Overcoming Fear when the stock fluctuates around your entry price

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DGMan

Dear all,

How would you overcome the fear or anxiety when the stock fluctuates up and down around your entry price (i.e. instead of moving straight towards your favouable direction, it just fluctuates)?

Over these days I have a couple of trades behaving like that and found it such a torture I exited them breakeven, only to see that they moved in my favourite directions....
 
When you put on the trade, your protective stop plus commissions are the cost of admission to the trade. It's your "basis" so to speak, your cost of investing in the chance of a particular price move having greater probability of transpiring than not. Your profit target is the minimum price you will take profits (or better if the market appears ready to offer more).

If you aren't truly comfortable with these costs of admission, then you will be trading scared and exiting too quickly, or cutting winners short.

If you are putting on a counter-trend trade, you may want to be more protective of your capital and move stops sooner, or exit if price hesitates to provide follow through on the pullback move, but when trading in the direction of an established trend, I think it's best to trust your trade and let it play out.

One easy way to do this if you find yourself sabotaging your trades too often, is to use a one-cancels-other (OCO) bracket with a stop and target automatically in place and walk away for a while.
 
My own 2 cents ...

You have to enter the trade and be prepared to give it "time to work" and expect it to go against you right away.

In the case of the /ES or /TF this past few weeks, I've entered trades and been ultimately proven right, but was down 2-3 points on the position for several hours because the market "just died." Annoying to watch, but I've learned that if I continue to think the trade is good, and I've not received any contrary signs, I need to give the trade both time and space (on the chart) to work.

It's a roller coaster indeed, and I daresay one of the HARDEST things I had to learn about trading. Patience -- otherwise the only person profiting from my trading activities is the broker. :)

But that's just me.
 
This is good advice. Also, some of my automation is designed to take advantage of flux. Finally, the main goal is to determine what is a high probability setup, to recognize the setup in real time, once you are aware, to get in as quickly as possible and then let the trade play out.

As always, your analysis for the most part AFTER a trade is placed with real money will be weaker than before you place the trade, so for example if I am not feeling comfortable with a trade, I may do it with less size.


Quote from NoDoji:

One easy way to do this if you find yourself sabotaging your trades too often, is to use a one-cancels-other (OCO) bracket with a stop and target automatically in place and walk away for a while. [/B]
More...
 
Really thanks of the advices of you guys. I have decided to take the advice of one of you guys that, after the order is filled, I would stay away from the screen and waiting for the result. See if it will improve my trading result.
 
DGMan,

You have fear/anxiety because you don’t know what you are doing and/or don’t actually have a system or setup to follow. So of course you are worried about it. But if you have a defined system that has a real edge, you know the math and realize any one trade is meaningless and completely random in its outcome. But that same setup is a net winner over the next 100 or 1000 trades (depending on your timeframe, tolerance to risk, trade frequency and so on) or whatever. That knowledge is power to follow your trade setup rules without question or hesitation.

When you can completely disassociate your success or failure as a trader on the individual outcome of one trade, you are finally “getting it” so to speak. Because as you gain real experience, you will realize how meaningless one trade is in the grand scheme of things. The two most important things are have an edge of some kind on any timeframe that fits “you” and follow the rules you have developed to capture that edge. Obviously an extraneous event could occur that could change your trade premise, but even that shouldn’t make any difference as you should already have in your plan what to do when that happens as well. I find it somewhat funny (sorry but from my point of view it is) when people talk about anxiety and fear (which happens all the time here). Nothing says I am a new trader who doesn’t understand the game like comments like that. Because if you did, you wouldn’t have fear of your position at all.

An elite athlete doesn’t get nervous and start doubting their training when it matters. They do what they trained to do and it happens without conscious thought (unless they think about it and get in there own way like you are). Your trading should be very similar to that.

Don’t make things more complicated than they have to be or are.

Best of luck

BM
 
Quote from DGMan:

Really thanks of the advices of you guys. I have decided to take the advice of one of you guys that, after the order is filled, I would stay away from the screen and waiting for the result. See if it will improve my trading result.
More...
in trading all figures should be studied well and i think you don;t need to wait , just make the trading that all the figures show you because the number tell the true :D
 
the problem with putting stops etc. is the HFT traders sharking on your stop and doing quote management to steal your last $100 in the account. that practice has to stop otherwise in 10 years it will be computers only trading while humans working in the farm fields. :D
 
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