[JTurner77]

Hello Everyone:

First post and I am a newbie to trading. I seeded my account with $25,000 and started trading in the middle of November a few weeks ago. After my first trade, a loser of $720, I have managed to run my account up to $28,500 at this moment.

So far, I am pleased with my success but also recognize that I have not been as disciplined as I would prefer nor have I honored my desired trading style that I planned to when I initiated trading. What I mean by that is that I had anticipated more swing/trend trading and I have been far more scalping/in and out of positions in the same day and generally been far more active in my trading than initially anticipated. However, I have held positions overnight and for several days on occasion.

I think the first trade loser really annoyed the crap out of me and scared me and that set me off my gameplan. I had watched several markets go my way big time, but was on the sidelines and then bam...my first trade is a loser. As a result, my very next trades were the right setups for swing/trend trading, but I took quick profits of a hundred bucks here and there. I know it was to rebuild my shaken confidence and eek back to break even.

Since that time, I have gradually ran it up to the positive territory with minimal drawdown since my first loser. My first losing trade was my biggest loser to date. My biggest winner was $1,750 on two e-mini contracts that I held overnight. All in all, the vast majority of my trades have been winners, but I have cut them short quite often.

I have now made some profits and am curious as to how I should handle this money. I have heard some say that you shouldnt withdraw winnings...let it compound and grow your size. However, I am also fearful that I will get overconfident and trade a little more loosely with the winnings. I am not sure I will...but I am fearful and I am trying to put myself in the best frame of mind psychologically to succeed.

With the MF Global and some stories I have read on blogs about platforms not filling stops in a timely manner and the flash crash, I also wonder if it is more prudent to keep my trading account smaller in case of fraud or some other crazy circumstance.

I feel rather confident that I will honor stops and not let my losers run too much. I am concerned that I might hold a position overnight of two or more contracts and that something crazy happens to cause a gap move against me.

Does anyone have any thoughts on this?

FWIW, I realize $3,500 aint that big of a deal in the grand scheme of things...but it is a big deal to me at this time.

[JohnTaylorHK]

Originally Posted by JTurner77 »

Hello Everyone:

First post and I am a newbie to trading. I seeded my account with $25,000 and started trading in the middle of November a few weeks ago. After my first trade, a loser of $720, I have managed to run my account up to $28,500 at this moment.

So far, I am pleased with my success but also recognize that I have not been as disciplined as I would prefer nor have I honored my desired trading style that I planned to when I initiated trading. What I mean by that is that I had anticipated more swing/trend trading and I have been far more scalping/in and out of positions in the same day and generally been far more active in my trading than initially anticipated. However, I have held positions overnight and for several days on occasion.

I think the first trade loser really annoyed the crap out of me and scared me and that set me off my gameplan. I had watched several markets go my way big time, but was on the sidelines and then bam...my first trade is a loser. As a result, my very next trades were the right setups for swing/trend trading, but I took quick profits of a hundred bucks here and there. I know it was to rebuild my shaken confidence and eek back to break even.

Since that time, I have gradually ran it up to the positive territory with minimal drawdown since my first loser. My first losing trade was my biggest loser to date. My biggest winner was $1,750 on two e-mini contracts that I held overnight. All in all, the vast majority of my trades have been winners, but I have cut them short quite often.

I have now made some profits and am curious as to how I should handle this money. I have heard some say that you shouldnt withdraw winnings...let it compound and grow your size. However, I am also fearful that I will get overconfident and trade a little more loosely with the winnings. I am not sure I will...but I am fearful and I am trying to put myself in the best frame of mind psychologically to succeed.

With the MF Global and some stories I have read on blogs about platforms not filling stops in a timely manner and the flash crash, I also wonder if it is more prudent to keep my trading account smaller in case of fraud or some other crazy circumstance.

I feel rather confident that I will honor stops and not let my losers run too much. I am concerned that I might hold a position overnight of two or more contracts and that something crazy happens to cause a gap move against me.

Does anyone have any thoughts on this?

FWIW, I realize $3,500 aint that big of a deal in the grand scheme of things...but it is a big deal to me at this time.

Hi JT,

You may consider some poker-based rules that a lot of folks use:

1. When your account reaches 50% profit, withdraw half of that profit.
2. GOTO 1

You will see that your balance increases, but that, within a few iterations (4) you safeguard and return your capital. If you maintain 2 accounts with the same broker, and are confident they won't automatically fund margin calls from this account, then simply transfer this money to the "holding" account. If not then you will pay transfer charges.

e.g. start with $1000
BF Profit Bank CF Holding
1,000.00 500.00 250.00 1,250.00 250.00
1,250.00 625.00 312.50 1,562.50 562.50
1,562.50 781.25 390.63 1,953.13 953.13
1,953.13 976.56 488.28 2,441.41 1,441.41
2,441.41 1,220.70 610.35 3,051.76 2,051.76

Best

John

[SIUYA]

if you are only trading a few contracts, keep the absolute minimum in your broker account. There is no reason to keep more than the minimum plus some margin for error for what you are trading. (peace of mind)

When it comes to withdrawing.....only you can answer that. Some people like to compound and reset monthly, quartlerly, yearly. Others keep a balance and withdraw any profits...some just compound. (strategy)
When it comes to strategies and styles, you have the problem most do....not sticking to the rules you set.....a deep, deep well of frustration, that if you can get your head around early will really help you in the long run. (strategy)

Plus a profit is a profit. You have made money. Congratulations....if I saw $3500 on the street I would still run to get it....even if I had a billion dollars. Don't discount this and become worried about it being potentially a small amount. (dollars) Look at it as percentages of equity....better and easier in the long run.

focus on the strategy that you can live with and the dollars and returns will look after themselves.

[MightyMouse]

I hate to use the term, but it does sound like you had a bit of beginners luck. If you did get a way from your plan, you may have fortunately stumbled on some strategy that is better than your plan would have produced and you may want to explore if there was a rhyme or reason to what you did do for the month. Under normal circumstances, getting away from your planned trades is the kiss of death. Or, at least one of the kisses of death.

There is a very good chance that you may have developed a habit that will destroy your account. The market does have a way of wiggling its ass in front of you for you to go for it only to find yourself bent over receiving something that you intended on giving instead of getting. A lot of "seasoned" traders fall for it over and over and over. On the other hand, you may be a newbie trading prodigy.

There is a lot to learn and for your sake I hope you have a whole lot more than 25K.

[JTurner77]

Thank you to everyone that has taken the time to reply.

Mightymouse:

You may very well be right in that I have enjoyed some beginner's luck. I know there is a lot I don't know.

This may leave me open to some ridicule/criticism, but I am primarily a discretionary trader. I do not have a mechanical system. I do look for patterns and things like that, but I have a fairly rudimentary gameplan. I basically try to sell rallies into resistance and buy downward moves into support. Nothing sexy about it at all.

My goal is to enter the trade near the support/resistance level so that I have a tight stop location. Say I am risking 1-2% of my capital or roughly $275-550. I entered the emini contract on Dec 6th at 1264.25 with a 1268 stop. I shorted another at 12.66 and then 1267.25.

I didn't really feel comfortable holding three contracts. My goal was to scalp the third against the resistance and hopefully make a few bucks. Ideally, I like to try to scalp a few trades near resistance to offset any loss should my stop loss get triggered.

I managed to get off three scalps and closed 13 ticks (or $162.50 before commissions). Seeing positive action on the price chart with some successive lows I resold the third contract and gave the trade a bit more room. It traded down from 1267 to 1264.75 and I booked that trade and left the two remaining contracts on. Being I was trading the overnight and up late on the west coast, I kept my 1268 stop and went to bad feeling good about the trade and the price action. When I awoke, the market was trading down and bouncing off the 1250 level. I covered my short at 1252.

This is a little insight into my style or philosophy. I guess I feel that if I keep my stops tight that my winners are going to smoke my losers and that I will make some decent trades.

However, my desire is to be able to take a more long-term focus and capture bigger moves. I enjoy managing the trade entry, but feel like I get caught up closing out the profitable trade way too early and I really would like to fix that. The Cocoa trade is killing me right now as I covered my two short contracts at 25.09 and the market is below 21. If I simply kept those two contracts, I would be up over 8k right now. Frustrating.

Anyway...I hope this wasnt too long. Just wanted to give you some insight as to how I do things so that you could offer up any constructive criticism you or others might have.

I think one of my better qualities is my ability to look at criticism/critiques fairly objectively. In my personal life, if I am doing something stupid, I dont want my friends to agree with me...I want them to slap me upside the head and tell me to pull my head out of my ass.





That put me at about 12.66 on the avg or about $300 in risk.

[JTurner77]

John...interesting idea. Thanks for sharing.

Siuya...thank you for your feedback. One reason why I am reluctant to keep just the minimum in my account is that if you take a look at my post above and my trading style, I like to enter a trade and scalp against resistance or with support until the trade starts to go my way. Thus, I like the flexibility of being able to put on positions larger than I normally would feel comfortable with because I am leaning against my tight stop above resistance.

My feeling on the matter is that it is a low risk entry and that I can take on greater size than normal since I am managing my risk exposure aggressively.

If you have any feedback on this aspect of my trading, I would love to hear it.

[SIUYA]

Originally Posted by JTurner77 »

John...interesting idea. Thanks for sharing.

Siuya...thank you for your feedback. One reason why I am reluctant to keep just the minimum in my account is that if you take a look at my post above and my trading style, I like to enter a trade and scalp against resistance or with support until the trade starts to go my way. Thus, I like the flexibility of being able to put on positions larger than I normally would feel comfortable with because I am leaning against my tight stop above resistance.

My feeling on the matter is that it is a low risk entry and that I can take on greater size than normal since I am managing my risk exposure aggressively.

If you have any feedback on this aspect of my trading, I would love to hear it.

the minimum plus a margin for error....is the minimum for your style....not just the minimum margin required.

[Gooner70]

Hi

You have posted many questions in there, which to me suggest that you have really thought about this from a Psychological and Strategic angle. - Which is one thing many starters fail to consider.

You first month of trading has been very successful, you have increased your account by over 10%, which is no mean feat, Obviously this is not a linear process, but continued performance like that would more than triple your account in a year if you were to compound your gains. On the other hand if you do not compound your gains you restrict this to approximately this level of performance to roughly doubling your account. If you can trade without disruption, whilst using your money added to your account, then do it. - I assume if you lost money and reduced your account, then you would also reduce your trade size accordingly, it cuts both ways..... . - I do on the other hand understand that from a mental perspective, putting money aside is a form of discipline, and if you feel that would benefit you more than optimizing your trading, then you should follow that course of action. - Ultimately it is up to you, you want to remain comfortable, perhaps if your success continues and appears consistent, you coudl start optimising and compounding.

Yes it may be beginner's luck, but maybe you've actually got a knack for this. Right now you are doing something right, try and build upon that, try and note what you are doing right and wrong and continue to build upon that.

Over-confidence is one of the risks of trading, and can scupper many a potentially good trading, your awareness of that is a very good starting point

Regards

Gooner70