My first 6 months of trading....not for the faint hearted..

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iwillwin

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Post Number: 1
Registered: 10-2004

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Sunday, October 10, 2004 - 10:30 am:

Hi all,

first off, i would like to thank from the bottom of my heart all those people who contribute to this website....it is unique and one of a kind....thank you all and my prayers r with u!

i just have to get this off my chest....so here goes and just stop reading if ur already bored..

I started out 6 months ago.....to date i have had only losses higher then 50k UK sterling....too ashamed to tell truth.......so for all those who have lost less feel happy :-)

it came to a point where i thought just get out while u can but i already burned the ship i sailed on to get here and now i am...so now i must carry on and struggle on,

then i came across this site www.incrediblecharts.com and i saw a whole new light......i know i should have learned first then joined.......but hey???

so i worked out what i did wrong and ive gone over it many times...i am a day trader which is another dangerous thing.

i have chosen to use EMA to signal trend direction or NO trend direction. EMA 5/21/63 days. I let it tell me whats going on....and for a while now i have missed out on the chance of recouping my losses because im scared ****less...pardon my expression.....I just follow the main rules let the middle go above or below slow and wait for fast do do same thing....exit when u have a profit whatever is in your head or sign of a reversal. I dont place stops I know I should but I do have a definite price in mind to get out at and because im sitting here while its happening and the trade will be closed by the end of the day........i think its ok let me know thoguh..

LONGER TIME FRAMES EFFECT WHATS HAPPENING NOW! I KNOW THIS NOW! I always keep my eye on the 1 day, 1 hour and 15 minute charts to see what the market is doing.

I learned how expensive it is not to adjust indicators settings to the time period being traded.

I know now that i will succeed...like a toothless budgie :-)

if u can get any help from this doesnt really matter im just sharing a experience any comments +/- r welcome!

thanks to all those who post and keep up the good work.........i hope we all succeed one day!!

bye

an idiot who doesn't know much yet

(Message edited by robin on October 10, 2004)

spider

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Post Number: 1755
Registered: 10-2002

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Votes: 7


Sunday, October 10, 2004 - 06:00 pm:

G'day iwillwin,
first off let me say how much I like your IC handle.
It might seem like a little thing, but I believe that our subconscious BELIEVES EVERYTHING THAT WE TELL IT, so we should take advantage of this knowledge, and only tell it the things that we want it to know.

So you tell it "I WILL WIN" and it says 'OK, I had better find a way to make this come true'.

Something else that you said that grabbed my attention:....

and for a while now i have missed out on the chance of recouping my losses because im scared ****less...pardon my expression..

Just about everyone here knows what you mean and how you feel, I know I do.
Let me be a smart arse for a moment and say that this is ABSOLUTELY the wrong way to think.

A small story to illustrate the point:.....

A little while back I decided that I needed to teach myself how to trade 'short term' movements.
With the exception of Range Trading, I have always struggled with this type of trading.
My long trading has been successful for some time but I GET BORED.

So I thought that I would liven things up a bit with some 'quick' trades.

Right from the start I had a string of loosing positions.
My money management rules kept me in the game but I was slowly bleeding to death.

I had placed a small amount of cash in a separate trading account which was dedicated to this exercise.

The slow bleeding went on for months, with only the occasional winner.

Eventually I stopped trading this account.
It was time for some serious research into what had gone wrong.

I wont bore you with all the results, but I will tell you that near to the top of the list was a mind set that said "For the sake of my EGO, I must recoup my losses, and get this account back to even".
I did not want to admit that the mighty spider could wash off a large chunk of his trading pool!

To make the situation worse, I had decided that I would not add any extra funds to this account, it would have to fund itself from it's own success.

I was putting myself back in the situation I was in when I first started trading, that is, I was seriously underfunded.

Each trade HAD to be a winner so that I could recoup my losses and bandage my ego.
So I started looking for 'winning' trades!
Any successful trader will tell you that no one knows which trades will be winners, we only know that the probabilities are high.

Guess what?

As soon as I worked this out(and a few other bits and pieces), I had a string of winners that have continued to this day.

This is a very long way of saying that every trade MUST be treated in isolation.

It has nothing to do with any trade in the past or future.

We must focus on each trade and close our minds (for that moment) to everything else.

spider.

P.S. I enjoyed your post.
Thankyou for taking the time to share your experiences with us.
I know you will be successful, because you 'burnt your boat'.

"Take all you can, and don't give anything back!"
Captain Jack Sparrow.

josl

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Post Number: 26
Registered: 06-2004

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Votes: 0


Sunday, October 10, 2004 - 06:34 pm:

Spider

Was that with CFDs
If so I was in a similar boat
Day trading became more panic than reason
Until I started using my position trading reasoning it was as if the kangaroos were in the top paddock
Empathise completely

IWillWin

Congratulations on your post
I know where you have been
Didn't lose amounts like you, but have made probably all the mistakes
I found that as I lost more my reasoning went out the window
I created a template to manage the trade to counter the panic created by having my money at risk
Apparently, when one panics one's reasoning ability slows down
Anyway, following the advice of people like Spider & others on this incredible site should make an incredible difference to your results
By the way, doing the previous comment, I have recovered all my losses & am in profit

Hope to hear in the not too distant future that you are prospering

Regards John

carolyn

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Post Number: 25
Registered: 09-2002

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Monday, October 11, 2004 - 10:03 am:

My last message to this board failed, so this is a test. Carolyn

carolyn

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Post Number: 26
Registered: 09-2002

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Votes: 2


Monday, October 11, 2004 - 01:28 pm:

HI all

IWillWin, well done on sharing what would have been painful information, you are on the first steps to a new start with your willingness to acknowledge your situation.
Please rethink the stop loss situation, you definitely need them. Go back over your trades and see the difference a stop loss would have made.

Spider, I agree about the 'bored bit' I trade long term because i have tried both and long term is by far the most profitable for me. But it is boring. I basically try to get my excitement in other areas of my life to counteract that.

I also think that there is a psychological issue to it. We have been brought up on the work ethic, that you must work long and hard to make money. Psychologically, something that is seems so easy and doesn't require a lot of time yet still is making a lot of money, is hard to reconcile with our ingrained work ethic. So we have a need to 'get busy' to justify ourselves.Hence the urge to day trade.

The work ethic isn't logical, when you think of the number of people who work long and hard for very little return, eg farmers, and people who make a lot of money with seemingly little effort eg the super rich.

That's not to say a lot of effort and hard work wasn't needed initially until you knew what you were doing, but now the hours simply aren't needed to be put into the trading.
That's my two bobs worth anyway, just relax and enjoy.
Carolyn

iwillwin

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Registered: 10-2004

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Tuesday, October 12, 2004 - 01:58 am:

Hi

thanks for the support, I know I will make it!

Its a funny old game but it does get me excited :-)

All I need to work on is not getting emotional, I came in on a position on friday but then pulled out, not because it went against me but because I couldn't control myself!!!

missed out on the chance to make £4k, damn, but hey theres always another trade right?

keep up the good work and i'm hoping to do a trade now, so wish me luck!

take care

Bye

Iwillwin

vermante

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Post Number: 184
Registered: 11-2002

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Votes: 2


Tuesday, October 12, 2004 - 05:05 pm:

Inspiration-(An Extract from the annual report of CRS)

"Nothing in the world can take the place of persistance.Talent will not;
nothing is more common than unsuccessful people with talent. Genius will not;
unrewarded genius is almost a proverb.Education will not ,the world is full of educated derelicts. Persistance and determination are alone omnipotent"

Calvin Coolidge

30 President of the United States Of America(1872-1933)

Vermante

shubh_labh

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Post Number: 95
Registered: 06-2004

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Votes: 4


Wednesday, October 13, 2004 - 10:05 am:

I found this in my email, sharing with you fellow members.

Copy..... paste:

The Psychological Mistakes Investors Make, Part 2
by John Mauldin

Guideline No. 1: You know less than you think you do.

People tend to believe that the more information they have, the more capable they are of making good investment decisions. But the simple truth is that more information is not necessarily good information. It is what you do with it, rather than how much you have, that matters. The "illusion of control" and the "illusion of knowledge" leads to over-optimism and overconfidence -- a potent combination. It leads you to overestimate your knowledge, understate the risk, and exaggerate your ability to control the situation. As a result, you make the mistake of making bold forecasts and timid choices. And that brings us to our second rule . . .

Guideline No. 2: Be less certain in your views; aim for timid forecasts and bold choice.

People also tend to cling tenaciously to a view or a forecast. Once a position has been stated, most people find it very hard to move away from that view. When movement does occur, it does so only very slowly. Psychologists call this "conservatism bias."

Stock analysts, for example, are exceptionally good at telling you what just happened -- but not very good at predicting what's going to happen. (In fact, one study shows that the average analyst is wrong by more than 50%.) They stick to what "was," and change a forecast only when presented with indisputable evidence of its falsehood.

This means they usually change their views too late to be of any real use to you.

Investors should note that these analysts are professionals. We tend to think of them as accountants sitting around looking at tables, numbers, and mind-numbing mounds of data and coming to a rationally based conclusion. The real view is that they are all too human and their humanity shows up all too readily in their forecasts.

This leads to our third rule . . .

Guideline No. 3: Don't get hung up on one technique, tool, approach, or view. Flexibility and pragmatism are the order of the day.

We are inclined to look for information that agrees with us. This thirst for agreement rather than refutation is known as "confirmatory bias." The classic example is to consider the following test.

First, look at the four cards below. Each is labeled with a letter on one side, and a number on the other. If I tell you that if a card has a vowel on one side it must also have an even number on the other side, which card(s) do you need to turn over to see if I am telling the truth?

E 4 K 7

Before I give the answer, consider the following. You have been employed at a nightclub as a bar manager. However, the club is keen not to allow underage drinking. If someone is under 18 years old, they must not drink alcohol. Now, in the problem below, each card is a customer. The card gives the customer's age on one side and what he/she is drinking on the other side. Which of these cards do you need to turn over to make sure there is no illegal underage drinking going on in the club?

Drinking Beer
25 years old
Drinking Coke
17 years old

In both cases, the correct answer is the first and last cards only. In the latter problem, this should be obvious. You are looking only at those people drinking alcohol, and only at those people under the legal age for drinking. In the former problem, these are the only two cards that can prove I was lying. (If you thought E and 4 -- as most people do -- you are suffering from confirmation bias, looking for information that agrees with you.)

Only E and 7 are capable of proving that I was lying. If you turn the E over and find an odd number, I lied -- and if you turn the 7 over and find a vowel, I lied. By turning the 4 over, you can prove nothing. If it has a vowel, you have found information that agrees with my statement but doesn't prove it. If you turn the 4 over and find a consonant, you have proved nothing. At the outset, I said that a vowel must have an even number, not that an even number must have a vowel!

How the problem is "framed" affects our answers. By picking 4, people are deliberately looking for information that agrees with them. Our natural tendency is to listen to people who agree with us. It feels good to hear our own opinions reflected back to us. We get those warm fuzzy feelings of content.

This is all tied up in our human quest for certainty. It is notable that we tend to associate with those who think like we do and confirm the rightness and wisdom of our judgment and views, whether on investments, politics, or religion. This only reinforces the tendency to set in concrete wrong views and notions. Sadly, this isn't the best way to make optimal decisions. Instead of listening to the people who echo our own view, we should observe the fourth rule . . .

Guideline No. 4: Listen to those who don't agree with us.

The bulls should listen to the bears, and vice versa. You should pursue such a strategy not so that you change your mind, but rather so you are aware of the opposite position.

The final bias we look at today is one of self-deception called "hindsight bias." It is all too easy to look back at the past and think that it was simple, comprehensible, and predictable. This is hindsight bias -- a tendency for people knowing the outcome to believe that they would have predicted the outcome ex ante. (See "Word to the Wise," below.)

The best example I can think of is the U.S. stock market over the past few years. Now, pretty much everyone agrees that the U.S. market witnessed a bubble, but calling it a bubble in 1998, 1999, or 2000 was an awful lot harder than it is now! This faith in our ability to "forecast" the past gives rise to yet more bias toward overconfidence.

This leads to our fifth rule . . .

Guideline No. 5: You didn't know it all along; you just thought you did.

Please do not consider my mention of any stocks to be a recommendation to buy, sell or hold. I am here to learn.

iwillwin

Member

Post Number: 3
Registered: 10-2004

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Votes: 0


Wednesday, October 13, 2004 - 01:04 pm:

Hi all

done a trade tuesday made £810. It was confidence boosting but I could have done a lot better!

How can I do better?

let you know what happens next, wish me luck!

Bye

Iwillwin

spider

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Post Number: 1759
Registered: 10-2002

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Votes: 3


Wednesday, October 13, 2004 - 01:47 pm:

Yo iwillwin,
very pleased to hear about your win.

It is only a small point but, you have probably noticed that the experienced traders talk in percentages rather than dollars etc.

There are very good reasons for this.
Firstly, when you are starting out, it takes you away from the 'money' aspect, and focuses you on the numbers.
Numbers, on there own can be less intimidating than talking about hard earned money and all the emotions that go with it.

Secondly, it is a more accurate way for you, and us, to judge the success of a trade.

Example:
If I made $500 on a trade this might sound like a lot or a little, depending on how much money the listener has to trade with.

If I tell you that I made $500 from a $1000 trade you would probably think that this was a good trade.
You probably would not be as impressed if it was $500 from a trade of $10,000.

It has another value also.

Let's say you are just starting out and you have scaped together $10,000 as a trading pool.
At the end of the year you have increased your trading pool by 35%. You were very careful to protect your capital and applied your money management rules.
The next year you achieve a similar result.
And the next year.

By now you have approximately $18,000 in your trading pool.
You probably know that you cannot give up work this year, but you know that you have the ability to consistently produce significant returns on your trading capital without undue risk.

Do you think that, armed with this knowledge, you could produce similar returns on a trading pool of $100k or larger?

How much confidence does this give you for the future?

The power of percentages!

If you are sitting on a small trading pool which is returning a good percentage return consistently, then wack a few zeros onto the end of that number and imaging the lifestyle you will have (if you don't let it all go to your head).

It's your percentage return that counts, it's the only way to compare apples with apples.

spider.

.

"Take all you can, and don't give anything back!"
Captain Jack Sparrow.

iwillwin

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Registered: 10-2004

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Wednesday, October 13, 2004 - 03:10 pm:

Hi spider

i see, well i made it on £3k investment on the dow jones index, i placed my trade at 10,074 got out at 034, well my trading pool right now is @ +£20k as we speak. percentage wise I guess its under 30% return.

I know what you mean on percentages, it just feels good to know recovered something!

I have made returns of +50% on day trading with varying amounts of initial margin. My best one to date was 50% on 25k margin, but easy come easy go, didnt know how to keep it!

I can make between 20 to 40% return on a daytrade but i find it hard to add and then i go and don't trade in the other direction! how stupid i am!

I know i can do well but i need to boost my confidence! any ideas?

thanks

bye

IWillWin

iwillwin

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Wednesday, October 13, 2004 - 03:49 pm: