I have left the job and started trading in futures but everything happened against my plan
I started trading on last monday in SBIN, moving average cross over but there was not trend from that day. And I lost around Rs.15000. As there is no trend I am getting many whipsaws, I know trend will come in coming days but now I hesitate to enter into the market because I dont when trend will come whether in next week, or mid week of the month or last week. Can you pls help me to overcome this. I have started to think to go back to job again
I have 2 things to do one is to get capital back so I will have to follow the system and after that think about the future whether to stay with trading or go back to job again. With your experience pls tell me whether swing trading is good and how to identify the trend.... I request you to please give me some advise. How to minimize the whipsaws and false trades. I need some mentor to help me. I had done back-testing of system for almost 2 years 2011,2012 so after understanding the performance I decided to quit job and started trading. Now within 2 weeks I have totally lost the confidence can you guys pls help me. I use moving average cross over system and facing whipsaws. I keep positions open overnight.
Hi tspact,
I too have left my daily job to be a full time trader. I am just 1 and half year experienced in this path. but let me tell you the things that I have learned from my mistakes. And majority of newbie also do the same mistakes. We basically learn some basic technicals, create a system, and start trading. But we tend to neglect the most important aspect of trading and that is money management.
1. Define how much you are willing to risk on a single trade. Risk that you can afford to loose
2. Do not put all your trading capital in a single trade.
3. Have proper entry, exit, stoploss levels in mind.
4. Do not bring any second thought or excuses to stay once the stop loss gets hit. Exit and wait for next signal.
5. Gradually build your position. Lets say if you are trading 5 lots of a contract. Enter with only 1/3rd of it on 1st trade. Add your next 1/3rd position once you get into profit and the stock movement proves your decision right by establishing the trend. Enter with the last 3rd when the stock pulls back a little and start resuming its trend.
6. As you mentioned you are a swing trader, you should not be in hurry to enter at once.
7. The key to survive in the market is sticking to it. ANd for sticking you need money. So if you will loose more than half of your capital in a single trade, in no time you will be out of the business. So have a proper risk and money management plan.
Get some good book on money management and read them.
Best of luck dear
Good luck