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So going back to Tuesday’s episode, thinking about trading as a business, I got a comment on the YouTube channel from someone who’s like, I’ve been day trading futures for two years. It hasn’t been working. I’ve been thinking about trading options now and having a longer period in a longer holding period. Is that what you advise I should do? And so I want to go back to Tuesday’s episode about thinking as a business. If you had a retail store or if you were a wholesale operation, or you were a manufacturer, sooner or later you have some costs, you’ll have variable costs. But at the end of the day, sooner or later, someone has to sell something. You have to create revenue. So I don’t know if you should just start and go and change asset classes and timeframes. That might be a big jump. If you like futures and you know that that’s what you’re interested in, you might consider just trading smaller and having a longer holding period of time and try that first.
That’s what I would try to, I don’t want to say fix, because you can make money trading in the short run. You might be having difficulty with it. I know it can be done though. However, for your emotional makeup and what you’re looking to risk and this and that, you just might find that it’s better for you to have smaller positions and hold them overnight over the weekend perhaps. So that’s what I would do. If I was going to make any change to my system. The first thing that I would do is just try to change the holding time, because the difference between futures and options is gigantic in so many ways, and I’m not even going to get into it here. This is just a completely other world. I don’t necessarily think that you have less risk because you have debits or net debits.
The key to making money to me has always been around position sizing more than entries and exits. I’m sure that’s up for debate, just my humble opinion. But what I would do is I would always, and this goes for anyone who’s out there, if you’re struggling doing what you’re doing and you want to make a change, the first thing that I would look at is keep what you’re doing. But you might be getting out of otherwise winning trades too soon. I get a lot of comments like that is I get in whipsawed, but you might not be giving yourself enough room for the daily. A typical mistake would be you look at the 20 day ATR, and it might be like 50. And so when you downtime, the ATR downtimes, so you might consider still using a daily ATR using intraday timeframes to give yourself more room and stop getting knocked out of trades.
Because in the short run, the data are very, very random. And it could otherwise be, your whole system could be just a mechanism to give you frustration because intention, sequel results, what’s the result of your trading? If it’s aggravation and frustration, you have to say to yourself on some level that you’re deliberately doing that, right? Just like a cigarette isn’t really a cigarette in the world of the people who would make tobacco products, they look at it as a “nicotine delivery device.” So with that in mind, think about all the rules that you’re following or not following and the results that you’re getting. If it’s frustration, then you could say that you’ve perfectly built a system to do nothing but aggravate yourself. Because if that’s where you’re at, that’s where you’re at. So, okay, I don’t want to feel those feelings anymore. What do I need to do?
I need to trade smaller, increase my holding period, and so this way, give myself much more room so that if there is some zigs and zags right after you get in, then you’ll be there. You’ll still be there for the retracement as well as the rebound, or if maybe your entries are not that good. And so what you think as an entry is actually the beginning of this spike up, draw down, and then retracement. Why don’t you wait for that to happen first? Then get in so you can kind of go to school on yourself again. But that’s my humble opinion. I know there’s a lot of smart people watching the show. The thing is to experiment and understand that you have to understand. So I was trained in economics, right? So applied microeconomics could be said to be finance, and finance really has one.
There’s a lot of thesis, thesis, but one is that cash has time value. You’d rather have a dollar today than a dollar next week. At the same time, you have to put in your time. You have to put in time, money, and effort to develop your craft. But when you go back to Tuesday’s lesson, when you start thinking about business being a business-minded entity, how long, if you were going to start a business, say you’re going to start a restaurant, you’re going to build a mobile app, you’re going to do one thing. How long would you put good money into a system that wasn’t making money before you wanted to pivot? So my advice on that is if you’re trying to trade on the short term and you can’t get a feel within three to six months, it’s time to pivot and increase your holding period.
Because the folks who do it very, very well, they develop that feel. They actually have the feel. They just have to uncover it and see how they can apply it to the market. So if that’s not showing up for you, it doesn’t mean you’re a bad person, and it doesn’t mean that you’re a loser. It just means that you have to pivot and try something different. Try another asset class or increase your holding period is probably the easiest thing to do, and then see how that works, how that feels. Because again, we label stuff and the studies that I’ve shown would encourage you to take risk home overnight despite how you might feel about that. I also have the data because I study the data as much, if not more

Than how I study the charts. And I look at like, okay, well what does overnight risk mean? Why do people so afraid of that? Why do they feel like they’re any more in control? Because they’re awake and sitting at their screen. You’re not. But you think that you are because you label it that way. That’s not the reality, at least for me. You might think differently. But at any rate, hope you had a great week.

The post Struggling trader wants advice on next steps first appeared on MartinKronicle.

The post Struggling trader wants advice on next steps appeared first on MartinKronicle.