Need help on 2 issues, which I think are psychological

R

RedDuke

I think this is the most appropriate section for my questions. I have a solid strategy and I am disciplined enough to only take trades when my set ups occur. I trade intraday on very short basis, my trades could be few minutes long, sometimes 10-20 minutes, rarely close to 1 hour. I have 2 problems and hope somebody can point in the right direction of how to solve them.

1) A lot of times, I lose focus for about 1 minute and miss a great entry and then miss the whole move because my risk tolerance rules do not allow me to enter at a different price. I try to have as little disruptions as possible, no chat rooms, phone calls, I have Bloomberg or CNBC TV on, but I need it in order to know if something sudden happens. Any advice on how to improve being focused?
2) Not as often as the first one, I do not pull the trigger when I need to. My system requires me to take all valid entries, by missing few I become a casino player and not the house because I do not "play" all hands, and my odds therefore do not kick in. One of the things on the back of my mind is over trading and this comes down as me not entering the trades. Any advice in this area?

I really appreciate the help.

Thanks,
redduke
 
(1) A part of you doesn't believe you have a "solid strategy". (2) Obviously, you're not disciplined if you're not taking the trades when you're supposed to, according to your own guidelines. (3) It seems apparent that you're gripped by perfectionism and are terrified of losing money and being wrong. (4) By operating in an intra-day time frame, you're probably very concerned about having a high percentage of your trades be profitable. You're setting yourself up to "eat like a bird and defecate like an elephant". (5) Listening to news? That's a desire to constantly know more information. Most news is B.S. Turn off the tv. (6) You talk about losing focus for 1 minute and then missing great entries. That sounds like "hindsight bias". You're talking about the past with a sense of certainty. You only want to initiate trades at the extreme-tick or not at all. (7) Okay, back to your questions.......how can you improve your focus? Reduce your position size to a one-lot and become comfortable trading at that level. Turn off the boob-tube. It's more important that you become comfortable taking trades and experiencing the fear, greed, hope, stress, exhiliration, ups and downs that will accompany each trade instead of knowing what some meathead journalist in New York is blathering about. Instead of trading to make money, merely try to "scratch" some trades so that you get some confidence back and you don't get bent out of shape over taking losses. (8) You're scared of overtrading? No. You're scared of being wrong. Since it seems you haven't traded before, you have to discover on your own, with real money, how you'll react to profits and losses. Start out small, take your signals, modify your system as you go along and ideally, your system's "edge" will show through and that voice inside your head will finally believe in your system.
 
Quote from nazzdack:

(1) A part of you doesn't believe you have a "solid strategy". (2) Obviously, you're not disciplined if you're not taking the trades when you're supposed to, according to your own guidelines. (3) It seems apparent that you're gripped by perfectionism and are terrified of losing money and being wrong. (4) By operating in an intra-day time frame, you're probably very concerned about having a high percentage of your trades be profitable. You're setting yourself up to "eat like a bird and defecate like an elephant". (5) Listening to news? That's a desire to constantly know more information. Most news is B.S. Turn off the tv. (6) You talk about losing focus for 1 minute and then missing great entries. That sounds like "hindsight bias". You're talking about the past with a sense of certainty. You only want to initiate trades at the extreme-tick or not at all. (7) Okay, back to your questions.......how can you improve your focus? Reduce your position size to a one-lot and become comfortable trading at that level. Turn off the boob-tube. It's more important that you become comfortable taking trades and experiencing the fear, greed, hope, stress, exhiliration, ups and downs that will accompany each trade instead of knowing what some meathead journalist in New York is blathering about. Instead of trading to make money, merely try to "scratch" some trades so that you get some confidence back and you don't get bent out of shape over taking losses. (8) You're scared of overtrading? No. You're scared of being wrong. Since it seems you haven't traded before, you have to discover on your own, with real money, how you'll react to profits and losses. Start out small, take your signals, modify your system as you go along and ideally, your system's "edge" will show through and that voice inside your head will finally believe in your system.
More...

Great advice, pay attention to it.
 
Great assessment!



Quote from nazzdack:

(1) A part of you doesn't believe you have a "solid strategy". (2) Obviously, you're not disciplined if you're not taking the trades when you're supposed to, according to your own guidelines. (3) It seems apparent that you're gripped by perfectionism and are terrified of losing money and being wrong. (4) By operating in an intra-day time frame, you're probably very concerned about having a high percentage of your trades be profitable. You're setting yourself up to "eat like a bird and defecate like an elephant". (5) Listening to news? That's a desire to constantly know more information. Most news is B.S. Turn off the tv. (6) You talk about losing focus for 1 minute and then missing great entries. That sounds like "hindsight bias". You're talking about the past with a sense of certainty. You only want to initiate trades at the extreme-tick or not at all. (7) Okay, back to your questions.......how can you improve your focus? Reduce your position size to a one-lot and become comfortable trading at that level. Turn off the boob-tube. It's more important that you become comfortable taking trades and experiencing the fear, greed, hope, stress, exhiliration, ups and downs that will accompany each trade instead of knowing what some meathead journalist in New York is blathering about. Instead of trading to make money, merely try to "scratch" some trades so that you get some confidence back and you don't get bent out of shape over taking losses. (8) You're scared of overtrading? No. You're scared of being wrong. Since it seems you haven't traded before, you have to discover on your own, with real money, how you'll react to profits and losses. Start out small, take your signals, modify your system as you go along and ideally, your system's "edge" will show through and that voice inside your head will finally believe in your system.
More...
 
Quote from RedDuke:

I think this is the most appropriate section for my questions. I have a solid strategy and I am disciplined enough to only take trades when my set ups occur. I trade intraday on very short basis, my trades could be few minutes long, sometimes 10-20 minutes, rarely close to 1 hour. I have 2 problems and hope somebody can point in the right direction of how to solve them.

1) A lot of times, I lose focus for about 1 minute and miss a great entry and then miss the whole move because my risk tolerance rules do not allow me to enter at a different price. I try to have as little disruptions as possible, no chat rooms, phone calls, I have Bloomberg or CNBC TV on, but I need it in order to know if something sudden happens. Any advice on how to improve being focused?
2) Not as often as the first one, I do not pull the trigger when I need to. My system requires me to take all valid entries, by missing few I become a casino player and not the house because I do not "play" all hands, and my odds therefore do not kick in. One of the things on the back of my mind is over trading and this comes down as me not entering the trades. Any advice in this area?

I really appreciate the help.

Thanks,
redduke
More...
It is possible that issues 1 and 2 are related, and that each is just a different form of avoidance. For whatever reason, you do not yet appear to have sufficient confidence in your method to automatically implement it when it gives you a signal. It is up to you to decide whether it is the method or you that requires addressing. If you have adequately tested your method and it stands up to scrutiny in the light of day, then you possibly need to learn to relax and have as few distractions as possible during the trading day. And if you continue to avoid solid entry signals from time to time, then keep a record of them and how those hypothetical trades would have fared. Assuming you have a solid method, the accumulated list of trades not taken should present you with a compelling case of why you should...just do it.
 
Guys, thanks for your advices.

Nazzdack,

It is not fear. I have been trading with real money for a while, and I go for pips or points, I know that I have decent account size not to worry about every tick. I used to trade forex off 3-5 min charts and this time frame is quite "relaxing" because the time between the bars is long enough to give myself some rest. Now I trade DAX of 1 min charts and this time frame requires uninterrupted attention, if I miss a good entry I do not chase. I do not really care whether I am right or wrong on individual trade because I know exactly where I get out if I am wrong. My hesitance in pulling the trigger is to see whether next bar confirm direction by 1-2 ticks, but the price jumps 2-4 and my rules do not allow me to enter. Since I am new to DAX, I only trade 1 contract.

I think that if I can train myself to be more focused, I’ll be able to solve both of these issues. But I am not sure on how to do this. The reason why I have TV on is know if something unexpected happens, so that I avoid trading during such time, so I think it is necessary evil.

Regards,
redduke
 
I do not think it is possible, and I am very experienced in developing software. To this date, I have not seen a single fully automated system that constantly generates profits. There could be some out there, but I do not see how this can be done. The best way I can describe what I am doing is mechanical discretion.
 
Quote from RedDuke:

I think this is the most appropriate section for my questions. I have a solid strategy and I am disciplined enough to only take trades when my set ups occur. I trade intraday on very short basis, my trades could be few minutes long, sometimes 10-20 minutes, rarely close to 1 hour. I have 2 problems and hope somebody can point in the right direction of how to solve them.

1) A lot of times, I lose focus for about 1 minute and miss a great entry and then miss the whole move because my risk tolerance rules do not allow me to enter at a different price. I try to have as little disruptions as possible, no chat rooms, phone calls, I have Bloomberg or CNBC TV on, but I need it in order to know if something sudden happens. Any advice on how to improve being focused?
2) Not as often as the first one, I do not pull the trigger when I need to. My system requires me to take all valid entries, by missing few I become a casino player and not the house because I do not "play" all hands, and my odds therefore do not kick in. One of the things on the back of my mind is over trading and this comes down as me not entering the trades. Any advice in this area?

I really appreciate the help.

Thanks,
redduke
More...

There's some important information missing from your story.

Losing focus can be caused by several possible reason:

* Your trading a trading instrument from a completely different time zone than your trading instrument. (ex. living in Chicago and trading the DAX).

Thus, if your not getting proper sleep or have recently made a change in your sleeping routine...

It's going to be very difficult to stay focus while looking for entry signals.

* Trading too long without giving your mind mental breaks from the computer.

You should measure how long your at the computer between each mental lapse problems.

* You have the inability to forget about a recent trade and your thoughts will go back to that trade at the worst possible moments...

Moments when your mind begins to see hints of a possible (pending) trade signal.

Your mind then self-sabotages via dealing with an event that already has a result instead of dealing with the current event that does not have a result.

Mind then takes the safest route via not taking action when you need to.

* You have too much information to review (charts, notes et cetera) prior to each trade...

Information overload.

* Unresolved personal problem or concern that needs resolution and/or completion.

Your mind than thinks about these problems or concerns at the worst moments during trading.

* Lack of proper exercise or poor eating habits.

* Physical problem...eye strain, painful wrist, painful back and so on due to poor posture while trading.

As for your problem #2...it could be some of the things above or it could be that your not as discipline as you think you are.

Discipline traders that misses trades knows that the market will be here tomorrow and will simply make a committment to reduce or limit missed profitable trading opportunities the next day of trading.

Nobody is perfect and to seek perfection can also be a problem.

I myself try to catch or trade a minimum of 75% of any trade signal that appears while I'm trading and watching the trading instrument.

(anything that occurs when I'm away from the computer I don't count)

Thus, I allow myself enough room to miss no more than 25% of my trade signals...

Allowing myself to be comfortable with the fact that I'm not perfect and that there will be another trading day.

Such helps prevent taking trades outside my trading plan...trades that could easily lead to overtrading.

Last of all, you must document any missed trades for later review prior to the next trading day like any top athlete will do in their post game preparation to help them be a little more focused the next game.

Note: The last paragraph above sounds like a contradiction when I had earlier said you could be dwelling too long on prior trades.

If you've played competitive sports you'll know its not a contradiction because to intentionally review a past event as a form of preparation is very different than not reviewing and letting that unreviewed past event sneak up on you at the worst possible moment.

Discipline traders that missed too many trading opportunities for what ever reasons...either they just shut down and call it a day or fix the problem prior to the next trade because they know what's causing the problems. Undiscipline traders will put the foot to the pedal and keep trading because they don't know what the problem is or underestimate its impact on their trading.

Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
 
Quote from RedDuke:

...I used to trade forex off 3-5 min charts and this time frame is quite "relaxing" because the time between the bars is long enough to give myself some rest. Now I trade DAX of 1 min charts and this time frame requires uninterrupted attention...
More...

Why are you trading the Eurex DAX via the 1min chart when you are aware of being comfortable in trading via the 3-5min charts in Forex Currencies???

Are you using different strategies when traversing from Forex to Eurex???

Mark
 
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