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

Quote from thinkfirst:

Day 2


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.
More...

Do not believe you or anybody else (which definitely includes myself :D ) can ever stop making mistakes. Believe you will make mistakes, except believe you can make less mistakes in this 30 days compared to previous.

Believe it would help if you force yourself to trade smaller size for the rest of this 1st 30 days. It is going to be almost impossible to rein in your psyche like it seemed almost impossible for me too since the fact that we are in this line of business realistically means our brains are wired for high risk tolerance. Undersized positions (much as I personally used to hate trading undersized) do help me read the chart better and make better decisions ... i.e., do help me make less mistakes aka make better profits since a mistake's loss actually requires practically a good trade's gain to just neutralize that loss, meaning I did one good trade for nothing???? maybe just for kicks???? that's making me feel stupid.

No point restarting your day count ... just try to accept your mistakes in these 30 days while trying to reduce them ... and do try undersizing ...
 
ThinkFirst,

Great thread and I wish you the best. I noticed some things that others did as well.

It does sound like your playing with scared money. While the fix may sound easy the fix kicks in something else that is just as difficult to deal with and thats greed. Greed is what "makes" you put on as large of a size as you are.

I suggest you work on the greed part first. Knock your size down to about 20% of what your trading now or what ever the number is that you can lower your focus on the PnL. Douglas in "Trading in the Zone" talks about this You miss out on what you would otherwise be seeing due to the stress of wanting a price to move instead of just letting it play itself out.

I was going to suggest writting all your rules down. In very great detail. so much that you can no trade or even think about trading (open or close) without a rule that addresses it. The time to think is "FIRST" not while your trading. You know this or you would callyourrself thinklater. There is no trading on presidents day. good chance to take a day and write down every damn rule there is with your trading. including how to handle what to do when you think a stock may make a move away from you.

Like you I fade moves but I also use trendline breaks and other types of setups including trend following, EOD moves, etc.... when looking at a stock I have been trying to look at the stop loss as that is the price I am paying to give myself a chance to make some money. Not unlike placing a bet at a blackjack table where your counting the cards. you may have an edge but an edge is just that, its not a sure thing. While you may win or lose on any given trade the true amount gained or lost is the edge (either negative or positive) by the amount you "bet". the rule of large numbers states that if given enough trials the one with the edge will have more in the end even if standard deviation messes with you at times. So remember when you win you dont win as much as the PnL shows and the same goes for losses.

There is a bunch of faders that are in a free chat room that I am in everyday. PM me if you would like details.

Best of luck and I think you will find after a while this journal will become very valuable. google docs is great too. you can keep writting a never ending paper of rules and/code for scanners etc...

Best to you and remember a mistake is only a mistake if you are not following the rules or the rules are not complete to be addressing anything that you maybe thinking of doing.

Robert

Quote from thinkfirst:

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.
More...
 
Day 1

Traded well today, followed my plan, had no problems with re-entering and exits.

short HAR +129
long HIG +49
long AET +176
long FSYS +280

+634 total

Today I pushed myself to make more trades and I kept re-entering after getting stopped out. I was trying different exit strategy and made less money than I usually would but I did follow my plan. Going to spend rest of the day putting excel spreadsheet together to improve my exits.
 

Attachments

Quote from monee:

Chances are you are playing with scared money.
More...

It sure looks like it monee, though I personally think there are other reasons. Thank you for reading my journal.
 
Quote from ave331:

Do not believe you or anybody else (which definitely includes myself :D ) can ever stop making mistakes. Believe you will make mistakes, except believe you can make less mistakes in this 30 days compared to previous.

Believe it would help if you force yourself to trade smaller size for the rest of this 1st 30 days. It is going to be almost impossible to rein in your psyche like it seemed almost impossible for me too since the fact that we are in this line of business realistically means our brains are wired for high risk tolerance. Undersized positions (much as I personally used to hate trading undersized) do help me read the chart better and make better decisions ... i.e., do help me make less mistakes aka make better profits since a mistake's loss actually requires practically a good trade's gain to just neutralize that loss, meaning I did one good trade for nothing???? maybe just for kicks???? that's making me feel stupid.

No point restarting your day count ... just try to accept your mistakes in these 30 days while trying to reduce them ... and do try undersizing ...
More...

Thank you ave331 for your comments. I understand that mistakes are just part of this business, however I think they should be an exception not a norm. Right now it's a norm for me and I'm trying to change that. I will keep restarting my "days", I think/hope once I get to 10-15+ I will think twice about making another mistake and going to "day 1 " again. It might be boring to read for some of you guys but I didn't start this journal to entertain anybody but rather help myself and maybe others to become better traders.
 
Quote from Robert Weinstein:

ThinkFirst,

Great thread and I wish you the best. I noticed some things that others did as well.

It does sound like your playing with scared money. While the fix may sound easy the fix kicks in something else that is just as difficult to deal with and thats greed. Greed is what "makes" you put on as large of a size as you are.

I suggest you work on the greed part first. Knock your size down to about 20% of what your trading now or what ever the number is that you can lower your focus on the PnL. Douglas in "Trading in the Zone" talks about this You miss out on what you would otherwise be seeing due to the stress of wanting a price to move instead of just letting it play itself out.

I was going to suggest writting all your rules down. In very great detail. so much that you can no trade or even think about trading (open or close) without a rule that addresses it. The time to think is "FIRST" not while your trading. You know this or you would callyourrself thinklater. There is no trading on presidents day. good chance to take a day and write down every damn rule there is with your trading. including how to handle what to do when you think a stock may make a move away from you.

Like you I fade moves but I also use trendline breaks and other types of setups including trend following, EOD moves, etc.... when looking at a stock I have been trying to look at the stop loss as that is the price I am paying to give myself a chance to make some money. Not unlike placing a bet at a blackjack table where your counting the cards. you may have an edge but an edge is just that, its not a sure thing. While you may win or lose on any given trade the true amount gained or lost is the edge (either negative or positive) by the amount you "bet". the rule of large numbers states that if given enough trials the one with the edge will have more in the end even if standard deviation messes with you at times. So remember when you win you dont win as much as the PnL shows and the same goes for losses.

There is a bunch of faders that are in a free chat room that I am in everyday. PM me if you would like details.

Best of luck and I think you will find after a while this journal will become very valuable. google docs is great too. you can keep writting a never ending paper of rules and/code for scanners etc...

Best to you and remember a mistake is only a mistake if you are not following the rules or the rules are not complete to be addressing anything that you maybe thinking of doing.

Robert
More...

Thank you Bob for your comments. Being stubborn as I am I'm going to keep my position size the same and if all goes well I'm planning to increase it a bit soon. 2 reasons: I think it's already small plus I've been trading long enough to see that at this point I should just be able to execute my plan even when it feels uncomfortable to do so. It's time to move to the next level...

Somebody wrote this and I think it makes sense:

"It's not the mathematical skill that's critical to winning, it's the discipline of being able to stick to the system. There are very few people who can develop the skills to get the edge, and far fewer still who can withstand the losses emotionally and stick with the system. Probably only one in five hundred people has the necessary discipline to be successful."

Also thank you for reminding me that markets will be closed on Monday. I think my trading strategy has some holes in it and this would be a good time to work on it.

See you in the chat...
 
Quote from thinkfirst:

Day 1

Traded well today, followed my plan, had no problems with re-entering and exits.

short HAR +129
long HIG +49
long AET +176
long FSYS +280

+634 total

Today I pushed myself to make more trades and I kept re-entering after getting stopped out. I was trying different exit strategy and made less money than I usually would but I did follow my plan. Going to spend rest of the day putting excel spreadsheet together to improve my exits.
More...

you did much much better than I did.

Just curious, how long have you been trading?
 
Quote from tomdavis:

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.
More...

Nice plan
 
Quote from thinkfirst:

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.)
More...

Yes - don't look at your P&L. Don't look at it during the trading day, don't look at it after the close, don't look at it the morning after. Look at it at the end of the trading week only.

If there's a box on your screen with your P&L, turn it off. If you can't turn it off, put a bit of tape over the screen where it is, or get another broker with more customizable software.
 
You must log in or register to reply here.
Back
Top