Thursday, May 08, 2008

Trading against the plan

I simply traded against my signals from frustration. The signals were Dam near perfect. It was all operator error. I completely lost it. I sold near the top of the day and got stopped out for 100 bucks. I then went long with large size out of frustration and my system then confirmed a sell signal. I didn't look at it. I ignored it. I just lost a bunch of money yesterday, and I wasn't going to loss money from another stupid stop getting hit. I sold the top. I canceled my traditional stop placement. This market is just fucking with me. It moves even farther against me. Before the market puts in its big drop in the afternoon I sell and take the loss knowing full good and well that my trade signals were right all along and that my original plan was correct. I could have reversed positions and made back all my money but the frustration was too much to handle. What hurt the most is that I didn't follow my plan. I tried to follow the plan, and then I got a small loss. I then went on tilt and blew it. I made the choice to not follow the plan. I chose to fuck up. I've blown up my account at least 6 times. All from deviating from the plan. This post is just like many I've written in the past. Another blow up with the same mistakes being repeated.

I lost A LOT. Not just money. I lost myself.
I simply went out of control. Cussing, screaming, throwing things, crying, punching myself in the head, bashing my head into the wood cabinet. I've had a migraine for 2 days.
How can you do that to yourself?
And you want to come back and trade?
Are you fucking out of your mind?
What will it take for you to admit you failed?
Congrats Bill, you won LT's bet. I blew up again. What the fuck do you people get out of this? HPT did it again, and that he's a fucking idiot. I've spent the last 3 years trying to improve my trading. If I'm not at work I'm in front of this computer working on my trading. I'm taking classes so I can learn how to program an automate a strategy. What I probably needed was a psychologist. Trading affected my grades in college. My grades my senior year in college dropped because I started spending time trading and reading all the trading books I could get my hands on. I thought I could make money in the market. I couldn't. I never learned. I guess people never change. How many times can someone fail and keep coming back? Is this an addiction, is this gambling?
When you fail it becomes gambling. When you come back and fail again it becomes an addiction. When you win, you are just lucky. When you win consistently without big blowups, you become a winner.
I wish I followed my trade signals. I wish I was a machine that would accept the small losses and let the winners run. I however am a human with emotions. Emotions that get in the way and fuck things up.

Help guide to Gambling Addiction


Dinosaur Trader on 1:27 PM said...

This is sad. Take some time off, fuck the blog.


Lugo on 2:15 PM said...


I understand you and although I don't trade as long as you, I had that feeling some time ago: I had a plan before the market open, I consistently forget my plan and do the oposite of my trading signals.

I stopped trading for a while to diagnose MY problem. It's a question of emotions and psychology. So more than be complete F$#%$ with yourself try to take this as a lesson. Try to learn from this.

As you said, it's your 6th time you blown your account. So you need to learn from your mistakes. Make that mistake a lesson and learn something from it.

Write in a paper the emotions you had, and the decisions you did that took you to that path.

I'm not giving you a lesson neither I want to teach you anything. I'm just sharing with you what happened to me. To be honest with you, what happened to you is also a lesson to me - and a big one!

Since I had that "losing" day that I disrespect my trading plan all day long, I invested my time in
1) developing a trading system and backtesting to know if it is profitable in several and different market conditions; (mental);
2) doing exercise as near as possible of nature: biking, walking near the sea or beach; losing some pounds to get in better physical shape (physical);
3) speding more time with my family and friends; analyzing my emotions at trading (emotional);
4) meditating/praying to reestablish my inner balance; clear and better define my goals and mission in Trading(spiritual).

There are few authors that I read at that time and they helped me a lot: Ken Wilber with his Integral Theory; Stephen Covey with his Seven Habits (the 8th is also very good); Brett Steenbarger with his "Enhancing Trader Performance".

Remember the first step to solve a problem is acknowledging there's a problem and diagnose it. You've already done that in this post. Congratulations. The second step is to write an action plan to solve it, the third is implementing it.

All the best for you.


tapeworm on 2:25 PM said...

i agree - fuck the blog!

it does seem like ur signals are money...since ur taking the steps to automate ur strategy, that may be ur answer...i know a guy who is a great programmer, and he's into the market...who knows, he may be willing to team up with u...either way, get ur head together, and see what happens

if u want me to get u and him together to see if u can work something out, let me know

good luck

HPT on 3:47 PM said...

Coming back after a big loss is psychologically one of the hardest things to do. More so when you've lost so much already in the past. Knowing all along what you had to do to make money and then acting against your plan is self destruction. If I could correct my problems, I probably would have by now. Perhaps I will just trade on the simulator for a month. I need to correct my bad trading habits.
That should be my goal if I want to continue. I have NOTHING TO LOSE.
I'm disgusted with myself. I never wanted to quit. When you start beating yourself up physically you need to realize that you've lost it, even if you've spent 3 years working on it and have had some success in the past. Trading shouldn't turn into this, what I've turned it into. People come to this blog to see success and someone making money and they want to learn how to. I should have followed the plan. I'll let you guys know what my plan is from here.

pik on 4:41 PM said...

"I'll let you guys know what my plan is from here."

Maybe thats part of your problem.....maybe you need to funtion without a plan. Maybe your success will come from siezing the immediate opportunity with risk mitigation being the focal point.

Try not making a trade unless the trade is a screaming BUY!. And then before you buy you have to ask if you can sleep that night with the given psotion size you have on that trade.

I've lost plenty of money, and I end up losing the most when I think I'm hot shit and drop a boat load of money on a trade. Don't give up, just find self control. You don't have to trade every day...Patience Patience Patience! Jesse Livermore always said that Patience was the key to a succesful trader.

Hang in there

cory on 5:54 PM said...

Been there, did exactly the same things so sue me. :)
What I did was to concentrate on just one specific setup then sim traded it over and over again until it became just a habit. Don't you know letting a small loss turns into a big loss is also a habit? Any way it came to the point that I was compelled to take the trade as soon as the setup showed up. Eventually the setup failed but I was too lazy to look for another setup. Btw, fading a failed setup is a bad idea since it doesn’t fail all the time.

sage08 on 8:18 PM said...

you seem to be in a hurry to get rich quick.. i was in the same situation until the market knock me out senseless.. now i devise a 10-year plan with profit levels which i need to meet to qualify for incremental increase in trading size. having said that, i'm glad i discovered trading much later in my career. i now have the luxury to fiddle with trading as an alternative. So, you got to prioritise.. your career or grades should come first.

F-Bomb on 8:28 PM said...

just keep going man. if this is your dream and how you want to define your life - being a winning trader - then keep going. like e. roosevelt said; damned if you do, damned if you don't. keep going, and keep learning. see you in the winner's circle.

Bluedog on 8:48 PM said...

"The definition of insanity is doing the same thing over and over and expecting different results."
-Rita Mae Brown, in the 1980s.

It's something to think about. If you abandon your method, including risk management, you're bound to repeat big blowups like you've already suffered in the past.

I'd suggest doing what Stewie does. Put yourself on "trading probation." Allow yourself only 1 trade a day. You'll be amazed at how many so so trades you'll pass, until you get the most perfect set up ever, including low risk. That's just a suggestion. I've done it to myself many times. Once you get your groove back you take yourself off probation. It might also help to give it a rest, then come back to it. Remember, you're in school so your studies should be of prime importance. Girls second. Trading third. ;)


Unknown on 11:01 PM said...

tell us how those arrows are generated...

Prospectus on 6:19 AM said...

Some questions for you to think about:

If you had an automated trading system, would you turn it on and let it run if you had an unreliable dial-up internet connection? Would you allow it to enter a big trade during a lightning storm when there was a chance you could lose power and be unable to exit the trade? What about if your computer was full of viruses causing wierd things to happen to your comp? Or what if you had a crappy broker where half of the data they streamed you was faulty? How about if that broker was so slow you had a 15 minute lag from order to execution? Would you run your ATS if there was a bug in it that caused it to randomly fire off an order every now and then?

All of these things seem obvious, but when you are a discretionary trader, you are part of the computer! Your mindset, thoughts, emotions are an integral part of the process. And your "computer" is not in working order right now.

Now I'll say some things that might piss you off, but I think you need to know. How do I know them? Because I have lived them myself. Here goes: You haven't really accepted the losses. You're getting into the market still trying to make it back. You lost. You have to accept it, and let that money go. You have to start over. Until you can let that old money go, you haven't accepted the losses.

Also, get ready for a kick to the head--when you lose and punch yourself in the head, you are acting like a 2 year old. You are freaking out because it feels better to do it, like a toddler having a tantrum. You need to grow up and act like a man. Quit the emo bullshit. You're having a temper tantrum, kicking and screaming, in front of the whole internet here because it fills a need you have for vaildation and attention. Grow up and knock it off.

You are immature, and that is why you make decisions that feel good (even if in a bad way) instead of decisions that are in your best interests. You need to grow up before you can trade successfully. You wouldn't hand your money over to a 14 year old hormonal emo-youtube-girl to trade, and don't give it to yourself while you're acting like one.

Self loathing leads an adult to positive change. If it kicks you down the other way, then you are a child, because that's how children handle it. It threatens their sense of value, so they freak out to get attention and affirmations from others that they are "okay".

Well, you're not "okay". When you can accept that you are not "okay" without it rocking your world, then you are an adult. And you can act in your own best interest to make positive changes.

My best advice to you, HPT, is three fold:

1. STOP TRADING for now--the markets take a lot out of you, and you're not in a position to give it right now.

2. STOP BLOGGING for now--you are blogging for the attention and affirmation, and that feeds your negative cycle and keeps you acting like a child. Write all you want, because it does help, but don't post it publicly! This is as harmful to you as emotional overtrading! Trust me.

3. GROW UP and ACCEPT THAT YOU ARE NOT OKAY. This one is tough, because I can't tell you how to do it. It has to come through your own maturing and personal growth. But you will know you are there when you can screw up and it doesn't devastate you, but inspires you to do better. And the highest test of that is if it all happens when nobody knows about it but you.

Read Rudyard Kipling's "If" poem and think about the things he says:

IF you can keep your head when all about you
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired by waiting,
Or being lied about, don't deal in lies,
Or being hated, don't give way to hating,
And yet don't look too good, nor talk too wise:

If you can dream - and not make dreams your master;
If you can think - and not make thoughts your aim;
If you can meet with Triumph and Disaster
And treat those two impostors just the same;
If you can bear to hear the truth you've spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to, broken,
And stoop and build 'em up with worn-out tools:

If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breathe a word about your loss;
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: 'Hold on!'

If you can talk with crowds and keep your virtue,
' Or walk with Kings - nor lose the common touch,
if neither foes nor loving friends can hurt you,
If all men count with you, but none too much;
If you can fill the unforgiving minute
With sixty seconds' worth of distance run,
Yours is the Earth and everything that's in it,
And - which is more - you'll be a Man, my son!

Good luck, and make this happen!

OBAT on 6:24 AM said...

I totally could feel your frustrations because in my bad days I go through the same emotions. It's like the market is fucking out to get me and I get pissed off at the market and the stocks I trade.

Focus your anger into working out, go for a run, lift some weights. After a day or two you should feel better.

Dinosaur Trader on 7:06 AM said...


Who the hell is Rita Brown? Some hippy? I think Einstein said that...

Damn West Coasters...


HPT on 8:11 AM said...

What the fuck am I suppose to say at this point. I lost. I failed. I tried again. I failed. repeat that 6 times. I'm not looking for the woe is me response from people. I could've left this blog with no response to readers. I thank you for your words of advice. I have to go to work now, perhaps I'll have more to say later.

Prospectus on 9:08 AM said...


I say this all in the hope that you will have your eyes opened a bit to what is going on, not out of criticizing you in any way:

"What the fuck am I suppose to say at this point. I lost. I failed. I tried again. I failed. repeat that 6 times."
You still haven't accepted that fact. Pointing it out shows that you still haven't come to terms with the losses.

"I'm not looking for the woe is me response from people. I could've left this blog with no response to readers."
You could have left with no response, but you didn't. That says a lot to me. If you wrote in a journal that nobody but yourself read, then the writing would be for your edification, but when you write it for others, you do it for a reason. What is your reason?

I think that the best thing for you to do is exactly what I said in my comment above, if you really want to change your cycle. People do self-destructive things because it fills needs they have.

I have been where you are, and I am not perfect but I have made progress. I thank Richard from Move the Markets for really smacking me around and causing me to think about the things that I have told you. Stopping trading AND blogging about my trading were both the most important steps I took to start changing my cycles.

Since then, I have started trading again, but very small and slow. I will blog again in the future about my trading, but I'm not there yet.

What are you supposed to say at this point? Nothing. Just let the loss be there. Let the failure sink in. No excuses, no blame, it just is. Nothing needs to be said. Just accept it.

Don't ever "come back" to trading. Write it off. Stop, for real. Once you are more mature emotionally, you can approach trading anew if it is an attractive opportunity for you, but it has to be a new endeavor under new rules and circumstances and attitudes. Maybe this seems like I'm just playing word games, but it my experience it is subtle but very true.

Good luck HPT.

FX on 9:49 AM said...

as usual I understand you because I've done many bad trades for big chunks of my trading account by averaging and moving stops. It's hard to come back and than do it again and again.

To prevent that all, I decided to change my style, to make it more adaptive for me. Because I need to take in account my psychological makeup for trading. I don't think that I will ever change. I will always do stupid things and trade bad, so if I want to trade profitably I got to put that in equitation. So now I scalp and get out very quickly, it's just good for me. I leave big part of profits on the table but I got to accept that this is only way that I can trade profitably. When I stay longer I tend to swing trade average down and good trading is history. So I just don't do it any more, I don't look for bigger profits and small profits add up.

I think that you will never change. But that doesn't mean that you can't trade profitably. You just got to stay in your niche. When you go for something else you will fail. You will never be disciplined enough to follow trading plan and cut losses quickly. If you again start to trade small in month or two another "oil trade" will come up and everything will be the same as now. I don't know how you should trade and in what part you are the best. But that's part that should be only thing on your "trading menu". Fuck everything else because all other stuff will in the end cost you so much. Find that one thing and stick to it. Now you scalp, day trade and swing trade and it's not working. You can't do it all, some of the stuff are bad for your discipline. That one thing is enough for your profitability you don't have to be good in all of it. Maybe you are but your mind isn't.

Common Sense on 10:39 AM said...

Prospectus NAILED it. I love to say FUCK and all of that, but it dilutes any professionalism you thought you had. I get it, blogs and trading can be lonely at times and boring and why not show some personality. I haven't lost money in the last 2 years trading the ES, but every time I get good profits i treat it like "house money" and over trade (lose). I say fuck, finish and get a degree, but don't put it #1 if you're only getting a liberal arts degree. Trading isn't gambling, LIFE is a fucking gamble. Getting married, gamble. buying a house, gamble. fucking some slut on friday night drunk, gamble. haha.

seriously, fuck the blog. too much energy and time for shit. fuck all of us, keep your trading secrets to yourself and don't share them with anyone. it's your future. don't give them away. only frauds teach how to trade.

i think the real issue is size of account. fuck, i only have a 25k futures account. i'm not going to make 6k a month on that shit. i have, but not consistently. i say get at least 100k, or go work for a group of CPO's, hedge fund, etc...all those mutual fund bitches get paid back for assets under management and they don't make shit most months.

maybe trade stocks.

DON'T ever run from your passion. Fuck what anyone else thinks. Believe in yourself. I would rather trade for 10 years and love it, then work for the fucking man and be his bitch in some shit career.

I love this quote. Dammed if you do, Dammed if you don't (thanks poster above).

So, in the words of HPT:

FUCK IT....Time to trade.

Parents don't get it because of all the RISK. Fuck is a motherfucker risk. do what you love.


Bluedog on 5:15 PM said...

Rita Brown came up with that quote. LoL. It's often misattributed to Benjamin Franklin.

I'd go out and get loaded tonight. Forget about trading. Have some fun and come back later refreshed and focused.


HPT on 8:47 PM said...

I don't want to type about how I lost anymore. I don't know what yo say anymore. I want to be happy. I want to do what is right. I'd hate to see this blog go, because I feel it is a big part of me. I'd hate to stop trading when I knew what I had to do to succeed. I'm done.

Bluedog on 6:49 AM said...

Mistake made. Now it's time to file it away in the "lessons learned" file, move on, and evolve as a trader.

Trading Goddess on 1:20 PM said...

Hello once again, my friend!

A steak is done. To be grammatically correct, you would say you are finished.

And I know you are not.

Read and re-read what Prospectus said above. It is all very wise advice.


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