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Everything posted by todds

  1. The full time, experienced coach is what I was talking about. Someone you knew was successful and could interact with face to face. Most don't have that opportunity so the next best thing might be a reputable service on the internet (key word, reputable). I don't think it is unrealistic to expect that one could find a service that would help them flatten their learning curve. Are there cranks, yes. Are there good ones, yes. One has to use their judgment. As an aside, many a champion golfer have had swing instructors that never came close to being champions themselves. However, most work quite hard on their own games and bring that experience with them. Whether the same can be said in trading I could only guess. Unless the 10 consecutive losses wipe out your account. The more painful the loss the more faith one must have in their method. The more faith one has in their method the more risk one might be willing to take. We could go round and round. One could trade 6E at $12.50/tick or EUR/USD at $1 a pip. Either way, unless one can find a size that easily allows them to take the next trade, even after a series of losses, they will have a hard time trading their method the way it should be traded. When people say they are having a hard time pulling the trigger live, even though they know their edge is good, I venture that this is the reason. Find a way to reduce size until it becomes insignificant, then slowly ramp it up. Steve46, if you are referring to my request for successful traders to share their "simple" methods so we can all move on, it was partly said in jest and partly as a challenge to the casual statements I hear to the effect that the edge is the easy part and most of the work is psychological. If it’s easy lets get it over with. No one is looking for a handout here, but if you offered… "Generally speaking professionals manage risk by varying position size, timing of entry and exit and size of stop loss." I couldn’t agree more. However, I would disagree that being a professional has to do with account size. I assume you are trading ES? So your max loss on a trade would be $1500? I assume $1500 is but a small fraction of your account? How is this different than someone with a smaller account who manages their trades the same way and risks the same % per trade by using other available instruments that allow them to do so? I am sure that you could come up with a position size that would cause even you to choke. That was my point. Figure out a size where you don't choke, no matter what percentage it represents of your account.
  2. I used to pay little attention to all the talk about position sizing. But, the more I go along the more I realize its significance. I am becoming a believer that one has to find a way to reduce their size until a loss is virtually painless. If not, you will never trade your method the way you should. Even if you have a large account and are trading 1% or even 0.5% per trade, if losing this amount still hurts you have to go even lower until you find a value that does not hurt. For most, this will mean trading stocks or forex mini-lots and leaving futures for another day.
  3. MP-TT, I really appreciate the time and effort you took to respond! There is a lot of great information in your post so I'll have to read it a few more times. I am definitely aiming in the direction of simple. The more I think of trading and compare it to my last endeavor of trying to be a professional golfer I know that ultimately success will come through simplicity. However, achieving simplicity is not always easy. One might say it is Simplicity through Mastery. Phil Mickelson makes golf look simple, and to him it is, but it took a lifetime for him to get to that point. A novice trying to copy his swing may not find it as easy as it looks. Funny you mentioned Charlie Wright. I have another of his books called "Trading as a Business". I'll have to look at that one again. Fortunately my trading journey has kept me away from indicators. I realized early on that they look a lot better in hindsight than in real time (this is not to say they cant work in the right hands.) Most of my two years has been following price action. The first year was spent entirely in sim trading the ES on a 30 second chart looking for specific reliable Elliott Wave set ups. While this gave me a great basis for reading price, I was not all that successful with it and really didn't like being confined to the ES. My second year has been live trading various futures using a method based on price action taught by a group in a subscription chat room service. I know what many are thinking..."SUCKER!" I don't look at it that way. One of the biggest mistakes I made in golf was not getting a qualified instructor/mentor early on in my career. I tried to learn it all from books and watching the pros on TV. This took exponentially longer to learn the nuances of the game than had I found someone to show me the "tricks" in person. I learned a lot more as a golf club manufacturer's rep when I was able to interact with the pros and ask questions. I would recommend to any new trader to either find a successful trader who will take you under their wing or experiment with various interactive services until you find one that seems reputable and makes sense to you. I have no problem paying for lessons from pros. Along the way I have also been doing research and experimenting with various ways to read price action. The threads I mentioned earlier along with James16 on Forex Factory have been very helpful. Thanks to Kiwi for that lead. I took around 1500 live trades in 2010 and finished the year net even. The second half of the year was better than the first. This tells me I know something but just need to make a few tweaks here and there (I also need to trade less!). The next project will be to go back over those trades in detail to see if anything pops out. In addition, I am considering forex to reduce position size utilizing mini lots. I am finding that a typical loss in futures is just too painful and thus causes hesitation. The light bulb came on regarding position size reading the James16 thread. Thousands of hours of screen time and continued education are the necessary building blocks to making a competent trader in my opinion. It all adds up, one brick at a time. MP-TT, I would guess that all the time and effort you spent on other things ultimately gave you the foundation to evaluate what has ultimately become your simple method. Thanks for your reply.
  4. MP-TT and other veteran traders who have made it to consistent profits over time: I really mean this with the utmost respect because it seems that you and others have a lot of experience and insight that can be helpful to us who are still trying to find our way to consistent profits. I have seen the above said by so many veteran traders so many times that I feel like I'm the last trader on earth who is still struggling with "what to do and when to do it". Assuming a method with positive expectancy seems to me to be the biggest assumption of them all. Is there something wrong with me that after two years of full time trading I still haven't been able to solidify a trading method that I know has positive expectancy? Is it really that easy? I am getting close, and sites like TL have helped a lot, but it took almost two years just to find TL! In the mean time I was doing research where ever I could find it: books, seminars, trading rooms, the usual suspects. Call me dumb, incurious, intellectually lazy, whatever but it is not for lack of trying that I have not yet devise that illusive trading plan with positive expectancy. The problem as I see it for most traders is that they are trying to learn something that is very difficult essentially on their own, unless they are fortunate enough to have Linda Raschke as their aunt or some such situation. It's a bit like trying to be a surgeon without going to medical school, only probably a lot easier. You have to cobble together your own research material, evaluate it for its validity, devise your own training plan, and test your systems all while having no clue what you are doing. How many people would die on operating tables if this was how surgeons learned their profession? How long would it take to be a competent surgeon? In a perfect world there would be two year vocational schools taught by successful traders where the students were put through a rigorous training program. Sure, some would still fail but I would wager the success rate would be multiples higher. What would be most helpful to most traders would be for successful traders to offer some insight as to where one might find this "simple trading plan". Or, better yet, share their simple trading plan so we can all get past that stage and start working on what is really important. I am finding threads like Reading Charts in Real Time and the Wycoff Forum here at TL to be most helpful, but I wouldn't say the methods taught there make solving the problem of what to do and when to do it a foregone conclusion. Is there an easier way?
  5. TradeRunner, I agree, regarding making a living playing a sport like golf the opportunities are limited. In golf it's the top 400-500 in the world and one must "qualify" to play in events. I was never good enough to be a professional golfer but was good enough to be competitive at the state and national amateur level. It still took many years of complete immersion to get to this level. If my trading equals my golf skills I will do quite well. I suspect many people can say the same thing about their own life achievements. The analogy was about the fact that trading is a performance activity, big money attracts talented motivated people, and one must be really good to make a living. I think it is what it takes to be “really good” that people don’t understand. It is about technical proficiency first and foremost. In trading, this is edge, and is the most difficult to attain in my opinion. It comes from acquired knowledge, attention and lots of experience, just like mastering any other field of endeavor. Confidence follows technical proficiency. My point is that there seems to be a sort of mysticism that people attach to trading, as if it is somehow different than other difficult endeavors. If there is a difference it is that we are allowed to enter the arena long before we are ready. For traders with some success in another worthwhile field, I do not believe their difficulties are about the "issues" they bring with them to trading, or some other latent psychological demons. If I am having trouble pulling the trigger, it's because I don't believe in my edge. Why should I believe in my edge? For the first two years of my trading life I got my head handed to me nearly every time I entered a trade because I picked terrible entries. Why should it be any different next time? If I'm having trouble staying in a trade it's for good reason. For the first two years of my trading life my trades rarely went anywhere because I was picking crummy trades. My technical proficiency was a mess. These are logical and healthy reactions. It is only through acquired knowledge, attention and experience that we improve our skills and slowly begin to have confidence in our judgment. I am trying to keep it that simple and not get sidetracked on other things.
  6. It is funny how so much is made of trading. The way I look at it there is no difference between trading and any other performance endeavor where big money is a reward for excellence like sports or music. No one would expect an athlete or musician to be skilled enough after two or three years to be good enough to make a living. Why should we expect any less from traders? The reason most traders fail is because they are woefully ill equipped skill-wise, even after several years, to compete with professionals. The truth is, they just are not technically good enough. I compare it to an area where I have reasonable experience and expertise: golf. In my twenties I attempted to be a professional golfer and later worked fourteen years as a manufacturer's rep helping the world's top professional golfers fine tune their equipment for competition. Every player I worked with on the professional golf tours had one thing in common: phenomenal ball striking and putting skills. This was the bare minimum requirement, their "edge". If you couldn't hit the ball well or putt well, forget about trying to be a professional golfer. It was only after acquiring these skills that the individual's mental toughness, competitive spirit, and psychological makeup separated the champions from the also-rans. In most cases it took these golfers 5, 10, or 15 years before they had the technical part of their game to the point where they could compete. They often started when they were kids, and had instructors along the way pointing them in the right direction. Very few learned it on their own. They competed at all levels on the way up, honing their skills against people their own size, age and ability. But what do we do as traders? We read a book, open an account, trade in sim for a few weeks then do the equivalent of teeing it up in the US Open. It's no wonder we blow out. I would venture that most traders never come close to developing the technical skills (their Edge) required to begin trading with real money, let alone in sim (sim can be just as damaging to your psyche as real). These technical skills are not acquired quickly. It is a combination of knowledge and experience. Knowledge comes from books, seminars, websites, teachers, coaches, mentors, gurus, whatever it takes. Experience comes from screen time, lots of it, 5000-10,000 hours of it. I am with FXGirl on this point. To try to make it any more mysterious than this is counterproductive imho.
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