Author Topic: Becoming a net-positive trader.  (Read 300 times)

PipMeHappy

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Becoming a net-positive trader.
« on: June 30, 2022, 09:18:57 PM »
Hello everyone,

I have been in the trading world since I first looked at a chart in Sep. 2012, making this year my tenth: I have made a lot of bad choices (and probably still have some to make that I do not yet know about) but, in the end, I seem to have found a path to consistency. It is hard work, emotionally, to stay cool but it pays off: this applies to situations such as:

- keeping off trading when the charts are choppy;
- putting on a larger position and handling that;
- sitting on a trade that goes nowhere from one day into the next, and maybe across the weekend.

Since finding an approach that works for me, and using my head to rule my heart, I have been doing much better: it is not so much the technical set-up that I happen to have chosen in the end, but rather my risk management.

The challenge now is not to get too greedy and biding my time until I can comfortably increase my position size relative to the account equity, which of course can magnify losses and force a smaller stop loss range to play with.

Out of honesty to this community, here are my stats from my account since February, taken from MyFxBook.


PipMeHappy

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Re: Becoming a net-positive trader.
« Reply #1 on: June 30, 2022, 09:21:03 PM »
Now, that looks great, does it not?

Out of honesty, though, here is the full picture:

https://www.myfxbook.com/members/PipMeHappy/francesco2022/9438418

This is my current trading portfolio on MyFxBook, which means you can see where I was BEFORE February
in terms of my P/L: it is not great, and I have made no secret about it.

Now, I would like to know if anyone has any questions or maybe like to share their story...

Thanks for listening and I hope to hear from you.

PipMeHappy

Kaitsu

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Re: Becoming a net-positive trader.
« Reply #2 on: July 01, 2022, 04:57:09 PM »
it is not so much the technical set-up that I happen to have chosen in the end, but rather my risk management.
One might say that this sentence is the most valuable statement that any trader can possibly adopt as the core of their entire trading approach. Excellent!!!

It is strange to think that people always think about their bank account balance before spending their money - and yet can take trades without any regard for their possible negative impact on their equity account.......

Risk management, funds management, top grade trade selection, strict discipline with strategy rules, they are all important - but without risk management the rest is pointless.....

Thanks, PMH :D
Ships are safe in harbour - but that is not what ships are for....

PipMeHappy

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Re: Becoming a net-positive trader.
« Reply #3 on: July 01, 2022, 05:50:22 PM »
"It is strange to think that people always think about their bank account balance before spending their money - and yet can take trades without any regard for their possible negative impact on their equity account......."

Perhaps because if we approach trading like a night of fun at the casino, then caution is not at the forefront of our thoughts as we engage in this activity.

Once you start caring about not losing too much money, and defining what "too much" means to you, then it starts feeling less like a game and more like any other budgeted activity involving your money, using some degree of  prudence and planning.

"Risk management, funds management, top grade trade selection, strict discipline with strategy rules, they are all important - but without risk management the rest is pointless....."

Sadly it is something we newbies hear a lot at the start but always think it does not apply to us, especially when we are taking too many risks and make large wins in a row and start feeling invincible. There is always only one outcome: ruin. Only experience seems to teach a lot of us why managing loss is actually more important than all the rest, as you say.

However, simple mottos and catchy rules are also meaningless: yes, trading is remarkably simple but only once you have figured out what kind of trading you can manage on a daily basis, and then streamline it to the point that it looks effortless. Like any professional showcasing their skill, it is only experience that makes any human endeavour look effortless in the hands of someone who invested hundreds of hours in learning that craft, and has sacrificed loss of time, loss of money, loss of a comfortable bodily state of being - in other words, emotional and physical pain - to achieve that level of mastery.

I am confident that I am on a virtuous path - all my metrics tell me that I am doing good things - and the challenge now is not to veer off it while also getting better at certain things within a profitable approach.

I am not qualified to give "advice" here, but I can certainly vouch for having lived on my mind and body the pain and humiliation of being unprofitable time and time again, or being profitable without really knowing why / how to sustain that over time. This time it really feels and looks different, not just a matter of luck or "getting away with risky behaviour". If anyone has any comments on that or can relate, I would like you to share your thoughts here, please.

Thanks to you too, @Kaitsu , for your comments here and for popping by. Appreciate it, especially coming from one of the few people I have known in this world of trading forums for many years.

Peterma

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Re: Becoming a net-positive trader.
« Reply #4 on: July 01, 2022, 06:38:03 PM »
Hi PMH, thank you for sharing the a/c chart.

Your trading story reflects so many of the old (and successful) traders in history - they all tell of their many failures and the years of graft to ultimately succeed.

I have followed your story from the 1st time you joined BP - think it was with fxcm back then - anyways one thing that I noticed from the very start, the reason why I referred to you as PMH in our interaction.

It's PMA - your Positive Mental Attitude.

PipMeHappy

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Re: Becoming a net-positive trader.
« Reply #5 on: July 01, 2022, 09:42:59 PM »
"Positive Mental Attitude"

I have to say, @Peterma , you are not wrong. I am not an optimistic person but when I decide to do something
I am positively inclined to succeed.

Yes, FXCM... I still try things on demo through them, they have been a good platform for me to learn on
and I am familiar with the execution set-ups, so... Wow, you remember well. I am truly humbled!


Kaitsu

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Re: Becoming a net-positive trader.
« Reply #6 on: July 02, 2022, 08:40:22 AM »
especially coming from one of the few people I have known in this world of trading forums for many years.
Yes it has been quite a few years now! I think I joined BP back around 2014-15 and you were there then. Those were times when people talked much more within their posts and it was easy to build an identity relationship with others in spite of the internet barriers. I continually miss those days with you, Lexys, Turbonero and Ebbieb and others.

I wouldn't say that (retail) trading is a lonely business, that would be too negative, but it is certainly an isolated existence. And in those early days of forums I found a lot of pleasure in talking with others in the same "club". I haven't talked with anyone else about trading anywhere else except on forums, with the exception, perhaps, of one old friend back from our mutual bank trading days - and that is quite infrequent nowadays, although he also writes on a forum.

And, when I think about it, this isolation is perhaps another contributing factor why retail traders don't seem to focus on risk management enough. If there was one thing I learnt from the bank trading floor all those years ago, it was accountability for my results. I had my limits, I had to define my objectives, and I had to explain the results. This was all public within the dealing room and subject to strong peer scrutiny. It was at times irritating and frustrating but was always a strong disciplinary overseer and, at the same time, motivating.

On the other hand, it was also a powerful filter of the trading employees. Many who were chosen to train as traders gave up very soon. Not because of poor results, but because of the personal emotional pressures that trading large sums of bank money create and the accountability in front of the others. It was not really a very strict environment at all but many found it personally too much to handle and went back to desk work.

But small retail traders are usually only accountable to themselves and do not suffer this peer pressure and it is easy just to ride over the poor patches with some kind of excuse and carry on as before. When one has to show one's equity curve and justify it in order to continue then it changes one's focus immensely! :)

I think it would be helpful to many if they thought of their equity account as a fund that they are managing for some specific purpose or on someone's behalf. E.g. For retirement, or their children, etc. In that way the growth of the "fund" is more important than the fun of impulsive and spontaneous trading that doesn't actually produce any growth over time. It nurtures discipline and patience! 
Ships are safe in harbour - but that is not what ships are for....

PipMeHappy

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Re: Becoming a net-positive trader.
« Reply #7 on: July 02, 2022, 03:12:48 PM »
especially coming from one of the few people I have known in this world of trading forums for many years.

I think it would be helpful to many if they thought of their equity account as a fund that they are managing for some specific purpose or on someone's behalf. E.g. For retirement, or their children, etc. In that way the growth of the "fund" is more important than the fun of impulsive and spontaneous trading that doesn't actually produce any growth over time. It nurtures discipline and patience!

Yes, you are right, accountability... a very important concept. This is why @Leebax and I post our YouTube updates: being accountable publicly puts you under a moral obligation not to behave recklessly, as you would have to publicly justify it. This is normal human behaviour, but of course we all know that learning from our mistakes is a very positive experience, therefore making mistakes and publicly being accountable for them is okay if we did our best (in trading as in life) to avoid them and can somehow turn them into a positive force.

@Kaitsu , the example of the dealing room is to the point. What is more, the issue of larger sums is where I will be heading, if growth is what I am building on for my own trading: how will I handle the larger losses as well as the larger profits? As you say: emotional pressure builds - some people cannot handle it. We will see.

There are few people I can talk to trading. Like you, the Lexys of this world are few and far between, just to name one from the BabyPips days. Anyway, must get going.

I will keep you posted on progress.