Maintaining Self Discipline

[Overnight]

Made 1 trade today. It was a winner. Although I followed all my rules, the trade actually was not a good one. I like to get in at a retracement to a trend or beginning of a trend and there were signs that price wasn't trending that I ignored when I took the trade.

Don't be hard on yourself...You followed your rules. That will keep you alive. So you missed the huge moves? So what?!? So did half the universe of traders today. Some won, some lost, and some are stuck with swinging into the wind.

Also, remember something...You do not have to trade every darned day. Take a day off once in a while. Like today, for me. A day off. Whatever. Maybe the whole week, because recall that this is Thanksgiving week. US markets are off-kilter, and that just messes up patterns. Hell, the CL and NG inventory reports will both drop Wednesday this week! Craziness!

 

[studentofthemarkets]

Don't be hard on yourself...You followed your rules. That will keep you alive.....

Thanks! I felt better after reading this.

 

[studentofthemarkets]

Today I had my first losing trade in the last 5 days. I followed all my rules but didn't wait for the best entry.

I'm still trying my idea of stopping for the day after 1 loser but trading as long as I want if I have winners. I spent the rest of the day watching where I would have liked to have traded. This wasn't so bad. I'm glad I have a solution to taking too many losses in a day and I think it's really helping me to be more selective in my trades. Also, by only taking a few trades a day max (compared to the 50 or so I sometimes have taken), I have time to really think them over in my head and figure out if I could have done anything differently.

What I can re-learn from today's losing trade is that I need to be extra careful when trading at the open because price is unpredictable and the moves are so big 10 ticks SL doesn't give much room for an error. I know this, just didn't follow it.

Yesterday's trade had the opposite problem....taken in a slow time of the day. Tomorrow I'm going to try to get it right....somewhere where I can see regularity in the price patterns and find a good trade that doesn't need a SL bigger than 10 ticks.

 

[studentofthemarkets]

Today I took another losing trade then stopped for the day. However, I'm very happy with the trade. Although I'm only going for 10 sl and 10 tp, it's only to refine my entry skills until I can get in easily and capture bigger moves. Today I was stopped out by 2 ticks before it turned and went in my direction for 82 ticks.

Followed all of my rules. What I could have done better is entered with a stop instead of market order and waited for a little more confirmation before entering. Those 2 adjustments should have been enough to capture 10 ticks off of the move higher.

 

[studentofthemarkets]

Had two 10 tick winners today. Followed all my rules. One had 50 ticks potential and the other had 40 ticks potential.

These 2 trades are good examples of what my trades are supposed to look like. I hope future posts will show nothing except these kinds of entries and trades.

 

[Bernard111]

My 2 cents for improving your trading day:

1) don't be obsessed with winners %. This is detrimental to #2;

2) in order to get those '40 /50 ticks potential', you have to adopt the philosophy of "look after the downside and the upside will look after itself" (cit. by Tony Sycamore).. in other words, forget the % of your winners & losers but stay longer on those winners and manage the risk properly.

"One common adage on this subject mat is completely wrongheaded is: You can't go broke taking profits.That's precisely how many traders do go broke. While amateurs go broke by taking large losses, professionals go broke by taking small profits.

The problem in a nutshell is that human nature does not operate to maximize gain but rather to maximize the chance of a gain.

The desire to maximize the number of winning trades (or minimize the number of losing trades) works against the trader. The success rate of trades is the least important performance statistic and may even be inversely related to performance."

- William Eckhardt

 

[studentofthemarkets]

You can't go broke taking profits.That's precisely how many traders do go broke. While amateurs go broke by taking large losses, professionals go broke by taking small profits.

and

The success rate of trades is the least important performance statistic and may even be inversely related to performance."

- William Eckhardt

Thanks! This is good stuff. I understand that the real money is in catching a trend and making more than 10 ticks.

Temporarily, for this journal, I'm refining my entry skills by focusing on 10 ticks SL and 10 TP. I've seen improvement in doing this because it forces me to watch how price action develops before a trend begins. Focusing on a win rate just helps me to try to accomplish this task. However, once I can identify the beginning of a trend and how to enter it with a lot of consistency, I'll start increasing my profit target.

 

[studentofthemarkets]

Today I had 2 winners and then a loser. Although I was tempted to keep trading after the losing trade because I thought I saw some good trade entries, I stuck to my plan to quit for the day after 1 loser.

All 3 trades broke an entry rule. 1 was slight and the other 2 happened because I was so focused on other aspects of the trade set up that I forgot to watch the key indicators. However, the general idea of entering into a retracement in a trend was still something I tried hard to follow today (as opposed to trading a breakout). The first 2 trades won even though I was wrong about the timing of the buyers coming in. The 3rd trade lost although that was a better retracement into the short term up trend.

I need to work on remembering all the factors that go into a trade entry and making sure everything is lined up before pulling the trigger.

 

[studentofthemarkets]

I think my new rules of taking fewer trades per day and quitting for the day after 1 losing trade have possibly helped me turn the corner.

This is the longest number of days I've ever had being profitable. Just wanted to post my stats...especially because if history repeats itself, my profitability won't last long.

All trades are demo for now.

 

[studentofthemarkets]

4 winners and no losers today.

I should be ecstatic, but in looking over the trades, none of them were taken in the locations I want to be taking trades in. I followed my rules except for one trade where the rules weren't that clear. However, I was guessing for the trend direction...which isn't wrong if you don't mind taking a lot of trades, but that defeats the goal I'm working on of limiting myself to only a few trades to refine accuracy for entering a trend.