my journal 3

[Yamato]

I either get out today at a good price or... I am changing my mind about closing it.

A bounce is overdue:



Do you know how it's going to feel to close my trade and see JPY rise for 5 days?

If I don't close it, how much more can it fall?

I am really delusional, I know. It's really a bad spot I am in.

I selected a bad trade, because I didn't want to lose 200 dollars. Really think about it. I would have never gotten into this trade, had it not been for that 200 dollars I was losing from it. I tend to be vengeful and hold grudges, both with life and trading.

Same as in 2008 actually. GBP was losing 200 dollars. I added contracts, and brought my account from 24k to 5k.

I have to close it?

I don't know. I am really frustrated by this choice of whether to close it and risk feeling like an idiot because it bounces on Monday, or keeping it open and risk feeling like an idiot because it doesn't bounce and I blow out my account.

If it could just rise 50 ticks and allow me to close it without a 6000 dollars loss, it would be easier.

So far it's like this for me: if I can get out of this crap with a loss of 3000, I'll be ok with closing it.

If if I have to lose 6000, I am very tempted by the idea of not closing it.

Only 4 more hours to go.

It's amazing how little the JPY bounces in general. It just goes straight down or straight up. It reverses on the next day. Forget about expecting the wild swings of all other markets. JPY just goes one way or the other. Too bad not studying this behavior before.

...

On the other hand, let's also think about this:

1) if I close the trade today I risk being an idiot with 18k who missed a trade that could bring him to 25k
2) if I close the trade monday or later, I risk being an idiot with 0k

So the biggest risk is definitely in not closing it. Furthermore, I do deserve some sort of punishment, so feeling like an idiot for closing it before it rises would be an acceptable feeling.

Would I go long on JPY tonight? If I were flat and had lost nothing, would I consider going long on it, even with just one contract?

Nope. Too risky. Therefore I should be wise and risk feeling like an idiot for missing profit rather than for blowing out my account. There is no doubt that the feeling might be the same, but losing money is worse than missing profit.

idea2develop

Missing profit is almost no big deal at all, because opportunities are there every day. Losing money is different, because money is not there every day. You should not risk losing money out of being afraid of missing profit.

All right then. I need to close the trade today. Even if there is a big chance that Monday it will go my way and I'll regret it. But today I don't know what I will know Monday, so it makes no sense to feel like an idiot for being unable to predict the future.

This situation is too similar to GBP 2008. I martingaled on it, left my positions open and left for my vacation, for an entire month. When I came back, I had lost everything.

I cannot repeat that mistake. Lost money is worse than missed profit. Lost money is worse than missed profit. Lost money is worse than missed profit. Lost money is worse than missed profit...

I must show to myself that I've learned something from my past blowing out of accounts. Not everything I was taught, but at least a small percentage of the beatings I've taken. At least those lessons that resemble the present, I must at least learn from those.

If, despite all these realizations, I still decide to keep my JPY contracts open, then I am a Jesse Livermore, for life.

The question is really down to this: do I want to make money or do I want to be thrilled and break records but only temporarily until I blow out my account? Do I want to make money or do I want to go after % performances and then blow out my account?

If I close my positions today, I still have a good capital and a chance to increase it. If I don't close it, I will be playing russian roulette. Which is what I did yesterday. But if you play russian roulette, in the long run you blow out your account.

It is not anymore an issue of technical analysis here, as it wasn't yesterday. It is about whether i want to gamble or trade. Whether I want to play russian roulette or increase my money. The moment I decide I am not playing russian roulette, I will despise myself for playing it so many times. For not ending this madness one day earlier.

But I will not have blown out my account one more time.

This is a costly mistake. That set me back two weeks or more.

But it won't set me back 4 months if I close the trades today. If I don't close them today, the risk is losing 4 months of work.

But I might also not lose any time at all, because it could bounce back up.

The question is also this: what happens if I am set back 2 weeks? If I am dead by being set back two weeks, then I might as well risk it. But since I am in it for the long haul... then I might as well **** the two weeks and not risk the 4 months, because unless i learn this method of minimizing risk, it will happen again in the future, so I might as well show myself that I have learned now by losing 2 weeks, rather than showing late that I have not learned anything by blowing out an account much bigger than this one.

This could set me back 2 weeks now, and spare me later suffering. If I do learn.

I could get lucky by staying long overnight, and then this will happen again. As it's been happening given the luck I've had with it before, the martingale method I mean.

Only 3 and a half hours to go. I think I've made up my mind and I will close it. But if I am here with this trade open, it means there's other tendencies in me as well, that, after all these years of trading/gambling, are still active in my mind.

I don't know if we could call these tendencies "self-destructive" or what else, and if I tried, I might come up with some nice explanation that sounds very good and that is wrong, maybe linking everything to my parents. Let's just say that I have tendencies that make me blow out my account despite knowing how to not blow it out. Maybe there's two people in me, that alternate one another, and one of the two is not wise.

 

[Yamato]

In the meanwhile, on JPY, there's no bouncing in sight. If I have indeed made my mind up, I will be closing the trade, at worst, at 22 CET.

So what am I doing here, monitoring JPY... I should be watching a movie or even having dinner or getting drunk. Anything. What's the point of this...

Obviously I am depressed. I am not happy that today I will avoid blowing out my account. I am sad that I got into this trade to begin with.

I was at 24500 yesterday, and to avoid that 200 dollars loss, I am now at 18k.

I can't celebrate jack.

I totally feel like an idiot.

Instead of just taking it easy and let my systems trade, as i had written down here, I went and did martingale trading on the worst market of all, JPY, which never bounces basically. During the day I mean. It doesn't ever bounce. It either goes up all day or down all day, but it doesn't have intraday reversals.

What am I doing? What am I still hoping for, given this knowledge?

I should just stop writing these anxious thoughts on the journal, stop monitoring, hope for the best, and close the trade at 22 CET.

Let's try to do it.

I should be doing the best, be wise, and hope for the best, and not be stressed out.

Let's just pretend I am in December and I've got 18k, which an awesome capital for me. Let's pretend this never happened. That I haven't just lost 6k by chasing a 200 dollars loss.

 

[Yamato]

You know, I could be coming up with so many explanations that have sounded great in the past, and they may be true, I don't know how much, but the fact that they sound good doesn't mean they're right.

Blowing out my account could be due to one or a combination of these:

1) I simply don't know how to be profitable (possible, but unlikely)
2) my parents make me feel that this money is sinful, I feel guilty, and I try to lose it
3) I am bored and I look for thrills in trading
4) I am unhappy and I vent out my frustration in trading (frustrated is different from bored, but not too different)
5) I am mad at my father, who never praised me, and, out of spite, I perpetuate my being a failure, which is what he always told me I was and I'd be ("do things my way or you won't succeed" type of reasoning)

So many things sound good, but what's the point? Blaming something will only postpone my solving the problem in this case. Do I want to suffer and learn to be profitable, if I can do it at all?

Or do I want to just suffer, repeating the past mistakes, which are quite known by now?

GBP 2008 is a perfect example of how I blow out accounts, the one I remember the most (cfr. previous description) and it is strikingly similar to this JPY trade. But there have been many other instances since then, when I've blown out my account after reaching a high capital, due to a lack of stoplosses and a martingale approach (same thing: denial).

Martingaling is a glorious method, it provides excitement and a high percentage of wins. And then it blows out your account.

Barely making money with stoploss trading, means you'll lose 2 days out of five, break even some weeks... make 1000 a week, so what?

One way your account increases, the other way it is periodically blown out.

I've opted, so far, for having a brilliant equity line for a few months, until you blow out the account.

Or rather, I've opted for both approaches, but whereas one stoploss trade doesn't heal a martingale approach, if you place one martingale trade in an otherwise healthy account, you could blow it out even just with that trade.

...

Can I stop being two or more people at least when I trade? Not saying that I have multiple personality, but just the usual compulsive behaviors some of us have, such as those who can't quite smoking, can't quit eating... everyone.

Can I be totally stable when it comes to trading?

I need to be totally stable. Despite these destabilizing losses, which destabilize me even when just amount to 200 dollars.

It is crazy. It is a crazy game.

Will I ever learn to handle the emotions involved in trading?

We'll see.

idea2develop

...

Will I ever learn to relax, and have a good time? This relentless working... it's what's blowing out my account.

3 hours to go.

...

I need to change, and... if I don't change, my equity line will always go up for a while and then go back down to zero periodically. This is hopeless.

I cannot allow myself to screw up even once, or this is never going to change.

I need to change.

The Eagles - Desperado (Remastered) - YouTube

I don't want to live my whole life like this. I want to be more modest, and achieve something. I must stop feeling like I am special and things will turn out for the best no matter what I do. It doesn't work like that. This is yet another explanation (see 5 explanations at the start of this post) for my failure in trading: I feel special, blessed by the gods and similar.

 

[Yamato]

I think the JPY behaves so strangely because the Japanese go to sleep. I think it is a very likely explanation. It's got to be connected to their schedule/time zone.

All you have to do is understand where it's going for the day, and you automatically where it will go for the rest of the day. Maybe just a moving average would do. Oddly though, my systems have not proven profitable on JPY, and yet I have many such systems. Maybe it changed behavior in recent years.

 

[Yamato]

wow... losing 6500

two hours to go and it just keeps falling and falling



no bounces whatsoever for two straight days... anyway, what the hell am I doing complaining about how the market behaves, so stupid

If i don't change, it's hopeless for me. I am only going to blow out my account, with revenge trading. I feel like a drug addict who has to stop cold turkey

I don't know if I have it in me to stop this type of trading, that depends on my mood, on my boredom... on my frustrations... it's not a proper method, it's not profitable in the long run. No matter how good I may be.

I am tired of being myself as a trader, but this still may not be enough to change.

I am tired and depressed. And yet it's not bad luck, it's not like someone robbed me or wronged me: it was me who did everything.

I am really surprised by my own self. Who am I? What kind of a monster am I?

...

AH AH...

I just caught myself planning to keep the 5 contracts open overnight through the weekend!

After all this wise talking I might actually do this crap after all. This is crazy, man, but the idea of being robbed of 6000 dollars just hurt soo bad...

...

Just give me a loss of 3000 and I'll close it tonight. Otherwise it's going to tempt me very much. Losing 6500 is just too unbearable for me right now.

I would rather keep it open, risk it all, and maybe in a few days I'd be at 30k.

All right, I am willing to take a loss of 4000. But not more.

I am going to check the chart with daily candles to check how oversold we exactly are.

...

wow, when it comes to trading, I cannot keep my word from one minute to the next.

That's the kind of monster that I am.

I don't want to close it anymore.

You've seen my transformation live.

**** this.

What's the worst that can happen? I lose everything.

If I don't lose everything, what happens? I am at 17k.

If I have to start all over again from 17k, I am going to kill myself.

An hour and a half to go. Either bring me to a loss of 4000 and a capital of 20k, or I am not closing this goddamn trade. I want my money back.

I am not closing my JPY trade to wake up on monday and find JPY 100 ticks higher.

Either give me some money back right now, or I'm staying long until I either blow out or I see my account at 30k.

...

Studying this and this:
http://www.wikinvest.com/currency/Japanese_Yen_(JPY)/WikiChart
http://quotes.esignal.com/esignalpr...chart.bardensity=LOW&x=44&y=12&chart.studies=

...

Ok, long analysis, 10 minutes.

Here's my biased take, given that I am long. A bounce is overdue.

It'd be best to bet on GBL short from 146, and stay on it until it returns 10k, but unfortunately this is what I am stuck with.

Should i get out of this, lose 6k, and then wait for a chance to go short on GBL?

What do I do?

I am really torn between these choices. I have such mixed feelings about this one.

I am going to leave it open if I get to 22 (one hour to go) with these mixed feelings. Really a cowardly choice, but... I can't close it and lose 6000, even though you might argue that I've lost them already, but I haven't if I keep it open and bet on a bounce.

Come on, I can't lose 6 mother ****ing thousand dollars on this trade, on a trade that I martingaled because I was losing 200 dollars on one contract. Man, I suck!

 

[Yamato]

I am really torn and here's another reason to stay long:



...

Don't think I'll be closing it. **** it.

...

40 minutes to go. If it rises another 20 ticks, and I can exit with a 4000 dollars loss, then i'll exit.

...

That's it. Only 30 minutes to go. I am preparing to keep my 5 contracts long on JPY overnight and over-weekend.

This is one crazy trade. I better sleep all day long on Monday because I might be tempted to close earlier for whatever impulsive reason.

I either blow out the account or make 3000 dollars from this trade. I've placed LMT orders starting at 0.011111, and the others above:



That is a long way to go, but a lot of things coincide.

On Mondays the JPY rises, or so it's been doing lately.

It's been getting more and more bouncy lately.

It's been falling for a long long time.

The trend line says it will bounce.

And last but not least, I am desperate.

So many factors coincide.

This was a compulsive trade to begin with. I wish I had studied it before entering it. Today I could have easily entered it with 1 contract, and it would have been a sure bet. But with 5 contracts, it is total gambling, russian roulette type of thing. You probably won't get unlucky, but if you do, you die.

...

And if by Tuesday I'll have 26k, I might as well put all those trading systems back (I removed gold and copper systems and made some more changes), which I had removed when I was being wise and talking about scaling down, playing it safe and all that (until just an hour ago).

I don't think I'll ever change at this point.

I am just screwing around I guess. But it's stronger than me. Maybe I need a partner, but I've argued with all those I worked with, so I am alone again.

...

Ouch!

Being saved by the bell maybe, because it's rising now. 15 minutes to go and "only" losing 4900 dollars. As I said, if I lose less money from this crap, I am more willing to get out of it.

Losing "only" 4700 now.

Losing "only" 4500 now.

I guess others might be thinking that JPY is not likely to fall on Monday. I guess that'd be one more reason to stay long overnight.

But if... you know what I am thinking. I feel less of an idiot by exiting with a loss of 4000 than a loss of 6500, as when I decided I wouldn't exit.

...

Still looking at it. 10 minutes to go. If it rises 10 ticks in 10 minutes, I better close this one, and I most likely will.

And leave the systems as they are (with fewer systems enabled).

Otherwise, I stay with my 5 JPY contracts, and re-enable all those heavy systems. And I am in gambling russian roulette mode again.

8 minutes to and 13 ticks to rise for me to exit the trade.

6 minutes to go and 15 ticks to rise.

Not too likely to make it.

I am about to re-enable all my systems, and stay long on JPY overnight, over-weekend, with 5 contracts.

...

Done. I am a compulsive gambler again, after speaking wisely for a couple of hours.

Pretty sick.

I am sick. And there's more than one person in my head.

Simon & Garfunkel, Bridge Over Troubled Water, Central Park - YouTube

I guess... I don't trade to make money, I trade to get financial orgasms, and trading is like my substitute girlfriend, pretty much.

Also, half of the fun probably comes from writing this journal about what a prodigy I am, or how I blow out my accounts, just so long as people are paying attention to me. Yeah, that's it.

I probably lacked or received too much attention in my childhood and I am hungry for attention, and I try to get it by doing something special with trading... my father won't get impressed by my compounding the account? Then I'll blow it out, subconsciously, on purpose or maybe simply by trying too hard to compound it even more. This is true, for sure, but there's other things, too. As I said, I try not to overestimate explanations that sound good.

 

[Liquid validity]

If you are only 4k down, f**k it pull the plug.
Kill the trade, don't think about it just do it.
It will sting, but do it anyway.

Come monday you may be up, may be down.
Right now you can close and still have 20k.
Protect that 20k

Your choice, but I wouldn't stay in an over leveraged trade over weekend.
Good luck whatever you decide.

 

[Yamato]

Thanks again for the feedback and warm advice.

However, right now I would still be on time to lose 5200. It was down to about 4500, but it was still too much psychologically to take. I would have closed at 4000, as I said.

I realize that I have disappointed many readers of this journal, although my priority is honesty. Also, I may have disappointed people, but there's another person in my head, doing all sorts of things with my actions - mostly with trading though, not in every field of my life.

I can't handle that guy. The guy who gets bored. The guy who is frustrated from work. The guy... who wants to be a prodigy. I cannot handle any of these guys. That's me speaking again now, the wise one, because as soon as the markets close, all those guys disappear from my head.

But when I am on TWS and see the charts in motion, those guys resurface.

What will be, will be. I don't have to rely on this for my survival, so I guess I can't... I could never complain about anything that is going on in my trading, first of all because it's all my responsibility, and second of all, because I can't complain about life in general, considering what the average human being has.

I do have a sad life, but not materially speaking. Just spiritually and emotionally. It has to do with my attitude. Not with the things I don't have. I am not saying either that my attitude has to be changed, because I find life and people depressing, so I believe there's nothing to be cheerful about.

 

[Yamato]

First morning after the craziest martingale trade I've ever done.

I feel guilty.

I slept very well, because I didn't want to get up. 10 hours. Sometimes being depressed makes you sleep better.

Right, I am depressed.

In the meanwhile, last week, the systems lost 2000 dollars, which reminds me that one of the reasons I trade discretionary, with all these compulsive risks, is that the systems aren't performing according to expectations.

Not much more to say.

A trade that seemed certain to be favorable last night, now seems like a mistake again, but I would have felt even worse had I woken up after closing it and taking a loss of 5000 dollars.

With this martingale method, I postponed my depression, a deeper depression, by two days.

Or, I deferred it to another compulsive trade, in the future, in case this one turns out to be lucky.

We are all different and some of us have qualities in some areas and not in others, and for trading, I am not gifted. I am tidy, a hard worker, I am anti-social... I have characteristics, which in some cases are precious virtues.

I have some of the virtues required by trading, but still not enough, and there's definitely one major ingredient that I am missing although it's not clear to me which one it is.

Maybe the answer is simply that I am focusing on trading too much, I am too obsessed with it, and I don't have a life outside of it. Or rather, I study conspiracy theories right now, so it's more work. Right, and work at the office, where, again, I don't waste time, and don't socialize. And maybe the key to my repeated failure at trading is that I don't "waste time", whereas trading requires you to take it easy, waste time, and wait.

Maybe that, or maybe it's just one of those explanation that sound good.

...

Again, I go back and review my actions of the last few days, and I remember that Thursday I was up 24500, and then what happened?

The systems turned their +600 into -600 or similar, and my account balance went from above 24k to about 23k.

Then I felt bad. So I kept trying to make up that loss from the systems with my discretionary trading, where all my trades had been profitable, so great job, but the JPY trade, which was down less than 200 dollars.

So, given that I couldn't touch the systems, I started focusing on that JPY loss, and I wrote about it here as it evolved, that the only trade that was not going well was the JPY trade.

Then I felt we were at the low of the day, and I added another contract, because I thought that way not only would I close at break-even but I'd make money.

Then JPY fell another 50 ticks, and I was down 1000 dollars, so I was so pissed off, that I added all the contracts I could add, and overnight i expected to make at least 2000 dollars of profit, so I set up my LMT exit orders accordingly.

Next day, it was losing 2000 dollars, as none of the LMT exit orders got taken.

And yesterday, one day later, instead of going to bed with a 1000 dollars, I went to bed with a 5000 dollars loss.

And, remember, this all started with a 200 dollars loss.

Now, yesterday, I decided that I will "double or nothing", that means I will either blow out my account or exit this trade with a profit.

So, here I am, risking my entire account, my work of almost 5 months, in order to avoid a trade that is costing me a 200 dollars loss. And all this in the span of 24 hours.

And yet I knew this mechanism from repeating it several times in the past, and many times it blew out my account.

So why did I do it again?

Because when you're there, with the 5000 dollars, it's easier to... postpone the pain. It's easier to...

idea2develop

It's easier to trade a smaller immediate pain (losing 5000 dollars, but initially losing just 200 dollars) and exchange it for a huge potential pain later.

In the long run martingale will blow out your account, as the huge potential pain will materialize.

But each instance of martingale consists of trading a small immediate loss with an improbable future huge loss.

It is improbable that JPY will not bounce on Monday. It is improbable that it will lose another 100 ticks and cause me a loss of 5000 more dollars.

But multiplying together a series of... 10 improbable events of 10% decreases your probability of getting away with it from 90% to 0.9^10 = 35%

Besides, this specific event is much more probably than I'd like to think. I think I have about 66.6% on my side, and there's 33.3% chance that JPY will indeed lose another 100 ticks.

...

Someone told me "keep doing the same things, and keep expecting the same results".

I have been fixing some things and effectively. Actually I am better at improving myself than the average person. I know for sure. Because I am much better than the average person, so how did I become much better than them? By not spending hours per week watching tv and talking about soccer, and similar wastes of time.

However, with trading, there is something missing. Something I've been unable to fix.

What is it?

Well, the systems made money, so that is not supposed to be fixed.

The thoughtful trades, with stoplosses, and even the thoughtful stoplossless GBL trades, all those trades made money, consistently, and without "russian roulette" risks involved.

So, all those can be kept.

The martingale trades, and the stoplossless trades in markets that can keep going against you, those are clearly the culprits.

What are the characteristics of these three types of trading?

1) systems: I can stay away from the screen all day long, and they'll behave the same and make money.
2) good discretionary: I can insert the orders in 10 minutes, and stay away all day and they'll make money, without risking the entire account.
3) bad discretionary: it happens with constant monitoring of TWS.

So the culprit is clearly monitoring the markets live.

Don't get me wrong, up to here, part of the profit did come from monitoring the markets, because part of the profit came from bad discretionary trading, but the difference is that the 66% of profit that came from non-monitoring doesn't cause me the risk of blowing out the account, whereas the 33% of profit I got from martingale trading does.

So I have to eliminate the constant monitoring of TWS.

But I need to trick myself, because this is not going to happen through sheer will power, given that I am not a machine and i can't insert a rule in myself which I will always follow.

I need to trick myself with a good habit.

And here's where all the problems are.

To stay away from TWS, through habits, rather than sheer will power, I need to stay away from the computer.

To stay away from the computer, given that I can't simply watch tv, because I know how bad that is (I'd rather gamble than watch tv), i need to stay away from home.

But I have learned that home is good. And outside is bad.

Indeed, sports is a waste of time. So that is ruled out.

Movies works for a while, but I run out of movies to watch, and it's not worth it in general, like for television. Indeed, usually I leave the movie theater half way through the movie, by how unbearably bad these movies are.

Friends are the worst thing of all. They make you waste money, drink beer, smoke... worst of the worst.

So what do we got? Is there a constructive way to stay away from home or a way to not come to TWS while staying home?

I should have figured this out while I still had capital above 20k.

If I were at the beach, I would definitely have no problems with this issue. But I am in Rome, so let's say it: in Rome there is no good way of not staying home. Yes, of course, a movie, a restaurant... but it cannot be done on a regular basis, and it won't keep me outside for longer than 2 hours. Then I still have from 5 pm till 10 pm to avoid gambling.

So forget relying on not staying home.

I will be home, and I have to find a way to stay away from TWS.

If I don't, hopefully not next week due to JPY, but sooner or later I'll blow out my account again.

And forget relying on will power. I don't have it in me. I know it will not work. I don't know what will power is when it comes to trading, because there are many forces within you that make you do what you shouldn't do. It is like the sirens singing to ulysses. The markets will find a way of fooling me if I stare at them for too long, meaning more than 10 minutes while having the ability to pull the trigger (it's ok to stare at charts for hours from the office, where I can't trade).

Forget using the TWS demo account. I know i quickly go from simulated trades to real trades, when i feel these trades are too profitable to be missed.

So, these things are not practical/working solutions and have failed so far:

1) governing my behavior with will power
2) staying outside
3) watching tv
4) using the simulator
5) web browsing

I don't know what to do, but I certainly don't want to start with 4k again.

I am tired of having to start from 4k. I've been doing it too many times.

If I could stop trading altogether, that could be a possible solution, but I can't because the systems are not good enough, and if it were up to them, I'd be at 10k instead of 24k right now (which I still hope to be on monday).

What the **** do I do? I am serious about solving my problem, but I seriously cannot find a solution.

I would need to have two distant houses. One without a computer and one with a computer. And then I still don't know what the **** I'd do while at the house with no computer.

This is not a game and it is not intentional.

My life relies on my trading success, I've invested a lot of work in this, and I am a profitable discretionary and automated trader, but there's that martingale/gambling side in me that keeps me from being profitable.

I cannot find a solution.

Also, there is no promising or swearing to god that will ever help me. I've said too many times in the past: "from now on...", "this is my last discretionary trade...".

And also, it wouldn't make sense to stop discretionary trading, because it has produced more profit than my systems.

Trading requires an incredible amount of self-control and I don't have it. Or at least, when it comes to trading, my self-control is not effective.

I just give up.

Look, I've tried everything. Self-control doesn't work. Staying at the movies doesn't work. Watching tv doesn't work. The simulator doesn't work. Rules don't work. Promises don't work.

I tried everything. I give up. I am condemned to repeat the past. Endlessly. Remember that quote?

The Life of Reason - Wikipedia, the free encyclopedia
The life of reason; or, The phases of human progress : Santayana, George, 1863-1952 : Free Download & Streaming : Internet Archive
Full text of "The life of reason; or, The phases of human progress"

Those who cannot remember the past are condemned to repeat it. In the first stage of life the mind is frivolous and easily distracted; it misses progress by failing in consecutiveness and persistence. This is the condition of children and barbarians, in whom instinct has learned nothing from experience. In a second stage men are docile to events, plastic to new habits and suggestions, yet able to graft them on original instincts, which they thus bring to fuller satisfaction.

I do remember the past, but instinct is stronger than the memory of the past maybe. Or maybe I want to repeat it.

I don't know.

"This is the condition of children and barbarians, in whom instinct has learned nothing from experience". I know exactly how I blow out my account by having repeated it several times. And yet instinct takes over, when I am in front of TWS, I lose 200 dollars, and think I can avoid that loss by buying another contract.

...

I am also reminded of that story, about the frog and the scorpion:
The Scorpion and the Frog - Wikipedia, the free encyclopedia

The Scorpion and the Frog is a fable about a scorpion asking a frog to carry him across a river. The frog is afraid of being stung during the trip, but the scorpion argues that if it stung the frog, the frog would sink and the scorpion would drown. The frog agrees and begins carrying the scorpion, but midway across the river the scorpion does indeed sting the frog, dooming them both. When asked why, the scorpion explains that this is simply its nature. The fable is used to illustrate the view that the behavior of some creatures, or of some people, is irrepressible, no matter how they are treated and no matter what the consequences.

Maybe I can solve my problem, or maybe, like for the scorpion, my nature is to hammer myself in the balls, and therefore, like also for many other compulsive gamblers, I cannot repress a behavior that I know to be harmful.

It'd be really easy to define my problem "compulsive gambling" and put myself in the same group as millions of people who have the same problem. But maybe it sounds good and it's not the truth.

It'd be so nice if Monday I don't lose another 5000 and recoup the 5000 ongoing loss, and then stop gambling altogether. But, as my friend said, repeat the same behaviors and expect the same consequences. I will definitely find myself in that situation again, because it's happened already so many times.

If instead I had high-frequency trading systems that make money regularly, every week, then I'd probably stop trading altogether. So this shows that in me there is some motivation to make money and it's not just about the joy of gambling. I've never thought I was totally a compulsive gambler, because i have shown no compulsive gambling otherwise.

I don't care for cards, casino, lotto, online betting... nothing like that.

Let's recapitulate one last time.

I have 3 types of trading:

1) automated that produced 1/3 of the profit and it's healthy
2) discretionary with stoploss and thoughtful planning, and it produced 1/3 of profit, and it's healthy
3) martingale/stoplossless trading, that also produced 1/3 of the profit, and it's deadly

I cannot get rid of #3.

Getting rid of #2 and #3 would be easier but I can't do it, because it reduces my trading profit by too much.

I cannot find a solution and if, like the scorpion, I cannot find a solution and answer "that's just the way I am" at a time when my instinct is hurting me so much (ongoing loss of 5000 from it), then will I ever solve this problem?

 

[Yamato]

more ideas on solving compulsive gambling problem

I was in the bath tub and I came up with a few more ideas on my problem of compulsive gambling.

idea2develop

Much like other people with similar problems, including the scorpion from the scorpion and frog fable, I must not place myself in situations where my irrepressible instincts will prevail over my rationality.

I do the same with cakes. You can decide if you buy or don't buy a cake, and that's where you should start your diet, when shopping. If you bring the cake home, when it's in the refrigerator, it becomes almost impossible for most of us not to eat it.

In the same way, there is work to do with compulsive gambling. By the time the only thing separating you from compulsive gambling is a mouse click, it is too late. You must put distance between your irrepressible instinct and your ability to act on it.

So, what is the right safety distance for me to stay away from TWS?

I cannot be at my computer with hours on my hands. That is like having the cake in the refrigerator or being a scorpion and crossing the river on top of the frog.

Another thing that is not good enough is being home with time on my hands and my computer turned off. Sooner or later I'll get bored and turn it on. Being home is not good altogether because it is just too close to the computer and to TWS.

So I basically have to find something that works for sure, and just like you can't buy a cake and hope not to eat it, I shouldn't be home and hope to avoid compulsive gambling. Not right now, not the way my mind works right now. Maybe in 20 years, maybe with more money, or less money... not right now. It doesn't work.

I can't be home.

I need an activity outside of the home, not necessarily outdoors, but not in my house with my pc.

Then more.

I cannot have an activity that is like... a recreational sport, because I can easily stop doing that any time I want.

There is no course that is good enough, because courses don't last from 14.30 when I get out of work till 22.00, when the markets close (more or less, because I go to bed).

Courses and sports are not good.

I need an activity that lasts all these hours and that I am committed to, and all I could think of is some volunteer work, but am I willing to do this? Am I willing to commit myself to helping others?

Nope, not at all.

I am not willing to make the changes necessary to be profitable, and yet I am willing to spend hours every day writing this journal.

It's really a mystery - I don't understand what I really want. My life seems more driven by small efforts avoiding little things I don't want (not being at the office, martingaling in order to avoid taking a loss) than by bigger efforts achieving bigger things that I want.

Rather passive resistance against little annoyances than active behavior to achieve bigger things.

It seems to me that I've achieved a lot of things that required constant but limited efforts and that when it comes to achieving big tasks, such as changing my life, with profits from trading, I cannot achieve it because I am not willing to:

1) use sheer will power to stop the negative behavior
2) keep away from temptations by making sure I am not sitting at home with my pc and too much time on my hands

I either become more active in #1 or #2 or this is not going to happen.

Over the years I have greatly increased the knowledge necessary to make money with trading, but without some sort of injection of will power (at least to keep away from home, by even just going to movies all day long), there is no way I will defeat my third unwanted ingredient of compulsive gambling.

#1 automated is fine
#2 stoploss trades or stoplosslessness trades (GBL and similar) are fine
#3 martingale or stoplossless trades in bottomless markets are BAD

I need to avoid #3 with some sort of injection of will power. It's not going to happen otherwise.

Either this JPY trade will blow out my account, or it will happen two weeks later at the rate I am going.

...

You know, as they say, "no pain no gain".

I've managed to eliminate all annoyances from my life, but without taking the pain of closing a losing trade... that is one pain I cannot remove, if I want to be profitable.

Don't want to meet people in the subway? Take the taxi. Annoyance eliminated.
Want to sleep properly and not hear the neighbors? Go upstairs. Annoyance recently eliminated.
Want to have an acceptable job? Increase your part-time until you leave as early as 14.30. Annoyance eliminated.
Want roommate to not touch you? Educate him. Annoyance eliminated.

I have successfully eliminated, one by one, all major annoyances of my life, including friends who bored me.

The shower was cold, and I finally got off my ass, and called the plumbers, and that got fixed, too.

Now I'd like to have extra money, through trading. Can it be done?

Yes, but not with the usual method of eliminating annoyances.

Losses cannot be eliminated and they cannot be fixed.

In particular, in a market that goes one way or another, but never bounces, like JPY.

Some things, like going to the dentist or closing an unprofitable loss, are necessary like brushing your teeth.

Some annoyances are not avoidable. And I've been fixing the problem of losses in the wrong way.

It's time to stop doing this crap. And find a way to handle losses that doesn't destroy my future.

But I still do not know if I'll have the will power to go to the movies all day long, do some volunteer work to stay away from my pc all day long, or stay at home and not engage in compulsive gambling.

I don't know if I'll do it. I don't even know if Monday my account will be nearly blow out by the JPY trade, or halved.

I suck. I am not all bad, but I partially suck. When it comes to trading I am being spineless or something like that. Maybe life has been too good to me for me to be a good trader. Maybe I am missing some will power that is necessary. And yet I am so orderly... maybe I am weak while being very conscientious and hard-working. It seems impossible to me that every day I am the one working the most at the office, and yet I could be weak, despite being the hardest working person. Or rather, I am not strong at everything.

Furthermore, I am very methodical, consistent, and orderly at everything I do, but maybe trading, with its chaos, short-circuits me.

I don't know how it will end. We will see. If I change or keep blowing out accounts.

Provided I live and I am not in a coma, I will come back to tell you whether I quit trading, become a millionaire, or decide to commit suicide. If I get killed crossing the street, sorry about interrupting the journal without getting to the bottom of this trading journey.

The Godfather - 07 - Love Theme From The Godfather - YouTube

 

[Yamato]

Some hope for my martingale trade:
Forex Analysis: Japanese Yen Breaks ¥91, How Can we Trade It? | DailyFX

Pure price action shows that the Relative Strength Index on the USDJPY weekly chart is now at its most overbought in 35 years—an almost-incredible statistic.

...the potential for a pronounced Japanese Yen correction is simply too great. Traders should remain wary as a substantial USDJPY reversal seems imminent, but timing such moves remains extremely difficult.

Of course at a time like this, I'll even go listen to someone reading my palms, provided they tell me that my trade will go well.

 

[Yamato]

In the end, when it comes to trading, I have proven to be spineless. Hard-working, intelligent and all that, don't get me wrong.

But also spineless. No one else could ever tell me this, because they don't know me, and they'd have been... and did get blocked for telling me.

But now I can tell myself this.

In all these years, my efficient and methodical elimination of all annoyances, people, situations... has lead me to a comfortable life, so comfortable, and so much did I spoil myself, avoiding people and unpleasant situations, that now, rather than accepting a loss of 200 dollars, I've placed myself, knowingly, in a situation where I could lose the entire account.

So much did I spoil myself.

My efficiency, and scarlessness, and soft skin and soft hands, my increasing ability to avoid all pain and suffering, yes, with intelligent solutions, has made me weak. Weak and deranged, thinking that I could have a scarless equity line.

I dared too much, like Icarus getting too close to the sun.

And i got punished, or will get punished next time.

I wanted to stay grounded and, like Icarus, I will be grounded, literally.

I was too efficient in eliminating all annoyances and all efforts and all pains, and now I find myself so weak and spoiled that I am unable to withstand ordinary disappointments, not just in trading but in everyday life.

I am extremely sensitive and touchy. I get offended daily by the smallest things.

I complained about these small things all the time on this journal. Once they happen, you can only complain about them.

The difference with trading is that if the market hurts me, by showing me a loss, I can try to avoid it, to dodge it, by using martingale, or by waiting.

The market shows you a loss, and it's up to you how to handle it. However you handle it, it is a self-inflicted wound. You decide when to take it.

And a person as sensitive as I am, do you think I will volunteer to accept that moral wound?

There you have the explanation of my problem: I am too sensitive and I cannot accept the wounds of trading, which are called "losses".

This time the explanation sounds very good, and maybe it's right, like the other 10 explanations i have offered for my compulsive gambling.

So after all it is not exactly compulsive gambling: it is genuine and thoughtful trading, that unfortunately turns into compulsive gambling once I find out that the trade I picked didn't turn out to be profitable.

idea2develop

So here's all the explanations for my trading problem again.

My trading is sabotaged/hindered by:

1) boredom
2) frustration
3) desire to be a failure to spite my father
4) guilt for making money without working (a sin for my catholic parents)
5) lack of clarity on a defined profitable method
6) hyper-sensitivity (the last one I've come up with) to losses that I avoid by postponing exits

They could all be true and they all sound true.

...

As Good As It Gets - Melvin Walking to Restaurant - YouTube

Listen to this, I am very close to melvin udall, except I don't even go out because I am bothered by the face of some guy at the store and how he looks at me. Now imagine how I'll react to seeing a loss of 200 dollars. I've blocked all people except contacts from posting here, because I was hurt by their comments... the list is very long, of things that bother me. But the difference with the markets is that you cannot avoid their losses or, if you try, occasionally you blow out your account.

 

[jazeonli]

1. You said you use time based exits for your positions. Why don't you make a rule to use a time based partial stop-loss exits when doing martingale?

Let yourself add as many martingale contracts as you will. There is no way to change that when it comes to you But if all those contracts are at a significant loss after some time period (e.g. one day), reduce number of contracts by one. Repeat that every day until you have a profit or feel comfortable with the lossing amount.

2. Why don't you work on new trading systems to spend your time while at home? When I get into systems development/backtesting I mostly forget about looking at the TWS.

 

[Yamato]

Good point on your #1, but what rules can I respect? You know I have a problem with rules as well, and that is probably yet another explanation of my problem. I feel like I am above rules.

Let's do that list again (idea2develop):

My trading is sabotaged/hindered by:

1) boredom
2) frustration
3) desire to be a failure to spite my father
4) guilt for making money without working (a sin for my catholic parents)
5) lack of clarity on a defined profitable method
6) hyper-sensitivity to losses that I avoid by postponing exits
7) inability to follow rules, after a childhood of strict prohibitions by my father


Your #2

Good point, too. But I cannot make sure that I'll be working on systems all the time. Even if I just get away from that work for 5 minutes, it's enough to do something very regrettable.

After all this thinking, I think the answer might have to be found in my spinelessness. I got too good at avoiding annoyances that now I am unable to deal with the annoyance of taking losses.

Dude, I am even annoyed to death by this little kid who's running around right now next door. If I could nuke him and get away with it, I would by all means nuke him.

Now I'll try to go out and buy some things, but it's a very hard task for me, as it is for melvin udall (cfr. previous post, video at the end).

My life is so neat that losses to me are unbearable. Everything has to be my way. Here's an eighth explanation:

1) boredom
2) frustration
3) desire to be a failure to spite my father
4) guilt for making money without working (a sin for my catholic parents)
5) lack of clarity on a defined profitable method
6) hyper-sensitivity to losses that I avoid by postponing exits
7) inability to follow rules, after a childhood of strict prohibitions by my father
8) too proud and neat to accept trading losses that offend me and disrupt my planned order of things

Everyone remembers how bothered I was (cfr. start of this journal, first few pages) when a few people gave me ratings of 1 star, I was even banned for a week for rating myself 5 stars after registering multiple times. Now, if the rating of a journal like this bothers me so much, how will I take losses from trading? Imagine. It's very clear what the problem is, without having to find other extra reasons in my childhood. Losses drive me mad.

I need to work on reducing my sensitivity and taking a lot of beatings from life. I've been too successful at avoiding beatings, and it interferes with my trading.

 

[jazeonli]

Good point on your #1, but what rules can I respect?
...
7) inability to follow rules, after a childhood of strict prohibitions by my father

Not all rules are the same. Maybe your father's rules weren't good and you resent following bad/stupid rules. That doesn't mean you cannot follow your own smart rules.

If you still feel unable to follow smart rules then you might enter an order for the partial position exit at the end of the day (or even after the close) that will execute the next day while you are at work. And please don't write that you might cancel the order in the morning before you go to work

 

[Yamato]

Very good feedback. I can tell you've been there. Yes, no orders work with me (except those I use with my healthy discretionary trading, which I've described in previous posts). I've tried all those venues. If the psychological barrier is there, there's no handcuffs (of which I would have the keys anyway), no order, or rule that will keep you from falling into those behaviors that blow out your account.

I think it's psychological, and it comes down to my hyper-sensitivity to disappointments/pain/losses.

Basically the cure is that I have to learn to take beatings from life. To accept life's beatings. My life has been to perfect and too much like Melvin Udall's life. Hyper-protected. So perfect that I could not accept losses in it, or frustrations at work (where I meticulously avoid contact with everyone).

Listen, here's what I have done. Like Melvin Udall in that As Good As It Gets clip I posted, I went out in the street, a very crowded street in rome, via cola di rienzo, especially in the weekend. I am starting to learn to handle unpredictable events, like people getting in your way, just like you experience all the time in the market.

My task, while shopping and walking in the crowd, was to learn to not mind the challenges of people and the unpleasant experiences. Learn to not be annoyed by life's annoyances.

I noticed something. A couple of girls actually looked at me, and they were not horrified either. Odd experience. I haven't been looked at for years. Because usually when I walk I stare on the floor. It was an odd experience to look straight ahead in front of me.

As Good As It Gets - Melvin Walking to Restaurant - YouTube

I think the answer to my problems is in being outside, experiencing life and people, with all its imperfections and unpleasant sides.

This will be good for two reasons:

1) it will keep me away physically from temptations
2) it will get me used to accepting unpleasant annoyances, which is the same that happens in trading with losses, and that, given to being so spoiled, I am unable to handle

I think I should start going out again with my roommate on coffee breaks. I will definitely not allow him back to touching my shoulder. But I'll handle him as an annoyance, in order to get used to handling annoying events in my life. I have to stop methodically removing all elements that annoy me, because this makes me so unused to handling those few annoyances that you cannot get rid off (e.g.: trading losses).

idea2develop

Of course, this work is all useless if on Monday I wake up and find my account wiped out from a further fall in JPY. No matter how much walking I do in the streets of Rome, I am not going to take that umpteenth blown out account too easily.

 

[Yamato]

Peter Schiff 2013 Interview: Gold, Silver, Japanese Yen, U.S. Dollar Prediction - YouTube

 

[Yamato]

Sayonara to Yen Short? - CNBC

 

[Yamato]

Forums - Fading Yen - It has gone parabolic

 

[Yamato]

Forex: BoJ Keeps Heat on Yen – USD/JPY Cracks ¥91, EUR/JPY Over ¥122 | DailyFX