A bird in the hand Is worth two in the Bush

[Dr_Explode]

Good wisdom as usual from FT71.

I have a similar setup. I simply mark the day during the times I make most money. Once I reach 11:00 AM I check how much I've made. If I give back 10% of that, I leave the room for an hour. If if I give back another 10% of that original figure, I stop until 3 PM. If I lose that last 10% I turn off the computer. It's necessary at this stage for me to just hammer those rules in, forcing myself to leave the room no matter what. I miss moves in the afternoon sometimes this way, but on balance if I continue to give back more than 20% after 11 AM, I've found I trade myself down much further.

The difficulty is when I am down net before 11 AM and then make it out of the hole by 11:30. Have to make some rules for that situation.

 

[Rearden Metal]

I have encountered quite a few traders over the years, who say things like: "I'm up a decent amount of money today, therefore I'll quit while I'm ahead and go home now."

<b>Not a single one of those guys ever got rich. Most have since completely failed at the business of trading, while the very best of them never got better than five-figure grinder status. </b>

 

[Cheese]

Quote from Jax:

I'm hoping to get a little advice on how to mentally tell myself it is ok to stop trading once I'm up nicely on the day. Currently I trade the er2. I've been trading for about 1 year now and I'm finally to the point where I can make money, but I'm having trouble keeping it. My problem is that I can't tell myself to STOP Trading and always feel like I can get a little more.

Today I was up over $700 on two contracts after the first hour of today's market, however I finished the day flat. Unfortunately, this behavior is not common for me and need to snap out of it. Has anyone mastered this problem, any tips or suggestions?

Sincere Thanks,
Russell

If there is a psychological problem it is that of an underfed cat who will eat very quickly anything it is offered. You have to take the whole day as one big cake. Eat it slice by slice or eat big slices from it.

Among many matters you have not yet learned to address, your problem is in this equation: trading another bit of the day should not lead to a loss any more than trading an earlier part of the day.

BTW what are the criteria for your entries?

 

[murray t turtle]

Quote from FuturesTrader71:

Jax,

Everyone struggles with this aspect of trading. You just need some simple money management rules that forbid you from giving so much back but allow you to continue to go after more opportunities.

Since you are already aware of how much you are up while you trade, you need to keep tabs on how much you are giving back and have the discipline to stop. For me, I more often than not finish near my high of the day. However, I have rough patches just like everyone else where I need to make adjustments as the market changes. During these times, I give myself a down limit before I'm done.

So you are up $700 and blood is rushing through your veins out of excitement... that's good. So now, you need to tell yourself that you will risk $100 before you have to take a break from trading (and your break must involve you getting up and leaving the market for at least 30 minutes). Once you come back, you have credit for another $100 to take advantage of more opportunities. If you lose that, then you are done and you are $500 up for the day.

You can use any limit you like for how much you will give back. I figure $100 is good because that is a point on 1 contract for the ER2.

The bigger issue is whether or not you are too attached to your P&L. With myself and most guys I have worked with, this is always the case. It is the old "man, I was just up $700 and I lost $100. I need to get it back." Those last few words are what get you in trouble. Don't trade to make a specific amount and don't trade to make money BACK.

Just trade to take advantage of the opportunities you are given by the market. PERIOD. Trust me.... if you ever even consider that you need to take a trade to make money back or to make a certain $ value, then you are setting yourself up for a rough road. 2 out of 10 times, you might get what you want but you will pay it back in the long run. This has been my constantly stubborn experience.

Strong attachment to the results of your trading in monetary figures is the demon that I think gets most people out of balance. Consider what you were thinking the whole time you were giving your money back and you will probably come to the conclusions I am outlining here.

Best wishes .

========================

Jax Russell;

And until you get to the point where you ''trade to take advantage of the opportunities given you by the market'';
may find it helpful to check your brokerage statement or notebook for winning trade entry/exit time.

Have had a profit target , especially downtrends,get hit in a few minutes ;
usually takes longer,profits for me usually takes longer,
so seldom enter a ES emini position in last half hour.
Might not matter to a scalper. Actually dont have a rule forbidding it.

Even though FuturesTrader71 has a smaller time frame than me;
like the fact he has ran several businesses, including derivatives.

And if most of my gains were in mourning , losses later;
would fix that also.

My losses are mostly caused by me not recognizing a weekly trend change, including but not limited to a sideways trend;
which affects my intraday trend trading.

 

[Bitstream]

Quote from JMowery1987:

Funny how I have the TOTAL opposite problem. I have been undertrading, and not being confident in my system.

I wish I had your problem instead, I know I could fix that. =P

cud be a good sign...had da same prob for a long time in intervals...that's u instincts to preserve u capital...mind u all of da sudden i begun tradin' smaller'n'slowly increasin'; me tradin' took off in no time and had successes like never before.

hang on

 

[candletrader]

One strategy to overcome the psychological issue which you are experiencing is to lower the per trade expectancy whilst increasing the hit rate...

Yes, you may well make less per trade (but maybe not overall, if the opportunity factor increases as a result of quicker trade duration), but at least you will get to book money more frequently, so at least you will get to feel good about yourself...

For example, if you employed the above thinking your $700 day (which ended up being a $0 day) could have been, say, a $200 day... the downside is that a future $1400 day may only end up being a $1000 day etc... but the main thing is that you would be taking home profits most days...

 

[JMowery1987]

Quote from Bitstream:

cud be a good sign...had da same prob for a long time in intervals...that's u instincts to preserve u capital...mind u all of da sudden i begun tradin' smaller'n'slowly increasin'; me tradin' took off in no time and had successes like never before.

hang on

Still hanging, I posted this before I read Trading in the Zone by Mark Douglas. I really think it helped me a lot more than and a lot faster than I could have done by trying on my own.

Still working on it though.

 

[Bitstream]

Quote from JMowery1987:

Still hanging, I posted this before I read Trading in the Zone by Mark Douglas. I really think it helped me a lot more than and a lot faster than I could have done by trying on my own.

Still working on it though.

dump books, never read 1 in my entire career, and glad did so...just trade very small, show uself consistency and things will take care of themseves, there are millions of ways to exploit da mkt and every personality can find somethin' that suits her needs; it's just up to ya to find u way and u will.

have a good 1

 

[golablue]

I trade ES and use the following simple plan to protect my capital:

For every ES point I book, I allow myself to give back roughly 1/3 of it before I call it a day.

This plan is only applicable AFTER I've booked a profit and am TOTALLY out of a position. It does not apply to positions that I'm currently managing.

If I've booked 6 points of profit, I allow myself to lose roughly 2 of it the rest of the trading day before I call it quits.

In this manner, I'm able to ensure that I come back the next day with more "bullets in my ammo bag." My goal is to grow my account everyday.

While I do recoginze that I miss out on many trading opportunities by embracing this mentality, I have found that it suits my psychological makeup best.

 

[EqtTrdr]

I don't understand the point of stopping for the day and going home...


If each trade is an independent event, then who is to say the next 5 trades won't be winners?