Wasting my time?

[wayneb 7]

So I'm about 4 wks in sim and consistently in the red. Most days by several hundred dollars. At this point I am starting to feel it's a waste of time and see no way to ever be profitable. I have watched all the videos and read Andrews books but still can't seem to get in the green. I have been trading from 9:30 to close every day. I average about 20 trades a day with only one or two winners. I feel I am chasing the market and every trade goes the wrong way. I know everyone has a different learning curve but I really don't see any way of turning it around. Any input would be appreciated.

[Abiel 475]

What are the issues you have detected from analyzing your trading journal?

[Kasper 13]

Do you document your trades? if so can I see some of them?

What strategy are you using?

Are you exercising proper risk management?

Also, it's only been 4 weeks so, don't lose hope just yet 🙂

Kasper

 

[wayneb 7]

Thanks for the response guys, most of my trades go the wrong way and get stopped out. It looks like I jump into everything late. The ones that do go in the right direction still get stopped out because I usually only let them go 10 cents in the wrong direction before bailing out. 10 cent swings on 20 trades add up to big losses. Maybe I need to take a smaller position? I usually trade 50 or 100 shares per trade.

[Abiel 475]

Your share size seems ok. do you have a trading plan / rules? A trading plan doesn’t guarantee success, but a good plan that is followed will help you stay in the game longer than not having one.  “If you fail to plan, then you’ve already planned to fail.”

[Kasper 13]

Your stop loss should be at High/low, VWAP or Moving Averages. You can also use the ATR to figure out your stop loss.

You should write down some rules and follow them religiously. 

For example, you need to make rules for both entries and exits. Most new traders only have an entry rule with no real target and no real stop loss.

kasper

[BrianS 5]

I am replying because I wanted to use the word nascent in a forum.  But four weeks is the nascent stage of your trading journey and it would be something amazing if you weren't losing.  Without knowing the exact strategies you trade, I might suggest not trading all day.  Instead, maybe trade the first 90 minutes and wrap up any winners shortly after.  Maybe take a small break and then really analyze the trades you made to make sure they are truly following a plan.  I have seen so many people post a couple of trades either here in the forums or in chat in down times and get amazing feedback.  Maybe try to commit to 4 stocks to watch and try to fine one opening range breakout each morning and then a VWAP reversal or cross type of trade.  Since you are early on in sim, I think it is worth exploring one trade per day at a level that you mark as support or resistance before the market starts.  For me, these are the most satisfying trades.  Charts will slow down as you watch them more and then entries will get easier and chasing will become less frequent.

[wayneb 7]

Thanks guys, this all makes complete sense and today I quit at 12:30 with a 150 profit. I spent the rest of the day analyzing my bad trades and feel like I'm not just spinning my wheels but learning. I also had a bad fill today and quickly learned to do limit orders. I wrote down all my rules on index cards and followed them. It's amazing how logic goes out the window when your in the heat of a trade! It reminds me of Mike Tyson saying everyone has a plan until you get punched in the face. I also heard another good one tonight, "If you find yourself in a hole, stop digging!"  BrianS, I understand the nascent stage from my former skydiving days. After you have about 20 jumps you become dangerous because you have all the skills in hand but really don't know how to use them. In Skydiving you die, Day Trading you loose money. Thanks again guys, I'll stick with it for a while and see how it goes.

[Gordon Freaman 10]

I've been in simulator for 4 months now, and only had 3 green days. Keep learning the stuff 🙂 

[baracuda 8]

That's a bit scary to me. Do you trade all day? What do you think is the reason? I had bad days and good. I can't say that it's all red all the time. I try stopping when I hit $100 (2% of account size). Some day emotions take over, I take a break the next day. Funnilly I trade better when my wife sits next to me 🙂 Psychology is a weird thing!

[RTrader 20]

Another thing you should be doing is back testing strategies using something like TradingView because it has great charting. Keep the results in a spreadsheet. You need at least 50 samples/trades in order to get any stats from it and find out if that strategy actually makes money or not. A lot of strategies only work in some markets and stop working for a while in others. Also test it in multiple market types, such as bear markets, bull, and volatile. I'd bet your strategy doesn't have an edge or you are not executing it as it was tested. Execution is the hardest part for sure.

[Daniel Thomas 23]

Just a few recommendations: 

1) never base your stop loss off a dollar amount (ie: a $0.10 cent move)  Use technical levels (patterns, moving averages, areas of previous consolidation, high/low of previous candles, etc...).  I have a saying directly related to this, which is: "TRADE TECHNICALS, NOT P&L'S."  $0.10 cents as a stop trigger is arbitrary, unless it coincidentally lines up with a technical area. 

2) always aim for a minimum of 2:1 reward/risk ratio.  And if the risk to a technical level (as mentioned in point 1 above) is too much to stomach, then take a smaller position, or find a different trade.  Again, find a technical area for your stop (not an arbitrary dollar amount), then take a position commensurate with the amount of money you're willing to risk if things don't go your way on the trade.  A 2:1 reward/risk ratio only has to pan out slightly more often than 1/3 of the time for you to make money.  If you've read Andrew's book, and/or studied other technical literature, you can easily be more accurate than this.  I would guess that my accuracy is well above 80%.  

3) stop trading all day.  90% of "day-trading" money is made from 9:30-10:00.  From 09:30-09:45 there is a significant amount of opportunity, but it also comes with more risk. From 09:45-10:00ish, there is still plenty of opportunity, but less risk...  From 10-11 you'll find plays worth taking, but the movement will rarely parallel the opportunity you had from 09:30-10:00.  Frankly, trading between 11:00-14:00 is, in my opinion, the source of many Day-Trader's demise.  It leads to overtrading, which leads to giving profits back, as well as overspending on commissions.  If you insist on seeing as much action as possible (for learning and repetitions), yet being efficient in the process, trade from 09:30-11, then again from 14:00-16:00; but leave during "chop," which is the window between.  And just a little nugget for ya:  The best moves/pivots are at 09:45, 10:00, 11:00, 12:00, 14:00, 15:00, 15:30.  

4) learn to trust yourself.  I'm willing to bet that there have been MANY trades that, had you just stuck with your intuition rather than stopping out -- you would have made money (cuz you were correct on the move).  You must trust yourself in this game..., and back to a previous point - a $0.10 stop is taking control (trust) away from yourself, and basing said control on arbitrary metrics (as opposed to the education/wisdom you've acquired).  

5) The final point I'll make is this:  the more repetitions you get in, the more comfort and wisdom you'll develop.  Trading is much like everything else in life, in that the more exposure you get to it, the more repetitions you experience, and the more practice you employ -- the better your acumen will develop.  Nothing in life worth anything comes easy.  If you want to be a successful trader bad enough-- the only person in your way is the person you see in the mirror.  Keep your head in the game, keep persevering, and you WILL develop into the Trader you want to become.  

 

Gl; STAY GREEN!

Edited May 12, 2019 by Daniel Thomas

[naka 1]

there have been some really good replies here.

you said you're making about 20 trades per day. to me, that's a lot.

this is where i'd like to re-emphasize the importance of journaling your trades. i have a trading diary filled with every trade i've taken, along with the setup, reasoning, and market sentiment at the time. i also screenshot the chart, so i can quickly review the technicals at a glance.

i switched to only trading my A+ setups about 6 months ago. i went from making about 15-20 scalps per day, to making only 3-5. this one change more than doubled my overall net PnL.

the takeaway is that i was only able to realize i needed to make this adjustment because i had the data from my trading journal to back it up. without that, i wouldn't have even realized i needed to make that change.

there were some additional side benefits, too. not only was i able to focus more on the trades that had a better chance of working in my favor, i was also able to free up mental bandwidth from managing setups that were anything less than excellent.

also, at least you're losing money trading in the SIM, and not actual capital. congrats on starting out in SIM. most skip that step and regret it.

 

 

 

[wayneb 7]

Just a quick update, what I've learned so far: Just finished my 5th month in sim and no improvement. In fact I feel I am getting worse over time. I know Andrew often says some people just cannot do this and I am seeing why. I have spent over 40hrs a week full time on this and have nothing to show for it. I have learned so much and could teach a course on it but cannot get it to work in the real world. Most of the time the patterns and strategies fail. It is easy to cherry pic setups after the fact but in reality I find most setups fail miserably. ORB's go the wrong way, ABC's fail, VWAP breaks are false, bull and bear flags go the wrong way. Support and resistance are non existent. For every setup that works I can find 10 that don't. The instructional videos are great but they are cherry picked stocks that the setup in question worked beautifully. Why not post a video on the 10 that failed .

My wife who knows nothing about trading just picks a stock because she likes the name, goes long or short and has a better win % than me. This tells me trading may come down to dumb luck and is just gambling. You really have a 50 / 50 chance of success on each trade and patterns / setups are meaningless. Andrews style confirms this because his accuracy is only 50% or less. He jumps in and at the first sign of failing gets out and tries again and again till he gets it right. Random! He gets it to work because he takes a big size and can make good profits on a .12 cent move. For most traders this strategy will not work. Even with 1000 share position you need a .20 cent move to make it worth your time and in this market that is very difficult. It is frustrating because I do have a passion (or maybe obsession, same thing I guess) for it and would love to con't but after 5 months I would think some improvement should be evident. I have recently started intraday trend trading and having some limited success  but still no better than 50 / 50 guessing. I tried a coin flipping experiment and my trading reflects the same outcome, about a 30% accuracy rate. 

Sorry for the long rant but I think most traders are going through the same thing and It's good to vent. Thanks everybody.

[RTrader 20]

Wayne, I honestly think you are right. You are realizing something that most people never seem to get. Day trading is the most stressful, and most difficult way to make money in the market. Maybe it’s all the internet marketing or something, but reality is there is almost no long term edge day trading. I know because I have been trading for years actively since about 2012. A lot of traders do well for a while, then fizzle out because the markets change. So the strategies do work, but only for a while and under certain market conditions or on the right stocks. If you back test low timeframe ORBs or most other day trade strategies people use on short timeframes, they really don’t have a measurable edge over time once you factor commission, taxes etc into it. The traders that do make money with those strategies, are using a lot of discretion in their decisions. I have noticed a lot of traders just want to jump in and starting using some of the strategies, but they don’t research and back test to see if they actually have a net profit long term.

If you are thinking of quitting, you should consider looking at swing trading first. A lot of people think it is risky to hold overnight, but I think it’s less risky. You are going to get much larger moves out of your trades, which means you can have smaller position sizes/larger stops etc. It’s much less stressful and honestly, more rewarding then scalping intraday. What I have found is the move everyone hopes to get day trading, many times doesn’t happen until the following day. The market rewards patient traders who stick to their plan. Sorry if this is all controversial; many people might not like it… but that has just been my experience. Remember the group is BearBullTraders, not BearBullDayTraders 😊

Example swing I took, and am still in: UBER breakout on 6/27. I waited until the late day pullback to enter around VWAP. I only use 60m charts and daily. I was planning to hold this overnight and longer if it works. Next day it launches on Friday and I was up over 4% in less than a day. Who knows maybe it will run huge. These IPOs can do some crazy stuff, but now I have a position I could potentially ride for very big move. We will see what happens.

Edited June 29, 2019 by RTrader