0
0FXTrader0
To be succesful in trading
To be succesful in trading.
Make more than you lose.
To be succesful in trading.
Make more than you lose.
commanderco
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dc2000 said:
Why would you allow the cynicism of others to dictate to you?
This being the case you will never gain control of your mind/ emotions and you will become victim to your own self forfilling prophecy.
In order to trade with consistent profitability, you must address the problem of "self" before selecting techinques, brokers, instruments, timeframes etc.
It is the absurd belief that technical firepower; a background in being slightly clever with numbers, a university education etc is going to give you an edge.
The fact that you can gather up all the tools that you will ever need to trade, free on the net, must tell you that there is much much more to this game than meets the eye.
Why do so many people write books about trading, when in my opinion, it is so much easier to simply trade. Remember less than 5% of the traders are profitable, whilst 100% of traders read the books.
Where on earth do people get the insane idea that this game is both simple and obvious ... well let me tell you where it comes from.
It comes out of their own separation with reality plus some childish notion that they do not need to change because somewhere in their past they learnt that change can be painful.
(notice I said "can be" not "is")
ronfalcone
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the 'psychology' of trading
I appreciate the advice on how much of my trading is emotional and how much technical. But you'll pardon my digression; I don't believe much of it. Please read my explanation with an open mind.
Yes, I believe emotions play a role in trading. But I also believe that there's been way too much emphasis on the 'psychology' of trading by yet another group of ex-traders, writers and others who have created a small 'cottage industry' which promises to help traders master their craft by only getting it right in their minds first.
I strongly feel that people are always looking for a scapegoat to explain their inabilities at doing things in life. For example, I know musicians (I was one for 30 years) who continually blame their instruments as the source of their playing issues; I know many neurotic housewives who spend all day fretting about their imagined 'neuroses' when all they probably need is to climb out of their own narcissistic heads. And I also believe that traders---myself included---find it more convenient to blame their own 'emotional' issues instead of admitting they don't have a bloody clue as to what, if anything, moves the market and how, if at all possible, the code can be cracked to capitalize on that market.
Let me give you an example to prove my point: let's say, hypothetically, that I told you I had discovered the Holy Grail. It consisted of 3 easy steps, A,B and C. It was so simple, a child could do it. Now do you think you would still screw that up because of your emotions? You would if you were totally backward. But now, what if I said that in addition to A, B and C, you've got to do more complex tasks; if you were capable of doing those tasks, you'd still be okay - no problem with emotions. But if you were starting to have trouble and began experiencing lots of stress and mounting frustration, you might then jump on the "if only I get my emotions in order" bandwagon.
Because trading is very complex, emotions do play a role but mainly as they pertain to a loss in focus, concentration, confidence, etc. In other words, emotions enter into the picture as the task becomes more complex but I don't believe they ARE the picture. Having said that, the key to developing a good trading mindset with proper focus, concentration and confidence comes from practice, practice, practice, losing lots of money, and then re-practicing hard and getting it right, not merely from learning to control one's emotions.
The reason I am so emphatic about all this is that I fear, new traders will get the impression that trading is more about getting their 'heads' in order when it's really about getting your technique and learning curve in order through very HARD work, no quick fixes, no psychobabble. You gotta work your a--- off. Period.
What say you?
I appreciate the advice on how much of my trading is emotional and how much technical. But you'll pardon my digression; I don't believe much of it. Please read my explanation with an open mind.
Yes, I believe emotions play a role in trading. But I also believe that there's been way too much emphasis on the 'psychology' of trading by yet another group of ex-traders, writers and others who have created a small 'cottage industry' which promises to help traders master their craft by only getting it right in their minds first.
I strongly feel that people are always looking for a scapegoat to explain their inabilities at doing things in life. For example, I know musicians (I was one for 30 years) who continually blame their instruments as the source of their playing issues; I know many neurotic housewives who spend all day fretting about their imagined 'neuroses' when all they probably need is to climb out of their own narcissistic heads. And I also believe that traders---myself included---find it more convenient to blame their own 'emotional' issues instead of admitting they don't have a bloody clue as to what, if anything, moves the market and how, if at all possible, the code can be cracked to capitalize on that market.
Let me give you an example to prove my point: let's say, hypothetically, that I told you I had discovered the Holy Grail. It consisted of 3 easy steps, A,B and C. It was so simple, a child could do it. Now do you think you would still screw that up because of your emotions? You would if you were totally backward. But now, what if I said that in addition to A, B and C, you've got to do more complex tasks; if you were capable of doing those tasks, you'd still be okay - no problem with emotions. But if you were starting to have trouble and began experiencing lots of stress and mounting frustration, you might then jump on the "if only I get my emotions in order" bandwagon.
Because trading is very complex, emotions do play a role but mainly as they pertain to a loss in focus, concentration, confidence, etc. In other words, emotions enter into the picture as the task becomes more complex but I don't believe they ARE the picture. Having said that, the key to developing a good trading mindset with proper focus, concentration and confidence comes from practice, practice, practice, losing lots of money, and then re-practicing hard and getting it right, not merely from learning to control one's emotions.
The reason I am so emphatic about all this is that I fear, new traders will get the impression that trading is more about getting their 'heads' in order when it's really about getting your technique and learning curve in order through very HARD work, no quick fixes, no psychobabble. You gotta work your a--- off. Period.
What say you?
wasp
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I agree with you personally, emotion is only a part of trading and a not very big part.
Discipline is the key emotion that is required IMO, and through sound testing (backwards and forth in demo accounts or such) any one of many methods of trading can then be implemented easily and without emotional issues.
2 examples..
1. Trader uses simple MACD crossover system with 20 pip stoploss and a trailing stop.
2. Trader uses breakouts and/or support and resistance with 20 pip stoploss.
Both have tested and shown that 90% of trades that retrace to their stoploss will continue and the other 10% are not worth the risk of running it further. Keep it short and wait for next setup. Therefore, problem solved.
Both know that 70% of their trades will go into positive territory, although neither are any the wiser where it will wnd up, they are both looking for an ideal of 60 pips profit, or a signal to reverse, or end of day (or any numerous options).
So they both have reason to enter, they both know their stop is in a sfae place, and they both are aware and ready for when to exit.
The only emotions to keep in check as far I see, is to be able to keep disciplined (do their job correctly).
Once the system is proven to give more profit than losses and the signals and details are concreted as proven overall probable success, where is the deep physchological problem?
If you go to work every day (non trading) do you have issues with the phsycology of your doing your job as your supposed to? I doubt it?
Once you realise its all probabilities, and you know they are in your favor, happy days!
just my opinion
Discipline is the key emotion that is required IMO, and through sound testing (backwards and forth in demo accounts or such) any one of many methods of trading can then be implemented easily and without emotional issues.
2 examples..
1. Trader uses simple MACD crossover system with 20 pip stoploss and a trailing stop.
2. Trader uses breakouts and/or support and resistance with 20 pip stoploss.
Both have tested and shown that 90% of trades that retrace to their stoploss will continue and the other 10% are not worth the risk of running it further. Keep it short and wait for next setup. Therefore, problem solved.
Both know that 70% of their trades will go into positive territory, although neither are any the wiser where it will wnd up, they are both looking for an ideal of 60 pips profit, or a signal to reverse, or end of day (or any numerous options).
So they both have reason to enter, they both know their stop is in a sfae place, and they both are aware and ready for when to exit.
The only emotions to keep in check as far I see, is to be able to keep disciplined (do their job correctly).
Once the system is proven to give more profit than losses and the signals and details are concreted as proven overall probable success, where is the deep physchological problem?
If you go to work every day (non trading) do you have issues with the phsycology of your doing your job as your supposed to? I doubt it?
Once you realise its all probabilities, and you know they are in your favor, happy days!
just my opinion
commanderco
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wasp said:
I gather from your academic response that you do not trade for a living
fxmarkets
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hmmm, I think perhaps when starting out time and money is consumed by sifting through "methods" touted written, the way..... etc... maybe hammering home the geee aint this easy is it. whats my heart rate at this level for.. youve been hit before again and again.....through searching for method, market, broker, risk, entry exits, trade management.
Commanderco.
all along i experienced niggles.... ok so you see the trend change now, youve entered you are in profit, but you know the market is probable to pull back, that niggles me, I dont like the fact that you suspect and often it comes back , others want value right, now how to manage that, sell a portion into strength, well yeah, but a niggle for me is, i'm sellinng here for a reason right, why risk, its greater risk than from entry, what am i holding any here, niggle.
also ive noticed I can naturally be aggressive short term ,hmmm long take it, sell off take it, failure flat, back long, etc....... a few trades ,less time exposure risk and feels natural, almost prudent to me to trade that way. you dont have time to think negatives really you just flow , technicals pop up like need to get deal tickets open ready and correct size ticket to effect a reverse or just close flat to see or wait for a more probable interest level to be approached, breached, then whats happening..
but I am niggled about the long run hold against, well its gonna (likely) pull here... lordy.
commanderco you seem to run the two, agressive trades few times spread risk take what gives wether thats 5-20 points or scratch, or slight gain of a point ie what the market gives based on what it does.
and also you hold for a longer directional intra play maybe towards range, did these conflicts or niggles happen with you, did you perfect short term first or other way or something else.?
Fx.
Commanderco.
all along i experienced niggles.... ok so you see the trend change now, youve entered you are in profit, but you know the market is probable to pull back, that niggles me, I dont like the fact that you suspect and often it comes back , others want value right, now how to manage that, sell a portion into strength, well yeah, but a niggle for me is, i'm sellinng here for a reason right, why risk, its greater risk than from entry, what am i holding any here, niggle.
also ive noticed I can naturally be aggressive short term ,hmmm long take it, sell off take it, failure flat, back long, etc....... a few trades ,less time exposure risk and feels natural, almost prudent to me to trade that way. you dont have time to think negatives really you just flow , technicals pop up like need to get deal tickets open ready and correct size ticket to effect a reverse or just close flat to see or wait for a more probable interest level to be approached, breached, then whats happening..
but I am niggled about the long run hold against, well its gonna (likely) pull here... lordy.
commanderco you seem to run the two, agressive trades few times spread risk take what gives wether thats 5-20 points or scratch, or slight gain of a point ie what the market gives based on what it does.
and also you hold for a longer directional intra play maybe towards range, did these conflicts or niggles happen with you, did you perfect short term first or other way or something else.?
Fx.
ronfalcone
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I gather from your academic response that you do not trade for a living>
Just curious. Why would you infer that from the post which I thought was a good one?
Just curious. Why would you infer that from the post which I thought was a good one?
dc2000
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It leaves me right here still posting thank you
Oh how easily people are fooled its very easy to quote "self" "psychology" etc as being the biggest reason for failure, thats because its easy to point to something that is not quantifiable than to say actually you are doing x y and z wrong.
I know people get suspicious as soon as the word "system" is mentioned perhaps the same should be done for those who simply answer "psychology"
As for the second part of the statement every market in the world is a casino and what gives those that run casino's the edge, mathematical probabilities, the game is all about reducing their edge to a minimum and selecting high probability trades. NOTHING ELSE.
commanderco
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fxmarkets said:
fx ... here is how I trade. It has taken me years & years to finally reach this point.
Firstly, I trade futures rather than cash because
1 ...CME & CBOT keep the score not the broker ie no arguments about the high / low of the day.
2 ... The exchanges close for the weekend
3 ... Spreads are tight, 1 point
4 ... Commissions are 3 bucks RT.
You should not consider anything higher than 3.60 - 3.80 to start.
Next, you will need a tuned in specialty broker coupled with a good front end platform that can ram your instructions into the market when busy.
Next, figure out how long you are prepared to trade each day. For me it is 2 hours and so I need to pull alot of points each day which = volume. So there goes the theory of 1 hour scratching your head each day and 9 hours looking for an entry.
Next, you need to consider your time frame TF.
Given that the whole game balances upon a willing buyer and willing seller agreeing at a moment in time, shorter is better than longer. Somebody once wrote in T2W that he was an EOD trader, who when receiving a signal then reverted to the Bid/ Ask to "assist" with the entry.
I am not even going to comment on that one.
Next, remember to watch the candles in your TF very carefully as they are telling a story. Do not even think that you can leave a 5M TF for 4 minutes and 50 seconds and come back to the screen knowing what is going on. You dont. In fact you have not got a bloody clue.
Next, work out your entry point. For me, I watch for failures against the direction of the market.
ie If the bears fail to pull down a bull market then that is my entry point.
The price is either going up, down or nowhere and all 3 conditions are tradeable.... just remember to bail out of nowhere faster than up or down ie different scale in / scale out strategy.
Next, always enter the market with 3 numbers ..... entry, PS and profit target. Do not even consider voiding this rule as you are queueing to enter. This style of entry is called a bracket and you must load it into your front end platform to counter the speed of the market and other traders.
Next, enter another bracket "n" points ahead of the first bracket using the same points range, so that the PS = breakeven +1.
Next, when the 2nd bracket is touched, bring the 1st PS up to BE +1
Next, split the profit targets into 1 ... scale out 33% at "x" price
2 ... scale out 33% at "y" price
3 ....let the balance run with a trailing stop.
I often over ride # 3 when I see trouble ahead ie big volume buildup into a price spike.
In fact I will over ride everything if I so much as smell trouble in order to protect my profit , but this occurs infrequently.
You should preload these scale in / out strategies into your platform
Next, here is a simple example
1st bracket PS = 1947; Entry = 1950; Target = 1960 - 50 lots
2nd bracket PS = 1951; Entry= 1954; Target= 1964 - 50 lots and 1st PS now=1951
now you are long 100 lots at an average of 1952 and you can figure out your total exposure
which has been significantly reduced on a per lot basis.
Next, scale out 33 lots at say 1957 and another 33 lots at say 1963 and the final 34 lots
run up a volume spike and you pulled them at 1969.
33*5 + 33*11 + 34*17 = 1106 points
less brokerage @ .3 of a point = 30 and maybe 100+ points slippage
leaves you with a net gain of between 900 - 970 pts @ $12.50 = maybe around $ 11,500
It is a few minutes intense work and you should capture several of these each day.
Perhap this post will explain my response to some of your posts or perhaps not.
This is my final post with T2W, time to do other things.
Good trading for 2006 and saludos
ronfalcone
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chart question
Any help is appreciated.
I am not having a great time with Prophet.net. Not only does support suck, but they've obliterated all intra day historic charts for the YM contract ending December 2005. They claim that once a contract "expires" that's it. Finished. Dead. Kicked the bucket. (John Cleese, take over).
Can anyone recommend a reasonably priced charting service with really good intra day historic charts for YM and all e-minis? As I'm doing more back analysis now than real time trading, this is essential.
Danka shane,
Ron
Any help is appreciated.
I am not having a great time with Prophet.net. Not only does support suck, but they've obliterated all intra day historic charts for the YM contract ending December 2005. They claim that once a contract "expires" that's it. Finished. Dead. Kicked the bucket. (John Cleese, take over).
Can anyone recommend a reasonably priced charting service with really good intra day historic charts for YM and all e-minis? As I'm doing more back analysis now than real time trading, this is essential.
Danka shane,
Ron
I would try a mini account where 1 tick is only 1 dollar. I think the prices from demo trading and "live" trading may not always be the same. This will get you into the real numbers to test your system. I am just beginning and a customer service rep told me this when I inquired why their real time quotes are a little different in real time compared to others. This was his explanation. From all I am reading, the emotional factor is HUGE in this game which may be the case anyway. Just my two pips.
With regards to the emotional aspect of trading, IMHO it is the most important aspect if you are a discretionary trader. If you trade systems its limited to the discipline of taking each signal.
Personally I trade systems because it isn't emotional and I dont cry so much.
Also the common point people make about why traders write books and dont just trade. I think its just something people like to do. My brother-in-law teaches business and finance at a university, he constantly complains about the money so I suggest getting a job in a bank as a business analyst where he would easily double his money. But he enjoys it (fool!!
).
If we didn't have teachers we would all be thick so let them get on with it.
EDIT: I started trading two years ago and make money so for any newbies it is possible. I have learnt lots from this site and will continue to do so, you do have to filter out a fair bit though.
Personally I trade systems because it isn't emotional and I dont cry so much.
Also the common point people make about why traders write books and dont just trade. I think its just something people like to do. My brother-in-law teaches business and finance at a university, he constantly complains about the money so I suggest getting a job in a bank as a business analyst where he would easily double his money. But he enjoys it (fool!!
).If we didn't have teachers we would all be thick so let them get on with it.
EDIT: I started trading two years ago and make money so for any newbies it is possible. I have learnt lots from this site and will continue to do so, you do have to filter out a fair bit though.
timsk
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Hi Ron,ronfalcone said:
I thought of sending you a PM about Prophet.net but, then again, I thought that others may be interested even though it's 'off thread'. I too am somewhat disenchanted with them, even though I've been with them for quite a time now. For me, the crunch came when I received a bank statement and found the monthly debit had risen by 50%, without any warning! So . . . have you found a comparable service at an equal or better price?
Cheers,
Tim.
[Note to mods: please feel free to delete this post if it's inappropriate to the thread]
fudgestain
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True enough.breadman said:
ronfalcone
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rerophet
Not really. But I am now in the process of signing on with Tradestation as I will most likely be placing more than 10 trades per month---and the fee is waived if you reach that objective.
good luck
rophettimsk said:
Not really. But I am now in the process of signing on with Tradestation as I will most likely be placing more than 10 trades per month---and the fee is waived if you reach that objective.
good luck
FOREXHUSKY
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Trade demo
Trade demo or minis until you get really sure and consistant.
And remember. from small money you will not made money in forex,simple coz you will risk to much .
Anyway best idea is find good money managm.company,or good fund,and let them trade for you,and in same time you trade on your own.
Im now in my 6th year of trading,and first 1.5 was really up and downs,but i keep my demo records till today to monitor misteakes from old times.
Anyway market evolves all the time so most of old strategies already dont work.
So we need still educate,unless we made fortune in last couple years on trading and now we can relax and trade from time to time.
All pple write to me about how to get gld system or grail,its all dreams,HARD work and good indicators thats all.
And if you finally will find yourself lost just find good manag. company and go with them.
Personally im preWARN. you dont look at high % returns websites,coz they will lose your money,look more for 15-40% yearly returns,they trade at less risk so you can sleep.
Regards
FOREXHUSKY
California USA
Trade demo or minis until you get really sure and consistant.
And remember. from small money you will not made money in forex,simple coz you will risk to much .
Anyway best idea is find good money managm.company,or good fund,and let them trade for you,and in same time you trade on your own.
Im now in my 6th year of trading,and first 1.5 was really up and downs,but i keep my demo records till today to monitor misteakes from old times.
Anyway market evolves all the time so most of old strategies already dont work.
So we need still educate,unless we made fortune in last couple years on trading and now we can relax and trade from time to time.
All pple write to me about how to get gld system or grail,its all dreams,HARD work and good indicators thats all.
And if you finally will find yourself lost just find good manag. company and go with them.
Personally im preWARN. you dont look at high % returns websites,coz they will lose your money,look more for 15-40% yearly returns,they trade at less risk so you can sleep.
Regards
FOREXHUSKY
California USA