DugDug

Hi Fx Girl - enjoy the red shoes. Re the QandA quote - I added it given that you clearly have some knowledge in the subject I would open it right up thats all..... As this whole question of discipline, emotions, how to get, how to handle etc; really does open up a can of worms and can be applied to the whole gammit of life's experiences eg; sports, work, trading..... regards the question - " was interested in the strategies you use to deal with the emotional stress of trading." I have traded a few styles to see what suits - from pure option market making, trend trading - short term scalping, fading breakouts, taking breakouts. Ultimately the conclusion I found is the obvious one - match the style to the personality of the trader. That makes dealing with the emotional issues far simpler and more natural to handle - as the style that makes sense and is easier to trust is the one that will be easiest to stick to when there a re inevitable losses. Remember (no matter what people say otherwise) the only way to make money trading is to be long the instruments that go up, and short the ones that go down. Then.... Much the same as Thalestrader - Practice, practice, practice. There was a great book about success by Malcolm Gladwell that summed it up nicely - to be successful at something practice at it. Clearly certain some innate inherited talent makes certain things easier/quicker but practice makes perfect. Certain other things that I think you need to have, and these can definitely be practised as well to reduce the stress of trading. ( I am sure FX girl might have some exercises for these - for me it just kind of seems natural, but I still sometimes need to remind myself, which is an exercise in itself.) 1) You have to love what you do. You need to be constantly looking to improve what you do, and view it as a challenge. If not reassess why you are doing it, and possibly change the aspects of the job that you hate. You might go to bed pissed off at your self, but you need to wake up every day thinking today is a new day - how can I make some good trades. 2) You have to be able to admit when you are wrong. You will make mistakes, accept it. Plan for what to do in your trading when this occurs. eg; get up walk away for a while, trade smaller, get drunk. whatever works. 3) If there is nothing to do as a trade, dont trade (or find some other outlet for your gambling tendencies - eg reading forums, or pick a liquid low volatility speculative instrument to get your fix, get drunk, play monopoly). 4) Get understanding - not just knowledge. Knowledge is found in a book, understanding is found through your own thoughts and processes - copying others just wont work. If you dont understand something then dont participate - first learn, then understand, then participate.

Hi BlueWolf - congratulations it looks like you are doing all the necessary things to start successfully trading. In terms of a couple of your questions. 1. Any recommended reading on price action/reaction to help me develop a good system? Start sticking to this forums threads - there is plenty of information here to start with. (read everything with a grain of salt as there is plenty of crap but if you take notes and actually treat it like a study you should be fine). 2. I am also overwhelmed with all the charting software out there. Whats your preference? Again there is plenty of info on this forum, but in summary - you will find that every system is different and suits different people. There is no substitute for trailing a few different systems with free trials and working out what suits you and what does not. systems include - esignal, Ninja trader, Multicharts, Sierra chart. Just before you continue though too far can I suggest that everytime you come across a new idea/system/thread re read and look at your trading plan.....part of it should deal with your personality and what you are like and that an extremely important part of successful trading is matching a system to the personality. Dont make the mistake of trying to copy someone elses if it does not suit you. Its a waste of precious time. good luck.

Q; are you automating your trading, or doing high volume/frequency trading? If not- why not just use a broker platform without any extra NT or other system. If so - then the only real answer is to get NT, see if it works for you and your strategy. Time spent actually using the system is the only way you are going to answer the question.

also noticed on Bloomberg this article - i have cut and paste it to word. China Prop article.doc

I only just stumbled across this one - interesting....I guess it shows that it takes all types to make a market. I pay no attention to fundamentals when actually executing and managing a trade, however I do have a a big picture macro type of viewpoint of the fundamentals when planning the trade. Just so that it makes sense.....does that make sense?

Interesting on a number of levels - business plan v trading plan From a Trading plan perspective I tend to agree - if you are running profits - depending on the style then ideally you should not have profit targets. Additionally as no one can predict the future then putting profit targets is kind of pointless. However - I do think profit targets (lets call them these even though they also may be seen as risk reward points, good/fair value areas, etc;) are important to have, as they help visualise the trade from a risk reward point of view. ie; if you have a price at 100 and you think it will only rally to 105 where you will take profits then having a stop at 90 and going long does not make a lot of sense - unless you are right a high percentage of the time. If you are talking about ROI and goals from a business point of view - again yes and no - Yes- Sevensa put it perfectly you need to know if the business is profitable and worthwhile to do. Sometimes it is just better to work for someone else. It all becomes about have a positive expected return that allows you to compound profits over the long term - otherwise making $X a day today is not going to allow you to really build on that if in ten years time you are still only making $X a day. No - no strategy works all the time and so you can force the market to conform to your budgets, so trying to stick to budgets as such can be detrimental. example;I have had years of not making any money (up, down, up, down) until October and then having 3 months to make enough for the year.....so long as I stuck to the strategy. On saying all this - I actually do both and its much the same as thalestrader (I love that name) - I have profit targets and stops to determine my position sizing and help visualise what the trade should look like, however while these help determine the position sizing, they are not necessarily the be all and end all, as I will stop myself out quickly and even reverse if it fits the plan and the market mood changes.

Its not very sunny in the world! Interesting as you really would have to see the make up of the buyers - my guess is that they are not going to live there - hence they are speculators - so yes another Dubai waiting to happen. However China does have about 1.3 billion more people than Dubai. I was actually in an investor conference re Dubai real estate early last year 2008. They were up selling everything, people were taking notes, the mood was very upbeat about future projections, rising prices, happy customers etc; stage one complete and sold, stage 2-3 underway, all very exciting, until silly old me asked the question "how many people are buying and flipping the places?". The answer was "no body is flipping them as they dont want to take losses!". the room fell silent. A rather unfortunate gaff on the promoters behalf :crap: I felt very proud of myself. :haha:

Kiwi summed it up nicely - you need to match the style or system. If you are Warren Buffett - Entries are clearly more important, as he never/rarely exits a trade. What about the systems that are always either long or short - then their exits are their entries and their entries are their exits. Personally I feel exits are more important as - there is only one entry, and two ways to exit either with a profit or a loss. On saying that I have done a little bit or research in some of my discretionary trades and realised that if I improved my timing on the entries a little bit (basically by being more patient) then the exits also improved. Go figure

Hi Steven - from my experience, if you want to trade a wide variety of instruments then IB is the one to use. (options, equities, FX, futures) They give a wide access to varying markets - you can even trade (if you are very careful) without needing a price feed as they will accept orders. eg; I occasionally do trades in a market that I dont need a price feed for I just enter my order to buy/sell at a particular price level and if it trades their its executed. I have tested this against the live market prices and the orders are entered and seen by a friend in his live time system. As Tams said their historical data while available quite frankly is not great to backtest on - as they dont put them selves out as a data provider - they are a broker. The API is pretty good into excel - you can export everything - orders, price data, account details, and send orders into the system from it. Their charting system is pretty bad and not worth it - unfortunately - because if they actually managed to incorporate everything in one system it would make life easier! Their client servicing is pretty bad - unless you are a big user - and they know it - again they say they are not their to hold hands, but provide a service. - fair enough.

Hi - one good thing about MC is that it takes many types of data feeds. I download historical data into it from Esignal, and use IB live data for any intraday charts. To manage this easily I just keep a few extra charts open. MC is very flexible in the regard of combining data feeds and data sources. Never had a problem with IB as a broker hence why I use them On saying that I dont trade automatically via any system so I cant help you there.

as requested - I am not sure of the strategy you are showing - you might need more explanations, as the charts look to have a lot of lines, but they dont mean much to me.

welcome aboard the most frustrating, rewarding, disagreeable time of your life Snitzer. hint number one: - delve in read all you like, explore, go crazy, test, try, win, loose.....but what ever you do ensure that you keep yourself grounded and do what makes sense to you - so long as its grounded in reality - otherwise you can easily get lost in the thrill of learning and searching for ways to dissect and understand the market, as opposed to just listening to it and letting it work for you.

Damn I thought I was going to win a prize - A cigar....however I dont smoke and I thought this was a discussion not a Q and A? Hell...., while we are going down this path lets make it one as part of the discussion to expand on it. Question from : "my suggestions aren’t about controlling emotion. They are about controlling behavior." Chicken or Egg - do emotions control/direct/influence behaviour? Is it easier to try and limit your emotions and hence require less behaviour control, OR let your emotions run wild and control your behaviour via other methods? Do your emotions become desensitised over time and hence need less behavioural controls? If so how can you fast track this? As an aside - I thought "people who don’t have emotions (due to brain injury) can’t make decisions", was more along the lines of they can make decisions (they are not necessarily in a vegetative state) but they are usually poor ones as they cant process the information in a manner most people would consider normal? Can a computer with no emotions still make decisions based on a set of rules? Can hypnotism really help out? Because we all know that everyone has different emotional responses to different things (and different degrees of reactions), and so clearly different controls work for different people........ Regardless of all of the above (either controlling emotions, controlling behaviour, let the little buggers run wild and free only to be corralled by a bloody big fence - or controller :rofl:) Isn't it the issue of -----how do you get and maintain trading discipline to even try and control a,b,c or all of the above? Otherwise - have a good break, and see you in the new year.

Hi, please find attached an excel spreadsheet with a few headings I use. I divide it up into strategies and instruments - as I follow a few in both categories. (please note: this is an example of headings only, I use this combined with a lot of macros to incorporate a a PL and testing system, so you cant have the whole thing) (As a suggestion if you know some macros - use a lot of cutting and pasting, OR tables to fill in the journal using default values. It keeps the thought process consistent, it also saves a lot of typing) Try google - Bedford Louise trading plan- which might help regards Trading plans, that seemed a good one from memory. Trading Journal example.xls

For long term investing I suggest looking at some Value Investing books - Browne - The Little book of Value Investing is a good start, then books by Benjamin Graham. One overall investing guidebook that just gives common sense hints is The Zurich axioms - (Gunter is the author I think) Combine this with some trading books to keep you thinking about entries and exits.

There are two ways to treat a trading plan one - like a business plan - beliefs, goals, etc; Do this first to set out goals and try and see if this actually then matches step two two - incorporating a trade journal as part of a daily plan. Show how you actually implement your strategy so that you can review the numbers. Ideally you should have both - but I would imagine the second (a daily plan) is the one that is hardest to maintain and hence requires the most thought and discipline.

Hi FX Girl, I think that we are talking the same thing, and that its actually a good point to distinguish between the idea of the emotions v discipline. They are related but they are also different. The last part of your quote says it all. That discipline is about controlling the behaviour - but then does not our behaviour largely stem from our emotions????? Hence my belief that self discipline is largely in limiting/controlling the emotions that affect our behaviour. As Kiwi summed up perfectly - in the quote "The goal of discipline is to trade ones process/plan/method/system etc etc as one would wish notwithstanding ones emotions" I do think there is a difference - all the little tips and tricks you suggest are about controlling the emotions, but if you dont have the discipline to even follow those tips then they are largely pointless. A friend of mine was and is a very large currency trader, he was a very emotional trader (less so now he tells me) - he had huge highs and lows - he had his fellow traders get him to cut his position when ever he had a big win and used to stand up at the desk with arms raised screaming about how good the market is - it worked for him. Glad to hear you are a clinical psychologist, I am a profitable trader (one small loosing year in the last 17 - it was the markets fault not mine) my mother and my girlfriend tell me I am not emotional enough, maybe I need help in other areas of my life.:haha:

Q: Why Does Support Turn into Resistance and Vice Versa? A: Because its a market

Hi Dinerotrader, " broker guy thinks you need 4 times the margin amount in your account to trade at all." 4 times is often promoted by brokers as from an equity point of view, the market crashes have been about 25% - hence you will loose your money before they do. (FX might offer 500 times leverage!) regards margin trading and the amount required......put it this way - view it as a business risk. If you really want to push it and maximise it then consider what would happen if you get margined out - you would have to close the positions, and depending on the broker and the instruments, sometimes its not the instrument that is causing the problem that gets traded out by the broker - not such a problem with one instrument trading. You then have to add more cash - a hassle, and while you are waiting you maybe missing good opportunities. Will the broker want you back if you are constantly pushing the envelope? By always pushing it are you adding an extra stress that you dont need. One other point is that its good you realise regards thinking of trying to make $500 a day is probably relative to BFs account size, you definitely should be basing it off your own size, otherwise why not try and make $5000 per day? We would all like to emulate some profitable traders, but you have to play your own game. Good luck with next year.

The problem is none of the trading experts can tell you how to get rid of emotions. That's because the experts are all missing a basic concept about emotions: emotions are not the enemy; emotions are information. Most of the time, say 95%, the information is about you...not about the market. But you treat is as though it is about the market. Big mistake. Really big mistake. Hello FX Girl, welcome (given this was your first post) I think what you say is interesting and good - I agree that emotions are more about the trader, their views their reactions etc; , however - I feel the premise that you have started from actually deviates from the point or discipline somewhat. Discipline is not about getting rid of emotions, but rather more about limiting the inbuilt human emotions that cause many traders to have the "wrong" highs and lows from trading. There have been plenty of recent studies to show that humans are inherently poorly equipped to trade - if the rules of running profits, cutting losses etc are true. So if emotions are information then you still have to control them - especially if we are hardwired to be poor traders. (which kind of does make the natural emotional responses for most people wrong - or the enemy) The point of it being about our emotions is 100% correct - so long as you remember that it is still ALL about the market. Just because you have you emotions in check does not mean you can ignore the market. The market has no emotions, it does not care who you are, how you feel etc; etc; BUT the market is everything. If you dont respect it, then your ego will kill you - because while you may have the emotional fortitude to trade well, you still must have the discipline to trade well. I have seen some very emotionally controlled people blow up due to ego and ultimately poor discipline. Can you give a computer system that trades mechanically emotions? or discipline?

Hi PT99, I think every appreciates the desire to show setups and share ideas - thats what this forum is about. However, I think everyone keeps repeating these similar thoughts though - and not in a bad way. "there is a difference between fantasy and reality" I (and I think most others ) could not care about your account, your details, how much money etc; Do it in a demo account with a trillion dollars we would be impressed. What we are interested in is chart levels. eg; entry, stop, Take profit. Not lines on a chart that could have been drawn afterwards. I quite like the setup, I like the idea, it makes sense. BUT if you (or Nial) want people to pay for the actual numbers etc; and more information then fine - say that. I am sure those who feel it has merit will pay for it. BUT If you wish to point out the wonderful idea, share thoughts and generally help educate others then fine - do that. Put some numbers on the chart, and the ACTUAL "reality not fantasy" trade levels that could be done. Otherwise I am afraid that people while not being hostile are more confused, heading toward sarcastic. (this is all getting a hint of Bernie Madoff about it - this is how I do it, I am not going to tell you exactly and if you ask too many questions than I will get angry, but just remember that other people are happy customers )

I read, read, read - things like this site, other technical forums, two or three newspapers, watch porn, write poetry, fall asleep. Anything really. I thought this job was meant to be glamorous. It helps when I have a plan or attack every day so you know what to look for, and when to trade. Thats stops me from trying to judge every tick - plus I trade longer term than most.

edabreu - you beat me to it. I am not 100% sure about the US regulations, but in the UK and other parts of the world there are big differences in retail v wholesale or professional money. If you are not licensed you can say virtually anything and get away with it, but once you start taking peoples money then you have to be very careful about what you say, who you say it to and what you do. This is not the forum for it as this would be considered retail - and thats largely who the SEC, FSA and other regulators want to protect - the big guys are supposed to know what they are doing. For anyone soliciting advice it becomes an interesting slope, and all the disclaimers in the world don't help if you are not authorised, or putting yourself out to offer expert advice. On saying that you can find out plenty of information from other websites about setting up a fund. Doing it professionally and properly costs money for accounts, audits, marketing, compliance (very intense), legal - dont forget once you take public money you will need contracts - handshakes might not do it. etc; and you have to deal with clients, and run the business as a business over and above the business of trading. Not for everyone. I read somewhere that 50% of hedge funds (including ctas) go out of business due to operational business related issues rather than trading losses. You can have the best idea in the world but if you cant raise money for that idea then too bad. You might want to team up with someone who has that experience but not the programming/trading skills.

If you buy data from anyone, ensure that they have gone through and made sure the data is clean. There is a lot of stuff that is full of repeated days, gaps, etc; the good stuff is not cheap. Make sure the data you receive is able to be changed because I guarantee there will be modifications needed. eg; when is the close. As the exchange says, or the last recorded trade. eg; when to the futures contract roll over months, to which month. There will be big gaps. I would suggest that if you want to look at announcements etc then tick data is overkill, its just noise. a 5 min chart would be plenty....but thats up to you.

Sorry still on the aud/jpy since I have seen no tak of entries, stops etc; just lines and a few notes. (i apologise if its just me being stupid) So correct me if i am wrong.....(I am rounding the numbers for ease off the chart) After the fakey has shown itself. you buy at the next bars opening - Go long at 8120. Stop = 50% of the range of the fakey bar => 8134-(8134 - 8004)*50% = 8134-(130*50%). So stop is 8070. Take Profit target 8250 Hence Risk = 8120 - 8070 = 50 Reward = 8250 - 8120 = 130. ????