Dec 162010

Hello everyone.  I hope you all are doing fine with your trading, or at least making improvements.  The forums have been a big success with over 100 registered users.  We now have sponsors for Bund, ES, NQ, & EuroStoxx with people posting their pre-market plan & sharing their trades afterwards.

Today I went short on the stoxx and covered half at the open swing low.  That’s where Markus went long.  I stopped out on the second half of my short and he did well on his long.  By sharing our trades we can see the market from another point of view.  He was clearly on the right side of the market this morning and it was interesting to see how he saw it and traded it.

To me this is the most important part of trading – sharing & learning with others.  Which reminds me of the survey results:

Since multiple answers were possible, I put the number of votes corresponding to each choice in orange.  I was really surprised, 41 people are interested in a trading room for the European morning!  And 36 for the US morning session.  That’s surprising to me because there are only a few of us posting our plans & trades in the Stoxx & Bund forums.  I have an idea on why this is the case and it’s that there are a lot of traders who are interested but don’t feel comfortable sharing their plans & trades, or are a bit lost in the process.

As FT71 said in his latest blog post, “A rising tide lifts all boats”.  I’ve heard that before.  For example when a sector is doing well then all the stocks in that sector benefit.  And when a trading group is doing well everyone benefits.  I used to think that I had to keep everything secret as it was my “edge”.  Now I realize just how silly that is.  If several of us trade the same way it will help. If I buy a support level and others buy it too then that increase the chances of it going up.  This is why SMB can post their “play of the day”.  They’re not worried about competition, they want others to push their stocks up for them.  They want a rising tide.

So for the people who may be lost, FT71 has a webinar series that covers his method.  They require a small donation to a non-profit charity which is great because it’s a small amount and it’s for a great cause.  Here is a list of the topics:

I cannot recommend these webinars enough.  If you want to participate in the forum discussions, then you simply need to watch these webinars and then practice!  The fourth one is about Daily Homework.  I cannot tell you the difference this has made in my trading.  I used to fly by the seat of my pants while trading.  Now I define where I’ll do business before the market opens and I let the market come to me.  “IF .. THEN ..” scenarios help me take discretion & decision-making out of market hours.  As my trader friend Jeff Castille says “You do your thinking outside market hours”.

So Webinar 4 part 1 is due to be released today.  I’m really looking forward to it because I need some guidance on how to do my homework and prepare.  And based on my interpretation of the survey results, there are 40+ people who need help as well.  I hope some of you will decide to post your ideas & trades and get feedback.  It will definitely help you to improve.  Even if you just ask questions, that’s a good place to start.

Back to the trading room or review sessions – I’m still considering it.  A few people expressed concerns that it could be distracting to my trading.  I totally agree that it is a valid concern.  But I also think there is potential to help.  For example this morning on the bund I could say “I think I’m going to exit here it’s stalling” and someone else could have said “that’s your monkey talking, stay in the market hasn’t proved you wrong”.  Absent of a group environment we have to learn to say that to ourselves and I think it’s really important that we learn to do that, even if in a group.

I’d still like to create a room but I need to focus on a few issues with my own trading first.  The new year is around the corner and I’d like to start making decent money.  But I haven’t forgotten about it so please stay tuned.  In the meantime, you’ll find us on Twitter using the #FT71 hashtag.  I’d like to start using that more while trading if there is interest please let me know.  For me, being more active on Twitter would be an intermediate step before a trading room.

  4 Responses to “Sharing & Group Effort”

  1. hi, a experienced day trader told me recently that it is impossible to make more money then your starting balance in this game. ie he meant say you started with a £10k bank then you wouldn’t expect to make more than £10k from daytrading ina year as he says its simply not viable and you would be taking too much risk. I disagree with that statement as you are personally doing it so far this year and your drawdown was never this low this year as far as i can see. So whats your thoughts on this, his point was if you have more money you can reduce overall risk by trading a basket of products instead of just one. Do you think 200% or even 300% returns are feasible and realistic trading one market?


  2. I think he has a good point and it’s probably true for most people. I don’t think it’s realistic to make 100% per year.

    In my case, after coming off 4 months sim, I started making money right away and my equity curve never went negative. My only loosing week was 1k so figure a drawdown intraweek of 1.5x that so 1500. So if I started with a 2k account I could have made 400%. But I also could have blown up had my drawdown come right at the beginning.

    I prefer not to say my account size but I will say I have not made 100% this year so I can’t prove your friend wrong. I trade a bit conservatively for my account size. I hope to increase size soon but will not do so until I have my risk management under control (avoiding large losses).

    So to summarize – it all depends really. with a small account one can make over 100% but also run the risk of ruin. WIth a large account making 100% is really hard.

    My advice is not to worry about the percent return and just focus on getting small base hits in order to get consisently profitable. Then once base hits are working, think about optimizing. i’ve been hitting base hits with 1-2 contracts for 16 weeks now and most of last year and it’s a long & difficult process just to get past the base hit stage. So one thing at a time.

  3. hi mike, forgot to say this trader also states that he has never in his time seen one profitable futures trader, but many stock traders. He states there are far more choices in stocks and often he finds many stocks that have moved 2 or 3 times their atr where the same cannot be said for futures.

    Being a futures trader yourself does this worry you?, especially the fact most people cannot make money in the long term doing what we are doing? Id appreciate your thoughts, cheers

    I mean i have done countless research on this and even when i traded in a prop environment most traders there lost i must admit.

  4. Jason – I forgot to answer the part about trading a basket. I think it’s better, at least when starting out, to trade one type of product. I was trading two before and it was twice the work and split my effort between them (I was trading bund & ES). Now I focus on equities only and do ES & Stoxx (and rarely NQ). so a basket of equities could be ok but trading say crude, equities, gold, bonds, etc. would be difficult.

    your friend not seeing one profitable futures trader makes me suspicious. I guess if he was trading in a stock environment that might make sense.

    i agree that stocks can move quite a bit more but searching out stocks is a lot of work and then there are liquidity questions. i like sticking with a single market (which could be a single stock) so that i get to know it. but I think there are definitely good opportunities with stocks.

    Who knows maybe I”ve been lucky for the past 4 months and I’ll go into a major drawdown or something. time will tell.

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