Chinook's EUR/USD (E/$)Mumblings
- Thread starter chinook
- Start date
Quote from illiquid:
This was my biggest leak in my trading, having a few small losses due to plan deviation leading to further overtrading trying to get it back, and just making things worse. Somehow making the first mistake justified making the next one, and so on -- a deadly cycle, until you finally swear on your kids that you will never place another trade outside your system parameters ever again
You wrote it well. Sometimes, it feels like I'm punishing myself for deviating from the plan.
Anyway, how did you manage to plug this leak--just enough pain over time? Or does it still pop up once in a while but less often?
I think I will add something to my 'plan' to try and get around that problem. Beyond the usual stop-losses, I will only trade two losses per day. This means that if I lose the first two trades of the day, I will just figure today isn't a good day, and try again the next day... If I am making good profits and then make 2 losses, I will accept my gains where they are at, and then stop.
Hopefully that will help curb the problem, because I seen it show up in equities, and will likely show up in forex.
Robert
Hopefully that will help curb the problem, because I seen it show up in equities, and will likely show up in forex.
Robert
chinook,
In my opinion you are pro trader material, if you do not consider yourself a pro yet...
In my opinion you are pro trader material, if you do not consider yourself a pro yet...
I just came to realize that no matter how much money I made doing impulse trades, I would eventually give it back and more. The unplanned trades always had little conviction behind them since I knew I was going outside my set parameters, and having no set target or stop-loss invariably led to either taking small profits or exceptionally large losses. Eventually, "Trade only the System!" became the #1 rule to the system.
I think when one decides upon a system, he needs to stick to that set of rules completely and forsake all others -- choose either the system, or go completely discretionary, it ends up all being semantics anyways. I'm constantly tweaking and adding different setups to what I consider The System anyways, so there's always flexibility, but changes made must be prefaced with a long period of research and stat-taking. IMO, do whatever it takes to have complete confidence in your system, so that when those stop-loss orders get triggered, it doesn't phase you at all cuz you're just looking forward to the next setup, and ignoring everything else in the mean time.
I still need to fight myself from pulling the trigger every once in a while, but I think I've finally gotten over that hump -- it was definitely THE most expensive lesson for me to learn. Time will tell if I still owe tuition for that one
I think when one decides upon a system, he needs to stick to that set of rules completely and forsake all others -- choose either the system, or go completely discretionary, it ends up all being semantics anyways. I'm constantly tweaking and adding different setups to what I consider The System anyways, so there's always flexibility, but changes made must be prefaced with a long period of research and stat-taking. IMO, do whatever it takes to have complete confidence in your system, so that when those stop-loss orders get triggered, it doesn't phase you at all cuz you're just looking forward to the next setup, and ignoring everything else in the mean time.
I still need to fight myself from pulling the trigger every once in a while, but I think I've finally gotten over that hump -- it was definitely THE most expensive lesson for me to learn. Time will tell if I still owe tuition for that one
This is such a good thread.
I find that when changes are made, take baby steps. Small little tiny tweaks....
Also basing these changes on histrorical, require one to keep it loose, in trhe translation going forward...
Michael B.
I find that when changes are made, take baby steps. Small little tiny tweaks....
Also basing these changes on histrorical, require one to keep it loose, in trhe translation going forward...
Michael B.
Thanks illiquid. I think most people are trained to work hard to solve problems or fix things. To be a good trader requires a lot of hard work too. But the hard work should be done when one is searching for a trading style or identifying edges. Maybe we switch to this hard work mentality when we see these small losses accumulate during the trading day. Then we keep on trading to "fix things" and not obey the plan.
Not trying to sound condescending, but "been there, done that."
I found that it didn't help me too much when I had a period of difficulties early on with my ES trading. Later on, I found that I had to try and avoid losing days by at least giving it a fighting chance - because I saw I had a chance to do a little better. Of course, there's a limit to when one should stop or keep on trying. Identifying reasons - especially external ones - can help you avoid them - and more importantly anticipate/plan for them to interfer with trading (I have a 2-year old begging for attention at times).
Imagine passing through a week with the 2 first trades being losing trades - that's a devastating feeling. Not to mention a bad streak for your trading equity.
Many times losing trades would be because of failing concentration leading up to the trade, and I needed to "get back on track" with my "plan/train of thought". My little trick is doing several "mental trades" almost paper trading to see if I'm up to trading or not. Otherwise I guess experience adds up over time, although I wish I had written down some rules to help me. I might try and make some computerized "reminder" almost like the MS Office avatars to bug me when I need to remember something, but the chore of generalizing these situations might not be so easy.
Another good therapy was doing some manual labour. Shoveling sand/grovel alone for hours - it's small pieces of work with each load of sand adding up into a big pile. It helps keeping things into perspective. I almost never balk at very large amounts of work anymore - because I know that feeling of progress - trying to evaluate how much work it takes - and how long - and then being right... that's a great feeling. That's having a plan, executing it and succeeding. If you use 10-12 hours trading and everything goes sour, then you need something to repair some of that mental stress. Just collapsing in front of the TV or shunning anything which requires some effort is not a good help.
Yup, I almost got into big trouble on friday, but managed it after I got back on track. I just wish I a good entry and then the objectivity to let that one ride out the day. It was a typical sliding day, where stops were taking out in stages - and even more typical for a friday slide. The exhaustion of traders was also evident.
Quote from illiquid:
...
The unplanned trades always had little conviction behind them since I knew I was going outside my set parameters
...
I think when one decides upon a system, he needs to stick to that set of rules completely and forsake all others
...
I'm constantly tweaking and adding different setups to what I consider The System anyways, so there's always flexibility
...
I still need to fight myself from pulling the trigger every once in a while, but I think I've finally gotten over that hump -- it was definitely THE most expensive lesson for me to learn. Time will tell if I still owe tuition for that one
I also sort of jumped the trigger on firday, and maybe other days this week with some choppy conditions in the markets.
However, I think the main reason behind my success in EuroFX over my ES trading earlier, is that I savour only my best setups for this trading - although I have become more daring lately - not helping too much, though.
I had about 100 trades going absolutely right every time - still I got in a little early some times. What I was doing was to enter when I was fully convinced that I was right - although it's a little easier to hold that conviction for a brief time, and many times pulling out quicly would be the saviour for the trade not going bad. Understanding the flo and ebb of the markets - seeing that certain price levels and retracements triggers new activity is what keeps me making trades. The sudden interruptions of this needs evaluation and might sometimes lead to very large moves. I have a tough time predicting the big moves, but do quite well on the small ones.
Other trades and external events change the conditions for a trade all the time. It's mind-boggling to try and analyze all of this when so much is hidden from us traders. Everyone are trying to do something in the market, and sometimes we can recognize what that is. Then if it seems like a good idea - as well as having some backing - then it's worth riding along on a trade.
Entering a trade when everything is "dead calm" can be very difficult because there are no helping signals which can guide you.
Therefore, restricting trades to when you see the opportunity opening up with activities indicating the right move - that might be a good trigger - but also restricting trades to only the one which give you 100% conviction of a right move. That is probably what you were doing before, but now you have lowered your standards for what is a good opportunity, as well as being stressed out when several days have been exhaustive.
Being very restrictive and selective with trades has a resemblance to that of digging a really long ditch or big hole. You get to show a lot of patience and understand that little by little, you're getting there. Sometimes you may even get a big chunk of progress.
Rejoining this balance of mind bit by bit over some days or weeks does a lot of good. Lowering standards, or saying that one can't do it doesn't help much. Replaying recorded data, and training on those right setups might also help. Also remembering that losing more than a normal day's profits is going to take time will help one in not underestimating the dangers of lingering in a market or working conditions/state of mind that are not helpful.