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With all due respect, I think you are over stating how difficult it is to trade. You don't need to put in 10,000 hours to be profitable. Maybe to become a master of the craft.
This 10,000 hours to learn a craft is often quoted bit the truth is everyone is different. Some learn quickly, some never learn sadly. You can be profitable trading in far fewer hours than that. Just my 2p.
Thanks, this is a fantastic post full of good advice. Focussing on one set up and keeping your risk small is great advice for anyone starting including myself.
Hope you don't mind me asking but what sort of ROI do you get on a monthly basis trading 2 contracts? Thanks.
. . . life's failures are people [like you and me] who did not realize how close they were to success when they gave up. I believe Al B means well for all traders. The gent that told you to throw Al in the g-can probably should have said, "Al B is not my trading methodology." Staying out of chop is critical. One way I've found is to have trading chart, let's say the YM on ticks correlated with a 5 min chart. I multiply those ticks x 5 and us that chart as my "trending" chart - stay with the overall trend of the slower chart. E.g. YM 5 min = say 1500 tick chart. 1500 x 5 = 7500. Don't go against the 7500 chart. Also, TOS/TheoTrade has a fascinating indicator called the RSI Laguerre. Primarily I used this indicator to show me when the market is gaining strength and about to move - after that, Al B price action. I hear your cries for help. Best wishes.
I have also tried to trade H2's and L2's (Al B), and seeing trades not set up properly, to get into obvious bad trades. I think there are two solutions to this, while sticking to rules:
1. Look at different time domains (5 min, 15 min, 30 min, 60 min) for intraday signals. Quite a few H2's should set up
2. Stick to one TF, e.g. 5 min, and watch 3-4 instruments (uncorrelated hopefully, e.g. oil, gold, emini)
** another way to avoid chop is to look for two legged PB to EMA, as Al Brooks says in one of his best videos he says this is the best setup for people starting out, and if you don't get enough trades, u can move to multi-instrument monitoring
You might consider analyzing your trades from a different perspective. I've attached a few jpgs which describes how I see one of your trades.
This is what I see:
1. You're getting backticked to death! Your stop is on the same bar as your entry price on the 7500 Volume bar chart.
2. Your momentum indicators are short, not long.
3. A simple volume up/down indicator (which I show on the chart) would tell you that volume is starting to go negative.
4. Nothing on your chart is telling you what the market is really doing - you're expecting the market to move up because the previous bar candle was up (I'm making an assumption here based on your other trades). That might work in a strong trend, but trading to the upside previous to your trade was choppy and weak - not much of a trend there.
You need to incorporate some type of order flow information to your decision making. I know Jigsaw is hard to read on the ES because it moves so fast. But there are other alternatives like the VolumeDelta indicator from ninZa.co. At the very least, you guesstimate who's in control or if the market is just floundering around - which is really what it was doing when you entered that long. Just based on the order flow, you wouldn't have entered that long.
7500 Volume bars are huge for the ES. Given the volatility and backticking even on slow days, you need to look inside the bar you're trading - one of the jpgs is a 1 minute chart showing the same elements of your trade. Even a simple Volume Up/Down indicator would have given you more information.
Trading is about information. Forget your indicators and setup rules for a while and try to concentrate on what the market is doing. Go over 100 random trades on market replay and analyze them in depth using some form of volume/order flow information. Look at your trades on different chart sizes - down to the second even. I would wager that you could have avoided at least half of those stopped-out trades just observing the order flow.
The reality is (at least my opinion of it is) that no one can trade these markets today without order flow information. How you get it and how you use it is up to you. It's a steep learning curve but it can only add solid information to your existing trading plan.
Well I'm not checking this numbers as long I'm in profit.
But calculation is very simple.
I'm making 4,5 points on average (because of losses) per contract and I'm only trading 3 days a week, about 12 days in a month
so 4,5 points x $50 x 2 contracts x 12 days =
sometimes less but sometimes much more :-)
But the important thing is to stop focusing on money!
It sounds strange because we are doing this for money but it's all about points only. Is about perfection and simplicity.
Money is not a target but a "door opener" it is only needed to cover the margin and allows us to trade.
But at month end I'm also happy then about the outcome (money) :-)
Steven, using tick or volume, I try to use two charts : my trading chart for YM is set at 1500. My parent parent is set at 7500 with EMA's 20 and 8. Don't disobey your parents - they know better.
Re: limit or market, as you watch the candles form on your faster chart, I use a 75% rule. If the candle closes at least 75% or better of the total length of the candle, I use it as an entry if all else is in good order - the parent approves of the direction.
I recall Van Tharp identifying the belief that "money is NOT important" as the #1 trait of successful traders. (...implying the opposite belief is a major barrier to success...)
To focus on making money is to put tremendous pressure on yourself, it messes you up real good.
So how do you actually get away from that?
Off the top of my head, the Sedona Method (Hale Dwoskin) comes to mind. It has 5 ways of releasing... they all work from different angles.
Personally, the most powerful belief in my toolbox is that the Universe always provides for me. This is a potent antidote to greed, insecurity, and anxiety about money. It sets me free while trading... which makes a huge difference. My security is NOT on the line with every trade or even a series of trades.
So the real questions are:
how do I trade free?
How do I trade happy?
How do I enjoy trading regardless of immediate results?
The answer is simple: one's gotta do it out of a good place within.
A place of abundance, not a place of lack.
Trading out of lack creates more lack.
Trading out of abundance creates more abundance.
And this is not some mystical new age mumbo-jumbo. This is just solid psychology. Winning the game before you even begin. Operating out of a place of strength and clarity, instead of weakness and lack.
How many traders out there trade out of the fullness, abundance, and joy within? Less than 5%? 2%? Ah... beginning to understand the success / failure stats.
You are never in the wrong place... but sometimes you are in the right place looking at things in the wrong way.