Complacency in trading.

[Laissez Faire]

I think greed is part of it as well - particularly when I have a day where I make a huge profit compared to my average daily profit. It seems like that can be destabilizing as well. In fact, I told my girlfriend that a good day I recently had was worrisome as I may start thinking this is a normal day and be disappointed tomorrow if I make only a fraction of that.

I have at times wondered if it would be better for me to just shoot for an average daily conservative target below my capabilities, be content with that and log off after hitting it.

 

[deaddog]

Right. I think that's good advice.

Just like a good trade can have a bad outcome a bad trade can have a good outcome. Those may be the worst.

Yup! The market will go out of its way to reinforce bad behavior.
If you focus on process rather than results you won't make bad trades.
No bad trades, no good results to mess with your mind.

 

[Laissez Faire]

A few I have archived. I didn't complete these two on top, but a losing streak started just after the peak on both.

Most recent:

Of course, when you lose money, you start thinking that maybe you don't have a clue to begin with and maybe it was all luck in the first place.

 

[TheDawn]

Hello, all,

I haven't read a how-to trading book in ages and can't recall if this was ever covered, but I'm curious if complacency in (discretionary) trading is a common pattern/problem.

Yes, to me at least all the time. It's absolutely annoying. You end up making the stupidest mistakes that your rules have specifically forbade and you end up losing, sometimes a huge amount all because you think you are invincible now and nothing can go wrong. And then you have to spend the next X amount of trading periods to earn back the losses.

I don't think I ever conquered it. It still creeps up from time to time. I think the only way to completely eliminate it is to automate the entire trading process and just let the machine do everything without any interference on your part. Because as long as there is one chance of you interfering in any stage in the trading process, there is a chance of you putting in some wrong moves because of complacency.

 

[savoir]

Maybe you enjoy making a drama out of winning and losing money?

You describe that you know how to make profits. You describe that you know how to give back the profits that you make. Is this self-awareness or self-delusion? Only you can know which.

See trading as a game. Not everyone can win. To be a winner you have to take out more money than you put in. Be a winner. All winners get rich.

All losers put more money in than they take out. They contribute to the profits of winners. Most losers never take anything out. Actually, many are obsessed with putting a lot in. They think they fail because they don’t have enough to put in.

When a loser comes across a consistent winner, he wonders why the winner sweeps his profits regularly when he could compound his profits to trade thousands of contracts. He doesn’t understand because he is a loser.

A sure sign of a loser is one who makes a spreadsheet extrapolating his success with a piker account into owning the world eventually. The dream keeps him working overtime. In practice, he has a bit of success and compounds until he has the invariable “drawdown” and has to reload. But he thinks he is “close” and repeats the same experience, the same drama, etc.

 

[Laissez Faire]

Maybe you enjoy making a drama out of winning and losing money?

You describe that you know how to make profits. You describe that you know how to give back the profits that you make. Is this self-awareness or self-delusion? Only you can know which.

See trading as a game. Not everyone can win. To be a winner you have to take out more money than you put in. Be a winner. All winners get rich.

All losers put more money in than they take out. They contribute to the profits of winners. Most losers never take anything out. Actually, many are obsessed with putting a lot in. They think they fail because they don’t have enough to put in.

Food for thought.

When a loser comes across a consistent winner, he wonders why the winner sweeps his profits regularly when he could compound his profits to trade thousands of contracts. He doesn’t understand because he is a loser.

A sure sign of a loser is one who makes a spreadsheet extrapolating his success with a piker account into owning the world eventually. The dream keeps him working overtime. In practice, he has a bit of success and compounds until he has the invariable “drawdown” and has to reload. But he thinks he is “close” and repeats the same experience, the same drama, etc.

I don't dream about compounding to trade thousands of contracts. At least not yet.

But surely it's a goal to grow my account such that I can trade say 5 contracts comfortably.

Wouldn't sweeping a small account make sure that account stays small forever while sweeping a larger account is different as you're already well capitalized and making good money on modest or even small size relative to account size?

Or is it there something about actually withdrawing those profits even if it's a smaller account?

 

[savoir]

Food for thought.



I don't dream about compounding to trade thousands of contracts. At least not yet.

But surely it's a goal to grow my account such that I can trade say 5 contracts comfortably.

Wouldn't sweeping a small account make sure that account stays small forever while sweeping a larger account is different as you're already well capitalized and making good money on modest or even small size relative to account size?

Or is it there something about actually withdrawing those profits even if it's a smaller account?

To be a winner, you take the possibility of losing off the table completely. This means taking out your original capital when you have proved yourself trading the minimum and going forward with profits only. I think tripling your initial account trading the minimum is a reasonable point to remove original capital.

Additional contracts are traded at set profit points. Either you make the profits to add another contract or you haven’t earned the opportunity to do so.

Sweep profits quarterly at longest. Monthly works well. Always pay taxes from past profits not future profits.

Buy things from profits to put into your trading office. When you sit at your computer and almost everything you see around you has been bought with trading profits, you will literally and figuratively be in a different place.

 

[Laissez Faire]

To be a winner, you take the possibility of losing off the table completely. This means taking out your original capital when you have proved yourself trading the minimum and going forward with profits only. I think tripling your initial account trading the minimum is a reasonable point to remove original capital.

Additional contracts are traded at set profit points. Either you make the profits to add another contract or you haven’t earned the opportunity to do so.

Sweep profits quarterly at longest. Monthly works well. Always pay taxes from past profits not future profits.

Buy things from profits to put into your trading office. When you sit at your computer and almost everything you see around you has been bought with trading profits, you will literally and figuratively be in a different place.

Good stuff, savoir.

Thank you.

 

[GotherL]

Could be. Never played poker seriously. Was just curious if this was something traders here actually had dealt with and if it's a common problem in trading or not.

It's a bit more common in poker due to it having more of gambling aspect but it's not bound to only poker or trading.

Can happen in any competitive sport, career or even video games.

 

[newwurldmn]

Complacency is a vice in any competitive endeavor. Some people are born to not be complacent (watch the Jordan documentary); others are wired to not be competitive; others have to work on this trait.