in other words best, you are still having trouble accepting being wrong,it will probably happen in 60% of your trades,embrace it,then figure out how to minimize the damage when it occurs,still playing head games with yourself,this obstacle is the biggest wall in front of your making/breaking..play the sim like it 's real
I'd like to become a better trader
- Thread starter PO
- Start date
Quote from Redneck:
My buddy gets it
You did read the part where she mentioned that she adjusted her stops this week to accomodate the extra volatility, yes?
It goes without saying that if the market`s volatility increases by a substantial amount, you would need to adjust for the increased noise. If not, you will get stopped out more than you are used to, unless your entries are perfect.
If you are okay with getting stopped out a lot and potentially taking a lot of small hits before taking a winner, that is fine, but you will probably miss out on many moves that you usually are able to anticipate.
You asked of an example of how I know that a certain stop is needed? I believe I already provided that, but I`ll give you a quick simplified example.
Say I believe we are forming a double top and I`m looking to short. The first top was at 1200. We are currently trading @ 1198 and I believe that we might not take out the previous top and I want to enter short right now. Filled @ 1198. I use a 1,5 point stop most of the time. This would place my stop @ 1199,50. Now, I could place a stop here and risk being stopped out from noise while still being correct on the direction, or I could place the stop @ 1201 since I believe that for the market to tank (and my idea to be correct), it would be far less likely that we retrace that much.
Another way to do it could be to use a fixed stop of 1,5 points, being stopped out and then re-enter in the same direction.
Or better yet, reading the market so well that you don`t need more than 1,5 point to prove you wrong
On other trades, I might be willing to risk only 0,5 points.
I don`t believe we should argue this much further. It`s just a matter of styles and I don`t think we disagree that much either. I basically use 1,5 points most of the time, but I know that I can use 2,5 on a rare occasion if I feel strongly about it or less than 1,5 if that makes sense. It hardly takes up much mental energy to control this in real time.
I do however agree that widening stops just because you can is not a good thing, if it happens because your entries are poor and you are constantly too early and need "forgiving" stops. That is not what I`m advocating.
NoDoji,
I was not aware that you used a fixed stop. You mention maximum stop and fixed stop in your post. Are those synonymous?
What you write makes a lot of sense though. I need to think more about this
Thanks,
LF
Appreciate it laissez
Your answer tells me all I need
Now letâs focus on helping BL, IF heâll allow it
Although I am chuckling that you are rethinking NODâs fixed stop â if you only knew
Should you adopt it â all the better â in a couple of waysâ¦.
And no; traders never adapt to conditions - we simply go blindly into that good night - too funny
RN
Your answer tells me all I need
Now letâs focus on helping BL, IF heâll allow it
Although I am chuckling that you are rethinking NODâs fixed stop â if you only knew
Should you adopt it â all the better â in a couple of waysâ¦.
And no; traders never adapt to conditions - we simply go blindly into that good night - too funny
RN
Quote from Laissez Faire:
NoDoji,
I was not aware that you used a fixed stop. You mention maximum stop and fixed stop in your post. Are those synonymous?
What you write makes a lot of sense though. I need to think more about this
Thanks,
LF
Since I have a max stop, period, I consider it fixed. It can be smaller if that makes sense, but it won't be larger, so I consider it fixed.
The important thing is that I increased my stop size a small amount, but I increased my minimum acceptable profit target by twice that amount. This has served me very well. Today I took back to back losses, but by holding the very next trade for full target (didn't even move to lock in the minimum), I ended up with a profit almost twice as much as the two losses combined.
BL
Couple of things
First
Thinking and posting about stops last night in anotherâs thread â I came to realize the stop I called B/E is actually a 1 to 2 cent stop (but never more than 2 cents)
Iâll use it, for example, where price is butting up against S or R, and it will either hold, or notâ¦. And I am not willing to risk more than commissions and a penny to find out.
To be clear
My "fixed" stop never moves - and it does have enough wiggle room to allow price to move about, but not break my account when hit.
My B/E stop is actually 1, or 2 cents, plus commissions
And as your P/A skills improve â it is absolutely the right thing to do â to use that skill to âreasonablyâ decrease the amount you risk based on PA â Protect capital fist is our mantra
BUT doing this also means you are thinking/ assessing/ making more decisions â and less focused on reading PA / actual trading..
It also means the potential for entering goes up exponentially (less need for patience and discipline - and something you lack)
I submitted the âfixedâ stop as a tool to combat this..., that you could evolve out of once yotu patience/ discipline/ PA reading/ trading skills improve
Also I'll add; my âfixedâ stop is such that I can incur several in a row and they wonât adversely affect me â money or emotional wise
I take em and simply keep on trading
My apologies for the confusion and not explaining it
====================================================================================================
Second
NOD, Ammo, and I have been trading for awhile â LF is new â so when I refer to the traders in the below it is NOD, Ammo, and myself I am referring to
First â strictly from my stand point
When I first read through your journal â I see a lot of me, and where I used to be â in you (with the exception I believe I was more open minded and willing to change â I just didnât know how)
I'm pretty sure Iâve hit every one of your âtouchyâ issues â with my postsâ¦. why, because I see you in me â and I know every one of my weaknessesâ¦.
I have worked my butt off to identify every one my weaknesses⦠The difference is Iâve accepted, and now embrace evey one of them
Over time the market will expose, and exploit every weakness we have - to make us lose â and truthfully it is not the market exploiting us â it is us..
Each of us is our own worst enemy, until we accept that, embrace it, and then evolve into our best friend â sans any ego.
Because ego is the worst enemy of all, closed mindedness is the second worstâ¦.
So yes, I truly do have a soft spot in my heart for you⦠but I also know I canât do it for you⦠and ultimately your success or failure is your responsibility.
I was adamant you apologize, not for me, and not for the other traders â but for youâ¦. Hard pill to swallow wasnât itâ¦
=============================================================================================
The traders who are trying to help you (specifically NOD, Ammo, myself) have very clear eyes⦠We developed our clear eyes first by exposing our self, and our weaknesses/ faults â to our self
Now we use our clear eyes to identify, decipher, and exploit emotional/ psychological weaknesses in the market â every day
It is that same skill that allows us to see your deficiencies, through your writings â you canât see them, but we can clear as dayâ¦
And so can the other traders reading your journal.
We are giving you feedback â based on what we know wonât work, if you want to be profitable, and succeed.
We know these things because, without exception, we have had our asses handed to us in spades..., and repeatedly..., by the marketâ¦
We donât give you feedback to belittle or berate you, or inflate our egosâ¦
The feedback youâve received is truly from the heart⦠and it comes from lessons learned the hard way⦠in some cases very hard, and very costly ways (both monetarily and emotionally)
=============================================================================================
You think youâre being open and receptive â youâre not
You think you are taking this seriously â youâre not
You think you can become successful by doing less than 100% - you canât
NOD, Ammo, myself â know what it takes.., as do some..., but certainly not all..., of the others whoâve posted in your thread
We are professionals (retail professionals, but professionals nonetheless), we trade for a livingâ¦.
You can either âwillinglyâ take whatâs been shared and benefit⦠or remain wallowing
You are no where close to where you need to be â either accept thatâ¦, and start doing the necessary workâ¦, with the necessary mind set
Or not
Trading is so flippin easy it ainât even funnyâ and anybody and everybody can sound like they know how to trade
====================================================================================================
Developing a traderâs mindsetâ¦
Where one must expose â yet completely accept â oneâs flawsâ¦
Where one comes to know, and accept â uncertainty
Where one comes to understand oneâs opinion â means nothing
Where one is completely open, receptive, and trusting â in what one sees
Where one can maintain no opinion, no bias â yet take decisive action
Where one can take decisive action â without hesitation, or reservation
Where one can remain patient, focused, and disciplined â for as long as it takes
These are only a few btw â but enough for you to get the point
Is what differentiates us â that and having the ability âconsistentlyâ do itâ¦.
==============================================================================================
You are no where close to thisâ¦â¦
Like I said â I have a soft spot for you â because you remind me, of me back in the day â when I was stupid, full of myself, and couldnât find my ass with both hands
===============================================
I keep saying it is your choice..., and it is â If you want it
But if you want it â then you need to step up â and do what it takes
If we are truly kindred spirits â you will
If weâre not â then I am wrong
Like LF said â I talk too much â but Iâm okay with thatâ¦. along with all my other flaws/ faults... It is who I am...
RN
Couple of things
First
Thinking and posting about stops last night in anotherâs thread â I came to realize the stop I called B/E is actually a 1 to 2 cent stop (but never more than 2 cents)
Iâll use it, for example, where price is butting up against S or R, and it will either hold, or notâ¦. And I am not willing to risk more than commissions and a penny to find out.
To be clear
My "fixed" stop never moves - and it does have enough wiggle room to allow price to move about, but not break my account when hit.
My B/E stop is actually 1, or 2 cents, plus commissions
And as your P/A skills improve â it is absolutely the right thing to do â to use that skill to âreasonablyâ decrease the amount you risk based on PA â Protect capital fist is our mantra
BUT doing this also means you are thinking/ assessing/ making more decisions â and less focused on reading PA / actual trading..
It also means the potential for entering goes up exponentially (less need for patience and discipline - and something you lack)
I submitted the âfixedâ stop as a tool to combat this..., that you could evolve out of once yotu patience/ discipline/ PA reading/ trading skills improve
Also I'll add; my âfixedâ stop is such that I can incur several in a row and they wonât adversely affect me â money or emotional wise
I take em and simply keep on trading
My apologies for the confusion and not explaining it
====================================================================================================
Second
NOD, Ammo, and I have been trading for awhile â LF is new â so when I refer to the traders in the below it is NOD, Ammo, and myself I am referring to
First â strictly from my stand point
When I first read through your journal â I see a lot of me, and where I used to be â in you (with the exception I believe I was more open minded and willing to change â I just didnât know how)
I'm pretty sure Iâve hit every one of your âtouchyâ issues â with my postsâ¦. why, because I see you in me â and I know every one of my weaknessesâ¦.
I have worked my butt off to identify every one my weaknesses⦠The difference is Iâve accepted, and now embrace evey one of them
Over time the market will expose, and exploit every weakness we have - to make us lose â and truthfully it is not the market exploiting us â it is us..
Each of us is our own worst enemy, until we accept that, embrace it, and then evolve into our best friend â sans any ego.
Because ego is the worst enemy of all, closed mindedness is the second worstâ¦.
So yes, I truly do have a soft spot in my heart for you⦠but I also know I canât do it for you⦠and ultimately your success or failure is your responsibility.
I was adamant you apologize, not for me, and not for the other traders â but for youâ¦. Hard pill to swallow wasnât itâ¦
=============================================================================================
The traders who are trying to help you (specifically NOD, Ammo, myself) have very clear eyes⦠We developed our clear eyes first by exposing our self, and our weaknesses/ faults â to our self
Now we use our clear eyes to identify, decipher, and exploit emotional/ psychological weaknesses in the market â every day
It is that same skill that allows us to see your deficiencies, through your writings â you canât see them, but we can clear as dayâ¦
And so can the other traders reading your journal.
We are giving you feedback â based on what we know wonât work, if you want to be profitable, and succeed.
We know these things because, without exception, we have had our asses handed to us in spades..., and repeatedly..., by the marketâ¦
We donât give you feedback to belittle or berate you, or inflate our egosâ¦
The feedback youâve received is truly from the heart⦠and it comes from lessons learned the hard way⦠in some cases very hard, and very costly ways (both monetarily and emotionally)
=============================================================================================
You think youâre being open and receptive â youâre not
You think you are taking this seriously â youâre not
You think you can become successful by doing less than 100% - you canât
NOD, Ammo, myself â know what it takes.., as do some..., but certainly not all..., of the others whoâve posted in your thread
We are professionals (retail professionals, but professionals nonetheless), we trade for a livingâ¦.
You can either âwillinglyâ take whatâs been shared and benefit⦠or remain wallowing
You are no where close to where you need to be â either accept thatâ¦, and start doing the necessary workâ¦, with the necessary mind set
Or not
Trading is so flippin easy it ainât even funnyâ and anybody and everybody can sound like they know how to trade
====================================================================================================
Developing a traderâs mindsetâ¦
Where one must expose â yet completely accept â oneâs flawsâ¦
Where one comes to know, and accept â uncertainty
Where one comes to understand oneâs opinion â means nothing
Where one is completely open, receptive, and trusting â in what one sees
Where one can maintain no opinion, no bias â yet take decisive action
Where one can take decisive action â without hesitation, or reservation
Where one can remain patient, focused, and disciplined â for as long as it takes
These are only a few btw â but enough for you to get the point
Is what differentiates us â that and having the ability âconsistentlyâ do itâ¦.
==============================================================================================
You are no where close to thisâ¦â¦
Like I said â I have a soft spot for you â because you remind me, of me back in the day â when I was stupid, full of myself, and couldnât find my ass with both hands
===============================================
I keep saying it is your choice..., and it is â If you want it
But if you want it â then you need to step up â and do what it takes
If we are truly kindred spirits â you will
If weâre not â then I am wrong
Like LF said â I talk too much â but Iâm okay with thatâ¦. along with all my other flaws/ faults... It is who I am...
RN
Yes, Redneck. If not too much, you do talk a lot
Seeing your need to defend your viewpoint and "be right", I do believe we may have touched one of your issues as well.
NoDoji did clarify that she: 1) Widened her stop this week to accomodate the increased volatility; 2) Have a fixed stop in the sense that she honors a maximum stop (just like I said I do), but that she may use a smaller stop as well.
Then you proceeded to say that you chuckled when I was considering what she meant about her fixed stop.
Funny, isn`t it?
Good weekend all! I`m off for some beers now!
Seeing your need to defend your viewpoint and "be right", I do believe we may have touched one of your issues as well.
NoDoji did clarify that she: 1) Widened her stop this week to accomodate the increased volatility; 2) Have a fixed stop in the sense that she honors a maximum stop (just like I said I do), but that she may use a smaller stop as well.
Then you proceeded to say that you chuckled when I was considering what she meant about her fixed stop.
Funny, isn`t it?
Good weekend all! I`m off for some beers now!
Laissez
If you wish me to be wrong â then I am wrong
If you wish me to be belittled â then I am belittled
If you wish to feel superior â then you are superior
If you wish it to be funny â then it is funny
NOD, well she is my friend, and my colleague â period
I trust this satisfies your need
Now may we please get back to BLâ¦, he is all that matters in this thread
RN
If you wish me to be wrong â then I am wrong
If you wish me to be belittled â then I am belittled
If you wish to feel superior â then you are superior
If you wish it to be funny â then it is funny
NOD, well she is my friend, and my colleague â period
I trust this satisfies your need
Now may we please get back to BLâ¦, he is all that matters in this thread
RN
This week was a critical test of my traderâs mindset. Not too long ago I posted a concern on CL Redux about adapting to trading CL as it was breaking into a higher price range and volatility level with which I had no experience. I knew Iâd have to adjust the size of my stops to avoid getting chopped up, and more importantly I wanted to be sure Iâd be able to hold through the volatility for larger profits. I was especially concerned that increasing the size of stops would cause me to become focused on loss instead of gain, and affect the traderâs mindset Iâd worked so hard to cultivate.
This week I was tossed into the maelstrom of wide swings as price broke to new highs with power. Because I had worked so hard over the past year to cultivate the traderâs mindset, I was able to adapt quickly without fear and I found that my trading was even more aggressive because I increased my minimum profit target commensurate with my larger max stop and it felt plain good to make more money.
As an inexperienced trader, having been humbled by the market a few times over, and before even knowing what a traderâs mindset was, I might put on a trade, and take a loss. Iâd then have a new state of mind, one of self-doubt and fearfulness. Iâd see the next setup and think, âWhat if itâs another loser?â In my quest for certainty that it wouldn't be a loser, Iâd find obscure reasons why the setup was confusing and I shouldnât trade it. Sometimes Iâd go the rest of the day talking myself out of trades. If I passed on a trade and it turned into a great move, I might start revenge trading (trading without waiting for the next solid setup). Maybe take another loss. Maybe finally catch a wave in my favor and cut it short as soon it covered the previous losses.
I know now that I wasn't alone going through these processes, because I see so many traders here struggling with these same issues.
Hereâs an example from yesterday of the New Me and how I traded with the traderâs mindset RN describes above vs. the Old Me:
Eastern time
01:17pm Long CL @ 97.46, stop just below the previous barâs support level, looking for a breakout of an internal double top (97.70) and targeting a move to 98.20, which was a previous support becomes resistance level that Iâd noted before starting to trade yesterday morning. Since there was an internal double top of 97.70, I planned to reverse short at the same price Iâd be stopped out, because there was no clean strong trend in play.
01:19pm Stopped out for the loss and now short at what quickly becomes apparent may be a pivot low off the trend line. I was so focused on the 1-min and 3-min chart, I forgot to cross-reference my main 5-min time frame (where I'd draw trend lines) and completely missed that price was pulling back to the trend line and hadnât quite got there yet.
The Old Me: Iâm an idiot! Why didnât I wait for confirmation on the 5-min chart before going long in the first place? And why did I short when thereâs a trend line right there? What was I thinking? I canât believe I did this! What's wrong with me? Why can't I follow my rules?
The New Me: Oh no, I was focusing totally on the smaller time frames and forgot to look at the 5-min chart. The trend line is right there and I shouldâve waited for the pullback entry off it. If this short is stopped out and I switch long at that same price, itâs a now fully confirmed entry and my profit target is nearly twice these silly losses. I really like this one!
01:28pm Stop loss on the short is hit and Iâm immediately long @ 97.50. Price moves up a little, wiggles a bit, dips just below my entry, then runs back up toward the internal double top, breaks it by only a single tick, and wiggles around indecisively for a minute or so.
The Old Me (assuming I even took another trade): Oh no, itâs a failed break through resistance, I better grab my profit here and cover some of those losses before it sells off. Whew, got almost 20 ticks on the trade and erased over half the losses!
The New Me: Itâs run 20 ticks in my favor and if it retraces that entire 20 ticks, sellers will definitely step in off that failed break of the DT, so Iâm moving my stop to break even here. If price then breaks the previous barâs low, Iâll join the sellers and switch back to a short for a break through the trend line. Right now, the plan to hold for 98.20 zone is still good.
01:33pm: After that minute or so of wiggle, price makes a new run at 97.71 and breaks out nicely.
01:35pm: Price is about to touch my 98.20 target zone and I quickly move my stop up to lock in a profit @ 98.10 in case 98.20 indeed becomes resistance for this breakout. Iâm taken out of the trade exactly 10 ticks from the 98.20 pivot high of the move for 60 ticks of profit. Despite making a couple mistakes because of focusing on smaller time frames without cross-checking my main chart, Iâve made a fine net profit out of the trades.
Itâs so difficult to get to this point, but the rewards are absolutely worth it. No one can do it for you. Itâs a personal journey requiring an immense amount of study, analysis, and enough trust in your edge that no individual trade result or group of trade results or occasional mistakes affect your ability to trade the very next setup that presents itself and manage it according to your rules.
Your P/L throughout the day will be irrelevant. Youâll be trading in the zone, trading every valid setup and managing it according to your rules. If you make a mistake, you put it behind you, keep calm and carry on.