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Day trading - Considering throwing in the towel for good.
How are you suppose to find your edge/niche doing the same thing over and over again and not trying everything out.
How are you suppose to make any progress by not changing anything when clearly things aren't going well.
Something has to change. There is nothing wrong with jumping from one thing to another. Dismiss what you don't like and keep what you like, even when it goes against all "rules". You're unique.
Assuming your method has an edge then this should give you a clear understanding on what you should work on to further optimize your trading and bring it onto a new stage.
Try to find a solution to survive the drawdown(s) and you're good.
This might be the right thing to do as soon as you are noticing you're in a drawdown. Your method might not be optimal suited for the actual market conditions. Scale back and wait for the market to change or use another strategy better suited for actual market conditions.
The problem is not that you're undercapitalized but that you have yet to find a way to live through the drawdown(s).
Expectations set you up for disappointment and are best left behind.
People at the end of their life often regret the things they didn't do. You can be a trader your whole life long and not making any money, so what? You tried and did your best. You did what you wanted to do. If the focus is on making money it will be very hard to succeed. Maybe you should give it one last shot when possible. Focus on the drawdown(s). If you decide to quit that's alright too, maybe it's time for some new adventure(s) and who knows what will cross your path. Be happy.
Well, technically, it's blowing up even if the account is small.
Humbly, and I'm obviously not in a position to give advice, I think trading is a waste of time if no edge is already developed through back-testing/study/forward testing. Reason being that you spend 6 hours looking at a market where the same 6 hours could be spent researching/back-testing for example 10-20 past market sessions.
Curious. Why is it you think you don't have an edge after 10 years? Did you simply apply yourself incorrectly or do you think it's not possible for a retail trader to gain an edge? Or some other answer?
It sure is high leverage, but I think realistically it's possible for a good futures trader to gain that in volatile markets. Of course, the higher the leverage the more difficult it is to succeed, so it's quite possible I'd solve many or even all my issues if I reduced my leverage.
It's just hard to earn 'peanuts' with a small account - which is why I'm wondering if my time would be better spent working more and saving up more money before trying again.
Could always go down the 'funded company' path, but not sure it's worthwhile...
I'm sure I've read it all and seen it all in terms of directional day trading, but I've stuck with my current approach for the last 5 years or so after settling on something which makes sense and have good results in back-testing. Prior to that I tried a lot of things. My trading is based on statistical patterns which simply have taken time to discover and internalize - not to mention building the actual software I use.
It takes time to reach mastery at most things in life, so I don't see anything inherently wrong with sticking to a process or method.
I'm slowly progressing in another field at the moment. The key is simply sticking to it and I know I will reach my goal as long as I stay consistent. I wish trading was as easy. LOL.
I think many of my issues could be psychological, i.e., desire to make a profit, desire for something to happen, desire to make it as a trader, desire to leave my job, etc. When the drawdown comes, the best thing would probably be to leave the computer for a few days and get it completely out of my system, but I tend to get irrational and want to make it back quickly as a drawdown means I just took a big step back from reaching my dream.
Right. I'm extremely happy I actually took the shot and gave it my best, so thanks for reminding me. I had kind of forgotten that. But I did something many people would not have dared. It have cost me financially and possibly other opportunities, but I'm still glad I did it instead of regretting not giving it a chance.
It's possible it's time to move on now, though.
Curious. Are you a consistently profitable trader yourself?
Personally, I'd say that I wouldn't shoot for 8 % indefinitely and would seek to slowly compound such that % risk/gain should be highest initially and reduced later on.
But maybe my main mistake simply have been rushing it and starting out too aggressively.
What would you say would be a good daily % goal, then? If any?
I think it's possible to beat the market, but it requires the dedication and will power to follow a plan that has been back tested. That being said I believe I have developed edge but I squander it by not following my own trading plan. I move my mental stops and sometimes completely do not use my mental stops and hold onto losses hoping it will turn around so I can get out at break even. This is how I blow up my account everytime. I don't take my own advice and start gambling and rooting for a loss to turn around.
I write in my journal on this forum about how important a stop loss is to my trading. This has not saved me from myself and I revert back to gambling quite often. I don't know how many times I will have to lose my money until I realize I must follow my back tested trading rules. But never the less I will keep trying to win because I really like trading futures in particular.
You've accomplished more than many who attempt to trade. I say that, because you were able to quit your job and trade full-time. How many people who attempt to trade can say that?
You mentioned that you introduced statistics into your strategy. At least you are thinking outside of the box. Many day traders stick with the same pedestrian indicators, and never consider deep statistical analysis. The closest they come to statistics is Market Profile and Bollinger Bands (the average, 1sd, 2sd, blah, blah, blah).
In my opinion, you shouldn't limit your progress to a time frame. Ten years may be a long time. But if you are studying on your own without the tutelage of a professional trader or a prop firm, then 10 years isn't that long of a time, especially when you have other commitments.
It sounds like you just need to take a step back and reassess things.
You've already assessed your capitalization.
Other things to consider are (things I have actually asked myself):
1. Am I trading too many sectors (Equites, Interest Rates, Energy, Commodities, Currencies, etc)? For me, I limited my trading to one sector-- interest rates. When I limited myself to a sector (or specific instrument), I began to understand what affects it, and understand its movements.
2. Do I really have an edge? You might want to revisit the statistical angle. Statistics can be the basis of your edge provided you are looking at the right thing.
3. Do I suck at directional trading? I suck at directional trading. That why I held my nose and explored pairs trading. I personally don't like pairs trading, so I look at one instrument in the context of others, look for correlations and cointegration and use one instrument as an indicator and trade the other. I have to have a legitimate reason for entering a trade, and one line crossing the other doesn't work for me.
4. Does my discipline suck? My discipline sucks. I will hold on to trades to long, move stops and dollar cost average without justification. So, I looked in algo trading a little over two years ago and haven't looked back.
5. How much debt to I have? Before embarking on trading full-time, a trader should be debt-free-- mortgage paid off, car note paid off, and no outstanding loans.
Trading is tricky. We can fool ourselves into thinking that we aren't making any progress when in fact we are making tremendous progress. Just look at where you were 10 years ago compared to now. Are you willing to throw all of that away?
Again, it sounds like you need to take a step back and return with a fresh perspective. Return to the workforce and get the capital that you need. When you return to trading, keep your 9-to-5 until you are consistent. For me, that's where an algo comes into play. I can run it while at work.
“Paid a firm to create a custom statistical application based on my methodology which I use for my trading.
- Tons of back-testing.”
“I've had really good periods where I've both tripled and quadrupled my account over a period of months with few losing days. But invariably, the drawdown comes and it tends to accelerate and I just liquidate my account before it's all gone. Then I start over again a bit later and tend to do well early on, but the same pattern tends to repeat.”
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1. Many traders say that they have rules for their trading and they experience problems because they don't follow them consistently during live trading. Was that the source of the drawdowns you experienced?
(sorry if you addressed this before, I couldn't find it in the earlier posts)
2. And is the entry/exit methodology you have developed 100% rule-based or is it "primarily rules-based" (if that's a thing; that is how I characterize my own approach). Or are decisions primarily discretionary after analyzing statistics?
“What if the truth was that 95 % of would-be traders are not successful after 10 + years? And among the 5 % who are, they're not making that much? Maybe it's like 1 % that actually make a killing?”
3. I've been trading and reading posts on trading forums for about 15 years and this sounds right to me, except I suspect that the 1% number might really be 0.01% - 0.1%. My own history is that I became variably profitable after about 5 or 6 years, i.e., I can make money swing trading every year but the % gain is quite variable.
