21/10 – Focus on my trading attributes rather than trading results

My trading results have continued to be negative this past fortnight.  I just don’t understand what’s going on.  Nearly every trade I place produces a losing result.  I am talking 80-90% losing trades.  I even attempted to trade AGAINST my established trading strategy on several occasions – but even then the results were losing trades. Nuts!

However, at this point I have decided to focus on some good developments in my trading, in other words, the actions I complete as a trader – how I spend my day….

Firstly though I have to admit that sometimes it’s very difficult to keep going during these times- I need to constantly pick myself up from the floor.  Crazy!

Note I am working carefully to look into the trades – assessing what the market conditions are saying, assessing my execution, assessing my setup reading and so on – so I am not just sitting still and letting the market pound me in my face.

So here are examples of how I am developing stronger traits as prop trader:

  • My discipline has increased even further in recent weeks – the extent to which I place and manage trades – how I progress through the day – the daily 6am starts!
  • Pre-session preparations –

process-2

  • End of Day Reviews (encompassing both ‘Trader Performance’ and ‘Strategy Performance’)

process-1

  • Thus, generally speaking creation and compliance of processes/routines throughout the trading day – use of checklists for these – pre-session preparation, end of day reviews, setup checklists
  • Documentation – of all trades, of missed setups, of interesting points
  • Conversations with other traders – sometimes in the role of coach, sometimes in the role of student – such as with colleagues in my small trading office or with professional hedge fund traders
  • Widening my horizons by emulating and looking at what other traders are doing – Twitter has been really helpful for that!
  • Risk/Money Management – although this has never really been an issue for me – this aspect of my trading operation is well in order!
  • Constructive analysis regarding strategy development – constantly trying to get better

So, all in all, I have to say that most traders and/or trading coaches should be at least a little bit impressed as to how I go through each trading session, even if they wouldn’t be impressed by the profit & loss account.

In due time, if I am putting in the right actions, the positive results should eventually come (assuming I have a good strategy in place!).

All right, that’s my update for the week.

 

 

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12 Responses to 21/10 – Focus on my trading attributes rather than trading results

  1. David Eppel says:

    Nobody makes money trading Forex, don’t waste your time, get into options and make money,be happy. Seriously- there is an army of woeful forex traders taking massive losses,there are probably a few institutions quaffing the Krug and laughing right now.

    Like

    • Diane says:

      Hi, David I used to trade stock options for over 20 years and moved to forex around 5 years ago. One of the areas I have noticed with a good number of forex traders, they are not good at risk management and have unrealistic expectations. The reverse is true of traders in options and futures.This is a generalisation of course but is based on my experience of coaching traders from all types of backgrounds and markets.

      Like

  2. Hey Mr eppel,

    You been trading options for almost 10 years now.
    How much money have you made overall in that time?

    Really all forms of speculative trading are difficult.
    Options are just another risky instrument like the rest.
    Just because you can sell options with a high win rate does not mean you wont lose money overall.

    But i agree George is playing a extremely hard game trying to day trade the FX, there are better ways to make money in the markets but none are easy.

    ADT

    Like

    • Many thanks for both of your comments David Eppel and ADT. ADT, what would you say are better ways to make money in the market?

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      • I think taking 20 to 30 day trades per week, which equals 1000 to 1500 a year is way too many. The markets have a random element and you will be catching too much random noise as well as spread adding up. 1500 trades and say average 2pip for spread and slippage etc means you have to make 3000 pips a year just to break even.

        I think you need to more selective, ideally somewhere between 50 to 150 good trades per year. Those could be day trades or they could be longer term trades.

        Good edges are very hard to find in the markets, they should rarely occur, all the easy good edges have been arbed away, therefore if you are getting lots of signals to trade that probably means your edge isn’t the best (has very low expectancy).

        Liked by 1 person

  3. Thanks for your comments ADT – that’s much appreciated. By the way, I am all on board with your view on transaction costs! I wrote some of my thoughts on transaction costs here: https://gputtner.wordpress.com/2015/06/22/226-trading-results-graph-a-word-on-transaction-costs/ and https://gputtner.wordpress.com/2014/11/17/trading-compared-to-roulette/
    I do view transaction costs similar to the way gamblers face the house edge in casino games such as roulette or blackjack.
    Your other comments are also great food for thought – thanks!

    Like

  4. AA says:

    george,
    there really is no need to be up at 06.30.go take a break for a week or two.then come back and settle back in slowly.start maybe 11am or even later.put in about an hour.if you still do $hit,then cut it to 30mins.still do $hit then cut even that to 15mins.focus on improving what you do better and once you do start improving build it back up but to no more that say a fair days shift of about 8hrs.do not buy into the masters of the universe BS which has you believing you need to put in 20hr days
    focus on things you can control.you can give yourself 8hrs of sleep a night.you can watch your diet,drink a good amount of water,hit the gym,have time for your friends and family(exorcising my own demons here)
    and switch off that damn squawk if your still listening to it.

    Liked by 2 people

    • I think hours should be dictated by strategy, if the strat demands a 6am awakening to trade the european session which starts around 7am to 8am then so be it. But I don’t recommend spending more than 4 hours a day trading, you cant trade 8hrs+ a day long term, for decades, anyone doing that will just burn out.
      The aim in trading is to increase size, you want to be trading £100+ a point on your best edges, not £10 pound a point on lots trades based on a week edge.

      Liked by 2 people

      • AA says:

        Four hours or less,even better.agreed on increasing stake size.
        Is there any strategy which can pinpoint the timing of a trade? My point is to take the trades which appear during the time you alott to trade.sometimes there may be no trade to take at all.the more time you give it,the more opportunities there will be.you have to strike the balance.or automating is the way.

        Like

  5. >I just don’t understand what’s going on

    One other thing.

    Trading a 1000+ signal per year trading system that has a low expectancy is likely to give you draw downs of at least 50R sometimes (probably more than 50R to be honest) .

    Thats not 50R losers in a row, there will be winners as well but the net drawdown from peak to valley could easily exceed 50R.

    The system might make 100R+ a year, but you will have to take those big drawdowns to get there, thats the problem with low expectancy systems (based only on chart patterns).

    Really to get your expectancy up and drawdowns down you need to use information outside of the charts. Like if you are a stock trader only trade stocks that are moving because some news event is causing momentum and follow through in price action. That kind of system might have better expectancy than one based only on chart patterns.

    AM

    Liked by 2 people

  6. Another way to look at what is going on:

    A 0.1 Expectancy system after 1000 trades will have 550R worth of winners and 450R of losers, net 100R profit.

    A 0.25 Expectancy system after 1000 trades will have 625R of winners and 375R of losers, net 250R profit.

    A 0.5 Expectancy system after 1000 trades will have 750R winners and 250R losers, net 500R profit.

    450R of losses when 0.1
    375R of losses when 0.25
    250R of losses when 0.5

    Its unlikely your system has an expectancy over 0.25 over the long term.

    But which ever way you cut it, you are going to experience a lot of losses when taking 1000+ trades a year. Very hard to maintain discipline over 1000 trade in such a short amount of time.

    Liked by 1 person

  7. Pingback: 26/10 – Practical improvement tips for daytraders | Trick or Trade

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