confidence ?
- Thread starter cashclay
- Start date
i’m not. my size is only 200 shares of stocks below 5
i feel confident in my trading plans but then for some reason start to think about the money i could lose. i’m new to the trading and perhaps what i’m asking is how overcome this feeling. does it happen to everyone who starts off
There is a difference between confidence and competence.
Competence means all possible price action, reactions to those actions and trade outcomes are understood and a plan is in place for them.
Confidence comes AFTER competence.
If one thinks they have (or should have) confidence BEFORE competence, they are not being realistic about where they are in the trading process.
Edit: Saw your reply. Would suggest looking at trades in sets, say 30 or more. Work out the P/L and see where you would land. Lots of work, but better than "Gambling" without enough data. Also work more on how to exit a trade that is going negative and looks like it will head to the stop. It is totally fine to take a lot of BE after comms.
Competence means all possible price action, reactions to those actions and trade outcomes are understood and a plan is in place for them.
Confidence comes AFTER competence.
If one thinks they have (or should have) confidence BEFORE competence, they are not being realistic about where they are in the trading process.
Edit: Saw your reply. Would suggest looking at trades in sets, say 30 or more. Work out the P/L and see where you would land. Lots of work, but better than "Gambling" without enough data. Also work more on how to exit a trade that is going negative and looks like it will head to the stop. It is totally fine to take a lot of BE after comms.
%%
Sounds right;
I seldom record feelings or thoUhts.
IF my guts start [screams, feelings ] keep bothering me \I look @ some more charts,50dma/200dma ,bid\asks, charts, more charts, check my recorded entry price + profit, or P&L
I have an advantage like anyone that reads studies;
penny stocks tend to go to pennies, almost like gambling stupid risk .
Instead of $1,000 on penny cr#p if i was doing that/ 2 SPY,$880.
WMT sells 50#of bull cr*p for about $5, good for garden;
also realize if your plan calls for buying cheap buggy whip co below $5.00\likely lose
You need to focus on the proces of trading and not the outcome. Outcome is money focus. Proces focus is : are you following your rules? If you rules are not clear, work on that first.
If your strategy is good, then it's your (inner-child-) brain, which didn't learn yet, that losing money is not the end of the world, if it's part of a bigger picture.
Even if you know that, your brain dosn't change attitude so quickly.
Had the same problem at my beginning, was really shocked to discover my brain dosn't understand what trading is about.
Keep telling yourself (in the bathroom, on the bus, on the highway):
"I can afford to lose money. I'm trading for long term success. Stop loss hit is totally okay"
(your SL should be 2%, or any other amount you really willing to lose for the sake of long term success)
Whishing you success
Last edited:
Normally, I would not go in to this kind of stuff, but I think it is important for the OP to understand this exercise. You tell that the SL should be 2%. Well, you have a stop and you have the risk you take. That are two different things. Your stop could be 10% from your entry, but your risk could be 1% of your capital. Look up position sizing. What is more important is this: I risk 0.18 percent of my capital per trade with one of my systems. I have no emotional attachment to any trade I take. Still I get about 2r on average a day with this systems. That make around 50% a year with risking 0.18 percent a year. No losing sleep, no emotions, great results. It is just one system but it demonstrate that you do not need to be in the 1 to 3% risk of capital per trade...
I'm sure you also cut your winners short while taking full losses.
It takes time and experience (back-testing + forward testing/live trading) to build confidence in your trading method (assuming it's any good to begin with).
One trade is just that. One trade. Over the course of a month or a year an active trader will do a ton of trades, so you shouldn't be attaching too much importance to one single trade.
It takes time and experience (back-testing + forward testing/live trading) to build confidence in your trading method (assuming it's any good to begin with).
One trade is just that. One trade. Over the course of a month or a year an active trader will do a ton of trades, so you shouldn't be attaching too much importance to one single trade.
Referring specifically to manual trading - we're all human - humans feel
It how one manages their feelings
Like LF stated - this trade is one of many
===================
It always good to think what might go wrong - called developing a plan "A" / developing a contingency plan "B"..., AND why we use stop losses
========================================
Seek out the source of your doubt (internal uncertainty) -> identify it / define it / resolve it
Will take work - but so does anything worth having / pursuing
RN