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Comments on TraderFeed: When the Trading Demons Get Out of Control





Updated: 2016-08-14T03:34:09.589-05:00

 



Excellent ideas, GlobeTrader; I appreciate your co...

2008-05-21T06:59:00.000-05:00

Excellent ideas, GlobeTrader; I appreciate your consistently fine ideas and your sharing of personal experience--

Brett



Hi Brett, for an individual, small (or smaller) ac...

2008-05-16T03:11:00.000-05:00

Hi Brett,
for an individual, small (or smaller) account trader scaling back may not work as you can't go below trading 1 contract.

(For all readers thinking, that trading 1 contract can not produce the results you crave for, take a look at an oil chart. You will see multiple >100 tick swings during the trading day. Catch 3 or 4 of these and ride them for "just" 30 ticks and depending on your account size you will have daily returns of 1% to 3%, assuming an account size less or equal 100k$.)

Demo trading may not put the demon back in the bottle. Of course after a big drawdown you should go to demo for a time to protect your account, but then you should trade real again or you will just develop a fear to press the trigger at all once you put your money on the line again.

I found another course of action which helped me, when I was in one of those severe drawdown periods.
There are some contracts which move slower and a lot more rangebound than the contracts I usually trade.
I usually trade higher volatility contracts like Oil, Natural Gas, Gold, the Euro but also the German DAX or the British FTSE, which all show considerable higher ranges compared to the ES.
Therefore, if I have to slow down in my trading I go to the Canadian Dollar or Australian Dollar. (I don't trade the ES as this contract is my market meter, telling me where the equity market wants to go.)
These currency contracts move at a slower pace, usually are rangebound and still show enough volatility for my trading method to work. And that means they are ideally suited to get me back on track.

Chris



Great post, Dr. Steenbarger!As you have pointed ou...

2008-05-16T02:07:00.000-05:00

Great post, Dr. Steenbarger!
As you have pointed out several times: There are so many (esp. retail) traders who always talk about their lack of self-discipline when they actually miss the sufficient edge to be profitable after costs.

Cheers,

Markus