This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
Begin Depressive Rant
I’m referring to you, Mr. “You Suck and I Hope You Fail”. Your analysis was correct, and you got your wish. I’ve thrown away all of my prop trading gains and I’m down a bit besides. I am a terrible trader, and I’ve failed. I’m out of control, and I keep throwing money away with bad trades, time after time. I lost all 6% from last month and then a bit more over the last two days, and I’m now underwater. I can’t make money trading, but I sure can lose money. I’m just not cut out for this, apparently. I love it and want to succeed more than anything, but I have to face it–I’m just no good. I’ve been trying for two years now and if I don’t have it by now I’m not going to get it. I’m going to quit before I blow up my account. I’ve “kept swinging” all the way down from my 30% return peak, which was obviously a fluke. “Fooled by Randomness”, eat your heart out.
I’m discouraged beyond belief. I hate my job, and was really hoping to do well with the Prop trading so I could put more capital to use and go full time, but that dream’s gone. I admire all the profitable, disciplined traders out there that have tried to teach me over the years, and I’m sorry I’ve wasted your time with my questions. I wish everybody luck and success in their trading.
End Depressive Rant
So I’ve vented and chilled, and I don’t want to give up, but what I’m doing isn’t working. I’m not trading until I work something out, but I’ll be back. Thanks for the comments.
This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
September 5th, 2007 at 2:06 pm
Prospectus, many traders, including all of us, have gone through what you are going through. The self-doubt, the feeling of failure, etc, before finally starting on the path of consistent profitability. The problem (and our apologies in advance if you are offended) is not that you’re “no good” or not “cut out for this” but rather it looks like you don’t have a system. You jump from one methodology to another, from dummy trading, to trying to scalp parabolic moves (which we feel has got to be the most difficult systems– we have been doing this for almost a decade and wouldn’t try it, much less recommend to new traders). You don’t suck, you just need a system. After you find a system, just stick with it and become better at it. Your energies now should focus simply on that — what kind of trading do I want to do? A scalper? Futures? Swing-trading? Momentum break-outs? etc. Jumping from one system to another before giving the first system a chance to work, is probably one of the most common reasons new traders blow their accts and give up. If you love trading, give it a chance, but master one system. Easier said than done of course, but completely doable. Good luck.
September 5th, 2007 at 2:49 pm
Prospectus… you obviously did something very right to be up 30% or so not so long ago. You should really take a look at those great trades and see what you can take out of them. I know prop trading has allowed you to trade more… but sometimes trading more might not always be the best thing.
I can’t comment on your system because I frankly don’t know it too well, but I do know the frustration you’re feeling right now. Just remember that you do have a day job (even if you hate it) and that gives you the financial flexibility to take some time off from trading and really work on your system. If trading truly is your passion… you just can’t throw that away. You see how others can make a living out of it. Don’t throw it all away because you’re having a tough time. You’re about breakeven right now since you started with the prop firm… it could be a helluva lot worse.
If there’s anything I can do to help… you know where to find me. Best of luck and I’m sorry you’re having a difficult time.
September 5th, 2007 at 2:50 pm
maybe it wasn’t 30%… but you were up big.
September 5th, 2007 at 3:02 pm
take HCPG and OONR7’s advice! they have been there, and are profitable now
September 5th, 2007 at 3:12 pm
Thanks, guys.
HCPG, I think you’re right, and I’ve been too scattered in my focus. I’m familiar with a lot of setups, and that’s been my answer to the crazy conditions over the last few weeks. This was the wrong answer, obviously. I used to be focused on Trader-X breakouts, but I stopped having success with them last Feb after the big market correction. Must be all the volatility, but they don’t seem to go to the Fib extension anymore. Maybe that’s just me missing the best ones, but that’s my experience. I need to pick one system and trade it exclusively, but it has to be a system that is well suited to the current market conditions, or else I’ll just keep throwing R’s away, only more systematically. I like dummy-style trading and fibs. I also like gaps, since they are easy to spot and are not subjective in the least.
00NR7, I really like your trading style, and I want to focus on following it going forward. I’m not going to trade live again until I’ve made +5R on paper following your system as close as I can. I’ll study your blog to get up to speed.
September 5th, 2007 at 3:16 pm
Prospectus-
The first two posts are spot on. It is in times such as this where the greatest learning occurs. This learning establishes a base for a successful trading career. Find something that you are good at now - looking at your 30% run up seems to fit :) - and become great at it. Know exactly when to jump into that type of trading. What type of environment was the market in when you experienced those gains? Once you have one strategy that is successful you can begin to experiment with new techniques. Paper trade, or start very small, in techniques which you are unfamiliar with and go from there. I think you’ll find that if you stick to what you know you are good at your account size will prosper.
September 5th, 2007 at 3:27 pm
glad you’re not giving it up.
September 5th, 2007 at 3:49 pm
Prospectus, the most important lesson Street Smack gave us was to master 15 minute charts first. I tried one of his setups with real money. I was successful. And then I stopped trading them. Know thyself is the most important monicker in this business. What/how have you traded in the past that gives you an advantage? Richard has become successful scalping from the onset. I believe he is the exception. Less commissions, time to look at the setup…..15 minute charts are perfect. 15 minute charts used to be too fast for me, so I traded 30 minute charts. 5 minute charts kick my ass EVERY time. I will get there…someday. But, for now, I am concentrating on gap 15 minute setups for close to 3 years now.
September 5th, 2007 at 3:55 pm
Prospectus,
It seems that you just need to focus on fewer set-ups instead of jumping from one system to another…when I was at point of giving up many years ago just like where you are now, a very wise trader advised me to go back to all my trades and remember which of these trades did I feel like I was most relaxed and calm (whether taking profit or cutting losses). And I found that I’m most relaxed when trading breakouts and chasing momentums…you need to find that trader inside you and trading will be more pleasurable
September 5th, 2007 at 4:27 pm
dude… ex engineer, stop day trading off the noise. Look for setups the night before, similar to what TAZ trader and Highchartpatterns do.
Look at the charts the night before, look for a breakout to a new high, or a retracement. Buy the follow-through using a stop-order with a profit target and a stop loss. You would still be “day trading” but using the daily charts.
The amount of noise in this market is incredible. Watching the daily chart during market hours (not the 15/30 minute chart, but literally the daily candles) shows me very clearly how difficult it is to day-trade this market these days. The signal-to-noise is very high.
September 5th, 2007 at 4:59 pm
I think you are being rash again. OONR7 has a great system, and I’ve taken a bunch of interest in it myself, but switching gears again is just that… switching gears again. The HCPG people have it exactly right: what kind of trading do you want to do? Pinoy’s giving one method of trying to figure that out, if you have sufficent notes or recall. Long ago in one of my articles I gave a similar suggestion, of keeping track of when you are not comfortable. Even if you prefer one of the harder styles to master, if it’s what you prefer then just focus on it until you get it. Like someone said, you have a dayjob so you’ve got plenty of time to figure things out.
I agree with you, I think, that your experience with CFC has given you a bad habit. The way CFC was moving back and forth several % at a time, going long and short at random would have yielded decent profits with tight stops. I think, since then, you have been eager to teach stocks a lesson when your first attempt is stopped out (like CAL and NVDA spring to mind). But CFC was an unusual situation.
You haven’t really been trying to trade in your current style for 2 years… you’re really just starting out in the full-fledged prop trader sense. I don’t know many beginners that can make ~200 trades in their first month and still break even. You’re going to be fine.
September 5th, 2007 at 5:28 pm
As per Jamie’s comment, eons ago, in a post forgotten because it conjured up too many painful memories, said it takes 3 years to become a proficient daytrader. If this was easy, there wouldn’t be any money in it. We go up against the smartest minds on Wall Street (I don’t beleive that but it turns my wife on) and try to make a living. I say again, track R’s, not money, and trade the chart with a timeframe that is most comfortable. Pinoy often trades 30 minute charts. I will bet the daily chart is not far away from his scan. In fact, I will bet my next male child.
September 6th, 2007 at 12:41 am
Just to empahsize what some have said, I don’t think it matters what system you use, as long as the system fits your style and temperment. There are hundreds of traders on the Net, all with their own type of system. Although a few are good enough to make money using anyones system, the vast majority of them would become money losers trying to use a system that doesn’t fit their personality. I have been experimenting lately with a style that uses options to hedge longer term positions. I am sure I am using options in the exact wrong way, according to options experts, but if it allows me the comfort to stay in a postion, and make money with it, then it works for me. Point is, you have to find YOUR system. You can take bits and pieces of other systems, but you have to make it your own, otherwise you will never fully be comfortable with it, and will constantly question it and fail to follow its rules. Just food for thought.
ADD
September 6th, 2007 at 5:25 am
bottomline: the system you use every day needs to make 100% sense to you… even if you’re the only one that understands it. I struggled for a very long time with X’s entries and his rationale… but little by little it started to sink in and then I started with intraday fib. lines which seemed to make all the sense in the world to me (at least from a results standpoint).
Frankly, what you’ve been doing got you to where you’re at right now. So, why not try something completely new???? I probably tried a hundred different ways to trade before getting to where I’m at. It’s all part of the experience of becoming a better trader. However, you have to understand a particular trading system before you truly start trading it. Heck, if you can mix a bit of my system, with Jamie’s, throw in a dash of Richard and a few cloves of Pinoy and make it work for you… and understand it then that’s what trading your own way is all about.
I remember when I first started blogging with Esto, I said that I really should be called Frankentrader because I’ve absorbed so many things from so many different traders out there.
September 19th, 2007 at 12:22 pm
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