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Uhh, I am going to say delicate things here, which may destabilize you a bit,
so if your alerts go off Tom, just stop reading please, I really don't want to
mess with your psy balance. This is really only if you want to press a bit
further on your skill, which I find pretty well tuned already. In fact, you'd
be among the very few fully intuitive traders I know who have mastered their
technique to an advanced level!
OK, now, my few thoughts:
You are limiting yourself, intentionally that is, and you don't like it. It
seems to me you have a belief you cannot do better, or it is dangerous to do
so. I believe the contrary. One can always improve, in all areas, including
those where you put blockers. Now don't go and apply what I am going to say
like that, but I trust you know already, that would not be the thing todo.
Before everything, IF a part of you wants to push your limits, and I believe
there must be one, or else you wouldn't post this, then figure out what it is
it wants to accomplish, what it's intention is for you. Whatever your "parts"
are doing, they always do so for some good "higher" reason, generally to
protect you. I'd venture to say part of you wants more monetary rewards for
your efforts, but the current dominant parts block this desire because of past
traumatic losses. Traumatic meaning they hurt you and your self esteem, not
necessarily your wallet.
>From what I infer here, you:
- Are confortable trading very short,
- Are intentionnally trading constant size (even if you vary according to
intensity)
- Don't want to believe in virtues of increasing trading size, and find
arguments for.
- Don't feel confortable trading long term.
No critiques here, just a feeling you try and avoid everything that may boost
your returns beyond your current confort zone.
Like everything else you've done so far, you can improve further. You do not
have to change your preferences, but you should not rule out alternatives or
new additional ways on the exclusive ground that it is dangerous.
- You trade very short because it reassures your sense of control. No stops (if
I remember) + constant screen presence mean you must wear out fast, so indeed,
it is not a good idea to extend too much time horizon. But make sure, this is
what you really want, not what you do so as to avoid something else, like fear
of pressing the trade further, and risking losing most of the profits so far.
Make sure all of your parts really agree on everything.
- Constant size helps you coping with your internal pressure. You may have
unpleasant recollections of past losses occurring while increasing size, and
you don't want to renew the feeling. However, if you stop moving ahead, you
also expose yourself to more severe consequences, should you incur losses in or
outside your trading. It is easier to cope with unforeseen events in your life
while sitting on $1million than $200K. Your part wanting to avoid big losses
should also consider that.
- Increasing trading size will inevitably increase the size of your losses, but
you should also have larger winners. and if managed properly, your "dynamic"
equity curve should not drop below your "constant" equity curve. Drawdowns will
be larger, but stop above, where you'd been otherwise nevertheless.
- Long term: another way to avoid tackling issues which could lead to increased
equity. Make sure, it is because you believe you make a better return on short
trading. Make sure also you are sufficiently diversified so as to weather
setbacks in your short term trading.
Just thinking,
Gwenn
Tom Cathey a écrit:
> Tom B. wrote:
>
> > I would like to thank both of you for sharing your experiences with
> > discretionary trading.
> > I hope the list is really listening..
> >
> > I would appreciate it if you could share any money management strategies
> > that you use for risk management (% or fixed dollar Amt., etc.), adding
> > strategies, scaling etc.
> > Do you pull $ out as you go ? etc. Any insights would be beneficial to
> > all of us.
> >
> > Thanks in advance.
>
> Hi Tom -
>
> Glad to be of help!
>
> Yeah, I really liked Bob Kodama's post too - A real insight into the life
> of a real trader....I like the way he slept near his computer for the
> alerts. <g>
>
> Well, let's see. I generally decide how many contracts to trade based on
> my conviction for a particular trade. Remember, my S&P trades last only an
> average of 30-90 minutes with a TIME pattern really deciding how long to
> hold. If a number of key factors line up and I get a real instinctive pull
> saying " this is so obvious"...I load up to maximum day margin with full
> size S&P's.
>
> But...if I feel luke warm, I may even rarely do 2-3 mini's...or just pass
> on the trade. It's all an ANALOG thing for me, not digital. Like a VU
> meter has gradual levels from 0-100...I have gradual convictions.
>
> I am strictly a counter-trend trader, attempting to buy or sell a
> panic....never buy break-outs anymore....used to.
> Well, maybe on a rare occassion, but for the most part, I usually regret
> these "public trades". I look for these "counter-trend" entries to turn
> into "with the trend" trades, of course.
>
> I do not scale in/scale out ...just initiate all at one price. I know
> Tudor Jones is a strong advocate of scaling in and out...so who am I to
> say? In fact, on my big score in Oct, 97...I scaled out some of the
> position on Friday, and thank God I held the bulk to the open on
> Monday....It worked there.
>
> I always pull money out of the account when I can. This keeps me sharp. My
> biggest losses have usually come after a big score. (sound familiar?) This
> is really true for me probably due to overconfidence. It's almost a way of
> protecting myself from myself. Perhaps I will never do a "Larry Williams"
> (10K to 1M this way) , but I personally cannot hack large positions (more
> than 5 full S&P's) at this point...maybe later, maybe never.
>
> I personally feel pyramiding is a mistake. I guess Ken Roberts started a
> whole new generation of 'em out there.It seems everytime I do it I blow
> what was a good trade. I start with a profit, then add, then the market
> comes back to past my breakeven and I panic out. BTW, I am a very lousy
> long term trader. I mean well, and do OK with forecasts, but cannot hold
> through adversity.
>
> In fact....I don't know if he's still around, but there was an English guy
> who did psychological profiles for about $300. I saw a writeup in Club 3000
> back in '93? and gave him a call. He sent me a questionaire (maybe 50
> questions) and it profiled my trading psych makeup. It came out to be
> totally biased to a short term, type 'A' personality. He later said that a
> person like me would probably do poorly long term but has the potential to
> do quite well short term. That was the best $300 I ever invested in
> trading. I was so tuned to reading Gann, and all the long term stuff, I
> thought long term was what I needed to do...but I guess as they
> say..."beware of the man who knows himself well" <g> Now that I think of
> it, Linda Raske recommended him in an article she wrote in Club 3000. I'll
> bet Bo would have his contact info if he's still at it.
>
> Well, that's enough for now. You won't be hearing much from me probably
> 'til next week 'cuz the market is starting to get going again.
>
> Oh, I saw the CODE post about the "Master" system. Do you suppose that
> this is the notorious currency system that was offered by a doctor in Club
> 3000 for $35,000, then $60,000???? Man, how things deflate in price
> to their "real" value, huh?
>
> Have a great week all -
>
> Tom Cathey
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