I've encountered similar circumstances in the past with regard to big changes in methodology. What I usually did was *completely* or to whatever extent possible remove ALL the tools used in the prior method from all screens. Charts, order entry, even *hide* stuff so that you just cannot go back, no matter what. Otherwise, it's like a carpenter who switches to become a mechanic but tries to use the same carpentry tools to fix cars.
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How to change from futures book scalper to longer term trader
- Thread starter downtickboy
- Start date
In the past few years I have gone from a scalper in the T-Bond pit to "swing-trading" equities. The change wasn't planned, it was more of an evolution steered heavily by opportunities I saw and people I happened to have been lucky enough to meet. Anyway, if you've got a longer term system that you think is a winner, I recommend the following:
1. Keep a detailed log of your new method's trades on Excel so you can demonstrate/reassure yourself regularly that you DO have a legitimate edge.
2. Trade 100 share lots (or 1 contract) until you can let trades go to their designed outcome. Hopefully this is small enough that the financial impact of your results is meaningless to you....Then gradually increase your size to where you would normally be. It takes time to re-wire your brain and change old habits.
I hate to be harsh, but if you can't follow your new method trading only minimum size lots, then either you are undercapitalized or this type of trading is just not for you.
Good Luck
1. Keep a detailed log of your new method's trades on Excel so you can demonstrate/reassure yourself regularly that you DO have a legitimate edge.
2. Trade 100 share lots (or 1 contract) until you can let trades go to their designed outcome. Hopefully this is small enough that the financial impact of your results is meaningless to you....Then gradually increase your size to where you would normally be. It takes time to re-wire your brain and change old habits.
I hate to be harsh, but if you can't follow your new method trading only minimum size lots, then either you are undercapitalized or this type of trading is just not for you.
Good Luck
Quote from SethArb:
hello downtickboy
have you ever traded this order book
" scalp style"
overnight ( i.e. after hours ) ?
and if this too has been harder to do this yr
for you compared to recent yrs ?
- many mainly order book scalpers who used to make a poop load of money suddenly not be able to do much on a CONSISTENT basis.-
No I never have done the overnight after hours thing and neither have the others I know of. There might be some oppts there though. I heard of some trading fixed income spreads overngith which I have been told is somewhat easier. However I think I am heading in the right direction of where I want to go by switching styles.
Quote from qazwsxedc:
Are you switching "to scalper book trader mode" in an effort to control/reduce perceived risk? In that case change your perception. No, seriously. What I mean is that you need to figure out, with reasonable accuracy, how much drawdown you expect during each *profitable* trade.
Then see how the outcome changes (for the worse!) if you curtail those drawdowns or if you take small profits instead of larger ones.
The point is that you "switch to scalper book trader mode" because you're doubtful whether your longer term trading has an edge. You need to be certain. Do the numbers.
I would say yes to the control/reduce perceived risk of why I switch gears and that it is uncomfortable having at times good trades go against me because I am an not used to dealing with the short term adverse moves against my initial entry spot. You are correct that I need to change my perception but that so far has been the struggle.
Also thanks Twalker for the post.
Quote from risktaker:
I've encountered similar circumstances in the past with regard to big changes in methodology. What I usually did was *completely* or to whatever extent possible remove ALL the tools used in the prior method from all screens. Charts, order entry, even *hide* stuff so that you just cannot go back, no matter what. Otherwise, it's like a carpenter who switches to become a mechanic but tries to use the same carpentry tools to fix cars.
Great example of the struggle.
Quote from mr roboto:
In the past few years I have gone from a scalper in the T-Bond pit to "swing-trading" equities. The change wasn't planned, it was more of an evolution steered heavily by opportunities I saw and people I happened to have been lucky enough to meet. Anyway, if you've got a longer term system that you think is a winner, I recommend the following:
1. Keep a detailed log of your new method's trades on Excel so you can demonstrate/reassure yourself regularly that you DO have a legitimate edge.
2. Trade 100 share lots (or 1 contract) until you can let trades go to their designed outcome. Hopefully this is small enough that the financial impact of your results is meaningless to you....Then gradually increase your size to where you would normally be. It takes time to re-wire your brain and change old habits.
I hate to be harsh, but if you can't follow your new method trading only minimum size lots, then either you are undercapitalized or this type of trading is just not for you.
Good Luck
Thanks for the suggestion. I was on my way to starting the trade log like you said. I have no problem holding the winning trades until they hit some kind of target or my exit signal is given except when they don't go right away. It is the trades where a good signal is given but they don't take off fairly quickly so I am sitting in a good trade signal but it has yet to produce much or may be against me (not stopped out) yet I am trying to stay with it for it to develop for me. That has been my trouble spot.
Banjo and qaz have it correct. It probably boils down to fear and a desire to control risk. Think about where you're coming from: a tightly structured world where short term controlling risk and banking profits is paramount. Think about where you're trying to go based on your method's description: a loosy goosy SAR / stop out method where you enter and "let it ride". You have no control and your trained habits are attempting to reassert control by stepping in and doing what you've trained yourself to do. Lots of rewiring to do.
Quote from downtickboy:
Thanks for the suggestion. I was on my way to starting the trade log like you said. I have no problem holding the winning trades until they hit some kind of target or my exit signal is given except when they don't go right away. It is the trades where a good signal is given but they don't take off fairly quickly so I am sitting in a good trade signal but it has yet to produce much or may be against me (not stopped out) yet I am trying to stay with it for it to develop for me. That has been my trouble spot.
As part of your log, keep track of how much money your "premature evacuation" of your trades is costing you. I went through the same thing. After a month, when I tallied up how much money my impatience cost me, it went a long way towards
curing that problem. Also, I strongly agree with not watching your trades. If you set a trap in the woods for wild game, and then stand there and watch the trap, you're not going to catch much....same thing in trading. When I enter a trade, I immediately set a stop, a profit target (all based on the usual testing methods), and a "time stop"..."One Cancels All". Then, I take the symbol off my monitor and focus on the next trade.