Jump to content
Sign in to follow this  
drbubb

ADVICE for a "blown up" Trader

Recommended Posts

ADVICE for a "blown up" Oil Trader

> from Tony Caldaro's Blog

Was inevitable that some would get wiped out from a MOVE like this one:

UCmq9tx.png

justinob2018 says:

Now that I got wiped out by oil, I’m starting all over again,

...but I still find myself anxious about every decision or call I make on the markets. If any successful and knowledgeable person would be willing to help mentor me going forward would be an amazing blessing

  • eb9b9f1a1c14aac564c94bb0cc867646?s=40&d=aahmichael says:

    1. Forget about market calls. No one has ever made a penny in the market from a market call. You make money from trades.
    2. You must trade a system that removes all thinking, guessing, and decision making.
    3. That system must identify specific repeatable setups that include specific entry prices and stop prices. The entry orders and stop orders must be entered simultaneously.
    4. You can not trade scared. If you trade scared then every trade will be a loser.

  • 6a299f88ff29e3bfe739f9bdd889a33e?s=40&d=mcgcapital says:

    You just blew an account yesterday so today is far too soon to be trading again. On top of strict risk management you need the right mentality and it’s almost impossible to come straight back in after major losses and think clearly. Just start by writing down some basic rules such as:

    1. ‘I’m only going to risk x% of capital per trade.’ X should fall as the account becomes bigger. You might be ok risking 5% at the start on a small account where it doesn’t matter too much if you drawdown. X should probably be 0.5-1% for experienced traders with large accounts, and 2% or so for intermediate traders. Definitely don’t do more than 5%.

    2. Decide which times of day you’re going to trade and when you’re not. Can imagine that you’ve been staring at it non stop for last few weeks and that burns you out if you’re always in a position. The market will still be there tomorrow.

    3. Also become a specialist at something. Sometimes when I attend trading events my broker organises I meet people who have money (clearly not from trading as they’re not profitable) and they basically have positions open on every market going. They then can’t monitor them all, cut winners early and run their losers all over the place. Makes it a car crash. Pick a market to trade and learn everything about it. I’d go for a stock index like SPX as you tend to get moves in both directions. Something like oil can move very quickly in a straight line as you’ve seen… I think that makes it harder to actively trade.

    4. Always use stops in line with what Aah has advised you. The stop needs to be adjusted for volatility, so bigger stops needed for higher volatility… and that means you correspondingly cut your leverage such that your overall amount risk is kept under the x% of account you’ve decided under rule 1.

    5. Only take trades that have a minimum 1:1 set up risk reward, and ideally more than that. Sweet spot would be between 2-4:1. Don’t target breaks of support or resistance, make sure your target is above support if short and below resistance if long.

    6. Go with the momentum. If you’re entering trades you need some kind of signal that momentum is about to turn in the direction of your trade. So monitor the candlestick patterns such that you can see a levelling off before going in against the previous direction. Also identify the larger trend, which is currently down. The best entries at the moment are when the market rallies and loses momentum as that allows you to short it with the least risk and to maximise profits. Don’t enter mid range as then you’re likely to keep getting whipsawed and will find it hard to tilt risk reward in your favour.

    That’s the basics.. it’s just maths, have an edge through risk management, accumulate points, take profits, repeat.

    Do that with consistency and your account grows, so you can keep edging the leverage up. Don’t think about the money, only the process. The money will come if you do it right.

    Would also say that these markets are quite unpredictable at the moment which makes the set ups harder. Stuff which worked well over the past few years like going long on oversold RSI isn’t always working now. So entries aren’t always that easy.. if you nail down the risk management side then you’re still going to have to do a lot of work in understanding conditions and what represents an entry and what doesn’t. So don’t expect to be profitable immediately. And for that reason I’d say it’s worth doing a demo until you can prove profitability otherwise you’re just wasting money

  • 11c5fdeaa10cf20d541075c3309b3906?s=40&d=gtoptions says:

    Stop trading! Invest in no or low cost index funds. Enjoy your life.

> https://caldaro.wordpress.com/2018/11/14/wednesday-update-644/#comments

Share this post


Link to post
Share on other sites

"Was inevitable that some would get wiped out from a MOVE like this one"

Having said that a XX% drop (from XX to YY) is NOT so big in the longer term chart of Oil

Dr0OzBzU4AAFZyo.jpg

What made this interesting and dangerous was the "laser beam" nature of the move down

(I warned about the "laser beam" in a Nov.8th post on in my Diary):

Oil is oversold

USO, the Oil etf, shows three waves to the downside, and is in bounce territory

USO / United States Oil Fund LP ... update : Last: $13.06 (21.1% WTI) : -0.12

6v81TWM.gif

Best buy might come after a bounce and retest, since the "laser beam" down move could cut through support

zLd24Za.png

Strong support may not be hit until about $58

Share this post


Link to post
Share on other sites

MORE ADVICE (from the Tony C blog)

wisconsindoctor says:

November 14, 2018 at 8:24 pm

GTO, I agree.
Too many people are impatient, and want to make a quick buck. They think they can beat the system. Many bloggers waste their time trading for pennies everyday. They spend all that time and energy for a small profit (hopefully) but they’ll never get those years back. My advice is to work hard, save, and invest for the long term. It may not be for everyone, but it’s made me a million plus.

Greg Seymour says:

November 14, 2018 at 9:45 pm

True true true!

imranqqq says:

November 14, 2018 at 11:19 pm

Not going to mentor you, but as one who trades for a living for the last 15 years, I will give you the single best piece of trading advice you will ever get – if you want to be a sustainable trader into the future, never risk more than 1% of your trading capital in a single trade.
If you can’t do this, give up trading as a career. I’m serious; guys like me – not to mention better traders – will take all your money before you know what hits you. (I guess that already happened to you with oil).

Tom Fischer (@TomFischer15) says:

November 15, 2018 at 1:41 am

Justin, if nobody else sends you an e-mail address, you can e-mail me. I’m here usually market hours.
tom641@centurylink.net

Share this post


Link to post
Share on other sites
emuntrader says:

nKZR52.jpg

Hey Guys, hope everybody is doing well. I have been extremely busy with the roofing business in North Carolina, so I haven’t been able to even look at the market lately. But here are my thoughts…
It looks like we are caring out a simple zig-zag pattern from the 2815 high. Looking for a bottom that will take us back up to my red box reversal zone. I may put on a longer term put option if we get up to those levels. time will tell.

I read an unfortunate comment on someone taking a big loss. I to have learned from the school of Hard Knocks as well. And I have been in your shoes. I day traded for nearly a year on a virtual account before i started trading. again.

A few Books to help you on your way.
OEW – tony’s class
Candlesticks – Steve Nison
High Probability Trading strategies – Robert C Miner
RSI Complete guide – John Hayden (download for free on internet)
Encyclopedia of Chart Patterns. – Bulkowski

Here are a few good ones that stand out.

Also, a person endorphins increase higher when taking a loss, than taking a profit.
I will see if I can find the research paper on that one. A great read for all traders. It will not be until the weekend.
Small wins lead to bigger wins
smaller position sizes leads to higher profits.

Share this post


Link to post
Share on other sites

Here's my experience. When I blew up 2 FX margin accounts I realised there were better things to spend my life on. I swore off trading completely. 3 years later I spotted that Ether was undervalued and since the Pound was under pressure due to Brexit and QE I was fed up with my meagre savings losing value and decided to bet a third of my net worth on Ether. Ether then promptly lost 50% but you cannot quit (i.e. get stopped out), its all or nothing. Then the miracle happened, the price went above my buy-in price and I remembered to HODL. I multiplied my stake by x50 by Christmas.

Now I have invested a third of that in gold, gold stocks, oil and Ether (again). The rest in interest-bearing deposits. I think its important to bear in mind how easy it is to give back what you have gained, and QT sucks up dollar liquidity causing falling markets, so it'll be hard to make multiples for a while.

Share this post


Link to post
Share on other sites
On 15/11/2018 at 11:27 AM, drbubb said:

MORE ADVICE (from the Tony C blog)

wisconsindoctor says:

November 14, 2018 at 8:24 pm

GTO, I agree.
Too many people are impatient, and want to make a quick buck. They think they can beat the system. Many bloggers waste their time trading for pennies everyday. They spend all that time and energy for a small profit (hopefully) but they’ll never get those years back. My advice is to work hard, save, and invest for the long term. It may not be for everyone, but it’s made me a million plus.

........

imranqqq says:

November 14, 2018 at 11:19 pm

Not going to mentor you, but as one who trades for a living for the last 15 years, I will give you the single best piece of trading advice you will ever get – if you want to be a sustainable trader into the future, never risk more than 1% of your trading capital in a single trade.
If you can’t do this, give up trading as a career. I’m serious; guys like me – not to mention better traders – will take all your money before you know what hits you. (I guess that already happened to you with oil).

Interesting little thread I’ve only just glanced at.

These two stand out for me. The first was my school of learning, what was it the Jesse Livermore once said, something along the lines of its not my thinking that earned me my rewards, it’s my sitting; can’t remember the exact quote but sums up the top post.

The second I suppose is plausible for an active trader (way too low for an investor) but the sentiment is right, you only have to look at the message boards to see why so many fail with trades against the sharks that frequent them.

One their thing I’d add specific to companies, research, research and more research to anything that constitutes a sizeable position. Anyone taking a large stake really has to get to know the company, to sense an end goal and what’s on the horizon.

Share this post


Link to post
Share on other sites

BE CAREFUL & BE A CONTRARIAN

NOTHING SELLS better than Fear

But humans are good at overcoming their Fears

Rick Rule - The Future is Hopeless, but it Need Not be Serious

"I Learned... You will EITHER be a CONTRARIAN... Or a Victim"

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

×