Mental break-down from TA

A lot of good advice from experienced traders. As mentioned you're overcomplicating things and don't appear to have a clear cut system yet.

However from reading your opening post it seems what's really at the root of your problem is fear of being wrong. This is the most basic and classic error that new traders and the general investing public make. Society has conditioned us that being wrong is bad. Being wrong is for losers. Well being wrong is what trading's all about, because you are wrong a lot. In trading, being wrong is just a number, a stat that goes into calculating win rate, expectancy, etc. There can be no emotion attached to being wrong. It's tough to change your thinking, but it can be done.

You also made the comment that you are trading so that you can make a living. This might be feeding your fear of being wrong. Do you have the pressure of making money from the markets to pay the rent and eat? If so, you are up against a huge headwind. Scared money is usually lost.

Your goal as a trader is only to trade well. That means following your plan like a machine. IF you have a valid plan, AND you can follow it, the money will come.

You need to:

1. Stop trading and write down your trading plan. Entry and exit rules, position sizing, risk management, etc.

2. If you don't have a horde of cash to support your living expenses that is apart from your trading capital you need to wait until you have one or get a job that will support you while you get the trading figured out.

3. You have to trade ridiculously small size so that p/l has no affect on you. Practice holding to your rules 100%. Increase size very very gradually only after consistent success at each level.

4. Keep meticulous records and a journal of your emotions prior to entering, and while in every trade.

Most of us who've been around a while and are doing well went through all these phases and steps. Our peers who fell by the wayside were the ones who were impatient and wanted to jump ahead or were too proud/stupid to listen to the advice they were given.
 
Quote from lescor:

A lot of good advice from experienced traders. As mentioned you're overcomplicating things and don't appear to have a clear cut system yet.

However from reading your opening post it seems what's really at the root of your problem is fear of being wrong. This is the most basic and classic error that new traders and the general investing public make. Society has conditioned us that being wrong is bad. Being wrong is for losers. Well being wrong is what trading's all about, because you are wrong a lot. In trading, being wrong is just a number, a stat that goes into calculating win rate, expectancy, etc. There can be no emotion attached to being wrong. It's tough to change your thinking, but it can be done.

You also made the comment that you are trading so that you can make a living. This might be feeding your fear of being wrong. Do you have the pressure of making money from the markets to pay the rent and eat? If so, you are up against a huge headwind. Scared money is usually lost.

Your goal as a trader is only to trade well. That means following your plan like a machine. IF you have a valid plan, AND you can follow it, the money will come.

You need to:

1. Stop trading and write down your trading plan. Entry and exit rules, position sizing, risk management, etc.

2. If you don't have a horde of cash to support your living expenses that is apart from your trading capital you need to wait until you have one or get a job that will support you while you get the trading figured out.

3. You have to trade ridiculously small size so that p/l has no affect on you. Practice holding to your rules 100%. Increase size very very gradually only after consistent success at each level.

4. Keep meticulous records and a journal of your emotions prior to entering, and while in every trade.

Most of us who've been around a while and are doing well went through all these phases and steps. Our peers who fell by the wayside were the ones who were impatient and wanted to jump ahead or were too proud/stupid to listen to the advice they were given.
More...

i wish i could give reps on this board; that is the best post i have read in months.



regards,


-krazy
 
In my experience, if you're TRULEY relying upon more than one strategy and more than three indicators......

You're probably overkilling and all the extra bells and whistles are doing is flushing/scaring you out of trades/positions and just contributing to paralysis through analysis.

This is where time and experience come into play. I am a firm believer that time and experience in the markets, coupled with your overall strategy/style are the most important things. Indicators are simply triggers for action.

At the end of the day it really sounds like a confidence issue more than any TA issue. If you are successful time will show you that less is more and your trading instincts should start to take over.

Now, if your getting your mouth smashed and your confidence is being tested each and every trade and starting to shake or crack, you'll find yourself falling back to indicators that, in the end, won't give you the REAL answers you seek. The true Holy Grail in this game is internal control, instinct and psychology which moves one to make decisions and take corrective actions accordingly. You will not find success purely through any set of indicators. They are helpers and performance enhancers only.

Yep, time and experience are the true edge developers in this game. The only question you have to ask yourself is "Am I gonna survive and stay solvent enough for that penny to finally drop?"

That is the million dollar question.

Of course, as always, just my .02 over the Internet.

Good Luck!
 
Quote from lescor:



1. Stop trading and write down your trading plan. Entry and exit rules, position sizing, risk management, etc..
More...

Not that easy to do for me. Every part of my trading is a variable. Almost nothing stays constant in my trading except size, and the types of stocks i trade (nasdaq 99 % of the time)

--

my Holding period, stops (mental), and profit targets, are always changing.

I tried doing this before. Like i'd say "Ok, I'm going to hold this stock for three days, looking for one point, with a 75 cent stop loss". I was getting stoped out alot. When it worked, it worked great, but I "lost" more times than I won.
 
Quote from cashmoney69:

Here is my problem:

I'm a swing trader, and every day now i feel more and more confused about what I should do. If I'm in a position, I cant figure when to get out, and if I'm trying to get in, I have a hard time knowing what's the right price to buy/short. Here is a quote from Elder.


-----
Come into my trading room

"Amateurs grab a single timeframe, most often daily, apply their indicators and ignore other timeframes. This works until a major move swells up from the weeklies or a sharp spike erupts from the hourly charts" pg 130
----


I feel, because of Elder, this is why I'm not as good a trader as I should be. For those of you that read my journal, it's obvious something is wrong. I have four different charts I look at. Daily, 15 min, 60 min, and weekly. I feel that if I dont have all these charts up, I'm going to suffer the consequence as Elder said in the above text that i made bold font.

---

"The problem with losers is that their decision making process is a mess. To resolve the problem of conflicting timeframes, you should not get your face closer to the market, but push yourself further away" pg 131

---

Obviously this is not yet working for me. I look at daily charts more than anything, but weekly seems TOO long.

Maybe my problem is that I dont have a solid holding period????

The reason I dont have a definite holding period is because I need to be flexible, and move with the market, not against it.

Telling myself that I'm going to buy XYZ and hold for "x" number of days I think is too strict for a trader.

However if you are flexible, you'll ride out the whipsaws and ride the stock in the desired direction.

This is why I look at so many timeframes. I want to know what has happened, and what could happen whether its 15 minutes from now or a week from now.

...but thats just part of the problem.

On the four charts I have up, I have over 12 indicators. It wears me down mentally, but I get lost with out them.

Daily (4 months):
* volume
* 50 EMA
* 15 SMA (high)
* 15 SMA (low)
* 20 SMA
* 7 SMA

15 minute (16 days):
* volume
* 7 SMA
* 15 SMA
* CCI (parameter set to 15)
* MACD

60 minute (8 weeks):
* 15 SMA
* BB's (with 20 ma)
* volume
* MACD

Weekly (4 years):
* 7, 15 SMA's
* 50 EMA
* BB's with 20 ma
* volume
* MACD
* ADX

without my indicators:

1. how do I tell if a stock is over priced?
2. How can I see crossovers without MA's and macd?
3. How can I tell where a price is heavily supported without volume?
4. How can I tell if the stock is going to reverse or continue its trend without MACD?
5. How can I tell how strong a trend is without ADX


The bottom line:

I'm lost. When I make a trade, its just a gut feeling.
More...
Do the actual PRICE bars get in the way of all those indicators?
:D
 
Quote from cashmoney69:

So I can make a living...
More...

The question wasn't why you want to trade.

Very specifically, you must be able to answer why you believe your activities in the market will result in profits; how you will facilitate this transfer of capital; and from whom you will be profiting off of. Or work backwards -- take any one of those technical indicators you listed, and ask yourself: how will I profit from this set of data, as opposed to someone else? Is it because I will react faster to this MA crossover than others? Or because my settings are unique and have proprietary value in anticipating future price action in my market? Etc.

In other words, work towards defining your role in the markets. Until then, you will have a difficult time differentiating between what is useful and what is not towards that end.
 
Clearly TA is an evil cult that must be stamped out!

Seriously, look at only volume, price, know your support/resistance lines, and use daily and 15, 60 min gaps. So often price when it reverses goes back to fill the gap.

I rarely use inidicators.

You'd be surprised how often just looking at: is it making lower lows (uptrend) or lower highs etc. works. Use that as your primary baseline and it works great.
 
Quote from TorontoTrader2:

Clearly TA is an evil cult that must be stamped out!

Seriously, look at only volume, price, know your support/resistance lines, and use daily and 15, 60 min gaps. So often price when it reverses goes back to fill the gap.

I rarely use inidicators.

You'd be surprised how often just looking at: is it making lower lows (uptrend) or lower highs etc. works. Use that as your primary baseline and it works great.
More...

agreed.


every single indicator out there is historic and does not show future moves with 100% probability.

do not look at TA as a crystal ball - if you do, you will go insane.
 
Quote from cashmoney69:

Not that easy to do for me. Every part of my trading is a variable. Almost nothing stays constant in my trading except size, and the types of stocks i trade (nasdaq 99 % of the time)
..
More...

nothing new here, it's just too many moving parts symptom (been there), the day you can nail down a single part is the day you can begin a step foward.
 
You must log in or register to reply here.
Back
Top