Mindset of a losing trader

TripleJs said:
I think now when I am about to do dumb thing I actually know that it is not right to do that, but I did that any way and say to myself this is the last time but I keep on repeating it. How do you train your brain to do the right thing?
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Sounds like your "method" needs work.

It should be... (1) You know exactly what you should do and why, and (2) do that and only that.
 
TripleJs said:
do you mean the plan for the day? yes，I tend to make money and only make few trades a day when things line up , but when I had consecutive loser, I made 10x more trades. sometimes I grind my self back to green if not I am deep in the hold. I Really want to change that now.
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No I mean a written trading plan. An operators manual so to speak that you could give to someone else and they would be able to trade your system.
 
TripleJs said:
What if I had a plan but I couldn't stick to it, isn't it become an issue of my thinking? Like according to my plan, market will go down, but I am not discipline enough to wait for a pullback because I am too afraid of not getting in a big trade.
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All traders have this problem to some degree no matter how long they traded, or how much they have made. It's a lot easier to find ways to make $ in the market than it is to actually execute it through thick & thin.

Marty Schwartz (pit bull) this legend went on full tilt a few years ago losing $25M in not time, nobody is immune from having destructive trading psychology at any time.
 
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Scataphagos said:
It should be... (1) You know exactly what you should do and why, and (2) do that and only that.
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This is impossible for discretionary traders as they have situations where they have no "exact"rule for. That's why they call them "discretionary traders".
I am sure that this is even the case for any trader that has a good performing system.
I can make fix rules for the situations that I solve now in a "discretionary" way, but that will have a big negative impact on my returns. Discretionary can also mean that there are exceptional temporary extra rules to try to get the best outcome.
If I would trade only with exact rules, I would leave big amounts of money on the table in many trades. The behavior of the markets cannot be controlled by a few exact rules. In best case you can control parts of each move.
 
This makes sense to me. Not all traders need precise rules BUT I think ALL traders need a process / checklist of what's essential for them to review as well as to get them in the right mindset for trading. For instance, I have 5 key macro indicators that I have to review each day (there are more that I look at but these 5 are essential). Then, I have to identify my key levels for each market. Lastly, I have to review each market in 3 key time frames. I also have some mental prep that I do around mindset.

Again, it's a process / checklist but not precise rules. This fits with a lot of the mindset training I do with young athletes, in particular baseball players. What I want them to do is go through their processes and routines which will allow their subconscious mind to give them the best chance for success.


virtusa said:
This is impossible for discretionary traders as they have situations where they have no "exact"rule for. That's why they call them "discretionary traders".
I am sure that this is even the case for any trader that has a good performing system.
I can make fix rules for the situations that I solve now in a "discretionary" way, but that will have a big negative impact on my returns. Discretionary can also mean that there are exceptional temporary extra rules to try to get the best outcome.
If I would trade only with exact rules, I would leave big amounts of money on the table in many trades. The behavior of the markets cannot be controlled by a few exact rules. In best case you can control parts of each move.
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formikatrading said:
Again, it's a process / checklist but not precise rules. This fits with a lot of the mindset training I do with young athletes, in particular baseball players. What I want them to do is go through their processes and routines which will allow their subconscious mind to give them the best chance for success.
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:thumbsup: :)
 
wrbtrader said:
You need quantitative statistical analysis of your real trade performance and you need quantitative statistical analysis of your backtest results...then you compare the numbers against each other.

Without that information, anything else you do will be like entering a street fight with your arms tied behind your back.

In fact, stay away from trading if you don't have any statistical analysis because usually people trading without any statistics...they're also trading without any objective trading plan.

Don't forget...learn about risk management and make sure you're properly capitalized.

wrbtrader
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Very very very well stated.

I am currently making the mistake of trading real time without a verified quantitative statistical analysis backtested Edge. I'm tracking real time trade results to seek edge statistical, but that's forward testing and I'm trading without an edge.

You right sir, I need to get myself in backtest and prove it first and stop being lazy.
 
MrMuppet said:
You can master your psychology once you've found your edge. What's the intention behind losing money and feeling good about it?
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I once suggested the same to the pre-eminent trading psychologist Brett Steenbarger -- he agreed.
 
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