Three Years and Still Losing...

[Blue 10]

I've been trading full time for 3 years and I'm still losing money. I'm at the end of my rope! Looking for some help, words of encouragement, or even some harsh words from those who know.

 

I'm in my late 40's, broker is IB, day-trading NQ.

 

Three years ago I was laid off and took it as an opportunity to go full time into trading. Had enough money to make a good go of it. Prior to this, I'd read all Larry Williams material, plus all the classics as well as many other books. I traded with a broker for several years. Net result was to lose my $20K trading capital.

When I was laid off, I figured I could spend a few months paper-trading and then go live and start making money. Seemed logical, as everything else I'd done in my life worked that way! Most things I've tried ended successfully.

 

Not trading.

 

Began with a mix of live and paper trading. Took me two years to paper trade successfully, all the while losing controlled amounts live At this point I can usually make my target of $100 net profit trading NQ in less than half an hour, on paper. Logically, this should translate into some success trading live, if not the same success.

But no, not at all! I'm still losing my loss limit every day, after three years of this. When I reach my loss limit, and go back to simulated trading, boom, target in 10 minutes, or 15 minutes. Next day, same thing.

 

When I close on a small loss, it turns around. When I hold the loss waiting for it to turn around, it doesn't, but keeps growing--hold, hold, hold, loss keeps growing--close the trade and boom! it turns around. When I hold waiting for a move, the market inevitably moves against me. When I close after waiting for it to move, it goes in my favor, without me. When I'm profitable with a minuscule couple of ticks, hold, hold, hold waiting for the big move I can see coming, and give up after waiting too long, then Boom! it shoots to the moon, as expected. Again without me.

Net result is my losses grow at an astounding pace, my profits are like try to build a tower by stacking sheets of kleenex.

 

Is this game rigged? Seems like my broker is trading against me, feeding me whatever market data they need to clean me out. Is this just paranoia, or am I wasting my time and money here?

 

Is it worth persisting? Can one really be successful trading from home?

[jonbig04 10]

The answer to your last question is yes.

 

In my very limited experience price action is all that matters. Focus only on that and get those dreaded lagging indicators off of your screen if you haven't already. Just my advice and its worth the price you paid for it

[james_gsx 16]

I would have to question whether or not you are trading something that actually works with your personality? Have you thought of trading other markets?

[brownsfan019 17]

I'll provide my opinions Blue and you can take it for what it's worth...

 

I've been trading full time for 3 years and I'm still losing money. I'm at the end of my rope! Looking for some help, words of encouragement, or even some harsh words from those who know.

 

I'm in my late 40's, broker is IB, day-trading NQ.

 

Three years ago I was laid off and took it as an opportunity to go full time into trading. Had enough money to make a good go of it. Prior to this, I'd read all Larry Williams material, plus all the classics as well as many other books. I traded with a broker for several years. Net result was to lose my $20K trading capital.

When I was laid off, I figured I could spend a few months paper-trading and then go live and start making money. Seemed logical, as everything else I'd done in my life worked that way! Most things I've tried ended successfully.

 

Not trading.

 

I can understand that as I am the same way - just about everything I do can be successful if I work hard enough.

 

Began with a mix of live and paper trading. Took me two years to paper trade successfully, all the while losing controlled amounts live At this point I can usually make my target of $100 net profit trading NQ in less than half an hour, on paper. Logically, this should translate into some success trading live, if not the same success.

But no, not at all! I'm still losing my loss limit every day, after three years of this. When I reach my loss limit, and go back to simulated trading, boom, target in 10 minutes, or 15 minutes. Next day, same thing.

 

This is why when I hear the - trade on sim and when you can do it there, you can do it live - is incredibly misleading. As the rest of your post demonstrates, there is a high degree of emotion involved when real money is on the line that simply cannot be simulated.

 

The good news is that your paper trading is making $. The key from there is to work on the emotional part so you can do it live w/ real money.

 

When I close on a small loss, it turns around. When I hold the loss waiting for it to turn around, it doesn't, but keeps growing--hold, hold, hold, loss keeps growing--close the trade and boom! it turns around. When I hold waiting for a move, the market inevitably moves against me. When I close after waiting for it to move, it goes in my favor, without me. When I'm profitable with a minuscule couple of ticks, hold, hold, hold waiting for the big move I can see coming, and give up after waiting too long, then Boom! it shoots to the moon, as expected. Again without me.

Net result is my losses grow at an astounding pace, my profits are like try to build a tower by stacking sheets of kleenex.

 

This is the most disturbing part of the post for me. Reason is that you do not have a set of firm rules in place. If you do, they are not being followed (back to that emotional thing).

 

From the sound of the post, you are basically trading by the seat of your pants even if they are some pretty typed up rules that are laminated by your computer. The rules, if any, are not being followed.

 

My suggestion Blue is to create a money management plan. You need to come up with a plan that makes sense for you but also puts $ in your pocket.

 

Is this game rigged? Seems like my broker is trading against me, feeding me whatever market data they need to clean me out. Is this just paranoia, or am I wasting my time and money here?

 

Is it worth persisting? Can one really be successful trading from home?

 

I do not believe the game is rigged nor is your broker trading against you since the NQ is traded at a centralized exchange. Your broker makes money on commissions, not on you losing money. They cannot fake quotes or move the market to get your contract(s) out. I've never traded at IB but if they were doing this, we would hear and read about it rather quickly. So yes, that is the paranoia, or better yet, anger/frustration/fear/etc talking in your head.

 

Can you make $ at this business? You sure can. Is it difficult? Incredibly. And your post illustrates that - you can make money in sim but can't live. In theory, there should be no difference (assuming your fills are accurate); yet we know this to not be true. When your emotions kick in and you trade recklessly, the odds are stacked against you heavily. Winners are tiny and losers a big. We need the opposite to be true.

 

================

 

Some other thoughts:

 

* There are some great threads right here on TL about actual trading. Recently, this thread in the Candlestick Corner, has gotten popular. Take a look. This area that DB runs is also popular.

 

* Trade entry is only the first part and you've seen this. From there you need to design money management rules that fit your risk tolerance.

 

* If you want feedback on how you are trading, start a thread and post screenshots. Use SnagIt to annotate them.

 

* While it can get messy, elitetrader does have some gems floating around there as well. It's time consuming, but you can find some good ones if you look hard enough.

 

* Get a daily log/blog going. TL has a spot here or head over to a free service like blogger. Don't worry about how many are viewing, just get your daily thoughts on paper.

 

 

Good luck in your journey and use the community here as there are some very good members floating around.

[Kiwi 16]

The game is rigged blue. By you. Because its not like anything you've succeeded at in the past:

 

- you don't have to work hard to succeed

- working harder doesn't necessarily make it easier

- your emotions and what you do because of them seem to hinder rather than help you

 

etc etc

 

We seem to be jumping to solutions too quickly here. I'd suggest we stay in the problem space a bit longer. Why? Because there is a chain of things you need to be doing right to succeed in this hardest easy game in the world and any one can cause failure.

 

One basic thing you need is a method with positive expectancy after expenses. While one is in the "having trouble" stage that method needs to be something that you can't second guess - what mark douglas calls the mechanical stage.

 

So, questions:

1. Does your method consistently make money with hindsight (when u review charts). What's the ratio of money won vs lost?

2. Does the method live up to that in paper trading? If not why not?

3. Is the method mechanical (if x happens then y happens I will do z)?

 

After you answer those questions here then try this. Something you might want to read follows. Read it. And as you do so post your reactions to it and how well and where it fits your experience.

 

http://www.precisefutures.com/free_doc/doc_1.html

[smwinc 20]

I would consider taking some time off trading and getting a normal job.

 

Trading when you are under financial pressure is extremely difficult.

 

I don't know your circumstances, but I can tell you now, the more you feel like you NEED to make it in trading right now, the less you will.

 

Making money is a hell of a lot easier when you don't need to be making money.

 

Making money when you have bills to pay, friends / family that have expectations, is far harder.

 

I would suggest doing what needs to be done so you have neutral/positive cash flow in your life, and spending all the other spare time on building a viable trading business. Like Kiwi said, there isn't "one quick solution" here.

[brownsfan019 17]

I don't know that quitting is the answer. We don't know exactly what is behind the troubles here but if it's purely an emotional thing, that can be corrected if worked on intensely. The key is to find the problem - whether a poor system or emotional issues - and see if there's a way to fix that. He says he is making money on sim, so in theory the system can make money. When the real money light is on though, something changes.

[Blue 10]

You guys are amazing. Thanks for the encouragement and the assurance that the problem is with me, not the game itself.

Right on the money with my problem, I think.

Brownsfan esp. Don't have a mechanical plan, I'm trading mostly by the seat of my pants. And that usually results in an ave. of 40+ trades per day.

My background is in engineering, a world ruled by facts. Since I realized early on that the same kind of consistent, reliable facts don't exist in trading, I've instead concentrated on "tape reading," using TWS Booktrader to acquire a "feel" for the order flow. I can now do this with some competence, but it's highly susceptible to emotion. The "feel" when trading live is not the same as the "feel" when trading sim. The only solution here is to continue with this method until the emotions subside. An uncertain bet at best!

Alternatively, the value of a mechanical method is more apparent to me now with 3 yrs experience than it was in the beginning, ie, probability vs certainty. I guess I'll have to hit the books again and look for a method I can work with. Switching horses this late in the ride is somewhat problematic, however, as my resources are now quite thin.

I'll do the reading as suggested.

[brownsfan019 17]

Blue - feel free to join us in the Candlestick Corner. If you want something simple to start with, go to this thread about the 20 EMA. I know others will say take a step back, get a job, etc. but if you want to start working towards a new trading life, start today.

 

Food for thought - you can easily make that daily target on ONE solid trade per day. Maybe just using the 20 EMA thread can do it for you...

[MC 10]

You guys are amazing. Thanks for the encouragement and the assurance that the problem is with me, not the game itself.

Right on the money with my problem, I think.

Brownsfan esp. Don't have a mechanical plan, I'm trading mostly by the seat of my pants. And that usually results in an ave. of 40+ trades per day.

My background is in engineering, a world ruled by facts. Since I realized early on that the same kind of consistent, reliable facts don't exist in trading, I've instead concentrated on "tape reading," using TWS Booktrader to acquire a "feel" for the order flow. I can now do this with some competence, but it's highly susceptible to emotion. The "feel" when trading live is not the same as the "feel" when trading sim. The only solution here is to continue with this method until the emotions subside. An uncertain bet at best!

Alternatively, the value of a mechanical method is more apparent to me now with 3 yrs experience than it was in the beginning, ie, probability vs certainty. I guess I'll have to hit the books again and look for a method I can work with. Switching horses this late in the ride is somewhat problematic, however, as my resources are now quite thin.

I'll do the reading as suggested.

 

WOW 40 trades a day will get only 1 person rich...your broker.

 

I think you hit the nail on the head, though it was almost mentioned in passing. You were living in a world of being governed at your engineering job. You got a taste of absolute freedom to do WHATEVER you wanted emotionally and being starved in that regard you ran with the new found freedom. This is IMO why people are prone to gambling or drug addictions as well...it's an escape from reality and authority. I have to say 40 trades a day would label you as a mega scalper box or an addicted gambler. I don't have an addictive personality so I can't fully relate, but I can imagine how good it feels to be seemingly in control and to fill that void, despite the negative end result. Just keep in mind THE MARKET is your boss now and it's really the one in control. Play the laws of probability and move to at least a semi-mechanical trading system. You can allow some degree of freedom, like on the last portion of your position, scale out for example, so it's not 100% rigid and mechanical.

 

Just remember an addicts gambling is about FEELING in control when they really are not. Playing the odds isn't full on "gambling" despite you not being able to control the games outcome. When done properly YOU'RE in control, at least with your position sizing and execution.

 

Good luck

[Hlm 10]

I would be interested in seeing a couple days worth of entries/exits on the chart you watch labeled with what you were thinking at the time. This would give us a much better idea of your current knowledge and style. Just a thought if you have the time.

[Head2k 10]

Blue, thank you for sharing this. I am a beginner, been around trading for about half a year, so I cannot give you any advice. But I think we have some things common. My background is in engineering, too. At the beginning of my trading journey I tried to apply scientific approach to trading, programming and backtesting mechanical strategies without knowing virtually anything about the market itself. When I realized that it was not the right way I was (and I still am a bit) tempted by the other extreme - pure tape reading or watching very fast charts to get the feeling of dynamics of the market. Yet, at least for me, it is not the right way either. I lose sight of the forrest and get sucked into every little move. I guess that is what happens to you, too, with those 40 trades.

I think one has to find some kind of balance. To be scientific with preparation and deciding where to act and under which conditions. And to apply discretion when judging those conditions and price action around those key levels.

I wish you to find this balance, as well as I wish to find it myself

[fifty2aces 10]

Like everyone else has said, 40 trades is too many - commissions are probably crushing you.

 

Example - assuming commissions are $4.50 roundturn (guessing - not sure exactly what IB charge), you'd be paying $180 a day. That's equal to the value of 36 ticks on NQ, so you need to take 36 ticks a day on average just to break even.

 

My advice would be to try to trade less, and try to come up with a more concrete plan - might be a good start to look for areas of major support and resistance, and only trade around them.

[jasont 10]

Hi Blue,

 

First of all it is great that you have recognized there is a problem. That in itself is where many go wrong as they are too proud to recognize that something isn't working or that they might be wrong. As you are from an engineering background I suspect it might help you to figure out what needs improvement through a process of elimination.

 

You mention that you can usually obtain a $100 profit within half an hour paper trading. That right there says you are doing something right during that time. You also mention that in a way you are trading by the seat of your pants. I'm going to be honest and say I don't believe that for a second. You have been watching the markets for 3 years, in fact you have been tape reading. Tape reading doesn't mean making up trades on the spot, I'm guessing there are certain things that occur that trigger your ideas which put probability on your side when you paper trade. You just may not know exactly what that is yet.

 

Your problem to me does not appear to be a technical one, it appears to be an emotional one. A suggestion for your first step would be to find the things that you look for when reading the tape to enter trades whilst simulation trading. Eg. Low volume on pullbacks and high volume on advances, periods of sideways movement after initial breakout, testing a range after breakout etc. I'm not sure what you look for but it is important that you assess what it is. Without a plan to follow you surely cannot expect to be consistent.

 

Many will say that a plan has to be followed to the letter, I agree but it depends on whether you are trading guides or rules. I tend to think rules are for mechanical traders who must continue to trade through any circumstance where as guides are for traders who allow for some discretion. However if you are not doing the same thing consistently you will build up anxiety due to not knowing whether today is the day you can no longer read the tape. (Trust me I have been there and it ain't pretty.)

 

Once you have developed your plan and it is down on paper, don't think that it cannot be adjusted. If you are trading and find certain things aren't sitting well with you, change things until you are comfortable with it. This may mean trading different time frames or different tools altogether.

 

Basing the following on past experience, I will suggest that your emotions arise from not identifying how you are trading or taking the trading personal. I say past experience because I had a similar problem to yourself. I was doing both just recently and found it very difficult to trade. I would make gains in simulation and break even in live trading.

 

I discovered two things, one was that my plan wasn't concrete. I traded the same setups but didn't have exact places to enter. I didn't know exactly what would trigger my entry when I saw the setups. I discovered that if I used a smaller time frame I could see the exact point at which my entry should be placed. That on its own was a big relief to my trading as I no longer felt I had to guess the right place to enter.

 

The second thing I discovered was that I was taking my trading personally. Each loss meant I was no good, I had lost my touch, I wasn't a worthy person etc. On the other side, each win meant I was a hero, it proved I was worthy, it proved to everyone around me that I could make it. Suddenly being honest to myself I realized that winning and losing only mattered to my business. Whether or not I thought I was worthy or unworthy didn't make me money. It didn't put food on the table nor did it allow me to pay the bills. So to put aside the feelings of self worth at a loss is extremely important if you want to get down to business. It has since allowed me to trade with the business in mind rather than my ego.

 

I'm not saying you have the same problems as listed above, each case is different. I just wanted to let you know that I experienced the same thing recently and these were two problems that were affecting me. Your top priority should be to figure out how you will trade, then you can work on why you are not trading it. Bit hard to figure out why you aren't trading a plan you don't know the details to. Best of luck mate.

[WHY? 16]

Read George George Douglass Taylors book the Taylor Trading Technique about 40 or 50 times and then put what you learned into practice. You got an engineers mind so wade thru his book. Also read any threads on this forum on Taylor and any other forums. However, remember pure Taylor MO is less confusing that modifying Taylor like many try to do.

[radekj 10]

Blue,

 

please read this book (more times):

 

The Inner Game of Trading: Creating the Winner's State of Mind, Robert Abell, Howard Koppel.

 

 

If you say that you enter nq 40+ times per day than this is gambling-hazard and you are depend,

stay away from market until you have fix you head, this book will help you.

 

ciao

radekj

 

PS: i am living from daytrading es from home by IB, it tooks me about 10 years to fix my head, because it was my bigest enemy

[speres 10]

I've been trading full time for 3 years and I'm still losing money. I'm at the end of my rope! Looking for some help, words of encouragement, or even some harsh words from those who know.

 

I'm in my late 40's, broker is IB, day-trading NQ.

 

Three years ago I was laid off and took it as an opportunity to go full time into trading. Had enough money to make a good go of it. Prior to this, I'd read all Larry Williams material, plus all the classics as well as many other books. I traded with a broker for several years. Net result was to lose my $20K trading capital.

When I was laid off, I figured I could spend a few months paper-trading and then go live and start making money. Seemed logical, as everything else I'd done in my life worked that way! Most things I've tried ended successfully.

 

Not trading.

 

Began with a mix of live and paper trading. Took me two years to paper trade successfully, all the while losing controlled amounts live At this point I can usually make my target of $100 net profit trading NQ in less than half an hour, on paper. Logically, this should translate into some success trading live, if not the same success.

But no, not at all! I'm still losing my loss limit every day, after three years of this. When I reach my loss limit, and go back to simulated trading, boom, target in 10 minutes, or 15 minutes. Next day, same thing.

 

When I close on a small loss, it turns around. When I hold the loss waiting for it to turn around, it doesn't, but keeps growing--hold, hold, hold, loss keeps growing--close the trade and boom! it turns around. When I hold waiting for a move, the market inevitably moves against me. When I close after waiting for it to move, it goes in my favor, without me. When I'm profitable with a minuscule couple of ticks, hold, hold, hold waiting for the big move I can see coming, and give up after waiting too long, then Boom! it shoots to the moon, as expected. Again without me.

Net result is my losses grow at an astounding pace, my profits are like try to build a tower by stacking sheets of kleenex.

 

Is this game rigged? Seems like my broker is trading against me, feeding me whatever market data they need to clean me out. Is this just paranoia, or am I wasting my time and money here?

 

Is it worth persisting? Can one really be successful trading from home?

 

 

You can but it takes Education And Discipline

 

If you wish, pm me and I will help.

[stevio 10]

 

 

I discovered two things, one was that my plan wasn't concrete. I traded the same setups but didn't have exact places to enter. I didn't know exactly what would trigger my entry when I saw the setups. I discovered that if I used a smaller time frame I could see the exact point at which my entry should be placed. That on its own was a big relief to my trading as I no longer felt I had to guess the right place to enter

---------------------------------------------------------------------

 

Thanks Jason, You just made me relize that this is a problem I have too. I know EXACTLY the setups I am looking for. However, the exact entry is usually a discressionary guessing game (i.e. +/- .25 on the ES or +/- 5 pips on the EUR).

 

I need to dig deeper and develope rules for the exact entry so as to totally remove the "guessing" aspect of the setups.

 

I have to say my trading got a lot better (no, not there yet) when I set down a dogma of exactly the setups I was after and took each trades when the setups presented themeselves. Thereby, removing most of the "discressionary" part. This freed up so much emotional energy. It's great, the setup comes, my rules say "I have to trade it" and so I do. Now, if I can just remove the last little piece of guess work, it should get even better.

 

thanks

 

S.

[jonbig04 10]

Exactly! There are no good days or bad days, you either follow your rules or you don't. Follow them when they work, follow them when they don't work. JUST FOLLOW THEM. Eventually you will have a set of rules that show positive expectancy. When you do, you have arrived! All you have to do is follow your rules, increase size and repeat.

[mg1193 10]

Agree with you. After few days of following plan human brain starts wandering and result is bad day. Trying to pinpoint the cause, for this few weeks. What is helping is typed up rules next to monitor.

[BlowFish 10]

Do you have a sound plan? If you can't answer immediately in the affirmative stop trading until you can. If you do have a sound plan then why aren't you following it? I still find myself asking that last question occasionally (once in the last month, a week ago yesterday, mid morning) You need to get to the point where aberrations are rare.

 

Just to be contrary, there is nothing wrong with taking 40 trades a day in and of itself. That is, if your method calls for this, and of course your plan is profitable when executed with discipline. Personally I think the benefits of high frequency trading can potentially far out weigh the drawbacks but that's another debate. However my guess is that you are probably jumping in and out of trades for the wrong reasons? In which case there may be a clue to the second question I asked.

[cybrbrdr 10]

I am a fairly new trader and new to the forum. I can relate to this thread, as I am struggling with same issues. I have a plan which I would consider as mechanical, as it has a well-defined set of rules. I have trouble with exits, getting out too quickly, or hanging in too long. Have worked with both set targets and trailing stops, but haven't got the hang of it. I trade NQ and ES mostly. Will study the threads. I feel that one of the main things I need to work on is the rhythm of price action and how it relates to support and resistance throughout the day. Right now, I am sort of breaking even or making a slight profit. I hope I have passed the point of losing consistently, but just need to take it up a few notches.

Cybrbrdr

[sevensa 10]

I have a plan which I would consider as mechanical, as it has a well-defined set of rules. I have trouble with exits, getting out too quickly, or hanging in too long.

 

Doesn't these two statements contradict each other? If you have a plan with a well defined set of rules, but doesn't address exits, then you only have half a plan.

[snav77 10]

Wow its amazing you completely addicted to trading but iam not.aim doing for my living only not more than that.