my journal 3

[bbmac]

Your last post absolutely sums up the dichotemy you experience and face re trading...compounding this ' urge' for discretionary trading is the extent that only you will know - that maybe you have lost some faith in the automated systems because of their prediliction for long drawdown periods and performance that is worse than the past/disappointing to you. Maybe you should 'give yourself a break ' on discretionary trading ? - stop beating yourself up about it - maybe - just maybe you got good/better at it - such that if you could control your money management such that it doesn't put you in situations where you are losing big percentages of your account on any one trades (s) placed - you could realise an overall gain from it...To some extent though I think you enjoy this dichotemy - it keeps you alive and is who you are and without this edge of the seat roller coaster of a ride re your trading activity - life for you would be much duller ?

G/L

 

[Yamato]

Yes, this makes sense. Maybe you're right on everything. My life is very boring, and maybe I use trading, among the other things, as entertainment. Also, it is true that I am very frustrated by the under-performance of the systems relative to the past, and by automated trading altogether, and its rhythm.

 

[Yamato]

Hey guys, great news.

Remember how I was losing 5000 dollars just a few hours ago, maybe 24 hours ago... and I didn't even want to check my account balance... burying my head into the sand. Well, I checked and now capital is above 30k again, and my loss is about 1500 dollars.

I am quite happy. If I can manage to keep this open, it's very likely that I'll reach 40k of capital by the end of next week. The hard part now is waiting without closing it, because... well, you know how I am. After feeling scared stiff, I won't feel like keeping it open, I won't believe my eyes as soon as I can break even. The only way to really let it run... would be to not monitor at all.

But I know myself and know that I can't do... won't do that either.

Roberto Carlos - Detalhes - YouTube

so repetitive, so long, so good

music2play

It's not about the tune, but about the arrangement. The tune is totally dumb, but dude, they play it so well that it couldn't be played better. Disco music does the same thing of repeating the same melody over and over, but it sounds like a washing machine to me.

 

[Yamato]

I guess I could write something, while I play some music loud, to cover the noise by the possessed neighbor child.

Roberto Carlos - Detalhes - YouTube

Today I had a minor disagreement with my colleague. He has this habit of asking me how soon I'll be leaving, given that I leave at 14.30. It's a real pain in the ass to be asked every day not just when I am leaving, given that he knows I leave at about 14.30, but also if I want him to bring me back a coffee, given that he knows that I haven't drunk one coffee for the past 2 years. Not one coffee. I do not drink coffee, you... unpleasant person.

He has a way of harassing me by being apparently nice. I, too, have a way of despising him by saying "no, thanks" and "yes, please".

So he asked me again what I'd be leaving today, and today I snorted, because I was just so busy working hard to be done by the time I'd leave, 30 minutes later (but he didn't know it, so that makes his question even worse, because I was only 2 minutes from 14.30).

Dude, today he was actually asking me because he wanted to ask me for a ride on my cab... or just to bust my balls, but today, I mean, he had a good excuse for asking me. I snorted, as I was going to the copy machine to get some stuff I printed. When I came back I replied that I would be leaving a bit later today, because I came later. He was offended apparently and didn't reply anything. But it's always like this: he can act rudely, but I keep acting politely. He slams our door regularly, but he's an underdeveloped uncivilized human, so I accept it. If I just dare to snort after being harassed for months with the "when are you leaving?" question, dude, this guy gets offended for life. LOL.

This time I won't wish him any accidents, because I got reprimanded by the forum management. Let's just say that I hope to not meet again with unpleasant people like him, and the rest of... 95% of the world population.

...

Roberto Carlos - Detalhes - YouTube

How are my trades going?

Above 30k. Although today was an awful day, dude.

GBP and JPY went big time against me, and I martingaled back at them, big time. Now I am still losing thousands on them, but luckily I had made some money on NG, GBL... lots of money on those trades, especially GBL. So I am, miraculously, still above 30k, despite having big losses on those guys.

ZW, wheat, is something apart, because it's supposed to bounce big today, and it did bounce quite a bit, but unfortunately I had removed my takeprofit just a few minutes before, because I was expecting a much bigger bounce... let's see if the takeprofit... i put it back, regretting having removed it, and now let's go see if it got triggered.

Yep, it did. One contract got closed, so now I am above 31k, and dude, still losing like 4500 dollars on GBP and JPY combined, which means that if they were to bounce, I'd make a fortune. I also went short again on GBL, because it bounced back up, after I had sold the 3 contracts.

Dude, this guy punched me on my arm! I am talking about over a year ago. I don't why, he must have been mad about some sarcasm of mine about him, he felt disrespected or something - I am still talking about that uncivilized roommate of mine. He's older and probably expects me to respect him just a little more than he respects me.

So dude, he punched me in the arm, and of course I didn't punch him back. Why? My uncle asked me why. Because I want to keep this credit. He owes me now, for life. Even if one day I should decide to machine-gun him, I will be getting back at him for that day he punched me in the arm.

Roberto Carlos - Detalhes - YouTube

Eu sei que esses detalhes
Vão sumir na longa estrada
Do tempo que transforma
Todo amor em quase nada...

Dude, my arm still hurts. It will until I'll machine-gun him to death.

...

Been thinking about picking a bottom on JPY. The crazy thing is that as soon as JPY will turn around and start climbing back...



(weekly candles)

... as soon as it will reverse, I will be out and I'll start waiting for the day it will start falling again - after waiting months for this bottom than never arrives!

Same thing on wheat. I've been waiting for months, but as soon as it reverses, I'll lose interest.

 

[jazeonli]

Just an idea how to blowout an account with martingale and still keep some money.

It looks like the number of your martingale contracts rises with the rising account balance. Have you thought about withdrawing 1/2 or 1/3 of your monthly profits and trading with the rest?

If you blowout the account, you still have a portion of the profits in your bank account. And since you are withdrawing only a small portion of the profits you keep compounding your account also.

If profits are extreme at the end of the week, withdraw at that point as the next week might be a martingale week.

With your history it would be prudent to keep some profits safe and prevent yourself from using recent profits for martingale. Just don't be gready. You may withdraw even a small portion of the profits so that you don't feel like you are hurting the equity compounding too much.

 

[Yamato]

Got it. Your reasoning is clear, and I've noticed the same pattern, too: making money then gambling it. And your solution has been suggested many times before. But for some reason... I cannot implement it. Because whatever personality I am in, whether travis the gambler or travis the automated trader, both people believe they will make money, so they don't feel like decreasing the capital. Then there's travis the... just blown out the account, and he's too depressed to create any rules, that at any rate will not be followed by the two other travises.

 

[jazeonli]

After a while you would start feeling good about the rising bank account the same as you feel good about your equity curve. I would suggest to stop showing the equity curve and rather show your bank account curve. The good thing about the bank account curve is that it cannot have a drawback

You already withdraw some money for the expenses. Just add to that portion of the profit (even 10-20% would do wonders).

It's up to you but I just don't wish that you have to start writing 'my journal 4'. It is not about what you believe. Statistics is strongly predicting 'my journal 4'.

 

[Yamato]

Wait, this is not the third journal because I blew out 2 accounts. I have blown out 20 to 30 accounts. This was titled "my journal 3" because I needed to implement options (as explained in the first post of this journal, and the previous one, "my journal 2") to keep trolls from posting here. And I've achieved it perfectly this time, so I won't create a new journal, even if I were to stop trading altogether... I would still write this same journal, "my journal 3".

If I were to become a Franciscan friar, then I'd probably start "my journal 4", and let the trolls post on it, let them place their paws on my hand, even, like Saint Francis did with the wolf of Gubbio:
Wolf of Gubbio - Wikipedia, the free encyclopedia

Regarding the accounts... well, you gotta talk to the other two travises. I have multiple personalities, I guess like everyone else, or maybe it's not like everyone else. It seems normal to me. I feel like I am pretty normal, among the 5% of the civilized people.

 

[jazeonli]

Don't blame the travises. You just need to enter a recurring withdrawal instruction in you IB account. Start with 500 EUR per month.

It would be refreshing to see you learn from your experiences.

 

[Yamato]

Even before consulting with the other travises, let me tell you in advance that if I withdrew money and placed it in another account, it would not be any safer, possibly even less safe, because here in Rome I have been increasingly engaging in a... debauched lifestyle, spending a lot of money on cabs, paying my friend to keep me company, paying math lessons... this is not good. I overextended myself and that is partly why I went back to gambling just a few days ago. I remember I woke up and I said to myself: hey, I'm overextended and I need to make money to keep up with my expenses:
http://www.trade2win.com/boards/trading-journals/140032-my-journal-3-post2087456.html

Suddenly I woke up an hour and a half early, because... maybe because I was worried about my capital. This is not good.

I overextended my expenses, and I feel the need to make money. This is never good...

...

Other than this, what do you (and the other three readers) think of these 4 trades: Long over-weekend (and all of next week) on ZW, GBP, JPY?

And short over-weekend on GBL (and all of next week, with martingaling if it goes higher)?

I'm already doing them, but what is your opinion?

...

Coño, Manny, I want what's coming to me, the world, chico, and everything in it. Even if I just had 200 ticks in my favor on my Monday - overdue given the falling on GBP, JPY and ZW - I would make... 5000 on JPY (2 contracts long), 2500 on GBP (2 contracts long), and I'd make... well, let's count in points on ZW: I just want 40 points out of it. That's 2000 dollars. If everything goes my way, I will finally reach 40k of capital. At which point I will post my equity curve and celebrate. And then I'll stop gambling, if the other travises allow me.

Scarface Soundtrack - Intro Theme - Giorgio Moroder - YouTube

...

"the world, chico".

Scarface "the world chico...and everything in it" - YouTube

 

[Yamato]

Ok, the week is over. I have lost about 3000 dollars with my own trading, while the systems would have made 1500 dollars all by themselves. Needless to say, I wasn't trading them.

All these trades I am making... it better be worth it. By now with the systems I would be at 35k, instead of 30k.

It's going to be almost impossible to reach them. I hope the USD stops rising so much. It hasn't taken a break for months almost.

I am tired.

Let alone ZW. Wheat has been falling for months and months, while the other related markets haven't fallen anywhere near as much.

I am really fed up with being abused unfairly by the markets, who do not behave according to my expectations.

Once and for all:

ZW has to rise, big time.
JPY and GBP have to rise, big time.

GBL has to fall, big time.

Gods of the markets, please, see to it.

 

[Yamato]

I am sad, about this that I am. About this that I am doing. This addiction, this erratic behavior.

I am sad to not be in control of myself at all times. Boredom, greed, other feelings take over and control my behavior. It doesn't just happen with trading, but this is where you pay it the most dearly.

I am sad. It's useless to say "from now on never again". It'll happen again.

Well, at least I've cut down on the contracts and now I only have 2 contracts per currency, and 1 contract on the others. But still, no stoplosses whatsoever.

I hope I'll stop this frantic compulsive gambling. I don't mind discretionary trading in a market like GBL, when it has reached stoplosslessness conditions.

Other than that, I am said about my persevering on JPY and GBP, and seeking a bottom, that, even if it happens, I won't take advantage of, because I very quickly abandon the trade once I've been proven right.

All in all, the feeling is not anger. It is just sadness, for being the way that I am, for being several persons at once, for being controlled by feelings that I cannot forecast, and that now I can forecast, but that I still cannot control. I cannot even control being outside my house. I can do it for a week, but I get tired, dude. I get totally tired of being away from home until 21.00. I can't ****ing do it anymore. I am sick and tired of being outside all these hours. One week was enough.

Ever since reaching 30k, I've been spiraling out of control with my compulsive gambling.

I wish... I wish I could just reach 40k next week and put it all away for a while, at least for two weeks. I know I can set trading aside for a couple of weeks, but first I want to reach 40k so I feel good about having tampered. Otherwise, if I stopped now, I'd feel like an idiot.

Hopefully I'll close my trades on Monday evening, with a profit of 5000... it would be fine. I'd be content with reaching 35k.

All I need is JPY 100 ticks up, 2500 dollars made.
GBP 100 ticks up, 1200 dollars made.
ZW 20 points up, 1000 dollars made.

Maybe a few hundreds from the GBL trade, which I'd leave open, because that market is awesome right now. Wait, if I make 500 euros on it, I'll definitely close it, at 142sh.

Basically I just need very normal things to happen: markets that are heavily oversold - mother ****ing GBP and JPY - need to bounce, will you ****ing get it into your heads? You're not supposed to just keep falling and falling. I am not talking about reversing altogether. All I ask for, is that you bounce a little bit.

 

[bbmac]

Probably part of the reason for the 'compulsion' re your discretionary trading is that you cannot readily define your discretionary trading egde and judging by your posts you almost certainly can't define the risk and money management you use - optimised to the historical metrics oif that edge, to trade it...this leads to somewhat arbitrary/knee-jerk trading decisions even within this overall 'discretionary' context. Discretionary should really only mean ' not automated, ' ie you physically have to place and manage the trades. Like I posted before - I think to some extent you like the ' seat of the pants ' ride that your discretionary activity gives you but probably more accurately it seems - if your last post is anything to go by - it is a love/hate relationship with it.

The concepts of over bought or over sold are the very essence of trending markets - ie markets that are trending up are over bought and trending down are over sold - these terms are often used in trading - but are abstract technical concepts really as no one can readilly define what they mean and there exists no accepted defintion of them.

G/L

 

[Yamato]

Replying as I read.

Correct, I do not have a defined profitable strategy. I might be profitable, but I don't know what I am doing. However, when it comes to the systems, I do have a defined profitable strategy and risk/money management, but they do not make money fast enough for me.

Regarding "Discretionary should really only mean ' not automated, ' ie you physically have to place and manage the trades", I don't know if everyone would agree with you. I don't believe there are many profitable discretionary traders who could tell you 100% of what they do.

Yes, I agree on love/hate relationship, and "ride" remarks.

Yes, I know that overbought and oversold are debatable.

 

[bbmac]

Agree re diference between your automated trading and your discretionary trading.

Any type of trading should be boring - but your discretionary trading is not (occassionally your automated trading is/has not been either - when you have enabled too may contracts to be traded and thus increased drawdown [realised or unrealised] / equity curve swings.) We discssed in a post above about wether you use the discretionary trading both as a counter balance to the disappointing automated trading results and as a form of entertainment in what you consider an otherwise dull life. For this activity to 'entertain' you - you have to have wild fluctuations in the quity curve and the possibility of the 'jackpot, ' which is how you 'play' it - it is no coincidence. The market is no place to seek kicks. As a contrast to that I am a discretionary trader and I can define my edge- but my trading is boring with few exceptions and they are not because I have overleveraged or am in deep drawdown or am 'flying by the seta of my pants' - I get excited by a strong/definite move - such as that caused by U.s NFP yesterday (particularly when I am involved and on the right side of it lol.)

I also wonder to what extent you want yourself to fail / are afraid of success...this is a common psychological condition....you use phrases like '..if only x would happen...I would change my behaviour to y...' mainly referring to if you could get out of a period of drawdown/unrealised drawdown on open trades or minimise such to an acceptable level relative to how bad it might have been, or indeed if your account would hit a new equity high - you would stop doing this or that with regard to what you consider (and rightly so) to be compulsive/reckless discretionary trading...and then ....you seem to do everything you can to ensure that y does not happen - because of course if it did - you might indeed have to change your behaviour and this would diminish the thrill of the ride and make the trading activity more boring.

Post numbers 3006 and 3008 above show to a large extent how you hide behind what you consider to be multiple personalities at play in your discretionary trading blaming them for your erratic trading activities. Apart fromn being an easy cop out and lazy - this again re-enforces the idea that you might be afraid of success for the reasons stated above. You make half hearted and short lived efforts to get control over your discretionary trading and this again points this way.

You really shouldn't fear 'success' if you measure it as making a consistent reliable income from your trading activity such that yuou can live off it (this you have often discussed as the 'aim/goal' in your successive journals,) - because the simple truth you will already know is that you are a million miles away from that. The automated trading results are very disappointing and have long periods of drawdown and have not been reliable enough to fulfiull this definition. (On a seperate point but related to this is that in some senses you are still discretionarily auto trading in that you mess with the money management and when/when not to trade the automated systems (we have discussed this at length in My Journal 2.) Your discretionary trading is erratic and based on no definable edge/optimised money management and as stated is in some ways a response to the disappointment of the auto trading results. It too does not fulfill this defintion. So long as you seek your entertainment from the markets - this will likely continue.

It is not inconceivable that it is beyond the wit of a man of your obvious ability/intelligence to get a grip on your trading activities such that they give you the best chance of success and long term success - howsoever you may define that - This of course assumes that you really want to - because the evidence suggests that you may think you do - but actually - you may not ?

G/L

 

[barjon]

Agree re diference between your automated trading and your discretionary trading.

Any type of trading should be boring - but your discretionary trading is not (occassionally your automated trading is/has not been either - when you have enabled too may contracts to be traded and thus increased drawdown [realised or unrealised] / equity curve swings.) We discssed in a post above about wether you use the discretionary trading both as a counter balance to the disappointing automated trading results and as a form of entertainment in what you consider an otherwise dull life. For this activity to 'entertain' you - you have to have wild fluctuations in the quity curve and the possibility of the 'jackpot, ' which is how you 'play' it - it is no coincidence. The market is no place to seek kicks. As a contrast to that I am a discretionary trader and I can define my edge- but my trading is boring with few exceptions and they are not because I have overleveraged or am in deep drawdown or am 'flying by the seta of my pants' - I get excited by a strong/definite move - such as that caused by U.s NFP yesterday (particularly when I am involved and on the right side of it lol.)

I also wonder to what extent you want yourself to fail / are afraid of success...this is a common psychological condition....you use phrases like '..if only x would happen...I would change my behaviour to y...' mainly referring to if you could get out of a period of drawdown/unrealised drawdown on open trades or minimise such to an acceptable level relative to how bad it might have been, or indeed if your account would hit a new equity high - you would stop doing this or that with regard to what you consider (and rightly so) to be compulsive/reckless discretionary trading...and then ....you seem to do everything you can to ensure that y does not happen - because of course if it did - you might indeed have to change your behaviour and this would diminish the thrill of the ride and make the trading activity more boring.

Post numbers 3006 and 3008 above show to a large extent how you hide behind what you consider to be multiple personalities at play in your discretionary trading blaming them for your erratic trading activities. Apart fromn being an easy cop out and lazy - this again re-enforces the idea that you might be afraid of success for the reasons stated above. You make half hearted and short lived efforts to get control over your discretionary trading and this again points this way.

You really shouldn't fear 'success' if you measure it as making a consistent reliable income from your trading activity such that yuou can live off it (this you have often discussed as the 'aim/goal' in your successive journals,) - because the simple truth you will already know is that you are a million miles away from that. The automated trading results are very disappointing and have long periods of drawdown and have not been reliable enough to fulfiull this definition. (On a seperate point but related to this is that in some senses you are still discretionarily auto trading in that you mess with the money management and when/when not to trade the automated systems (we have discussed this at length in My Journal 2.) Your discretionary trading is erratic and based on no definable edge/optimised money management and as stated is in some ways a response to the disappointment of the auto trading results. It too does not fulfill this defintion. So long as you seek your entertainment from the markets - this will likely continue.

It is not inconceivable that it is beyond the wit of a man of your obvious ability/intelligence to get a grip on your trading activities such that they give you the best chance of success and long term success - howsoever you may define that - This of course assumes that you really want to - because the evidence suggests that you may think you do - but actually - you may not ?

G/L

travis

I always follow your journey with interest and I hope you will excuse me butting in after this somewhat harsh, but realistically thought provoking, piece by bbmac.

What comes over to me is an almost pathological hatred of losing, which seems a much stronger element than your desire to win. Your reaction to losing is generally to throw more money at it on the basis of the telling comment in your post 2993:

"How did I get to lose 8000 dollars on GBL?

I didn't lose them: the position on GBL is still open"


If that is right it's probably so deep set in your make up that you can't do much about it. You'll likely never feel comfortable about taking a loss unless you can find some "feel good" factor that allows you to pat yourself on the back for taking one.

Again, excuse the butting in.

jon

 

[Yamato]

Agree re diference between your automated trading and your discretionary trading.

Any type of trading should be boring - but your discretionary trading is not (occassionally your automated trading is/has not been either - when you have enabled too may contracts to be traded and thus increased drawdown [realised or unrealised] / equity curve swings.) We discssed in a post above about wether you use the discretionary trading both as a counter balance to the disappointing automated trading results and as a form of entertainment in what you consider an otherwise dull life. For this activity to 'entertain' you - you have to have wild fluctuations in the quity curve and the possibility of the 'jackpot, ' which is how you 'play' it - it is no coincidence. The market is no place to seek kicks. As a contrast to that I am a discretionary trader and I can define my edge- but my trading is boring with few exceptions and they are not because I have overleveraged or am in deep drawdown or am 'flying by the seta of my pants' - I get excited by a strong/definite move - such as that caused by U.s NFP yesterday (particularly when I am involved and on the right side of it lol.)

I also wonder to what extent you want yourself to fail / are afraid of success...this is a common psychological condition....you use phrases like '..if only x would happen...I would change my behaviour to y...' mainly referring to if you could get out of a period of drawdown/unrealised drawdown on open trades or minimise such to an acceptable level relative to how bad it might have been, or indeed if your account would hit a new equity high - you would stop doing this or that with regard to what you consider (and rightly so) to be compulsive/reckless discretionary trading...and then ....you seem to do everything you can to ensure that y does not happen - because of course if it did - you might indeed have to change your behaviour and this would diminish the thrill of the ride and make the trading activity more boring.

Post numbers 3006 and 3008 above show to a large extent how you hide behind what you consider to be multiple personalities at play in your discretionary trading blaming them for your erratic trading activities. Apart fromn being an easy cop out and lazy - this again re-enforces the idea that you might be afraid of success for the reasons stated above. You make half hearted and short lived efforts to get control over your discretionary trading and this again points this way.

You really shouldn't fear 'success' if you measure it as making a consistent reliable income from your trading activity such that yuou can live off it (this you have often discussed as the 'aim/goal' in your successive journals,) - because the simple truth you will already know is that you are a million miles away from that. The automated trading results are very disappointing and have long periods of drawdown and have not been reliable enough to fulfiull this definition. (On a seperate point but related to this is that in some senses you are still discretionarily auto trading in that you mess with the money management and when/when not to trade the automated systems (we have discussed this at length in My Journal 2.) Your discretionary trading is erratic and based on no definable edge/optimised money management and as stated is in some ways a response to the disappointment of the auto trading results. It too does not fulfill this defintion. So long as you seek your entertainment from the markets - this will likely continue.

It is not inconceivable that it is beyond the wit of a man of your obvious ability/intelligence to get a grip on your trading activities such that they give you the best chance of success and long term success - howsoever you may define that - This of course assumes that you really want to - because the evidence suggests that you may think you do - but actually - you may not ?

G/L

Replying as I read.

"Any type of trading should be boring - but your discretionary trading is not": very concise and powerful point and it will make me think.

Thanks for letting us learn more about your trading and the emotions you experience.


Yes, big dilemma of the boring nature of trading, as you write and I do admit that I love trading and I enjoy very very much making money with it. I definitely seek the thrill of being right, and of making money. I don't know which one thrill I seek/need more.

"...how you hide behind what you consider to be multiple personalities at play in your discretionary trading blaming them for your erratic trading activities": very interesting point of view, because my analysis seemed to be a good summary of the situation, but as I've pointed out before, an explanation that sounds great doesn't always mean that it's correct.

In a similar way, an explanation that always sounded good to me is that "i am afraid of success", as you suggest might be the case. However, this could be simply an excuse to justify my losses, and not admit that I am simply not a profitable trader. You know, it is very easy and appealing to someone like me who wants to be right all the time, to say "when I am right, it's because I am a genius, and when I am wrong it is because I am afraid of success and I was wrong on purpose". Very very appealing, so probably it is not the case.

Wow, damn. Not again. "a million miles away" and "the automated trading results are very disappointing and have long periods of drawdown and have not been reliable enough to fulfiull this definition"... this is your usual way, after years of arguments, of slipping in some poison with the other reasonable remarks. I think you really have a problem with my systems, or my being an automated trader. You really overdo it and do not describe the reality of things - which is that my systems are profitable, although not as profitable in the future as they are in the past.

I am going to skip the rest of your post, because I don't want to get into more arguments with you regarding my systems, given the past arguments we've had. From now on, when you write a post where you slip in poison against my systems, please label it with a warning. You definitely have a personal war on my systems, that's been ongoing for years. Whenever I relax, you bite again, with your poisonous posts against my systems.

 

[Yamato]

travis

I always follow your journey with interest and I hope you will excuse me butting in after this somewhat harsh, but realistically thought provoking, piece by bbmac.

What comes over to me is an almost pathological hatred of losing, which seems a much stronger element than your desire to win. Your reaction to losing is generally to throw more money at it on the basis of the telling comment in your post 2993:

"How did I get to lose 8000 dollars on GBL?

I didn't lose them: the position on GBL is still open"


If that is right it's probably so deep set in your make up that you can't do much about it. You'll likely never feel comfortable about taking a loss unless you can find some "feel good" factor that allows you to pat yourself on the back for taking one.

Again, excuse the butting in.

jon

Well, this is in fact a very pleasant post compared to the previous one, so thanks for getting my mind off of it. Ok, then let's also add that I agree with you. The biggest problem seems to be taking a loss. Thanks for the feedback.

 

[Yamato]

I picked up this book again: "Jack D Schwager - The Market Wizards.pdf". I am not going to read it, but I'll use the search function to find something on "money management". Just out of curiosity, after a reader told me to read it again.

Page 32, Bruce Kovner:

Do the losses bother you at all anymore?
The only thing that disturbs me is poor money management. Every so often, I take a loss that is significantly too large. But I never had a lot of difficulty with the process of losing money, as long as losses were the outcome of sound trading techniques. Lifting the short side of the July/November soybean spread was an example that scared me. I learned a lot about risk control from that experience. But as a day-in, day-out process, taking losses does not bother me.

Page 33, Bruce Kovner:

What other mistakes did you make that year?
My money management was poor. I had too many correlated trades.

Page 36, comment by Schwager:

One statement by Kovner, which made a particularly strong impression on me, concerned his approach in placing stops: "I place my stop at a point that is too far away or too difficult to reach easily." In this manner, Kovner maximizes the chances that he will not be stopped out of a trade that proves correct, while at the same time maintaining rigid money management discipline.

Paul Tudor Jones, page 52:

So everyone who was with you for a long time was still ahead of the game?
Yes, but I had to suffer some intense drawdowns during the interim. That cotton trade was almost the deal-breaker for me. It was at that point that I said, "Mr. Stupid, why risk everything on one trade? Why not make your life a pursuit of happiness rather than pain?"

That was when I first decided I had to learn discipline and money management. It was a cathartic experience for me, in the sense that I went to the edge, questioned my very ability as a trader, and decided that I was not going to quit. I was determined to come back and fight. I decided that I was going to become very disciplined and businesslike about my trading.

Ed Seykota, page 64:

Without divulging trade secrets, how have you been able to so spectacularly outperform standard trend-following systems?
The key to long-term survival and prosperity has a lot to do with the money management techniques incorporated into the technical system. There are old traders and there are bold traders, but there are very few old, bold traders.

Marty Schwartz, page 105:

Is there anything to add to that list?
The most important thing is money management, money management, money management. Anybody who is successful will tell you the same thing.
The one area that I am constantly trying to improve on is to let my gains ran. I'm not able to do that well. I'm always working on it. To my dying day, I'll probably still be working on it.

Yeah, I am done. It wasn't worth reading the whole thing all over again.

Dude, I know these principles. But if I feel special, if I feel that I am blessed by the gods, if I feel that I am infallible, then I am not going to apply them. Maybe that's the problem. But too many times I've said "I nailed it". It must be a mix of all the explanations I have listed.

For those who dared to misrepresent and insult my systems, I am still holding a grudge and will be holding a grudge for weeks. Careful what you post. This method of giving good peaceful advice and then, suddenly, berating unfairly, sadistically, and in bad faith, my systems, that are still profitable (although not as profitable as I'd like them to be), this way of acting reminds me a quote from Scarface:
You turn your back on him, he'll stick it in | Scarface quotes

01:10:44 Let me tell you something about that greaseball cocksucker.
01:10:48 He is a snake, that's what he is.
01:10:53 You turn your back on him, he'll stick it in.
01:10:57 You don't trust a guy like that.

Think-Big from Scarface | Anyclip

Let's just say that I've been bitten again, like two years ago, after relaxing and turning my back. I'll be alert now, and I'll definitely hold a grudge.

 

[Adamus]

Since other people are throwing their hats into the ring with their solutions, I figured I would do the same, especially if it helps defuse the after-taste you have from bbmac's message. The guy is presumably as human as the rest of us and I think he probably did a great job in holding himself back from saying a lot of stuff he could have said. It's often a frustrating experience reading your journal, wondering why on earth you don't do x, y or z to put things right. It takes a big step back to realise that you're not me, and in fact you are so very not me that my x, y and z would be either impossible or inconceivable for you.

Anyway, the discussion of the joys of internet forums aside, I just wanted to say I continue to read your posts with great interest to see whether you 'make it', and if so, how you pull it off, knowing your history and experience from your journals 1, 2 and 3.

I believe you have the ability to be a successful discretionary trader and a successful systems trader and even both at the same time. I am also sure you know more than you need to know already. The only problem is, you can't implement what you know because of the emotions.

I discovered through my systems trading and later my discretionary trader, neither sustainable unfortunately, that my problems were all emotional. I'm convinced I'm in the top 5% intellectually and you probably are too. However it's not intellect that makes good traders. It's emotional management, making the right choices at the right time. All of us on this forum here can tell in hindsight what that was, but actually doing that in real time is something else.

While you have spent a lot of your time concentrating on money management, I have spent mine concentrating on emotional management. I'm training myself to be able to make the decisions I know I have to make.

Let me try to sum up really briefly what I learned.

The human is very emotional. So emotional in fact that you can't make decent intellectual decisions about your life (about reality, not just theory) without using your emotions. Your subconscious brain scans all the incoming stimuli and thoughts, ideas and events and sifts through it all and can then tell you via emotions (a good feeling or a bad feeling) when you are standing at the point of decision.

However, this ability is something that evolved only recently in humans and is not perfect - there are several major flaws in the subconscious mind. So sometimes you can really trust your emotions, and in other situations you shouldn't trust your emotions. The professional trader has to know which situation is which and go with his/her gut feelings when appropriate, and completely override them when appropriate.

Looking at a chart and just 'knowing' that it is going to bounce is an emotion.

So is the desire to close a profitable trade to book the profit (good feeling) and the desire never to close a losing trade because of the bad feelings that come with booking a loss (i.e. most failing traders let their losses run and cut their profits short).

There are tons of further examples.

The difficult bit is to be able to use the rational mind to step in when the unhelpful emotions turn up. Many people assume that this is too hard. However research shows that it can be done by anyone, unless your dorsolateral prefrontal cortex is damaged. There was a famous piece of psychological research done by researchers at Stanford University called the 'marshmallow test'. They got hold of a bunch of 4 year olds, said to each one, you can have a marshmallow now, or you can have two marshmallows when I get back from my errand. The researcher put a marshmallow on a plate in front of the kid and told the kid that if the marshmallow was still there when he got back, then there'd be a second marshmallow reward. These kids were four years old, so all the mental strength of a toddler.

Some kids lasted the whole 15 mins and got the reward. Some kids ate the marshmallow straight away despite saying they wanted to wait for the 2nd one. Follow-up studies showed that the ones who could restrain themselves went on to do really well, while the others were more likely to develop drug dependency or get into crime in their teenage years.

By the way, you rarely post your trades anymore. We are lucky if you say whether you went long or short. Sometimes I'd like to analyse your bounce trades to see whether I would have taken them as well.

I could ramble on but I suspect you will refer me to a previous post where you already give your opinion on this emotional/psychological issue.

Enjoy your Sunday. Let's hope the new pope they choose is a good one - if at all possible.