u need a break mate
and some rethinkin on your trading system
do let me know how you trade may be i might be able to help u
Hi. Volatility by its implications means that most if not all of your stops become vulnerable. When mkts are moving against you or when they are range bound, scale down your position sizes to minimal (timid in your vernacular). Larger position sizes are merited only in trending markets where the risk/reward has a higher probability of playing out on the reward side. We can try and help more if you can be specific about your trading style or positions. Good luck.
@farzooq: a break meaning i should stop trading for a bit? my trading system seems to work with a higher percentage of wins vs losses, isnt that enough to keep the same system? or do you mean as in tweaking parts of the system?
@sadiqjafri: i have read your point of view that you should only use large positions in blatantly trending markets before but my problem was different.
let me explain:
over the last two years i have been trading using largely the same system and it has made me money more or less consistently. my problem lies somewhere between greed and optimisation: i started trading nov2007 and up until june2008 i made roughly 9% while the market clocked -9%, my second year (j08-j09) i clocked in 10% while the market clocked -42%. this year june09 to end october my return was +10.5% with the market at +28%.
the greed/optimisation thing came in in beginning october because since the beginning of the year i have been trying to get myself to increase my position size, from the stable 2%(timid) to 10%(aggressive) average i have been maintaining, in the attempt to better my returns but i couldnt manage to do this. practically i always had this inherent hesitation to pull the trigger on a larger position (more then or equal to 10%) in a trending market.
which brought me into october when i forced myself to take either a aggressive position of a timid one, so i kept my best position as the largest (~25%) and four to five other positions as ~10%.
this worked from the first of october to the 16th, but on that 400 point and subsequent days all my positions correlated and bang next thing i knew everything moved against me though i walked out of october with a negligible loss of -0.05%.
when i used the same strategy of position sizing in nov, only my biggest positions moved against me - which though keeping my accuracy at 60% has made me record my second largest loss using this system
i basically use a mixture of technical ~75% (momentum, resistance/support and SMAs) and fundematals ~25% (choosing which scripts to trade)