FredBloggs
Guest
read some of grob's posts about drills. convert what he is saying to your own method.
How not to overtrade?
- Thread starter LeeD
- Start date
This. But you are emotionally not there yet,so even that wouldn't help you.What you need is a big painfull loss.It is the very best lesson.I say that because at least you have the guts to come here and show us your ass.Which tells me you don't give up easily,but you need a good lesson.Unless you resolve these issues,blowup is just around the corner.Just for a change,come back and tell us what happened next...
One of the best posts I have ever read on ET. If there was ever a hall of frame on ET this would be on it.
Thanks Handle123
All the Best
John
Thanks Handle123
All the Best
John
When it comes to your state of mind, there are two ways that I've found you can alter your habits. The first is through practice and time, which allows you to build stronger and more positive habits over the previous ones. The other, and one that is not so commonly acknowledged is through emotion. Quite literally, if you put enough emotion into some thought of how you want to be, whilst acting it out constantly, youll find that sooner rather than later you'll actually act that way.
For what it's worth, I am a completely self taught trader and I've struggled through all of those. I won't lie and say that I don't occasionally succumb to wanting to do each of the them today either.
For what it's worth, I am a completely self taught trader and I've struggled through all of those. I won't lie and say that I don't occasionally succumb to wanting to do each of the them today either.
Your journal is a great idea; it will really help you. Perhaps you are already doing this (perhaps your journal contains this level of detail) but here is what I would suggest.
Keep a spreadsheet with your P/L. You might keep multiple spreadsheets for different types of trades.
For example, I have one sheet that has all my calendar spreads for the last two years--one line per round trip. It has the entry and exit dates, implied volatility, and other data about the trade and the P/L. When you scan through one of these sheets, over time, patterns begin to show themselves. You find out which kinds of things are working for you and which are not.
The reason I suggest this is because I frequently find that my recollection or my 'feel' for what is working is pretty inaccurate. If I actually look through the numbers, a different picture sometimes emerges.
Keep a spreadsheet with your P/L. You might keep multiple spreadsheets for different types of trades.
For example, I have one sheet that has all my calendar spreads for the last two years--one line per round trip. It has the entry and exit dates, implied volatility, and other data about the trade and the P/L. When you scan through one of these sheets, over time, patterns begin to show themselves. You find out which kinds of things are working for you and which are not.
The reason I suggest this is because I frequently find that my recollection or my 'feel' for what is working is pretty inaccurate. If I actually look through the numbers, a different picture sometimes emerges.
This is probabbly a fair way to describe my expectations. In the hindsight, I always see how some of the trades could have resulted in masive gains. However, aiming for such tardes I fail to realise substantial profit more often than not. So far I am learning to moderate my expectations.
Now I know where to aim. From your post in a different thread it appears if you start running a loss early in the day you abandon the target and just aim for the break-even. That's the main rule I should learn. Historically, on days when I had a couple or more trades in a row that resulted in a stop, I assumed it was a day with good volatility and was trying to turn a substantial loss into a more than average profit. This often resulted in a daily loss...
As long as I can keep losses in check, profits, however moderate, should add up pretty quick.
So far I find it a challenge to stay cool but as others say with experience calm should come.
A gym machine next to the trading station is a great idea!
That's one of the psychological challenges I find: see a potential for profit and calmly miss it. The signal I have currently for trend end is not very reliable... but when I assume the trend is finished before this signal (based on level of resistance or what not), it's usually a costly decision.
"Only element I can control is risk" - I gotta remember that! Small gains add up as long as losses are under control....
When you start a trade you must be taking a certain view. So, is the statement above admission of fallibility? Do you mean to say you don't get emotionally attached to a trade?
Meaningful stop-for-the-day rule is something I am still developing. Simple maximum day loss number doesn't seem to be very good. If I run a loss early I still have time to make some back in a regular manner while late in the day I'll have to take excessive risk in order to counter a large-ish loss.
Handle, you regularly refer to backtest results. Is there a reason you don't automate most of your trading? Is it because some rules you use can't be efficiently formalized? Or is it because you think you can do better than a machine with entry levels etc?
Does it mean you miss a number of larger-gain trades because either price dips below the entry level before going in you favour? Or do you have such a good break-even trigger that most of would-be-profitable tradesd still result in a profit?
In order for the price to reach the target level I often have to watch 60% of the target profit avaporate and turn into a small loss. I understand in this case you would try to realise that 60% and hope to re-enter if the price reverts far enough. So far I am trying to avoid this in order to keep the number of trades smaller and learn to realise larger profits this way (as Specterx suggested above). Does it make sense in this instance?
Do you include the abilty to run the winners for the maximum gain?
Does it mean a lot of trades (probabbly, over 50%) have to result in break-even?
Is 'grob' another name of Jack Hershey?
Been there, done that!
It helps put emphasis on discipline but most certainly doesn't help stay calm and relaxed while trading.
If I gave up every time I felt the path was getting difficult, I wouldn't be getting anywhere. There are certainly occasional easy ways to success (others call it being in the right place at the right time) but you can't rely on finding one every time. I appreciate giving me a credit for what is common sense.
I am actively following a few routes to improve my decision-making. Steep learnign curve isn't called this for nothing.
Changing yourself takes time. Let's hope I'll have something to report soon.
I understand you aren't referring to the actual "emotions" here... Is it the same the techinique athlets use? They imagine themselves performing a certain difficult feat in great detail untill they can finally do it.
So, experince isn't a cure for boredom and lust for being adventurous, is it?
Thanks! The book has very encouraging reviews on the Web. I have ordered a copy.
I have all of this in my journal. I also have time of each trade so that I can put entry and exit on a chart later on if desired.
I also write brief notes regarding why I entered the trade and any unusual events but I should be more thorough and consistent here.
lots of good advise on this thread. Different for everybody. At my old prop, I saw overtrading kill careers before they even got started.
Stop when you hit your first profit of the day. Regardless if it is as little as $50 or in the first minutes of the opening. You need to condition your mind to taking money out of the markets, not giving it. Take money out every day. You will be amazed that you can string together 30 maybe 90+ days of consistent profitability day trading. Think about all the times you gave it back. You just gotta stop trading when you either hit a daily stop loss or reasonable profit.
Stop when you hit your first profit of the day. Regardless if it is as little as $50 or in the first minutes of the opening. You need to condition your mind to taking money out of the markets, not giving it. Take money out every day. You will be amazed that you can string together 30 maybe 90+ days of consistent profitability day trading. Think about all the times you gave it back. You just gotta stop trading when you either hit a daily stop loss or reasonable profit.