Emotional ruts and what to do about them

Quote from zorrotrader:



Here's a practical rubber on asphalt question - how do i break these patterns or loops of what seem to be automatic preprogrammed responses from somewhere inside. There has to be a point in the process of executing an impulse trade or missing a trade do to hesitation that an incorrect thought or belief is acted on automatically. It seems like many of the obvious emotions and feelings that some would say you need to monitor and/or experience occur after I have acted on an ill conceived belief. Is there a way to interrupt the pattern? And if I can break the pattern how do i know what should be there in it's place? It takes more than sheer will power.
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Here's my .02 - MORE!

Specifically, you will need: more pain, more loss, more self-condemnation, more planning, more practice, more time, more accountability, more method refinement, more discipline, more funding (probably).

What you need less of: time frames, indicators and opinions of other traders - this is a journey that is very deep and personal.

I mean this with all the empathy and compassion possible - empathy because I have been and in some ways am still going through what you described - but let's face it, it takes longer to amend a problem than to create it, usually.

Part of how I broke the cycle was that I picked only one entry and traded just that for a while until the feeling of impatience passed - it took a few weeks.

I'm curious - you stated that you read Douglas several times - did you ever try the live trading exercise he recommends?

"Thought without action is wishful thinking"

Best Wishes,

Paul
 
I think it was in one of the Schwager Market Wizard books where he interviewed William Eckhardt, and to paraphrase him:

"If you know what you're doing wrong, stop it. If you have no idea why you're losing money, then it's hopeless."

It makes total sense to me, but I have seen a lot of traders and clients who had gambling problems or addictions. They seem to live to click the button, much like playing the slots at Vegas.

If you're mostly having problems with intraday breakouts of triangles, for example, you could either fade yourself, or adopt a different method to trade a potential breakout, but the bottom line is that there might be a "fear of missing out" mindset that you might want to explore first?
 
Quote from mrsinister:

Being a very rash and impulsive guy has gotten me into loads of trouble trading. A stock is exploding...HEY, I want in! Top tick...smoked! I tried some sort of NLP stuff, mostly just meditation, a kind of reprogramming of my instincts. I'm still pretty impulsive in life, but have developed some patience and discipline. Of course being broke for a while will do that too...

:D
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Bwahahahahaha... Gawd... loooohhhoooozzzzeeerrr...

You "tried" NLP stuff ... "trying" to reprogram yourself...

Impulsive in life...

Don't act like you have it all under control... it's obvious you're still working on it and hoping that it's "your" problem to solve...
 
Quote from nkhoi:

there is also fear of success, a guy just told me his short didn't get executed during the 10 points drop, turn out he didn't push the button, may be you didn't identify the real problem yet.
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No one has fear of "success"... it's just that you and zorro can't tend to admit that you suck at grasping the market. You can't admit your flaw of skills so you look at your emotions for an excuse for sucking bad...

C'mon... these answers are obviously stupid...
 
Quote from Maverick1:

Zorro

Think about 3 things:

- Confidence
- Risk Reward
- Win rate

There's a reflexive relationship between the 1st and latter 2
It may be cliched, but that's reality

i don't know how u trade, whether it's intraday futures or stocks on a longer time frame, but one thing is consistent across all time frames, and that is that if you're risk reward is anything short of 2:1 on your trades, you will always have fear hovering over you and paralyzing you; fear to pull trigger, fear to take a normal, healthy loss, fear to go into drawdown and not be able to dig yourself out, fear of losing in a nutshell; even the best trading strategies with high win rates of 60% and above occasionally allow 3-4 losing trades in a row

we've all heard about risk reward, over and over again but my sense is that it's easy to pay lip service to the concept and much harder to actually implement something that's solid.
Win rate is crucial and you should invest every minute of your time in finding a robust entry method, but at end of day, you HAVE to have a 'I don't care' attitude about a loss, 3-4 consecutive losses and a down day. Sure, it always hurts to take a loss, but you have to be able to pick yourself up after 3 losing trades and take the 4th like nothing happened... tough to do, but absolutely necessary

You probably have thought about this, but I'll just say it anyway: how many consecutive losing trades can you take before you break down emotionally and are inable to trade? As a corollary, do you have a daily stop loss on your account, a max daily drawdown? If you're trading 6-8 times a day, for ex, and have a small capital base, say 25k, and are risking 1% on each trade, that's suicide. To echo what Larry Hite says in Market Wizards, u have to undertrade on each signal, risk 0.25% or less of your capital, is my own rule. So when you get that inevitable streak of losers, you're unfazed, only lost 75bps on your account; and are looking forward to blasting that away in the next trade. You obviously have to be well capitalized for that. Trading is a business

I know many will probably jump in saying that 3:1s or better are hard to find or impossible, especially day trading. Until recently I thought so too, but not anymore... I have seen much better than that, intraday on NQs

If you're looking for a robust entry method with great risk reward, here's my tip for you:

Optimize risk reward; find an entry point with the following characteristics:

- It is specific, mathematically definable, and triggers frequently
- Once it triggers, you are either immediately right or wrong; price should NOT come back to your entry point

In other words, you are looking for an entry where you take minimum heat, never more than 2-3 ticks.
To optimize your risk reward, use entry on a lower time frame and an exit on a higher time frame

Master heat and you will crush your fear

Good Luck
Maverick
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Well, let's make it simpler for zorro and some other fake mofo's...

They don't have a plan. They haven't put enough time towards research and turning that lack of dedication into some psychological issue.

Simply, zorro and a few others(most... LOL) commenting in this thread doesn't have the required commitment.

LOL... this is one stupid ass thread about a loser who can't admit that they are not special and there's nothing superstitious about trading. You need the prior "realistic" sacrifice to trade, no matter what.

...

Trading psychology is BS... in most terms... Do you expect successful traders to talk about trading psychology? No they won't...

It's just the way it is... Actually, people who don't give a fuck about it makes more money... Seriously...
 
Quote from Maverick1:

Zorro

Think about 3 things:

- Confidence
- Risk Reward
- Win rate

There's a reflexive relationship between the 1st and latter 2
It may be cliched, but that's reality

i don't know how u trade, whether it's intraday futures or stocks on a longer time frame, but one thing is consistent across all time frames, and that is that if you're risk reward is anything short of 2:1 on your trades, you will always have fear hovering over you and paralyzing you; fear to pull trigger, fear to take a normal, healthy loss, fear to go into drawdown and not be able to dig yourself out, fear of losing in a nutshell; even the best trading strategies with high win rates of 60% and above occasionally allow 3-4 losing trades in a row

we've all heard about risk reward, over and over again but my sense is that it's easy to pay lip service to the concept and much harder to actually implement something that's solid.
Win rate is crucial and you should invest every minute of your time in finding a robust entry method, but at end of day, you HAVE to have a 'I don't care' attitude about a loss, 3-4 consecutive losses and a down day. Sure, it always hurts to take a loss, but you have to be able to pick yourself up after 3 losing trades and take the 4th like nothing happened... tough to do, but absolutely necessary

You probably have thought about this, but I'll just say it anyway: how many consecutive losing trades can you take before you break down emotionally and are inable to trade? As a corollary, do you have a daily stop loss on your account, a max daily drawdown? If you're trading 6-8 times a day, for ex, and have a small capital base, say 25k, and are risking 1% on each trade, that's suicide. To echo what Larry Hite says in Market Wizards, u have to undertrade on each signal, risk 0.25% or less of your capital, is my own rule. So when you get that inevitable streak of losers, you're unfazed, only lost 75bps on your account; and are looking forward to blasting that away in the next trade. You obviously have to be well capitalized for that. Trading is a business

I know many will probably jump in saying that 3:1s or better are hard to find or impossible, especially day trading. Until recently I thought so too, but not anymore... I have seen much better than that, intraday on NQs

If you're looking for a robust entry method with great risk reward, here's my tip for you:

Optimize risk reward; find an entry point with the following characteristics:

- It is specific, mathematically definable, and triggers frequently
- Once it triggers, you are either immediately right or wrong; price should NOT come back to your entry point

In other words, you are looking for an entry where you take minimum heat, never more than 2-3 ticks.
To optimize your risk reward, use entry on a lower time frame and an exit on a higher time frame

Master heat and you will crush your fear

Good Luck
Maverick
More...


Great post

What you have suggested allows many losing trades and a few winners and one will come out ahead.

But I do believe if the stop is too tight many trades will be stopped out ,that with a slightly larger stop would have been profitable.

Enjoyed your post.
 
Quote from slapshot:

Here's my .02 - MORE!

Specifically, you will need: more pain, more loss, more self-condemnation, more planning, more practice, more time, more accountability, more method refinement, more discipline, more funding (probably).

What you need less of: time frames, indicators and opinions of other traders - this is a journey that is very deep and personal.

I mean this with all the empathy and compassion possible - empathy because I have been and in some ways am still going through what you described - but let's face it, it takes longer to amend a problem than to create it, usually.

Part of how I broke the cycle was that I picked only one entry and traded just that for a while until the feeling of impatience passed - it took a few weeks.

I'm curious - you stated that you read Douglas several times - did you ever try the live trading exercise he recommends?

"Thought without action is wishful thinking"

Best Wishes,

Paul
More...

:D ...

I love your last point... Obviously, most of the guys ever tried Douglass' things...

It's so funny how they read these Psycho-BS and tend to re-affirm their problems and think it's a great book because they mention what you are "chosing to go through"... but they don't do jack shit about it.

I really recommend most of the guys in ET to watch Dr. Phil. Seriously, I like what Dr. Phil's gotta say about choices.
 
Quote from zorrotrader:


The bad days are usually a result of impulse trades. They are trades I make - usually breakout trades that fail - that i know i shouldn't make and aren't part of my trading routine but i make them on complete impulse and usually end up with a nasty reversal. It's the seemingly uncontrollable nature of these impulse trades that really seems to damage my psychology and emotions.
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You have to figure out why you take these trades.

It may be that you just love being in a trade.

If that's your problem, maybe you can help it by having a choice of several things to trade. If you are watching 3 or four things, at least you will select the least crappiest trade out of the bunch.
 
Nothing really wrong with getting in impulse trades, it's when you know that it's not looking good and you go into "hope mode"...

You need to know when something is turning or different from what you anticipate and get out at a negligible small loss.
 
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