Struggling and Aggravated

[Enigmatics 10]

I've put so much work into this over the last 10 months trading and the 1.5 years before that charting/absorbing as much info as I could. I have a set up that I'm absolutely STUNNED I haven't broken out with. Instead I'm currently mired in the mental struggles of trading from a dwindling account. Over the past 2 months I have routinely let perfectly viable plays go right by me because I'm being too cautious, even scaling back my normal position sizes in the process.

 

..... And then today I get the text message from a buddy of mine. He scored $20,000 on a penny stock (CMEY). This is a guy who doesn't chart. He swears by "researching" these often fictitious companies who do nothing but sell shares on the backs of grandiose stories or align themselves with promoters. He knows I'm struggling right now and insisted I "get into" this stock with him. I couldn't believe I was even having the conversation. Throw away all that I learned to jump into a penny stock? "Just trust me man, it's going to .10, this is months and months worth of research!" he said.

 

I'm just beside myself right now. I really am.

[Tradewinds 12]

You are on the normal journey. If you were not going through this, something would be wrong. I would be amazed and absolutely stunned, if I heard of a trader who hadn't experienced what you are experiencing. Don't get me wrong, I'm not trying to encourage you to keep trading, . . . . and I'm not trying to discourage you. I really don't like it when people encourage other traders to just keep on going. Maybe you should, maybe you shouldn't. I really don't know.

 

Do you have a very, very well defined exit signal? We all spend time trying to find good entries, but then we need to learn how to manage the trade. You must have an ABSOLUTE EXIT POINT. Where you WILL EXIT! Period. No thinking. You know what to do, and YOU DO IT. No worry, no fear, just execute, and know that it's the right decision. If you are not at that point, then there is no point in trading live.

 

If a trade is entered, and then there is doubt about what to do after that, then you can not mange the trade well. You need very well defined profit signals. Note that I didn't state profit "target". I don't have profit targets. Whatever the market gives me, I take it. Period. You need profit taking signals, and signals that the trade is not doing what you thought it was going to do. (Note that I didn't state: Stop Losses. I don't have stop losses. If the trade isn't doing what I thought it would do, I exit. Period. Some people would call that a mental stop loss.) You must have signals and rules for those two situations. If you don't have signals and rules for those two situations, then you have no idea what to do after you have entered the trade. Hope, pray, sweat, swear, groan, fist pump when you make a profit, etc. If your reaction to a loss is anything more than just understanding that it's a cold, calculated decision, then there might not be real trust in the strategy.

[Enigmatics 10]

You are on the normal journey. If you were not going through this, something would be wrong. I would be amazed and absolutely stunned, if I heard of a trader who hadn't experienced what you are experiencing. Don't get me wrong, I'm not trying to encourage you to keep trading, . . . . and I'm not trying to discourage you. I really don't like it when people encourage other traders to just keep on going. Maybe you should, maybe you shouldn't. I really don't know.

 

Do you have a very, very well defined exit signal? We all spend time trying to find good entries, but then we need to learn how to manage the trade. You must have an ABSOLUTE EXIT POINT. Where you WILL EXIT! Period. No thinking. You know what to do, and YOU DO IT. No worry, no fear, just execute, and know that it's the right decision. If you are not at that point, then there is no point in trading live.

 

If a trade is entered, and then there is doubt about what to do after that, then you can not mange the trade well. You need very well defined profit signals. Note that I didn't state profit "target". I don't have profit targets. Whatever the market gives me, I take it. Period. You need profit taking signals, and signals that the trade is not doing what you thought it was going to do. (Note that I didn't state: Stop Losses. I don't have stop losses. If the trade isn't doing what I thought it would do, I exit. Period. Some people would call that a mental stop loss.) You must have signals and rules for those two situations. If you don't have signals and rules for those two situations, then you have no idea what to do after you have entered the trade. Hope, pray, sweat, swear, groan, fist pump when you make a profit, etc. If your reaction to a loss is anything more than just understanding that it's a cold, calculated decision, then there might not be real trust in the strategy.

 

I'm primarily using volume spread analysis. I was formerly an "indicator" based trader, but after reading the variations between Richard Wykoff and Tom Williams, I saw the market in a whole new light. It helped to explain why my pattern worked in one instance, but not another. Leading up into April I was really narrowing down the ones I went for well. Then it started happening ..... I was finding that I was constantly exiting trades too early. My little 2-4% were nothing compared to what I was seeing. So I started trying to hold out for more in the trades I was in.

 

Ever since then it's become this battle of either holding too long because of previously missed opportunities, not holding long enough, or just passing up a perfectly viability trade because I'm being overly cautious. I had always had exit strategies, typically using price/volume and moving averages I know to be resistances. I've also been incorporating price by volume bars.

 

The month of April should've been the big move for me. Instead I nibbled at small percentages and missed some really large moves. I've found myself hesitant to go long over multiple days on stocks because my account hasn't been able to absorb the risk.

 

Yada yada yada .... Like I said, it's frustrating.

[Tams 20]

I've put so much work into this over the last 10 months trading and the 1.5 years before that charting/absorbing as much info as I could. I have a set up that I'm absolutely STUNNED I haven't broken out with. Instead I'm currently mired in the mental struggles of trading from a dwindling account. Over the past 2 months I have routinely let perfectly viable plays go right by me because I'm being too cautious, even scaling back my normal position sizes in the process.

 

..... And then today I get the text message from a buddy of mine. He scored $20,000 on a penny stock (CMEY). This is a guy who doesn't chart. He swears by "researching" these often fictitious companies who do nothing but sell shares on the backs of grandiose stories or align themselves with promoters. He knows I'm struggling right now and insisted I "get into" this stock with him. I couldn't believe I was even having the conversation. Throw away all that I learned to jump into a penny stock? "Just trust me man, it's going to .10, this is months and months worth of research!" he said.

 

I'm just beside myself right now. I really am.

 

if you feel bad, inferior, depressed, because someone scored on a penny stock,

you deserve to feel bad, inferior, and depressed.

 

Penny stocks are highly manipulated, if you don't know that, you will learn one way or the other.

Edited June 1, 2011 by Tams

[Enigmatics 10]

if you feel bad, inferior, depressed, because someone scored on a penny stock,

you deserve to feel bad, inferior, and depressed.

 

No, just aggravated by it. Like I said, I've put in a lot of time and effort.

[zdo 20]

First, have you read Rande Howell’s book? If you don’t come to more awareness of 1 how your fears are ‘organized’ (for lack of a better term) and 2 how your ‘self image’ (another for lack of a better term) is regulating your performance – both outside of your awareness – it really doesn’t matter how much you believe in your edge (or not)

 

re” “just passing up a perfectly viable trade because I'm being overly cautious”

Paraphrasing Mark Douglas --- Outside awareness again, every ‘red’ (or potential ‘in the red’) can re stimulate any and every uncleared defeat, defect, desertion, deprivation you’ve ever experienced (or even imagined ‘correctly’)

Without a healthy you, your time and effort is 'nothing', your edge is 'nothing'.

 

re: “Ever since then it's become this battle of either holding too long because of previously missed opportunities, not holding long enough, or just passing up a perfectly viability trade because I'm being overly cautious.”

Finally something more practical - For every edge, there is a distribution of results. For every distribution of results, there is an adequate scaling (out - in this case) schema

 

I sincerely hope I have frustrated you even more … just right

[Tams 20]

if you feel bad, inferior, depressed, because someone scored on a penny stock,

you deserve to feel bad, inferior, and depressed.

 

Penny stocks are highly manipulated, if you don't know that, you will learn one way or the other.

 

No, just aggravated by it. Like I said, I've put in a lot of time and effort.

 

then you deserve to feel bad

 

trading is about yourself, not others.

trading is like playing golf... you call the shots, you make the swing, you hit the ball... nobody else.

 

 

if you get aggravated by someone's peeny stock win, LOL, you will never make anything out of this....

trading penny stock is gambling, stop now is your best bet

 

 

 

 

 

ps. i might sound harsh, but 5 yrs from now, you will see the value of what i am saying:

unless you change your frame of mind, you will simply repeat more of what you have been experiencing.

[Enigmatics 10]

then you deserve to feel bad

 

trading is about yourself, not others.

trading is like playing golf... you call the shots, you make the swing, you hit the ball... nobody else.

 

 

if you get aggravated by someone's peeny stock win, LOL, you will never make anything out of this.... trading penny stock is gambling, stop now is your best bet

 

 

 

 

 

ps. i might sound harsh, but 5 yrs from now, you will see the value of what i am saying:

unless you change your frame of mind, you will simply repeat more of what you have been experiencing.

 

I get what you're saying, but know that I don't trade penny stocks. I gave up that wasteland about a year ago when I finally came to my senses.

[Tams 20]

trading is one of the few endeavors where the reward is not in direct relations to the effort you have put into it.

 

 

 

if you think your reward should be tied to your efforts, go get a factory job.

Edited June 1, 2011 by Tams

[Enigmatics 10]

then you deserve to feel bad

 

trading is about yourself, not others.

trading is like playing golf... you call the shots, you make the swing, you hit the ball... nobody else.

 

 

if you get aggravated by someone's peeny stock win, LOL, you will never make anything out of this....

trading penny stock is gambling, stop now is your best bet

 

 

 

 

 

ps. i might sound harsh, but 5 yrs from now, you will see the value of what i am saying:

unless you change your frame of mind, you will simply repeat more of what you have been experiencing.

 

I tried posting this before, but it didn't go thru ....

 

Trust me, I'm not trading pennies. I got out of that wasteland about a year ago. My efforts have been focused entirely on small and mid-caps.

[zdo 20]

re: "I'm primarily using volume spread analysis" and

"He swears by "researching" these often fictitious companies who do nothing but sell shares on the backs of grandiose stories or align themselves with promoters..."

 

It’s not likely – but every now and then someone comes along who is better at ‘Tom Williamszing’ that even Tom Williams was.

That’s what it takes to thrive at penny stocks and that may be the case with your friend’s “research” ing… But again, not likely. Especially if he “insisted I "get into" this stock with him”

Odds are vastly with Tams re penny stock craps.

Anyways, what traits and strengths do you admire in your friend?

What could you do to be even better at vsa?

[Enigmatics 10]

re: "I'm primarily using volume spread analysis" and

"He swears by "researching" these often fictitious companies who do nothing but sell shares on the backs of grandiose stories or align themselves with promoters..."

 

It’s not likely – but every now and then someone comes along who is better at ‘Tom Williamszing’ that even Tom Williams was.

That’s what it takes to thrive at penny stocks and that may be the case with your friend’s “research” ing… But again, not likely. Especially if he “insisted I "get into" this stock with him”

Odds are vastly with Tams re penny stock craps.

Anyways, what traits and strengths do you admire in your friend?

What could you do to be even better at vsa?

 

Honestly the only admiration I have is that he has the balls to go in 15,000 on a penny stock. Other than that his "trading" (if you want to call it that) has no foundation other than what he thinks he's reading about those penny stock companies.

 

As far as my VSA is concerned, I thought I was picking it up rather quickly but now I'm having a hard time determining where I'm going wrong. Spotting absorption, stop volumes, supply/demand, etc. etc ... these were not hard principles to understand. Alas, something's amiss.

 

Take NOK today. I had a position at 6.57 on the second 5min candle after the first had shown reversal on larger than average sell volume. I was also taking into account the previous days action as it seemed people were largely interested in shares at these lower prices. It dips on me to 6.50 and I get stopped out. Went away from it when low and behold it filled it's sell gap from the morning and tested demand around 6.60, upon which it absolutely rocketed up. Hit a peak of 7.02 I believe. Sure enough I brought up the 30min chart and there was a definite stop volume in there. However, I have had absolutely little success lately trying to trade VSA on 30 or 60min time frames, which astounds me given you'd think the "trend" would be better.

 

This is routine with me. I'm around the plays, just not maxing them out or slippage removes me from the equation entirely.

Edited June 1, 2011 by Enigmatics

[Enigmatics 10]

I should also note, I think where I also went wrong was I stayed pragmatic far too long. I was using 5k position sizes as my staple for trades when I could've made more of an impact trading the setups I was most confident in with slightly larger sizes and having to reduce my downside risk by being able to get out faster.

 

There is a gentleman I helped and taught everything I knew. His account since we started trading together is up 45% in 3 months. Alas, the biggest difference is that he expanded his position sizes beyond what I was.

 

All I know is it seems evermore apparent that beyond knowing your setups, it takes money to make money. As my account has dwindled this has become a major issue in my ability to turn it all around, particularly because I depend on it for income. Amazing what already having an income and trading out of opportunity, not necessity can do for one's psyche.

Edited June 1, 2011 by Enigmatics

[bwebber 10]

Take NOK today. I had a position at 6.57 on the second 5min candle after the first had shown reversal on larger than average sell volume. I was also taking into account the previous days action as it seemed people were largely interested in shares at these lower prices. It dips on me to 6.50 and I get stopped out.

1% stops will gradually destroy your account on low dollar stocks. Instead of taking one trade with 1% stop, spread your money out over ten trades with 10% stops. You must be willing to take risk to be successful, but just do it with a smaller amount of capital on each trade.

[Enigmatics 10]

You must be willing to take risk to be successful, but just do it with a smaller amount of capital on each trade.

 

Unfortunately this is what I've failed to grasp these past two months. My mindset is that I have to eliminate as much downside risk as possible, trying to be overly perfect on entries and it has backfired immensely.

 

It's honestly hard to spread what little money I have left around too, which has become the rub.

[illcrx 10]

What is your trading style? Are you a day trader or a swing trader? Do you just trade pivots or counter moves? VSA has many uses, intraday or daily.

[noego 10]

No offense to you and your struggles but in the big scheme of things time-wise you are still in grade school as a trader. I am a trading educator (I do not solicit or take business from this or any other site so I am not tooting my horn---just giving an opinion from a vantage point that others may have missed). For most of us this is a lifetime labor of love. As with most difficult things becoming a professional can take +- 10,000 hours to gain true skill and competence. I am not saying you are or are not going to make this work. Most do not have the discipline to go along with the technical skills they gain so for some it doesnt matter if its 10,000, 20,000 or 50,000 hours of study. I truly wish you well in your trading and your study. I caution you not to focus on "system" over solid market technical skills across multiple time frames using volume and price action as your keys. This is where the time comes in...watching live markets for many hours days weeks months and years is the greatest lesson of all....charts are easy to read when they are not moving (right to left reads vs. left to right). Again good luck and good trading to you.

[Enigmatics 10]

What is your trading style? Are you a day trader or a swing trader? Do you just trade pivots or counter moves? VSA has many uses, intraday or daily.

 

I day trade. I have a particular pattern I look for on intraday dippers, a lot of which focus on stocks that break the lower bollinger band .... and as I said before, I use volume spread analysis as my primary gauge for entry/exit.

 

I would like to take more advantage of daily set ups, but I just haven't been comfortable going long in this market, especially when using my margin. I've had to use my margin because I didn't have a ton of start up capital, which is also the reason I am so adverse to widening my stops. That in turn has shook me out of many of these set ups which run pretty hard for an intraday move.

[illcrx 10]

Well if you are daytrading or scalping you have to expect lots of trading fees and be prepared for the drawdown that has on a small account. I also have a small account.

 

I myself "try" to swing trade lol but in the chatroom I go to there is a terrific day trader who has profit targets and when those get hit he takes it. I think thats the way to day trade, though to each their own.

 

If your account is getting smaller and smaller you need to see if its due to your trading or due to your commissions. I was astonished at how much commission i was paying.

 

But you need to be very cautious with a smaller account and if you are having problems and arent profitable then you need to look back and see what has and hasnt worked and focus on what did.

 

Oh by the way, were in a bear market now. Just my 2c

[Enigmatics 10]

No offense to you and your struggles but in the big scheme of things time-wise you are still in grade school as a trader. I am a trading educator (I do not solicit or take business from this or any other site so I am not tooting my horn---just giving an opinion from a vantage point that others may have missed). For most of us this is a lifetime labor of love. As with most difficult things becoming a professional can take +- 10,000 hours to gain true skill and competence. I am not saying you are or are not going to make this work. Most do not have the discipline to go along with the technical skills they gain so for some it doesnt matter if its 10,000, 20,000 or 50,000 hours of study. I truly wish you well in your trading and your study. I caution you not to focus on "system" over solid market technical skills across multiple time frames using volume and price action as your keys. This is where the time comes in...watching live markets for many hours days weeks months and years is the greatest lesson of all....charts are easy to read when they are not moving (right to left reads vs. left to right). Again good luck and good trading to you.

 

Oh I agree with everything you've said. As the months have dragged on since I officially started day trading, I have learned things I couldn't possibly have known before when I used to just chart and read. It's like I'm constantly peeling back another layer of the market onion. In the last couple months I've focused heavily on watching the SPY/Dow, the TICK, the US Dollar, particular sectors, and options volume. It's crazy to think how "compartmentalized" my trading really was when I first began. Volume spread analysis was also key in helping me see the bigger picture.

 

Unfortunately, I took on quite a bit when I started. I only had 10k equity (along with 4:1 buying power) and I was trying to pay bills, pay back money, and build the account. It put me in the position where I've been using margin to offset the lack of capital, but I've kept such tight stops that it's hindered my progress ... even though I know without a doubt when the market is conducive my set up can yield very nice results. I also haven't focused on learning how to properly short the market, which also limits my ability to trade on certain days.

 

I'm freshman when it comes to all of this ..... but I want to complete my degree. I just don't have the proper capitalization to outlast my growing pains.

[Enigmatics 10]

Well if you are daytrading or scalping you have to expect lots of trading fees and be prepared for the drawdown that has on a small account. I also have a small account.

 

I myself "try" to swing trade lol but in the chatroom I go to there is a terrific day trader who has profit targets and when those get hit he takes it. I think thats the way to day trade, though to each their own.

 

If your account is getting smaller and smaller you need to see if its due to your trading or due to your commissions. I was astonished at how much commission i was paying.

 

But you need to be very cautious with a smaller account and if you are having problems and arent profitable then you need to look back and see what has and hasnt worked and focus on what did.

 

Oh by the way, were in a bear market now. Just my 2c

 

My trading commission aren't too bad at $7.99.

 

The problem isn't my set up. The problem is a few things here which I've mentioned. I needed to pick my spots better. I've attempted these set ups on days when the market was getting beaten or better yet options expirations, which I had very little understanding of it's effect on the market. I'm also trading so "tightly" because again when I'm using my margin, if I don't keep losses under control it impacts my real equity moreso than the average. I've repeatedly tried to keep my losses to around $100-$150 (lately being even stingier) and there have been NUMEROUS occasions where I'm getting shaken out because of it, even though the stock ends up bouncing like I thought. I also find myself over-valuing a move because of prior losses, so I'm holding on too long to make up the difference, which I've repeatedly told others not to do.

 

These have all added to the mental gridlock I've found myself in. I know this setup works for people who are patient and pick their spots. I taught a friend of mine everything I know and he's taken the material and earned himself a nice 45% on his money in about 3 months. I just wish I could outlast this moment somehow. I've never felt like I had purpose in my life until I got into this. I've wanted to soak in everything I possibly can about it.

Edited June 2, 2011 by Enigmatics

[illcrx 10]

I hear you Enigmatics, with a small account you have lots of disadvantages but I will say this.

 

You must not rely on trading when you have debt and bills to pay! The NEED to make money will cloud your judgement and only make you loose more. Now everyone has bills to pay but if you can only see living 1-4 months on the money you have left then your only hurting yourself. It is the best advice that Ive heard and Im in the process of doing just that, I am trading with fake money right now so I can still be involved and get a feel for whats going on. Im also trading my Roth IRA.

 

I dont know your financial situation but if your stressing about income that much its going to really hinder you.

[Enigmatics 10]

I hear you Enigmatics, with a small account you have lots of disadvantages but I will say this.

 

You must not rely on trading when you have debt and bills to pay! The NEED to make money will cloud your judgement and only make you loose more. Now everyone has bills to pay but if you can only see living 1-4 months on the money you have left then your only hurting yourself. It is the best advice that Ive heard and Im in the process of doing just that, I am trading with fake money right now so I can still be involved and get a feel for whats going on. Im also trading my Roth IRA.

 

I dont know your financial situation but if your stressing about income that much its going to really hinder you.

 

Sigh .... you're right. Trading out of necessity instead of opportunity.

[bigsnack 10]

Unfortunately it sounds like you are in a crippling situation. I've attempted trading for a living and couldn't do it. Mentally I couldn't take the stress, and this was trading 1 lots on the ES!

 

Now I only trade for 2 hours a day in the morning, and then I go off to my day job. I'm in much better shape mentally and financially. My daily goal is 150 bucks a day on the ES, and after that I switch to SIM and trade huge lot sizes as a "game" of sorts to blow off steam. I've accepted that this may be my trading reality for years to come, and because of that I do a lot better than ever before. Good luck to you if you decide to continue to pursue trading as a full time career, but I myself couldn't deal with it, even with a win rate in the 70% range and a solid plan. Take care!

[Acer15 10]

You are on the normal journey. If you were not going through this, something would be wrong. I would be amazed and absolutely stunned, if I heard of a trader who hadn't experienced what you are experiencing. Don't get me wrong, I'm not trying to encourage you to keep trading, . . . . and I'm not trying to discourage you. I really don't like it when people encourage other traders to just keep on going. Maybe you should, maybe you shouldn't. I really don't know.

 

Do you have a very, very well defined exit signal? We all spend time trying to find good entries, but then we need to learn how to manage the trade. You must have an ABSOLUTE EXIT POINT. Where you WILL EXIT! Period. No thinking. You know what to do, and YOU DO IT. No worry, no fear, just execute, and know that it's the right decision. If you are not at that point, then there is no point in trading live.

 

If a trade is entered, and then there is doubt about what to do after that, then you can not mange the trade well. You need very well defined profit signals. Note that I didn't state profit "target". I don't have profit targets. Whatever the market gives me, I take it. Period. You need profit taking signals, and signals that the trade is not doing what you thought it was going to do. (Note that I didn't state: Stop Losses. I don't have stop losses. If the trade isn't doing what I thought it would do, I exit. Period. Some people would call that a mental stop loss.) You must have signals and rules for those two situations. If you don't have signals and rules for those two situations, then you have no idea what to do after you have entered the trade. Hope, pray, sweat, swear, groan, fist pump when you make a profit, etc. If your reaction to a loss is anything more than just understanding that it's a cold, calculated decision, then there might not be real trust in the strategy.

 

Hi, Tradewinds, I just came across you post regarding using CLEARLY DEFINED EXIT Signals as opposed to HARD Stops and Targets. I have come to conclude that this is a large part of tipping the scales to consistent profits. Very few Books, Traders or Methodologies go into detail regarding EXIT SIGNALS, in my journal i have tried to identify some clues but have failed to nail it down, some of which are "exiting when price does NOT move immediately in my favor (but How to you define Immediately?) and this causes me to overtrade by balking in and out, another one that use is exiting if price stays stagnant without breaking 2-4 tick in my favor, again this can be very misleading and cause me to miss moves that just need a little time, so basically my clues are often ambiguos at best.

 

Can you contribute any subtle clues to this list