Tag Archives: education

Ooh! Ooh! Statistics and Progress

So rather than continue to flail around blindly in the dark I decided to have a schlep through all the trades made so far from Jan’11 to present.

This was mainly to search for statistical support for my ‘feeling‘ that I’m finally improving as a trader.

Yes, this may come as something of a shock 😉

Keep in mind that I’ve worked full time (and more) through this entire period and continue to do so. This means that I’ve not really placed a lot of trades in comparison to most I guess. In addition I’m still getting to grips with the seriously useful information I need to process from my last post here.

Anyway to avoid duplication and because people always, always check this out I’ve written the actual info as an update to my Results Page here

Thanks for everyone’s continued support, comments and feedback

 

Major Changes – Part 2 of 2

Okaaay… I’m feeling quite intimidated writing this post because somehow ‘Part 1’ generated 380+ page views and I’ve just gained my 200th follower on twitter. So no pressure there then!

Honestly I’m somewhat mystified by this (especially related to twitter) but never the less I really appreciate the interest, comments and support. Thanks 😀

You are all awesome.

—– At this point I paused to make tea and then got completely distracted by passiveaggressivenotes.com —–

and we’re back in the room…

Part 1 of this post closed with me making the point that to be truly successful you need to trade your own personality in the market.

You need to go through the process of breaking down what charts are telling you and then re-building a trading approach that you can connect with technically and emotionally.

I finally realised this in/around the same time as stumbling blindly across a Canadian trader called Chris Lori. Now I’m going to point out from the get-go that I’m not affiliated to Chris (or anyone) and what follows is my own entirely independent opinion.

I’m also going to stick my neck out a little and say that my intention is to get ridiculously good at this skill. If this wasn’t clear before from reading my blog it’s now in black and white. There’s a sector of my personality which doesn’t do half measures and it’s worth being aware of this in respect to the next part(s) below.

What I’ve not found anywhere is an explanation or framework for improving as a trader.

I know this may seem a little hard to believe but really, think about it for a moment… Who’s out there teaching the process of how to improve as a trader? How do you go about the process of learning without burning tons of cash? More importantly – How do you make sure that instead of learning at random what you’re gaining is targeted experience?

I feel compelled to make another ‘gym’ analogy here to help explain this last point…

In the last month it’s finally dawned on me that I need to slim down and change my body composition. I’ve lifted weights for years now but I’ve still got a bit of a spare tyre. Finally I’ve finally found out what to eat, the type, frequency and the amount of exercise I need to do. BUT I only discovered this after what’s essentially been years of random experimentation.

Just think about if I’d gone about trying different diets and workout routines in a structured manner? I’d have been there (where I want to be) years ago already. Guess what? It requires me to do exercises I dislike and to have way more self discipline – LOL

Now you need to follow me on this. The reason I flew all the way to Ft Lauderdale for a workshop was that Chris had put a slide up in a webinar that broke down the process of learning to trade in a extremely structured way. An outline that directly relates experience to feedback and building a discretionary trading model linked to ones own individual personality.

This is a scientific approach I can use!

I can teach myself to fish without having to radically re-shape my personality or to try to become something/someone I’m not. In addition this wasn’t based on indicators or even specific setups but more on an entirely price driven view of the market.

At this point readers who know about price action trading will assume I am talking about pin bars or specific candle patterns etc… or will think ‘yeah, I trade price action too…’

Nope, sorry. The point I’m going to really labor here is that most of the 4 day session was spent with Chris explaining the conceptual framework he’s built up about how price moves which is essentially irrelevant of the fact that you’ve got candle ‘x’ or shape ‘y’. This was all about what’s happening to price behind the fact that it’s represented by a candle which is linked to a time period. If you want to get more from this post then a good place to start is at Chris’s site where you can sign up to a whole bunch of very decent information/videos for free.

Other than that it’s worth pointing out that almost half of the 36(?) attendees had also previously been at one of his workshops. Some had paid to come back three/four times already. That’s really a great recommendation in itself

Now if you’ve a cynical disposition you’d assume that it was because they didn’t ‘get it’ in the first place. However it was clear to me they were back because, like any expert, it was worth learning even more from the depth of Chris’s forensic view of how price moves. Personally I believe Chris’s take on the market is exceptional – he is a very, very good trader.

It was also great fun talking to a bunch of relatively new (and some very experienced) traders and I can honestly say there weren’t any idiots there. Not one.

I picked up so much in Ft Lauderdale but crucially I learned to see the market in a way which actually makes sense to me. There’s so much depth and information there – when you know what to look for!

I now know how to use what I’m seeing so that I can come up with trades of my own that match my outlook. All of these things rely on a conceptual framework and not a bunch of setups from someone else which I myself may or may not be successful at trading.

So what am I currently doing with all this new-found knowledge?

  • Creating a structured learning plan based on taking apart one aspect of trading at a time and thoroughly understanding it
  • Building my own trading model just for GBPUSD

Now if you think about the detail behind just these two points you can see that we’re now very, very far from looking for short-cuts. It’s not quick, it’s not sexy and it requires hard work.

It may though be the only way to succeed and then to remain consistently profitable long term. No-one else can really tell you when to get in 😉

I hope you’ve enjoyed this post and got something out of it. If you’re feeling disappointed that I didn’t give away more specific information about Chris and his approach then I really recommend you check out his site which is really the tip of the iceberg.

Beyond that I can’t recommend enough that you actually come to a workshop. Barring the advent of the zombie apocalypse I’ll be going to the next one whenever/wherever it happens to be.

Thanks for reading.

Major changes – part 1 of 2

So approximately 18 months into what was supposed to be a two year project I’ve reached a very interesting point in my journey that I’d like to share…

If you’re looking to become profitable and consistent in this endeavour I seriously suggest you pay attention.

In part 1 I’m going to argue that as much as we’d all like to deny it the following is true. Learning other people’s specific setups and copying their trading methods does not work.

In part 2 I’m going to try to explain what this means as far as learning to trade goes and some of the things I’m doing about it. Part 2 will take me a couple of days to put together so lets kick off part 1 first.

So 18 months in and having extended my timeframe for becoming profitable on a consistent basis I have been very much on the point of giving up. Well, not quite, but the most ‘giving up-est’ I’ve been so far.

This prompted me to look around for what the profitable traders I’ve ran into have said about their own path to success and whether there were any common points. Here are some very lose observations: –

  1. The average timespan seems to be 3-6yrs to get really good
  2. If you dig a little deeper it’s mostly nearer 6yrs
  3. Those that seem to be consistent threw out the rulebook and developed their own trading methodology from scratch based on personal observations
  4. The majority of these individuals use ‘price action’ rather than charts with loads of indicators and wavy lines
  5. Some only trade one or a very few number of markets with very simple setups/rules
  6. Most of these rules are entirely dependent on experience which reinforces their discretionary approach
  7. Anyone who is very heavily promoting or selling themselves/their approach probably isn’t actually trading at all

So what does this tell me – other than I’m possibly screwed?

It’s been written over and over and over (which I’ve also completely ignored) that you can’t really trade someone else’s system/approach.

Acknowledging this truth would mean that I’m going to have to do a lot of hard work so I’ve ignored this up till now and not understood the point being made.

This statement removes the possibility of all short-cuts and frankly that’s a bit of a bugger.

However I now know this to be true from the following experience.

In October last year I signed up with Jimmy Young and went through his excellent and extensive training. There’s absolutely nothing wrong with Jimmy’s approach and he is a completely genuine, honest and straight-forward guy with 20+ years of trading experience. The amount of effort he puts into educating his students is frankly un-paralleled. He’s got some extremely talented students and I can’t find any fault at all in how he conducts himself.

He genuinely wants everyone he’s teaching to succeed

When snow storms took out his local power/internet in the US Jimmy decamped himself to a motel for 3 days so his students could still get the information he provides every day. No really – Jimmy’s sending out a 10-15 minute webinar every day going though the previous day’s trades and what would have been the best approach as well as providing a huge amount of insight to the next day.

I know his approach completely works but I just am not able to enter the market and trade like he does. My personality with regards to trading just doesn’t work like his. Sad but true.

In order to not get emotionally steamrollered every time I look at what’s happening in the market I need to do what so many (now) successful traders have done and break everything down to something I can understand. Only then will this connect my personality, my unique view of the world and my psychology with how I trade.

Not only can I not trade like Jimmy, I can’t trade like @Trader_Dante, @FTSEDay, @50pips, @FT71 or any of the other great/supportive people I’ve run into on this mad arsed pursuit. To quote Monty Python…

Yes, we are all individuals!

So exactly where does this leave me, you or anyone else out there looking to become a consistently profitable trader?

You need to pull the market apart for yourself and see how it works with your own psychology/approach/creativity in mind. Then you can put it back together for yourself and objectively test what works. I’ve now come to the conclusion that this is the long, boring, slow and un-exciting process of becoming a trader. Just like working out and eating right is the long, painful, slow process of getting into really good shape.

There are so many people selling shortcuts, there’s the considerable challenge of self delusion and on top of that the impossibility of trying to change your personality to match someone else’s trading style… On this basis I’m un-surprised that few actually get there.

At this point you might think that I really should give up.

So why am I really excited now about moving forwards?

Well, think about it for a moment. What if the thing that’s holding you back isn’t that you’re not a good trader? What if it’s got a lot to do with the fact that you don’t take good trades like person ‘x’ because (surprisingly) you don’t see what they see ’cause you’re not them? Logically this makes complete sense to me. What a relief it is to put that burden down!

Perceptually the world I see isn’t what you or anyone else sees. You can get 100 different interpretations from the same chart. What follows from this is that you need to trade your own personality in the market.

How do you get to a point where this can happen? Well, you’ll have to wait for part 2 in order to find out and you’ll discover why I went all the way to Florida to really move things forward…

First time in a trading room – fun and very useful

So here’s a new experience for me that’s been something of an eye opener.

I had Thursday and Friday completely off work so took up Mike’s (@FtseDay on the twitter) kind offer to hang out with him and the crew in the trading room he’s created all focussed on trading the FTSE100 using a few really simple setups.

It was great fun since trading can be an entirely solitary experience plus the banter keeps everyone on their toes. The last thing you want to do is trade like a total d**k-head in front of a bunch of people 😉

I’m pretty gutted that due to me work commitments I’m unable to spend more time in this environment because as a learning experience I’d reckon it’s pretty awesome. To come back to a previous post (here) I’d suggest that in order to be successful at trading you need someone to teach you. Books on trading don’t work. Books on psychology are on the other hand extremely useful. I’ll come back to this point in another post.

Anyway, being in a trading room would (imho) be the top of the list for the fastest way to learn and importantly make money at the same time. Some of the advantages:

  1. Multiple people looking at the same chart – many hands make light work
  2. Can see the same thing from lots of angles – you may be wrong but someone else is probably gonna nail it.
  3. See other people’s psychology at work – if someone’s more patient then it’s easier to ask/learn from them how they do it
  4. Quickly learn from others what not to do 😉
  5. Moral support
  6. It is competitive and that’s a good thing. Props to eddie and especially James for winning the ‘balls of steel’ award last thing on Friday.
  7. Nothing worse than someone taking a trade (which you didn’t) and see them making their target while you sit on the bench – thanks eddie (lol)
  8. You learn faster as you’re learning from the ‘collective’ not just yourself
  9. The market is live and you’re trading it. You’re not learning from some static chart where the resolution (and success) is obvious with hindsight… This is a key advantage

Now this was all based on everyone learning/trading using the same kind of approach that Mike trades the FTSE100 with. I can imagine that if it was a ‘free for all’ room with no underlying ‘this is our approach’ theme then it wouldn’t be half as effective. However it was extremely useful.

If you’re new to all this and want to learn to trade effectively straight off the bat then I could do a lot worse than recommend you go check out what Mike is offering. Major bonus for the newbies is that he’s not taking the piss by charging stupid amounts of money for stuff that doesn’t work.

BUT before anyone gets way too excited though I’m going to point something out that I hope is obvious by now… There are still no short-cuts. No-one is going to hand you a guarantee that trade ‘x’ is going to work because it’s still your own psychology and experience that will determine whether you take a trade/setup or not.

I missed some absolute corking opportunities on both days but I still made some money while having a blast. So if this sounds interesting to you then go check out Mike on the twitter or here

2011 summary 2012 heads up and ‘secret weapon’ insight :D

So I’ve managed to procrastinate at olympic levels on writing this post but feel the need to draw a line under 2011 before moving into 2012. This kinda comes under the same category as tidying up, sending un-used clothes to the charity shop and filing paperwork but lets go for it 😉

First off – I’m continually surprised by how much I actually got out of blogging both as a way of kicking my own ass but also the comments, feedback and great people I ran into during the last 12 months. This ‘ere humble record received 6480 views last year and more astonishingly I gained >160 followers on the twitter. I have no idea what to do with the twitter side of things btw but thanks for the interest!

I’m entirely amazed by this and would like to say ‘Thank You’ as well as wish everyone an awesomely successful 2012.

I’m painfully aware that this ‘media’ (?) success is completely un-reflected in my trading results however and since this whole blog thingumy is entirely peripheral to the main point I’m not going to say much more other than bits of the site here need bringing up to date (esp. books) which I’ll do as and when. (honest)

So I’ll break 2011 down into quarters to give the whole thing some structure and take it apart from there…

Q1, Q2, Q3 Jan-Sept

I guess looking back this is really the ‘no freaking idea phase’ where not only did I not know but essentially everything (including myself) could have killed me. The bit where the caveman walks out of the cave in the belief that velociraptors are actually cuddly, kind creatures that are simply miss-understood.

On the plus side (possibly out of desperation) at the end of June I began to learn vipassana meditation which I’ve not mentioned anywhere in this blog previously. Now, I’m sure some people will take the piss 😉 and if you’d have told me in the beginning of 2011 that I’d now be doing this every day I’d have laughed my ass off too. No really. I’ve done stand up comedy about Jesus beating someone to death for driving in the centre lane of the motorway so don’t start on this, ok? K 🙂

The reason I mentioning this now is to say doing this has had a ridiculously positive impact on my life outside of trading which has fed back into how I view what I’m doing on this particular (trading) area…

So vipassana is ‘looking at things as they really are’ which, if you know any psychology at all or understand perceptual bias is very worthwhile getting your head around with regards to trading. Now hopefully you’ll follow me on this…

People (the majority of retail traders) look at trading (imho) because they are un-happy with their existing situation and being a trader will ‘solve all their problems’… doesn’t look hopeful eh?

This means that when trading they are extremely attached to the outcome and that will inevitable cause them to NOT see what’s actually going on in the market – they will be too anxious, too scared, too fearful and too everything. They will do everything wrong. Take profits too early, trade emotionally (revenge trade) and also pass up opportunities to actually do things properly.

Their trade will represent how they see themselves in the market. Overconfidence on one side (possibly) without the required actual knowledge versus fear on the other side also compounded by lack of knowledge.

Now to come back briefly to this – I’m writing this blog to prove to all the retail traders out there that have got sucked into the FX hype that it can be done and it would be pointless to pitch up out of the blue running around shouting ‘I did it – I’m consistent’ without being able to contribute to the rather sketchy (i.e. shit) path worn in the road by the travellers before. I’m talking about lack of ‘proper’ methodology about how to master this skill but I’m also digressing a whole hell of a lot. Sorry!

Anyway the psychology will kill you if you’re looking for success in the market to ‘fix’ an issue you have out there in the real world. One of the ironies here for me is that if I wasn’t going after this goal then I’d likely never started meditating in the first place and I’d not have seen what a powerful tool this has been at every level.

Here’s a hint at what’s happened outside of the trading arena.

  • No longer dealing with people that just sap my energy
  • Now getting on better with friends/colleagues in a job role that (while stressful) I really enjoy
  • Have resumed running in addition to the usual gym stuff I do
  • Haven’t had a cold or any sort of illness for the last 6 months
  • Eating better and sleeping better
  • More ‘level’ emotionally

Now, is my life suddenly perfect? Hell No 😉 but I’ve realised that all the solutions are actually locked away in my head and that they will absolutely NOT come from getting really good at trading in order to solve problems by being able to throw money at them…

So what does this mean for trading? Like a dog with a bone I still want to become very proficient at this skill. However, all the reasons for doing so are now subtly different because they’re no longer keying in to all the negative emotional and psychological debris that massively gets in the way of any kind of decision making. The emotional ‘tie’ between me as an individual and my position in the market isn’t going to screw me over (as much – lol) whenever I’m looking at what’s going on.

Now, am I suddenly a ‘super trader’? No because I still have some un-helpful character traits that I need to sort out.

1) I’m way too impatient. By this I mean I close good trades far, far too early. This is just going to take some new ‘rules’ and self discipline for me to stick to them

2) I’ve been trying to trade 5min intra-day bars when my work commitments make this virtually impossible. Putting myself under this kind of pressure has had a negative effect in the last few months. I actually like this timeframe a lot but it’s not workable in my current circumstances

3) Still crap at record keeping. Which essentially points to laziness on my part and currently have one and a half days before the end of tomorrow to write a proper trading plan for 2012. We’ll see how much coffee I can consume tomorrow eh?

Before I get into Q4 here’s another observation… The ‘goal’ of becoming a consistently profitable trader isn’t the actual goal at all. A goal is nothing more than an end point and when you’re at the foot of the mountain it’s entirely the wrong thing to concentrate on!

The goal is to master the process of executing good trades and managing them well. Concentrating on the ‘goal’ is simply going to be the most massively frustrating thing you’ve ever tried and you will more than likely give up. It’s the process that is 100% more important than the goal. Some obvious examples

Trading
goal – money etc. you’ve seen the spam too so I won’t elaborate 😉
process – simply learn to execute good trades one after the other

Diet
goal – lose 12kg
process – keep in mind what you eat, track it, don’t over-eat, exercise

Learn a language
goal – chat up anyone (LOL)
process – learn the grammar, structure, vocabulary and practice, practice, practice.

So you see, it’s the goal that’s sexy in the beginning but the PROCESS is way more important. This is why (to a certain extent) all the ‘positive thinking/affirmation’ crap gets on my nerves. Be mindful of the process and forget the goal 😉

Q4 Oct – Dec

Here I think things actually improved. I got some proper tuition and possibly found the humility to listen and focus on the process of becoming proficient at a skill using my own eyes/brain rather than expecting coin to fall from the sky like some sort of manna from heaven… Yes, it’s taken my 9 months (well more like 12+) of bashing my head on the wall before I realised I didn’t know anything about what I was really trying to learn…

People I’m learning from…

  • Jimmy Young – absolute 1st rate tuition/value for money/pull out all the stops so you ‘get it’ however intra-day (5 minute) so kinda challenging for me and the j.o.b.
  • Chris Lori – price action, price action, price action (1hr-4hr-Daily)
  • Nial Fuller – as above with a different slant

On this basis I’ve been making a fair fist of trying to trade during the day while working and let me be clear about this – it absolutely doesn’t work 😉 The amount of ‘mental’ required to get into the flow of what the market is doing on a daily basis isn’t compatible with staying employed. So I’ll be moving up to 1hr/Daily charts while keeping on with Jimmy’s excellent course as we progress through 2012.

So there we have it. I’m gonna head out to get a coffee and write a trading plan framework

Thanks again for all the comments, support, suggestions and especially criticisms

All the best to everyone for 2012

Namaste

Rob 😀

Finally 2012 can’t really start properly without some of the following because we must all be a bit ‘loco’ 🙂 Kickit! INsane in the BRain 😀

Trading can be fun!

So as a newbie trader (relatively) the work is in sorting all the internal obstacles to actually enjoy the process of trading. I’ve posted previously about some negative aspects (fear) which I’m now pleased to report I’ve overcome.

If you’re new to trading and feel like you’re putting your life in the hands of your enemy or you get extremely nervous when in a position then you really need to pay attention to the following.

The bit which isn’t exciting (not so much) is that I’ve beaten this in an extremely boring way… rather than transforming into some sort of warrior trader ninja/samurai 😉 I’ve done the following: –

1. Decreased my trade size. Yes, this is extremely un-sexy but if you’re new to trading and feel under pressure immediately when placing a trade it’s likely to be ’cause you’re risking too much in a single trade. Risk less, decrease your position size and you’ll be able to manage the whole process out WAY better than you would previously.

2. Gotten to a point where I’ve at least have half a clue what I’m doing. This is the bit that takes some time and (IMHO) involves learning from real people as to what to do. When I’ve made some consistent progress I’ll be more than happy to recommend various people and explain what component of my trading approach I learned from where.

For me the main task is now practising trading and really getting my head around using what I’ve been taught. This is setting up to be my mission for 2012. Trading as much as possible given that I work full time. I’m looking at changing back up to 1Hr/4Hr timeframes to do this.

3. Learn patience. Really this is invaluable (and I’m still learning this). Once you understand even a little (as I now do) about how prices move and where professional traders enter positions then you’ll be more than happy to wait for the price to get to where you want it to before getting in.

There is no reason to rush into a trade where you’re likely to lose money or get panicked into bailing out of a trade early. Decide in advance where you want to get in and then wait. If you miss an opportunity to get into a move then wait for a pull-back and then get it in if the reason for the trade is still valid.

Now of course you can go look at my actual trading results and notice that they’re less than stellar. So why should I be dispensing advice? Well, I guess what I’m trying to do with this blog is highlight what is actually really involved in going from not having a clue to having consistent trading success.

Jan 2010
Started thinking about trading, opened a small account and blew it up as I was utterly clueless

Oct 2010
Signed up for some very over-priced training, this didn’t help, re-committed

Jan 2011
Started this blog while still trading and consistently losing money

Oct 2011
Got the first bit of proper training, stopped losing money and started really studying

I know how far I’ve come since I started looking at this topic…

Looking back even 3 months I’ve learnt more about what it takes to really succeed at this than I did in the entire 12 months of 2010 and most of 2011 too. Scary huh?! 😉

So I’m now, as I mentioned above, at the practice, practice, practice stage and concentrating on executing good, well thought out, risk managed trades.

It’s not exciting or sexy or like it is in the movies but it’s at least becoming much more fun 😉

Learning to spreadbet hint – get good tuition

Most people who read this blog are interested primarily in trading and so won’t be aware of a certain personality trait that I possess. In actual fact it’s possible that anyone reading this who does actually know me (hi!) may not be aware of this fact…

I have a tendency towards extremes…

How does this manifest itself in the real world? I took up running (from a standing start) and went on to complete an ultra-marathon a few years later. I’ve spent a lot of the last five years in the gym and now look totally different physically… These are a couple of the more obvious examples.

So when it comes to trading my intention is to become really, really proficient. One way I’ve done this in other areas is to read about whatever subject (like psychology) a lot… and with trading I offer up exhibit A) which is a pile of about 30 books just on trading.

Yes, I don’t yet have a smart phone (see older post as to the reason why) and the picture resolution is bad so apologies for that…

It’s a big pile and I’ve read them all. Some I’ve read twice.

Now here is the hint I’m giving to people trying to learn to trade. You can learn a lot of things from books. However all the big steps forward that I’ve personally made as a trader have come from direct exposure to someone who is actually trading in the current market environment.

Let me repeat that.

You need to find someone to teach you to trade.

You need to get exposure to people who are successfully trading at the same time that you are trying to learn. They will know what works ’cause they’re doing it. For all sorts of psychological and other reasons listening to someone talking about trading is way more applicable to the real world of your trading now than the stack of books I’ve (badly) photographed above.

As a side note, stay off forums. Traders aren’t posting shit on forums. Traders are trading. Much the same way that the people talking about the markets with hindsight on TV aren’t trading either 😉

Here’s where new people wanting to make money trading get conned (notice I said make money trading, not learn to trade – I’ll come back to that some other post) There are people selling all sorts of shortcuts that promise to teach them to trade in a weekend. These sharks promise the earth but delivering less than sod all. If you want to learn properly about trading then you will more than likely need to invest in some training but please check them out first

Happily, there are also some genuine individuals out in the world who do want you to succeed and even better are prepared to give away free and useful advice!

People! Grab these opportunities with both hands and listen to what they have to say. If you were an aspiring professional sportsman and one of the guys who is out there winning medals offered to give you advice for free then you’d take it, right?!

So with the point I’ve made in mind (find a good tutor – duh!) I suggest you grab the last few remaining free training spots being offered this week from Mike (@FTSEDay on Twitter) which are on a first come first served basis so email traders@ftseday.co.uk

I wrote a blog about the last session here which has helped me get my head around an issue I had with trading. So there you have it. Find someone to teach you that’s doing it, not writing books about how they used to do it and practice