The Loser's Diary

looser

Active Member
#1
Yes i admit i am a big Loser. There are many reasons i call myself a looser.
  1. I keep on losing because i make plans but i never implement them.
  2. I follow my heart and my emotions and i remain away from reality. In the hope that my losses will cut and my position will become profitable, i ignore my stops.
  3. I don't follow my system, MM and more important stops.
  4. I get busy with urgent official assignments and forget that my positions are open which gives me huge losses (This is the biggest reasons of my loss). I need to monitor my positions regularly or leave my positions. I should monitor my positions at-least thrice daily (10.30-13.30 and 3.15 daily).
  5. I need to work on my emotions, i should feel free of any emotions at all weather its greed or fear. I should behave as a mechanical system is working not a human being. i should monitor my positions at-least thrice daily (10.30, 13.30 and 3.15 daily).

I'll again try my luck for one more year.

I am here to record my emotions before and after the trade so that at the end of one year of my trial period i should be able to pin point my weakness and strengths and decide weather i should continue or not (I take this period from 01-04-2011 to 31-03-2012).

I'll be doing trend following in F&O and momentum investing in stocks. I'll be starting with a capital of 21K only (I don't want to loose more money, i think that is enough to test my skills and temprament). My target will be MINIFTY (11K for Margin Money and 10K for MTM Losses). Initially i'll be starting with F&O, if i am able to make some money i'll divert it to Momentum investment side subsequently. As the initial sum is too small, i'll take only higher probability trades and will let other trades go.

Whatever I (THE LOSER) have learnt in technical analysis can be expressed in three lines:
  1. Trend is your friend.
  2. Plan your trade, trade your plan.
  3. cut your losses and let your profits run!

We have heard/ read these line a lot of times but these are easy to say and very difficult to implement. Actually the problem are many:

  • It is difficult to judge weather the market are trending or in congestion (Surely on the right edge of chart, ofcourse u can easily judge it in the middle of chart)
  • Congestions are very difficult to trade (basically to trade congestions you need to have bird's eye view of market, constant vigil on prices during market hours, tight stop losses). Actually it is difficult to do job, atleast for me it is very difficult.
  • People generally stop believing their system after some streaks of losses or they are influenced by their emotions (greed & fear) and they tweak their system and in worst cases they abandon their successful system.
  • My guess is that 99% of the trading population could not trade a system that would produce those kind of results(90% small loss trades and only 10% BIG profit trades). The reason is because they don't get to be right enough. They have too many losing streaks. They have losing streaks that are longer than five in a row. Most people cannot tolerate long losing streaks. When they occur, they totally abandon what they are doing.In such a system you could easily have 25 consecutive losses. At that point you become certain that your system is broken, and you try something else.
  • Inherent risk taking (Gambling) capabilities which force people to play gamble. Although there is a thin line difference between business risk and gambling.For eg. The weekly trend is negative, you are taking short position on the basis of EOD charts, in this case you are taking a business risk with bigger price targets and having high probability of win. Whereas if the weekly trends are negative and one wants to play for short covering and takes long position, then i'll call it a gamble because the probabilities are not in his favour and the targets are too near or less. Common man always say yaar it has fallen a lot, lets buy it. how much more can it fall!!!! I bought Koutons at 100+ price with PE of 4 with the same thing in my mind and its at 30-32 levels. So I shall be careful of such things in future.


1. Trend is your friend:

I see the markets can move in three ways:
  1. Upward (trending up) --Higher highs and higher lows on charts
  2. Downward (trending up) --Lower highs and Lower lows on charts
  3. Sideways (congestion) -- /\/\ or \/\/ type structures on charts please read first chapter of trading by the book for more details.
All the three above can be traded consistently, if one can identify its type of movement(Its very difficult to judge it in the extreme right side of charts). Trading congestions is difficult task and one has to be very fast, vigilant and flexible to trade congestion. (Please refer trading in the zone by Joe Ross).
Its better to trade a trending market where Risk Reward ratios are better. Its always better to sail in the direction of Wind. So I'll try to trade the trend (first two) and for congestions i'll stay away and wait for the trend. I always wanted to know that its sideways or trending (I used many indicators/ methods for this with partial success and now i came across SH's 315 which seems very promising).
Note: Never try to predict the markets, be humble and just follow the market. Market is always right and the market predictor is always wrong.

2. Plan your trade, Trade your plan:
Analyze the markets when they are closed. My job during the day is to monitor markets, execute trades and manage positions. Traders should be like fighter pilots - make quick decisions and have quick reflexes. Their plan of attack is already predetermined, yet they must be ready to abort their mission at any stage of the game.
But the humans can't stick to their plans, there emotions force them to deviate from the plan. The so called technical analysts (like me) start to predict market levels and often forget that technical analysis is to follow the markets not to predict them. And when their predictions go wrong (Markets are always right and losers are always wrong) the losers like me don't admit it and don't square off the losing positions in the hope that market will start turning on their way and get screwed up!!

3. Cut your losses and let your profits run!:
Getting out of a bad trade with only a small loss should be considered a big success! ........
But as humans we either don't want to quit our losing position due to our ego or we just don't want to take the small loss and hope that the market will move to our way.

So keeping these three things in my mind i'll try to be a robot, leaving behind all my emotions i'll try to trade it out. Before 01-04-2011 I'll try to fix my rules and on 01-04-2011 I'll go for hunt. In my next post I'll write up my rules.

Disclaimer: I am an inherent loser, please don't follow me. I request seniors to please guide me when ever i deviate from my plans.
 
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looser

Active Member
#2
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looser

Active Member
#3
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#5
do not call yourself a looser rather .....call yourself a ......learner........every trader may be successfull or unsuccessfull makes same mistakes as yours .............in the beginning of his trading carrier...............it is important that weather we have learnt somthing from mistakes.................or not
 

looser

Active Member
#7
do not call yourself a looser rather .....call yourself a ......learner........every trader may be successfull or unsuccessfull makes same mistakes as yours .............in the beginning of his trading carrier...............it is important that weather we have learnt somthing from mistakes.................or not
My purpose of calling myself looser is very simple and straight forward. It will keep me reminding that i as a human being will be falling in pit of emotions (greed fear etc.) It will remind me that i am not above markets when i m making profits, i still can repeat my mistakes. By nature i am a looser because i hold on to my losing positions in hope and i forget my system when my emotions are heavy on me.
 
#10
Hi
Good introspection. it is said that more than 90% day traders end in losses and the rest derive profit from the 90%."There is always a Bigger fool " is one of the truths.So if you have money to be spent, strong mind to accept losses, continue Day trading but not to recover losses!But as you have aptly observed, when your job do not allow you to concentrate on the terminal/position, better leave it. Enjoy your life. Enjoy your job.Enjoy your family life. One can always make money thru other avenues.Without day trading also people can live.
ssr
 

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