Mouse - mind connection

Great posts. Keep 'em coming.
I think I've learned/realized something already.
QUESTION: After entering a trade, how common is it that the trade may go beneath your entry before hitting goals ?
 
As an ES and NQ trader, I fully expect nearly every trade I enter to at least tick below my entry price a little...I think it would be foolish for me or anyone to envision that they could always enter on the exact tick of a move and not expect a brief drawdown, at least in the ES etc...How much against me I'll tolerate is dependent somewhat on the timeframe I'm in, what signal I used to get in, and current volatility, however you choose to measure that.
 
Quote from tradersaavy:

I JUST CAN'T LET THEM RUN.
More...

A few thoughts on your problem, which is one I also had at the beginning and was able to overcome. And I suspect of all challenges that new traders face, this is the most difficult, and most critical if you are to move ahead.

1. I'm reminded of the old adage that "scared money never wins". What this means is that your exit strategy is being ruled by FEAR. Fear of losing your gains. Fear of failing to show a profit. Fear that you will judge yourself as a bad trader. Overcoming this fear is an extremely difficult challenge, but you can't succeed if you don't.
2. Understand and admit to yourself that there is no easy fix to this problem. If there was, everybody would be trading profitably.
3. To overcome this problem, you MUST systematize your trading approach and prove to yourself in backtesting, and in trading initially in very small lots, that you can succeed. In this way, you will have the CONFIDENCE to let your trades run to the level that your system tells you is statistically valid. Without a system and your confidence in it, the odds are very strongly against you succeeding. I devoted two years to developing a system I could have confidence in, after nearly blowing my (large) account out of the water by trying to use my judgement on each trade. After developing a system that worked well with my personality, met my goals, and demonstrated a logical approach, I have never had a problem with confidence or with profitability. And I now see a losing trade as just part of the bigger picture of overall success.

So, get a system that works, practice the system, build your confidence in it, and follow the rules. Because without confidence in what you are doing based on good statistical probabilities, the odds are strongly against you.
 
lindq

Great post.
Your post does hit home. From your post I now realize that what I thought that I was totally sure of with my system, I actually am not. I will do relentless hours of backtesting now.
 
Lindq is absolutely right.

That is why imitating someone else by adopting that person's system usually leads to losses.

The reason being that one lacks the confidence, the faith, in the system and as a consequence when some losses appear (as they inevitably will) we give up.

Back testing is what enables us to acquire faith.
It wasn't until that point was brought home to me that things started to change.


freealways
 
The problem number one that is showed in statistics by official is that people are undercapitalised so the fear of losing. And when you have fear, it is not specific to trading but to any activity which requires reflex and concentration, there is a huge probability of bad execution.
 
that when working on the "let winners run" part -- you can also let that get out of hand. In sideways markets, "letting winners run" can frequently turn your winners into "break-evens."

In a sideways market if I'm trading 10,000 Qubes, I'll frequently book profits on half the position at profit of 10 cents (sometimes even 5 cents) -- then move stop to b/e on the remaining position.
 
You must log in or register to reply here.
Back
Top