Fearless trading

I think that trading fearless is the only way to trade, I mean not second guessing yourself, in my 4th month as a trader I made 13k, also you think you can do no wrongh and you actually have conviction with every trade you take, I still followed stop outs but never second guessed my initial feeling, then all of a sudden you start seeing/remembergin all the times you got absolutely waxed, it makes you puinch out of positionms early, while I was always positive in between I was not putting up the numbers I wanted too, I am just starting to get this back on track now in my 8th month, id suggest for anyone who wants help with the psychological aspect of trading they should read the book "trading in the zone" by mark douglas

One part of the book talks about the automatic human response to prevent yourself from doing things that hurt, think of touching a stove as a kid most ppl do it once and never again, so your automatic human conditioning is to remember the trades where you got absolutely screwed and try to avoid it at all costs, this prevents you from taking trades at the right price, just have to try to mentally filter stuff you did that was actually very dangerous vs stuff you did where things were out of your control and you got screwed.

JMO
 
Quote from dwl603:

, id suggest for anyone who wants help with the psychological aspect of trading they should read the book "trading in the zone" by mark douglas

JMO
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I couldn't agree more!!!!

I haven't seen any book that I think would help most traders more than this single book.

Any trader who hasn't read (no, I should say "STUDIED") it, I believe is making a huge mistake.

It is required reading for any traders I work with.
 
Quote from NUTSNEAL:

I couldn't agree more!!!!

I haven't seen any book that I think would help most traders more than this single book.

Any trader who hasn't read (no, I should say "STUDIED") it, I believe is making a huge mistake.

It is required reading for any traders I work with.
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Yeah its funny cause the part about new traders making more money then experienced had me pegged dead on, and you realize youre doing it then its such an eacy fix.


and I think this is the part where I should thank Lescor for recommending it to me I cant believe how much this one has helped me
Today I went long like 10000 ford on open then some asshole decided to post an offer 2 cents down for 200000 shares and it filled me with a bunch of extra shares on all my orders there was nothing on the bid and i punched out and i think i actually caught the low of the day on that one, cause i got scared, then i was stopped out, the stock proceeded to rip up the entire day which was my initial assumption, based on the GM news, pissed me off, but what can you do now i know that tomorrow that cannot stop me from trading the same way cause there wasd nothing I could do about this person.
anyways, Thx Lescor

:)
-Dan
 
Based on suggestions in other posts, I have closed the PnL window while trading, I must admit it is proving to be easier to stay focused during the trade not seeing the $+/-
 
I think that Johnnie T hit the nail on the head with several of his posts. If you know that you will not be hurt by any one loss or series of losses, the fear of entering a position will be greatly diminished. There is a benefit to paper trading to determine if your system has a positive expectancy, but until real money is on the line, one does not know how they will react.

I have my rules posted right next to my monitor. On the days that I follow my rules, I do okay. It's when I lack the discipline to follow those same rules that I "give" money to those on the other side of my trades. I was unfortunate in that when I started, a number of trades went my way when I did not follow the rules. That reinforced a bad habit. Instead of getting smacked up-side the head for being stupid, I was rewarded. Now is the process of undoing this. Very small size, limited risk (1% or less per trade), logging every trade, writing in the trade journal and grading my performance/adherence to the rules on a daily basis.

JD
 
Quote from fhl:

Fear does not come from a lack of control, as some have stated. Fear comes from expecting something bad to happen. In our case, losing money. If you watch a successful trader go about his business without fear, he is no more in control of what is going to happen to the trade he is in than the trader who is scared stiff. The difference is he expects to make money on the series of trades. That is his point of reference. He is confident that there will be increase over time. The fearful trader is looking at the trade he is in and expecting loss.
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This is the closest-to-the-mark definition of "fear" I've seen so far. It may be of use to distinguish the terms "hope" and "fear" and "positive attitude" from one another.

"Fear" is a instinctual and conditioned defensive response to the prospect of pain and typically manifests itself in traders as an inability to "pull the trigger," etc.

"Hope" is the (sometimes wishful) expectation that a positive outcome will result, usually in the face of insufficient preparation for or control of the current situation.

And a "positive attitude" is the belief that no matter what happens, one will gain from the result, whether it be learning something useful from a loss or the actual profit gained in a win.

The reason that we need to consider these distinctions is simple: each trader must master each in order to succeed.

For a while, fear was my biggest problem. I couldn't pull the trigger; I couldn't buy enough shares or contracts to make (or lose) any significant amounts of money; I was basically crippled. I defeated the fear through practice and study--basically reconditioning my reactions to given trade stimuli. One day, I woke up and realized, hey, I have no problems at all pulling the trigger any more! Complete familiarity with the mechanics and environment of trading removed any defensive responses.

Then, I faced the second-level challenge of dealing with hope. Hope was what I had in order to cope with the fundamental uncertainty there is in trading (and in life). I knew that my skills were far short of mastery, and so I had to rely on hope while defeating fear. But hope can screw you over just as easily as fear can, because it can sometimes seduce you into relinquishing control over things you actually have control over.

Finally, after my skills grew to an acceptable level, hope was not so much an issue. But the GREATEST CHALLENGE lies ahead of me: a positive attitude. The occasional lack thereof causes me to trade less "aggressively" than I need to--"aggressively" being defined by a W/L ratio of 2.5 or better on the system I'm currently using. My currently dismal W/L ratio of around 0.75 is not due to fear but of a "hey, a win's a win" attitude.

In order for me to succeed with this particular system, I have to change my beliefs about what's a good trade and what's a bad trade. Previously, I'd only look at whether I turned a profit or a loss, but now, I have to consider the relative sizes of those wins and losses.

It sounds a lot easier than it actually is. Looking at a profitable trade and saying: "that's not profitable enough--I can do much better" is like saying to the naked average-looking girl in my bed: "hey, get outta here, I can lay a supermodel just as easily."

Talk about an upward attitude adjustment! It's more of a self-image change--believing that I can and will land supermodels (very different from "hoping" to land a supermodel)...

Here's to us all!
 
"He was a slave to his subconscious. He had come to understand that the anticipation of pain was more immobilizing than the pain itself — though the knowledge didn't help him."

p145 'Stormy Weather' 1995 Carl Hiaasen, Warner Books.

Some may find the relatively simple techniques of EFT helpful
free manual: http://www.emofree.com/
 
paper trading is not the same as trading your own money.

paper trading migth be alot easier to translated into trading other people's money when there's no string attached.

people lose b/c of their perception of money.
 
Trade the stock of General Electric with real money. You won't make a bundle but (if you trade well) you won't lose a bundle either. Don't spend too much time in a Swimming Simulator, jump into the pool and start paddling around. General Electric stock is on the shallow end of the pool.
 
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