Nice Write up Teacher G..........TR I have Seen one psychological factor in my early trading life.........When I was jobless I took 10k from my father for trading, I was wipe out in 10 days ...again I took 10k again I wipe out.........5 times I was wipe out in a two month.....then my father refuse me to give money............So I decided I will sell my property ........I sold and go to bank did a FD of 5 lacs for monthly income.......(FD monthly income advice given by My Guru) then I started day tarding with the amount of 50k....with same method same TA............and I sirvived and recover 50k with in six month.....I belive if you don't have back up earnigs.....your wipe out chances in day trading is so high.....:thumb:
Why Day trading is Tough and only 2-3% are successful
- Thread starter amandeep86
- Start date
- Tags day trading problems psychology
Some gems to me from great Traders in 2011
-----------------------------------------------------
Futures First Prop trading Manager - A good trader should be able to make money in any day any market conditions irrespective of trending or range bound with 1 lot given and no additional capital given to add positions in the trending markets.
YOUR MISTAKE IS MY MONEY.
Master one Just NIFTY or CRUDE.
Smart Trade:- Wait for right opportunities.
A good trader will adapt himself to changing market conditions.
Have trading plan for at least 6 strategies and know when to use which strategy.
AW10:- Money for living could be made in trading patterns or candle stick patterns, pullbacks,retracements,or breakouts patiently waiting for the same in higher time frames.
Trade when the momentum in multiple time frames favors a direction.
i.e wait for high probability low risk higher time frame trades and enter in high volumes,Instead of trying to trade continuously irrespective of the market conditions.
I have clear rules to differentiate trend and Non trending zones and follow religiously.
TRADE THE RIGHT SIDE OF THE CHART
ALWAYS LOOK FOR LOW RISK ENTRIES
Raunak Agarwal - Position yourself as swing trader and trade only high probability low risk opportunities and Higher time frames. Have sufficient capital and have risk and MM rules.
Use P&F charts which will help to avoid trading the non trending zone.
Veluri:- Trade higher time frames and position yourself as swing trader. Trade price action - the flow method by Saint.
Anurag Munjal:-
Never bother about the capital - Money could be made in jobbing.
Linkon:- Wait for trending phase and trade in volumes. Avoid trading in the range bound market.
-----------------------------------------------------
Futures First Prop trading Manager - A good trader should be able to make money in any day any market conditions irrespective of trending or range bound with 1 lot given and no additional capital given to add positions in the trending markets.
YOUR MISTAKE IS MY MONEY.
Master one Just NIFTY or CRUDE.
Smart Trade:- Wait for right opportunities.
A good trader will adapt himself to changing market conditions.
Have trading plan for at least 6 strategies and know when to use which strategy.
AW10:- Money for living could be made in trading patterns or candle stick patterns, pullbacks,retracements,or breakouts patiently waiting for the same in higher time frames.
Trade when the momentum in multiple time frames favors a direction.
i.e wait for high probability low risk higher time frame trades and enter in high volumes,Instead of trying to trade continuously irrespective of the market conditions.
I have clear rules to differentiate trend and Non trending zones and follow religiously.
TRADE THE RIGHT SIDE OF THE CHART
ALWAYS LOOK FOR LOW RISK ENTRIES
Raunak Agarwal - Position yourself as swing trader and trade only high probability low risk opportunities and Higher time frames. Have sufficient capital and have risk and MM rules.
Use P&F charts which will help to avoid trading the non trending zone.
Veluri:- Trade higher time frames and position yourself as swing trader. Trade price action - the flow method by Saint.
Anurag Munjal:-
Never bother about the capital - Money could be made in jobbing.
Linkon:- Wait for trending phase and trade in volumes. Avoid trading in the range bound market.
Reposting one images posted in my thread.
Why do Average Day traders make losses?
Why do Average Day traders make losses?
Steps taken by me so far to overcome this problem
1 learning TA from various online sources
2 preparing a system for trading
3 reading various books to understand phycology
4 developed money management system
5 barred myself from trading until my guru gives me a green light
6 currently reading ytc to decide trade area and entry point
Hopefully iam on right track
Wish me luck
great post from some unsung TJ members
1. Get Your Mind Right
2. Always cut your losses and let your profits run. Take small losses and large wins.
3. Trail stop loss. Don't let a profitable trade turn to a looser.
4. Trade as per plan. Don't trade unless you know where you should get in and where you should get out.
5. Always use protective stop to limit your losses.
6. Learn to be patient. Don't trade impulsively. Wait for the right opportunities and setup.
7. If the reason you entered the trade is no longer valid, get out.
8. Do your own homework. Keep ready long/short levels to enter trade. Make use of system to inform you when the target entry/exit price is there for the taking.
9. Be open to research.
10. Give time to your sytem to work. If your method of trading is working, don't keep changing it.
11. Remember the market is never too high or low to buy or sell.
12. Be disciplined. A trader has periods of profit or losses. Don't let the losses get to you psychologically.
13. No indicator that is a 100% right all the time. Use common sense along with your method of trading. If your indicators are telling you one thing but the market is obviously doing something else, listen to the market.
14. Remember the golden rule - The market is always right.
15. Never risk all in a trade/trades. Max. loss on open positions should never be more than 5% of capital. Close all loosing positions immediately if this loss level is reached.
16. Don't overstrech your capital. Trade markets you are sufficiently capitalized for.
17. Never trade with money you cannot afford to lose.
18. If you hit your target profit, take it, or atleast protect with trailing stop loss.
19. Don't revenge trade and try to make up for all your losses in one trade.
20. Don't blindly follow someone else's recommendations or tips.
21. If there are few consecutive days of losses or there are a row of loosing trades, take a break for a few days or weeks. Trade only when you are in the right psychological frame of mind.
22. Don't trade to many markets. It's better to be an expert in one market than a novice in many.
23. If there is a margin call, it means something went wrong with your trade, and exit the trade.
24. Don't take losses personally.
25. Most important, have a life besides trading. If you are not happy with life in general, you will not be in the right frame of mind to be trading.
1. Get Your Mind Right
2. Always cut your losses and let your profits run. Take small losses and large wins.
3. Trail stop loss. Don't let a profitable trade turn to a looser.
4. Trade as per plan. Don't trade unless you know where you should get in and where you should get out.
5. Always use protective stop to limit your losses.
6. Learn to be patient. Don't trade impulsively. Wait for the right opportunities and setup.
7. If the reason you entered the trade is no longer valid, get out.
8. Do your own homework. Keep ready long/short levels to enter trade. Make use of system to inform you when the target entry/exit price is there for the taking.
9. Be open to research.
10. Give time to your sytem to work. If your method of trading is working, don't keep changing it.
11. Remember the market is never too high or low to buy or sell.
12. Be disciplined. A trader has periods of profit or losses. Don't let the losses get to you psychologically.
13. No indicator that is a 100% right all the time. Use common sense along with your method of trading. If your indicators are telling you one thing but the market is obviously doing something else, listen to the market.
14. Remember the golden rule - The market is always right.
15. Never risk all in a trade/trades. Max. loss on open positions should never be more than 5% of capital. Close all loosing positions immediately if this loss level is reached.
16. Don't overstrech your capital. Trade markets you are sufficiently capitalized for.
17. Never trade with money you cannot afford to lose.
18. If you hit your target profit, take it, or atleast protect with trailing stop loss.
19. Don't revenge trade and try to make up for all your losses in one trade.
20. Don't blindly follow someone else's recommendations or tips.
21. If there are few consecutive days of losses or there are a row of loosing trades, take a break for a few days or weeks. Trade only when you are in the right psychological frame of mind.
22. Don't trade to many markets. It's better to be an expert in one market than a novice in many.
23. If there is a margin call, it means something went wrong with your trade, and exit the trade.
24. Don't take losses personally.
25. Most important, have a life besides trading. If you are not happy with life in general, you will not be in the right frame of mind to be trading.
Take a challenge. Buy when price closes above 5 SMA, set your stop at 2 ATR on your trading Timeframe. If you are trading on 5 min TF, put ATR indicator on chart below with 15 periods. Your exit point is SL. If Stop Loss is hit, and the price already crossed down 5 SMA reverse your trade then and there. Remember a twist to the challenge. If your trade moves 6 ATRs in favour, you should exit the trade with a profit. The rule here is - You MUST loose on every single trade continuously 100 times. Fix in advance, how much you want to loose on each trade. You MUST book your losses exactly at fixed level. Remember that you should not book profit even in a single trade...but only losses. In case, if you happened to exit at 6 ATRs favourable move and booked profit, you MUST restart from trade one. Trading secret will be revealed.
Challenge Accepted and lost :lol:
PHP:
Sr. Trade Date Date
1 Short @ 7,985 01 October 2014 Exit @ 7,830 13 October 2014
2 Long @ 7,864 13 October 2014 Exit @ 7,837 16 October 2014
3 Short @ 7,837 16 October 2014 Exit @ 7,778 17 October 2014
4 Long @ 7,816 17 October 2014 Exit @ 8,078 29 October 2014
5 Short @ 8,357 03 November 2014 Exit @ 8,376 05 November 2014
6 Long @ 8,376 05 November 2014 Exit @ 8,336 07 November 2014
7 Short @ 8,336 07 November 2014 Exit @ 8,363 07 November 2014
8 Long @ 8,363 07 November 2014 Exit @ 8,529 24 November 2014
9 Short @ 8,522 25 November 2014 Exit @ 8,550 28 November 2014
10 Long @ 8,550 28 November 2014 Exit @ 8,526 08 December 2014
11 Short @ 8,526 08 December 2014 Exit @ 8,381 10 December 2014
12 Long @ 8,404 10 December 2014 Exit @ 8,359 11 December 2014
13 Short @ 8,359 11 December 2014 Exit @ 8,145 16 December 2014
14 Long @ 8,179 16 December 2014 Exit @ 8,125 16 December 2014
15 Short @ 8,125 16 December 2014 Exit @ 8,172 18 December 2014
16 Long @ 8,172 18 December 2014 Exit @ 8,416 02 January 2015
17 Short @ 8,435 02 January 2015 Exit @ 8,468 02 January 2015
18 Long @ 8,468 02 January 2015 Exit @ 8,448 05 January 2015
19 Short @ 8,448 05 January 2015 Exit @ 8,300 06 January 2015
20 Long @ 8,151 07 January 2015 Exit @ 8,450 15 January 2015
21 Short @ 8,490 15 January 2015 Exit @ 8,547 16 January 2015
22 Long @ 8,547 16 January 2015 Exit @ 8,754 21 January 2015
23 Short @ 8,730 21 January 2015 Exit @ 8,757 22 January 2015
24 Long @ 8,757 22 January 2015 Exit @ 8,927 27 January 2015
25 Short @ 8,926 28 January 2015 Exit @ 8,998 30 January 2015
26 Long @ 8,998 30 January 2015 Exit @ 8,958 30 January 2015
27 Short @ 8,922 30 January 2015 Exit @ 8,627 09 February 2015
28 Long @ 8,620 10 February 2015 Exit @ 8,567 10 February 2015
29 Short @ 8,567 10 February 2015 Exit @ 8,593 10 February 2015
30 Long @ 8,625 10 February 2015 Exit @ 9,015 02 March 2015
31 Short @ 8,958 02 March 2015 Exit @ 9,017 03 March 2015
32 Long @ 9,017 03 March 2015 Exit @ 8,959 04 March 2015
33 Short @ 8,959 04 March 2015 Exit @ 8,635 19 March 2015
34 Long @ 8,623 20 March 2015 Exit @ 8,610 20 March 2015
35 Short @ 8,610 20 March 2015 Exit @ 8,340 26 March 2015
36 Long @ 8,471 27 March 2015 Exit @ 8,414 27 March 2015
37 Short @ 8,414 27 March 2015 Exit @ 8,444 27 March 2015
38 Long @ 8,444 27 March 2015 Exit @ 8,763 08 April 2015
39 Short @ 8,734 09 April 2015 Exit @ 8,781 09 April 2015
40 Long @ 8,781 09 April 2015 Exit @ 8,757 09 April 2015
41 Short @ 8,757 09 April 2015 Exit @ 8,786 09 April 2015
42 Long @ 8,786 09 April 2015 Exit @ 8,739 16 April 2015
43 Short @ 8,739 16 April 2015 Exit @ 8,502 20 April 2015
44 Long @ 8,476 21 April 2015 Exit @ 8,414 21 April 2015
45 Short @ 8,414 21 April 2015 Exit @ 8,474 22 April 2015
46 Long @ 8,474 22 April 2015 Exit @ 8,423 23 April 2015
47 Short @ 8,423 23 April 2015 Exit @ 8,183 30 April 2015What I did was used 2 horizontal Lines on chart one for SL and one for TGT . . .
Adjusted them manually on the entry bar . . .
As we wait for the SL to hit quite a few whipsaws are avoided . . .
Experimented with different values of Factor for Stop/Profit the above one is with NF on 15 Minutes with Stop = 2 * ATR and Profit Stop = 12 * ATR
Total 47 Trades, Was successful to Lose some points on 30 of them
But even with only 17 Winners, total gain was about 2900+ points
cost or slippage not considered
Thanks
Last edited:
Challenge Accepted and lost :lol:
What I did was used 2 horizontal Lines on chart one for SL and one for TGT . . .
Adjusted them manually on the entry bar . . .
As we wait for the SL to hit quite a few whipsaws are avoided . . .
Experimented with different values of Factor for Stop/Profit the above one is with NF on 15 Minutes with Stop = 2 * ATR and Profit Stop = 12 * ATR
Total 47 Trades, Was successful to Lose some points on 30 of them
But even with only 17 Winners, total gain was about 2900+ points
cost or slippage not considered
Thanks
PHP:
Sr. Trade Date Date
1 Short @ 7,985 01 October 2014 Exit @ 7,830 13 October 2014
2 Long @ 7,864 13 October 2014 Exit @ 7,837 16 October 2014
3 Short @ 7,837 16 October 2014 Exit @ 7,778 17 October 2014
4 Long @ 7,816 17 October 2014 Exit @ 8,078 29 October 2014
5 Short @ 8,357 03 November 2014 Exit @ 8,376 05 November 2014
6 Long @ 8,376 05 November 2014 Exit @ 8,336 07 November 2014
7 Short @ 8,336 07 November 2014 Exit @ 8,363 07 November 2014
8 Long @ 8,363 07 November 2014 Exit @ 8,529 24 November 2014
9 Short @ 8,522 25 November 2014 Exit @ 8,550 28 November 2014
10 Long @ 8,550 28 November 2014 Exit @ 8,526 08 December 2014
11 Short @ 8,526 08 December 2014 Exit @ 8,381 10 December 2014
12 Long @ 8,404 10 December 2014 Exit @ 8,359 11 December 2014
13 Short @ 8,359 11 December 2014 Exit @ 8,145 16 December 2014
14 Long @ 8,179 16 December 2014 Exit @ 8,125 16 December 2014
15 Short @ 8,125 16 December 2014 Exit @ 8,172 18 December 2014
16 Long @ 8,172 18 December 2014 Exit @ 8,416 02 January 2015
17 Short @ 8,435 02 January 2015 Exit @ 8,468 02 January 2015
18 Long @ 8,468 02 January 2015 Exit @ 8,448 05 January 2015
19 Short @ 8,448 05 January 2015 Exit @ 8,300 06 January 2015
20 Long @ 8,151 07 January 2015 Exit @ 8,450 15 January 2015
21 Short @ 8,490 15 January 2015 Exit @ 8,547 16 January 2015
22 Long @ 8,547 16 January 2015 Exit @ 8,754 21 January 2015
23 Short @ 8,730 21 January 2015 Exit @ 8,757 22 January 2015
24 Long @ 8,757 22 January 2015 Exit @ 8,927 27 January 2015
25 Short @ 8,926 28 January 2015 Exit @ 8,998 30 January 2015
26 Long @ 8,998 30 January 2015 Exit @ 8,958 30 January 2015
27 Short @ 8,922 30 January 2015 Exit @ 8,627 09 February 2015
28 Long @ 8,620 10 February 2015 Exit @ 8,567 10 February 2015
29 Short @ 8,567 10 February 2015 Exit @ 8,593 10 February 2015
30 Long @ 8,625 10 February 2015 Exit @ 9,015 02 March 2015
31 Short @ 8,958 02 March 2015 Exit @ 9,017 03 March 2015
32 Long @ 9,017 03 March 2015 Exit @ 8,959 04 March 2015
33 Short @ 8,959 04 March 2015 Exit @ 8,635 19 March 2015
34 Long @ 8,623 20 March 2015 Exit @ 8,610 20 March 2015
35 Short @ 8,610 20 March 2015 Exit @ 8,340 26 March 2015
36 Long @ 8,471 27 March 2015 Exit @ 8,414 27 March 2015
37 Short @ 8,414 27 March 2015 Exit @ 8,444 27 March 2015
38 Long @ 8,444 27 March 2015 Exit @ 8,763 08 April 2015
39 Short @ 8,734 09 April 2015 Exit @ 8,781 09 April 2015
40 Long @ 8,781 09 April 2015 Exit @ 8,757 09 April 2015
41 Short @ 8,757 09 April 2015 Exit @ 8,786 09 April 2015
42 Long @ 8,786 09 April 2015 Exit @ 8,739 16 April 2015
43 Short @ 8,739 16 April 2015 Exit @ 8,502 20 April 2015
44 Long @ 8,476 21 April 2015 Exit @ 8,414 21 April 2015
45 Short @ 8,414 21 April 2015 Exit @ 8,474 22 April 2015
46 Long @ 8,474 22 April 2015 Exit @ 8,423 23 April 2015
47 Short @ 8,423 23 April 2015 Exit @ 8,183 30 April 2015What I did was used 2 horizontal Lines on chart one for SL and one for TGT . . .
Adjusted them manually on the entry bar . . .
As we wait for the SL to hit quite a few whipsaws are avoided . . .
Experimented with different values of Factor for Stop/Profit the above one is with NF on 15 Minutes with Stop = 2 * ATR and Profit Stop = 12 * ATR
Total 47 Trades, Was successful to Lose some points on 30 of them
But even with only 17 Winners, total gain was about 2900+ points
cost or slippage not considered
Thanks
Lessons I learnt the hard way in day trading.
1) Think of how much you can lose before considering and imagining about raining profits each month. I initially used a trading system with win percentage of 33% and R:R of 1:4. It was a good system but the drawdowns made me doubt myself, so I had to move to a system with winning percentage of minimum 50% so that drawdowns were less painful even though R:R of 1:2 was only possible.
It is better to have a system with minimum 50% win from back testing as the severity in a loosing streak is reduced in this case.
probability of one loosing trade is 1/2 or 0.5 or 50%
probability of consecutive 6 loosing trade is 0.5*0.5*0.5*0.5*0.5*05 or 1.5625%
and the chance of seventh consecutive loosing trading is less than 1% so I can trade in a peaceful manner risking 1% each trade.
2) Any strategy that works in a trending market does not work in a ranging market and vice versa. This I had to learn the hard way. It is better to have two strategies, it is easy to have two strategies one for trending market and one for trading market. It is easy for anyone to have two strategies one for trending and one for trading, but the toughest part is having a method to gauge the market whether it is in trending mode or trading mode.
This was one of the toughest phases for me, once this is figured out loosing trades reduced considerably and I reached break even stage of trader. This is not even enough to profit each month from market. You will loose one day win another day and this goes on till you are ready to accept whatever market teaches you.
3) Next stage was distinguishing between sub sections of trending and trading market and equipping yourself to find what is the type of market currently.
Currently I use 4 strategies one for each type of market scenario.
trending:
1.Normal trend.
2.Fast trend.
trading:
3.Normal sideways.
4.Channel sideways.
5.Not tradable.
4) Higher time frame analysis.
This always helps, but I had difficulty in watching 30 min charts 5 and 1 as well in the same time, so I do not check higher time frame but use a method where I get a signal only when 30 min is trending, using bollinger bands. However, have noticed that most of the reversals happen at higher time frame support and resistance or higher time frame decision points. Currently, I use SMA(21) to take trades in the direction of higher time frame. This is one thing I need to learn and make sure to implement in my trading strategy.
5) Scaling in and out:
This is the one I still need to learn, but I guess will make a huge difference in my min monthly returns and max monthly drawdown. Once the things I am trying to implement in my trading strategy.
1) Think of how much you can lose before considering and imagining about raining profits each month. I initially used a trading system with win percentage of 33% and R:R of 1:4. It was a good system but the drawdowns made me doubt myself, so I had to move to a system with winning percentage of minimum 50% so that drawdowns were less painful even though R:R of 1:2 was only possible.
It is better to have a system with minimum 50% win from back testing as the severity in a loosing streak is reduced in this case.
probability of one loosing trade is 1/2 or 0.5 or 50%
probability of consecutive 6 loosing trade is 0.5*0.5*0.5*0.5*0.5*05 or 1.5625%
and the chance of seventh consecutive loosing trading is less than 1% so I can trade in a peaceful manner risking 1% each trade.
2) Any strategy that works in a trending market does not work in a ranging market and vice versa. This I had to learn the hard way. It is better to have two strategies, it is easy to have two strategies one for trending market and one for trading market. It is easy for anyone to have two strategies one for trending and one for trading, but the toughest part is having a method to gauge the market whether it is in trending mode or trading mode.
This was one of the toughest phases for me, once this is figured out loosing trades reduced considerably and I reached break even stage of trader. This is not even enough to profit each month from market. You will loose one day win another day and this goes on till you are ready to accept whatever market teaches you.
3) Next stage was distinguishing between sub sections of trending and trading market and equipping yourself to find what is the type of market currently.
Currently I use 4 strategies one for each type of market scenario.
trending:
1.Normal trend.
2.Fast trend.
trading:
3.Normal sideways.
4.Channel sideways.
5.Not tradable.
4) Higher time frame analysis.
This always helps, but I had difficulty in watching 30 min charts 5 and 1 as well in the same time, so I do not check higher time frame but use a method where I get a signal only when 30 min is trending, using bollinger bands. However, have noticed that most of the reversals happen at higher time frame support and resistance or higher time frame decision points. Currently, I use SMA(21) to take trades in the direction of higher time frame. This is one thing I need to learn and make sure to implement in my trading strategy.
5) Scaling in and out:
This is the one I still need to learn, but I guess will make a huge difference in my min monthly returns and max monthly drawdown. Once the things I am trying to implement in my trading strategy.
I personally believe consistent successful day traders r less than 1%.
no greed driven traders can make day trade , in my past i am luckily shown enough time about 2-3% return possible daily . But with age , little risk i plan only 4% selective return per month.
u reqd atleast 3-4 yr of price observation,action plan where to take then actual trade journal entry, psychological feel what may happen , a good read on leading indicator to be become a day trader. For me i learnt also from speedchess , quickly to act on market and getting out from potential danger.
I used extensively EOD + hr chart bias , plus guessing right side in omnitrader, to create a system and taken trade .
Later on different market condition ,like range bound - i take trade as scanned by another system .
Idea from OTA ,confidently allow me to counter trend intraday ,as well as defined loss limit.
SO FOR MARKET DIRECTION I USE SOME BIAS, but intraday execution as per system analysed before market, position size/stop r mechanical
no greed driven traders can make day trade , in my past i am luckily shown enough time about 2-3% return possible daily . But with age , little risk i plan only 4% selective return per month.
u reqd atleast 3-4 yr of price observation,action plan where to take then actual trade journal entry, psychological feel what may happen , a good read on leading indicator to be become a day trader. For me i learnt also from speedchess , quickly to act on market and getting out from potential danger.
I used extensively EOD + hr chart bias , plus guessing right side in omnitrader, to create a system and taken trade .
Later on different market condition ,like range bound - i take trade as scanned by another system .
Idea from OTA ,confidently allow me to counter trend intraday ,as well as defined loss limit.
SO FOR MARKET DIRECTION I USE SOME BIAS, but intraday execution as per system analysed before market, position size/stop r mechanical
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