Discipline Trading

[vulcher]

Hi, I'm a long time reader but this is my first posted.
I developed a mechanical system that works really well but when it comes to real trading I failed to follow, ignore, and even go opposite of my system buy/sell signals which resulted in a big losses proving the system works and I'm the problem. I noticed this behavior in a real account and I stopped trading real money and now even with paper trade I still have the same problem.
Is there any books I can read or advice I can use to help me eliminate this behavior?
Thanks in advance

 

[wartrace]

If you have a purely mechanical system that works couldn't you code it as a strategy and let the computer make the trades? I am just throwing that out as a possible way to remove the emotion that is causing losses.

 

[JTrades]

Hi, I'm a long time reader but this is my first posted.
I developed a mechanical system that works really well but when it comes to real trading I failed to follow, ignore, and even go opposite of my system buy/sell signals which resulted in a big losses proving the system works and I'm the problem. I noticed this behavior in a real account and I stopped trading real money and now even with paper trade I still have the same problem.
Is there any books I can read or advice I can use to help me eliminate this behavior?

I've had similar problems.

Do you do anything else other than trading that requires discipline?

If you can improve your discipline in an other area of your life, you'll probably find your success there will translate into success with your trading.

 

[qxr1011]

I developed a mechanical system that works really well

it does not work well at all

what works well is your lying to yourself somewhere along the way during paper or demo trading

somewhere along the way you imagined what u would do .. but you did it either post-factum (or just a moment too late when you should do a trade) or never did the trade at all...

so all bad trades either never executed (or where mentally discarded) and the good trades left to be - hence a beautiful method

=== but when it comes to real trading I failed to follow, ignore, and even go opposite of my system buy/sell signals which resulted in a big losses proving the system works and I'm the problem ===

sure

one can lie to himself (or others ) but not to the market

and one knows that

hence ignoring or going against the system (that was based on lies to yourself) .. the system that that never was good



a lot of people think that they lack the discipline to execute the method in real life as they executed it on paper

it quite the opposite:

in fact their lack of the discipline manifested itself much earlier:
they lack discipline to execute on paper exactly as they should execute in real life per their method....

that the major problem with the paper trading - it allows one to lie to himself

there is a good Russian proverb: the paper can stomach anything...

so in fact you have a method that does not work, and you know that (subconsciously)... you just made yourself to believe that its ok, that it will work in the real life.. so you started trading with method that does not work, and you run form it...

back to the drawing board

 

[vulcher]

If you have a purely mechanical system that works couldn't you code it as a strategy and let the computer make the trades? I am just throwing that out as a possible way to remove the emotion that is causing losses.

I have it programmed to the point where it will send me a text message and all I have to do is execute. I usually start fine but halfway through the day I start buying and selling using my feelings which are proven to be wrong and I ignore all text messages. This behavior get worse when I start losing.

 

[vulcher]

I've had similar problems.

Do you do anything else other than trading that requires discipline?

If you can improve your discipline in an other area of your life, you'll probably find your success there will translate into success with your trading.

No I don't do anything to improve it what kind did you try?

 

[qxr1011]

an if you try to automate the method it will not help to improve the real trading

what automation will do is to expose the lies during paper trading, and it will show to you during paper trading what I just told you: that the method does not work

 

[vulcher]

Thanks for your honesty. I agree with you that this whole thing may be a loosing strategy and need time to validate with actual real trading. All I'm trying to get help with is discipline to respect certain rules. Wether the strategy write or wrong the problem I have Is once I start trading all rules are out the window. So far all I proved is I have discipline issue.

 

[qxr1011]

Thanks for your honesty. I agree with you that this whole thing may be a loosing strategy and need time to validate with actual real trading. All I'm trying to get help with is discipline to respect certain rules. Wether the strategy write or wrong the problem I have Is once I start trading all rules are out the window. So far all I proved is I have discipline issue.

i think you and most other people do not have any discipline problem

during real trading you trade exactly as you did in the paper trading !

the only difference is market does not allow you to discard bad trades, it does not allow you do not count trades that you entered later as if you entered them earlier etc etc..

your trades in real life are exactly like your trades on paper... just all lies got exposed

on paper you also traded against the method, you just did not counted those trades - made them as nonexistent.. market showed them to you...

 

[Zr1Trader]

I've had similar problems.

Do you do anything else other than trading that requires discipline?

If you can improve your discipline in an other area of your life, you'll probably find your success there will translate into success with your trading.

Agree,

I used to smoke cigs and as I was smoking one day earlier in my trading career I asked myself, if I don't even have the discipline to not smoke then how will I have the discipline to trade properly ?

Behaviors in trading can open a whole new can of worms on your perspective in life in many different areas.


OP, also psychology probs aside. your backtested system must make sure to account for slippage, commission, sample size should be large enough to know it is robust. Make sure it's not overfit ect. Know what conditions it does well in and which ones it does not.