To learn from your mistakes – good deed, but life is short, all the mistakes can not be made in time, therefore it is useful to refer to the experience of other traders.
Now I want to talk about several traders, ставших в последние 2-3 years widely known in narrow circles, о типичных ошибках, which led some to the draining of hundreds of thousands of dollars, and about the reasons, приведших других к успеху и прибыли в миллионы долларов.
Let's start with averaging. Trade successfully, усредняясь, can be quite long… until black comes властелин Swan. One of the most powerful examples of averaging, который я знаю, demonstrated trader Ingo, which in the fall 2008 year averaged 8 once, и принял лосс, only having lost 200 sipi points. Yes, Yes, он выкупал тот самый пробой уровня 1200. The only reason, which he still trades, is, what he found the strength to admit his mistake and close a losing position. Since then, his trading style has changed quite a bit., he stopped aggressively counter-trending, стал брать небольшую прибыль очень быстро.
The biggest problem with the onset of the black swan after averaging is not even a loss of money. – money can be easily returned. The problem is, that such things very much undermine the psyche, и оставляют раны в подсознании, от которых очень трудно (and sometimes impossible) bounce back, and the fear of repeating the swan can manifest itself in the most bizarre forms, interfering with successful trading. Why do yourself irreparable harm? Say no to averaging, и вообще, перестань разговаривать с усреднениями!
Averaging is allowed only when approaching with a large volume, который может двинуть рынок, but in this case it is more correct to talk about a set of positions in parts. A manager of a large fund with a weekly and monthly trading horizon can look at the sequence and gradually enter against the daily trend, but an ordinary intradealer should just forget about averaging.
A few words about feet (подробнее о них поговорим позже). If you don't use feet (tough, mental, or disastrous) – sooner or later your broker. It does not lead to sin, ставь стопы!
One of the famous Russian traders regularly describes his trading experience, it is an invaluable source of material on applied trading psychology. According to the classification M. Дагласа, it is of type “boomers and busters”. This is best illustrated by one of his old yield charts.:
Greed and fear – that's all, что можно увидеть на этом графике. Lack of system, Discipline and stops always lead to the same ending. long ago took the first step to enlightenment – он понимает все свои проблемы, but can't find a way to solve them yet. We wish Alexey to gain discipline, stop changing your trading rules, and start observing them, – word, do all that, what he can only write about so far. The main psychological problem of a trader after big losses – a tendency towards negative thinking (negative thinking). He makes a list of prohibitions – Togo, что не надо делать. but, it is very difficult for a person's subconscious to dictate, what no need to do. The demon of contradiction sits in the subconscious and wants to do it anyway (“Short for everything!”). Positive thinking theory (positive thinking) approves, that it is much easier to teach the subconscious to do something make. This is especially evident when dealing with children.. It's hard to get what you want, если использовать частицу “not”: “Don't put your feet on the table” – and the child will definitely put his feet on the table, seizing the moment, когда никто не смотрит. It's much easier to act by example.. All children want to become adults, поэтому они хотят подражать взрослым: “Посмотри, because mom doesn't put her feet on the table, only small children do this” – and the child will immediately remove his feet from the table., all professional traders work confidently, хладнокровно и дисциплинированно, Tonly losers and weaklings can't follow their rules!
One of the most interesting trade magazines on the forum from year to year leads . Досадно, that despite the fact, that he methodically captures all his mistakes, like , is he yet can't take the next step and find a way, how not to repeat them. This year, the start of trading turned out to be sad for him.:
01-15-10 08:18 PM
Weekly Update for week 1/50 ended 01/16/2010
A disastrous start to the year. Down 99.5K (24%). It all happened on Thursday.
Saw the follow-up rally on BIDU on Thursday, and thought it was overdone at 449. Forgot all the harm I have suffered in BIDU on previous occasions, and that this was just a day to expiration. Bought 50 JAN 450 PUTS @ 6.50, as well as shorting 500 shares. Then came another surge and I added another 60 contracts @ 5.80, and extra 500 in shares. Watched all morning for exit point, but instead came another surge by noon, and in vengeance bought 200 contracts @ 4.00. That was the last act of desperation. Watched as the stock climbed and did not look back, while the premiums kept eroding. Finally closed all 310 contracts at prices from 1.80 down to 1.30 as the bids kept disappearing when I put in my limit order to get out. Lost 102K in stock and 14K in options.
Regular readers of his magazine are well aware of all the typical mistakes.: averaging, trade in revenge, inability to close a losing position in time. Unfortunately, на прошлой неделе drawdown his Account has already reached 44%:02-20-10 01:32 AM
Weekly Update for week 6/50 ended 02/20/2010
D-E-P-R-E-S-S-I-N-G week, down 57K (20%).
No words to explain the disaster that happened. Began on Tuesday, with what was supposed to be 100 contracts of X FEB 50 PUT worth 16K that I initiated via a Trade-Trigger. Unfortunately, there were double executions (was in the process of modifying the trigger when it fired – didn’t know and the replacement caused another execution): When I realized that, I was coming dangerously close to the max loss of 6K. Instead of closing it out, decided to double down with 100 X FEB 55 PUT (worth 98K) in a bid to break-even. That was not to be. Instead the stock kept moving against me, I exceeded the max loss, and nothing fired (realised that my program was unable to process the new option symbology format), and I lacked the will to close the losses. Finally closed it when it was unbearable, losing 17K in one, 18K in the other, and the stock position was closed out at the max loss of 6K. That defined the rest of the week as I couldn’t get anything right.
Now he needs to double the depot, just to break even. We wish удачи в этом нелегком деле.Другой печальный пример шестизначного лосса показал from the same . Trade was going well, пока не случилось ЭТО:
07-17-09 10:56 PM
Mostly a good day to the end of a busy week
+ 2495 Day
+ 11447 Week
+ 10703 Month
07-20-09 09:42 PM
My worst day in terms of money (not percentage but pretty close)
I became the victim of a stock scam today in a false rumor of a buyout of HAR. The timing could not have been worse for me as I was short over the weekend and in I was in the office early today to check how the premarket trading was going for HAR. What had happened is that a press release was issued to many news organizations including AMEinfo.com in the Middle East. this caused the stock to shoot much higher and in fact went over 50% higher while I watched to my horror. My reaction was actually to short more and thats what I did. I started to short more shares but then within the two minutes it went from 26ish to over 35 and I went from highly skeptical of the buyout to fighting for survival of my account. I was put in no choice. I must cover or risk losing my ability to trade. I started to cover and just like most stop losses I was covering at the worst possible time and causing my own losses by having the bids that I did. I then changed direction again and went long. This again turned into a mistake as I found about the worst time to not only cover my short but to start going long. I did not wait around long with my long and covered that very quickly as it did not move higher.
For most of the day I dealt with the mental experience of knowing that I had put myself in a situation that allowed this type of loss to occur and how I can best deal with that.
– 117167 Day / Week
– 106464 Month
Averaging, coup and hit the saw because of emotion, eventually – megasliv. Unfortunately, after this blow, Robert could not recover:02-11-10 11:11 PM
So many things went wrong with this trade I don’t even really know how to begin. The start actually went pretty well. SWM gave a long signal.I entered correctly but I made my first mistake when I raised the profit target offers beyond where they should be after I covered half.and so instead of taking a nice gain on a small amount of shares it moved against me…I did have a possible $1 gain+ though and I should have at least exited near break even. Mistake one. The rest of the trade became doomed when I then became too aggressive in buying it at first and then not enough towards the bottom as I was holding out for a 50%+ drop… After believing that the pricing was panic and believing that opportunity was available I ended up putting my foot in the ground with the thought that I would do two things. So I ended up riding the stock all the way down again. It was too late to recover by the time I figured this out… Margin. I was running into a margin issue as I could not carryover a large amount of SWM as I pulled money out of my trading account when I was trading poorly before… I am not sure what else I could have done wrong with this trade. I could have taken a hard dollar amount stop, entered into the fade according to plan (without forgetting that long fades can really move against you before retracing), and many others that I am sure I will think of later… The last time I saw a stock behave like this was over a year ago. It doesn’t make how I traded it today alright but it does show that we don’t see this kind of price action often. SWM - 12278
Changing the original plan, turning a profitable trade into a losing one, averaging, shoulders are too expensive, but the market can behave irrationally longer, how will you keep your solvency. The same fairy tale about the white bull. We wish Roberto deal with her problems.
Examples And Show, how naive are the excuses for their own weakness from the series:
“Here, I would have a large deposit, then I wouldn't make those mistakes, what now”. Bullshit. Don't kid yourself: if you can't follow the rules on a small deposit, big won't help.
What about successful traders? Trader in 2008 gave a deposit of $ 400K to his friend , and he overclocked it to $ 4M. Thereafter for a long time leaked it to $2M, but then I pulled myself together, and showed strong growth last fall. Despite the prohibitive risks that, judging by the transaction log, takes on himself , it is seen, that he trades in the system (albeit quite wild) and respects the feet. Way to go, Sol!
Trader went the way “from dirt to Kings” for two years. Having started trading in a prop firm with a daily loss limit of $50, he gradually went out to three, четырех, and 5-digit profitable days, and eventually became a millionaire. The gods do not burn the pots!
06-27-05 09:34 PM
Ive had a few bad days since i last posted.
End of last week i did
Wed -118
Thurs +29
Friday -40
Monday +8908-29-05 11:15 PM
+321 today. New best day ever again! 11-14-07 09:27 PM
One of my worst days ever, and i thought monday was bad. Never been this frustrated in my life….
Attachment:
11-30-07 09:27 PM
Surprisingly good day today, and made my monthly mark of 100k just by a few hun… Relieved and happy.
Attachment:
12-28-07 09:39 PM
Good day again today. Month total about 111k. Not going to trade on Monday, so today is the last day of 2007 for me.
That brings the tally to a little over 1.1m on the year.
Finally, , – true industry benchmark. In 2008, Don traded around 585.000 contracts / ES, and earned over $ 1.6M. Simple counting shows, that the average profit was “Total” about $3 on contract! Don – the best embodiment of the idea of providing liquidity, and about, that even a small statistical advantage allows a trader to be the owner of his own casino.
Think, the statistics of his trades speak for themselves:
2008 Statistics (All $ are net of transaction costs)
Market Days Traded: 253
Market Days Not Traded: 0
Days Positive: 197 (78%)
Days Negative: 56 (22%)
Weeks Positive: 45 (88%)
Weeks Negative: 6 (12%) Includes 2 in DecemberMonths Positive: 12 (100%) The current trailing stop will ensure December ends +.
Months Negative 0 (0%)
Average Day P&L: + $6,505
Median Day P&L: +$6,195
Note: Multiplying the average by the # of days traded won’t tie to the Net P&L for the year because the latter includes overhead expense.
Largest Gain: $70,423 (Yes, I’ve linked to it. ‘Twas the toughest post of the year.)
Largest Loss: -$93,574 (This one’s a fun read. Note the comment “On 12/31, this will be a distant memory and the wound will have scarred over.” Just remind me to take 10/6/09 off.)Days to Recover from Largest Loss: 4
Largest Daily Winning Streak: 15 Days – Aug 26 to Sep 15 (+ $185,250)
Largest Daily Losing Streak: 3 Days – Feb 1 to 5 (Minimal Damage at -$9,213)
Largest Weekly Winning Streak: 21 – Jul 14 to Dec 5
Largest Weekly Losing Streak: 2 (Twice) – May 19 to May 31 and Dec 8 to Dec 19
# Times with Consecutive Losing Days: 9
Daily Profit Distribution (# Days at each Profit or Loss level) … Click to Enlarge.
Note 75% of the days fall within the first 3 bars of profitable segments (essentially 0 to $30K).
And perhaps the most important statistic of the year, when compared to prior years (after all, the only stat that means anything is the bottom line):
Pre-2008
# Months P&L (before overheads) > $100,000: Zero, Nada, Zilch
2008
# Months P&L $100,000 – $200,000 : 6
# Months P&L $200,000 – $300,000: 2
# Months P&L > $300,000: 1
I highly recommend reading Don's 2008 magazine, and pay special attention to his worst and most profitable trading day. Trader's way – this is not a robe trade on a tropical island. It's blood and sweat, it is a constant process of improvement through realizing one's own mistakes and correcting them. It's obedient education the best teacher of life – Market. All traders, without exception, commit mistakes. Admitting your own mistake – the first step to success, which few are capable of. Successful traders go further – they find a way not to make old mistakes anymore. They are disciplined, are cold-blooded and confident., I give my opinion on the main characteristics of market participants. The choice is yours.
| Successful trader | Лузер |
|---|---|
| is at peace with the market and with itself | at war with the market and with himself |
| controls your mental state | not controls your mental state |
| follows the plan | doesn't follow plan (or doesn't even have a plan) |
| opens a deal, следуя сетапу | opens a deal, following emotions |
| keeps a log of transactions | does not keep a log of transactions |
| analyzes its transactions | does not analyze its transactions |
| working on bugs and developing | does not work on errors and does not develop |
| uses feet | does not use feet |
Article published with permission test-trading
