The last two weeks for me have been tough. After the large January losses and a review of the month I felt confident that things would get better. I moved away from futures trading to focus on swing trading, which I think will work with my personality better. I have only been trading for a year and I am still very much a novice. I do not have 150 IQ and I don’t have 10 years of experience working for a trading firm(i.e.- I am not a trading genius and I will make mistakes). What I do have is a desire to trade and the willingness to take the risk associated with trading for a living. If I fail it is my fault, my time and my money. If you are a trader you know how hard this job is and if your are not you should keep your critical comments to yourself. Until you have put your ass on the line and tried to trade for a living I don’t care about what you have to say.
I know nothing is written in stone when it comes to trading and that there will be times when there will be losses. All I know is to do is try and preserve my capital, continue to work on developing a system, and try and move forward. This year will be my first full year of total focus on a single approach to trading. Last year was just a time to learn and I switched back and forth between different markets and styles of trading. I am trading without a complete system to some degree right now, but I am trading small size. In reference to my losses over the last two weeks, my biggest loser was BA with was a $600 loss and the rest were small losers. I closed out 8 short trades,on Tuesday, each losing between 100 to 250 dollars (two days earlier I was up over 2K on these trades). Even though each was relatively small, it adds up with so many positions. I got ahead of myself in my desire to get back to making money and had on to may trades at one time when the market conditions did not warrant. In my defense, this market has been nearly impossible to trade, for me and most other people and I have not learned when it is better to not trade at all. I know I still have a lot to learn and I’m willing to share my losses and gains with the trading world in an effort to better myself and maybe help others in there own quest to trade.
I personally have lost about $3,400 swing trading in the first 10 trading sessions of this month which equates to about about a 2% loss. Even though this is a small loss it is still a loss and I know that I either have to stop trading, cut the number of positions, or get back in sync with the market. There are some people out there who think that just because we have a blog and trade full time that we should never lose money. Every trader suffers drawdowns and times when it seems that the market is out to get them. We are no different. Right now things are hard and this market sucks. I will slow my pace and try get back to flat for the month. In the mean time I will try and stay positive and wait for times when the market is easier to read to trade aggressively.
I am currently reading Van Tharp’s “Trade Your Way to Financial Freedom” and Farley’s “The Master Swing Trader“. I think these books will help me get closer to having a complete swing trading system.
-Tradeitup
Comments
Stick with it, a 20% drawdown should be expected every once in a while.
Hang in there. Forge the naysayers. A friend once gave me a card in college with these words: “Don’t let the turkeys” get you down”. What great advice. Your mental outlook is key to trading well.
Take care,
Skyb0x
tradeitup,
I think you should take solice in the fact that you have the right approach,
have been humbled by the markets, and are just striving to get better. Your losses are similar to mine so far in 2008, except for me the 3k was 80% of my trading account. I think part of the problem is that swing trading does simply not work in this bear market - there is too much chop. Maybe it does for Alan Farley, who’s done it for years, but not for learners. I am sticking to day-trading and 1 to 2 day overnight holds lately. Also, focus on executing good setups, not the money.
I am also reading the Farley book - go to his website http://www.hardrightedge.com/trader.htm where he gives daily examples of tickers that meet the 7 types of setups he uses (the 7 bells). Also join us on wallstreak - we need more guys that focus on swingtrading there so we can learn from the daytraders but teach them things also.
Best of luck. Marvin.
stick with it you guys!! we’ve all gained and lost money in this market..but with a determined attitude and willingness to learn this thing, it’ll come around!! (i appreciate the honesty of this blog!)
atore
tradeitup - Don’t fall into the trap of thinking a large IQ, loads of experience at an institution, or lots of degrees is in anyway a key to success. Supposedly smart traders blow themselves up all the time, primarily because they can’t deal with being wrong, and just because someone’s a strong institutional trader doesn’t mean they can trade for their own account well. It’s a different game.
You’re doing the absolutely right thing trading small as you learn. I would perhaps have recommended not starting without a defined system, but there’s definitely value to be had from the experience of trading live.
HopeToGetRich - Your comment about swing trading not working in this bear market just isn’t true. You just need to realize that bear markets are more volatile, so you can’t use the same sorts of stops you used before, and things happen more quickly.
Tradeitup: I agree with John, if you don’t have a defined system with an exact system that has proper entries and exits.
I also agree that Bear markets are more volatile. However, it’s not smart to short during a bull market and very tricky to go long in a bear market. In some ways, I think you need a slightly different system in a bear market. I personally prefer the contrarian syste, Short relatively weak stocks while the market is near a swing high and long relatively strong stocks near swing lows. Utilities were a long near the end of Jan and I’m looking at XLF as a potential short while this market is headed near swing highs.
In any event, I would recommend a full stop on the swing trades until you have your system clearly defined. It’s really hard to trade without a proper plan. You hold losers too long and sell winners quickly.
hey tradeitup. i love your honesty, your humble attitude and your logic. I promise you something, i am very confident you will succeed in trading. i have been at this crazy game for over 10 years and have seen the successes and i got my fair share of horror stories too. Listen anyone who has never traded for a living, has NO room to say anything negative. Once your money, your life and your family’s financial future is put on the line day in and day out you will know what’s it like to be humble and you will respect anyone who has the balls to take on suck an endeavor. But i am not writing you today because i want to give some shit talking loser my time of day. I am writing you because i am sure you will succeed. Right now, you are in the exploratory phase, trying out new things and seeing what fits your personality and you are in the self discovery phase which in my opinion is very early in the trading career. Trading well takes a long time and for some people this time will translate into money lost and the lessons you learn along the way will burn you and you will learn to never make those mistakes again.
My best advise to give someone new in trading is this and this i think is the key to trading well: Manage your losing/winning streaks.
Know the difference, know your self. Do you have a self destructive attitude during losing streaks? do you think you are a loser for losing money? do you want to make up for that huge loss on your next trade? do you wanna buy 1000 shares of INTC right before earnings and ‘hoping’ it goes up $4? Every single trader that walks this planet has losing and winning streaks, even guys who traded for 50 years have it. Anyone who claims they don’t have losing streaks is a fucking liar and not worth a conversation with them. Ok, now that we know that traders have both winning and losing streaks, the real good traders know how to first recognize a losing streak and secondly how to manage your way out of it ’successfully’. Yes, losing streaks can be managed successfully, you reduce size dramatically, you stop trading for a while, you read a book. Managing a losing streak requires patience and need a mental tune up, positive attitude and minimize the damage to the account while you get your head straight then once the stress and anxiety starts to dissipate and you are seeing more and more trades start to produce profits you enter the winning streak and now your confidence is high and you seem to spot good trading opportunities and moves ahead of other traders and your position size increases and now you are booking green trades more and more frequently. Your execution is near perfect, you get in and get out with flawless precision and booking stagnant trades very quickly and you are routinely pulling profits out of the market. Your attitude is to close stagnant and losing trades very early and quickly, your attitude is very positive and you are hungry for green.
So, know yourself and recognize the difference and manage those streaks. You will succeed, stay positive and keep learning but keep your tuition at a minimum.
As a full time trader myself, i am rooting for you 110% and you get ALL my respect. Sorry for the long email, I’m out!
Thanks for all the comments and encouraging words guys. I always appreciate insights from other traders and their thoughts on problems I am facing with my trading. Keep them coming.
@ Hope to get rich - I think that swing trading will work in this market but I do lack the experience needed to be successful. I will try to get over to wallstreak once I get a little further along with my system.
@ John and LP - Since leaving futures trading ( which took up a large % of my time) I now realize how much more work I need to do to have a complete system. I will be taking a step back in order to more clearly define my goals and system ideas. Also I like the idea of short relatively weak stocks at highs and long stronger stocks at lows.
@ Stewie - I will have to work on recognizing when I am in a losing/winning streak and then attempt to manage the situation. I do lose some confidence when things begin to get bad but I do not have a self destructive personality (i.e. gabling on earnings). I do however attempt to trade my way out of the situation instead of slowing down. Also I have a bias to the short side of the market which prevents me from taking some long positions that would be very profitable. I am working on getting past that negative bias and allow myself to be on both sides of the market.
Once again thanks for all the comments.
