Over-trading versus Fear of Loss

There is something to be said for going home with a realized profit. My trades last a long time sometimes, days or weeks or months. Sometimes just a few hours or minutes. There will be another entry tomorrow so why not enjoy the night. Missing an entry doesn't jepardize me in any way. It's not based on taking every entry. If I get off early I like to go to the store and smile knowing I made more in an hour than just about everybody in line except for those girls with all the make up and tight pants, short skirts and high heels. But I really worked for my money. No lying around.
 
SimpleMeLike said:
Thanks d08,

I do believe in the system, but here is the thoughts in my head after taking a winning trade for the day of lets say $300 to $400

"ok, thats enough, we end the day making money, turn computer off"

"ok, but what if tomorrow gives you a loss, then thats two days of really making no money, you should keep on trading"

"Just keep on trading, so what if you take a loss, the system says you will win more then lose, just trade what you see and forget about taking a loss after having a win"

After the reading the posts and advice here. It is best, I trade the system when a setup occurs during the daily timeframe I want to trade and remove my thoughts of losing money, feeling bad about a winning day turning into a losing day, and greed. And realize, I am in the business to make money, and in order to make money I have to trade my system.

Thanks,
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One day should not mean anything in the long run because this is about statistics. I struggle with this myself, I get bogged down thinking about "that shitty week" but I'm looking at the trees not seeing the forest. Unless it's some record-breaking-risk-explosion trade, it shouldn't matter, normal sized losses should make you yawn rather than scare you.
 
java said:
There is something to be said for going home with a realized profit. My trades last a long time sometimes, days or weeks or months. Sometimes just a few hours or minutes. There will be another entry tomorrow so why not enjoy the night. Missing an entry doesn't jepardize me in any way. It's not based on taking every entry. If I get off early I like to go to the store and smile knowing I made more in an hour than just about everybody in line except for those girls with all the make up and tight pants, short skirts and high heels. But I really worked for my money. No lying around.
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You're comparing yourself to people with salaries? How much do you make in a terrible day and how does it compare to them? Paid salaries are almost never taken away from you, trading profits evaporate with ease. Too fixated on short-term thinking. During the best times I'm usually thinking of the profits as a cushion for the bad times up ahead - and they're always coming, sooner or later.
 
Handle123 said:
. So in your testing, on losing days in morning, does it show you can recover by end of the day? Do you stop at getting net profitable during the session or are you swinging for fences till end of the day?

I prefer to get positive net zero on the day if possible and tomorrow another day. But still comes down to what the method averages each day and where profits usually come in by the hour so you can better understand if the losses can be made up.
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Thanks Handle123

Yes, my testing shows I take a loss in the morning, I can usually recoup the loss in the afternoon. However, I have been taking the loss and then ending trading for the rest of the day on most days. So, I need to stop this.

Thanks,
 
d08 said:
You're comparing yourself to people with salaries? How much do you make in a terrible day and how does it compare to them? Paid salaries are almost never taken away from you, trading profits evaporate with ease. Too fixated on short-term thinking. During the best times I'm usually thinking of the profits as a cushion for the bad times up ahead - and they're always coming, sooner or later.
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And the great thing about trading or the great thing about me is I enjoy it all and am not miserable and at least have maintained some sense of humor over the years. Yes, I compare myself to people with salaries and always come to the same conclusion...Beats working!!
 
Herbert said:
Over-trading is one prevalent trading mistake that Forex traders make. What happens when you over-trade, is that when you win those trades that you have entered you are reinforcing bad trading behavior, and bad trading behavior only has one eventuality; losing money, usually a lot of money, or all of your account. Hence, over-trading should be avoided.
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when they have losses , they can't accept them , then they try to get their money back ,THEY INCREASE SIZE like gambler on martingale , then they fear losses.SIMPLE PSYCHOLOGY
 
True. Revenge trading is about one of the worst things a trader can do, and many have seriously problems unlearning that awful habit. It took me years to learn not to do that, at least most of the time. The urge is still there.
 
SimpleMeLike said:
Thanks wartrace,

Well, if I don't take alll the trades in real time, then how do I know the system works. This is my question or asking for advice. Should I take all the trades in real time or end the day when that first trade is a profit? Yes, I can calculate the trades after market for data collection of wins and losses, but again, its not real time live real money trading.

When I give back 3-400 dollars on a day of trading, I am simply following the rules of my system. My system does not state "when you feel or think the trade is going to against you when up 3-400 dollars on the day, exit the trade entirely"

However, yes there are times when I am in trade and just from experience I see price action dance around my entry price and go against me. Every part of me wants to exit that trade for a minor loss cause I "feel" the trade is going against me. More then likely it does. But am I being discipline trader. I feel if I exit the trade, then I am not following the system.

Yes, I see the tape and order book, but I don't pay attention to it. I am more of systematic trader and not discretionary trader. I don't like thinking alot while in a trade.
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My point is the system you developed seems as if it is working on the entry but is failing you in managing bad trades. The only way to refine your system is to take every signal and observe what happens on both the good trades and the bad. Keep a trading journal and review it. Perhaps you will see something that you can develop into the system to cut your losers.

I personally do not believe in mechanical system trading. In my opinion as you gain experience trading you JUST KNOW you are going to lose on the trade. To me it doesn't make sense to let it go to your maximum loss.
 
wartrace said:
My point is the system you developed seems as if it is working on the entry but is failing you in managing bad trades. The only way to refine your system is to take every signal and observe what happens on both the good trades and the bad. Keep a trading journal and review it. Perhaps you will see something that you can develop into the system to cut your losers.

I personally do not believe in mechanical system trading. In my opinion as you gain experience trading you JUST KNOW you are going to lose on the trade. To me it doesn't make sense to let it go to your maximum loss.
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Thanks wartrace,

Yes, currently I have no plan for managing bad trades, except for taking the full maximum loss. Like you mention sometimes you just know the trade is not going in your favor, but the system/discipline states respect your stop loss. For now, I will except the max loss and second guess.

I can definitely understand what you mean. I am keeping a trading journal and track all trades outcomes and make notes.

I will proceed with taking every signal and observe what happens. For me, if I take every signal, I have better data and better outcomes.

Thanks,
 
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