Breakthroughs That Led to Trading Improvement and Success.

[dwt 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 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.

I don't know if you've yet read Brent Penfold's "Universal Principles of Successful Trading". If not I recommend it. His law of "maximum adversity" sounds particularly like your last statement.

 

dwt

[Ingot54 13]

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.

 

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!"

 

That sounds like a neat approach, TN.

 

So your breakthrough was to focus MORE on the probability that your entry is aligned with the market

 

as opposed to the usual attempt to

 

isolate the highest probability of the market rising or falling?

 

That is a bit subtle .

 

So as I understand that, you no longer attempt to pick the rises and falls of the market. Instead your focus is on ensuring you are trading WITH the market.

 

I think I "get" this. But can you please clarify further. If I was to apply what you have shared, I would be looking to trade with the most likely TREND of the market, and not simply with a shorter term target.

 

In this case, I would be looking at higher TF as well as signs that an entry was in the direction of the enduring trend?

 

Is that a fair assessment?

 

Thanks

 

Ingot54

[QTrader 10]

My breakthrough moment was when I realized that one of the great "secrets" to trading is that when things line up and you have "the nuts" pressing it and being extra aggressive (while still controlling risk) is what can turn you from a good trader to a great trader. A bit more size, a bit more aggressive entries, a bit more boldness on the exit when your conviction is high and the difference is between night and day.

 

The great traders I hear and read about all have this trait and now I have seen it for myself and internalized it on a more personal level.

[malaguti 10]

I'm still waiting for that breakthrough..but if theres a few things that I could consistently say was where I had losing trades..

1) I wasn't following the higher timeframe. That a down day could be a buy in a weekly chart, and the same for a down week in a higher time frame.

2) I just kept chasing strategies. Like you say Ingot, focus and perfect one. I now have just one strategy which has incredible success and returns. I now focus on trying to perfect it by identfying and duplicating the winners from identifying why I had losers. (How to identify the highest probability winning trade, even though everything may point to the same setup, where actually it wasn't).

 

Hope I'm clear, but I'm getting there. Oh and it really bloody helps to have a good software package that allows you to test theories. Not a back testing tool, because you just simply cant account for intuition, but just to see if something is worth chasing.

[peterjerome 10]

ingot,

your journey parallels mine, a search for the holy grail. trying every new system that came along. like btrader, i was constantly trading, trying to 'force' the market to reward me.

my ah-ha came when i realized i was doing this...'forcing'.

 

i now let the market pull me...i am in charge of setting rules of engagement. i've talked about my method in past posts. i switched from day trading, to my current strategy, trading 'daily' bars. i'm a position trader and hold positions for months vs days. my results have been dramatic...consistent ROI returns of 4.5% to 5.5% on a monthly basis. able to maintain an active lifestyle now and live off the proceeds.

 

the problem i have now (a good problem) is how do i decide which equity to replace with a better gainer....not a simple matter of replacing the one with the lowest gain.

good trading to all,

peter.

[Tradewinds 12]

 

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.

 

Take EVERY setup. I believe that this is critical. I do NOT believe in "false signals". As far as I'm concerned, there are no "false signals". There are just signals. Period. That's why I talk about reversal confirmation or reversal failure. It's a "One, Two Punch".

 

 

1. Signal
   
2. Signal Confirmation / or Signal Failure
   

 

If I take the Signal, then sit back and think that everything is just fine, and I don't look for the Confirmation/Failure, that's when I get into trouble.

 

If the Failure happens:

 

1) I am faced with

1. Acceptance of loss. (Not

necessarily

that I made a mistake. I may have, I may not have)

2. Denial

2) Accept loss as a strategic move for long term success.

[Granpa74 10]

First, i would like to give KUDOS to all traders in this post..BRAVO! its nice to see a nice,peaceful and productive post.(not the same ole bashing and smart A.. comments that we see often)

 

After 1.5yrs as an aspiring trader, i used every indicator,automated software, educator service out there, blew up 3 times. Then it hit me, Price Action and the markets are gonna do what they are gonna do, with or without me. As a daytrader mental balance and achieving goals, reducing losses was key.

I also, came to the realize that every trader is watching PA in his/her own way and for one person 38% or 62% Fibs was a preference. But in reality its all the same shit! ( if price is going up or down) it will get from point-point eventually. So, i had to find my way of seeing Price and comfort zone to trade as mechanically as possible.

 

So, i fired my mentor, stopped reading trader forums (except TI, when i see good responses only) and gave it a K.I.S.S approach.

 

Mayor issue i found, was my trades were on point, but my stops were to big or i would move the stop making the loss larger. Then i noticed, i wasn't patient with staying in a trade for 3-4 hours so. Also, i was overtrading taking 20-25 a day was to much for my mental balance so, 3-5 trades per day. I started using all-in /all-out and trail my stop as trade goes in my favor.

 

Incresed my dollar per contract instead of overleveraging my act. This allowed for that mental demon to not tap me on my left shoulder and make me screw up a good trade. Then, set daily/weekly goal (realistic one) If i hit daily goal early, i cut size by 50%. If i hit weekly goal in the first 2-3days of the week, i will pay my self my %, cut size by 50% the rest of the week and take Friday off.

 

Some my argue this many different ways, but its what has worked for the last 3 yrs of my trading and it's as simple as possible and i can look at trading in the most 1+1 manner and love it more everyday.

I started on the ES then moved to TF. Now, i trade (TF,CL and GC) without complicating things and making a living.

 

Hope this helps any of you out there.

 

Tks.

Ed

[Tradewinds 12]

i used every indicator,automated software, educator service out there, blew up 3 times. Then it hit me, Price Action and the markets are gonna do what they are gonna do, with or without me. As a daytrader mental balance and achieving goals, reducing losses was key

 

I wish there was a good way of proving to new traders what the key issues are. There probably is a good way, but I don't know what it is. A new trader does not know who to trust, or what standards to use in sorting through all the information. That would be an interesting topic, . . . what are the filters and standards for evaluating the worth of a trading plan, indicator, advice, or mentor.

 

 

So, i fired my mentor, stopped reading trader forums (except TI, when i see good responses only) and gave it a K.I.S.S approach.

 

Eventually, we need to narrow everything down, and focus. I have been through the phase, where I just had to make a decision about what 4 or 5 things are the most helpful, accurate, and needed, and them dump everything else. I don't know of any good way around this process for new traders. Even if we had the perfect answers right up front, would we listen to them? Again, the issue is, who do you trust, and how do you know if someone has good answers or they don't? What is the process? What is the standard? How do you or I know if someone actually has good advice or not?

[peterjerome 10]

granpa74,

you uncovered the 'secret'...."learn what you are doing wrong and STOP doing it."

 

IF there was a 'perfect' system and it was given to 100 traders(along with $10,000) you would have:

2% made a ton,

10% are making a good living

88% would lose everything.

 

same with giving a scapel to 100 people.

 

my journey parallels yours...at some point you just "get it", and things turn around.

 

one of the ten percenters

continued success to you.

peter (AKA granpa 71)

[MadMarketScientist 11]

peterjerome,

 

Now there's something I agree with. You make a great point. No matter how "good" the trading system, training or strategy most people will still blow it. It's how it has always been, it's how it always will be. But, that's important -- you can't have everyone do well if ou expect to profit - there has to be some easy money to be had.

 

I think it's part of the reason many don't even realize that the training/strategy/course they have might actually really be good -- it just won't be in their hands. Not to say there isn't plenty that isn't worth anything, but even the good ones get bashed because in the wrong hands they are worthless.

 

MMS

[n00btrader 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.

 

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.

 

Great post, would love more information. How do you decide at which point you should quit each day?

 

How does your dynamic goal setting strategy work? What is meant by the needs of your trading?

[TheNegotiator 13]

granpa74,

you uncovered the 'secret'...."learn what you are doing wrong and STOP doing it."

 

IF there was a 'perfect' system and it was given to 100 traders(along with $10,000) you would have:

2% made a ton,

10% are making a good living

88% would lose everything.

 

same with giving a scapel to 100 people.

 

my journey parallels yours...at some point you just "get it", and things turn around.

 

one of the ten percenters

continued success to you.

peter (AKA granpa 71)

 

I think I'd like to elaborate my opinion on this. I often hear of traders who have a strategy and have a tough run. They abandon their strategy and look for something 'more' effective. So I would say that it is really important to identify what is going wrong, whether you are doing it wrong or it is just wrong, or whether the fact is the failure of what you are doing to make money is a symptom of something else you are doing wrong or a real change in market conditions.

 

Hope that makes sense. Lol.

[peterjerome 10]

I...I would say that it is really important to identify what is going wrong, whether you are doing it wrong or it is just wrong, or whether the fact is the failure of what you are doing to make money is a symptom of something else you are doing wrong or a real change in market conditions.

 

exactly...bottom line, it boils down to decisions. ultimately the buck stops with the trader.

peter

[Tradewinds 12]

granpa74,

"learn what you are doing wrong and STOP doing it."peter (AKA granpa 71)

 

Learn - Something very few of us actually do. To some degree, I think of myself, and the human race as just robots. We can be so mindless. And if we are not mindless, we know what we shouldn't do, but then we go ahead and do it anyway.

 

So what's the answer? I'm not sure what the answer is. I need to be "re-programed". As someone who does a lot of programing, and looks at human behavior, I think a lot of our behavior is "programmed" into our DNA, and it's difficult to overcome.

 

Issues like this are why I'm interested in "trading psychology", which isn't really trading psychology, it's just psychology, period.

 

But where does psychology meet will power? At some point I just need to move out of the comfort zone, and reprogram those brain cells. I don't do meditation, but I'd be interested in using it to retrain my brainwashed mind into actually doing what works.

[TheNegotiator 13]

Learn - Something very few of us actually do. To some degree, I think of myself, and the human race as just robots. We can be so mindless. And if we are not mindless, we know what we shouldn't do, but then we go ahead and do it anyway.

 

So what's the answer? I'm not sure what the answer is. I need to be "re-programed". As someone who does a lot of programing, and looks at human behavior, I think a lot of our behavior is "programmed" into our DNA, and it's difficult to overcome.

 

Issues like this are why I'm interested in "trading psychology", which isn't really trading psychology, it's just psychology, period.

 

But where does psychology meet will power? At some point I just need to move out of the comfort zone, and reprogram those brain cells. I don't do meditation, but I'd be interested in using it to retrain my brainwashed mind into actually doing what works.

 

I personally believe that many times when we think we know what we should/shouldn't do, actually our understanding of why is very poor. This is why we repeat the mistakes. Until we deeply understand our actions, how can we definitively state what is right and wrong? How many times do you see a kid run across a road? You know they know they shouldn't and hopefully it isn't always just to disobey you. But they still do it. One day they see the consequences maybe in the news or something. They don't do it any more.

[Tradewinds 12]

I personally believe that many times when we think we know what we should/shouldn't do, actually our understanding of why is very poor. This is why we repeat the mistakes. Until we deeply understand our actions, how can we definitively state what is right and wrong?

 

Good point. And I think it's a very important point. I think that also ties into being "mindless", or really understanding what is going on. Looking for that deeper understanding, is why I put almost all my emphasis in trading on market internals, and the news.

[ptcman 10]

This is really one of the best threads in TL.

 

I can say that I've been involved in the financial markets for the past 11 years.

Basically I've always looked at it as a hobbie, though, always thinking that one day, when I would give up my day job, I would want to do this for the rest of my life

 

I've lost thousands of dollars.

I've jumped from system to system, I've used Elliot Waves, WD Gann, indicators and oscillators, Fibonacci, Murrey Math, and whatever I could find.

I always was felt more comfortable with very short term trading / daytrading, but I confess that I never was able to be profitable, at least not in a sustain way.

 

Last year I decided that enough was enough, it was impossible to follow the markets and working at the same time so I decided to embrace the markets once and for all.

 

If I had problems before, now, being 24/7 available for the markets didn't helped a bit. I continued to make the same mistakes and continued to lose money.

 

One year have passed and I'm in the same place, well, worst actually since I'm totally devastated with my lack of commitment.

 

I have a complete list of my trades, where I have noted all my errors, my weaknesses, my strengths, but now I stuck. I have no idea how to, and what to to with that data.

 

I love the markets, I love the way they work, the unlimited possibilities that it give us so we can earn our living.

But I'm stuck, demoralized, tired. Friends say to me that I should give up, take a long vacation, but giving up is something that I cannot, 1 year full time in the markets is nothing, though, those 11 years should have given me more than enough time for me to find my way.

Taking a vacation is something that I thought, but lets face it, when I came back the problems will continue to be here, and they will all be the same.

 

I continue to say that leaving my job, and embracing the markets full time was the best thing I could have done, but...

[peterjerome 10]

i record every single trade...very easy to do in eSignal. when i analyzed these trades it became CRYSTAL clear what i was doing wrong and why i was losing money. i just stopped repeating the wrong behavior...it.wasn't that complicated. simple really.i believe the REAL wake-up call comes AFTER you lose a LOT of money.

 

fi learn very little when things go right, but everything from my mistakes..

the lost money is really tuition at the 'school of hard knocks'...expensive, but worth it.

 

peter.

[SIUYA 11]

ptcman - "I have a complete list of my trades, where I have noted all my errors, my weaknesses, my strengths, but now I stuck. I have no idea how to, and what to to with that data""

 

when recording this data its important to record information about what you were thinking at the time.....this can help further analyse the data, and make it work for you. dont just run the data through a statistical analyser. Look at it...work out why certain trades work for you, and which did not.....even if they made or lost money when you did not feel comfortable with them.

Also - keep this data.....its amazing to use to look back on..... first to remind you of of what - if anything - you learn over time. Plus to remind you of what a PL trail can look like. Often we forget how long losing streaks can last and what a PL equity curve can look like.... mine is big spikes up, and small grinding losses.

[MightyMouse 12]

This is really one of the best threads in TL.

 

I can say that I've been involved in the financial markets for the past 11 years.

Basically I've always looked at it as a hobbie, though, always thinking that one day, when I would give up my day job, I would want to do this for the rest of my life

 

I've lost thousands of dollars.

I've jumped from system to system, I've used Elliot Waves, WD Gann, indicators and oscillators, Fibonacci, Murrey Math, and whatever I could find.

I always was felt more comfortable with very short term trading / daytrading, but I confess that I never was able to be profitable, at least not in a sustain way.

 

Last year I decided that enough was enough, it was impossible to follow the markets and working at the same time so I decided to embrace the markets once and for all.

 

If I had problems before, now, being 24/7 available for the markets didn't helped a bit. I continued to make the same mistakes and continued to lose money.

 

One year have passed and I'm in the same place, well, worst actually since I'm totally devastated with my lack of commitment.

 

I have a complete list of my trades, where I have noted all my errors, my weaknesses, my strengths, but now I stuck. I have no idea how to, and what to to with that data.

 

I love the markets, I love the way they work, the unlimited possibilities that it give us so we can earn our living.

But I'm stuck, demoralized, tired. Friends say to me that I should give up, take a long vacation, but giving up is something that I cannot, 1 year full time in the markets is nothing, though, those 11 years should have given me more than enough time for me to find my way.

Taking a vacation is something that I thought, but lets face it, when I came back the problems will continue to be here, and they will all be the same.

 

I continue to say that leaving my job, and embracing the markets full time was the best thing I could have done, but...

 

Ptcman,

 

I appreciate your honesty. It seems to me that in spite of your love of the markets, after 11 years, you do not really want to make money in the markets or you would. It may be that you are simply happy to be around the markets whether you make money in them or not and for you that is enough.

 

It doesn't sound like you need money If you left your job and are able to sustain yourself without an earned income. This may be an issue. When you trade, you are trading against others who want to make money and you are easy pickings because you give up your capital without a pause. In short, they do a really good job of convincing you that their position is the right one and yours is wrong.

 

There are lots of others like yourself who trade because they love the action so you are not alone. In fact, you are in the majority.

 

I do not know what your financial threshold is but before you reach the end of your rope, I would suggest you do something like buy a box of used books and go door to door and try to sell them all at a profit. If you can do that, then you can come back to the market and start to convince traders that your position is better than theirs. It may sound crazy but you have to do something to break the pattern you are stuck in. If you don't want to try to break the pattern then it is probably true that you are just happy to be around the market even if you continue to lose.

 

 

MM

[tacdog 10]

My trading improved when I started to keep a trading journal. It helped me identify my biases and bad habits

[Tradewinds 12]

I recently became interested in what it would take to prove that my trading system is actually profitable. It helped me a lot. It made me more serious, and much more critical of my own system. But that really helped. I suggest that you trade you system, and that you scrutinize you system as if you were trying to prove to someone beyond any reasonable doubt that they could trust it. Not that you can trust it, that someone else could trust it. That's a much higher standard.

[MightyMouse 12]

There are lots of breakthroughs that occurred. The manifestation of the breakthroughs was evident when my winning trades became significantly bigger than my losing trades. And my winning days became a lot greater than my losing days.

 

When a trader takes money from me, he gets crumbs, when I take money from him, I take anything from crumbs to everything he has if he is willing to put up it up on the table.

[Ingot54 13]

There are a lot of things that lead to breakthroughs - some people are already living the ideas that others are just discovering.

 

In my own case, I was alerted to the "improved life" at the age of 23yrs, when I saw an advertisement for a $10 book written by Joe Karbo. Joe was a "retired" entrepreneur (they never retire), but he had a generous spirit.

 

And, enterprising to the end, he had produced this book which I believe was his finest contribution, called: "The Lazy Man's Way to Riches." He died 10 years later, in 1980 at the age of 55yrs, while being interviewed by a breakfast TV crew.

 

The book is still available, through Amazon.com

 

I loaned mine to someone who thought he needed it more than I did. By then he was probably correct - the book had already turned on the lights for me! That book moved me from "farm boy" to entrepreneur in 3 weeks, though to be candid I believe I was born with the mindset that led me to "discover" such things. I suggest you Google for "the lazy man's way to riches by joe karbo" or simply go to one of the two links provided above.

 

Meanwhile I read the book "Think and Grow Rich" by Napoleon Hill.

 

Here in this 7 minute video, Hill gives an interview about the events that led up to the writing of the book, and his meeting with the philanthropist Andrew Carnegie.

 

[ame=http://www.youtube.com/watch?v=1GCaEZscfvA]YouTube - ‪Napoleon Hill talks about his meeting with Andrew Carnegie‬‏[/ame]

 

There are many other similar videos to follow that one - I leave it to the reader to pursue that to whatever extent they feel it will benefit them. But I recommend that readers do explore some of these - you may be one to whom this will provide one of the "missing links" in your earthly education.

 

The "mastermind" video might be worth a look. Some of you are already far past this point, and others of you will merely scratch heads and dismiss it. You take from this whatever you need

 

[ame=http://www.youtube.com/watch?v=J4mo0pz8oi4&NR=1]YouTube - ‪Napoleon Hill Think and Grow Rich Two-Mastermind Principles‬‏[/ame]

[Ingot54 13]

Here is another idea, as opposed to a story about an actual breakthrough.

 

But reading these tips can actually BE the breakthrough for some people:

 

This ideo is 1:24 long.

 

[ame=http://www.youtube.com/watch?v=QEPtqx90grI&feature=related]YouTube - ‪Jack Canfield: Finding a Mentor‬‏[/ame]

 

This is a principle that I KNOW will benefit any person on the planet - if you can grasp this and take action, then you can not help but advance towards your goals.

 

And remember what Napoleon Hill said: "A goal is a Dream with a Deadline."