Frustrated trader, need advice

[bbmac]

Your are (presumably) inlcuding yourself in this description..?

Generally-absolutely, except I have never made a post saying that this way or that way cannot be done and that this t/f or that t/f is the only way etc...I refer to a lot of posts on this and other boards/forums not just your own. I know people that make money from markets in ways that most with these opinions will swear cannot be done.

The comment which you highlight, and post to which you refer is indisputably fact, not my opinion.

G/L

 

[tommog]

bbmac, you raise a good point and it is for that reason i tend to keep my time horizon very short. I have managed funds in the past and despite making decent returns over the long haul the draw downs, of say, a trend following system that trades 4-5 times a month can be extremely uncomfortable. The advatntage of day trading is you can start every day a fresh, bank your winning, then start again. Doesnt make as much money imo but it is easier on the stress levels

But for a newbie i think its good to learn the baasics of risk:reward and sticking with an approach

 

[DionysusToast]

Here's my 2c.

Trading lower timeframes is not noise. It is simply a different game where the interpretation of order flow rules the roost. Order flow is meaningless if you are trading dailies and intra-day moves are meaningless without order flow. By order flow I am specifically referring to having an order book and actual trade information to reference.

You cannot analyse order flow on forex.

As a disciplined trader, you have a log from which you can gather stats of how well your plan works when you follow it.

You have written down what you are looking for in the charts and to be honest - based on that description, it sounds like a hell of a lot. How big is the trade execution part of your plan, the part that details when you enter? How vague is it? How much does it enforce consistency?

Here is my entry plan for trading the ES. This is on my wall in front of me all day. There is a single A4 sheet with my pre-market prep, open analysis and trade entry rules.

1) Approaching overnight high, overnight low, yesterdays high, yesterdays low (or just past it) look for signs of reversal. Note down thoughts at the time. If the action shows a clear reversal with lots of size coming in, then go with it. If you miss by more than 8 ticks, do not take the trade.
2) If an opportunity for a major reversal is missed, then wait for a 50-70% pullback to enter. Only take this if confirmed by the tape & DOM.
3) If the day appears to be a runaway day, try to get in on a small pullback ONLY if this pullback has the characteristics of other pullbacks. Do not get in on a larger or more protracted pullback.
4) Do not trade 15 mins before an announcement.
5) Do not exit any trade after entry, unless stops/targets are hit.
6) Log each trade and grade it A-F in terms of how well it was executed and how close to the plan.

This is simple, yet effective.
- on a normal day fade the highs & lows or get in on a retracement if you miss it.
- on a runaway day, guage the pullbacks and get in on a 'normal size' pullback.

This gives me 1-2 trades a day.

If your plan is too complex and too open to interpretation you will be following the plan but you wont be consistent. If you aren't consistent, your journal will be of little use as you will be varying every day and therefore not be producing performance metrics you can use.

When I started my plan - it was 50 pages by the way - so maybe I'm just projecting my past problems onto you.

Also - as you want to day trade, I'd move to Futures/Stocks where you have the additional dimension of order flow to refine your entries.

 

[tomorton]

AspiringTrader - This isn't about timeframes but I feel that using so many criteria / variables within such short timeframes you're trying to fly an A380 before you can fly a Cessna. Find the simplest trade pattern you can. Become expert at it. Use it in one market only. Know the market so well you feel you have become part of its chart. Exclude all TA and fundamental data from your trading day that don't help confirm or negate this pattern (but don't ignore global sentiment).

 

[bbmac]

Here's my 2c.

....... Order flow is meaningless if you are trading dailies and intra-day moves are meaningless without order flow. By order flow I am specifically referring to having an order book and actual trade information to reference. ....You cannot analyse order flow on forex.....

It's good to have a plan and to try to stick to it, of that there is little doubt if any.

In forex whilst there is no reliable order flow/market depth or indeed volume (other than broker generated data) we can easily see where there existed previous near-term obvious imbalabces of supply/demand or demand/supply and we know the other techjnical phenomena widely used by the market that has historically proven to cause such particularly as part of a confluence of other such things. We also have Price action itself and the clues that this can provide about a market's potential future intentions. Marry them together and a trading edge can be found regardless of the lack of the other info you refer to, and to this extent, intraday moves are not meaningless (whatever you mean by that,) but can be profited from. In an intraday market without a centralised exchange that provides the reliable info you refer to it is still possible to find a trading edge.

G/L

 

[bbmac]

AspiringTrader - ...... Find the simplest trade pattern you can. Become expert at it.... Know the market so well you feel you have become part of its chart. Exclude all TA and fundamental data from your trading day that don't help confirm or negate this pattern....

I think this is good advice.

G/L

 

[Black Swan]

DT, you do realise that they guy trades FX only?

 

[Black Swan]

Generally-absolutely, except I have never made a post saying that this way or that way cannot be done and that this t/f or that t/f is the only way etc...I refer to a lot of posts on this and other boards/forums not just your own. I know people that make money from markets in ways that most with these opinions will swear cannot be done.
The comment which you highlight, and post to which you refer is indisputably fact, not my opinion.

G/L

hmm...and these are at home retail traders (such as the OP) who are probably working of (at best) a 2 pip sread on the Euro, from a $5K account, with a BT broadband connection, through a 3 year old 'out of the box' single monitor set up from Dell?

 

[bbmac]

hmm...and these are at home retail traders (such as the OP) who are probably working of (at best) a 2 pip sread on the Euro, from a $5K account, with a BT broadband connection, through a 3 year old 'out of the box' single monitor set up from Dell?

You make a good point. A couple certainly started that way but like all successful people have invested and continue to invest in their business.

G/L

 

[DionysusToast]

DT, you do realise that they guy trades FX only?

Yup and I think perhaps his efforts would be better directed elsewhere.

 

[bedsit]

About your doubts - do not despair. You should accept some facts about trading e.g. there are losses all the time (can't be avoided). The only thing you can do is control your risk. If you are a beginner you shouldn't risk more than 1% per each trade. So if your account is £5,000, the max I would risk is £50 per trade. So if you lost £50 and you are down to £4,950 next trade you can afford £49.50 loss = risk. This way it would take you a long time to lose all the money (much more than 100 losses in a row). In the meantime you may find the right way to improve your success rate. BTW I never risk more than 2% and sometimes I tend to risk only 1%.

Risk/reward - from my experience (I'm a FX day trader) I don't get that many 1/2 or better trades. It happens sometimes, but not as often to justify it. Most of the time I go for 1/1. Of course I've read about it somewhere (like you shouldn't enter trades if risk/reward is worse than 1/2), but that's out of touch with reality so far as FX day trading is concerned.

Apart from the risk control (IMO most important), one needs some time to go through the charts and look for the systems that are statistically proven to work over a long period (1 year or longer).
If the worst comes to the worst - if you are losing more than 90% of the time using your current strategy you can always do the opposite from your system and turn it into 90% success. (Assuming you have a clear idea where you should exit a trade at a loss or a profit based on risk/reward = 1/1.)

Good luck AT

 

[Dinos]

I'd echo bedsit comments, like most things in life, there is the textbook way of doing things and sensible way of doing things. Higher or smaller timeframes really doesn't matter, its down to what suit you as a trader, I've noticed over the years, those who advocate the higher timeframes are generally not good at trading the lower timeframes, (no disrespect intended to anybody here, just observation and comments made). Like Bedsit, I'm an FX day trader, using nothing higher than a 15 minutes chart with lower time frame or tick charts to enter the trade.

I would also echo the comment about R&R, textbook says greater reward than risk, not necessaarily true, 1:1 is fine, but you need to fairly highly consistant with you success rate.

Your set up, has to suit you and your style, another trader and I on here, both trade the M15, but both intrepret things completely differently, and both of us each benefit from our own approach.

Last thing I'd say KISS, don't over complicate thing, LESS is MORE imho, and stops, use religeously, don't start averaging to cover bad trades

 

[wackypete2]

Yup and I think perhaps his efforts would be better directed elsewhere.

I agree. For new traders forex would not be the best way to start. If you only have limited capital then you have limited choices, though.

Peter

 

[Black Swan]

I'd suggest that with limited capital FX is the only place to start. In fact I'd go so far as to suggest it should always be the only place to start given you should never start in this game with more than 500 dollars (for your first attempt) and with Alpari, fxcm etc. you can get right down to fractional ten cents lots.

In relation to TFs this becomes as tired and circuitous a discussion as we have on T2W, not quite up there with FA versus TA but in the ball park..

Look, the OP needs to simplify and rationalise everything he's doing, because, surprise fookin surprise, it aint working. I can in theory make my edge work on every TF, It actually works in practice just as well, after all its only a frame of reference. But do I want to stay in a EUR/USD trade for 24hrs + and make 100+ pips or do I want to work off 10-15 min TFs, perhaps make 105, but have to dip in and out of the market 6 times, 4 loses 2 winners over the same period? I have seen this comparison thousands of times so please no hot air up my ar5e.

The science of TA does not exist, it's a fookin probability based game (unless you're right at the top of the food chain making all the big decisions) which is underscored by your mind as the first M and money management as the second M, your winning probability might or might not increase with the number of trades you make (IMO it falls off) but what's as sure as T2W being littered with *BEBOYS and snide sophist wannabee vendors is that those extra transaction costs, and the gaps caused as you move in and out the market, drain your account.

Always makes me chuckle how folk never tell the guy to go away and get his head fookin straight, or question his MM, but latch on to "ooh, ooh, it must be your method". Same on every forum though isn't it, the most sticky eyes are on the "methods and strats" sections when any prIck can develop/hack a system that'll get them temporarily on the right side of a bet 8 times out of ten.

*breakevenboys

 

[Chartsy]

i agree blackswan, now that i have apparently an edge, once two losses occur i started to feel doubt in what i had, ' this isn't working'. i kept going though and read some of trading in the zone and so far it seems like i've improved in my head.
it just seems so easy to make money, all you have to do is find a good method and click buttons and you will average out wins!
Then you realise after ages of developing your method, style, analysis,money management, you have a drawdown and realise it's only just begun.....

 

[Splitlink]

Lots of frustation----I can see that!

You mention that you "only" aim to make 5 trades per day, because you are new.

My aim is to only make one trade per session but I make more than that before I get it right. Five trades, for me, is a very bad day because

1) I have, usually, lost too much on the previous ones to be able to get it back. Three trades is more common. Therefore, as I see it, to keep those losses at minimum, one should close as soon as it is thought to be going wrong. I've lost more money waiting for it to go right than you could imagine.

2) My intelligence, in not getting the direction right after all that time, is insulted.

If, as is said, 90% of traders are wrong it seems to me that 90% of the trades are wrong. Their problem is that they will not accept that fact and get out while they can.

So, you see, we are all different in our trading styles and it is no good us telling each other that we are wrong when we know differently.

One thread that I have considered above average, in recent weeks, is

http://www.trade2win.com/boards/first-steps/105646-revisiting-price-action-4.html#post1352486

and I thought that #29 the best. You need to go through it all, though.

 

[TRADEFUTURES]

This has got to be some kind of a joke>>>>lol<<<

The Thread starter AspiringTrader has not once come back>>> lol

Wild goose chase?

 

[redart]

It's only been 2 days. Some people (not me) have real lives!

 

[Splitlink]

This has got to be some kind of a joke>>>>lol<<<

The Thread starter AspiringTrader has not once come back>>> lol

Wild goose chase?

Wild goose chases are the norm for most.

 

[Lodian1019]

Hi guys hows it goin?

I'm a newish trader in Forex who's been trading demo and micro accounts on and off over the last year and a half. I have developed an overwhelming passion for trading during the last year and i'm very determined to succeed and become a successful trader, and honsetly my passion is not for the financial rewards but for my own self pride and confidence and to hopefully master a unique(what i feel it to be) skill that eludes 90% of people who try. It's not for arrogance or for ego but self reward in being successful at what i'm most passionate about, the financial rewards of being successfull are a merely a bonus to me.

My trading journey so far has been dificult for me, being that i'm learning/trying to teach myself alone through research and study on any information i can find on the internet and then applying that knowledge i've learnt in to practice on demo accounts and live micro accounts. Unfortunately i'm alone in my studies as i can't afford a mentor over the internet and that no one person i know actively trades or invests or even has any interest in the subject what so ever. And i mainly keep my trading to myself as i know when it's mentioned around to friends it's usually met with "Oh.. yeah you probably shouldn't, you wouldn't know what you're doing" or "It's probably a bit over your head".

In the last 8 months or so i've been devoting many hours each week after work to study and have completely transformed my trading from basically a trader with out a plan into an organised trader with a plan.

I have a detailed trading plan written down and in arms reach which consists of my goals, personal trading qualities - good and bad, what type of trader i want to be, where i want to be in the future ect and most improtantly to my discipline and money/risk management. My traing plan is my bible and has helped me grow as an aspiring trader.

My frustration comes from my lack of success(haha i know, obvious right!), lately i've been so frustrated to the point where i'm contemplating my worst fears "Maybe i'm just not a trader" that it just don't have 'IT' what it takes to be a successful trader.

I was day trading the 5 - 15 minute minutes charts for a while as i felt it fit with my trading style and sense of patience.

My style consisted of,

TA and Fundamentals.

TA for observaitons of where the market is and what it's currently doing on non major news days.

I don't use indicators what so ever as i prefer a naked chart with candle sticks.

I don't look for patterns in the charts( head and shoulders, ect), i look for what the market is currently doing being is it up, down or sideways.

I look for Volume in the bars relative to the time frame for momentum, i look for pivot points, breakouts, support and resistance, daily/previous day swing highs and lows.

I look for where i think people would place stops for if the trade turns on them it mive give a quick squirt of momentum when they get stopped out.

I look for pull backs for entry
Ect..

I use fundamentals for major news days(Rate decisiosns, CPI ect) and anouncments.
Mainly just use my economic calender, wait for the out come of a release then to the charts for entry if i feel it will be market moving data.


Money/risk management,

I only trade money i can afford to lose

Resk reward is Minmum 2:1(was usually risk 15points for 30P reward) i always watched my trades so if i meet my target i'd continue to activly trade in hope of 3:1, but i'd always lock in and close my position if it threatens to move back below 2:1. If it moves against i'll just let it get stopped, move on and try and review my trade to see if i can work out were i went wrong.

As a newbie i only look to make Max 5 trades a day so i have to make each trade count.
I log all my trades and in sets of 15 to establish a percentage of success versus loss for a sense on probability of success on my entry strategys.

And i have just a general all round perception of 'The markets always right'.


I later leanrt that psychologically day trading and activley managing trades was not for me due to the fact i was always taking profits too early or at breakeven in fear of going back in to negative territory, which %70 of the time if i had just let it run it's course i would have taken my target profit or potentially more. On the other hand if a trade just never went my way i would just let it run and be stopped, it never bothered me being stopped as i just shrugged it off as a loss and that i was wrong... funny that.

So i now swing trade the daily charts, and have banned my self for looking at lower time frames when in an open position, just so i cant see all the little niggling pullbacks and small reversals along the way that would stress me out to close the position early if it were a successful trade. I now either hit target or get stopped, and hope for a high probability of successful trades.

But latley i've been frustrated and stressed with my entrys.

See i'll enter a trade and generally the trade starts to move my way but extremely slow, i mean as an example say it takes half an hour to move ten points my way but then if it wants to reverse on me it will lose those ten points in 2 minutes and i'm back were i started.

You see in a losing trade i'll lose 20 points in 5 minutes, but in a winning trade it'll take 3 hours to make 20 points... i just don't understand what i'm doing so wrong. And this happens consistantly all the time to me.

Or trades seem the perfect setup, i enter, they turn against me i get stopped.. the with in ten points of being stopped it turns back to what would have been my a lovely little profit. And i mean i'll see a setup that meets my criteria, then watch it and wait for a pullback to the opposite direction i intend to trade, then look for it to gain back good momentum back in my direction. So the setup is there, momentum in my direction, i'll open the position then BANG moves against me out of the blue and stops me, then straight away back on it's merry little way to where i thought it was going to head, and i do place all my stops to allow for a possible short lived reversal.

Just the other day i made a trade that was in a clear down trend, it had just had a short reversal and was heading back down in the direction of the down trend, i went to a lower time frame to look for a entry point based on my criteria, prices were showing clear a rejection of a resistance level twice and had strong momentum moving short and the current bar had just moved lower than the previous bar that had also closed low. so it was looking good for me on the daily and the lower time frames to sell short. So i did... Then F**kin BANG soon as i place my trade 5 minutes later it turns and busts through the
resistance level. Within 20 minutes i'm stopped out for a 50 point loss... it then only rises another 2 points higher and proceeds to head back to where i thought the trade was going to head. If it wasn't for that unlucky breakout and just being stopped by 2 points i would have made 120 points giving me my 2:1.

All this happens all to often a winning trade takes for ever if it makes it, a losing trade will get stopped as quick as you would ever see and i get the unluckiest of reversals stop me out with in 10 points usually then head into the direction i want.

I'm generally just breaking even with the account or losing money now. profitable days are short lived.

So i dont know what to do anymore, am i just not a trader? am i the unluckiest person alive? is this normal for newbies? Any advice would be greatly appreciated!

I havent traded for a few days since that last one knocked me out by 2 points, i'm afraid what ever i do i'll be chewed up and spit out again by the market. And i'm sure my monitor could do with out a hole in it of the shape of a fist..lol

Well sorry for the rant guys.. just really needed to vent to someone, as i don't get to talk to anyone i know about trading.

Oh well, least i have my health.. for now till my head explodes!

Cheers guys,

AspTrd.

AspTrd, I know you posted this a bit ago but I have just read it.Please don't think I'm having a go its constructive criticism.

First of all are you on Crack?
15 pt stop, depending on what your trading etc, but in Futures (Im using this as an example) that is over $150 acceptable loss. I trade with a 5 ticks stop for 6E(EUR/USD) ES(S&P mini) is 4 and CL(Crude Light) is 7.

From what I gathered from your initial post, your executions seem based on what you see, or what you think you see.Using your time frames etc,

I would try and build a strategy around an equations as such using your selected indicators/time frame. For example

9SMA Crosses 21EMA- Go long.

Get to the centre of your strategy and try to remove as much human thought as possible. Get as methodical as possible, and don't look at it as

"Oh how typical i close my order and it moves in the complete opposite way" The market does t even know you exist.


Anyway hope you can take something from that.

Lodian