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It's going to take longer than you think. But it is a worthwhile exercise. When a rule is foating around in your brain it's easy to change, once it's written down you're not changing the rule you are breaking it.
It's really the only thing you can control. You have no control over the market, only over yourself.
Long only because I've been burned by being short. If I'm long I can only lose what I invest, if I'm short I can lose way more than my original investment.
I've been caught a couple time with what I considered a perfect short only to have the company bought out at a ridiculous premium.
My number one priority is capital appreciation. My strategy is simple. I buy stocks that are going up and hold them until they don't. I don't hold losers in my portfolio.
"The days when I keep my gratitude higher than my expectations, I have really good days" RW Hubbard
Hmm, okay, well then instead of trying to get it done in a few days, I'll focus and let it take as long as it takes. I like the perspective about the rule being broken if it's written down.
In general, I'm striving for self-mastery, outside of trading as well as within. Sometimes it takes multiple mistakes until I get it, but I'd like to get it down to a single mistake ideally. Not sure how realistic that is though!
That makes sense. I can only imagine what it feels like to be in short in a situation like that. And simple sounds good. It seems like it can be easy to overcomplicate things unnecessarily with trading, and other life stuff too.
The only other advice I can give you is to study losing traders. Take the time to figure out why most traders lose. Make a list of the top ten reasons traders fail, then don't do any of that stuff.
Good luck!
"The days when I keep my gratitude higher than my expectations, I have really good days" RW Hubbard
1. Sit on my hands during periods of consolidation, literally if necessary. If the market isn't trending, then I shouldn't be trading. I'll use the standard definition of trends (bull market = higher highs and higher lows; bear market = lower highs and lower lows), while keeping an eye out for reversals, and important prior with-trend swings being taken out.
2. Don't exit trades early. They must be allowed to run their course. The initial profit target is at least beyond the prior with-trend swing. If the market is trending downward, then the target should be at least beyond the last swing low. If the market is trending upward, then the target should be at least beyond the last swing high.
3. Focus entirely on trading support and resistance failures on a single chart/timeframe with the SIM account.
I'm not sure if I'll review each trade, each day in this journal, or in my private journal. I'll try to make it a habit to at least do a review at the end of the week of the results in this journal though. If I have time, I'll work on a write up of Mark Weinstein's soybean trade no. 2 (trader from Jack Schwager's Market Wizards, for those that haven't read the book or don't remember the name). I think there were two soybean trades anyway, with the first being a pretty sizeable loser, and the second being the redeemer. I may have to go back and reread his section again just to make sure I have the details right.
Anyway, the basic idea will be to go over the soybean trade that worked out. If there's enough info, then I might go over the losing trade too. If I remember correctly, the following info is given in the interview with Schwager: the approximate date(s) of the trade, and the prices of two entries and an exit. I've gone on TradingView in the past and marked up the chart with that info, but it's been a while and I have a little more experience under my belt, so it'll be nice to do a redo.
I know that there's some debate about the legitimacy of this particular market wizard, because his claims are pretty out there, but if he's the real deal, then it's theoretically possible that similar results can be attained if you can figure out how he did it. Probably a fat chance of that happening, but you never know if you don't try.
This might be a totally pointless exercise, but it seems fun, so I'll get to it at some point!
now i hope you have throw this book into the trash can.
all you have to do is forget everything you read in that book
then forget you ever found that book
forgive George for writing that book.
No one makes any money from reading books
go dig the fishing pole out of storage and go fishing. your wallet will appreciate you more.
Please do not sue me for bad advice. It was the best I could think of to say. but then i am dumb.
on second thought burn the book saving some other poor soul from reading it and losing all his money.
look up and study COGNITIVE DISSONACE. this is all about how we believe things that are opposite are both true. you know things like up and down are both the same. we believe that false is true. gets us into all kinds of trouble in life. we believe for example that evil is good. we fall into this trap all the time. we keep losing money but believe we will make money and try another trade losing more money. this place is full of such wishful thinking and cognitive dissonance. https://en.wikipedia.org/wiki/Cognitive_dissonance
I was reading on wikipedia above link & it mentioned like the drunk who drinks expecting not to get drunk. I got to thinking maybe keep trading and losing believing you are not going to lose is the same as the alcoholic who keeps drinking believing this time he is not going to pass out drunk. Now we all know that the drunk needs to go to AA and the gambler who keeps losing needs to go to GA +> GAMBLERS ANONYMOUS.
in case no one told you. TRADING IS GAMBLING. Trading is all based on gambling mathematics. they are simply 2 different gambling methods.
Traders who win know ahead of time everything about the mathematics of their trading rules.
so I suggest you go out first get a phD in mathematics of Probability & Statistics then apply it to 50 years of trading the markets under every kind of condition. and prove first that you always win big and have tiny drawdowns and have more than a huge bankroll to eventually come out a winner or else go home and pet your new puppy. then go to your local GAMBLERS ANONYMOUS MEETING TONIGHT.
IF Georges book produced winners then by today the world would be full of people trading Georges Options. nope the world was busy buying new houses in CHINA because the prices were not allowed by law to go down per the CCP. chinese communist party. it is still not legal to sell your house for less in china. although over the weekend that might have changed as seller prices crash down by 50% overnight with no takers.
I will now give you the clue to your problem. the problem is not the book. is not the options market is not trading the problem is your mind. you believe what is not believable or not true. you believe you will not get drunk if you keep drinking. or you will make a ton of money if you just keep losing all your money. cognitive dissonance. you believe what is obvious not true. the solution is to believe what is true and not believe what is not true. you simply made an error in what you believe. NOW FIX THE ERROR OF YOUR BELIEF. the truth is that your actions are must always reflect what you believe. so long as you believe what is not true you will simply keep losing. when you believe what is true you will stop gambling away losing all your money.
here is a way to look at your problem. you believe that your mind can change the outcome of a random trade. you believe that when you enter the trade that your mind will force the market to go your way. take 3 coins flip them when all 3 coins come up the same you win. otherwise you lose. you seem to believe that if you read that book by george that you can win the game of 3 coins. not a chance in hell you can win this game. Options are even a bigger loser than the game of 3 coins i just now made up because no one would be dumb enough to play this game of 3 coins all have to be the same.
YES IT TAKES HUMILITY TO ADMIT THAT YOU CAN NOT WIN AT A GAME THAT HAS THE ODDS SO BIG AGAINST YOU. YOU BELIEVE THAT YOU CAN WIN AGAINST THE ODDS OF OPTIONS. IMPOSSIBLE. NO GEORGE IS NOT GOD HE DOES NOT HAVE THE IMPOSSIBLE ANSWER TO WINNING WHEN THE GAME IS RIGGED AGAINST YOU WINNING.
There's certainly a lot to unpack here. I don't trade options the way George Fontanills does in his book. I primarily focus on futures, specifically the MES, with the goal of transitioning to the ES. I exclusively trade in a SIM account at the moment, because it doesn't make sense to throw money away without solid proof of potential profitability.
The only times I've traded options were when the price action of the securities looked good. Ironically, the best trade I've ever made to date was from buying puts on B&G Foods a while back. I've made some other trades, again with options, that would have worked out if I hadn't exited early out of fear. I do appreciate your input on George and his book though! That part about throwing the book in the trash, and forgiving George gave me a good laugh!
On "cognitive dissonance," I'm very familiar with that concept. I have had my share of addictive issues in the past, but so far, I've managed to overcome them. Sometimes genes and environment stack your deck in crappy ways, but a lot of things can be overcome. It's definitely not always easy, and sometimes it's incredibly painful, but it's worth it. In my opinion anyway.
Due to having issues with addiction in the past, I try to monitor my emotions and behavior, in case I get off balance, or start to fall into an addictive cycle. My main issue has been with developing unhealthy coping mechanisms. In essence, "this is painful, I must escape." Trading doesn't really fit the bill for my personal preferences for escapism, lol. I do try to keep in mind though that what I think about the markets could be total fantasy and based on nothing but wishful thinking.
To your comment about trading being gambling, I agree with that to a point, but it may be that after enough time and experience I agree with you fully. We'll see. I currently think that trading is essentially trying to read crowds. I try to figure out what everyone's doing and do that. When enough people change their minds, I try to go along with them. That's not always what I've focused on, and I attribute at least part of my trading inconsistency so far with hopping around to different methods/ideas when things got hard, or frustrating, or boring. So now I'm focusing on one thing, and I'll test it until I'm satisfied that it's not worth pursuing, all with Monopoly money, so no actual cash is at risk.
I'm sorry, I don't have time to address the rest of what you said right now. Thanks for the feedback though!
1. I started watching the MES at about 9:29 AM. It took until 9:48 AM to realize that price was ranging between 4,371.00 and 4,378.75. Ranging means that I don't trade, so I made myself detach from the screen. It wasn't easy, because I got the usual "what if I miss this," or "what if I'm wrong about thinking the market is ranging," but the goal is to cultivate self-discipline, so those thoughts had to take a hike. It helped that I had an alarm for 9:50 AM and 9:55 AM to stop trading in case volatility picked up from the Wholesale Inventories release. I'll need to work on identifying ranges much, much quicker. Almost twenty minutes to figure out that the market isn't trending is way too long, in my opinion.
Overall, I'd say I did okay with goal no. 1 today, but there's definitely room for improvement.
2. Easy today. I didn't take any trades, so there was nothing to hold on to.
3. I struggled with no. 3 today, because I'm used to using three charts. One for observation, one for closer inspection, and one for trading. We'll see how tomorrow goes!
