My Wyckoff journal

[wrbtrader]

Thanks for that great post WRBtrader. How did you go about integrating that into your daily trading? Was it difficult to interrupt and stop trading to conduct said review? Was it a learned habit or an easy response for you? Just interested....

It was a learned habit but not for the purpose of trading. Thus, it was learned prior to becoming a trader. It had been learned due to the environment I grew up in...I started as a 1) and then I became a 3) as described below. It took several years for me to become a 3).

1) Some traders have learned that mental process prior to trading but just don't know how to apply it to trading.

2) Some traders didn't learn that mental process prior to trading and will never learn/develop it after they become a trader.

3) Some traders have learned that mental process prior to trading and eventually learn to apply it to trading.

4) Some traders didn't learn that mental process prior to trading and will learn/develop it after they become a trader.

Most of the traders I've met, they are a 1) or 2).

With that said, most trading days for me, its not difficult to stop/review that mental process during the trading day. It's become more of a routine/habit after many years of trading. Yeah, some days are very difficult and that's where the maturity level kicks in...call it quits for the day and go do something that gives me a feeling I've accomplished at least one thing for the day.

By the way, if you're in a profitable trade and you then realize you did something wrong but the trade is profitable (called a lucky trade)...you still need to do the mental review process. Ignoring the mental review process in situations like this (lucky profits) can instill bad trading habits.

 

[damnpenguins]

Cheers - thanks for that @wrbtrader.

I had to do something similar as a Project / Programme Manager. The budgets would be in the millions, so they weren't small projects... Lots of stress...

Life as a PM involved conducting a lot of reviews and constant performance assessments, both personally and of the project as a whole. A lot of times you have to be brutally honest in your appraisal of your own performance. Its the only way to improve.

In fact the more I think about it the more I can see similarities between the inevitable setbacks that occur in large scale projects and the losses one inevitably faces when trading...

I struggled for quite a while to detach my ego from the outcome of the project I was working on, particularly in terms of defending my actions etc

It took a while but I got there...

Funny that it has come full circle and that I am thinking about that in terms of my trading!

Thanks for your post again, it has prompted me to approach things from a different but familiar perspective.

 

[Buy1Sell2]

Sim trading and observation are both absolute wastes of time. Once you have been trading a while, you will understand that what I am saying is correct. Your mindset will totally change once money is on the line. That is where you will learn to trade succcessfully.

 

[jimmiebarton]

Sim trading and observation ARE NOT waste of time. Sim trading and observation remove the emotional component. Once you go LIVE, realize that will kick in, and must be accounted for.

i feel theres a real benefit to parsing or separating the subjective from the objective. then accounting for the addition of the emotional

 

[Buy1Sell2]

I paid thousands of dollars for classes and one-on-one mentors who all said that sim trading was a waste of time. It wasn’t until I heard Mark Douglas talk

I wouldn't pay one dime to any mentor including myself if I was one. You must be your own mentor. You must be your own guru. The money that was spent on mentors could be spent on mentoring yourself in the real market gaining the real knowledge that you need to trade successfully.

 

[jimmiebarton]

I wouldn't pay one dime to any mentor including myself if I was one. You must be your own mentor. You must be your own guru. The money that was spent on mentors could be spent on mentoring yourself in the real market gaining the real knowledge that you need to trade successfully.

this is why i ignore your trades

 

[damnpenguins]

I'm just going over yesterdays posts - @dbphoenix asked what was the source of the stress that led to my decision to take 5pt profits.

More for posterity so I can come back and look at my development later on, but also as it might explain a few things I thought I'd write down some thoughts.

Sit down, get a drink coz here comes another loooooong post from damnpenguins

 

[damnpenguins]

Yes there was stress in terms of judging the state of each trade and determining the best exit. The criteria I used for that is lifted straight out of what @dbphoenix has laid out before for trending exits. Range based exits are even simpler. All of these have been personally backtested.

When I say it was 'stress' I mean that it was another variable that had to be assessed in real time. It wasn't a debilitating emotional stress that caused trading errors etc.

I am an ex Project Manager. The logical way forward in a project where timeline and scope stresses are impacting a release date, is to drop that feature and deploy it in a later release. From my perspective I used my experience as a PM to reduce the 'stress' of judging the exit criteria until a later date.

@fortydraws uses 5pt targets among others. From what I've gleaned he uses different targets on different trades. He has optimised his approach. He knows when to go 'Gonzo' and hold out for the bigger gains. Obviously his trading style has always heavily influenced me. We all want to be the next Rory Mcilroy or Tiger Woods etc....

To my mind I'd rather concentrate on taking 5pts out of the market consistently and leave it as a potential source of optimisation to take more out of the larger moves, and even ranges....

By keeping it as simple as I can I believe I am taking the right path for myself.

As always - all comments are welcome. If I'm making an idiot of myself let me know....


/monologue

 

[damnpenguins]

Over the weekend I finished reading @Hooti's journal from last year and I was really impressed with his(?) approach to the mental aspects of what we are doing here.

It helped solidify a few things that had been bumbling around in the subconscious for a while. Particularly with regards to the oft quoted analogy from @dbphoenix regarding treating the trading day from a neutral perspective -

The conclusion I came to goes back to Db's analogy about watching say... two high school football teams play. You don't know the towns, you don't know anybody on the team. You don't care at all who wins, but you love the game and are watching how it plays out. You see it without caring who wins... without caring about winning. Without caring about profit?

I'm happy with my technical progress but I know that I am at that point in my development where the real work starts. Thanks to a few PM's I feel I am on the right path with the mental aspects, so I thank all of you for your help recently.

I traded yesterday for the first time with a solid, neutral mindset. Not all of the session, but I had a glimpse of the mental state of mind I am aspiring to.

I've always fought emotions in trading and tried to control them, but it only takes a subtle shift in thinking to understand that there need be no battle within the mind if you are viewing everything from a neutral perspective.

This shift opens me up to trusting myself to scratch that trade that isn't working, not doing it because I have to in an attempt to minimise loss. It opens me up to see trader behaviour as clearly in the live market as I do in sim.

I'll be honest and say that I was really taken 'off balance' over the weekend after the responses to my decision to go live with reduced risk. I'd like to thank everyone for the advice. I've taken it, and not gone live this week.

I understand the market will be there tomorrow. It is time to focus on fostering the habit of good trading and maintaining this neutral mindset.

/Fin

 

[dbphoenix]

I traded yesterday for the first time with a solid, neutral mindset. Not all of the session, but I had a glimpse of the mental state of mind I am aspiring to.

Though it may not be the most attractive analogy, this process is not unlike dissolving a clot. If those who work to be successful could get just this far, the road ahead would be much clearer.