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Been "trading" three years...


Hi Everyone! :-)
been trading for three years E-minis (YM, NQ).
Started with sim, then live, then sim again, then live and so on.
Good news is, I didnt loose a lot of money.
I studied lots of books about trading psychology, analyses, positive thinking, etc.
I consider myself as a very disciplined and positive person.
But I noticed something and I would like to know your opinion.

Every of my strategies worked for maximum one or two months. I always adapted the volatility or current "mood" of market, but it didn´t help.
But after few weeks, I always ended up on B/E or worse.

I discovered that some of my internet friends on forum, who claimed to be full time traders, have got trading web pages, when they offer mentoring to trade and selling trading books and strategies.
It seems that there are just two groups of traders:
1) guys who make money by selling books and "know hows" and do not trade.
2) guys who loose money by trying to trade by those books and know hows.

It is quite dissapointing not to make any money after three years of keen studying. So my final question is:

Is there around the world a guy, who makes money of trading from home?
Because I think I tried everything (trend line breaks, moving averages, triangles, flags, etc.) and nothing worked...

Bless you, Sanderson
Here's an example ... As I type ES is at a key area 1402.25 .. I think a big boy or two may be watching this area .. also the 1398.75 area
Originally posted by redsixspeed

Here's an example ... As I type ES is at a key area 1402.25 .. I think a big boy or two may be watching this area .. also the 1398.75 area

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HOD 1402.75
Originally posted by redsixspeed

Here's an example ... As I type ES is at a key area 1402.25 .. I think a big boy or two may be watching this area .. also the 1398.75 area

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ES has been at that 1402 area since my post from 8/29. I thought the # was important but I calculate everyday and get different #s, not the last couple of days though.
ES also weekly closed above that area.
ok, here is my last post in this topic. Someone has been trading three years as the topic states.

I am in a room with a bunch of ego boyz they like to talk in riddle. So they talk about algos and laugh cuz some of us are dumb ya know. As they talk I watch my levels when they post "its algo time" or "buy program here". I noticed the level the market was at each time. Now I no longer care when they make those post cuz I know the levels.

So it is possible to find the big boyz, just play dumb ...



Originally posted by Sanderson

Guys, I am surprised...
More then 166 reads and nobody wrote something like "Hey, I am a full-time trader using just technical analyse, it works!"
This makes me feel like I really spent three years of learning averages, breakouts, etc in vain:-(
I am showing you chart from yesterday...it might help to get some more reactions from you guys:-)

Click image for original size
expect



I am trading the probabilities (2 fully automated systems) ... slightly better than BE, but this is much tougher than I ever thought.

WRT your chart, I would argue that your losses are less than the 1-min ATR ... how do you expect this to work, if you keep your stops in the noise-band?

Also, a good number of those trades are taken in the middle of a trading range. This is where you should be exiting trades entered at the extreme of the range.

Your last BUY break-even is a shame. Glancing at the chart it was up 20-ticks, nearing the upper part of that trading range, you should be already out or have a much tighter trailing stop.


You have tried everything - you say. Now it's time for you to pick ONE poison, and stick with it until YOU make it work.

But did you really try everything? Have you ever looked at other markets? Market Profile? Elliott Wave?

I am a big believer in backtesting. That will easily show you most "setups" are no better than random entries. That could help you find proper trade management rules, even starting from random or pseudo-random entries (just ignore the P&L in absolute value, and focus on P&L variations as you test different trade management options - do that on several thousand trades).

Get Ninja or Multichart, buy 10-years of tick-data history for 5 to 10 markets, roll-up your sleeves!
Sanderson,

I think you will find that pattern of setups working only for a few months repeating itself until you come to the conclusion that one setup is not any better or worse than the other. And it sounds like that may be where you are now. The important thing is where do you go form here. If you are like most you will probably quit from either conclusion or coercion. Conclusion meaning you decide that this just doesn't work and coercion meaning you run out of money or some other factor (an angry spouse for example)forces you to quit.

The Traders that do end up being successful all seem to have one thing in common. They have taken a style of trading and made it their own. How or when this will happen for you I can't say as this is something that happens on a very personal level and everyone is unique.

Don't begrudge the strategies you have learned so far as they may play a significant part in what ultimately becomes your own unique style and method.

Dom993 made a great point when he said to focus on testing trade management. I too am a big believer in this. My philosophy is that there is much too much emphasis placed on trade setups. A trade only has two potential outcomes, either it will work or it won't. However you can apply an almost infinite number of trade management techniques to that very same trade. If we say a trade did not work what do we mean? Did it not work at all or could it have worked if we traded it differently. Just to give an example, if I am expecting a 2 point profit from a trade but it only delivered one point then turned around and stopped me out I could say that was a failed trade, but the same trade was a winner for the trader(s) that were expecting 1 point, 3 ticks, 2 ticks, 1 tick of profit.

Something that really helped me was to design my trade management to where roughly half of my losing trades are in fact small winners meaning that even though the trade didn't go the way I thought it would I still ended up 10, 20 or 50 bucks up. This also helped me with the psychological aspects of trading. The trade off of course is less big winners but to me it is worth it.

My advice to you would be to stop looking for trade setups that work and start finding ways to make them work. This will get you to look at trading in a whole different light. Start with something simple because again it really doesn't matter any trade only has two outcomes you can't change that all you can change is how you trade it.

I'll give you an example of something I did but that doesn't mean it will work for you remember everyone is unique.

I had noticed that on a particular trade setup (a simple breakout) that the initial push was usually 3 ticks the second push was typically at least 2 ticks so I adjusted my trade management accordingly. I also realized that if the initial push was not 3 ticks then the probability of the trade working was reduced therefore I learned to exit as best and fast as I could. If the trade did work I still had a runner to play with and that's a whole another study to do on finding the best trade management on runners.

The important thing to find out here is not how often you had winning trades but how did you manage the losing ones. I said earlier that there is only two outcomes to a trade either it will work or it won't. To take that a step further there are 4 possibilities for those two outcomes. You can either have a big winner or a small winner, a big loser or a small loser. If you can avoid just one of those possibilities you can achieve great success in trading.

How exactly you will take a trade setup and make it work I can't tell you, that is something that you will have to work on and figure out for yourself, but I can tell you that once you do you will be able to look at trading in a whole new way and then be able to look at other setups and figure out how to make them work for you as well(not necessarily using the same methods).

Last words: Congratulations on trading for 3 years and not losing a lot of money. Not too many people can say that.
Sanderson,

I feel your pain.

Looking at your chart, I have a few observations. (I do not trade such a short timeframe but the thoughts/concepts are still valid)

Your 1st sell was near a bottom area. I would have been going long 2 candles later on the higher high back to the swing high congestion 13326-13330 area.

Your next sell- then- buy appear to be in the "middle" to me. I don't see any reason to dabble there.

Next sell is also middle-bottom.

Next buy was too late for me. I would have taken the signal 7 candles sooner as a higher high was made after testing the swing low (entry of my 1st trade) target would be back to the swing high 120s.

When that swing high failed, it could have been a signal to go short around 116 going down to the swing lows 090s.

I would suggest, losing the trend lines and just let what price is doing "wash over" you until reading price action comes to you.

Reading the price action is really not difficult, it's getting the mindset to "allow" it to click.

I don't know how to turn that switch on, it just happened for me and I hope it does for you.

Best of luck.
Dom993
Hi, I do not share much your enthusiasm for backtesting, but I will make a note of this line of yours:
"Now it's time for you to pick ONE poison, and stick with it until YOU make it work."
Cheers, S.
myptofvu
Hi, thanks for quite a long comment..appreciate that...

"The Traders that do end up being successful all seem to have one thing in common. They have taken a style of trading and made it their own. How or when this will happen for you I can't say as this is something that happens on a very personal level and everyone is unique."

How long did take to You if I may ask?

I also will check out the trade management you mentioned as I feel that this could be really important.
I completely understand that is not about showing the trading setup and I would not ask for it as I know that what works for You, does not have to work for me and vice versa.

"Last words: Congratulations on trading for 3 years and not losing a lot of money. Not too many people can say that."

Thanks for this, I have never seen it that way...
Big Mike,
thanks for your observation about my chart, but I got more curious about one of your lines:

"I would suggest, losing the trend lines and just let what price is doing "wash over" you until reading price action comes to you."

After how many years (or months, if You got lucky-) ) did it come to You?

S.
Originally posted by Sanderson

BeyondMP:

"What, in your opinion, is the single most important factor needed for a trade to be successful?"

I had to think about this question the whole day to be honest. I figured out lots of answers - I do not know if this is what you expected me to write, but I would answer your question this way.

For a trade to be successful is important to follow the rules of the strategy. It depends of trader´s expectations - for one trader a small profit is enough so he takes few bucks and the trade is successful. Another trader aims higher and therefore he can end up on SL or B/E without the success. So I would say the most important factor is expectation.

Sorry if I am completely wrong with the answer:-)

Sanderson


I won't judge your answer. However, I will offer mine.

I will quote a nearly 100 year old book, since I think Richard D. Wycoff said it best in "The Day Trader's Bible" originally published in 1919. By the way, when you read his book you find out that all the books about trading that follow his, simply, repeat the same concepts he put forth(not the method but the concepts).

He defined a Day Trader: "as one who follows the immediate trend. This means that he pursues the line of least resistance. He goes with the market--he does not buck it."

My answer is-

The market must move in the direction of your trade for it to be successful, plain and simple.

Most TA traders act, as if, TA is the cause of market movement. TA is just a reporting method, not the cause. So, to elevate your trading from just hope for movement, you need to understand the forces that move your particular market.

This is not as difficult as it might seem. I will give you a simple example from the current market. Yesterday, we saw major movement after the Fed's statement. Observers of the indices know the pattern of movement after a major Fed announcement. There is always a 3 pulse move, the direction of the first move(up-yesterday) is the direction of the third pulse. So, you saw the first move up, waited for the pullback, then entered your trade. It didn't matter what method of trading you were using, the results would have been the same, a move up.

Again, this is a very simple example. However, there are identifiable "causes" that can be observed and used in intraday index trading. And, remember, watch the market movement after you enter, let it tell you what to do, not your TA. Or, some preconceived action that may or may not be the correct one.