cents. I thought there was potential in this stock because it was a clear pattern and went long at a price of 17.95 at 14.50. Now I would not normally enter so close to a whole number, this was a calculated gamble, there were plenty of greens around, the worst that could happen was that I would lose a few cents, but if it made the whole number I could see it shooting up. It did make the whole number and naturally did not shoot up, I exited at a price of 18 at 14.57, which is a few bars after the whole number when it is flat lining.

So there's an example from this afternoon, three trades -4, +4 and +5 so +5 overall. I would not normally take so many trades but thought there was potential in each trade. There's the logic and reasoning, that's my current standard. Obviously because I was busy with ORCL I was not watching other stocks so I might have missed other opportunities but at the time I thought ORCL had potential for a good move,

On this thread if any traders are in the same position (i.e. still trying after a long time investment) feel free to post trades and invite any helpful and constructive criticism.

Hi Nearlythere,
A few things spring to mind re. your ORCL trades . . .
As I understand it, ORCL was on your watchlist by virtue that it had gapped down? On its own, that's not enough to suggest that it's intra day range is going to be wide - by which I mean a full dollar or more, thereby providing a decent opportunity for profit. You grabbed +5 cents on a stock with a max daily range of circa 40 cents - i.e. 12.5%. To make any money - your position size would have to be huge. Consequently, for my money, ORCL isn't a good stock to day trade on a one min chart.

Although you detail entry and exit points, your "logic and reasoning" isn't so clear. The first trade appears to by a gap fill trade, but the subsequent three strike me as being a case of chasing the stock, wanting to get something out of it having invested time and money on the first trade and come away with nothing for your troubles. This is a rhetorical statement - you will know instantly whether or not there's any truth in it. If there's even a shred of truth in it, then you need to tighten up your methodology - maybe even have a checklist - and only enter trades when all relevant boxes are ticked.

To conclude, I suspect you need to review your stock selection process and tighten up on your set up and trigger criteria so that you're only trading the stocks that offer the very best opportunity for profit. HTH.
Tim.
PS. Hopefully Richard will comment too and, if he disagrees with my remarks, obviously ignore me and follow his advice!

Actually I had this stock on radar and slightly later than your chart there was a just over 40c break up which would have been lovely to catch.

Unfortunately I didn't take the trade myself but in retrospect looks great!

Quick observation.

I guess Orcl is Oracle....who bid for Sun Micro.

On the open it's probably had the main move becasue everyone has priced in the bid potential where as Sun micro may get a counter bid or reject it etc so would have more potential to move imo.

I've gone back and checked yesterday's figures and FWIW, I alerted ORCL pre-market and traded it myself three times, scalping twice in the first minutes purely on level 2 taking +15c and then +7c.
The final trade was the later chart break to a new high and I ran it till it touched the previous day's low and exited there for +50c.
That sort of scalping needs a lot of experience, but the later bigger trade was purely charting.
I think timsk has made some very good points - very well worth reading imho.

Richard

PS I don't normally trade ORCL for the reasons timsk has mentioned