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Thanks again TropicalTrader. I think this was a nice foray onto this forum but Im really starting to think this forum is not for me. At least not as a participant.
I think people want to help in general here and this is the most caring forum I've been on with the absolute BEST people but the more I look for answers outside myself the more I just get the same answers. You need to look inside.
I need to learn to work my edge. I know what expectancy is. I know what risk and reward and probably are. I know WHAT I need to do. I need to learn to DO it and do it consistently.
I don't know any great skill that comes from ease. Knowing is the easy part. I have to go through the losses. And I'm learning to live with alot of smaller losses vs trying to avoid them. That's just where I'm at.
Im trying to stay in the futures game in live mode full time. Thats it. Thats my goal.
Im not committing huge amounts of capital at any one time. I need to find out what is wrong and fix it. That's painful and I'm learning but it's neccessary.
Im transitioning from SIM to live trading for the first time since first trying to trade futures live a year ago. I got REALLY slaughtered back then. So I'm not like that anymore but I have along way to go.
But like I said I think it's just time for me to move on. In the words of the littlest hobo...
Every stop I make, I make a new friend,
Can't stay for long, just turn around I'm gone again...
This week I listened to Thinking in Bets by pro poker player Annie Duke. It was a great read and I highly recommend. She tells some entertaining stories and goes deep into Cognitive Biases. One of the terms I really like that I hadn't heard before is the word "Resulting" which is when we interpret things with a bias based on the result. Example, we veer off our plan and the trade works so we're happy and consider it a good trade vs veering off our plan and the trade doesn't work, now we're upset with ourselves. She goes pretty deep into a lot of psychology that's useful for traders.
Annie was a psychology major who's older brother became a pro poker player and then she got into it and was fortunate to be in a mastermind group with some of the world's best poker players who worked very hard on their craft...
-------------------------------- QUOTE from: Sandpaddict (I'm not making this a mention because he asked to be left alone)
Thanks again TropicalTrader. I think this was a nice foray onto this forum but Im really starting to think this forum is not for me. At least not as a participant.
I think people want to help in general here and this is the most caring forum I've been on with the absolute BEST people but the more I look for answers outside myself the more I just get the same answers. You need to look inside.
I need to learn to work my edge. I know what expectancy is. I know what risk and reward and probably are. I know WHAT I need to do. I need to learn to DO it and do it consistently.
I don't know any great skill that comes from ease. Knowing is the easy part. I have to go through the losses. And I'm learning to live with alot of smaller losses vs trying to avoid them. That's just where I'm at.
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I think this is an excellent example of why most traders fail.
In modern society we are taught to try harder, work harder, "attack until we succeed" and this can produce results in many business endeavors - but its not likely to work in trading. Maybe after many, many, many years of getting the crap knocked outed of you, but most likely not.
To quote Mark Douglas "The best traders think differently." "They're not afraid".
When we are making effort and pushing hard to get to our goals, we see the obstacles as our enemies. The obstacles are blocking are path to the promised land. They are attacking our dreams of success. On those days when we've taken a few losses in a row its easy to go into pain and feel victimized by the market. "The market" is stopping us from succeeding. So the natural thing humans do is either try to fight the market (just keep buying that falling knife) or get scared out of the game.
If you don't start thinking differently, then you're not likely to step out of this destructive pattern. That's why I put "the it's 80% psychology thing" in the title of this thread.
We need to really understand our biases, like recency bias, "resulting" bias, black and white thinking (its either this or that, one extreme or the other), the illusion of certainty, etc.
Then, we need to train ourselves to think differently. So we never see the market as an enemy, to quote Andrew Menaker "it's an opportunity generating machine". WE are the obstacle. WE are the way. If you've ever had to train a dog, you'll know it takes a lot of effort, consistent focus over time. Same with us evolved monkeys - and knowing how to act when everything is going our way is one thing, knowing how to act when our emotions are going wild is another. As we retrain our brain and reprogram our subconscious mind to think differently about our experience with the market, there will be less emotions, we will have more ability to stay rational.
Always remember that its a marathon and if you're frustrated with all the disappointments after those brief moments of success, get real about this journey. I very much doubt that all your will power and force will do anything except dig you into a big hole - and we're here to live out our dreams! I know I AM..
Thanks for your comment on the 3 trading groups. Very intuitive and pretty much on the money.
Since you asked, I think I am in the group 2 camp, risk averse. I am very cautious, do only trades my broker recommends in her daily newsletters and my trades are mostly option spreads - maxed out for minimum risk and maintenance. I have only been doing this since April so I literally have a dearth of experience. So far I'm positive $198 dollars before fees and commissions and this doesn't trouble me at all - my account is less than five grand. Beats a savings account. I enjoy watching the option spreads - it takes them a while to come to profit/expiry, and in the meantime I can follow the profit and loss meandering about - its plenty of excitement for me. Mostly I am just trying to learn by watching, and see where it all takes me.
Shark, the top SMB trader, said he lost 300K in a trade. He said it took him months to get back in the green. I wonder how that’s possible with their risk managers around. Swang, another too SMB trader, said his account size is $10 million. I’d assume Shark also has around the same account size. If the recommended stop loss is no more than 1-2%, I wonder how Shark lost $300K or how he got to stay at SMB.
Guys who make several million dollars a year are not subject to the same risk parameters as a new trader trying to break even. "How he got to stay at SMB"? Businesses work by retaining good people. You don't "let someone go" because they have a rough patch or make a mistake. Likely a loss like this was being actively managed (it was probably a multi-day trade) and the risks were understood. He was probably not using a hard stop anyway, and was probably trying to hedge off risk instead, but that's just a guess and I don't know anything about the circumstances.
In stocks, gap risk is real and I'd not be surprised to find that a large loss like that was due to a big gap up/down. It's unlikely that a senior trader who mentors others would demonstrate a pattern of poor risk management, like adding beyond a predetermined risk amount. Either way, I have no doubt that the risk was discussed with everyone involved, and that it was not a "rogue trader loses his mind" situation.
I'll reiterate that a "stop" is not necessarily a "stop market" order. And especially not a single one. Particularly for larger positions, instead of just blowing out of it, often a hedge is put on and both are wound down. "Stop" in this context means "risk limit".
Thank you for sharing this. It was extremely helpful to me. I finally started to realize that I need to work on my process and psychology. I will be using that list.