Maintaining Self Discipline

[studentofthemarkets]

What are you trying to overcome (your words)? What IS the issue?

That is really good question, because it's making me think through it a little more. Thanks for asking.

The issue is that I have had a problem for years now of losing too much money in a short amount of time by taking multiple entries and getting stopped out before the trade opportunity develops.

It's almost always characterized by getting in during the chop that oftentimes happens just before a larger move.

 

[formikatrading]

So how many trades do you take a day?

 

[studentofthemarkets]

So how many trades do you take a day?

My plan calls for an average of 4 to 5 trades a day, taken from 8 am CT and stopping at 11 am CT.





The white arrows show the trends I want to get into. I only traded the end of trend up from the open and then got the 1st trend down today.

By entering late in the upward trend, the trades didn't have follow through and it led to taking 3 trades.

IF I had stuck with my plan, I would have been ready to trade at 8 am instead of at the open and likely would not have tried to go long at the end of the up trend.

Being ready to trade on time is entirely my fault, but also entirely easy to fix. And I stopped trading for the day earlier than I should have because I didn't trust the initial break of the next move up. Also something easy to improve on.

Usually each of those 4 to 5 trend trades will have several good entry points spread over 10 to 15 minutes.

I'm not sharing how many trades I'm actually taking, because they are way too many. So that leads me to wondering....why am I overtrading?

If I don't get stopped out right away, I'm not letting my trades run to their full potential. Why? I don't know. I guess I need to reevaluate that also. It's easy to close a trade in profit earlier than it should be closed. I've been setting my targets to capture only a certain amount of ticks, rather than visualizing where the trade has potential to go to and trailing.

When I close too early, I try to get back into the trend, which can also contribute to overtrading.

So, if I were to advise myself, I'd say to limit my tries to about 2 attempts per trend, give each trade enough stop loss room to actually work and hold onto it as long as the moving averages all say it's trending.

There. Problems solved.

I feel like I've made a lot of progress in the last few minutes thinking through these solutions I've actually been stuck on for a while. For starters, I'm going to go write in my plan only 2 attempts per trend allowed and the other things I mentioned on here.

Thanks for the questions!

 

[studentofthemarkets]

Today I did better at following my trading plan but I didn't stick to it as well as I need to.

I traded with 1 contract today because it is mentally easier for me to use a larger stop loss with only 1 contract and I'm trying to let my trades go as far as they can and don't really care about only getting 20 ticks or so for the first contract. Someday I'll go back to it, but for now I don't have a good win rate so 2 contracts seems to be hurting more than helping.

What I did right:
1. I Didn't trade against the trend.
2. I almost succeeded in limiting my trades the way I need to.
3. Most of my entries were according to my rules, even when they were stopped out.
4. Almost started my trading day on time.
5. Tried to adjust the stop loss to a logical place.
6. Didn't close out the last trade too early.
7. Quit trading when ahead and realized that I really don't like today's price action.

What I did wrong:
1. Once again chop, the area of indecisiveness before a move, was a problem. I had waited patiently to go long because I didn't want to be short (don't really like shorting) but when the trades didn't work out I changed direction and did go short with late entries, and they were not good trades.
2. The last trade entry wasn't exactly by my rules, and was another last second reversal, but it was the one that actually worked.

What can I improve? I don't like the way I kept entering trades when it seemed the direction was changing. It's hard to keep waiting for what could be the beginning of a trend, but that is what I need to do. Remember to stick to my rule about only taking 2 attempts to get into the beginning of each trend.

 

[formikatrading]

Hey -- a suggestion when you journal is not to point out what you did wrong. Instead, focus and write on areas where you can you improve. I know it may sound like I'm splitting hairs here but psychologically it makes a difference. It helps you feel more like you're improving and that there are ways to improve even more. Best wishes!

Today I did better at following my trading plan but I didn't stick to it as well as I need to.

I traded with 1 contract today because it is mentally easier for me to use a larger stop loss with only 1 contract and I'm trying to let my trades go as far as they can and don't really care about only getting 20 ticks or so for the first contract. Someday I'll go back to it, but for now I don't have a good win rate so 2 contracts seems to be hurting more than helping.

What I did right:
1. I Didn't trade against the trend.
2. I almost succeeded in limiting my trades the way I need to.
3. Most of my entries were according to my rules, even when they were stopped out.
4. Almost started my trading day on time.
5. Tried to adjust the stop loss to a logical place.
6. Didn't close out the last trade too early.
7. Quit trading when ahead and realized that I really don't like today's price action.

What I did wrong:
1. Once again chop, the area of indecisiveness before a move, was a problem. I had waited patiently to go long because I didn't want to be short (don't really like shorting) but when the trades didn't work out I changed direction and did go short with late entries, and they were not good trades.
2. The last trade entry wasn't exactly by my rules, and was another last second reversal, but it was the one that actually worked.

What can I improve? I don't like the way I kept entering trades when it seemed the direction was changing. It's hard to keep waiting for what could be the beginning of a trend, but that is what I need to do. Remember to stick to my rule about only taking 2 attempts to get into the beginning of each trend.
View attachment 241064

 

[studentofthemarkets]

Hey -- a suggestion when you journal is not to point out what you did wrong. Instead, focus and write on areas where you can you improve. I know it may sound like I'm splitting hairs here but psychologically it makes a difference. It helps you feel more like you're improving and that there are ways to improve even more. Best wishes!

Thanks! You make a good point.

I'll try to rephrase my terminology to keep it positively based. The important thing I think we both agree on is that analyzing where improvement can be made is very important. My current opinion is that working on improving might be the only path to success.

 

[studentofthemarkets]

Today I did better at following my trading plan but I didn't stick to it as well as I need to.

I traded with 1 contract today because it is mentally easier for me to use a larger stop loss with only 1 contract and I'm trying to let my trades go as far as they can and don't really care about only getting 20 ticks or so for the first contract. Someday I'll go back to it, but for now I don't have a good win rate so 2 contracts seems to be hurting more than helping.

What I did right:
1. I Didn't trade against the trend.
2. I almost succeeded in limiting my trades the way I need to.
3. Most of my entries were according to my rules, even when they were stopped out.
4. Almost started my trading day on time.
5. Tried to adjust the stop loss to a logical place.
6. Didn't close out the last trade too early.
7. Quit trading when ahead and realized that I really don't like today's price action.

What I did wrong:
1. Once again chop, the area of indecisiveness before a move, was a problem. I had waited patiently to go long because I didn't want to be short (don't really like shorting) but when the trades didn't work out I changed direction and did go short with late entries, and they were not good trades.
2. The last trade entry wasn't exactly by my rules, and was another last second reversal, but it was the one that actually worked.

What can I improve? I don't like the way I kept entering trades when it seemed the direction was changing. It's hard to keep waiting for what could be the beginning of a trend, but that is what I need to do. Remember to stick to my rule about only taking 2 attempts to get into the beginning of each trend.
View attachment 241064

The rules I've recently added to my trading plan are as follows:

1. I will limit myself to 2 attempts to enter at the beginning of a trend.
2. Each attempt should be about 5 minutes apart or more...and only because I'm trying to prevent multiple losing entries.

However, I seems like moving a good trade to BE quickly is important. I would rather get taken out at BE and get in immediately after, if the set up is still right, than to risk a full stop loss. So, I'm adding the following to my trading plan:

3. I can take unlimited BE+1 (or higher) trades. So, basically, the 2 attempts allowed would be 2 losses allowed per attempt at a trend.

If this doesn't seem to work, I might go back to adding a 2nd contract and just take any profit I can with the first target as a way of lessening the cost of the stop loss of the 2nd contract.

 

[studentofthemarkets]

I tried a new method of moving to break even quickly after each trade moved into a small amount of profit, hoping the trend would be strong enough to not retrace and I could get 100 or more ticks per trade. That's not what happened.

The good news: No losing trades and ended with 56 ticks (demo) profits. My method of moving to break even quickly did save some trades from unexpected turns the market made.

The bad news: All the trades had the potential of making 85 ticks or more if I had left a 30 tick stop loss in place.

More bad news: Because I was trying to hold out for a runner I didn't take small profits, which meant that I had taken many trades and exposed myself to a lot of potentially full stop outs, without making any money. This is really dangerous.

More of the more bad news: This was very intense trading and I didn't really like it, which led to missing good trades because I didn't think they would work and on the last trade I "gave up" trying for a larger profit. Just wanted enough to end the day in profit and be done so I could think about why this method didn't work the way I hoped it would.

I'm not so sure I like this method anymore. It would seem using 2 contracts and trying for only 10 to 20 ticks with it and then still keeping a 30 tick stop loss would have made the most money....except, for capturing only 10 ticks, how big of a stop loss do I use? 10 ticks is too small because of "noise." Anything larger than 1:1 risk to reward is not usually worth the risk.

Maybe the most profitable way to have traded today would have been to simply keep a larger stop loss with one contract and just hope I got the direction right.

None of this would be much of an issue if I could get more precise with calling good trades.

 

[studentofthemarkets]

Made 20 demo ticks.

Decided not to trade today because it's a Bank Holiday. Turns out it would have been a great day to trade. I did watch price movement, while working on other things trading related.

The one trade I took wasn't meant to be a trend trade. I still wasn't really planning on trading, but I thought I saw where the break would happen and thought I'd take a chance. I knew price was likely to keep pushing up, but I didn't know how much it would retrace before getting there. So, I settled for getting a quick 20 ticks and watched it run without me. Price never got close to retracing to my entry point, so had I stayed in the trade and trailed, it could have had a large profit. I'm OK with that because getting in at a break of a prior high isn't always safe. The better entry would have been close to the turn about 1/2 an hour after the open. I think if I had gotten in there, I would have tried trailing it above the break because I'd have had a lot more room let it retrace some without risking much profit.

 

[studentofthemarkets]

Made 7 ticks

Trying to keep a positive outlook on today, so here are all the things that went well:

1. It was a net gain.
2. I didn't look at any charts smaller than 1 minute.
3. I think I can learn to trade 1 minute charts without having a huge stop loss. I started out with 90 ticks +/- and was able to adjust it down but I think I might have been able to get out of losing trades earlier if I had it in my mind that it was OK to do that. I really wanted to just hold on even through drawdowns. 4 trades needed to be closed. 2 trades were the right direction and having a larger stop loss would have been better.
4. I'm closing some good trades too early, but at least I got the direction right on them.
5. I think I did overtrade, but I've improved by taking far fewer trades than usual. I didn't keep to my rule about 1 trade per 5 minutes...once was on purpose the other times I forgot I had that rule.
6. I think I'm improving on waiting instead of jumping in....planning instead of reacting.
7. If I had just held onto one of my last long trades, I would have been very nicely profitable. I really need to just let a trade stay on and keep the stop loss at breakeven, because eventually one will have caught a trend. Maybe I need to go back to trading 2 contracts to do this. I'll think about this some more today. Just checked the chart and 6 trades would have made 20 ticks with a 20 tick stop loss and 4 trades would not have. 6 trades would have made it to 30 ticks with a 30 tick stop loss...one was right at 30 ticks, so I might need to make a rule to not take profit if it comes close to 30 ticks. I might just trail the first trade, close it for a little if it only goes a little and let it go further if it trends a little. I think I like that idea best.

What I need to work on the most: understanding what price is doing and where it's likely to go....especially before taking a trade.