Looking for a Trading Coach?

Looking for a Trading Coach?

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    106
Inability to follow a profitable system is probably caused by lack of capital and/or lack of trust in the system. The latter can be overcome by understanding what the system is based on and thorough testing. The former by not trading until sufficient capital is available or by willpower. Another possible reason could be bad execution - things like not running the system in time, not updating data, not giving the orders in a timely manner. This one can correct by willpower as well.

When I used a system once upon a time I tested it thoroughly before starting actual trading and then didn't follow it properly due to fear of losing caused by undercapitalization. The way the mind works - mine at least - seems to result in underperformance when not taking all system signals but picking them. This dawned on me and I took care to get the system signals only and blocked other influences like looking at charts, watching market tv, reading newsletters. I then forced myself to take all signals despite undercapitalization and became successful with it.

Experts maybe wouldn't approve of that but they have different interests than moi, like selling books or keeping clients etc.. My risk, my decision, my result.

Helpful to me was also understanding that successfully applying a system is a process which takes a lot of time. This process consists of many small steps - the individual trades. Over time the positive expectancy would show in profitability but it is still a process. And I need to allow it to unfold and not stand in the way.

Also, one should be aware that there are no guarantees for success, no sure things. At least not to my knowledge. If one can't accept that then trading is quite difficult. Every level of success is possible but nothing is guaranteed. Trading a system is a business decision.
 
Quote from JimmyJam:

The issue is not so much one of laziness, but rater psychology, as other traders alluded to.

In all other aspects of our society, we have rules which are in place to control our behaviors and force us to act in a disciplined and responsible fashion, otherwise we will have to suffer the consequences.

For example:

1) If you break the driving laws when driving, you may lose your licesnece, go to jail and/or worst case scenario, have an accident which results in injury to yourself and/or others. So you are forced to obey the driving laws.

2) If you break the spoken/(and unspoken) rules of your job (for those who have/need one) you will be disciplined, and worst case scenario, written-up before being fired, at which point you will no longer have access to the money/perks that the job gives you. So you are forced to obey the rules of your job.

3) If you break socieity's rules (carry an unlicensed firearm, steal, commit violence on another person, etc.) you will be subject to the penal system and be denied your basic freedoms for a very long time. So you are forced to obey the rules of society.

Because the individual trader is completely responisble for their own trading, they do not automatically follow the rules of discipline when trading, and lose money/opportunity as a result of not having those psychological controls in place.

The solution then, is to create, as part of your Trading Ruleset penalties for not following the rules of your trading, along with the practicing and visual conditioning of taking your trades.

This is a very important topic, and one that is not discussed enough amongst traders, but it well known that developing a good trading system is only half the battle, the other half is to instill the correct conditioning ... very much like Pavlov's Dog. :)

Good trading,

Jimmy Jam
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Respectfully I disagree. If you have a system/setup which you have tested (I prefer hand testing myself) over a sufficiently long period you will know all there is to know about the success of the system/setup. That's where the confidence comes from.
 
Quote from TimothySykes:

Read all of Ari Kiev's books.
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Agree 100%. One of his non trading books, A pattern for daily living- is by far the best self help book ever written, and its the basis for all of his trading books as well. Its about the size of your hand and is around 100 pages long, shouldnt take more than an hour and a half to read. It changed my life.
 
Quote from DrEvil:

If you want it badly enough you will do what many successful traders did and figure it for themselves. Never heard of back and forward testing? You sound lazy ...
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What I had wished to state was this, that while testing your systems and if the results are good. Then, everything is fine. However, the moment you reach the $3000.00 stop loss mark that you use in the actual sense (reality) of trading you are bound to be scared. In this fear, you can and might spoil your trades.

Therefore, it is not the case of laziness but a simple bitter truth that even if the system is a good one, you are unable to trade is as per the conditions as it may go against your conscience or personality.

Machines (including computers) deal with just plain facts and figures and not the other emotional factors which may have to be dealt with.

Hence, I once more ask my question, as I wish to know as to what is better to understand what you can and what you can not follow before doing trading via the system.

As the saying goes "Little knowledge is dangerous" and "it is better to be forewarned and forearmed". So, better be laughed at, than later on if I lose money just because I could not ask some questions.
 
Quote from Mike805:

Some interesting ideas so far. Hopefully I can provide some useful insight.

Two things come into my mind when I think of trading roadblocks, be it in trading a system or trading discretionarily. One - the idea of "letting go" and not being emotionally attached to the outcome. Two - the amount of psychological energy expended while dealing with the anxiety and/or fear of not knowing the outcome.

In terms of letting go: I've found in my interactions with friends, this concept seems to be extremely difficult for most people. A majority cannot seem to handle the idea of an uncertain outcome, especially those who have had a good amount of success in their lives. My fiancé is an example – she doesn’t understand why I don’t take profits as soon as I get them, the concept of letting winners run is psychologically defeating to her, the fact that there exists a chance of giving up gains causes her an overwhelming amount of anxiety. She admits she could never do what I do for that reason. I find “letting go” to be so incredibly difficult as well – but, through years of training myself mentally to accept this fact, trading has become tolerable. I certainly admit trading takes a psychological toll on me when I enter a drawdown, i.e. knowing there were opportunities to exit at a small profit or breakeven – but that wouldn’t be sticking to my plan – a much more destructive behavior over the long run.

I trade both discretionary and systemically. At the moment, I trade a mechanical system that is right 57% on average – that means 43% of the time I am losing money with this given system. Obviously it has a positive expectancy, but, in the moment while in a trade, this fact doesn’t matter – it’s all about relieving the problem at hand, i.e. the anxiety of being in a position that I do not know the result of. The amount of mental energy this takes can be significant, the fact that the trade may be going counter to your intuition – the fact that occasionally you may want to “outsmart” the system by exiting early or cutting a loss. These facts cause one to use up mentally energy and do stupid things – one just has to let go…

I'd be a liar if I said I didn't struggle with these issues on a daily basis... I overcome them because I am mentally tough. A lifetime of sports has helped, so has emotional intelligence. There is no cure all for the anxiety and fear, simply put – you are either cut out to deal with it or you aren’t. I do believe that with training anyone can get there, but, you have to want to conquer these demons. Ask yourself that – do you really want to conquer these issues? That’s how, just let go… This applies to all aspects of life BTW, relationships, money… (I probably sound like an infomercial about “positive thinking” or some horseshit like that, let me state that all the positive thinking in the world will not make you a successful person). You can’t control if someone will or will not fall in love with you, or hire you for a job, but, you can control your demeanor, your knowledge, your words. Why would it be any different in taking a trade? You can control the entry and you can control your exit… apply some good sense and a bit of skill, and there you go.

The truth is, if you are a control freak in any sense of the word, trading is likely not for you. It will be overwhelmingly difficult to handle the uncertainty. IMO, wanting to control something is akin to believing it will fail.

Mike
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Good post Mike.

I thought grob's one about the problems being "learnt" and physiological rather than psychological was interesting. Although as usual he was overcome with grandiosity and couldn't recognize when he was in agreement with people like steenbarger.

Steenbarger talks about behavioural ways of overcoming programmed mistakes (ones where you do the wrong thing and can't even detect the thought that caused it).

Denise Shull with ANNA talks about ways of dealing with the problems Mike talks about.
 
Quote from FreedomAchiever:

Is that relevant to my question? :confused: :confused: :confused:
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