Yamato
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Yamato
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The road to martingale and blowing out is this:
1) you enter a trade where, in order to avoid being stopped out, you do not enter a stoploss
2) the trade goes against you
3) you add contracts
If you do not enter a stoploss in a trade, you're setting yourself up for martingale and blowing out your account.
I say this, because last night I incurred the martingale temptation again, as JPY fell from 0.010700 to 0.07065 and I gave in again.
idea2develop
Once you do not insert the stoploss, you're on the road to perdition.
1) you enter a trade where, in order to avoid being stopped out, you do not enter a stoploss
2) the trade goes against you
3) you add contracts
If you do not enter a stoploss in a trade, you're setting yourself up for martingale and blowing out your account.
I say this, because last night I incurred the martingale temptation again, as JPY fell from 0.010700 to 0.07065 and I gave in again.
idea2develop
Once you do not insert the stoploss, you're on the road to perdition.
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Yamato
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On the Yen I am almost in the same situation as a week ago, except with fewer contracts and 100 ticks lower. I think the situation is promising, because all the currencies are falling, whereas the Yen is showing a green candle. Bu this may be wishful thinking.
Also my ZW trade is looking good, ready for a bounce.
Also my ZW trade is looking good, ready for a bounce.
For your information, I tried to sell JPY after the big bounce, but it was too fast and I missed it.
Anyway, your trades should be fine now; it just made a new high and I don't see big obstacles until 798, which is where I will evaluate again if going short.
Anyway, your trades should be fine now; it just made a new high and I don't see big obstacles until 798, which is where I will evaluate again if going short.
Yamato
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Yes, you're very right.
Once again, extremely lucky to have removed all LMT exit orders before going to work and to have stayed out until now, doing medical exams.
So what happened is that I came home now, found 2500 dollars of profit on TWS, and closed the position.
Now capital is at 30k.
My martingaling so far has brought me about 15k. This is un****ing-believable.
And yet it is all wrong if you know what i mean. But that is why it is so hard to learn, precisely because it is profitable 90% of the time. Then one time out of ten, it will blow out your account.
Once again, extremely lucky to have removed all LMT exit orders before going to work and to have stayed out until now, doing medical exams.
So what happened is that I came home now, found 2500 dollars of profit on TWS, and closed the position.
Now capital is at 30k.
My martingaling so far has brought me about 15k. This is un****ing-believable.
And yet it is all wrong if you know what i mean. But that is why it is so hard to learn, precisely because it is profitable 90% of the time. Then one time out of ten, it will blow out your account.
What I did sometimes to avoid the unavoidable is trying to cheat myself.
For example, in your current situation:
-your system gave you some money, you're at about 15K with them; very good, let's continue;
-your discretional trades gave you another 15K; consider this (and only this) like money you can afford to lose with your discretionary trading. Like a separate account. This means not using more than 15K as margin, and also simulating a margin call like if your account was really limited to 15K.
-(most difficult part) perform your analysis, but next time you are wrong, instead of opening another contract, try to close it and open it again at a better price (at risk of being the stupidest man in the world)
I tried these self-cheating techniques, and had some success in at least delaying my next blow-out. The main goal is having more time to calm down, and to discover that, maybe, your analysis can be wrong 2-3 times in a row, but in the long run it's right... and then, why risk everything on each trade?... build up some confidence... afterall if I become millionaire in 2 years instead of tomorrow... you get what I mean.
I'm aware that while I'm typing you might be already riding 3-4 contracts of some other future. You seem to be in the very dangerous stage where, after being one step away from disaster several times, you have no fear anymore. Afterall, you faced death (for your account), and you know that nothing worse can happen. Even after blowing out the account, one thinks that it was unavoidable, that things had gone too far, stupid stuff like this.
Only after slowly restarting some months later one realizes 100% how stupid he was.
Yamato
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Very wise words as usual, and they totally apply to me because we have the same personality and we trade very similarly: a coexistence of automated trading with profitable discretionary trading that is however poisoned and turned into unprofitable by pride.
It's almost hilarious that we're here discussing what's wrong with me, when this "risking my entire account on one trade" has brought me more profit (15k vs 11k) in one month (or a little more, because my GBL trade at 146 might have been early January, and that was definitely martingale) than 5 months of trading with stoplosses plus letting the systems trade for me.
But it's not crazy if you see my IB account and its equity line since I opened it. It started with 3 to 5 thousands about 10 times or more, and about 4 or 5 times it went to as high as 20 to 30 thousands (the other times it went straight back to zero).
The reason is that your account cannot survive martingale methods for longer than bringing it from 4k to 30k.
Regarding your advice to split the account, it is not practical for my case - and you're not the first person who advises me to do exactly that. Too much bureaucracy and software issues and fees, but, more importantly, it is precisely a large account ("large" for my standards) that might protect me from my discretionary madness, in that with more margin I will be able to afford more systems, bigger systems (that trade bigger contracts such as silver), and this action will replace my action. My action always intensifies when my account is idle. The more systems, the less it will be idle. Also, I am hoping to calm down, although, judging from the past month, one would rule it out categorically. Indeed, I have done nothing but martingale for the past month.
The key, I have realized, is to use a stoploss for every trade you enter. If you don't, then you're going to use martingale the minute your loss exceeds two hundred dollars. That's the way my mind works. So I should insert stoplosses that only cause me 200-dollars losses. If I incur losses bigger than that, I will risk revenge trading, which is almost as bad a martingale (placing more trades on the future that caused you the previous loss).
Another good way to avoid the risk of compulsive gambling and martingale trading is to be away from home. As I said before, it is like that fable of the frog and the scorpion. I am the scorpion and I might not be able to refrain from biting the frog carrying me across the river, even if it will mean my drowning in the river. If I am home, I will be like the scorpion on the frog. I must not be at home. That would be the best solution. Except that in winter it is even harder to spend the whole day outside.
It's almost hilarious that we're here discussing what's wrong with me, when this "risking my entire account on one trade" has brought me more profit (15k vs 11k) in one month (or a little more, because my GBL trade at 146 might have been early January, and that was definitely martingale) than 5 months of trading with stoplosses plus letting the systems trade for me.
But it's not crazy if you see my IB account and its equity line since I opened it. It started with 3 to 5 thousands about 10 times or more, and about 4 or 5 times it went to as high as 20 to 30 thousands (the other times it went straight back to zero).
The reason is that your account cannot survive martingale methods for longer than bringing it from 4k to 30k.
Regarding your advice to split the account, it is not practical for my case - and you're not the first person who advises me to do exactly that. Too much bureaucracy and software issues and fees, but, more importantly, it is precisely a large account ("large" for my standards) that might protect me from my discretionary madness, in that with more margin I will be able to afford more systems, bigger systems (that trade bigger contracts such as silver), and this action will replace my action. My action always intensifies when my account is idle. The more systems, the less it will be idle. Also, I am hoping to calm down, although, judging from the past month, one would rule it out categorically. Indeed, I have done nothing but martingale for the past month.
The key, I have realized, is to use a stoploss for every trade you enter. If you don't, then you're going to use martingale the minute your loss exceeds two hundred dollars. That's the way my mind works. So I should insert stoplosses that only cause me 200-dollars losses. If I incur losses bigger than that, I will risk revenge trading, which is almost as bad a martingale (placing more trades on the future that caused you the previous loss).
Another good way to avoid the risk of compulsive gambling and martingale trading is to be away from home. As I said before, it is like that fable of the frog and the scorpion. I am the scorpion and I might not be able to refrain from biting the frog carrying me across the river, even if it will mean my drowning in the river. If I am home, I will be like the scorpion on the frog. I must not be at home. That would be the best solution. Except that in winter it is even harder to spend the whole day outside.
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Yamato
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Yamato
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Yamato
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ZW still losing about 700 dollars. It seems to be starting to bounce just about now:
I am kind of sad. When my financial problems seem to be solved, each time I feel how sad my life is, how sad a family I've had.
Franz Schubert: Piano Trio in E flat Major - Andante con moto - YouTube
I am kind of sad. When my financial problems seem to be solved, each time I feel how sad my life is, how sad a family I've had.
Franz Schubert: Piano Trio in E flat Major - Andante con moto - YouTube
Yamato
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Ok, historical moment. I've entered trade on JPY with a 200 dollars stoploss.
Will I remove it before it gets hit? If it were bigger than 200 dollars, I'd be doing revenge trading in case it got hit. Without a stoploss, I would be doing martingale and risking my account.
Let's see how it goes. It's just 10 ticks from being hit.
So far it has resisted for 15 minutes, and we're 20 minutes from the close, so something might happen, in one direction or the other. In which case, I'd be saved or would lose 200 dollars.
I've placed a takeprofit which 1500 dollars away, so this would be a great trade if it worked.
How do I feel?
Relaxed.
If it doesn't work, I lose only 200 dollars. And that sucks, but it seems to be working.
However it goes, I won't have to spend the night sleepless.
...
I have a feeling my NG trade will be triggered tomorrow, while I am doing more medical exams.
...
Most likely my JPY trade will not work out, and I will lose 200 dollars. Well, I'll have to get used to it. This is the only way to trade. With stoplosses.
...
Trade on JPY miraculously still open and up about 100 dollars. Tempted to close it, but I won't. I will raise the stoploss. No, I won't. 200 dollars loss at the worst.
Will I remove it before it gets hit? If it were bigger than 200 dollars, I'd be doing revenge trading in case it got hit. Without a stoploss, I would be doing martingale and risking my account.
Let's see how it goes. It's just 10 ticks from being hit.
So far it has resisted for 15 minutes, and we're 20 minutes from the close, so something might happen, in one direction or the other. In which case, I'd be saved or would lose 200 dollars.
I've placed a takeprofit which 1500 dollars away, so this would be a great trade if it worked.
How do I feel?
Relaxed.
If it doesn't work, I lose only 200 dollars. And that sucks, but it seems to be working.
However it goes, I won't have to spend the night sleepless.
...
I have a feeling my NG trade will be triggered tomorrow, while I am doing more medical exams.
...
Most likely my JPY trade will not work out, and I will lose 200 dollars. Well, I'll have to get used to it. This is the only way to trade. With stoplosses.
...
Trade on JPY miraculously still open and up about 100 dollars. Tempted to close it, but I won't. I will raise the stoploss. No, I won't. 200 dollars loss at the worst.
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I made several brainstorming sessions on stoplosses. And on targets, which in the end is the same thing.
If you go with logic, a stoploss should be placed at a point where, if reached, price has a greater chance to continue his trend; a target should be placed where price has a greater chance to invert his trend.
I'm not so good though, and, like I said elsewhere, I never knew anyone so good to not only have an edge in his entries but also in his exits.
So let's not talk of optimal stop-target but of "defensive" stop-target. I think that a defensive stop-target is still useful, because it allows you to survive. In the long run, if you have an edge on the market, with stops you increase your chances to win (or better, decrease your risk of ruin); if you don't have an edge, actually stops will decrease your chances to win: in this case, your best chance to win would actually be to risk all your bankroll in a single trade. But, even in this case, stops can be useful: you can survive enough to understand that you don't have an edge and change/adjust your strategy.
I literally hate stops, and when I can monitor my trade I never use them; when I'm calm and quiet, like in this period, I'm not scared to close my trades manually when I'm losing. When I'm mad, having stops wouldn't help anyway, because I would probably place my mouse right over the "cancel" button on tws, ready to remove my stop whenever price gets close to it.
OT: typing with a tablet sucks, sorry if my post is badly written.
If you go with logic, a stoploss should be placed at a point where, if reached, price has a greater chance to continue his trend; a target should be placed where price has a greater chance to invert his trend.
I'm not so good though, and, like I said elsewhere, I never knew anyone so good to not only have an edge in his entries but also in his exits.
So let's not talk of optimal stop-target but of "defensive" stop-target. I think that a defensive stop-target is still useful, because it allows you to survive. In the long run, if you have an edge on the market, with stops you increase your chances to win (or better, decrease your risk of ruin); if you don't have an edge, actually stops will decrease your chances to win: in this case, your best chance to win would actually be to risk all your bankroll in a single trade. But, even in this case, stops can be useful: you can survive enough to understand that you don't have an edge and change/adjust your strategy.
I literally hate stops, and when I can monitor my trade I never use them; when I'm calm and quiet, like in this period, I'm not scared to close my trades manually when I'm losing. When I'm mad, having stops wouldn't help anyway, because I would probably place my mouse right over the "cancel" button on tws, ready to remove my stop whenever price gets close to it.
OT: typing with a tablet sucks, sorry if my post is badly written.
Yamato
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Speaking of posts that are "badly written", let's congratulate each other on our English, given that we've been speaking English the whole time, while we're both Italians.
Regarding stoplosses, I feel the same as you and I agree with all your points, except that my pride makes my relationship with them much more problematic, so I guess I have a much bigger problem than you. Due to excessive pride, and to taking the market personally, I am practically unable to close a losing trade manually (like you do), and so, unless I insert a stoploss, it turns into martingale for me.
If I insert a stoploss, I still take the loss, no matter how small, personally, and so I engage in revenge trading. It's like when playing Risk where sometimes I can't stop attacking someone until I have one army left. My account is therefore always at risk, because I am always in "mad mode" or "proud and taking things personally mode".
Regarding stoplosses, I feel the same as you and I agree with all your points, except that my pride makes my relationship with them much more problematic, so I guess I have a much bigger problem than you. Due to excessive pride, and to taking the market personally, I am practically unable to close a losing trade manually (like you do), and so, unless I insert a stoploss, it turns into martingale for me.
If I insert a stoploss, I still take the loss, no matter how small, personally, and so I engage in revenge trading. It's like when playing Risk where sometimes I can't stop attacking someone until I have one army left. My account is therefore always at risk, because I am always in "mad mode" or "proud and taking things personally mode".
Yamato
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I need to celebrate now. Sorry if I am showing off, but if I don't celebrate and show off here, where am I going to? If I don't celebrate and show off today when am I going to do it?
After whining on this journal for years, it is only fair to myself and to the readers to celebrate when something positive happens.
So, here it is:
I don't know how many more of these equity lines I'll be posting. I am kind of feeling satisfied with this amount of bragging, and I am also realizing that it's in very poor taste. At the same time, as I said, if I don't praise myself, no one else is going to do it. Especially, in my case, coming from a family that believes in martyrdom and self-sacrifice and anything other than dying on the cross is to be criticized and looked down upon.
...
This morning the balance was at 30500, as the JPY trade with the 200 dollars stoploss was profitable by 600 dollars. Lucky.
Now we're about to enter uncharted territory, because my biggest capital ever has been 31k in the Spring of 2009. Until here, I felt that I could do it, because I've done it repeatedly, going from a few thousands to the neighborhood of 30k. Then, each time I blew out my account. So, from here, I will get even more panicky. (But maybe that's precisely why I blew out my account).
After whining on this journal for years, it is only fair to myself and to the readers to celebrate when something positive happens.
So, here it is:
I don't know how many more of these equity lines I'll be posting. I am kind of feeling satisfied with this amount of bragging, and I am also realizing that it's in very poor taste. At the same time, as I said, if I don't praise myself, no one else is going to do it. Especially, in my case, coming from a family that believes in martyrdom and self-sacrifice and anything other than dying on the cross is to be criticized and looked down upon.
...
This morning the balance was at 30500, as the JPY trade with the 200 dollars stoploss was profitable by 600 dollars. Lucky.
Now we're about to enter uncharted territory, because my biggest capital ever has been 31k in the Spring of 2009. Until here, I felt that I could do it, because I've done it repeatedly, going from a few thousands to the neighborhood of 30k. Then, each time I blew out my account. So, from here, I will get even more panicky. (But maybe that's precisely why I blew out my account).
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Yamato
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Going on medical exam in 15 minutes. Roommate still slacking off on phone, personal calls. Came at 10.30 as usual. JPY still open, but not doing as well as this morning. I am regretting not going short on GBL yesterday. This feeling could cause me to do some revenge trading. Hopefully the hospital will make me forget about it. Should be busy until about 6 pm.
Yamato
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Nothing much. Remember how they wanted to transfer me to another office, months ago? Then I talked to the union and they told me that since I previously had surgery to my head, to get the medical certificates, so that they cannot transfer me due to medical reasons, because I've had consequences from this surgery - I don't like to get into more details, because it hurts just to talk about it... I am really pissed off about it, and mad at all the doctors. That's why I didn't go back to a hospital for the last ten years.
