Breakthroughs That Led to Trading Improvement and Success.

[Ingot54 13]

All traders if they are open about it, are on an evolutionary journey with their strategy and technique. My own path has been rough, having blown a couple of accounts and more than once suffering the angst of the decision to quit or not.

 

Thankfully I persisted. Today I have what has turned out for me, the structure of an excellent system, and enough runs on the board to signal that I have broken through.

 

I would like to share with you (and hope you reciprocate) the things that have made the difference, and brought about that moment of eventual enlightenment. My final breakthrough came about as a combination of much of what I had already learned, but hadn't placed enough weighting on in the past.

 

1) The popular pendulum swings between using a few "good" indicators, to using none and trading pure Price Action. I have tried both of course, but I came back to the good old (customised) MACD, and two well-known others which I have also customised. I am finding the signals from these so reliable that I wondered why I didn't stick to the approach at least 2 years earlier when I first received them.

 

Why do I use a few indicators, instead of pure PA? Because that's what works for me, and that's what I am comfortable with. In the future, I may lean more towards PA alone, but right now, I am pleased with what I have. I am still learning.

 

2) I have always done far better on the higher time-frames - 4H to 8H to Daily. Yet, because I have a close trading buddy who is successful at scalping, I dabbled in this short-term stuff for years. What I was battling was my own trading personality and trading profile. Scalping simply does not suit my make-up, and it certainly does not suit my day job.

 

The positives to come out of scalping for me are that I have become much better at the technical side of analysis, and I discovered a couple of things that actually work far better in the higher TF than they do in the 5 and 15 min TF. And the biggest breakthrough there, was the understanding that I excel at the higher TF trades. I no longer feel the frustration and guilt associated with scalping failure.

 

3) I have learned to trade from the "right hand edge of the screen". Years ago I discovered Alan Farley's website (Google it if interested) but I can not recall much about it, other than I think he is a very short term trader. I simply was not interested in that, but a light bulb was turned on that has never gone out.

 

That light bulb shone the way to help me ignore many of the hundreds of videos and systems that only serve to lock traders into a carousel of hopping from one indicator, or one system to another.

 

How is that? Well "most" system sellers and marketeers try to show you what you could have done, or where you could have entered to make this amazing profit. In hindsight, the entry was optimum, and indeed the trade was great.

 

What the hardrightedge.com concept taught me was that in reality the trade would most likely NOT have been visible, and most certainly NOT likely to have been taken at all. What we were looking at was a cherry-picked situation to illustrate how the system "selected" this great winning trade.

 

So how did I apply the concept successfully?

 

By learning to take EVERY setup as it came - no exceptions. THAT'S where the winners come from. Sure, there were/will be losing trades, but unless you take all those setups and make all those entries, you will not be in your trade long enough to profit, or you will not be able to get an entry at all.

 

4) I found a trading "buddy" who may not always have been on the same page as I am, but we have learned so much from each other, and every day we link via Messenger or Skype, and send screen-shots and discuss entries and setups. I have had the privilege of meeting up with this friend a couple of times - but I live north of Brisbane, and he lives south of Sydney, so the messaging services work well for this situation.

 

Being able to discuss trades and outcomes, as well as give heads-up to new sites and ideas (and yes - interesting indicators and approaches) has been a very maturing experience for me. I have the confidence to admit my silly mistakes to my mate, and instead of chastising, he asks "Why did you do that? What was the trap there?"

 

5) I used to spend hours every day reading newsletters and trying to get a handle on the Fundamentals that rock the world. While this was good - and even necessary in order to understand why currency moves occur, it is now no longer essential reading. There is no sin in unsubscribing to your favourite newsletter.

 

Indeed, hitting "unsubscribe" will release you to concentrate effort where it is most valuable - in finding and managing your trades.

 

Of course what goes along with cutting down on newsletter reading, is cutting down on forum time. Don't get me wrong - I still belong to forums and I still post - forum life is healthy for a trader. But do learn to control it - read only the best posts, and contribute only when you truly have something to ask or say.

 

I used to be an active member of 2 forums, and made about 2500 posts on one, and 4000 posts on the other. Sure I learned a lot, and it was essential at the time for me, because I found myself teaching-in-order-to-learn, so it was great then. But I had to realise I had outgrown the need for reading and contributing on a daily (or hourly at times) basis.

 

Today I do not feel the need to "belong" to a community to the same extent. But I still seek out "good" places to learn and contribute.

 

6) I finally understood the true meaning of discipline. I have always been a "wild horse" of sorts - ever unorthodox, and ever contrary and thinking differently. It's just in my make-up. So it irked me to no end when I read the mantra of "discipline" in trading. I had nothing but contempt for the word, and saw it as a way of being "controlled".

 

But then another light bulb was turned on. While discussing trading one evening with my buddy on the Messenger Chat, asked me: "You have some great setups, and have made some great trades. What is damaging your record?". I couldn't find the answer immediately, and he refused to tell me what he thought until I had 24 hours to think about it.

 

The next evening he asked me again: "Well ... do you know what is damaging your trading?"

 

During the following day I looked over my past trades. I looked back at my strategies, and the systems I had used in the past. What I found was not pretty. I had jumped from method to method, and from time-frame to time-frame. I had some good trades using simple setups, but then abandoned them for something "better."

 

In short, I had never truly focused on, or mastered ONE single trading strategy in the 6 years I had been in trading.

 

That was indeed an "aha!" moment. But I still can not bring myself to use the word discipline. Try substituting the word CONSISTENCY and see if that helps you. It sure made a difference to my mental approach.

 

Instead of trading like a piece of tin-foil, I now trade like a rod of iron. I am immovable and unshakeable in my determination and desire to simply follow my own rules (no one forces me - I make the rules) my own plan and my own setup.

 

It works - it is not broken - it does not need to be fixed or "tweaked to death".

 

I have not mentioned things like money management, because I think it goes without saying how essential that is for traders of all instruments and time frames - but I do acknowledge how vital MM is if you are to make a consistent stream of income in trading.

 

This has been a long post - only my second on TL - so will hand over to you.

I hope this has been of value to one person at least, as we enter the 2011 trading year.

 

What has been your breakthrough moment?

 

What things have turned around (or are turning around) your trading?

 

:missy:

 

[SIUYA 11]

What has been your breakthrough moment?

 

I have them all the time, and I hope to continue to have them.

Until I am 100% automated.....and even then, I will still be interested in learning, having break through moments, and customising what I am doing for the market at hand.

For 2010 if pushed for one thing that has made a difference.....

 

consistency - in plan, attack, research and results analysis.

 

While stopping the musical chairs jumping around of ideas is welcome, at some stage I see it as an essential way of organising, researching. learning - and keeping fresh.

[Tradewinds 12]

One of my breakthroughs came when I stopped using the typical trend lines. I decided quite early that I didn't like moving averages, or anything similar to a moving average, but then I started using Parabolic SAR's. I wasted a lot of time on that, and just confused myself. When I just started looking at the current and recent price high's and low's, then things started to change for me.

[Crazycod 10]

Thanks for the post ingot. I certainly share many similarities to your journey and can relate to a lot of them . I too used to jump from indicator to indicator and newsletter to newsletter and different time frames etc. Consistency did not exist in any form and I found myself heading downwards for a long time. Now, I have learnt to be disciplined enough to only trade setups when they occur and not preempt them or jump in whenever I see something running up or down. That was the "aha" moment for me - just sitting and waiting and taking those trades when they present themselves.

[MadMarketScientist 11]

Fantastic and detailed post. You layout quite a few important concepts that many struggling traders should embrace.

 

Given at any one time I'm quite confident 90% are struggling it's important to try and short cut this journey to profitability as much as possible since most people cannot withstand multiple wipeouts.

 

Major breakthroughs for me?

 

1. Realizing that optimization is bad in most situations. I tended to trust over-optimized systems thinking that past would replicate in the future. it didn't.

2. Switching to using variable targets and stops - that adjust based on market condition. I spent a long time trying to force a market to go "4 points" or whatever and instead now trade very much in tune with what's happening that day.

3. Understanding drawdown happens and isn't reason for panic but realizing for me my circuit breaker of tolerance is in the 15% - 20% range absolute max and adjusting my position sizing and markets as a result.

4. Understanding that revenge trading loses lots of money - getting those emotions under control.

5. Realizing there are some markets that really fit my personality and some that don't - - and stop forcing the ones that don't to work for me.

6. Using different timeframes than the old standbys. When I daytrade I NEVER use time intervals. I only use tick, range or renko. If I swing trade, I ONLY use time interval.

7. Not daytrading forex -- only swing trading forex. Daytrading markets that have reliable, centralized, regulated trading -- that's not fx intraday.

 

Well, I could go on since it's been many years and many breakthroughs, probably breaking a few things along the way

 

 

MMS

[Brookwood 10]

Just a quick one of very many:

Stopped using Fibonacci levels. That was major, since, as a noob, I had been trained to put so much emphasis on that. It just points to the bigger issue which is to look at price and not get caught up in imaginary lines and indicators.

[Kiwi 16]

I both like and am amused by your post Brookwood.

 

The funny thing is that I gave up fibs around 4 or 5 years ago. And just recently I have reinstated them for a couple of specific purposes where they are doing a nice job of increasing my expectancy. Specific is the key word and it is very market dependent - read that as "when do the sum of players consider value has been reached or perhaps the acceptable stretch has been overdone."

[btrader 10]

Very good points so far.

 

For me the ahh ha moment was this, trading less is more.

Its very tempting for many new traders to over trade, thinking that the more I trade the more money I will make. I have personally reduced my own trading to one market, two hours a day max and I can quit sooner than that if my profit objective is achieved. I have found my trade results much more consistent after implementing this into my trade plan.

[Brookwood 10]

I'm not against Fibs altogether.The idea of percentage retracement can be useful but they seem to have more utility on longer-term chart than I trade on.Good to know about, but ultimately for me, a distraction.So, to bring the topic back around, just getting rid of everything on the charts that's not helping you make money- keeping it as simple as you possibly can.

[blueberrycake 10]

The funny thing is that I gave up fibs around 4 or 5 years ago. And just recently I have reinstated them for a couple of specific purposes where they are doing a nice job of increasing my expectancy. Specific is the key word and it is very market dependent - read that as "when do the sum of players consider value has been reached or perhaps the acceptable stretch has been overdone."

 

This is consistent with my observations as well. When trading stock indexes and commodity futures, I never found Fibs to be of any value. However, when trading major forex pairs, I've found them to be a useful odds enhancer under some circumstances.

 

-bbc

[wits7yle 10]

As a preface, I only trade US Equities

 

The one breakthrough that turned it all around for me was when I realized that instead of focusing on the 'setups' (when in fact, most traders are the ones being SET UP) it was all about establishing my bias for market direction (comes with hours and hours of market price action study and countless hours being in the chair losing my shirt many times) and once I establish the odds of a market move I will be accumulating in an 'Area' that I think the stock will turn IN the same direction as the market at key *Reversal Times* and only a stock I am very familiar with and have traded many times. After I initiate a trade, I also monitor market internals to figure out if I should be ringing the register as I am profitable (scalping for profit and also trailing my stop-HITTING SINGLES) or HOLDING the entire position for a Target Area (HOMERUN).

 

I have almost consistent daily profitability now and the occasional 1 or 2 homerun trades per week. I find myself very happy at the end of each week.

 

One Caveat: I also know when NOT to trade. This is when I don't lose any profits I already made and preserve capital for when I do see an opportunity.

[Phil-n-Texas 10]

there were 4 things that flipped the switch for me:

1) chart pattern recognition

2) market flow analysis

3) fixed risk allocation (money management)

4) scaling

 

the above came about after years of soul searching and paying "tuition" as an amature trader but when it happened it seems like it all came together within a 6 month period.... i.e., things started working more in concert.

 

there are of course other components and techniques that I use but the above were life-savers in being able to survive as a trader in early development.

 

re: fibs... i use them quite a bit for calculating entries and targets in conjunction with pivots and good ol' fashion support and resistance + confluence.

[dwt 10]

Thanks, Ingot for opening an interesting thread. With a few specific exceptions, most of what we're all telling one another here comes down to one word (IMHO) -- FOCUS

 

We all began knowing little and realizing how little we knew we all ranged all over the map, from long to short term, indicators to none, this guru and that -- or ebook -- or DVD -- or webinar, ad nauseum.

 

Perhaps Henry David Thoreau said it best. "A man is rich in proportion to the number of things he can afford to leave alone."

 

I'd bet that none of us began to succeed until he discarded most of that baggage, and just focused on a couple symbols, one or two indicators, only a couple timeframes, etc.

 

I'm working hard to do less this year: be better rested, watch fewer charts for less time. Remind myself that I'm paid for performance, not by the hour. FOCUS, then let go.

 

Regards.

 

dwt

[kuokam 10]

Thanks for sharing, Ingot.

You say you found a trading buddy. How did you find him? For me this is key, equal to a competent mentor, with no time and expense limit. I believe I really need one myself. Any one interested?

[Ingot54 13]

You say you found a trading buddy. How did you find him? For me this is key, equal to a competent mentor, with no time and expense limit. I believe I really need one myself. Any one interested?

 

Hi Kuokam

 

Who knows how things work. I guess it had to do with a lot of work I was putting in on an Australian stock forum in 2005, chatting about the Fundamental drivers of stocks, and charting. I moved from equities to derivatives, and then to Currencies, because of the speedier activity in Forex charts.

 

I began to talk about Forex and strategies, started Forex threads, and got permission to use some of the systems in use on Forex Factory on the Aussie forum. We used to pm each other about systems, and chat on Skype and Messenger ... still do.

 

But you are correct - if you have a trading buddy, it does lessen the need for a mentor, which can cost money. The idea of having someone to use as a sounding board in this way becomes entirely useless if you can not be honest about wins, losses, silly mistakes, failure to follow your plan, trading unsuitable currency pair, gambling on direction and so on.

 

I still get a bit sheepish when I have to admit a loss, because ... hey! who wants to admit they blew a trade? Particularly when by now, you should have passed that point.

 

But I can tell you this - real mates don't give a toss. They care past the superficial thing. You have to be firm with each other when trading, and have a bit of fun when you're not. The bottom line is that you have to give as good as you get - reciprocate the learning/teaching stuff.

 

The short answer to your question - "How do you find a good trading mate?" is that first you have to be a mate I guess. You can pm traders with whom you share similar ideas and trading instruments. I don't think you have to trade the same TF - eg if you scalp, and he likes longer term positions - that shouldn't stop a good buddy thing happening. Traders Laboratory seems to be filled with even-tempered traders - I would imagine it would not take long to fit in here and find friends to chat with off-forum.

 

It is something you can't force. When I was working contract interstate, I took the time to drive over and see him. It was a great experience to see and share the setup of a fellow trader face-to-face. I guess we are mates for life now - but probably only catch up every 18 months or so in person. Doesn't matter - I care how his trading is working out, and vice versa.

 

I find forum life a bit artificial at times, particularly when some people are inflexible - and many members who post are afraid to say they stuffed up, or that they are struggling. Must a pride thing - we all know jolly well that a lot of us have struggled get to break-even. For myself - I have a darned lot of money to get back from the brokers, and it is going to take me a long time.

 

No shame in that. I never give up once committed.

 

But it is only recently I have managed to get any sort of confidence that I can continue to get back more than I lose. I don't aim to become wealthy - but I want to be able to develop my trading as a guaranteed second income, that I can enjoy making, in a relaxed manner. I've worked on my strategy - now I have to work on myself.

 

I have always found that a bit of self-disclosure quickly brings you to people who are feeling the same. And people are attracted by honesty, not BS. Nobody knows me so I have nothing to lose. It doesn't bother me to say I have had a bad day trading. But by the same token, no one wants to hear how much you are making either.

 

Even with my mate, we talk in pips ... not dollars. I kind of know how much per pip he risks, and vice versa, but we never feel the need to cheer about our wins ... just mention the few pips (or the many) and move on.

 

I hope you do manage to find someone who you can grow along with, Kuokam. It may be the best thing that happened to your trading development.

 

Anyway mate - enjoy 10 minutes of nostalgia on me. Remember Paul Newman in "Cool Hand Luke"?

 

YouTube - Cool Hand Luke - No man can eat 50 eggs scene.

[JMC 10]

Great topic for a thread. I'm sure each trader progresses at his own pace and has breakthrough moments that takes him to the next stage. For me personally, the two biggest breakthroughs were- 1) trading simple support and resistance w/ confluence for entries 2) using all-in/all-out approach. It has made all of the difference in my trading (ES intraday).

[kuokam 10]

Hi Kuokam

 

Hi Ingot

 

Thanks for input and the great piece of movie. First time I see it.

To me it looks like it is a bit more difficult to find a buddy trader here in continental Europe, probably because serious traders are not as plenty as in other places. The competent few are too busy with banks and the forums, specially the french ones that I also follow are crowded with "analysers" who boast their "analyse du cac" all over the place. Since 2007 I have managed to have a trading session with one competent trader but he was an old bank employee who only arbitraged municipal bonds on IB, which I still can't understand . So we couln't do much together. But I'll keep trying and follow your suggestions. I know working with a buddy works because I did just that at school, since we could have the teacher but for short periods of time. We would then pool together, exercise and explain to each other what wasn't clear and at the end every body would understand what he hadn't in the classroom.

As the oriental saying teaches, the teacher appears when the student is ready. It may be that student Kuokam is not ready yet. So, while waiting for things to happen in due time, I will try to more strictly observe my trading rules. So far I find myself incapable of such an easy thing as to record all my trades. Also, for the year just starting I have decided to focus on trading fundamental announcements.

Thanks for your suggestions .

[Ingot54 13]

To me it looks like it is a bit more difficult to find a buddy trader here in continental Europe, probably because serious traders are not as plenty as in other places. The competent few are too busy with banks and the forums, specially the french ones that I also follow are crowded with "analysers" who boast their "analyse du cac" all over the place. Since 2007 I have managed to have a trading session with one competent trader but he was an old bank employee who only arbitraged municipal bonds on IB, which I still can't understand . So we couldn't do much together. But I'll keep trying and follow your suggestions.

 

As the oriental saying teaches, the teacher appears when the student is ready. It may be that student Kuokam is not ready yet.

 

Au contraire, Kuokam, Vous etes prêt!

 

Your story reflects the that of a person who is truly searching for answers. And let me assure you, breakthroughs in trading do not come while sitting on your hands staring at the screen day after day, doing the same things that failed you last week, and the week before.

 

The late Jim Rohn was attributed with the saying: "When you know want you want, and you want it badly enough, you will find a way to get it"

 

There are other things worthy of consideration in trading mate-ship:

 

1) You may have an advantage in being unable to find someone "locally' to work with and bounce ideas off. Trading is an intense vocation - but it is not ALL of life. Even a trading buddy needs his space and the opportunity to pursue his own private interests. Having even a close friend nearby for too often, can damage your welcome at times.

 

That is probably why chatting on Skype works so well for me. I don't feel compelled to report every little detail of what I am doing - and vice versa. Quite often we log on, say "hi" and then pursue our own thing for an hour. The only thing that might interrupt the solace, is a quick 'heads-up' if there is a nice trade setting up. Later of course there is a bit of banter and dissection of trades, and an exchange of ideas too.

 

2) You have to be constantly researching and bringing new ideas to the relationship. Keeping in mind that the buddy thing was born out of trading, and it could die from lack of oxygen, if the refreshing breezes of new ideas don't occasionally blow. Any relationship will stagnate if not stimulated, and trading buddies suffer from it too.

 

3) Never forget to keep working on yourself and you trading psychology. Sometimes this kind of personal growth is a very useful topic, but it will always remain personal. The subject is usually best treated with a trading coach/mentor, but the joys of the breakthroughs are free to be shared. Sharing your breakthrough stimulates your friend to also recognise the benefit of self-work too, and keeps the relationship growing.

 

There are other opinions on this, and these are just a couple of mine.

 

I could suggest a starting place might be a quality forum such as this - read as much as you are able, and then become involved in asking and contributing. You might then discover that you have been helped more than usual by one particular person, and that you are also on good terms via private message. As I mentioned earlier, to have friends (mates) you have to show yourself to be friendly (by BEING a mate). Friends are helpful, but can be tough on us - much like family, who know all about us, but still like us anyway!

 

So, while waiting for things to happen in due time, I will try to more strictly observe my trading rules. So far I find myself incapable of such an easy thing as to record all my trades. Also, for the year just starting I have decided to focus on trading fundamental announcements.

Thanks for your suggestions .

 

Those are all good things to do, Kuokam. It may be that you will find your niche by focusing more on one specific area. There are many excellent traders who are extremely good at trading the news. I can not do this well, but there are times that trades just pop out at you from the screen.

 

You may have noticed the activity in the USDCAD on Friday 21st January. After the data release, the pair fell 50 pips steadily, over the period of 30 minutes. It was not a violent correction, and entirely tradeable. I watched the move, but became distracted domestically, and missed an entry.

 

You mentioned that you have rules, and that you do not record all your trades - even though you admit it is "such an easy thing". Having your rules written down is one of the best things you can do. It prevents a subconscious bias from hijacking your strategy.

 

The mind is very good at convincing us that we have kept all our rules, when we have an opinion of the trade direction. But unless we actually go down the list of our rules and actually CHECK EVERY BOX, we won't see that an error has been made.

 

The reason for writing down your trades is so that you can identify recurring errors you are making. Without such records, it is impossible for you or anyone else to look over your trades, and identify the places you keep getting it wrong. And you don't have an opportunity to consolidate the things that went right either

 

We are very fortunate to have Rande Howell contributing regularly to our Psychology threads Trading Psychology - Traders Laboratory - Professional Traders Community

as well as in his own Blog on this site Traders Laboratory - Professional Traders Community - Blogs

 

The Blog section of Traders Laboratory is probably the single most under-viewed section of the site, yet it may contain thousands of the seeds that can boost your trading performance if planted in the right 'ground' at the right time. It may be worth trawling through the Blogs - who knows, you may be able to strike up a relationship with some of the very best traders around - no one else is talking to Bloggers.

 

Here's another thought for you mate:

 

[ame=http://www.youtube.com/watch?v=9VePAtOFboE]YouTube - Jim Rohn[/ame]

[kuokam 10]

I did struggle to have this post accross, as I kept receiving the message " your message is too short, please add at lieast 20 caracters". I added a whole paragraph to what was already almost a page but still at no avail. Don't know what to do around this. Finally I had to do some copy and paste before I could send.

 

Comme vous écrivez bien, Man!

 

I am always struck by the level of culture and correctness on english speaking forums. Cheers!

 

The late Jim Rohn was attributed with the saying: "When you know want you want, and you want it badly enough, you will find a way to get it"

 

Completely with you and Jim Rohn re the psycho side of things. Maybe I want it baldly but not enough . In fact I am aware that a good trading log can do must of the things a person can see over your shoulders, but I must still find a way against this inertia...

 

You may have noticed the activity in the USDCAD on Friday 21st January. After the data release, the pair fell 50 pips steadily, over the period of 30 minutes. It was not a violent correction, and entirely tradeable. I watched the move, but became distracted domestically, and missed an entry.

 

I was watching the pair you mention and ready to trade it on that release, but it didn't unfold as per my trading plan. There are many trading styles for news as you know, and the one successful here would have been spike trading, which I don't do for personnal reasons, one of them being I don't have an early news provider. I prefer to let the things calm down, the market digest the info and pick its direction, and only then take a position that can sometimes last for hours or even days. That same day, the retail sales from GB was tradable for me but I busy with my day job, so missed out.

You get that less often that with the spikes, but they can sometimes provide a complete trend changing that you can ride very far, provided you clearly understand what is going on, which is not always the case for me.

The main news this week is on the FOMC statement out of the US this wednesday.

 

We are very fortunate to have Rande Howell contributing regularly to our Psychology threads Trading Psychology - Traders Laboratory - Professional Traders Community

as well as in his own Blog on this site Traders Laboratory - Professional Traders Community - Blogs

 

The Blog section of Traders Laboratory is probably the single most under-viewed section of the site, yet it may contain thousands of the seeds that can boost your trading performance if planted in the right 'ground' at the right time. It may be worth trawling through the Blogs - who knows, you may be able to strike up a relationship with some of the very best traders around - no one else is talking to Bloggers.

 

I only joined recently, so I am gratefull you are pointing me to the right directions. I will take the time to visit the blogs, and try my best to profit the valuable lessons I am sure are hidden there.

 

Good day! Happy trading! Many pips all!

[MadMarketScientist 11]

I'm going to toss a couple of other thoughts as I continue to read this great thread on "breakthroughs" and one for me is simply TIME.

 

New traders do not realize the time it takes to become a successful trader. They put themselves on a super short leash and expect to be pulling down the profits in a few short days or weeks. I can tell you it just might take years to really get it down. Certainly there are those who do it in a compressed time -- but I'd have to say the minimum is "months" in almost all cases. Realize that going in. Build your account and trade plan around that learning curve. Or you'll give up way too soon and never give yourself a shot.

 

The other is to trade in the beginning until you are consistently profitable with fixed targets. Trailing is very subjective, and can really mess with your psyche. Fixed targets in the beginning -- add subjectivity later.

 

MMS

[tjnoon 10]

This is a great thread. I've had a few major breakthrus that made all the difference for me. One at least, I'd like to share here. That is, knowing when to quit trading each day. Far too often, and I imagine many can relate, I would be profitable, but because I wanted more out of the market, I would keep trading and then wind up turning a successful session into a loser. What a horrible feeling that would quickly take over my entire being as a result! Losing sucks of course, but letting a winning session slip away sucks even worse, in my opinion. Kills your confidence and destroys your energy.

 

It's hard not to impose our personal needs onto the needs of our trading. The problem is that the needs of our trading are most often at odds and conflicting with our personal needs. Personally, I may need to make 'x' amount of money, but on this session, the market just isn't going to give it to me. Knowing when to stop is a hard thing but for me. I use a dynamic goal setting strategy now that puts the needs of my trading in front of my own personal needs, that incidentally never has anything to do with trading. Rather than some fixed goal that I artifically impose on the market, I now take what the market will give me and quit when my strategy and dynamic goal setting approach tells me to quit. I find that I am quitting positive on most sessions and my equity curve is steadily reaching new heights on a consistent basis.

 

The great irony is that once I learned how to put the needs of my trading first, my account began to steadily groww, and my personal needs were at last taken care of. I had to give the needs of my trading priority over my personal needs so that I could make smarter trade decisions that were unbiased by my personal needs. If you put the needs of your trading first, then you have a better chance of taking care of your personal needs but never, the other way around.

[kuokam 10]

I'm going to toss a couple of other thoughts as I continue to read this great thread on "breakthroughs" and one for me is simply TIME.

 

New traders do not realize the time it takes to become a successful trader. They put themselves on a super short leash and expect to be pulling down the profits in a few short days or weeks. I can tell you it just might take years to really get it down. Certainly there are those who do it in a compressed time -- but I'd have to say the minimum is "months" in almost all cases. Realize that going in. Build your account and trade plan around that learning curve. Or you'll give up way too soon and never give yourself a shot.

 

The other is to trade in the beginning until you are consistently profitable with fixed targets. Trailing is very subjective, and can really mess with your psyche. Fixed targets in the beginning -- add subjectivity later.

 

MMS

 

To some point I a agree with MMS that time is needed for the skill to sink in. Only problem is the benchmark. which amount of time is needed for who? it took a couple of weeks to as killed traders and mentors as Dennis and Eckhardt to turn motivated newbees into renowned traders. Yet you find people still struggling after years of seminars, books, webinars, exhibitions and so forth. May it be that the problem lies at how you enter the business?

As for fixed targets, it definiotely did not work for me. Now I prefer to bring my stop to BE and let the market decide how far it takes me.

 

Regards,

Kuokam

[tjnoon 10]

Kuokam and MMS make good points and I agree with both. My system aggressively seeks to get me to breakeven as quickly as possible too, but I approach my trades with two positions, one gets out at a high percentage fixed target while the other I will use a trailing stop technique and see how far I can ride the move. I call it the Hannah Montana approach; The Best of Both Worlds.

 

I also agree with Kuokam's statement that how one enter's the business is critical. Some will never get it while other's might come to a level of success quite quickly. I believe in the end, the market will give you what you deserve and ask for. I believe that many people who have not or can not find success are probably trading for the wrong reasons. Perhaps it is even unconscious. You know, the typical ego reasons that one has to prove to oneself they they can outsmart the market, or perhaps they trade because they love the thrill and excitement. These are NOT reasons to trade. Learn how to play chess or go ride a roller coaster. It's much cheaper and will do way less damage.

 

To me if you want to succeed, you have to ask the RIGHT question. "Why am I trading?" Then you have to come up with the right answer, and genuinely believe it through and through. "To make money!" That IS really, the only reason to trade, in my humble opinion. Once you can honestly come to that conclusion, you can then ask the next critical question, "What is it exactly, that I must do, to achieve that objective?" Again, in my opinion, there is only one answer. I have to trade the edge that my system or approach or trade syle (whatever) gives me and profit from that edge, over time. Too many traders are caught up and emotionally involved in the 'trade that they are currently in,' and wind up making very human (and incorrect) decisions. The only problem is that the market is NOT human nor does it play or care about human rules or sentiments. What about the next trade? And the next? The problem is very easy to see when you look at it like that.

 

Then, it's just about money management, capitalization, discipline, execution and the confidence and vision to actually trade the approach that gives you that edge, at the right side of the chart. No easy endeavor for most humans and I would venture to say, that most approach the market light years away from those concepts and ideas. They don't know the proper question to ask or even that they need to ask anything at all.

[bigsnack 10]

This is a great thread!

 

My biggest light bulb moment was when it was recommended to me that I try and see price movement as a series of support levels / resistance levels "flipping", as opposed to just viewing price as swing highs and swing lows. After embracing this mantra and staring at naked charts for months afterward, things really turned around for me.

 

I also noticed that my setups worked best at specific times of the day, so that cut the amount of time I spent watching the charts down considerably. This actually helped me, because it allowed me to focus more efficiently during the time that I was actually watching.

 

I also have to echo that time played a huge role as well. For me, it took about 18 months of pain and frustration before things clicked more often than they didn't.

[TheNegotiator 13]

For me, it was squaring myself with losing. The way I found it was best for me to view it was that for each trade, I need to focus on the probability my analysis and trade being inline with the market rather than the probability of the market doing something directly. I realise this may sound like semantics, but it works for me. It means I am never coming from the standpoint of "why couldn't you just do this..., you normally do it so why not now!":angry: lol

 

So now when I enter a trade I mostly say "okay, well I got that one wrong".

 

TheNegotiator.