How I stopped making the same mistakes in 2010 and started to make more money

Quote from thinkfirst:

Thank you for your comments. For better or worse I don't believe in scaling out. In my opinion this is how I can end up making the most money on the smallest position size. I do scale out within the level and couple cents but not on different levels. I'll keep an eye on it and when market will keep telling me that scaling out is more profitable for my style I'll change.
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Fair enough. One final comment, if I may. Entries are usually made when things line up exactly the way you like to see them. Beyond that, price seldom acts exactly in accordance with our plans. So the least amount of uncertainty is exactly at the time of entry when preceding price action is exactly as it should be, according to you. That's when I prefer a figurative sniper rifle for fairly precise entries.

However, as a trade plays itself out, you can no longer be demanding of optimal price alignment. The market does what it will do and you're already blowing in the wind. That's when uncertainty generally increases. Uncertainty is a bit like darkness. That's why I'd prefer to have a shotgun in the dark rather than a precision sniper rifle. Just my opinion. Either way, good luck.
 
It sounds to me like you're a frustrated swing trader. You start out as a swinger only to end up as a day trader. Perhaps you should reconsider and become a day trader. Marcel Link, in his "High Probability Trading" (2003), aptly states:

Just as every real estate investor knows that the three most important things are location, location, location, a trader should know that cutting losses, cutting losses, and cutting losses are the three keys to successful trading.

In another word, there are only three things that a day trader should remember:

1) Know when to take profit when you can, not when you have to.
2) Know that you can have a string of small losers and still come out ahead with one large winner.
3) Know in advance where the stop and price target will be placed. They should be placed immediately after you enter the trade. Try not to modify your stop.
 
Day 1

No mistakes.

Long AMAG, sold according to rules

Short AGN, covered according to rules, was tempted to move stop breakeven but didn't want to break my rules. I printed out my rules and my mistakes, so before I do anything I made sure it was not on my "mistake list"

+436

However I had another problem today. It's nothing new, I still care about P/L too much. And the way it affects me is when I make money in am I have harder time putting on new positions because I don't want to lose what I've made. I do understand it makes no sense, however I still care. Everybody tells me I should just look at it as points not money, but to be honest I don't know how yet. I think I will be much better trader when I move away from caring about P/L. Any advice on how to get there? (and I mean p/l for the day, I don't keep position p/l when I have open positions.)
 
Quote from saliva:

It sounds to me like you're a frustrated swing trader. You start out as a swinger only to end up as a day trader. Perhaps you should reconsider and become a day trader. Marcel Link, in his "High Probability Trading" (2003), aptly states:

Just as every real estate investor knows that the three most important things are location, location, location, a trader should know that cutting losses, cutting losses, and cutting losses are the three keys to successful trading.

In another word, there are only three things that a day trader should remember:

1) Know when to take profit when you can, not when you have to.
2) Know that you can have a string of small losers and still come out ahead with one large winner.
3) Know in advance where the stop and price target will be placed. They should be placed immediately after you enter the trade. Try not to modify your stop.
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Thank you for your comments. I don't think I am frustrated swing trader. I am usually very well aware of those 3 points you mentioned however I'm not always following my own plan. This is constant "me vs me" fight and I started this journal so I can stop fighting myself and start making money money.
 
Quote from thinkfirst:

Day 1

No mistakes.

Long AMAG, sold according to rules

Short AGN, covered according to rules, was tempted to move stop breakeven but didn't want to break my rules. I printed out my rules and my mistakes, so before I do anything I made sure it was not on my "mistake list"

+436

However I had another problem today. It's nothing new, I still care about P/L too much. And the way it affects me is when I make money in am I have harder time putting on new positions because I don't want to lose what I've made. I do understand it makes no sense, however I still care. Everybody tells me I should just look at it as points not money, but to be honest I don't know how yet. I think I will be much better trader when I move away from caring about P/L. Any advice on how to get there? (and I mean p/l for the day, I don't keep position p/l when I have open positions.)
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Almost every trader goes through what's happening to you. Here's how I got myself to follow my rules and I continue to do this every day, even after seventeen years:

1. Write down a comprenhensive set of trading rules.
2. On every trade, score yourself on how well you followed your rules. (I score myself from 0-5, with 5 being rules followed perfectly, and 0 being a total screw-the-pooch.)
3. On a spreadsheet, list all your trades for the day in a column with the score for each trade.
4. At the bottom of the column, calculate the average score for each trade. (Total score points divided by the number of trades.)
5. Beneath the average score, input your profit/loss for the day.

So now you have a series of columns (1 column for each day), and at the bottom of each column you have your profit/loss directly under your average score for how well you followed your rules. After about 20 days trading, one of three things will become apparent: (a) The higher your trading rules score the higher your profits; (b) the higher your score the lower your profits; (c) no correlation between your profit and your score.

Most traders don't follow their rules because they don't believe in them, and therefore they're always second guessing themselves. If you do the exercise as described for 20 trading days, you will begin to get a clear picture of whether or not you should trust your rules. Once you trust your rules, following them is easy. As I mentioned, I've been doing this for years and continue to do it for every day's trading. It's the only way I can be sure of my trading rules.
 
Quote from vhehn:

you will always make mistakes. the market has a way of tricking you into making new mistakes all the time.
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Mistakes can go either way; people just tend to call a loss a "mistake" and a win an "edge" when in fact it could be possible that the so called "edge' was a mistake that panned out for ya...peace
 
"I think I will be much better trader when I move away from caring about P/L. Any advice on how to get there? (and I mean p/l for the day, I don't keep position p/l when I have open positions.)"

Best suggestion I can make is take 1/2 off and let rest ride --I used to let rest ride with a BE stop-but later changed that to keeping my original stop in. That takes care of two things--you know you cant lose so you relax a bit and you can let your winners run and this volatility is great if you are on right side.

Once you are consistently making money you'll get used to it and with the cushion it wont matter much (only until you eventually hit the losing streak-then you get to relive it all :) )

I am not sure if that will help if you are shying away from putting in new positions.
 
Day 2

This is harder than I thought...

I didn't buy CAT and didn't short AMED because I didn't believe it would work, I would of made around $500 if I just followed my plan.

Went long SAP, got stopped out , didn't re-enter, another mistake.

-243 for the day (if I followed my rules would be around +$600 today)

I guess I have to restart my Day count since my goal is to go through 30 days without ANY mistakes.

Nobody said it'll be easy, but I do believe I will get this done.
 

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