If we follow the 03JAN79 model, we are in for a real chop fest for the next 8 months...I would rather light cigarettes with $100 bills than trade that in any real size.

It would be much more pleasant for all parties if they all simply agreed  to follow the precedent of the 07MAY80 FTD or (much) better yet the 17SEPT82 FTD that kicked off a 20 year secular bull.

Having hard time making any progress lately (~3 months). Not sure if this market can already be classified a chop fest. Leaders do not act like leaders and trash does not act like trash. Any recipes how to handle this other then 100% cash?

Gyanesh:

If you aren't making progress, your P&L is telling you all you need to know.  Why trade if not to make money??

Being in full cash isn't a punishment, its designed to protect you (in this type of market) from a death of 1,000 cuts.

However, if you feel that you need to have some trades on the board - cut your normal position size in 1/2. Pyramid into 1-2 of your best ideas maxing the positions so it leaves you w 85-90% +/- cash.

Keep raising your stop as you pyramid up as well. If the ideas work out and you make some progress add a 3rd small idea. If any of the ideas fail, give yourself a few days off to make sure your seeing the market for what it is and not what you want it to be.

I:

Thanks for the advice. For the past 3 months been in cash mostly, Did participate in increments of 15% - 20% but was stopped out multiple times. CERN, CRUS, ALGN, QCOR, MLNX just being a few of the choppy trades.  I tend to keep losses limited to not more then 3% to 8%. Wish I held on to MLNX but just could not hold it going into earnings and especially after it broke the 3-8% stop loss rule couple of times. The net portfolio is 1-2% up in the past months but its been brutal.

Gyanesh:

I would strongly recommend spending some time creating your own trading rules that incorporate O'Neils but are more tailored to your personality, experiences and trading style.

Have a section that concentrates on how to handle a losing streak. Have another one on how you'll trade a choppy market. Creating a rule book is one of the best things you can do as a trader IMO.

If I had, "multiple," losses I would not commit to new trades with full size positions. My rules would have me cutting my entire portfolio size down by half as well as limiting my core equity exposure. For me, protecting my capital is the light that guides all of my rules.

Additionally, after a string of losses I would have a forced trading hiatus. I would sit out a predetermined number of trading days. If I am losing then something is wrong with either my mindest or the market.

A clear head alone can turn around your performance and the time off will help sort things out and put the brakes on a losing streak.