My Journey In Technical Analysis

[XRAY27]

Dear XRAY27,

I agree with you here. In small accounts our emotions are very less. So its easy to follow our system or trading plan. Just last month I had a discussion with one fellow trader to multiply ac 10 times in a 1 month. I did that in 1 month approx (traded for 15 days only in a month in this ac) because I traded with only 5k initial funds. I also have gut feeling that its not possible to trade with same psychology in 1 lac ac or say bluntly that I must have failed to multiply the ac of 1 lac to 10 lac in exact same trades because of quantity.

Now the question is how to overcome this factor? This factor is haunting me since many years. I (or anyone) can make profits in big ac also (most of the times) but the returns are very less in comparison to small ac. How to overcome this? Suggest some solution please. Please reply in detail as this will be helpful for many traders. But please don't say just follow plan etc. Need some good and detailed advice, ready to read some books also for understanding the solution for this problem.

Attaching the image for your reference so that you understand the problem.

Anyone besides XRAY27 who understand the problem and have some good solution than please suggest.

Regards

Simple Trader

Hi,Simple Trader,

1.First thing is the plan from which you are trading ,should be mechanical

2.Trading a mechanical system is not easy,why ?? DD phase,
which will most stressful,until system is tested and capital is 2 to 3 times the Max DD ,we cannot move in

3. Even it is fixed ,mind will not allow us to get through each trade,basing our past knowledge of discretion peep in

4. To stop all this we need to practise psychological drill,trade should be started with small size,we should not skip any trade out of emotion ,once this is done for say 40 trades,we need to return to our normal qty

5.with normal qty ,check the slippage for one month,keep in mind that by adding slippage we should not cross risk per trade ,slippage and conservative MM are reason for low return of big account size,still that will be enough to grow when you can scale up in qty

6.why conservative MM,because we will have low strike rate of 40%

7.By end of 4 the month you will just following your system,withholding all the noice of social media

8.if you fail to follow the above plan,we need to repeat it

Study psycho cybernetics by Maxwell Maltz for psychological drill



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[Simple.Trader]

Probably not understanding your problem the wright way, following my short and simple answer to your queston: Every time you double your account, you add one more lot or in US Market one more contract to the existing amount you trade regularly with.

Thanks for sincere advice. Its a very good suggestion and practical one.

You wrote that you were not able to understand my question but your answer was perfect for my problem. Please allow me to explain one more time. This 5k was an experiment account. My real ac is much bigger than this one and when I try to do same performance in it than I always fail to multiply like this 5k ac. I follow same strategy in both. Returns are good in that also but far away from 5k ac. Why? I am use to trade in good size ac since many years than what causes the difference? Is there any psychological barrier or some other thing that I am missing? I will follow the suggestion now for rest of the 2019 that you gave me. Its a practical one and can be implicated easily.

1.First thing is the plan from which you are trading ,should be mechanical

Thanks for answer and for explaining every point in detail. Your all points are self understood except point number 1 to me. My system is Discretionary but I trade with set number of rules. Does it come into the mechanical category? Everything is predefined. Most imp SL, than Entry and than Exit also.

I have read many times your every point and will work on it definitely.

Thanks once again to both of you for taking time for valuable suggestions.

Regards

Simple Trader

 

[XRAY27]

Thanks for answer and for explaining every point in detail. Your all points are self understood except point number 1 to me. My system is Discretionary but I trade with set number of rules. Does it come into the mechanical category? Everything is predefined. Most imp SL, than Entry and than Exit also.

I have read many times your every point and will work on it definitely.

Thanks once again to both of you for taking time for valuable suggestions.

Regards

Simple Trader

Go through below books ,you will understand better

1/TRADING SYSTEMS by urban jakie and emilo tomasini

2/TRADING SYSTEMS AND MONEY MANAGEMENT by Stridsman Thomas.

 

[XRAY27]

The pattern of get up, go to work, pay bills; get up, go to work, pay bills. People’s lives are forever controlled by two emotions: fear and greed. Offer them more money and they continue the cycle by increasing their spending. This is what I call the Rat Race.”..
Rich dad poor dad

Same way traders run after systems ,in the name of optimisations..,same reason fear of loss,early exits..greed to hold profit with proper way

This F.Y 2019-20 was started with up and down,aug was great month..results of 4months will force many traders to screw there method..out of fear...it is this point we need back test...including stress test..and come out ..there after ,follow the system ,things will make you earn ...


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[Tuna]

Not my thread - but free gyan is something we barely resist from distributing. So bear with me:

Following a trading system, RR etc , faces a challenge - Trapped emotions !!

I had found as the biggest enemy in trading. Any kind of failure in the study, career aspirations personal life etc accumulated over years, tries to find the outlet through our trading. And even a simple failure on trading can tap into this huge reserve of trapped emotion, akin to a matchstick to a pile of gun-powder, - a force so overwhelming that takes the trader away from the trading plan, risk plan everything. So to be a successful trader, being happy is a must. Learnt it over time.

"Trading is not an arena for settling scores for past failures" ~ The Fake Trader.

 

[marimuthu13]

Not my thread - but free gyan is something we barely resist from distributing. So bear with me:

Following a trading system, RR etc , faces a challenge - Trapped emotions !!

I had found as the biggest enemy in trading. Any kind of failure in the study, career aspirations personal life etc accumulated over years, tries to find the outlet through our trading. And even a simple failure on trading can tap into this huge reserve of trapped emotion, akin to a matchstick to a pile of gun-powder, - a force so overwhelming that takes the trader away from the trading plan, risk plan everything. So to be a successful trader, being happy is a must. Learnt it over time.

"Trading is not an arena for settling scores for past failures" ~ The Fake Trader.

Very true bhai...wisdoms of words...

 

[XRAY27]

"Why do you think unsuccessful traders are obsessed with market analysis? They crave the sense of certainty that analysis appears to give them. Although few would admit it, the truth is that the typical trader wants to be right on every single trade. He is desperately trying to create certainty where it just doesn’t exist.” – Mark Douglas

 

[XRAY27]

Just posting my Aug Series performance.. weekly option ended with 43 % return.intra is in BNF..

 

[XRAY27]

Martin Schwartz

“A lot of people get so enmeshed in the markets that they lose their perspective. Working longer does not necessarily equate with working smarter. In fact, sometimes is the other way around.”​

 

[XRAY27]

Sharing it after taking permission!!!

Improving a system = system jumping

Many new traders go through this thought at least once in their trading career (however short that maybe ) - "I already have a trading system in place but i seem to get attracted towards other systems i see in social media/online.

So, improving(adding/modifying or creating a new one) one's parameters is good right? But, is it not system jumping?" This is an interesting question as system jumping is a topic that flash across every new trader's mind sooner or later

They would have read 'system jumping' is bad 100 times from various resources. So, one should never try to better his own system? Typically, when we are bombarded with new ideas/info about trading, 2 schools of thoughts can arise

1) If we start implementing ideas we see in a public domain/book or elsewhere, does it not amount to system jumping? If not, then what is system jumping? 2) What is wrong in improving my R:R/win ratio or other parameters (if i can)?

If we look into pt 1, we will understand that there is no definite answer for this dilemma. The answer lies in the belief we have about trading As we have heard enough about 'not jumping like a monkey from 1 tree to another', we would have ingrained 'system hopping' is bad

And it is. On top of that, 100% system sellers also keep advertising that 'they have the magical system' to make money in stock markets. If we look at it, a new trader stands no chance against this deluge of info that flows around everyday

2)When we are bombarded with these kind of info, it would be natural to think that the system we have (40 pct winning system with 1:2.5 RR) is the reason behind not making money in the markets. Nothing could be further from the truth. Think about it for a second.

If we look at pt 2, it is actually a valid thought. After all, we constantly endeavor to drive a better car, live in a better house, wear better clothes, eat better food. So,why not having something better than what we already have? Why trading system should be an exception?

Great question. But here is the real question - when do we stop? When we hit 90% winning system? or when we start making money? Traders do system jumping as they strongly believe that 'poor system' is the reason for them to not make money in the markets.

So, once we start to make money in our system (real money ..not backtested excel money) - that thought should dissipate slowly. Loitering on other people systems (available online and in forums) does not help the cause as well

Unless we live in an isolated environment(without family/friends), this backtesting/improving system idea should stop somewhere (or it would be forcibly stopped by your family/spouse) Trying new ideas forever would definitely rob us of the time we could spend with them.

This leads us to the basic question - why did we come into this trading profession? It might serve well now to revisit that thought. In my opinion, the improvement should happen in the trading size, it should happen in the execution. This thought process is very crucial

There is not much difference between a system with 50% winrate and a system with 40% winrate (assuming RR/ number of trades are equal and system makes money in the long run). Once we settle down, money management can fill the gap between these two systems nicely ..and over a period of 10 yrs, both these systems could have given a small fortune to a trader who respects risk. Please sit on this thread (content) for a while. This will make lot of sense once we understand the mental framework behind this phenomenon

Happy trading !!

Source: markets with madan and from his twitter