Scott I am with TB on this one. I have been having nothing but success during this triangle pattern that the markets are in right now. I have been reading about your frustrations on both forums, I am sorry buddy but I think that it is time for you to take a break. It is almost like if you just traded the opposite of what you have been trading than maybe you would have success. You always seem to be in the right place at the wrong time.

I wish that there was a way that I could help you but you never stick with anything long enough to see if it will work. You have been at it with all of us giving you advice for four years now and you are actually having worse results. 

You are a great person but I am just not sure that you are cut out to trade.

What ever you decide, I wish you luck buddy.

Another one of your friends,
Apsll.

After looking at these stock picks, and reading the rest of the posts, I have my own theories, if I may.

1)  What was working in a bull market (in my opinion) might obviously suffer in the worst financial crisis in a generation.  However, if you've had a drawdown, and it is less than 40% (and I believe Scott's is), then (in my opinion) you are still beating the general market and buy and hold investing.  Maybe that's looking at things through rose colored glasses, but there are traders out there who have lost their life savings.

2)  How long do you trade a system before you call it quits?  My guess would be until you start to move out beyond normal distribution.  That's why (in my opinion) if you trade a system you need to know things like biggest drawdown, largest loss, max consecutive losses, average win, average loss, proper position size based on expectancy. 

Even if you're not trading a system you can still get those numbers based on your own historical performance and essentially substitute yourself for the system.

Now the question becomes, are you trapped in a string of losses that is acceptable for your system or not? 

After Scott posted his coin-flip analogy, I did a little experiment.  Assuming that trading is about beating a coin-toss which it is not (the goal is to make money.  Trend following system perform at about 30% win rate which is far below a coin-toss).  Anyway -- I actually flipped a coin 50 times.  The results were:

Heads 23
Tails 27

Or it might have been the other way around.  In my mind that's pretty close to random.  But during the test there were several instances where heads came up over 5 times in a row.  And tails came up over 5 times in a row.

So the question to me at least should be not "how long I you stick with a losing strategy?" because the answer to that question should be zero days.  Instead, the question should be, "How do I determine if my strategy is a losing one?"

I don't know how other traders here do it but I like to look at expectancy.  Even if you're not trading a system you can look at your trade history and calculate if you have a positive expectancy.

Take your last 100 trades.

Take the average amount you win when you're right and times it by the % times you're right.
Now take the average amount you lose when you're wrong and times that by the % time you're wrong.
Now subtract #1 from #2
Is this number positive or negative?

If it's negative you will slowly drain your account down to zero and should question your method and hopefully look to fix it.

3)  Emotional control in the market (at least for me) is job one.  I don't know if this comes from experience, or from trying to will the market in your direction long enough to have gotten frustrated enough to realize that you take what the market gives and you adjust your expectations accordingly.  And I think that what the market gives is in direct relation to how little you "need" it. 

I don't know if everyone has had those table pounding, keyboard throwing moments at the market.  My early trading was riddled with them.  I always seemed to be asking "What's wrong with me", "Why can't I get this?" "Why is the market messing with me?"  Just because I wanted something so badly didn't mean that I would get it.  After awhile it seemed like every trade I put on was a huge loser.  At which point I would revert to a stomping, yelling 5 year old that didn't get the right toy for Christmas.

It was only after I quit trading for 6 months (might have been 12 months), started testing, and let go of everything that I thought "should" happen -- which included money flowing into my account -- did I begin to design a style of trading built around my personality.

I can remember my first day back.  All I wanted was to make 1 point.  That's it.  And I got it in AAPL.  From 69.77 to 70.85. Looking back, it seems that I was still missing the bigger picture because 1 point from 1 trade in the middle of any trading career should hold no statistical significance whatsoever, but it was a big morale booster.

What had I learned?  I had learned to find the one set up that appealed to me the most.  Not the secret set up.  Not the golden set up that was never wrong.  But one I could trade on a time frame I could trade.  And I began to master it and amazingly trades began to work out.

I have once heard it said that trading systems are not meant to generate money, but to curb psychological weaknesses.  I couldn't agree more.  There is an endless stream of opportunity in the market.  This is not the same as guaranteed income.  You need a structure that will hold back the many weaknesses that crop up when facing that endless stream of opportunity and loss.

4)  Looking at these trades I see...

SSRI - overextended.  Up over 100% since the bottom.  Nothing wrong with this, but you can expect consolidations which is what we're in now.  If you enter during a consolidation phase in order to get a jump on a breakout, then you have to expect you're going to get chopped around.

DIG  another consolidation.  I think the ultimate resolution is to the upside but it hasn't made a move either way out of it's channel.  I think it's important to look at the time frame of your trades as well.  And what type of trade you're putting on.  If this is a long term trend trade then your capital would be best served waiting for a breakout in either direction.

SQNM - seems like a late entry into the move.  The break from the bottom occurred on 12/12 and a continuation breakout on 01/05.  The pullback entry (if that's your style) was on 12/30.  If the trend would have continued you would have been fine.  It didn't and so the trade was a loser.  Sometimes that's all there is to it.

DAG - simply no follow through.

QCOR - you know, looking at these charts (and it could just be me) but I don't see any symmetry to the trades.  And I think this is what tobydad may have been referring to (my apologies tobydad if you weren't). 

If you have one trade that you master (in the beginning) then all of your charts will look the same.  I could be wrong here, but that's what started helping me.  When I printed up the charts of all the stocks I'd traded (like jas suggested) and saw that the winning charts all looked the same and I seemed to favor a particular pattern (the continuation trade -- usually after a first thrust from the bottom) then all of my charts began to look the same.

Chart after chart I would see bottom, first thrust, consolidation, trade.  Bottom, first thrust, consolidation, trade.  I began to know what my trades looked like when they worked and what they looked like when they didn't.  I began to know what a string of losers looked like and felt like and the same for winners.  But most of all I began to know myself.

I see the same thing here on the Board.  APSLL seems to look for the same thing time and again (accumulation off the bottom).  Tobydad seems to favor pullbacks after a thrust.  Bigblock uses the same indicators in the same way.  Funnymoney favors traditional patterns and never strays.  I myself like continuations and classic breakouts.

As a final thought, I might just be drawing false associations here, but I see that many of these trades seem to be made inside of consolidation periods when I think you would be better served to wait for a return to momentum on one side or the other. 

Well, this has certainly been long winded.  My apologies for the (many) personal references but it's the only way I can relate.  And as always, this is all just my opinion.  And only offered in the hope of helping another gain insight by reading something that he might connect with. 

David, I agree with Ben; very good post. 

Like Tobydad said: You can get mad at me if you want to; SQNM is the only example I need to deal with. On 1/20/09 price was stalling at Resistance and you are "gambling" that price will break through based on the indicators, so you went long (your words). I have been telling you for a couple of years now that this is a losing game and that you have to either wait for price to break the resistance or at least have some distance before resistance to make a small profit. You are under no obligation to listen to my advice of course but that is why SQNM was a bad trade (you did not wait for confirmation).

Davidjohnhall said: If you look at the stocks that folks play then you will see that they tend to look the same. You play them long enough and the outcome is almost self evident. Most of the time. I can see no correlation from one of your charts to the next. I usually do not agree with your picks and if I do then you do not play them anyway. It is difficult to help someone or give advice when you have no clue as to what they are thinking and why, or you see them making the mistakes over and over again even though I have warned you about them over and over.

Sorry if I was to honest with you, and I am no Guru but these are my observations.

johnlc dates are posted next to the issues. Welcome.

I owe this to Tobydad..... I think I see what you mean by my charts are all over the place.  I didn't realize it hearing that bit on DJH's thread about charts looking considerably different was a bit of a wake up call.  Yea I have gotten away from waht I had been tradign and drifting BACK to somethign that had worked well for me in the past.

Put simiply wether ther is validity to it or not IT worked like this and I made money whent eh marekt were moving
price greater than 50 EMA and 20-35-50 ema in an up trend profile with TSV and MS above zero.. anywhere in ther is see as the interest zone and an entry sought.  Oh.. but not to chase prices too high also used the diceman to get things that weren't showing allot of momentum yet but were trendign up and maybee startign to show it .. also some breakouts from consolidations were bought.

That is all it was.

What I've been trading that was frustrating me most was this reversal off the chanels.  To look at the trades in terms of signals Plot MAXH 15 and MINL10 on the charts.. no indicators thougth I tend to lean on the ones that have better indicators.  I do sort by RS Vs spy  and look for strength and weakness that way.  Before you baptise it as a dud strategy it's really just an entry that I tried to build a strategy around.  I'll also post one of it's winning streaks.

Scott I want to apologize for my blunt comments. You know me by now and that is who I am. I am glad that you have seen the value in David’s words even though I was trying to say the same thing concerning the resistance and consolidation factor. David and Tobydad are more delicate in there approach than I but please be aware that my intentions are pure it is just my delivery that is failed.

I do care about your success and have tried to help over the years. I consider you to be an asset to this forum. At times you lighten the mood when it is needed and I love that picture of you giving Ballroom dancing lessons. You are a straight up guy and never pretentious. I will celebrate when the day comes that you are confident in your methods and your success.

I remember when we first started talking; you were asking to become a member of the bottom feeders club. Those were the good old days. I will leave the advice giving to the statesmen of the forum; Tobydad, Davidjohnhall and Diceman. (Where is he by the way, I have not seen him on either forum lately)?

Apsll.

Scott’s calculations for profit and loss on the short trades are in error. The losses are actually profits and the profits are actually losses (plus/minus the adjustment for the commissions). The long trade calculations looked correct. Also 11 trades are double posted (DSX, ALNY, SOLF…). My counts as follows (assuming no errors from myself):

Trades:  57
Wins 30 (53%)
Losses 27 (47%)
Average gain $167.99   ($5039.73/30)

Average Loss $162.28   ($4381.65/27)
Average of all trades: $11.54   (($5039.73-$4381.73)/57)

Proper entry at a support or resitance levels is a low risk trade setup.  With tight targets and good stop placement, you can get high success rates.   Good luck.   

Scott, I took your buy column as entry and sell column as exit, so the entry/exit dates and prices where next to each other. I should have taken what you had stated literally.  I realized later when looking at the individual charts for entry/exit in the channel that some short trade’s entry price range did match the price as I had interpreted it.   OOPS!  Thanks for correcting my correction. I’ll just go back to lurking.